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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               -----------------

                                    FORM 10-K

                  FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
           SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
           |_| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
               SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended ______________________

           |X| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
               SECURITIES EXCHANGE ACT OF 1934

       For the transition period from January 1, 1999 to December 26, 1999

                         Commission File Number: 1-12955
                            JOURNAL REGISTER COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             DELAWARE                                    22-3498615
   (STATE OR OTHER JURISDICTION            (I.R.S. EMPLOYER IDENTIFICATION NO.)
 OF INCORPORATION OR ORGANIZATION)

                              50 WEST STATE STREET
                         TRENTON, NEW JERSEY 08608-1298
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

       Registrant's telephone number, including area code: (609) 396-2200

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                     Common Stock, par value $0.01 per share

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      None

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

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

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant as of March 17, 2000 was approximately $144,311,985.

     As of March 17, 2000,  45,367,428 shares of the registrant's  Common Stock,
par value $0.01 per share, were outstanding (excluding treasury shares).

     DOCUMENTS INCORPORATED BY REFERENCE. The information called for by Part III
is incorporated by reference to the definitive Proxy Statement for the Company's
2000 Annual Meeting of Stockholders,  which will be filed on or before April 24,
2000.

================================================================================


<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         STATEMENTS  IN THIS  ANNUAL  REPORT ON FORM  10-K  THAT ARE NOT  PURELY
HISTORICAL ARE  FORWARD-LOOKING  STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE  SECURITIES  ACT OF 1933 AND SECTION 21E OF THE  SECURITIES  EXCHANGE ACT OF
1934,  INCLUDING  STATEMENTS  REGARDING  THE  COMPANY'S   EXPECTATIONS,   HOPES,
INTENTIONS  OR  STRATEGIES  REGARDING  THE  FUTURE.  FORWARD-LOOKING  STATEMENTS
INCLUDE:  THE PLANS AND  OBJECTIVES  OF THE  COMPANY FOR FUTURE  OPERATIONS  AND
TRENDS  AFFECTING THE COMPANY'S  FINANCIAL  CONDITION AND RESULTS OF OPERATIONS.
ALL FORWARD-LOOKING STATEMENTS IN THIS REPORT ARE BASED ON INFORMATION AVAILABLE
TO THE COMPANY (AS HEREINAFTER DEFINED) AS OF THE DATE THIS REPORT IS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, AND THE COMPANY ASSUMES NO OBLIGATION TO
UPDATE ANY SUCH  FORWARD-LOOKING  STATEMENTS.  FACTORS  THAT COULD CAUSE  ACTUAL
RESULTS  TO  DIFFER   MATERIALLY   FROM  THOSE  EXPRESSED  OR  IMPLIED  BY  SUCH
FORWARD-LOOKING  STATEMENTS  INCLUDE,  BUT ARE NOT  LIMITED TO, (I) A DECLINE IN
GENERAL ECONOMIC CONDITIONS, (II) THE UNAVAILABILITY OR MATERIAL INCREASE IN THE
PRICE OF NEWSPRINT,  (III) AN ADVERSE  JUDGMENT IN PENDING OR FUTURE  LITIGATION
AND (IV)  INCREASED  COMPETITIVE  PRESSURE FROM CURRENT  COMPETITORS  AND FUTURE
MARKET ENTRANTS. SEE "ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION  AND RESULTS OF  OPERATIONS  -- CERTAIN  FACTORS  WHICH MAY AFFECT THE
COMPANY'S FUTURE  PERFORMANCE." THE COMPANY  UNDERTAKES NO OBLIGATION TO RELEASE
PUBLICLY  THE  RESULTS OF ANY FUTURE  REVISIONS  IT MAY MAKE TO  FORWARD-LOOKING
STATEMENTS  TO  REFLECT  EVENTS OR  CIRCUMSTANCES  AFTER  THE DATE  HEREOF OR TO
REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

                                     PART I

ITEM 1.  BUSINESS.

GENERAL

         Journal  Register  Company  (together with all of its  subsidiaries and
their  respective  predecessors  (the  "Company")  is a leading  U.S.  newspaper
publisher,  with total paid daily  circulation  of 636,939  and total  non-daily
distribution of approximately 4.6 million.  As of December 26, 1999, the Company
owned  and  operated  25  daily   newspapers  and  200  non-daily   publications
strategically clustered in seven geographic areas: Connecticut; Philadelphia and
its surrounding  areas;  Ohio; the greater St. Louis area;  central New England;
and the  Capital-Saratoga  and  Mid-Hudson,  New  York  regions.  The  Company's
newspapers are  characterized  by an intense focus on coverage of local news and
local sports and offer  compelling  graphic design in colorful,  reader-friendly
packages.

         From 1993 through 1999, the Company successfully completed 17 strategic
acquisitions,  acquiring 13 daily  newspapers,  126 non-daily  publications  and
three commercial  printing  companies.  The Company has generally  increased the
revenues and  significantly  increased  the cash flow and  profitability  of its
acquired  newspapers.  For the fiscal year ended  December 26, 1999, the Company
generated revenues of $469.6 million,  EBITDA (as hereinafter defined) of $160.7
million  and net income of $47.7  million.  In 1998,  the  Company's  EBITDA was
$146.7 million  (excluding special charges and an extraordinary item recorded in
the third  quarter  of 1998).  From 1993  through  1999,  the  Company  recorded
compound annual growth in revenues and EBITDA (excluding special charges in 1997
and 1998 and the extraordinary  item in 1998), of approximately  9.5% and 11.1%,
respectively.  The Company has achieved  this growth  through a  combination  of
expanding  revenues in existing  geographic  areas,  strategic  acquisitions and
implementing cost controls and ongoing expense reduction efforts at existing and
acquired newspapers.

         The majority of the Company's daily  newspapers have been published for
more than 100 years and are established franchises with strong identities in the
communities  they serve.  For example,  the NEW HAVEN  REGISTER,  the  Company's
largest  newspaper  based  on daily  circulation,  has  roots in the New  Haven,
Connecticut  area  dating  back to 1755.  In many  cases,  the  Company's  daily
newspapers are the only general circulation daily newspapers  published in their
respective communities.  The Company's non-daily publications serve well defined
suburban circulation areas and include the St. Louis, Missouri SUBURBAN JOURNALS
(the  "JOURNALS"),  the largest group of weekly  newspapers in the United States
based on total distribution.

         The Company manages its newspapers to best serve the needs of its local
readers and advertisers.  The editorial content of its newspapers is tailored to
the specific  interests of each community served and includes  coverage of local
youth, high school,  college and professional sports, as well as local business,
politics,  entertainment and culture. The Company maintains high product quality
standards,  using  extensive  process  color and  compelling  graphic  design to

                                       1
<PAGE>

attract new readers and to more fully engage  existing  readers.  The  Company's
newspapers typically are produced using advanced prepress pagination  technology
and are printed on efficient, high-speed presses.

         The  Company's  revenues  are derived from  advertising  (approximately
74.3% of 1999  revenues),  paid  circulation,  including  single  copy sales and
subscription sales (20.6% of 1999 revenues),  and commercial  printing and other
(5.1% of 1999 revenues).  The Company's  advertiser base is predominantly local.
The Company's newspapers seek to produce desirable results for local advertisers
by   targeting   readers   based   on   certain   geographic   and   demographic
characteristics.  The Company seeks to increase readership, and thereby generate
traffic for its advertisers,  by focusing on high product quality, local content
and creative and interactive promotions.  The Company promotes single copy sales
of its  newspapers  because it believes  that such sales have higher  readership
than  subscription  sales,  and that single copy  readers tend to be more active
consumers of goods and  services,  as indicated  by a Newspaper  Association  of
America  ("NAA") study.  Single copy sales also tend to generate  higher profits
than  subscription  sales,  as single copy sales  generally have higher per unit
prices  and lower  associated  distribution  costs.  Subscription  sales,  which
provide  readers  with  the  convenience  of  home  delivery,  are an  important
component of the Company's circulation base. The Company also publishes numerous
special sections and niche and special interest publications.  Such publications
tend to increase  readership within targeted  demographic  groups and geographic
areas. The Company believes that as a result of these strategies, its newspapers
represent  an  attractive  and   cost-effective   medium  for  its  readers  and
advertisers.

         The Company's  advertising revenues in 1999 were derived primarily from
a broad group of local retailers  (approximately 56%) and classified advertisers
(approximately  42%). No advertiser  accounted for more than 2% of the Company's
1999 advertising revenues. The Company believes that because its newspapers rely
on a broad base of local  retail and local  classified  advertising  rather than
more volatile national and major account  advertising,  its advertising revenues
tend to be relatively stable.

         Substantially  all of the  Company's  operations  relate  to  newspaper
publishing. In addition to its daily newspapers and non-daily publications,  the
Company  owns other  businesses  that  complement  and  enhance  its  publishing
operations,  consisting  of four  commercial  printing  operations  as well as a
company which develops application software for the newspaper industry.


















                                       2

<PAGE>

OVERVIEW OF OPERATIONS

         The Company's  operations are currently  clustered in seven  geographic
areas:

         CONNECTICUT. In Connecticut, the Company owns the NEW HAVEN REGISTER, a
daily  newspaper  with  daily  circulation  of more  than  100,000,  and  Sunday
circulation  of  approximately  108,000,  four  suburban  daily  newspapers,  60
non-daily  publications and one commercial printing company.  The suburban daily
newspapers in this cluster are THE HERALD (New Britain),  THE BRISTOL PRESS, THE
REGISTER  CITIZEN   (Torrington)  and  THE  MIDDLETOWN  PRESS.  The  five  daily
newspapers have aggregate daily and Sunday circulation of approximately  155,000
and 157,000,  respectively. The 60 suburban and community non-daily publications
have aggregate distribution of approximately 862,000.  Included in the non-daily
publications is Connecticut Magazine, the state's premier magazine,  acquired in
September,  1999.  Combined,  the Company's  Connecticut  daily  newspapers  and
non-daily  publications  serve a  state-wide  audience  with  concentrations  in
western Connecticut (Litchfield and Fairfield counties) through Hartford and its
suburban areas to the greater New Haven area; and the Connecticut shoreline from
New Haven northeast to New London.

         The  following  table sets forth  information  regarding  the Company's
publications in Connecticut:

<TABLE>
<CAPTION>

                                         Year          Year                          Daily           Sunday         Non-Daily
            Publication              Originated(1)   Acquired   Location         Circulation(2)  Circulation(2)   Distribution(3)
            -----------              -------------   --------   --------         --------------  --------------   ---------------
<S>                                  <C>             <C>       <C>               <C>              <C>              <C>

NEW HAVEN REGISTER..............         1755          1989     New Haven            100,030         107,886
THE HERALD......................         1881          1995     New Britain           19,095          38,857(4)
THE BRISTOL PRESS...............         1871          1994     Bristol               14,505              (4)
THE REGISTER CITIZEN............         1889          1993     Torrington            11,352          10,649
THE MIDDLETOWN PRESS............         1884          1995     Middletown            10,034              (4)
Imprint Newspapers
   11 publications..............         1880          1995     Bristol                                               98,766
Shore Line Newspapers
   11 publications..............         1877          1995     Guilford                                             129,739
Elm City Newspapers
    9 publications..............         1931          1995     Milford                                               90,342
Minuteman Newspapers
    2 publications..............         1993          1998     Westport                                              36,707
Housatonic Publications
    9 publications..............         1825          1998     New Milford                                           53,570
CONNECTICUT'S COUNTY KIDS
    2 publications..............         1989          1996     Westport                                              45,000
FOOTHILLS TRADER
    3 publications..............         1965          1995     Torrington                                            50,000
CONNECTICUT MAGAZINE............         1938          1999     Trumbull                                              88,639
Gamer Publications
    3 publications..............         1981          1995     Bristol                                               57,500
EAST HARTFORD GAZETTE...........         1885          1995     East Hartford                                         19,500
THOMASTON EXPRESS...............         1874          1994     Thomaston                                              1,485
TMC (7 publications)............                                                                                     191,020
                                                                                 --------------  --------------      -------
TOTALS..........................                                                     155,016         157,392         862,268
                                                                                 ==============  ==============      =======

</TABLE>

(1)  For  merged newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.

(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.

(3)  Non-daily  distribution  includes  both  paid and free  distribution.  Paid
     distribution  for  Housatonic  Valley  and  Minuteman  Newspapers  reflects
     Certified  Audit of  Circulations  ("CAC")  audit  results for the 12 month
     period  ended June 30,  1999.  All other  non-daily  distribution  reflects
     average distribution for December 1999.

                                       3
<PAGE>


(4)  In August 1996, the Company  commenced  publication of a Sunday  newspaper,
     THE HERALD PRESS,  serving readers of THE HERALD, THE BRISTOL PRESS and THE
     MIDDLETOWN PRESS.

         The NEW HAVEN  REGISTER is the  Company's  largest  newspaper  based on
daily  circulation  and is the second  largest  daily  circulation  newspaper in
Connecticut.  The NEW HAVEN REGISTER serves a primary circulation area comprised
of the majority of New Haven County and portions of Fairfield, Middlesex and New
London  Counties.  This area (including  portions of Fairfield  County which are
served by related  non-daily  publications)  has a population of 749,137 and had
population  growth of  approximately 8% from 1980 to 1999. This area has average
household income of $72,021, which is 28% above the national average of $56,184,
and a retail environment  comprised of approximately  6,600 stores. This area is
home to a number  of large and  well-established  institutions,  including  Yale
University  and Yale-New  Haven  Hospital.  As a result of its  proximity to the
large media markets of New York City,  Boston and  Hartford,  New Haven has only
one locally licensed television station (which serves a state-wide,  rather than
a local,  audience)  and a fragmented  radio market.  Consequently,  the Company
believes that the NEW HAVEN  REGISTER is a powerful  local news and  advertising
franchise for the greater New Haven area.

         THE HERALD, THE BRISTOL PRESS and THE MIDDLETOWN PRESS serve contiguous
areas between New Haven and Hartford. THE BRISTOL PRESS serves an area which has
a population of 322,794 and had population  growth of approximately 4% from 1980
to 1999. This area has average  household income of $75,186,  which is 34% above
the national average. THE MIDDLETOWN PRESS serves an area which has a population
of 98,990 and had population growth of approximately 16% from 1980 to 1999. This
area has average  household  income of $65,197,  which is 16% above the national
average.  THE HERALD serves an area which has a population of 102,575,  which is
essentially  unchanged  since 1980.  This area has average  household  income of
$52,925.  THE REGISTER  CITIZEN serves an area which has a population of 245,166
and had population  growth of approximately 12% from 1980 to 1999. This area has
average household income of $73,639, which is 31% above the national average.

         The Connecticut publications benefit from considerable cross-selling of
advertising as well as from  news-gathering  and production  synergies.  The NEW
HAVEN  REGISTER  gathers  state-wide  news for all of the Company's  Connecticut
newspapers; the newspapers cross-sell advertising through a one-order,  one-bill
system; THE HERALD and THE MIDDLETOWN PRESS are printed at one facility,  as are
THE REGISTER CITIZEN and THE BRISTOL PRESS.  Moreover,  in August 1996, in order
to take advantage of the contiguous nature of the geographic areas served by THE
HERALD, THE BRISTOL PRESS and THE MIDDLETOWN PRESS, the Company started a Sunday
newspaper,  THE HERALD PRESS,  serving readers of these three dailies with three
zoned  editions and having  Sunday  circulation  of  approximately  38,857 as of
September 30, 1999.

         PHILADELPHIA  AND  SURROUNDING   AREAS.  The  Company  owns  six  daily
newspapers and 51 non-daily publications serving areas surrounding Philadelphia,
Pennsylvania.  These publications include, in Pennsylvania, the DAILY LOCAL NEWS
(West Chester),  THE TIMES HERALD (Norristown),  THE PHOENIX  (Phoenixville),  a
group of non-daily  newspapers serving  Philadelphia's  affluent Main Line and a
group of 17 weekly newspapers, the InterCounty Newspaper Group, serving suburban
Philadelphia  and central and southern New Jersey;  and also in New Jersey,  THE
TRENTONIAN  (Trenton).  The Company also owns two commercial printing companies,
acquired with the  InterCounty  Newspapers in December 1997, one of which prints
the 17  weekly  newspapers  and one of  which  is a  premium  quality  sheet-fed
printing  operation.  The daily  newspapers,  acquired in the July 1998  Goodson
Acquisition (as hereinafter defined) include, both in Pennsylvania, The Delaware
County DAILY TIMES and THE MERCURY, Pottstown. The Goodson Acquisition non-daily
publications include, also in Pennsylvania, Acme Newspapers (Ardmore), including
THE MAIN LINE  TIMES,  serving  the  affluent  Main Line,  and NEWS OF  DELAWARE
COUNTY,  one of the largest audited  community  newspapers in the United States;
Town Talk Newspapers (Media);  and Penny Pincher Shoppers  (Pottstown).  The six
daily  newspapers have aggregate daily and Sunday  circulation of  approximately
187,000  and  166,000,   respectively.   This  non-daily   distribution   totals
approximately 692,000.


                                       4

<PAGE>

         The  following  table sets forth  information  regarding  the Company's
publications in Philadelphia and surrounding areas:

<TABLE>
<CAPTION>
                                    Year          Year                               Daily           Sunday         Non-Daily
         Publication            Originated(1)   Acquired       Location          Circulation(2)  Circulation(2)   Distribution(3)
         -----------            -------------   --------       --------          --------------  --------------   ---------------
<S>                             <C>             <C>        <C>                   <C>              <C>              <C>

DAILY TIMES (4)...........          1876          1998      Delaware County, PA       50,373          47,530
DAILY LOCAL NEWS..........          1872          1986      West Chester, PA          33,127          31,316
THE MERCURY (4)...........          1930          1998      Pottstown, PA             26,099          26,851
THE TIMES HERALD..........          1799          1993      Norristown, PA            20,752          17,787
THE PHOENIX...............          1888          1986      Phoenixville, PA           3,768
THE TRENTONIAN............          1945          1985      Trenton, NJ               53,177          42,513
Suburban Publications
   4 publications.........          1885          1986      Wayne, PA                                                   42,631
InterCounty Newspaper
    Group
    17 publications.......          1869          1997      Bristol, PA                                                109,950
Acme Newspapers
   4 publications (4).....          1930          1998      Ardmore, PA                                                 82,917
Penny Pincher Shoppers
   6 publications (4).....          1988          1998      Pottstown, PA                                               65,000
Town Talk Newspapers
   7 publications (4).....          1964          1998      Media, PA                                                   87,500
MERCER'S PARENT & CHILD
   GUIDE..................          1999         1999(5)    Trenton, NJ                                                 60,000
THE WEEKLY SAVER..........          1996         1996(5)    Trenton, NJ                                                 30,000
TRI-COUNTY RECORD.........          1975          1986      Morgantown, PA                                              21,363
THE HOMES MAGAZINE........          1988         1988(5)    West Chester, PA                                            18,545
THE VILLAGE NEWS..........          1980          1986      Downingtown, PA                                             18,135
THE TIMES RECORD..........          1980          1986      Kennett Square, PA                                           9,000
BLUE BELL JOURNAL.........          1999         1999(5)    Blue Bell, PA                                                7,300
TMC (6 publications)......                                                                                             139,966
                                                                                    ------------  ------------      -----------
TOTALS....................                                                           187,296         165,997           692,307
                                                                                     ===========  ============      ============
</TABLE>

(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
(3)  Non-daily distribution includes both paid and free distribution.  Non-daily
     distribution  reflects  average  distribution  for December 1999,  with the
     following   exceptions:   Suburban   Publications,   which   includes   two
     publications  (  SUBURBAN  ADVERTISER  and KING OF PRUSSIA  COURIER)  which
     reflect  the CAC  audit  for the six  months  ended  June 30,  1999 and THE
     SUBURBAN & WAYNE  TIMES  which  reflects  the ABC audit  results for the 24
     month period ended  September 30, 1999;  Acme  Newspapers,  which  includes
     three  publications  (NEWS OF DELAWARE COUNTY,  GERMANTOWN  COURIER and MT.
     AIRY TIMES  EXPRESS)  which  reflect the CAC audit for the six months ended
     September 30, 1999 and MAIN LINE TIMES which reflects the ABC Audit for the
     24 month period ended September 30, 1999.
(4)  Part of the Goodson Acquisition, completed July 15, 1998.
(5)  Year established by the Company.

         The majority of the  Company's  Pennsylvania  publications  are located
within  a  30-mile  radius  of  Philadelphia.  The  Company's  newspapers  serve
geographic areas with highly desirable  demographics.  The Delaware County DAILY
TIMES  serves an area which has a  population  of  586,647,  which has  remained
substantially  unchanged since 1980. This area has average  household  income of
$71,405, which is 27% above the national average. The DAILY LOCAL NEWS serves an
area  which  has  a  population  of  404,637  and  had   population   growth  of
approximately  37% from 1980 to 1999. This area has average  household income of
$87,691,  which is 56% above the  national  average.  THE  MERCURY  (Pottstown),
located approximately 40 miles west of Philadelphia,  serves an area which has a
population of 436,692 and had population  growth of approximately  18% from 1980
to 1999. This area has average  household income of $69,850,  which is 24% above

                                       5

<PAGE>

the national average.  THE TIMES HERALD serves an area which has a population of
170,604 and had population  growth of  approximately  7% from 1980 to 1999. This
area has average  household  income of $73,619,  which is 31% above the national
average.  THE PHOENIX  serves an area which has a population  of 118,749 and had
population  growth of approximately 29% from 1980 to 1999. This area has average
household  income  of  $88,152,  which is 57% above the  national  average.  The
Company's   weekly   newspaper  group,   Suburban   Publications,   in  suburban
Philadelphia serves an area which has a population of 324,680 and had population
growth of approximately  20% from 1980 to 1999. This area has average  household
income of $108,309,  which is 93% above the national  average.  MAIN LINE TIMES,
the flagship of the Acme Newspapers group, serves an area which has a population
of 391,936 and had population growth of approximately 1% from 1980 to 1999. This
area has average  household income of $104,400,  which is 86% above the national
average.  The  majority of the  Company's  Pennsylvania  properties  are located
within 20 miles of the area's largest retail complex,  the King of Prussia Plaza
and Court,  which is the largest mall on the East Coast of the United  States in
terms of total square footage.

         THE  TRENTONIAN  is  published  in Trenton,  the capital of New Jersey,
located 40 miles north of Philadelphia  and 75 miles south of New York City. THE
TRENTONIAN  serves an area which has a population of 285,905 and had  population
growth of  approximately  7% from 1980 to 1999. This area has average  household
income of $70,670, which is 26% above the national average.

         The Company's Philadelphia cluster cross-sells advertising.  The nature
of the cluster has allowed for the  implementation  of  significant  cost saving
programs.   For  example,  THE  TIMES  HERALD  and  several  non-daily  suburban
publications  share  printing  facilities,  as do the DAILY  LOCAL  NEWS and THE
PHOENIX.  Acme Newspapers,  part of the Goodson Acquisition,  are printed at the
DAILY  LOCAL  NEWS plant and at the  Company's  commercial  printing  company in
Bristol,  Pennsylvania. THE TRENTONIAN'S television guide is also printed at the
Bristol plant. All of these publications share certain news-gathering resources.
The Company believes that the continued  integration of the Goodson  Acquisition
newspapers   into  this   cluster   will  result  in   considerable   additional
cross-selling of advertising,  as well as additional cost saving  programs.  The
Company  further  believes  that  the  integration  of the  Goodson  Acquisition
newspapers  into this cluster allows the Company to compete more  effectively in
the areas it serves. The Company believes that the construction of a centralized
printing  facility in the  Philadelphia  area,  scheduled to begin in late 1999,
will result in considerable additional cost savings.

         OHIO. The Company owns four daily newspapers and a commercial  printing
operation in Ohio. The daily newspapers are THE NEWS-HERALD  (Lake County),  THE
MORNING  JOURNAL  (Lorain),  THE TIMES REPORTER  (Dover-New  Philadelphia)  and,
acquired as part of the Goodson Acquisition,  THE INDEPENDENT  (Massillon).  The
Company has aggregate daily and Sunday circulation of approximately  126,000 and
141,000,   respectively.   Non-daily   distribution   in  the  Ohio  cluster  is
approximately 125,000.

         The  following  table sets forth  information  regarding  the Company's
publications in Ohio:

<TABLE>
<CAPTION>

                                  Year            Year                             Daily           Sunday          Non-Daily
        Publication           Originated(1)     Acquired      Location        Circulation(2)    Circulation(2)   Distribution(3)
        -----------           -------------     --------      --------        --------------    ------------    ---------------
<S>                           <C>               <C>           <C>             <C>              <C>              <C>

THE NEWS-HERALD.........          1878           1987         Lake County         50,823           61,505
THE MORNING JOURNAL ....          1921           1987         Lorain              35,850           39,476
                                                              Dover-New
THE TIMES REPORTER......          1903           1987         Philadelphia        24,118           25,451
THE INDEPENDENT (4).....          1871           1998         Massillon           15,034           15,001
COUNTY KIDS                                                   Lake  County &
   2 publications.......          1997           1997(5)      Lorain                                                 38,500
TMC (4 publications)....                                                                                             86,780
                                                                                ---------        ---------          -------
TOTALS..................                                                         125,825          141,433           125,280
                                                                                =========        =========          =======
</TABLE>
(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
                                       6

<PAGE>

(3)  Non-daily distribution is solely free  distribution  and  reflects  average
     distribution for December 1999.
(4)  Part of the Goodson Acquisition, completed July 15, 1998.
(5)  Established by the Company in 1997.

         THE NEWS-HERALD  and THE MORNING  JOURNAL serve areas located  directly
east and  west of  Cleveland,  respectively.  THE  NEWS-HERALD,  which is one of
Ohio's  largest  suburban  newspapers,  serves  communities  located in Lake and
Geauga  Counties,  two of Ohio's five most  affluent  counties.  Lake and Geauga
Counties  have  populations  of  222,583  and  83,231,  respectively,   and  had
population growth of approximately 6% and 20%, respectively,  from 1980 to 1999.
Lake and Geauga Counties have average  household incomes of $58,122 and $75,437,
respectively.  THE  MORNING  JOURNAL  serves an area which has a  population  of
148,191 and had population  growth of  approximately  1% from 1980 to 1999. This
area has  average  household  income  of  $53,218.  THE TIMES  REPORTER  and THE
INDEPENDENT  serve contiguous  markets primarily in Tuscarawas and western Stark
counties.  THE TIMES  REPORTER  serves  the rural  communities  of Dover and New
Philadelphia,  which are located approximately 80 miles south of Cleveland.  THE
TIMES  REPORTER  serves  an area  which  has a  population  of  109,514  and had
population  growth of  approximately 7% from 1980 to 1999. This area has average
household income of $43,027.  THE INDEPENDENT  (Massillon)  serves western Stark
County,  at the southern edge of the Northeast Ohio  industrial  area,  which is
located  approximately  60  miles  south  of  Cleveland  and 20  miles  north of
Dover-New Philadelphia. THE INDEPENDENT serves an area which has a population of
240,594 and had population  growth of  approximately  4% from 1980 to 1999. This
area has average household income of approximately $52,675. The Company believes
that  each  of its  Ohio  newspapers  benefits  from a  fragmented  local  media
environment.  The Company further  believes that THE NEWS-HERALD and THE MORNING
JOURNAL compete effectively with Cleveland's major metropolitan newspaper due to
the focus on coverage of local news and local sports. The Company's Ohio cluster
benefits   from  a  variety  of   synergistic   opportunities,   including   the
cross-selling  of advertising  and editorial  coverage.  In addition,  THE TIMES
REPORTER and THE Independent benefit from commercial printing synergies, as both
operations include commercial printing.

         GREATER ST. LOUIS AREA.  The Company owns the  SUBURBAN  JOURNALS  (the
"Journals"), the largest group of suburban and community non-daily newspapers in
the United States (in terms of total  distribution);  one daily  newspaper;  the
LADUE  NEWS,  a weekly  newspaper  acquired  in  December  1997;  and six  other
non-daily  publications  in the greater St. Louis area. The JOURNALS are a group
of 42 newspapers  which are  distributed one to three times each week in the St.
Louis  suburban  areas,  including  communities  in Illinois,  with total weekly
distribution of approximately 1.7 million. The Company's daily newspaper in this
cluster,  THE  TELEGRAPH  (Alton,  IL),  has daily  and  Sunday  circulation  of
approximately 28,000 and 30,000, respectively.

The following table sets forth information regarding the Company's  publications
in the greater St. Louis area:

<TABLE>
<CAPTION>

                                    Year          Year                              Daily           Sunday         Non-Daily
         Publication            Originated(1)   Acquired        Location       Circulation(2)   Circulation(2)  Distribution(3)
         -----------            -------------   --------        --------       --------------   --------------  ---------------
<S>                             <C>             <C>            <C>             <C>             <C>              <C>

Suburban Newspapers of
  Greater St. Louis (79
  editions of 42 JOURNALS)          1922          1984          St. Louis, MO                                       1,695,580
THE TELEGRAPH.............          1836          1985          Alton, IL          27,885           29,886
LADUE NEWS
   4 publications.........          1981          1997          Ladue, MO                                             149,500
 COUNTY KIDS
  3 publications..........          1996          1996(4)       St. Louis, MO                                          90,000
TMC (1 publication).......                                                                                             15,000
                                                                                ------------    -------------     --------------
TOTALS....................                                                         27,885           29,886          1,950,080
                                                                                ============    =============     ==============

</TABLE>

(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
(3)  Non-daily   distribution  includes  both  paid  7,251  and  free  1,942,829
     distribution,  and  reflects  the CAC Audit  results  for the twelve  month
     period  ended  September  30,  1999 with the  following  exceptions,  which
     reflect average distribution for December 1999; CLASSIFIED PLUS (ILLINOIS),
     GRANITE CITY PRESS RECORD,  CLASSIFIED PLUS (MISSOURI),  SOUTH COUNTY KIDS,
     ST. CHARLES COUNTY KIDS AND WEST COUNTY KIDS.

                                       7

<PAGE>

(4)  Established by the Company in 1996.

         The  JOURNALS  have total  distribution  of  approximately  1.1 million
mid-week and approximately  634,000 on Sunday, for total weekly  distribution of
approximately 1.7 million.  The JOURNALS reach approximately 90% of the homes in
the greater  suburban  St. Louis area.  The  JOURNALS  serve an area which has a
population  of   approximately   2.4  million  and  had  population   growth  of
approximately  5% from 1980 to 1999. This area has average  household  income of
$57,750.  According to EDITOR & PUBLISHER  MARKET  GUIDE,  St. Louis is the 17th
largest  metropolitan  area in the United  States.  The JOURNALS  have  received
national recognition and have been studied by domestic and foreign publishers as
a   model   of   successful   neighborhood   newspapers.   Due  to  St.   Louis'
characterization  as a city of  neighborhoods  (92  municipalities  comprise St.
Louis County alone),  the Company  believes the JOURNALS offer local retailers a
cost-effective  way to reach  targeted  demographic  groups,  which  enables the
JOURNALS  to compete  effectively  with the major  metropolitan  daily and other
weekly  newspapers in the area.  The Company  believes  that the area's  largest
radio  station   competes   primarily  for  major  accounts  rather  than  small
advertisers  and,  thus, is not a  significant  direct  competitor.  The Company
believes that the  JOURNALS'  targeted,  highly  localized  approach  places the
JOURNALS  in a strong  competitive  position.  LADUE NEWS  serves  the  affluent
suburbs west of St. Louis,  an area with average  household  income of $108,019,
92% above the  national  average.  This area has a population  of  approximately
158,478 and had population  growth of  approximately  18% from 1980 to 1999. THE
TELEGRAPH serves a community located in southeast  Illinois,  within the greater
St.  Louis area and which is connected  to St.  Louis by the Clark  Bridge.  THE
TELEGRAPH  serves an area which has a population of 119,184 and had a decline in
population  of  approximately  2% since 1980.  This area has  average  household
income of $45,529.

         Suburban and community non-daily newspapers, such as the JOURNALS, have
several  advantages  over  national  and major  metropolitan  daily  newspapers,
including an intrinsically lower cost structure, the ability to publish only on,
what are for dailies,  the most  profitable  days (i.e.  one midweek day and one
weekend day) and the ability to avoid  expensive  wire  services and  syndicated
feature material.  Moreover, suburban and community non-daily newspapers provide
an alternative  outlet for local merchants and advertisers to advertise in their
own local  areas at costs lower than those of  national  and major  metropolitan
newspapers. Thus, the JOURNALS have a broader advertiser base and do not rely on
major accounts for advertising  revenue to the same degree as national and major
metropolitan daily newspapers.

         CENTRAL  NEW  ENGLAND.  The  Company  owns five daily and 18  non-daily
publications in the central New England area. The Company's publications in this
cluster  include THE HERALD NEWS (Fall  River,  MA), the TAUNTON  DAILY  GAZETTE
(Taunton,  MA), THE CALL (Woonsocket,  RI), THE TIMES (Pawtucket,  RI), the KENT
COUNTY DAILY TIMES (West Warwick,  RI),  acquired August 13, 1999 and a group of
weekly  newspapers  serving the South County,  Rhode Island area. The five daily
newspapers  have  aggregate  daily  circulation  of  approximately   76,000  and
aggregate Sunday circulation of approximately 58,000. The non-daily publications
in this cluster have total distribution of approximately 246,000.









                                       8

<PAGE>

         The  following  table sets forth  information  regarding  the Company's
publications in central New England.
<TABLE>
<CAPTION>

                                   Year          Year                               Daily            Sunday           Non-Daily
         Publication           Originated(1)   Acquired     Location           Circulation(2)    Circulation(2)    Distribution(3)
         -----------           -------------   --------     --------           --------------    --------------    ---------------
<S>                            <C>             <C>           <C>                <C>              <C>               <C>

THE HERALD NEWS...........         1872          1985     Fall River, MA           26,210           27,820
TAUNTON DAILY GAZETTE.....         1848          1996     Taunton, MA              14,142           13,426
THE CALL..................         1892          1984     Woonsocket, RI           16,199           16,314
THE TIMES.................         1885          1984     Pawtucket, RI            15,021
KENT COUNTY DAILY TIMES            1892          1999     West Warwick, RI          4,839
Southern Rhode Island
   Newspapers
   8 publications.........         1854          1995     Wakefield, RI                                                 54,502
Hometown Newspapers
   4 publications.........         1969          1999     West Warwick, RI                                              45,500
COUNTY KIDS...............         1999        1999(4)    Fall River, MA,                                               29,850
                                                          Pawtucket &
NEIGHBORS.................         1999        1999(4)    Woonsocket, RI                                                20,000
TMC (4 publications)......                                                                                              95,800
                                                                               --------------   ------------          --------
TOTALS....................                                                         76,411           57,560             245,652
                                                                                =============   ============          ========
</TABLE>
------------------
(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
(3)  Non-daily  distribution includes both paid and free distribution.  Paid and
     free non-daily  distribution for Southern Rhode Island  Newspapers  (except
     THE WESTERLY  SHOPPER,  THE WEEK IN SOUTH  COUNTY AND RHODE ISLAND  FAMILY)
     reflects the CAC Audit  report for the six months ended June 30, 1999.  The
     other  non-daily  distribution  figures reflect  average  distribution  for
     December 1999.
(4)  Established by the Company in 1999.

         THE HERALD NEWS and the  TAUNTON  DAILY  GAZETTE are  situated 14 miles
apart.  Each is  approximately  50 miles south of Boston,  Massachusetts  and 20
miles east of  Providence,  Rhode Island.  The region's  largest  shopping mall,
located  in  Taunton,  contains  one  million  square  feet of retail  space and
approximately 150 stores.  THE HERALD NEWS serves an area which has a population
of 162,021, which has remained substantially  unchanged from 1980. This area has
average  household  income of $44,248.  The TAUNTON DAILY GAZETTE serves an area
which has a population of 129,134 and had population growth of approximately 24%
from 1980 to 1999. This area has average  household income of $55,113.  THE CALL
serves an area which has a population  of 182,663 and had  population  growth of
approximately  12% from 1980 to 1999. This area has average  household income of
$58,265.  THE TIMES  serves an area which has a  population  of 182,837  and had
population  growth of  approximately 4% from 1980 to 1999. This area has average
household  income of $50,015.  Southern  Rhode Island  Newspapers  serve an area
which has a population of 154,960 and had population growth of approximately 27%
from 1980 to 1999. This area has average  household income of $63,936,  which is
14%  above the  national  average.  No local  television  stations  exist in the
communities which the central New England newspapers serve. Further, the Company
believes that its central New England  properties  benefit from fragmented local
radio markets.  As a result, the Company believes that each of its newspapers is
a significant  media outlet in its  respective  community,  thereby making these
newspapers  attractive  vehicles for area  advertisers.  The central New England
newspapers  benefit from  advertising  cross-selling;  moreover,  the  Company's
Massachusetts  and Rhode Island newspapers  benefit from significant  production
and editorial synergies.  For example, THE TIMES and THE CALL are printed at the
same  facility,   as  are  the  TAUNTON  DAILY  GAZETTE  and  THE  HERALD  News.
Additionally,  THE TIMES,  THE CALL and the group of paid suburban and community
non-daily  newspapers  serving  southern  Rhode  Island all share  certain  news
gathering resources.

         CAPITAL-SARATOGA  REGION OF NEW YORK.  The Company owns three daily and
four  non-daily  publications  in the  Capital-Saratoga  Region of New York. The
Company's publications in this cluster include THE RECORD (Troy), THE SARATOGIAN
(Saratoga  Springs),  the weekly  COMMUNITY NEWS,  serving Clifton Park, and THE
ONEIDA DAILY  DISPATCH,  acquired as part of the 1998 Goodson  Acquisition.  The

                                       9

<PAGE>

daily newspapers have aggregate daily  circulation of  approximately  42,000 and
aggregate Sunday circulation of approximately 39,000. The non-daily publications
in this cluster have total distribution of approximately 82,000.

         The  following  table sets forth  information  regarding  the Company's
publications in the Capital-Saratoga Region of New York:

<TABLE>
<CAPTION>

                                    Year          Year                          Daily           Sunday         Non-Daily
         Publication           Originated(1)    Acquired      Location     Circulation(2)   Circulation(2)  Distribution(3)
         -----------           -------------    --------      --------     --------------   --------------  ---------------
<S>                               <C>            <C>          <C>          <C>              <C>              <C>


THE RECORD................          1896          1987         Troy            23,668           25,560
                                                               Saratoga
THE SARATOGIAN............          1855          1998         Springs         11,147           13,008
COMMUNITY NEWS............          1969          1998         Clifton Park                                     28,134
THE ONEIDA DAILY
DISPATCH (4)..............          1850          1998         Oneida           7,581
Oneida-Chittenango
Pennysavers(4)............          1957          1998         Oneida                                           24,000
TMC (2 publication).......                                                                                      30,360
                                                                               ------           --------        ------
TOTALS....................                                                     42,396            38,568         82,494
                                                                               =======          ========        ======
</TABLE>
-----------------
(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
(3)  Non-daily distribution is free and reflects average distribution for
     December 1999.
(4)  Part of the Goodson Acquisition, completed July 15, 1998.

         THE RECORD  and THE  SARATOGIAN  are  situated  approximately  26 miles
apart.  THE RECORD serves an area which has a population  of 173,159,  which has
remained  substantially  unchanged since 1980.  This area has average  household
income of  $46,355.  THE  SARATOGIAN  serves an area which has a  population  of
208,307 and had population  growth of approximately  24% from 1980 to 1999. This
area has average  household income of $55,193.  THE ONEIDA DAILY DISPATCH serves
an  area  which  has a  population  of  75,397  and  had  population  growth  of
approximately  5% from 1980 to 1999. This area has average  household  income of
$47,728.  No local  television  stations  exist  in the  communities  which  the
Capital-Saratoga Region newspapers serve. Further, the Company believes that its
Capital-Saratoga  Region properties benefit from fragmented local radio markets.
As a result,  the Company  believes that each of its newspapers is a significant
media  outlet in its  respective  community,  thereby  making  these  newspapers
attractive  vehicles for area  advertisers.  THE RECORD,  THE SARATOGIAN and the
COMMUNITY NEWS benefit from  significant  cross-selling  of  advertising.  These
newspapers  also  benefit  from  significant   production  synergies.   Directly
following  the March 9, 1998  acquisition  of THE  SARATOGIAN  and the COMMUNITY
NEWS,  the  newspapers  began  printing  at THE  RECORD  plant in  Troy,  taking
advantage  of that  plant's  excess  capacity  and  achieving  significant  cost
efficiencies.  The three newspapers also share certain news-gathering functions,
and the Company  believes that  additional  synergies  may be available  between
them.

         MID-HUDSON REGION OF NEW YORK. The Company owns one daily newspaper and
11  non-daily  publications  in the  Mid-Hudson  Region of New  York.  The daily
newspaper  in this  cluster is THE DAILY  FREEMAN  in  Kingston.  The  Company's
non-daily  publications  in this  cluster  are  Taconic  Press,  a  group  of 10
non-daily  newspapers in Dutchess County, New York, acquired September 21, 1998,
and THE PUTNAM  COUNTY  COURIER,  serving  Putnam  County,  New York,  which the
Company  acquired as part of its  January  1998  acquisition  of HVM,  LLC.  The
Mid-Hudson  Region  cluster has aggregate  daily  circulation  of  approximately
22,000, aggregate Sunday circulation of approximately 29,000 and total non-daily
distribution of approximately 603,000.

         The  following  table sets forth  information  regarding  the Company's
publications in the Mid-Hudson Region of New York:

                                       10

<PAGE>
<TABLE>
<CAPTION>
                                  Year           Year                               Daily           Sunday          Non-Daily
       Publication           Originated(1)     Acquired         Location        Circulation(2)  Circulation(2)   Distribution(3)
       -----------           -------------     --------         --------        --------------  --------------   ---------------
<S>                          <C>               <C>             <C>             <C>             <C>              <C>

DAILY FREEMAN (4).........        1871           1998           Kingston            22,110          29,127
Taconic Press
11 publications...........        1846           1998           Millbrook                                            603,187
                                                                                   --------        --------         --------
TOTALS..................                                                            22,110          29,127           603,187
                                                                                   ========        ========         ========
</TABLE>
---------------
(1)  For merged  newspapers  and newspaper  groups,  the year given reflects the
     date of origination for the earliest publication.
(2)  Circulation averages for the six months ended September 30, 1999, according
     to ABC Fas-Fax Report.
(3)  Non-daily  distribution  includes  both  paid and free  distribution.  Paid
     distribution  for the Putnam  County  Courier,  part of the  Taconic  Press
     publications,  reflects  the CAC Audit  report for the twelve  months ended
     June 30, 1999. All other  distribution  reflects  average  distribution for
     December 1999.
(4)  Part of the Goodson Acquisition, completed July 15, 1998.

         THE DAILY  FREEMAN,  Taconic Press and THE PUTNAM COUNTY  COURIER serve
markets in the  Mid-Hudson  Region of New York. THE DAILY FREEMAN serves an area
which has a population of 265,862 and had population  growth of approximately 6%
from 1980 to 1999. This area has average  household  income of $47,837.  Taconic
Press  newspapers  serve  an area  which  has a  population  of  95,401  and had
population  growth of  approximately 8% from 1980 to 1999. This area has average
household income of $61,827.  THE PUTNAM COUNTY COURIER serves an area which has
a population of 89,937 and had population  growth of approximately 22% from 1980
to 1999.  This area has average  household  income of $83,108.  One  independent
television  station  (which  serves a regional,  rather than a local,  audience)
exists in the communities which the Mid-Hudson Region newspapers serve. Further,
the  Company  believes  that  its  Mid-Hudson  Region  properties  benefit  from
fragmented local radio markets.  As a result,  the Company believes that each of
these  newspapers is a  significant  media outlet in its  respective  community,
thereby making these newspapers  attractive  vehicles for area advertisers.  The
Company believes that the Mid-Hudson Region newspapers  benefit from significant
cross-selling of advertising,  production  synergies and certain  news-gathering
resources.  Certain  publications in this cluster also benefit from  advertising
cross-selling  with  THE  REGISTER  CITIZEN  (Torrington,   CT)  and  Housatonic
Publications (New Milford, CT), which serve Litchfield County, Connecticut.

ADVERTISING

         Substantially all the Company's advertising revenues are derived from a
diverse  group  of local  retailers  and  classified  advertisers.  The  Company
believes  that because its  newspapers  rely on a broad base of local retail and
local  classified  advertising  rather  than more  volatile  national  and major
account  advertising,  its  advertising  revenues tend to be relatively  stable.
Local advertising is more stable than national advertising because a community's
need for local services  provides a stable base of local  businesses and because
local advertisers generally have fewer effective advertising vehicles from which
to  choose.  Advertising  revenues  accounted  for  approximately  74.3%  of the
Company's  total revenues for 1999. The Company's  advertising  rate  structures
vary among its  publications  and are a function of various  factors,  including
results achieved for advertisers,  local market  conditions and competition,  as
well as circulation,  readership,  demographics and type of advertising (whether
classified or display).  In 1999, local and regional  advertising  accounted for
the largest share of the Company's  advertising  revenues  (55.6%),  followed by
classified   advertising   (39.3%),   legal  advertising   (2.4%)  and  national
advertising (2.7%). The Company's  advertising revenues are not reliant upon any
one company or industry,  but rather are supported by a variety of companies and
industries,  including realtors, car dealerships, grocery stores and other local
businesses. No advertiser accounted for more than 2% of the Company's total 1999
advertising  revenues.  The Company's corporate  management works with its local
newspaper  management to approve  advertising  rates and to establish  goals for
each year during a detailed  annual budget  process.  Local  management is given
little latitude for discounting  from the approved rates.  Corporate  management
also works with local advertising staff to develop marketing kits, presentations
and  third-party  research  studies.  A  portion  of the  compensation  for  the

                                       11
<PAGE>

Company's publishers is based upon increasing  advertising revenues. The Company
stresses the timely collection of receivables, and sales compensation depends in
part upon  performance  relative to goals and timely  collection of  advertising
receivables.  Additionally,  corporate  management  facilitates  the  sharing of
advertising  resources and information  across the Company's  publications.  See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations -- Certain Factors Which May Affect the Company's Future  Performance
-- Dependence on Local Economies."

CIRCULATION

         Substantially  all of the  Company's  circulation  revenues are derived
from home delivery sales of  publications  to subscribers  and single copy sales
made  through   retailers   and  vending   racks.   Circulation   accounted  for
approximately 20.6% of the Company's total revenues in 1999. Approximately 66.2%
of  1999  circulation   revenues  were  derived  from  subscription   sales  and
approximately  33.8% from single copy sales.  Single copy sales rates  currently
range from $.25 to $.50 per daily copy and $.75 to $1.75 per  Sunday  copy.  The
Company  promotes  single copy sales of its newspapers  because it believes that
such sales have higher readership than  subscription  sales and that single copy
readers tend to be more active consumers of goods and services,  as indicated by
an NAA  study.  Single  copy sales also tend to  generate a higher  profit  than
subscription  sales,  as single copy sales generally have higher per unit prices
and lower  associated  distribution  costs.  In 1999, the Company had total paid
daily circulation of 636,939,  paid Sunday  circulation of 619,963 and non-daily
distribution of approximately 4.6 million,  most of which is distributed free of
charge.  The  Company's  corporate  management  works  with its local  newspaper
management to establish  subscription  and single copy rates.  In addition,  the
Company  tracks rates of newspaper  returns and customer  service  calls through
formal reports which are reviewed  weekly in an effort to optimize the number of
newspapers  available for sale and to improve delivery and customer service. The
Company also  implements  creative and  interactive  programs and  promotions to
increase   readership,   through  both   subscription  and  single  copy  sales.
Circulation has generally  declined  throughout the newspaper industry in recent
years, and the Company's newspapers have generally  experienced this trend, even
as overall  operating  performance of its  newspapers has improved.  The Company
seeks to  maximize  the overall  operating  performance  rather than  maximizing
circulation of its individual newspapers.

ONLINE OPERATIONS

         The  Company  publishes  27 Web sites  which  represent  their  various
newspapers  and  magazines.  A  number  of the Web  sites  are  "cluster"  sites
combining  publications  within a specific  geographic area. The largest cluster
site is www.CTCentral.com,  which represents the NEW HAVEN REGISTER, THE BRISTOL
PRESS,  THE HERALD (New  Britain),  THE REGISTER  CITIZEN  (Torrington)  and THE
MIDDLETOWN  PRESS.  In addition to these five  dailies,  the site also  includes
news,  information  and ads  from 24  weekly  publications  situated  throughout
Connecticut.

         Cluster   sites   also   exist  in  St.   Louis,   www.yourjournal.com,
representing the Suburban  Newspapers of Greater St. Louis group;  Philadelphia,
www.allaroundphilly.com,  representing  the  Delaware  County  Daily and  Sunday
Times, the DAILY LOCAL NEWS (Westchester),  THE MERCURY  (Pottstown),  THE TIMES
HERALD (Norristown),  THE PHOENIX  (Phoenixville),  THE TRENTONIAN (Trenton, NJ)
and   the   weekly    publications;    the   Capital   region   of   New   York,
www.CapitalCentral.com,  representing THE RECORD (Troy) and THE SARATOGIAN;  and
in  Rhode  Island,   www.RICentral.com,   representing   Southern  Rhode  Island
Newspapers and the KENT COUNTY DAILY TIMES.

         The remaining Company newspapers, along with Connecticut Magazine, have
individual Web sites.

         The primary  source of online revenue is from  classified  advertising.
For the year ended December 26, 1999, the 27 web sites  generated  approximately
$3.2  million as  compared  to  approximately  $1.8  million  for the year ended
December 31, 1998.

         The  Company is in the  process of  re-launching  its sites  which will
offer viewers significantly more content,  improved  functionality and increased
interactive opportunities.

                                       12

<PAGE>

OTHER OPERATIONS

         The Company  owns and operates  four  commercial  printing  facilities:
Imprint   Printing  in  North  Haven,   Connecticut;   Midwest   Offset  in  New
Philadelphia,  Ohio; Nittany Valley Offset in State College,  Pennsylvania;  and
InterPrint in Bristol, Pennsylvania.  These operations also print certain of the
Company's  publications.   The  commercial  printing  operations  accounted  for
approximately  5.1% of the  Company's  1999  revenues.  The  Company  also  owns
Integrated  Newspaper  Systems,  Inc.,  a  company  which  develops  application
software for the newspaper industry.

EMPLOYEES

         The Company employs approximately 5,500 employees.

RAW MATERIALS

         The basic raw material  for  newspapers  is  newsprint.  The  Company's
newsprint  consumption  (excluding  paper  consumed in the Company's  commercial
printing  operations)  totaled  approximately  $36.5 million in 1999,  which was
approximately  8.2% of the Company's  newspaper  revenues.  In 1999, the Company
consumed approximately 82,000 metric tons of newsprint, including paper consumed
in its commercial printing operations. The Company has no long-term contracts to
purchase  newsprint.  Generally,  the  Company  has in the  past  and  currently
purchases all of its newsprint  from two  suppliers,  although in the future the
Company may purchase  newsprint from other suppliers.  The Company believes that
concentrating  its  newsprint  purchases  in this  way  provides  a more  secure
newsprint supply and lower per unit newsprint prices.  The Company also believes
that it purchases newsprint at price levels lower than those which are available
to  individually  owned small  metropolitan  and suburban  daily  newspapers and
suburban and community  non-daily  publications and consistent with price levels
generally available to the largest newsprint  purchasers.  The available sources
of newsprint have been, and the Company  believes will continue to be,  adequate
to supply  the  Company's  needs.  The  inability  of the  Company  to obtain an
adequate supply of newsprint in the future could have a material  adverse effect
on  the   financial   condition  and  results  of  operations  of  the  Company.
Historically,  the  price of  newsprint  has been  cyclical  and  volatile.  The
Company's   average  price  per  ton  of  newsprint   reflected  a  decrease  of
approximately  18% in 1997 and an  increase  of  approximately  8% in 1998 and a
decrease of  approximately  13% in 1999,  in each case  compared to the previous
year.  The Company  believes that if any price decrease or increase is sustained
in the industry,  the Company will also be impacted by such change.  The Company
seeks to manage  the  effects  of  increases  in prices of  newsprint  through a
combination of, among other things, technology improvements, including web-width
reductions,   inventory   management  and  advertising  and  circulation   price
increases.  The  Company  also has  reduced  fringe  circulation  in response to
increased  newsprint  prices,  as it  is  the  Company's  experience  that  such
circulation   does  not  provide   adequate   response  for   advertisers.   See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations -- Certain Factors Which May Affect the Company's Future  Performance
-- Price and Availability of Newsprint."

SEASONALITY

         Newspaper  companies  tend to follow a distinct and recurring  seasonal
pattern. The first quarter of the year  (January-March)  tends to be the weakest
quarter because advertising volume is then at its lowest level. Correspondingly,
the fourth quarter  (October-December)  tends to be the strongest  quarter as it
includes heavy holiday season advertising.

COMPETITION

         While many of the Company's  metropolitan and suburban daily newspapers
are the  only  daily  newspapers  of  general  circulation  published  in  their
respective  communities,  they compete  within their own  geographic  areas with
other daily and weekly newspapers of general  circulation  published in adjacent
or nearby cities and towns.  Competition for advertising  expenditures  and paid
circulation  comes from  local,  regional  and  national  newspapers,  shoppers,
television,   radio,   direct  mail,   on-line   services  and  other  forms  of
communication and advertising media. Since 1995, the Company has been developing
web sites for each of its  publications  which attract readers and  advertisers.
The Company has  published an on-line  version of the NEW HAVEN  REGISTER  since
1995.  The  Company  has  an  on-line  editorial  presence  and a  full  on-line
classified  advertising  service  for each of its daily  newspapers  and  weekly
newspaper groups.  Competition for newspaper advertising expenditures is largely
based upon advertiser results,  readership,  advertising rates, demographics and
circulation  levels,  while  competition for circulation and readership is based

                                       13

<PAGE>

largely upon the content of the newspaper,  its price and the  effectiveness  of
its distribution.  The Company's non-daily publications,  including shoppers and
real estate guides, primarily compete with direct mail advertising,  shared mail
packages and other private advertising  delivery services.  The Company believes
that, because of the relative competitive position of its suburban and community
non-daily  publications in the communities  which they serve,  such publications
generally  have been  able to  compete  effectively  with  other  forms of media
advertising.  Commercial  printing,  a highly competitive  business,  is largely
driven by price and  quality.  See  "Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of  Operations  -- Certain  Factors  Which May
Affect the Company's Future Performance -- Newspaper Industry Competition."

ENVIRONMENTAL MATTERS

         As is the case with other newspaper and similar publication  companies,
the Company is subject to a wide range of federal, state and local environmental
laws and regulations pertaining to air and water quality,  storage tanks and the
management  and  disposal  of  wastes  at its  facilities.  To the  best  of the
Company's  knowledge,  its operations are in material compliance with applicable
environmental  laws  and  regulations  as  currently  interpreted.  The  Company
believes that continued compliance with these laws and regulations will not have
a material  adverse  effect on the Company's  financial  condition or results of
operations.   The   Company  is  in  the  process  of   monitoring   groundwater
contamination  which has been  detected  at one of its  facilities.  The Company
believes  that  the  remediation  of  any  such  groundwater  contamination,  if
required,  will not have a material adverse effect on its financial condition or
results of operations. In May 1998, one of the Company's subsidiaries,  acquired
as part of the Goodson Acquisition,  received a notice of potential liability in
connection with a landfill  superfund site. The Company is fully indemnified for
all costs and liabilities arising out of this issue by the seller as part of the
Goodson  Acquisition  purchase  agreement.   See  "Management's  Discussion  and
Analysis of Financial  Condition and Results of  Operations  -- Certain  Factors
Which May Affect the Company's Future Performance -- Environmental Matters."

REGULATION

         Paid circulation  newspapers  which are delivered by second-class  mail
are required to obtain permits from,  and file an annual  statement of ownership
and circulation with, the United States Postal Service.  There is no significant
regulation  with respect to acquisition of newspapers,  other than filings under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if certain
threshold requirements under such Act are satisfied.























                                       14

<PAGE>
ITEM 2.  PROPERTIES.

         The Company  owns and  operates  118  facilities  used in the course of
producing and publishing its daily and non-daily publications.  Approximately 80
of the Company's  facilities are leased for terms ranging from one to six years.
These leased  facilities range in size from  approximately  160 to 70,000 square
feet. The location and  approximate  size of the principal  physical  properties
used by the Company at December 26, 1999, as well as the expiration  date of the
leases relating to such properties which the Company leases are set forth below:

<TABLE>
<CAPTION>
                                                       Approximate Area in Square Feet
                                                --------------------------------------------
                Location                        Owned Square Feet          Leased Square Feet      Lease Expiration Date
                --------                        -----------------          ------------------      ---------------------
<S>                                           <C>                           <C>                     <C>

New Haven, CT.........................             205,000(1)(3)
New Britain, CT.......................              33,977(1)(3)
Bristol, CT...........................              40,000(1)(3)
Torrington, CT........................              36,120(1)(3)
Middletown, CT........................              30,000(1)(3)
North Haven, CT.......................              24,000(3)                    10,000(3)                   12/31/05
Guilford, CT..........................              18,400(1)                     2,500(1)                    5/31/01
Colchester, CT........................                                            1,900(1)                   12/31/02
Trumbull, CT..........................                                            6,187(1)                     1/9/04
Westport, CT..........................                                            1,620(1)                   12/31/02
Milford, CT...........................              11,745(1)
New Milford, CT.......................                                            6,840(1)                    8/15/03
Old Saybrook, CT......................                                            1,950(1)                    3/31/00
Willoughby, OH........................              80,400(1)(3)
Lorain, OH............................              68,770(1)(3)
New Philadelphia, OH..................              85,567(1)(3)
Moorestown, NJ........................                                            2,000(1)                    3/31/02
Trenton, NJ...........................              54,642(1)(3)                 18,889(2)                   11/30/00
Turnersville, NJ......................              11,032(1)
West Chester, PA......................              34,000(1)(3)
Norristown, PA........................              40,000(1)(3)
Newtown, PA...........................
Philadelphia, PA......................                                           2,700(1)                     3/31/03
Ridley, PA............................               8,000(1)                    1,500(1)
Phoenixville, PA......................              10,696(1)(3)                                              9/30/02
Wayne, PA.............................              11,980(1)(3)
State College, PA.....................              23,365(1)(3)                 2,800(4)                    8/31/00
Bristol, PA...........................                                          70,000(1)(3)                 12/31/04
Fall River, MA........................              57,571(1)(3)
Taunton, MA...........................              21,100(1)(3)
Pawling, NY...........................                                           2,000(1)                     9/30/00
Troy, NY..............................              50,000(1)(3)
Saratoga, NY..........................              11,000(1)
Carmel, NY............................                                           2,000(1)                     9/30/00
Woonsocket, RI........................              49,338(1)(3)
Pawtucket, RI.........................              41,096(1)(3)
Wakefield, RI.........................              11,750(1)(3)
St. Louis, MO.........................              69,415(1)(3)                22,043(1)                    12/31/00
Warrenton, MO.........................                                           1,900(1)                     8/31/03
Festus, MO............................                                           6,783(1)                    12/31/00
Hazelwood, MO.........................                                           5,000(1)                     2/05/05
St. Charles, MO.......................                                           4,298(1)                     6/30/04
Collinsville, IL......................              14,587(1)
Granite City, IL......................              17,550(1)
Belleville, IL........................               8,400(1)

</TABLE>

                                       15

<PAGE>



2.  PROPERTIES. (CONTINUED)

<TABLE>
<CAPTION>

                                                       Approximate Area in Square Feet
                                                --------------------------------------------
                Location                        Owned Square Feet          Leased Square Feet      Lease Expiration Date
                --------                        -----------------          ------------------      ---------------------
<S>                                            <C>                         <C>                          <C>

Alton, IL.............................              39,000(1)(3)                 16,000(4)                    1/31/01
Oneida, NY............................              24,000(1)(3)
Kingston, NY..........................              25,800(1)(3)
Ardmore, PA...........................              25,250(1)(3)
Media, PA.............................                                            4,500(1)                    4/30/04
Primos, PA............................              85,000(1)(3)
Pottstown, PA.........................              48,000(1)(3)                  7,031(3)                    9/30/00
Massillon, OH.........................              25,000(1)(3)
Millbrook,  NY........................               5,000(1)

</TABLE>

(1)      Offices
(2)      Corporate headquarters
(3)      Production facility
(4)      Warehouse

         The Company  believes that all of its properties are in good condition,
are generally well maintained and are adequate for their current operations. See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Liquidity and Capital Resources."

ITEM 3.  LEGAL PROCEEDINGS.

         The Company is involved in a number of  litigation  matters  which have
arisen in the ordinary course of business. The Company believes that the outcome
of these  legal  proceedings  will not have a  material  adverse  effect  on the
Company's  financial  condition  or results  of  operations.  See  "Management's
Discussion  and Analysis of Financial  Condition  and Results of  Operations  --
Certain   Factors   Which  May  Affect  the  Company's   Future   Performance  -
Environmental Matters."

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

         None.





















                                       16
<PAGE>




EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth certain information as of March 17, 2000
with respect to each person who is an executive officer of the Company:

<TABLE>
<CAPTION>

      NAME                                                          POSITION
<S>                                                                 <C>

Robert M. Jelenic.......................................     Chairman, President and Chief Executive Officer
Jean B. Clifton.........................................     Executive Vice President, Chief Financial Officer
                                                               and Secretary
Allen J. Mailman........................................     Senior Vice President, Technology
William J. Higginson....................................     Vice President, Production

</TABLE>

        ROBERT M. JELENIC is the Chairman, President and Chief Executive Officer
of the Company.  He has been  President  and Chief  Executive  Officer since the
inception  of the  Company,  and has  been a  director  of the  Company  and its
predecessors  for more than the past six  years.  A  Chartered  Accountant,  Mr.
Jelenic began his business career with Arthur Andersen in Toronto,  Canada.  Mr.
Jelenic has 24 years of senior management  experience in the newspaper industry,
including 12 years with the Toronto Sun Publishing  Corp. Mr. Jelenic  graduated
Honors Bachelor of Commerce from Laurentian  University,  Sudbury,  Ontario. Mr.
Jelenic is a director of the NAA and Chairman of the NAA's Technology Committee.
Mr. Jelenic is 49 years old.

        JEAN B. CLIFTON is Executive Vice President, Chief Financial Officer and
Secretary  of the  Company,  positions  she has held since the  inception of the
Company,  and has been a director of the Company and its  predecessors  for more
than the past six years. Prior to joining the Company,  Ms. Clifton, a Certified
Public  Accountant,  had been employed by Arthur Young & Co. (a  predecessor  to
Ernst & Young  LLP).  She has 14 years of senior  management  experience  in the
newspaper  industry.  Ms.  Clifton is a graduate of the  University  of Michigan
School of Business Administration. Ms. Clifton is a member of the Postal Affairs
Committee  and the Employee  Benefits  Committee  of the NAA. Ms.  Clifton is 39
years old.

        ALLEN J. MAILMAN is Senior Vice President of Technology  of the Company,
a position he has held since February 1999.  From March 1994 to February 1999 he
was Vice President of Technology of the Company. From the Company's inception in
1990 to March 1994, Mr. Mailman was Corporate  Director of Information  Services
of the  Company.  He has 25  years of  management  experience  in the  newspaper
industry, including 14 years with Newhouse Publications.  Mr. Mailman received a
Bachelor of Arts degree in Economics  and  Mathematics  from the  University  of
Oklahoma. Mr. Mailman is 53 years old.

        WILLIAM J. HIGGINSON is Vice President of Production of the  Company,  a
position he has held since July 1995.  From  January  1994 to July 1995,  he was
Corporate Production Director of the Company and, from 1991 to January 1994, was
Production  Director of the NEW HAVEN  REGISTER.  Mr.  Higginson has 27 years of
experience in the newspaper industry. Mr. Higginson is 44 years old.





                                       17

<PAGE>



                                     PART II

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

         The  Company's  common  stock,  par value $0.01 per share (the  "Common
Stock"),  commenced  trading on the New York Stock Exchange on May 8, 1997 under
the symbol "JRC." The following  table reflects the high and low sale prices for
the Common Stock, based on the daily composite listing of stock transactions for
the New York Stock Exchange, for the periods indicated:

                                                  HIGH             LOW
                                                  ----             ---
                                                       (Per Share)
           Year ended December 26, 1999
           ----------------------------

           Fourth Quarter                        $15 3/4          $11 13/16
           Third Quarter                          21 7/8           13 7/16
           Second Quarter                         23               11 3/8
           First Quarter                          15 7/8           11 11/16

           Year ended December 31, 1998
           ----------------------------

           Fourth Quarter                        $16 3/16           $12 1/8
           Third Quarter                           18 7/8            13 3/4
           Second Quarter                          23 7/8            16 5/16
           First Quarter                           21                18




         On March 17, 2000,  there were  approximately 50 stockholders of record
of the Common  Stock.  The  Company  believes  that it has  approximately  1,272
beneficial owners.

         The Company  has not paid  dividends  on the Common  Stock and does not
currently  anticipate  paying  dividends on the Common Stock in the  foreseeable
future. The Company currently intends to retain future earnings for reinvestment
in the Company.  In addition,  the Credit  Agreement  (as  hereinafter  defined)
places  limitations on the Company's  ability to pay dividends or make any other
distributions  on the  Common  Stock.  See  Note  5 of  "Notes  to  Consolidated
Financial  Statements." Any future  determination as to the payment of dividends
will be subject to such prohibitions and limitations,  will be at the discretion
of the Company's Board of Directors and will depend on the Company's  results of
operations,  financial condition,  capital requirements and other factors deemed
relevant by the Board of Directors.

         The Company is a holding company which conducts its operations  through
direct and indirect subsidiaries.  The Company's available cash will depend upon
the cash flow of its subsidiaries  and the ability of such  subsidiaries to make
funds available to the Company in the form of loans, dividends or otherwise. The
subsidiaries  are separate and distinct  legal  entities and have no obligation,
contingent or otherwise, to make funds available to the Company,  whether in the
form of loans,  dividends  or  otherwise.  The  Credit  Agreement  is secured by
substantially  all of the assets of the Company and the common  stock and assets
of the Company's  subsidiaries.  In addition,  the Company's  subsidiaries  may,
subject to  limitations  contained in the Credit  Agreement,  become  parties to
financing  arrangements  which may  contain  limitations  on the ability of such
subsidiaries  to pay  dividends or to make loans or advances to the Company.  In
the event of any insolvency,  bankruptcy or similar proceedings of a subsidiary,
creditors of such  subsidiary  would  generally be entitled to priority over the
Company with respect to assets of the affected subsidiary.


                                       18
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.

         The following  selected  combined data (except number of newspapers and
per share amounts) for the combined  balance sheet of the Company as of December
31, 1995, the consolidated  balance sheet of the Company as of December 26, 1999
and the consolidated balance sheets of the Company as of December 31, 1998, 1997
and 1996 and the related  consolidated  statements  of income and cash flows for
each of the five years in the period  ended  December 26, 1999 have been derived
from the audited  financial  statements of the Company.  The selected  financial
data should be read in conjunction with "Management's Discussion and Analysis of
Financial  Condition and Results of Operations" and the  Consolidated  Financial
Statements and notes thereto included elsewhere in this Report.

<TABLE>
<CAPTION>

                                                        Year ended             Year Ended December 31,
                                                        December 26,   -------------------------------------------------
                                                          1999(1)      1998         1997         1996         1995
                                                        -----------    ----         ----         ----         ----
                                                       (In thousands, except number of newspapers and per share amounts)
Statement of Income Data:
<S>                                                     <C>            <C>         <C>          <C>          <C>

Revenues:
     Advertising................................            $348,995    $312,908     $266,914      $256,971   $249,534
     Circulation................................              96,783      89,388       80,211        79,776     73,797
                                                           ----------  ----------   ---------    -----------  --------
Newspaper revenues..............................             445,778     402,296      347,125       336,747    323,331
Commercial printing and other...................              23,787      24,484       12,282        14,373     15,626
                                                           ----------  ----------   ---------    -----------  --------
                                                             469,565     426,780      359,407       351,120    338,957
Operating expenses:
     Salaries and employee benefits.............             157,110     139,216      114,302       111,626    110,651
     Newsprint, ink and printing charges........              48,432      53,594       40,452        50,110     48,243
     Selling, general and administrative........              45,318      39,047       30,450        30,993     28,678
     Depreciation and amortization..............              28,798      23,844       20,480        20,525     19,178
     Other......................................              57,975      52,012       40,783        38,976     38,743
     Special charge(2)..........................                  --          --       31,899            --         --
                                                            --------    ---------    ---------    ---------    -------
                                                             337,633     307,713      278,366       252,230    245,493
                                                            --------    ---------    ---------    ---------    -------
Operating income................................             131,932     119,067       81,041        98,890     93,464
Net interest and other expense..................             (52,347)    (45,321)     (42,288)      (56,472)   (64,028)
                                                            ----------  ---------    ---------    ----------   --------
Income before provision for income taxes,
     equity interest and extraordinary item ....              79,585      73,746       38,753        42,418     29,436

Provision for income taxes......................              31,694      28,112       15,784        14,309      2,653
                                                            ----------  ---------    ---------    ----------    --------
Income before extraordinary item
      and equity interest ......................              47,891      45,634       22,969        28,109     26,783
Equity interest.................................                (226)         --           --            --         --
                                                            ----------  ---------     --------    ----------    --------
Income before extraordinary item................              47,665      45,634       22,969        28,109     26,783
Extraordinary item (3)..........................                  --      (4,495)          --            --         --
Net income .....................................            $ 47,665    $ 41,139     $ 22,969     $  28,109    $26,783
                                                            ==========  =========    =========    ==========   ==========
Income before extraordinary item per common share           $   1.02    $    .94     $    .51     $      --    $    --
Net income per common share, basic and diluted..            $   1.02    $    .85     $    .51     $      --    $    --
Proforma net income per common share(4).........            $     --    $     --     $     --     $     .74    $    --

OTHER DATA:
EBITDA(5)(6)....................................            $160,730    $146,706     $133,420     $ 119,415    $112,642
EBITDA Margin(6)................................                34.2%       34.4%        37.1%         34.0%       33.2%
Net income as adjusted, per common share(5).....            $     --    $    .99     $     --     $      --    $     --
Tangible net income, as adjusted(5)(6)                      $ 58,887    $ 55,537     $ 46,042     $  31,905    $ 30,931
Tangible net income, as adjusted, per common share(5)(6)    $   1.26    $   1.14     $   1.02     $      --    $     --

Capital expenditures............................            $ 17,438    $ 12,914     $  9,727     $   7,675    $  4,859
Net cash provided by operating activities.......              89,952      78,905       66,030        60,065      26,778
Net cash used in investing activities...........              32,084     352,774       19,447        25,700      50,557
Net cash (used in) provided by  financing
     activities.................................             (63,320)    274,228      (46,946)      (34,441)     24,384
Number of daily newspapers, end of period.......                  25          24           18            18          17
Number of non-daily publications, end of
     period.....................................                 200         185          141           118         114

</TABLE>
                                       19

<PAGE>

<TABLE>
<CAPTION>

 ITEM 6.  SELECTED FINANCIAL DATA.  (CONTINUED)

                                                        Year ended             Year Ended December 31,
                                                        December 26,   -------------------------------------------------
                                                          1999(1)      1998         1997         1996         1995
                                                        -----------    ----         ----         ----         ----
                                                       (In thousands, except number of newspapers and per share amounts)

<S>                                                     <C>             <C>         <C>          <C>          <C>
BALANCE SHEET DATA:
Total current assets............................         $ 88,397     $ 81,878     $ 77,833      $ 66,035     $ 73,456
Property, plant and equipment, net..............          104,976       99,978       92,620        91,713       99,036
Total assets....................................          687,180      671,869      327,931       305,985      306,434
Total current liabilities, less current maturities of
     long-term debt.............................           53,380       50,124       39,034        37,720       44,582
Total debt, including current maturities........          731,467      765,000      490,774       654,825      689,256
Stockholders'/members' deficit(7)...............        $(207,383)   $(225,313)   $(266,242)    $(423,658)   $(451,767)

</TABLE>

(1)      In 1999, the Company  changed its fiscal year from a calendar year to a
         fiscal year ending on the Sunday closest to December 31st. Accordingly,
         the  Company's  1999 fiscal year  results are  reported  for the period
         January 1, 1999 through December 26, 1999.

(2)      The 1997 special  charge of $31.9  million  (before  benefit for income
         taxes of $13.0  million) was incurred in connection  with the Company's
         initial  public  offering  and was  comprised  of $28.4  million  for a
         management  bonus  and  $3.5  million  for  the   discontinuance  of  a
         management  incentive  plan. The management  bonus was comprised of 1.1
         million  shares  of Common  Stock and a cash  portion  to  satisfy  the
         recipients' tax obligations arising from the management bonus.

(3)      The 1998  extraordinary  item represents a loss of $4.5 million (net of
         tax) related to the Company's  1998 debt  extinguishment  in connection
         with the prior credit agreement.

(4)      Proforma net income per common share for 1996 was calculated reflecting
         the 37,962,500  shares which were issued and  outstanding  prior to the
         Company's initial public offering, but subsequent to December 31, 1996.

(5)      The 1998 other data  excludes  the  effects  of special  charges  ($3.8
         million,  before tax  benefit,  $3.2  million of which was  recorded in
         selling, general and administrative and approximately $630,000 in other
         expenses) related to the cancellation of the Company's convertible debt
         offering,  integration of the Goodson  Acquisition,  and an increase to
         certain  receivable  reserves and an extraordinary  item ($4.5 million,
         net of tax) as  discussed  in Note  (3)  above.  The  1997  other  data
         excludes  the effect of the  special  charge of $31.9  million  (before
         benefit for income taxes of $13.0  million)  comprised of $28.4 million
         for a  management  bonus and $3.5 million for the  discontinuance  of a
         management  incentive  plan.  See  Note  5 of  "Notes  to  Consolidated
         Financial Statements."

(6)      EBITDA is  defined by the  Company  as  operating  income  (loss)  plus
         depreciation, amortization and other non-cash, special or non-recurring
         charges. Tangible net income is defined as net income, excluding equity
         interest, plus after-tax  amortization.  EBITDA and tangible net income
         are not intended to represent cash flow from  operations and should not
         be considered as  alternatives  to operating or net income  computed in
         accordance with generally accepted accounting  principles ("GAAP"),  as
         indicators of the Company's operating  performance,  as alternatives to
         cash from operating  activities (as determined in accordance with GAAP)
         or as measures of  liquidity.  The  Company  believes  that EBITDA is a
         standard  measure  commonly  reported  and  widely  used  by  analysts,
         investors  and  other   interested   parties  in  the  media  industry.
         Accordingly,  this  information  has been disclosed  herein to permit a
         more  complete   comparative   analysis  of  the  Company's   operating
         performance  relative to other companies in the industry.  However, not
         all companies  calculate  EBITDA and tangible net income using the same
         methods;  therefore,  the EBITDA and  tangible  net income  figures set
         forth above may not be  comparable  to EBITDA and  tangible  net income
         reported  by  other  companies.  Certain  covenants  contained  in  the
         Company's  Credit  Agreement are based upon EBITDA.  See  "Management's
         Discussion   and  Analysis  of  Financial   Condition  and  Results  of
         Operations."  Tangible  net  income per share is  calculated  using the
         weighted-average shares outstanding on a diluted basis.

(7)      During 1994, the Company was converted into a limited liability company
         and in March 1997 the Company was converted into  a  C  Corporation. In
         connection  with  such  conversion,  the  Company's preferred stock and
         dividends  in  arrears  thereon  were  redeemed for approximately $61.6
         million.


                                       20
<PAGE>


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

         THE FOLLOWING  DISCUSSION  AND ANALYSIS  SHOULD BE READ IN  CONJUNCTION
WITH THE HISTORICAL  CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO AND THE
OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS REPORT.

GENERAL

         The Company's  business is publishing  newspapers in the United States,
where its  publications  are  primarily  daily  and  non-daily  newspapers.  The
Company's revenues are derived primarily from advertising,  paid circulation and
commercial printing.

         As of  December  26,  1999,  the  Company  owned and  operated 25 daily
newspapers  and 200  non-daily  publications  strategically  clustered  in seven
geographic areas: Connecticut; Philadelphia and its surrounding areas; Ohio; the
greater  St.  Louis area;  central New  England;  and the  Capital-Saratoga  and
Mid-Hudson,  New York  regions.  As of December 26, 1999,  the Company had total
paid daily circulation of 636,939,  total paid Sunday circulation of 619,963 and
total non-daily distribution of approximately 4.6 million.

         The Company's  objective is to continue its growth in revenues,  EBITDA
and net income.  The principal  elements of the  Company's  strategy are to: (i)
expand  advertising  revenues and readership,  (ii) grow by  acquisition,  (iii)
capture  synergies from  geographic  clustering  and (iv)  implement  consistent
operating   policies  and  standards.   From  1993  through  1999,  the  Company
successfully completed 17 strategic acquisitions, acquiring 13 daily newspapers,
126 non-daily publications and three commercial printing companies, two of which
print a number of the  non-daily  publications.  The third is a premium  quality
sheet-fed printing company.

         The Company  believes that its  newspapers  are generally  effective in
addressing the needs of local readers and advertisers. The Company believes that
because its newspapers rely on a broad base of local retail and local classified
advertising  rather than more volatile  national and major account  advertising,
its advertising revenues tend to be relatively stable.

         As part of the Company's  strategy,  the Company  focuses on increasing
advertising  and circulation  revenues and expanding  readership at its existing
and newly acquired properties.  The Company has also developed certain operating
policies  and  standards   which  it  believes  have  resulted  in   significant
improvements  in the cash flow and  profitability  of its  existing and acquired
newspapers,  including:  (i) focusing on local  content,  (ii)  maintaining  and
improving  product  quality,  (iii)  enhancing  distribution  and (iv) promoting
community involvement.

         In 1999,  the  Company  changed  from a calendar  year to the  industry
standard fiscal year ending on the Sunday closest to December 31st. Accordingly,
the Company's  1999 results are reported for the period  January 1, 1999 through
December 26, 1999.

YEAR ENDED DECEMBER 26, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

         REPORTING  PERIOD.  As stated  above,  in 1999 the Company  changed its
fiscal year and  consequently  ended the year on December 26,  1999.  Therefore,
unless  specified  otherwise,  all comparisons to the 1998 reporting  period are
affected by the loss of days in the 1999 year-end period.

         REVENUES.  In 1999,  revenues  increased  $42.8 million,  or 10.0%,  to
$469.6 million, due to acquisitions. Newspaper revenues increased $43.5 million,
or 10.8%, to $445.8 million in 1999,  principally  due to increased  advertising
revenue   as  a  result  of   acquisitions.   Circulation   revenues   increased
approximately  $7.4  million,  or 8.3%,  to $96.8  million  in 1999.  Commercial
printing  and other  represented  5.1% of the  Company's  revenues  in 1999,  as
compared to 5.7% in 1998.  On-line  revenue,  included in  advertising  revenue,
increased 75% from the prior-year period to $3.2 million. Revenue, including the
five-day period ended December 31, 1999, increased  approximately $47.4 million,
or 11.1%, from the prior-year.

         SALARIES AND EMPLOYEE BENEFITS.  Salaries and employee benefit expenses
were 33.5% of the  Company's  revenues in 1999 and 32.6% in 1998.  Salaries  and
employee benefits increased $17.9 million,  or 12.9%, in 1999 to $157.1 million,
primarily due to acquisitions and increased pension expense.

                                       21

<PAGE>

         NEWSPRINT,  INK AND  PRINTING  CHARGES.  In  1999,  newsprint,  ink and
printing charges were 10.3% of the Company's  revenues,  as compared to 12.6% in
1998.  Newsprint,  ink and printing charges decreased $5.2 million,  or 9.6%, in
1999 as compared to 1998.  During  1999,  the  average  newsprint  price per ton
declined  approximately  13% from the prior  period.  The  decrease in newsprint
expense  attributable  to reductions in price have been offset in part by volume
increases related to the Company's acquisitions.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
administrative  expenses were 9.7% and 9.1% of the  Company's  revenues for 1999
and 1998,  respectively.  Selling,  general and administrative expenses for 1999
increased $6.3 million, or 16.1%, to $45.3 million.  During the third quarter of
1998,  the  Company  recorded  special  charges of $3.2  million  (see Note 5 to
Selected Financial Data).  Excluding the special charges,  selling,  general and
administrative  expenses for 1999  increased  $9.5 million,  or 26.3%,  from the
prior year,  primarily due to acquisitions  and promotion costs  associated with
the Company's revenue generating activities.

         DEPRECIATION AND AMORTIZATION.  Depreciation and amortization  expenses
were  6.1%  of the  Company's  revenues  in 1999 as  compared  to 5.6% in  1998.
Depreciation  and  amortization  expenses  increased $5.0 million,  or 20.8%, to
$28.8 million in 1999,  primarily due to increased  amortization  resulting from
the Company's acquisitions.

         OTHER  EXPENSES.  Other  expenses  accounted for 12.3% of the Company's
revenues in 1999 as compared to 12.2% in 1998.  Other  expenses  increased  $6.0
million,  or 11.5%, to $58.0 million in 1999,  primarily due to acquisitions and
increased  promotion  expenses.  During the third  quarter of 1998,  the Company
reported  $630,000 in special charges (see Note 5 to Selected  Financial  Data).
Excluding the $630,000 in special  charges,  other  expenses for 1999  increased
$6.6 million, or 12.8%, from the prior-year period.

         OPERATING  INCOME.  Operating income increased $12.9 million in 1999 to
$131.9 million from $119.1 million in 1998,  which included  special  charges of
$3.8  million as noted  above.  Excluding  the effect of the special  charges in
1998,  operating  income  increased $9.1 million,  or 7.4%, due to growth in the
Company's  advertising revenue,  continued newsprint cost savings and the effect
of acquisitions.

         INTEREST EXPENSE.  Interest expense  increased $6.8 million,  or 15.0%,
from 1998 to 1999 as a result of  increased  borrowing  in  connection  with the
Company's acquisitions, including the Goodson Acquisition completed in the third
quarter  of 1998,  offset  in part by 1999 debt  repayments  and a  decrease  in
average borrowing rates.

         PROVISION FOR INCOME TAXES. The Company reported effective tax rates of
39.8% and 38.1% for the years ended  December  26, 1999 and  December  31, 1998,
respectively.  The increase in the  effective  tax rate is primarily a result of
the Company's  acquisitions,  particularly the Goodson Acquisition  completed in
the third quarter of 1998.

         EXTRAORDINARY  ITEM. The Company recorded an extraordinary item related
to the write-off of deferred  financing charges in connection with the Company's
prior  credit  agreement  in the  amount of $4.5  million ( net of $2.8  million
income tax benefit) in the third quarter of 1998.

         EQUITY INTEREST. During 1999, the Company purchased a 7.14% interest in
AdOne, LLC ("AdOne"),  a provider of classified advertising on the Internet. The
loss recorded in 1999 represents the Company's prorata share of AdOne's net loss
since the date of the Company's investment.

         NET INCOME. Net income was $47.7 million, or $1.02 per share, basic and
diluted,  for 1999, as compared to $41.1 million,  or $.85 per share,  basic and
diluted,  for 1998,  which  reflects $6.8 million (net of $4.3 million of income
tax benefit) of special charges and an extraordinary item.

         OTHER INFORMATION.  EBITDA increased $14.0 million,  or 9.6%, to $160.7
million  from  $146.7  million  in 1998.  Tangible  net income in 1999 was $58.9
million,  or $1.26 per share, as compared to $55.5 million or $1.14 per share in
1998.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

         REVENUES.  In 1998,  revenues  increased  $67.4 million,  or 18.8%,  to
$426.8 million, due to acquisitions. Newspaper revenues increased $55.2 million,
or 15.9%, to $402.3 million in 1998,  principally  due to increased  advertising
revenue   as  a  result  of   acquisitions.   Circulation   revenues   increased
approximately  $9.2  million,  or 11.4%,  to $89.4  million in 1998.  Commercial
printing  and other  represented  5.7% of the  Company's  revenues  in 1998,  as

                                       22

<PAGE>

compared to 3.4% in 1997 due to the commercial  printing  operations acquired as
part of the InterCounty acquisition in December of 1997.

         SALARIES AND EMPLOYEE BENEFITS.  Salaries and employee benefit expenses
were 32.6% of the  Company's  revenues in 1998 and 31.8% in 1997.  Salaries  and
employee benefits increased $24.9 million,  or 21.8%, in 1998 to $139.2 million,
due to acquisitions.

         NEWSPRINT,  INK AND  PRINTING  CHARGES.  In  1998,  newsprint,  ink and
printing charges were 12.6% of the Company's  revenues,  as compared to 11.3% in
1997. Newsprint,  ink and printing charges increased $13.1 million, or 32.5%, in
1998 as compared to 1997,  primarily as a result of volume  increases due to the
Company's  acquisitions and an approximately  8.0% increase in the price per ton
of newsprint in 1998 as compared with 1997.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
administrative  expenses were 9.1% and 8.5% of the  Company's  revenues for 1998
and 1997,  respectively.  Selling,  general and administrative expenses for 1998
increased  $8.6  million,  or  28.2%,  to $39.0  million,  due to the  Company's
acquisitions  and the special charges  incurred during the third quarter of 1998
of $3.2 million (see Note 5 to Selected  Financial Data).  Excluding the special
charges,  selling,  general and administrative  expenses for 1998 increased $5.4
million from the prior-year  primarily due to acquisitions  and represented 8.4%
of the Company's revenues for 1998.

         DEPRECIATION AND AMORTIZATION.  Depreciation and amortization  expenses
were  5.6%  of the  Company's  revenues  in 1998 as  compared  to 5.7% in  1997.
Depreciation  and  amortization  expenses  increased $3.4 million,  or 16.4%, to
$23.8 million in 1998,  primarily due to increased  amortization  resulting from
the Company's acquisitions.  This increase was partially offset by a decrease in
depreciation  expense  related to certain  assets that became fully  depreciated
during 1998 and in the third and fourth quarters of 1997.

         OTHER  EXPENSES.  Other  expenses  accounted for 12.2% of the Company's
revenues in 1998 as compared to 11.3% in 1997.  Other expenses  increased  $11.2
million,  or 27.5%,  to $52.0 million in 1998,  primarily  due to  acquisitions,
increased circulation  promotion expenses,  increased postage expense related to
the  Company's  preprint  advertising  sales and  $630,000  in  special  charges
incurred in the third quarter of 1998 (see Note 5 to Selected  Financial  Data).
Excluding the $630,000 in special  charges,  other  expenses for 1998  increased
$10.6 million and represented 12.0% of the Company's revenues for 1998.

         OPERATING  INCOME.  Operating income increased $38.0 million in 1998 to
$119.1 million, including special charges of $3.8 million, from $81.0 million in
1997,  which included a special charge of $31.9 million related to the Company's
Initial Public Offering ("IPO") in May 1997.

         INTEREST  EXPENSE.  Interest expense  increased $3.2 million,  or 7.5%,
from 1997 to 1998 as a result of  increased  borrowing  in  connection  with the
Company's  acquisitions  including the Goodson Acquisition,  offset in part by a
decrease in average borrowing rates.

         PROVISION FOR INCOME TAXES. The Company reported effective tax rates of
38.1% and 40.7% for the years ended  December  31, 1998 and 1997,  respectively.
The reduction in the  effective tax rate is a result of the Company's  corporate
restructuring  implemented  January 1, 1998 offset in part by an increase in the
rate as a result of the Goodson Acquisition.

         EXTRAORDINARY  ITEM. The Company recorded an extraordinary item related
to the write-off of deferred  financing charges in connection with the Company's
prior credit agreement in the amount of $4.5 million (net of $2.8 million income
tax benefit) in the third quarter of 1998.

         NET INCOME. Net income was $41.1 million,  or $.85 per share, basic and
diluted,  for 1998,  which  reflects $6.8 million (net of $4.3 million of income
tax benefit) of special charges and an extraordinary  item, as compared to $23.0
million,  or $.51 per  share,  basic and  diluted,  for 1997,  which  included a
special  charge of $18.9  million  (net of $13.0  million of income tax benefit)
related to the IPO.

         OTHER  INFORMATION.  EBITDA as adjusted for the special  charges  noted
above in both years,  increased $13.3 million,  or 10.0%, to $146.7 million from
$133.4  million in 1997.  Net income in 1998  excluding the special  charges and
extraordinary item was $48.0 million or $.99 per share.

                                       23

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         The Company's  operations have  historically  generated strong positive
cash flow. The Company believes cash flows from operations will be sufficient to
fund its operations,  capital  expenditures and long-term debt obligations.  The
Company also believes that cash flows from operations and future  borrowings and
its ability to issue common stock as consideration for future acquisitions, will
provide  it  with  the  flexibility  to  fund  its  acquisition  strategy  while
continuing to meet its operating needs,  capital expenditures and long-term debt
obligations.

         CASH FLOWS FROM OPERATIONS.  Net cash provided by operating  activities
increased $11.0 million to $90.0 million in 1999. Net cash provided by operating
activities in 1999 primarily  resulted from net income before non-cash  expenses
(i.e., depreciation and amortization), of $76.5 million.

         CASH  FLOWS  FROM  INVESTING  ACTIVITIES.  Net cash  used in  investing
activities decreased $320.7 million to $32.1 million in 1999. The 1998 investing
activity  reflects the  Company's  purchase of the Goodson  Newspaper  group for
approximately  $300.0  million.  In 1999,  the  Company's  capital  expenditures
increased by $4.5  million,  due primarily to the 1998  acquisitions  and system
conversions  related to Year 2000.  During 1999,  the Company  began the initial
planning phases for its new Philadelphia  printing facility.  As of December 26,
1999,  approximately  $1.8 million of expenditures  were made in connection with
the facility.  The total cost of the project is currently  estimated to be $35.0
million and is expected to be  completed  in 2001.  The Company  expects to fund
this  construction  project with cash flows from operations and borrowings.  The
Company has a capital  expenditure  program  (excluding future  acquisitions) of
approximately  $17.0  million  in place for 2000,  which  includes  spending  on
technology,  including  prepress and  business  systems,  computer  hardware and
software, other machinery and equipment, plants and property, vehicles and other
assets.  The 2000 budget also includes funds of approximately  $25.0 million for
costs associated with the  Philadelphia  plant. The Company believes its capital
expenditure  program is  sufficient to maintain its current level and quality of
operations. The Company reviews its capital expenditure program periodically and
modifies it as required to meet current needs.

         CASH  FLOWS  FROM  FINANCING  ACTIVITIES.  Net cash  used in  financing
activities  was  $63.3  million  in 1999 as  compared  to net cash  provided  by
financing  activities of $274.2 million in 1998. The 1998 activity  reflects net
proceeds of  approximately  $808.0  million from the issuance of senior  secured
debt in connection with the Company's new credit facility,  $533.8 million which
was used to repay  outstanding debt. The 1999 activity reflects the use of funds
of approximately $29.9 million in connection with the Company's stock repurchase
program and approximately $33.5 million for the repayment of senior debt.

         On July 15, 1998, the Company entered into a new credit  agreement (the
"Credit Agreement") with the banks and other financial institutions, signatories
thereto and The Chase  Manhattan Bank, as  administrative  agent for the lenders
thereunder. The Credit Agreement provides for $500.0 million in term loans and a
$400.0 million revolving credit facility. The proceeds from the Credit Agreement
were used to repay amounts  outstanding under the prior senior facilities and to
fund the  Goodson  Acquisition.  The term  loans  mature on March  31,  2006 and
September 30, 2006, and the revolving credit facility matures on March 31, 2006.

         The Credit  Agreement  also provides for an  uncommitted  multiple draw
term loan  facility (the  "Incremental  Facility") in the amount of up to $500.0
million as permitted by the  administrative  agent to be repaid under conditions
as defined in the Credit Agreement.

      The amounts  outstanding under the Credit Agreement bear interest at (i) 1
3/4% to 1/2% above LIBOR (as defined in the Credit Agreement) or (ii) 1/2% to 0%
above the higher of (a) the Prime Rate (as defined in the Credit  Agreement)  or
(b) 1/2% above the Federal Funds Rate (as defined in the Credit Agreement).  The
interest rate spreads ("the applicable margins") are dependent upon the ratio of
debt to trailing four  quarters  Cash Flow (as defined in the Credit  Agreement)
and reduce as such ratio declines.

         The  Company   generally   manages  its   exposure  to  interest   rate
fluctuations  for  its  variable  rate  debt  by  entering  into  interest  rate
protection agreements. The Company was required under the prior credit agreement
and is required under the Credit Agreement to maintain  interest rate protection
agreements  for a certain  percentage of its  outstanding  debt,  based upon the
Total Leverage Ratio (as defined in the Credit Agreement).

         Interest rate protection  agreements  (IRPAs) relating to the Company's
borrowings  at  December  26,  1999  included  SWAP  agreements  with a notional
principal  amount of  $619.0  million.  At  December  31,  1998,  the  Company's
borrowings  included a SWAP agreement with a notional principal amount of $300.0

                                       24

<PAGE>

million which  matured on January 29, 1999.  On January 29, 1999,  the Company's
new SWAP agreements became effective, for an aggregate notional principal amount
of $400.0  million which reduce by $75.0  million per year  beginning on January
31,  2000 and expire on October 29,  2002.  The  agreements  exchange a floating
LIBOR rate plus an  applicable  margin for a fixed LIBOR rate plus an applicable
margin. In 1999, the Company entered into additional three month SWAP agreements
in an  aggregate  notional  amount of $219.0  million  which mature by March 15,
2000.  As of December 26, 1999,  if the SWAPs were marked to market,  they would
result  in a net  gain of  approximately  $6.1  million.  The  fair  value as of
December 26, 1999 of the IRPAs were obtained from the Company's  bank. The fixed
LIBOR rate of the SWAP agreements  range from 5.85% to 6.04%. For the year ended
December 26, 1999, the Company's weighted average effective interest rate on its
outstanding debt balance was  approximately  6.75%.  This takes into account the
interest rate protection agreements in effect during that period.

         As of December 26, 1999, the Company had outstanding indebtedness under
the Credit  Agreement,  due and payable in installments  through 2006, of $731.5
million,  of which $231.5  million was  outstanding  under the revolving  credit
facility.  There was  $168.5  million of unused and  available  funds  under the
revolving credit facility at December 26, 1999.

YEAR 2000

         During the fourth  quarter of 1999,  the  Company  completed  the final
phases of its remediation,  testing and contingency  planning in order to ensure
the Company's  Year 2000  readiness.  As a result of the Company's  planning and
implementation efforts, the Company experienced no significant  interruptions in
operations  during the  transition  period from 1999 to 2000. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  internal  systems or the products and services of third parties.  The
Company will continue to monitor all general purpose and production hardware and
software as well as those of its suppliers  and vendors for any  potential  Year
2000 issues that may surface.

         In  accordance  with  GAAP,  the  Company's  direct  Year  2000  costs,
including  modifying  computer  software or  converting  to new  programs,  were
expensed  as  incurred.  Additionally,  a  majority  of the  hardware  costs for
replacement  systems were capitalized as ordinarily  accounted for in the normal
course of business.  These system replacements  represented  upgrades consistent
with the Company's goal to maintain and improve  operational  efficiencies.  The
Company  capitalized  approximately  $6.1  million  related to new  hardware and
software in  connection  with its Year 2000  compliance  plan as of December 26,
1999.

INFLATION

         The Company's  results of operations  and financial  condition have not
been  significantly  affected  by  inflation.   Subject  to  normal  competitive
conditions,  the  Company  generally  has been able to pass along  rising  costs
through increased advertising and circulation rates.

RECENT EVENTS

         On  November  9, 1999,  the  Company's  Board of  Directors  approved a
change,  effective  December  27,  1999,  in the  Company's  fiscal  year from a
calendar  year to an  industry  standard  52/53 week  fiscal  year ending on the
Sunday nearest to December 31st.

         During 1999, the Company's Board of Directors  authorized the use of up
to $50.0 million per year for the repurchase of Common Stock. As of December 26,
1999, the Company had repurchased  2,369,200  shares.  As of March 17, 2000, the
Company had repurchased an additional 707,200 shares on the open market.  Shares
under the program are to be repurchased at  management's  discretion,  either in
the open market or in privately negotiated transactions.

         The decision to repurchase  stock depends on price,  market  conditions
and other  factors.  The Company  indicated  that there is no minimum  number of
shares to be purchased under the program.

         Purchases  under the program will be financed with the  Company's  free
cash flow or borrowings under the Company's Credit Agreement.

On February 28, 2000, the Company  announced its intent to sell the Ohio and St.
Louis area newspapers.  The Ohio properties include four daily newspapers with a
total daily  circulation  of  approximately  126,000.  The Missouri and Illinois

                                       25

<PAGE>

properties  include the Suburban  Newspapers of Greater St. Louis,  representing
non-daily  distribution  of  approximately  1.7 million and a daily newspaper in
Alton,  Illinois,  with daily  circulation  of  approximately  28,000 and Sunday
circulation of approximately  30,000.  For the year ended December 26, 1999, the
Ohio and St.  Louis area  newspapers  generated  approximately  $135  million in
revenue.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

         Management's Discussion and Analysis of Financial Condition and Results
of  Operations  and other  sections  of this Form 10-K  include  forward-looking
statements,  which  may be  identified  by  use of  terms  such  as  "believes,"
"anticipates,"  "plans," "will," "likely,"  "continues," "intends" or "expects."
These  forward-looking  statements  relate to the plans  and  objectives  of the
Company for future operations.  In light of the risks and uncertainties inherent
in all future  projections,  the inclusion of forward-looking  statements herein
should not be regarded as a  representation  by the Company or any other  person
that the objectives or plans of the Company will be achieved. Many factors could
cause the  Company's  actual  results  to differ  materially  from  those in the
forward-looking statements, including, among other things, the factors discussed
below under "Certain Factors Which May Affect the Company's Future Performance."
The  following  factors  should not be  construed  as  exhaustive.  The  Company
undertakes no obligation to release publicly the results of any future revisions
it may make to  forward-looking  statements to reflect  events or  circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

NEW ACCOUNTING PRONOUNCEMENT

      In June of 1998,  Statement of  Financial  Accounting  Standards  No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), was
issued by the Financial  Accounting Standards Board ("FASB").  Subsequently,  in
June 1999, the FASB issued SFAS No. 137, an amendment to SFAS 133, deferring the
effective date of SFAS 133 to years beginning after June 15, 2000. SFAS 133 will
require the Company to recognize  all  derivatives  on the balance sheet at fair
market  value.  Derivatives  that are not hedges  must be adjusted to fair value
through  income.  If the  derivative is a hedge,  depending on the nature of the
hedge,  changes  in the fair  values of the  derivatives  will  either be offset
against  the change in fair value of the hedged  assets or  liabilities  through
earnings or  recognized in other  comprehensive  income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be  immediately  recognized  in  earnings.  The  Company  has not yet
determined what effect, if any, SFAS 133 will have on the earnings and financial
position of the Company.

CERTAIN FACTORS WHICH MAY AFFECT THE COMPANY'S FUTURE PERFORMANCE

NEWSPAPER INDUSTRY COMPETITION

         The  Company's   business  is  concentrated  in  newspapers  and  other
publications  located primarily in small  metropolitan and suburban areas in the
United  States.   Revenues  in  the  newspaper  industry  primarily  consist  of
advertising and paid circulation.  Competition for advertising  expenditures and
paid circulation comes from local,  regional and national  newspapers,  shopping
guides,  television,  radio,  direct mail,  on-line  services and other forms of
communication  and  advertising  media.  Competition  for newspaper  advertising
expenditures is based largely upon advertiser results,  readership,  advertising
rates,  demographics and circulation  levels,  while competition for circulation
and readership is based largely upon the content of the newspaper, its price and
the  effectiveness of its  distribution.  Many of the Company's  competitors are
larger and have greater financial resources than the Company.

DEPENDENCE ON LOCAL ECONOMIES

         The Company's advertising revenues and, to a lesser extent, circulation
revenues are dependent on a variety of factors specific to the communities which
the Company's  newspapers serve.  These factors include,  among others, the size
and  demographic  characteristics  of  the  local  population,   local  economic
conditions in general, and the related retail segments in particular,  and local
weather conditions.

INDEBTEDNESS

         The Company has a substantial  amount of  indebtedness.  As of December
26, 1999, the consolidated  indebtedness of the Company was approximately $731.5
million,  which  represents a multiple of 4.6 times the Company's  twelve months
trailing EBITDA of approximately  $160.7 million. The 1999 EBITDA is impacted by

                                       26

<PAGE>

the loss of five days  resulting  from the  Company's  decision to adopt a 52/53
week fiscal year and to end 1999 on December 26, 1999.  As of December 26, 1999,
the Company had a net stockholders'  deficit of approximately $207.4 million and
a total  capitalization  of $524.1  million,  and,  thus,  the percentage of the
Company's indebtedness to total capitalization was 139.6%. The Company may incur
additional  indebtedness  to fund  operations,  capital  expenditures  or future
acquisitions.

         The Company believes that cash provided by operating activities will be
sufficient to fund its  operations  and to meet payment  requirements  under its
Term Loans and the Revolver under the Credit  Agreement.  However,  a decline in
cash provided by operating  activities,  which could result from factors  beyond
the Company's  control,  such as  unfavorable  economic  conditions,  an overall
decline in advertising  expenditures or increased competition,  could impair the
Company's  ability  to  service  its debt.  The Credit  Agreement  requires  the
maintenance  of certain  financial  ratios and  imposes  certain  operating  and
financial  restrictions on the Company which restrict,  among other things,  the
Company's ability to declare dividends, redeem stock, incur indebtedness, create
liens,  sell  assets,   consummate   mergers  and  make  capital   expenditures,
investments and acquisitions.

ENVIRONMENTAL MATTERS

         The  Company's  operations  are  subject  to  federal,  state and local
environmental laws and regulations pertaining to air and water quality,  storage
tanks and the management and disposal of waste at its facilities. To the best of
the  Company's  knowledge,  its  operations  are  in  material  compliance  with
applicable  environmental  laws and  regulations as currently  interpreted.  The
Company cannot predict with any certainty whether future events, such as changes
in existing laws and  regulations  or the discovery of conditions  not currently
known to the Company, may give rise to additional costs which could be material.
Furthermore,   actions  by  federal,  state  and  local  governments  concerning
environmental  matters  could  result in laws or  regulations  that could have a
material  adverse effect on the financial  condition or results of operations of
the  Company.  The Company is not aware of any pending  legislation  by federal,
state or local governments relating to environmental  matters which, if enacted,
would  reasonably be expected to have a material adverse effect on the financial
condition or results of operations of the Company. The Company is in the process
of monitoring  groundwater  contamination  which has been detected at one of its
facilities.  The  Company  believes  the  remediation  of any  such  groundwater
contamination,  if  required,  will not have a  material  adverse  effect on its
financial condition or results of operations.  In May 1998, one of the Company's
subsidiaries,  acquired as part of the Goodson Acquisition, received a Notice of
Potential Liability in connection with a landfill superfund site. The Company is
fully indemnified for all costs and liabilities arising out of this issue by the
seller as part of the Goodson Acquisition purchase agreement.

ACQUISITION STRATEGY

         The Company has grown through, and anticipates that it will continue to
grow  through,  acquisitions  of daily  and  non-daily  newspapers  and  similar
publications.   Acquisitions  may  expose  the  Company  to  particular   risks,
including, without limitation,  diversion of management's attention,  assumption
of  liabilities  and  amortization  of goodwill  and other  acquired  intangible
assets,  some or all of  which  could  have a  material  adverse  effect  on the
financial  condition or results of operations  of the Company.  Depending on the
value and nature of the consideration paid by the Company for acquisitions, such
acquisitions may have a dilutive impact on the Company's  earnings per share. In
making  acquisitions,  the Company  competes for acquisition  targets with other
companies,  many of which are larger and have greater  financial  resources than
the  Company.  There can be no assurance  that the Company  will  continue to be
successful  in  identifying  acquisition  opportunities,  assessing  the  value,
strengths and  weaknesses  of such  opportunities,  evaluating  the costs of new
growth opportunities at existing operations or managing the publications it owns
and improving their operating efficiency. Historically, the Company has financed
acquisitions  through  cash  on  hand  and  borrowings,  which  borrowings  have
increased  the  Company's  indebtedness.  The Company  anticipates  that it will
finance future  acquisitions  through cash on hand,  borrowings and issuances of
capital stock.  The Credit Agreement  limits  acquisitions to certain  permitted
investments and newspapers in the United States,  and requires that acquisitions
be financed  through  certain  permitted  sources.  In addition,  the  financial
covenants  contained in the Credit Agreement may limit the Company's  ability to
make acquisitions.

PRICE AND AVAILABILITY OF NEWSPRINT

         The basic raw material  for  newspapers  is  newsprint.  The  Company's
newsprint  consumption  (excluding  paper  consumed in the Company's  commercial
printing  operations)  totaled  approximately  $36.5 million in 1999,  which was
approximately  8.2% of the Company's  newspaper  revenues.  In 1999, the Company
consumed  approximately  82,000 metric tons of newsprint.  The average price per

                                       27

<PAGE>

metric ton of newsprint based on East Coast transaction prices in 1999, 1998 and
1997 was $510, $596 and $555, respectively, as reported by the trade publication
PULP AND PAPER  WEEKLY.  The  Company  has no  long-term  contracts  to purchase
newsprint.  Generally,  the  Company  purchases  all of its  newsprint  from two
suppliers.  Historically,  the percentage of the Company's newsprint supplied by
each of such  suppliers  has varied.  The Company  believes that it would not be
materially  adversely  effected  if it  were no  longer  able  to  purchase  its
newsprint supply from its two current  suppliers and that, in such event,  other
newsprint  suppliers would be readily  available to the Company.  In the future,
the Company may purchase  newsprint from other  suppliers.  The inability of the
Company to obtain an adequate  supply of  newsprint  in the future  could have a
material  adverse effect on the financial  condition or results of operations of
the  Company.  Historically,  the  price  of  newsprint  has been  cyclical  and
volatile.  The Company's average price per ton of newsprint  consumed  decreased
approximately  13% in 1999,  increased  approximately  8% in 1998 and  decreased
approximately  18% in 1997,  in each case  compared to the  previous  year.  The
Company  believes  that if any price  increase or decrease is  sustained  in the
industry,  the Company will also be impacted by such  increase or decrease.  The
Company  is unable to  predict  whether,  or to what  extent,  any  increase  or
decrease will be sustained.  Significant increases in newsprint costs could have
a material adverse effect on the financial condition or results of operations of
the Company.  The Company  seeks to manage the effects of increases in prices of
newsprint through a combination of, among other things, technology improvements,
including  web-width  reductions,   inventory  management  and  advertising  and
circulation price increases.  The Company also has reduced fringe circulation in
response to increased  newsprint prices, as it is the Company's  experience that
such circulation does not provide adequate response for advertisers.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company is exposed to market risk  arising from changes in interest
rates associated with its long-term debt  obligations.  The Company's  long-term
debt is at  variable  interest  rates  based on certain  interest  rate  spreads
applied to LIBOR,  the Prime Rate or Federal Funds Rate as defined in the Credit
Agreement.  To manage its  exposure  to  fluctuations  in  interest  rates,  the
Company, as required by its Credit Agreement,  enters into certain interest rate
protection  agreements,  which  allows the  Company to  exchange  variable  rate
interest for fixed rate,  maturing at specific  intervals.  The difference to be
paid or received  as  interest  rates  change is accrued  and  recognized  as an
adjustment of interest  expense  related to the debt. The related amount payable
to or  receivable  from  counterparties  is  included in accrued  interest.  The
Company's use of these  agreements is limited to hedging  activities and not for
trading or speculative activity.

         At December 26, 1999,  the Company had in effect SWAP  agreements for a
notional  amount of $619 million.  The fair market value of the SWAP at December
26, 1999,  had the SWAP been marked to market,  would have resulted in a gain of
approximately  $6.1 million.  SWAP agreements in an aggregate notional amount of
$400 million which became effective  January 29, 1999, reduce by $75 million per
year  beginning on January 31, 2000 and expire on October 29, 2002. In 1999, the
Company  entered into  additional  three month SWAP  agreements  in an aggregate
notional  amount of $219 million which mature by March 15, 2000.  Assuming a 10%
increase or  reduction in interest  rates for the year ended  December 26, 1999,
the  effect  on  the  Company's   pre-tax  earnings  and  cash  flows  would  be
approximately $2.4 million.





                                       28
<PAGE>




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                          INDEX TO FINANCIAL STATEMENTS

                                                                        Page
                                                                        ----
FINANCIAL STATEMENTS:

Report of Independent Auditors.........................................   30
Consolidated Balance Sheets............................................   31
Consolidated Statements of Income......................................   32
Consolidated Statements of Stockholders'/Members' Deficit..............   33
Consolidated Statements of Cash Flows..................................   34
Notes to Consolidated Financial Statements.............................   35

FINANCIAL STATEMENT SCHEDULE:

Schedule II, Valuation and Qualifying Accounts..........................  S-1

         All other  schedules are omitted because they are not applicable or the
requested  information  is shown in the  consolidated  financial  statements  or
related notes.





















                                       29

<PAGE>




                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Journal Register Company

         We have audited the accompanying consolidated balance sheets of Journal
Register  Company as of December 26, 1999 and December 31, 1998, and the related
consolidated  statements  of income,  stockholders'/members'  deficit,  and cash
flows for each of the three years in the period ended  December  26,  1999.  Our
audits also included the  financial  statement  schedule  listed in the Index at
Item 14(a).  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 financial statement 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
Journal Register Company,  as of December 26, 1999 and December 31, 1998 and the
consolidated  results of its operations and its cash flows for each of the three
years in the period ended  December  26, 1999,  in  conformity  with  accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
financial  statements taken as a whole,  present fairly in all material respects
the information set forth therein.

                                                      ERNST & YOUNG LLP



February 3, 2000
MetroPark, New Jersey









                                       30

<PAGE>



                            JOURNAL REGISTER COMPANY
                           CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                  December 26,     December 31,
                                                     1999             1998
                                                  -------------   --------------
ASSETS

Current assets:
   Cash and cash equivalents                       $  3,090        $   8,542
   Accounts receivable, less allowance for
    doubtful accounts of $6,293 in 1999
    and $4,632 in 1998                               65,597           58,244
   Inventories                                        9,899            8,440
   Deferred income taxes                              2,721            2,522
   Other current assets                               7,090            4,130
                                                   ----------      -----------
  Total current assets                               88,397           81,878
  Property, plant and equipment:
   Land                                               9,018            8,810
   Buildings and improvements                        66,187           65,127
   Machinery and equipment                          171,631          156,223
                                                   -----------     -----------
                                                    246,836          230,160
   Less accumulated depreciation                   (141,860)        (130,182)
                                                   -----------     ------------
  Property, plant and equipment, net                104,976           99,978
  Intangible and other assets, net of
   accumulated amortization of $42,751
   in 1999 and $28,297 in 1998                      493,807          490,013
                                                   -----------     ------------
  Total assets                                     $687,180        $ 671,869
                                                   ===========     ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Current maturities of long-term debt             $ 19,500        $     --
  Accounts payable                                   14,617          12,107
  Income taxes payable                                  438             829
  Accrued interest                                    6,886           6,374
  Deferred subscription revenue                       8,896           8,290
  Accrued salaries and vacation                       5,647           5,231
  Other accrued expenses and current liabilities     16,896          17,293
                                                   ----------      ------------
Total current liabilities                            72,880          50,124

Senior debt, less current maturities                711,967         765,000
Deferred income taxes                                20,291          14,029
Accrued retiree benefits and other liabilities       15,920          17,078
Income taxes payable                                 73,505          50,951

Commitments and contingencies

Stockholders' deficit:

Common stock, $.01 par value per share,
  300,000,000 shares authorized, 48,437,581
  issued at December 26, 1999 and
  December 31, 1998                                     484             484
Additional paid-in capital                          358,244         358,236
Accumulated deficit                                (536,156)       (583,821)
                                                   ----------      -----------
                                                   (177,428)       (225,101)

 Less treasury stock, 2,362,953 shares, at cost     (29,795)             --

 Accumulated other comprehensive loss, net of tax      (160)           (212)
                                                   ----------      ------------
Net stockholders' deficit                          (207,383)       (225,313)
                                                   -----------     ------------
Total liabilities and stockholders' deficit        $687,180        $671,869
                                                   ===========     ============

                             SEE ACCOMPANYING NOTES.

                                       31


<PAGE>

<TABLE>
<CAPTION>


                            JOURNAL REGISTER COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                                 Year Ended
                                                                 December 26,        Year Ended December 31,
                                                                     1999               1998              1997
                                                                 --------------    ----------------   --------------
<S>                                                              <C>               <C>                <C>

Revenues:
 Advertising                                                     $  348,995        $  312,908        $   266,914
 Circulation                                                         96,783            89,388             80,211
                                                                 --------------    ----------------   ----------------
Newspaper revenues                                                  445,778           402,296            347,125
Commercial printing and other                                        23,787            24,484             12,282
                                                                 --------------    ----------------   ----------------
                                                                   469,565           426,780            359,407

Operating expenses:
 Salaries and employee benefits                                    157,110           139,216            114,302
 Newsprint, ink and printing charges                                48,432            53,594             40,452
 Selling, general and administrative                                45,318            39,047             30,450
 Depreciation and amortization                                      28,798            23,844             20,480
 Other                                                              57,975            52,012             40,783
 Special charge                                                         --                --             31,899
                                                                 --------------    ----------------   ----------------
                                                                   337,633           307,713            278,366
                                                                 --------------    ----------------   ----------------
Operating income                                                   131,932           119,067             81,041

Other income (expense):
 Interest expense                                                  (52,265)          (45,465)           (42,282)
 Other                                                                 (82)              144                 (6)
                                                                 --------------    ----------------   ----------------
Income before provision for income taxes,
 equity interest and extraordinary item                              79,585            73,746             38,753
Provision for income taxes                                           31,694            28,112             15,784
                                                                 --------------    ----------------   --------------
Income before equity interest and extraordinary item                 47,891            45,634             22,969
Equity interest                                                        (226)               --                 --
                                                                 --------------    ----------------   --------------
Income before extraordinary item                                     47,665            45,634             22,969
Extraordinary item, net of tax of $2,755                                 --             4,495                 --
                                                                 --------------    ----------------   --------------
Net income                                                        $  47,665        $   41,139         $   22,969
                                                                 ==============    ================   ==============

Net Income per common share (basic and diluted):

 Income before extraordinary item                                 $    1.02        $      .94         $      .51
 Net income                                                       $    1.02        $      .85         $      .51


</TABLE>

                             SEE ACCOMPANYING NOTES.








                                       32

<PAGE>


<TABLE>
<CAPTION>


                            JOURNAL REGISTER COMPANY
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS'/MEMBERS' DEFICIT
                             (DOLLARS IN THOUSANDS)


                                                                                                              Total
                                                      Additional      Other                               Stockholders'/
                              Common     Membership    Paid-in    Comprehensive  Accumulated   Treasury      Members'
                                Stock     Interest     Capital       Income        Deficit      Stock        Deficit
                              ---------- ------------ ----------- -------------- ------------ ----------- ---------------
<S>                           <C>        <C>          <C>         <C>            <C>            <C>        <C>

Balance at January 1, 1997    $    --     $ 2,104       $ 222,167   $    --       $ (647,929)   $     --    $ (423,658)

Net income                                                                            22,969                    22,969

Conversion of membership
   interest                       379      (2,104)          1,725                                                   --

Issuance of common stock          105                     134,342                                              134,447
                              -------------------------------------------------------------------------------------------
Balance at December 31, 1997      484          --         358,234         --        (624,960)          --     (266,242)

Net income                                                                            41,139                    41,139

Minimum pension liability
  adjustment, net of tax
   benefit of  $153                                                      (212)                                    (212)
                                                                                                            ---------------
 Comprehensive income                                                                                           40,927
                                                                                                            ---------------
Exercise of stock options
for common stock                                                2                                                    2
                              ---------------------------------------------------------------------------------------------
Balance at December 31, 1998       484           --       358,236        (212)       (583,821)         --      (225,313)

Net income                                                                             47,665                    47,665

Minimum pension liability
 adjustment, net of tax of $37                                              52                                       52
                                                                                                            ---------------
 Comprehensive income                                                                                            47,717
                                                                                                            ---------------
Purchase of 2,369,200 shares
 for treasury                                                                                      (29,874)     (29,874)

Exercise of stock options                                       8                                       79           87
for common stock
                              ---------------------------------------------------------------------------------------------
Balance at December 26, 1999  $   484    $      --     $  358,244      $  (160)   $ (536,156)   $  (29,795)   $ (207,383)
                              =============================================================================================


</TABLE>
                             SEE ACCOMPANYING NOTES.

                                       33

<PAGE>

<TABLE>
<CAPTION>


                            JOURNAL REGISTER COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                                                                Year Ended
                                                                                December 26            Year Ended December 31,
                                                                                   1999                1998             1997
                                                                               --------------   ----------------    --------------
<S>                                                                             <C>             <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                       $   47,665       $  41,139         $  22,969
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Provision for losses on accounts receivable                                         4,257           4,464             3,291
  Depreciation and amortization                                                      28,798          23,844            20,480
  Net loss (gain) on disposal of property, plant and equipment and other assets         135          (1,074)             (464)
  Loss on equity investment                                                             266              --                --
  Extraordinary loss on extinguishment of deferred debt costs                            --           7,250                --
  Non-cash portion of special charge                                                     --              --            15,400
  Increase in deferred taxes                                                          5,993           7,928             4,779
  Increase in accounts receivable                                                   (10,726)         (5,885)           (4,546)
  (Increase) decrease in inventories                                                 (1,446)          2,412            (2,431)
  Increase in accounts payable and deferred subscription revenue                      2,442           1,301             2,311
  Increase in income taxes payable                                                   22,163          15,570             8,526
  Increase (decrease) in accrued interest                                               512           1,307            (2,431)
  (Decrease) increase in accrued retiree benefits and other liabilities              (1,193)         (6,877)            1,964
  Decrease (increase) in other assets, net of increase (decrease) in
    other current Liabilities                                                        (8,914)        (12,474)           (3,818)
                                                                               --------------      -------------    -----------
Net cash provided by operating activities                                            89,952          78,905            66,030

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment                                          (17,438)        (12,914)           (9,727)
Net proceeds from sale of property, plant and equipment and other assets                 22           1,487             1,186
Purchase of businesses and equity investment                                        (14,668)       (341,347)          (10,906)
                                                                               --------------      ---------------   -----------
Net cash used in investing activities                                               (32,084)       (352,774)          (19,447)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt:
  Senior facilities                                                                      --         808,000             4,000
  Accretion on subordinated notes                                                        --              --             1,205
Repayments of:
  Senior debt                                                                       (33,533)       (533,774)         (136,674)
  Subordinated notes                                                                     --              --           (34,524)
Exercise of stock options for common stock                                               87               2                --
Purchase of treasury shares                                                         (29,874)             --                --
Net proceeds from issuance of common stock                                               --              --           119,047
                                                                               --------------      --------------   -----------
Net cash (used in) provided by financing activities                                 (63,320)        274,228           (46,946)
                                                                               --------------      --------------   -----------
(Decrease) increase in cash and cash equivalents                                     (5,452)            359              (363)
Cash and cash equivalents, beginning of year                                          8,542           8,183             8,546
                                                                               --------------       -------------   -----------
Cash and cash equivalents, end of year                                          $     3,090         $ 8,542          $  8,183
                                                                               ==============       =============   ===========
SUPPLEMENTAL  DISCLOSURES  OF CASH FLOW  INFORMATION
Cash paid during the year for:
  Interest                                                                      $    51,753         $44,158          $ 44,713
  Income taxes                                                                        3,574           1,719             2,479

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of additional subordinated notes                                       $        --         $     --         $  1,205
Issuance of note payable in connection with an acquisition                               --               --            2,884
Comprehensive loss - minimum pension liability, net of tax                              (52)             212               --


</TABLE>


                             SEE ACCOMPANYING NOTES.




                                       34
<PAGE>



                            JOURNAL REGISTER COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 26, 1999

1.       ORGANIZATION AND BASIS OF PRESENTATION

         The  accompanying  consolidated  financial  statements  include Journal
Register Company (the "Company") and all of its wholly-owned  subsidiaries.  The
Company was  incorporated on March 11, 1997 and became a publicly traded company
in May of 1997.

         In March of 1997,  certain entities  (namely,  JRC, LLC, JRNI and INSI)
were combined and JRC, LLC was converted into a C corporation,  Journal Register
Company.  Substantially all of the membership interests and equity securities of
these  entities  were owned by  affiliates  of E.M.  Warburg,  Pincus & Co., LLC
(collectively,  "Warburg,  Pincus").  Since  the  companies  were  under  common
control,  this  transaction was accounted for on a basis similar to a pooling of
interests.  The  accompanying  financial  statements  include the  accounts  and
operations of JRC (or its  predecessor  JRC, LLC), JRNI and INSI for all periods
presented.

         Journal  Register  Company  (through  its  consolidated   subsidiaries)
primarily   publishes  daily  and  non-daily   newspapers   serving  markets  in
Connecticut, Philadelphia and its surrounding areas, Ohio, the greater St. Louis
area,  central New England and the  Capital-Saratoga  and  Mid-Hudson,  New York
regions;  and has  commercial  printing  operations  in  Connecticut,  Ohio  and
Pennsylvania.

         On November 9, 1999, the Company elected to change from a calendar year
end to a fiscal year ending on the Sunday closest to December 31st. Accordingly,
the Company's 1999 fiscal year ended on December 26, 1999.

         The Company has authorized 1,000,000 shares of Preferred Stock, none of
which were issued or outstanding as of December 26, 1999.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION

         The  consolidated  financial  statements  include  the  accounts of the
Company and all of its wholly-owned  subsidiaries.  All significant intercompany
activity has been eliminated.

         USE OF ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying  notes.  Such  estimates  would  include the allowance for doubtful
accounts and valuation allowance for deferred taxes. Actual results could differ
from those estimates.

         CONSOLIDATED STATEMENTS OF CASH FLOWS

         For purposes of the accompanying consolidated statements of cash flows,
the Company  considers  all highly  liquid  debt  instruments  purchased  with a
maturity of three months or less to be cash  equivalents.  The carrying value of
cash equivalents approximates fair value due to the short-term maturity of these
instruments.

         INVENTORIES

         Inventories,  consisting of newsprint,  ink and supplies, are stated at
the lower of cost (primarily first-in, first-out method) or market.

                                       35
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PROPERTY, PLANT AND EQUIPMENT

         Property,  plant and  equipment  are  stated at cost.  Maintenance  and
repairs  are  charged to  expense  as  incurred;  costs of major  additions  and
betterments are capitalized.

         Depreciation is provided for financial  reporting purposes primarily by
the straight-line method over the following estimated useful lives:

                Buildings and improvements                5 to 30 years
                Machinery and equipment                   3 to 30 years

         INTANGIBLE ASSETS AND OTHER ASSETS

         Intangible  assets  recorded  in  connection  with the  acquisition  of
newspapers  generally consist of the values assigned to subscriber lists and the
excess of cost  over the  value of  identifiable  net  assets  of the  companies
acquired.  These assets are carried at the lower of amortized cost or the amount
expected to be  recovered  by  projected  future  operations  after  considering
attributable  general and administration  expense and interest on debt allocated
to the various  newspapers.  If, in the opinion of management,  an impairment in
value occurs, any necessary write-downs will be charged to expense.

         The balance of intangible  assets at December 26, 1999 and December 31,
1998 was  comprised  principally  of  subscriber  lists and excess cost over the
value of identifiable net assets of companies  acquired.  These assets are being
amortized over a period of 4 to 40 years and are amortized by the  straight-line
method.

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121  "Accounting  for the Impairment of Long Lived Assets and for Long-Lived
Assets  to  be  Disposed  Of  ",  the  Company  reviews  the  recoverability  of
intangibles  and other  long-lived  assets  whenever  events  and  circumstances
indicate that the carrying amount may not be recoverable. The carrying amount of
the long-lived  assets is reduced by the difference  between the carrying amount
and estimated fair value.

         Other assets consist  principally of capitalized  costs associated with
the term loans and the revolver (as defined in Note 4, Long-Term  Debt) that are
being amortized over the terms of such loans.

         INCOME TAXES

         The Company uses the liability  method of accounting  for income taxes.
Under this method,  deferred tax assets and liabilities are determined  based on
differences  between financial reporting and tax basis of assets and liabilities
and are measured using the currently  enacted tax rates and laws that will be in
effect when the differences are expected to reverse.

         DEFERRED SUBSCRIPTION REVENUE

         Deferred subscription revenue arises from subscription payments made in
advance of newspaper  delivery.  Revenue is recognized in the period in which it
is earned.

                                       36
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         INTEREST-RATE PROTECTION AGREEMENTS

         The Company enters into Interest-Rate  Protection  Agreements ("IRPAs")
to modify the interest  characteristics  of its  outstanding  debt. Each IRPA is
designated for all or a portion of the principal  balance and term of a specific
debt  obligation.  Certain of these  agreements  involve the exchange of amounts
based on a fixed interest rate for amounts based on variable interest rates over
the life of the agreement  without an exchange of the notional amount upon which
the  payments  are based.  The  differential  to be paid or received as interest
rates change is accrued and  recognized  as an  adjustment  of interest  expense
related  to  the  debt.  The  related  amount  payable  to  or  receivable  from
counterparties is included in accrued interest. The fair values of IRPAs are not
recognized  in the financial  statements.  Gains and losses on  terminations  of
IRPAs  would  be  deferred  as an  adjustment  to  the  carrying  amount  of the
outstanding  debt and amortized as an adjustment to interest  expense related to
the debt over the remaining term of the original  contract life of the IRPAs. In
the event of the early  extinguishment  of a  designated  debt  obligation,  any
realized or unrealized  gain or loss from the IRPA would be recognized in income
coincident  with the  extinguishment.  Any IRPAs that were not  designated  with
outstanding  debt or notional  amounts (or  durations) of IRPAs in excess of the
principal amounts (or maturities) of the underlying debt would be recorded as an
asset or liability at fair value,  with changes in fair value  recorded in other
income (expense).

         STOCK OPTION PLAN

         The Company has elected to follow  Accounting  Principles Board Opinion
No. 25,  "Accounting  for Stock  Issued to  Employees"  ("APB  25") and  related
interpretations in accounting for its employee stock options. Under APB 25, when
the exercise  price of the Company's  employee  stock options  equals the market
price of the underlying  stock on the date of grant, no compensation  expense is
recognized.

         EARNINGS PER SHARE

         The Company,  in accordance with Financial  Accounting  Standards Board
("FASB") SFAS No. 128,  "Earnings Per Share",  discloses earnings per share on a
basic and diluted basis. Diluted earnings per share include any dilutive effects
of options, warrants and convertible securities.

         CONCENTRATION OF RISK

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

         SEGMENTS REPORTING

         In 1998, the Company adopted the FASB's SFAS No. 131, "Disclosure About
Segments  of an  Enterprise  and Related  Information"  ("SFAS  131").  SFAS 131
superceded  SFAS  No.  14,  "Financial  Reporting  for  Segments  of a  Business
Enterprise".  The adoption of SFAS 131 did not affect the results of  operations
or financial position and did not affect the disclosure of segment information.

         The Company is a newspaper company.  The Company publishes 25 daily and
200  non-daily  newspapers  in  the  U.S.  It  maintains  operations  and  local
management  in the  markets  that it serves.  Revenue is earned from the sale of
advertising,  circulation  and related  activities.  Newspapers are  distributed
through local distribution  channels  consisting of contract carriers and single
copy outlets.


                                       37

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

         EFFECT OF NEW PRONOUNCEMENT

         In June of 1998, SFAS No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities" ("SFAS 133"), was issued by the FASB.  Subsequently,  in
June 1999, the FASB issued SFAS No. 137, an amendment to SFAS 133, deferring the
effective date of SFAS 133 to years beginning after June 15, 2000. SFAS 133 will
require the Company to recognize  all  derivatives  on the balance sheet at fair
market  value.  Derivatives  that are not hedges  must be adjusted to fair value
through  income.  If the  derivative is a hedge,  depending on the nature of the
hedge,  changes  in the fair  values of the  derivatives  will  either be offset
against  the change in fair value of the hedged  assets or  liabilities  through
earnings or  recognized in other  comprehensive  income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be  immediately  recognized  in  earnings.  The  Company  has not yet
determined  what the effect,  if any, of SFAS 133 will have on the  earnings and
financial position of the Company.

         RECLASSIFICATIONS

         Certain  reclassifications  were  made to the 1998  and 1997  financial
statements to conform to the 1999 presentation.

3.       INTANGIBLE AND OTHER ASSETS

         Intangible  and  other  assets  as of  December  26  and  December  31,
respectively, net of accumulated amortization, are summarized as follows:

                                                        (in thousands)
                                                     1999            1998
                                                     ----             ----
Excess of cost over the value of identifiable net
    assets and subscriber lists                      $473,904      $473,245
Prepaid pension cost                                    9,230         8,434
Other                                                  10,673         8,334
                                                    ----------     ----------
                                                     $493,807      $490,013
                                                    ==========     ==========

         Included in other  assets is the  Company's  investment  in AdOne,  LLC
("AdOne").  On August 20, 1999, the Company  acquired a 7.14% interest in AdOne,
LLC, a provider of classified  advertising on the Internet.  The Company applied
the equity method of accounting for this transaction.  In addition,  the company
holds a $1.2 million promissory note from AdOne. The note bears interest at 9.4%
per annum and is payable  in five equal  installments  commencing  December  31,
2005.




                                       38

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

4.       LONG-TERM DEBT

         The  Company's  long-term  debt  as of  December  26 and  December  31,
respectively, was comprised of the following:

                                                       (in thousands)
                                                   1999              1998
                                                  -----             ------

Senior Secured Term Loans                         $500,000         $500,000
Senior Secured Revolving Credit Facility           231,467          265,000
                                                 ----------        ---------
                                                   731,467          765,000
Less current portion                               (19,500)              --
                                                 -----------       ---------
                                                  $711,967          $765,000
                                                 ===========       =========

           On July 15, 1998,  the Company  entered  into a new credit  agreement
with a group of lenders led by The Chase Manhattan Bank, as administrative agent
(the "Credit  Agreement").  The Credit Agreement provides a 7 3/4-year term loan
facility  ("Term  Loan A") in the  aggregate  amount  of  $250.0  million,  an 8
1/4-year  term loan facility  ("Term Loan B") in the aggregate  amount of $250.0
million and a 7 3/4-year  revolving  credit facility in the aggregate  amount of
$400.0  million (the  "Revolving  Credit  Facility").  Proceeds under these loan
facilities were used to repay existing debt and to fund the Goodson Acquisition.
The Company had $168.5 million and $135.0 million unused and available under the
Revolving   Credit  Facility  at  December  26,  1999  and  December  31,  1998,
respectively.

           The Term Loan A Facility  matures on March 31, 2006 and is  repayable
in quarterly installments  commencing on June 30, 2000. The Term Loan B Facility
matures  on  September  30,  2006 and is  repayable  in  quarterly  installments
commencing on June 30, 2000.

         The aggregate  annual  maturities  of long-term  debt payable under the
term loans are as follows:

                                                           (in thousands)


                2000.................................       $   19,500
                2001.................................           22,625
                2002.................................           35,375
                2003.................................           41,625
                2004.................................           47,875
                Thereafter...........................          333,000

         The Revolving  Credit  Facility is available on a revolving basis until
March  31,  2006.   Availability  will  be  reduced  by  consecutive   quarterly
reductions,  commencing  on June 30,  2002 and ending on March 31,  2006,  in an
aggregate  amount for each twelve month period  commencing on the date set forth
below equal to the amount set forth opposite such date (with  reductions  during
each such period being equal in amount):

                                                           PRINCIPAL AMOUNT
                                                             (in thousands)

                   June 30, 2002                               $   55,000
                   June 30, 2003                                   65,000
                   June 30, 2004                                  100,000
                   June 30, 2005                                  180,000


                                       39








<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

4.       LONG-TERM DEBT (CONTINUED)

         The Credit  Agreement  also provides for an  uncommitted  multiple draw
term loan  facility (the  "Incremental  Facility") in the amount of up to $500.0
million as permitted by the  administrative  agent to be repaid under conditions
as defined in the agreement.

         The  senior  secured  term loans and senior  secured  revolving  credit
facility are secured by  substantially  all of the assets of the Company and the
common stock and assets of the Company's  subsidiaries.  The senior secured term
loans and senior secured  revolving  credit  facility  require  compliance  with
certain  covenants,  which require,  among other things,  maintenance of certain
financial  ratios,  and restricts the  Company's  ability to declare  dividends,
redeem  stock,  incur  additional  indebtedness,   create  liens,  sell  assets,
consummate mergers and make capital expenditures, investments and acquisitions.

         The amounts  outstanding  under the credit  facilities bear interest at
(i) 1 3/4% to 1/2%  above  LIBOR or (ii) 1/2% to 0% above the  higher of (a) the
Prime Rate or (b) 1/2% above the Federal  Funds Rate.  The interest rate spreads
are  dependent  upon the ratio of debt to trailing  four  quarters Cash Flow (as
defined in the Credit Agreement) and reduce as such ratio declines.

         An annual  commitment  fee is  incurred  on the  average  daily  unused
portion of the Revolving Credit  Facility,  payable  quarterly in arrears,  at a
percentage which varies from 0.375% to 0.250% based on the quarterly calculation
of the Total  Leverage Ratio (as defined in the Credit  Agreement).  At December
26, 1999, the Company's commitment fee was 0.375%.

         The Credit  Agreement  also  requires the  Company,  in order to manage
interest  rate  risk,  to  maintain  IRPA's  for a  certain  percentage  of  the
outstanding  debt,  based upon the Total Leverage Ratio. In accordance with this
requirement,  the Company participates in certain IRPA's whereby the Company has
assumed a fixed rate of interest  and a  counterparty  has assumed the  variable
rate  (the  "SWAP").  Pursuant  to the SWAP  agreement,  the  Company  agrees to
exchange with certain banks at specific dates the  difference  between the fixed
rate in the SWAP  agreement and the LIBOR  floating rate applied to the notional
principal amount.  Prior to and during 1997, the Company, in connection with the
prior credit agreement,  also entered into interest rate collar agreements which
expired on various dates between April 30, 1998 and June 30, 1998.  The interest
rate collar  agreements  had an aggregate  notional  principal  amount of $286.0
million with ceiling  interest  rates ranging from 7.29% through 7.41% and floor
interest rates of 5.48%.

         IRPA's  relating  to the  Company's  borrowings  at  December  26, 1999
included SWAP agreements with a notional principal amount of $619.0 million.  At
December 31, 1998,  the Company's  borrowings  included a SWAP  agreement with a
notional  principal  amount of $300.0 million which matured on January 29, 1999.
On January 29, 1999, the Company's new SWAP agreements became effective,  for an
aggregate  notional  principal  amount of $400.0  million  which reduce by $75.0
million per year, beginning on January 31, 2000 and expire on October 29, 2002.

         In  1999,  the  Company  entered  into  additional   three  month  SWAP
agreements in an aggregate notional amount of $219 million which mature by March
15,  2000.  As of December 26,  1999,  if the SWAPs were marked to market,  they
would result in a net gain of approximately  $6.1 million.  The fair value as of
December 26, 1999 of the IRPAs were obtained from the Company's  bank. The fixed
LIBOR rate of the SWAP agreements range from 5.85% to 6.04%.

         The  estimated  fair  value  of the Term  Loans  and  Revolving  Credit
Facility  approximates  their  carrying  value  since  the  interest  rates  are
variable.



                                       40

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

5.       INITIAL PUBLIC OFFERING AND SPECIAL CHARGE

         In May 1997,  the  Company  completed  an initial  public  offering  of
9,375,000 shares (the "Offering") of its common stock, par value $0.01 per share
(the  "Common  Stock"),  at a price of $14 per  share.  The Common  Stock  began
trading on the New York Stock  Exchange  under the symbol  "JRC" on May 8, 1997.
The net  proceeds to the Company  from the Offering  were  approximately  $119.0
million,  which the Company  used to repay a portion of the amounts  outstanding
under the term loan and to retire all of the outstanding principal amount of and
accrued and unpaid interest on the Company's subordinated notes.

         On June 6, 1997,  pursuant to an agreement with the underwriters of the
Offering (the "Underwriting Agreement"), the underwriters exercised their option
to purchase  1,406,250  additional  shares of Common Stock at a price of $14 per
share.  In  accordance  with  the  Underwriting  Agreement,  these  shares  were
purchased  directly  from  Warburg,  Pincus  and were  purchased  solely for the
purpose of covering over-allotments made in connection with the Offering.

         In  connection  with the  Offering,  in the second  quarter of 1997 the
Company  incurred a special charge of $31.9 million  (before  benefit for income
taxes of $13.0  million)  comprised of $28.4 million for a management  bonus and
$3.5  million  for  the  discontinuance  of a  management  incentive  plan.  The
management  bonus was  comprised of 1,100,000  shares of Common Stock and a cash
portion to satisfy the recipients'  tax obligations  arising from the management
bonus.

6.       STOCK INCENTIVE PLAN

         Prior to the  completion  of the Offering  (see Note 5, Initial  Public
Offering and Special  Charge),  the Company's  Board of Directors  (the "Board")
adopted and the  stockholders  approved the Company's 1997 Stock  Incentive Plan
(the "1997 Plan").  Subject to adjustment as provided in the 1997 Plan, the 1997
Plan  authorizes  the  granting of up to  4,843,750  shares of the Common  Stock
through:  (i) incentive stock options and  non-qualified  stock options (in each
case, with or without stock appreciation  rights), to acquire Common Stock; (ii)
awards of restricted  shares of Common Stock;  and (iii)  performance  units, to
such directors, officers and other employees of, and consultants to, the Company
and its  subsidiaries  and  affiliates as may be designated by the  Compensation
Committee  of the Board or such  other  committee  of the Board as the Board may
designate.

         Incentive  stock  options are granted at no less than fair market value
of the Common  Stock on the date of grant.  The option price per share of Common
Stock for all other stock options are established by the Compensation Committee.
Stock options are  exercisable at cumulative  intervals of 20% commencing on the
first anniversary after issuance,  continuing through the fifth anniversary,  at
which time 100% may be exercised. These options expire ten years after issuance.

         Proforma  information  regarding  net income and  earnings per share is
required by FASB SFAS No. 123,  "Accounting for Stock-Based  Compensation",  and
has been  determined  as if the Company had  accounted  for its  employee  stock
options under the fair value method of that statement.  The fair value for these
options was estimated at the date of grant using a Black-Scholes  option pricing
model  with the  following  weighted-average  assumptions  for  1999  and  1998:
risk-free interest rate of 6.51% and 5.49%,  respectively;  dividend yield of 0%
for both years;  volatility  factor of the  expected  market price of the Common
Stock of .41 and .38, respectively;  and a weighted-average expected life of the
option of seven years for both 1999 and 1998.




                                       41

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

6.       STOCK INCENTIVE PLAN (CONTINUED)

         The  Black-Scholes  option  valuation  model was  developed  for use in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

         For purposes of proforma  disclosures,  the estimated fair value of the
options is amortized to expense over the vesting  period for such  options.  The
Company's proforma  information,  had compensation costs for the Company's stock
option plans been  determined in accordance with FASB SFAS No. 123, for the year
ended   December  26,  1999  and  years  ended   December  31,  1998  and  1997,
respectively, are as follows:

<TABLE>
<CAPTION>
                                                                            (in thousands)
                                                                1999            1998            1997
                                                                ----            -----           ----
<S>                                                             <C>             <C>             <C>

       Net income attributable to common stockholder:
         As reported                                           $ 47,665        $ 41,139        $ 22,969
         Proforma                                                44,619          39,135          22,259
       Net income per share
         As reported
           Basic                                                $  1.02          $  .85        $    .51
           Diluted                                                 1.02             .85             .51
         Proforma
           Basic                                                    .95             .81             .50
           Diluted                                                  .95             .80             .49

</TABLE>

         A  summary  of  the  Company's   stock  option   activity  and  related
information  for the year ended  December 26, 1999 and years ended  December 31,
1998 and 1997, respectively, are as follows:

<TABLE>
<CAPTION>

                                                1999                           1998                        1997
                                     ----------------------------------------------------------------------------------------
                                                       Weighted-                    Weighted-                 Weighted-
                                                        Average                      Average                   Average
                                                       Exercise                     Exercise                  Exercise
                                         Options         Price         Options        Price       Options       Price
                                         -------        --------       -------       --------    -------       --------
<S>                                     <C>             <C>            <C>          <C>         <C>             <C>

Outstanding-beginning of year           2,587,167      $19.27         1,825,189      $17.50            --           --
Granted                                   932,925      $14.72           925,700      $22.45      1,959,992      $17.50
Exercised                                   6,247      $14.00             5,174      $14.00             --          --
Forfeited                                 230,839      $19.14           158,548      $17.59         134,803     $17.52
                                        ---------                     ---------                  ----------
Outstanding-end of year                 3,283,006      $18.00         2,587,167      $19.27       1,825,189     $17.50
                                        =========                     =========                   =========
Exercisable at end of year                786,616      $18.55           332,973      $17.51              --         --
Weighted-average fair value of
  options granted during the
  year                                      $7.95                        $11.13                        $5.42

</TABLE>







                                       42
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

6.       STOCK INCENTIVE PLAN (CONTINUED)

         Exercise prices for options  outstanding as of December 26, 1999 ranged
from $14.00 to $22.50 per share. The weighted-average remaining contractual life
of those options is 8.2 years.

7.       EXTRAORDINARY ITEM

         In July 1998,  in  connection  with the Credit  Agreement,  the Company
expensed  approximately $7.3 million of deferred financing costs associated with
the  extinguishment  of the  Company's  prior credit  facility,  resulting in an
extraordinary charge of $4.5 million, net of tax (See Note 4, Long-Term Debt).

8.       EARNINGS PER COMMON SHARE

         The  following  table sets forth the  computation  of  weighted-average
shares  outstanding for calculating basic and diluted earnings per share for the
years ended December 26, 1999 and December 31, 1998 and 1997, respectively.

<TABLE>
<CAPTION>


                                                              1999              1998            1997
                                                              ----              ----            ----
<S>                                                           <C>               <C>             <C>

Weighted-average shares for basic earnings per share        46,820,485       48,437,521      44,792,774
Effect of diluted securities:
  employee stock options                                        53,125          188,935         190,747
                                                            -----------      ----------      ----------
Adjusted weighted-average shares for diluted
  earnings per share                                        46,873,610       48,626,456      44,983,521
                                                            ===========      ==========      ===========

</TABLE>

         Options to purchase  1.6  million,  1.7  million and 951,670  shares of
Common  Stock at a range of $17.63 to  $22.50,  $18.00 to $22.50  and  $17.63 to
$21.00, were outstanding during 1999, 1998 and 1997, respectively,  but were not
included in the  computation  of the diluted EPS because the  options'  exercise
price was greater than the average market price of the common shares.

9.       PENSION AND POST RETIREMENT PLANS

         The Company and its subsidiaries  have separate defined benefit pension
plans, certain of which are successors to prior plans. The benefits are based on
years of service  and  primarily  on the  employees'  career  average  pay.  The
Company's  funding  policy  is to  contribute  annually  an  amount  that can be
deducted for federal income tax purposes under a different actuarial cost method
and different assumptions from those used for financial reporting. Assets of the
plans consist  principally  of short-term  investments,  equity  securities  and
corporate and U.S. Government obligations.

         The  Company  uses  September  30, to measure  pension  plan assets and
liabilities.







                                       43
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

9.        PENSION AND POST RETIREMENT PLANS (CONTINUED)

         The following  table sets forth the plans' funded status and the amount
recognized in the Company's consolidated balance sheet:

<TABLE>
<CAPTION>

                                                                                    (in thousands)
                                                                Pension Benefits                    Post-Retirement Benefits
                                                            ------------------------               --------------------------
                                                            1999                1998               1999                  1998
<S>                                                         <C>                 <C>                <C>                   <C>

Change in benefit obligation
   Benefit obligation at beginning of year              $  74,278             $ 57,697          $   7,291             $  6,850
   Service cost                                             1,847                1,588                 15                   15
   Interest cost                                            5,203                4,516                493                  500
   Actuarial (gain)/loss                                  (5,100)                3,377               (210)                 197
   Benefits paid                                          (4,351)              (4,201)               (429)                (487)
   Business combinations                                      --                11,301                 --                  216
                                                        ---------              -------          ----------            ---------
   Benefit obligation at end of year                    $  71,877             $ 74,278          $    7,160            $   7,291
Change in plan assets
   Fair value of trust assets at beginning of year      $  83,956             $ 78,365          $       --            $      --
   Actual return on plan assets                             8,858              (2,099)                  --                   --
   Employer contributions                                     116                  114                 429                  487
   Benefits paid                                           (4,351)              (4,201)               (429)                (487)
   Business combinations                                       --               11,777                 --                   --
                                                        ----------             ---------        -----------            ---------

   Fair value of trust assets at end of year            $  88,579             $ 83,956          $       --             $     --
Reconciliation of funded status
   Funded status                                        $  16,702             $  9,678          $  (7,160)             $ (7,291)
   Unrecognized net
     Transition (asset)/obligation                            135                  240                 --                     --
     Prior service cost                                   (2,712)              (3,073)               (530)                  (622)
     (Gain)/loss                                          (4,443)                2,151               (580)                  (367)
   Contributions after measurement date                        55                   34                 --                     --
                                                        ---------              ---------        -----------            -----------
   Net amount recognized                                $   9,737             $  9,030           $ (8,270)             $  (8,280)
Amounts recognized in statement of financial
   position

   Prepaid benefit cost                                 $  10,104             $  9,466           $     --              $       --
   (Accrued) benefit cost                                   (874)              (1,032)             (8,270)                 (8,280)
   Adjustment required to recognize minimum
   liability                                                  231                  231                N/A                    N/A
   Accumulated other comprehensive loss                       276                  365                N/A                    N/A
                                                        ----------            ----------         ---------             -----------
   Net amount recognized                                $   9,737             $  9,030           $ (8,270)             $  (8,280)
Separate disclosures for pension plans with
   accumulated benefit obligation in excess of
   plan assets
   Projected benefit obligation at end of year          $   2,085              $ 3,811                N/A                    N/A
   Accumulated benefit obligation at end of year        $   2,022              $ 3,578                N/A                    N/A
   Fair value of assets at end of year                  $   1,728              $ 3,019                N/A                    N/A


</TABLE>







                                       44




                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

9.       PENSION AND POST RETIREMENT PLANS (CONTINUED)



<TABLE>
<CAPTION>
                                                                                    (in thousands)
                                                                Pension Benefits                    Post-retirement Benefits
                                                            ------------------------               -----------------------------
                                                            1999                1998               1999                    1998
<S>                                                         <C>                 <C>                <C>                   <C>


Components of net periodic benefit cost
   Service cost                                           $ 1,847              $ 1,588           $     15              $      15
   Interest cost                                            5,203                4,516                493                    500
   Expected return on plan assets                         (7,376)              (7,273)                 --                     --
   Amortization of net

     Transition obligation                                    105                  101                 --                     --
     Prior service cost                                     (361)                (367)                (92)                   (82)
     (Gain)/loss                                               60                (297)                (18)                   (17)
  Adjustment                                                 (48)                   --                 --                     --
                                                         --------            ---------          ----------              ---------
  Net periodic benefit (income) cost                     $  (570)             $(1,732)           $    398               $    416


Actuarial assumptions

   Discount rate                                            7.75%                7.00%                7.75%                7.00%
   Expected long-term return on plan assets                 9.00%                9.00%                  N/A                  N/A
   Rate of compensation increase                            3.00%                3.00%                3.00%                3.00%
   Rate of increase in health benefit costs
     Immediate rate                                                                                   7.00%                8.00%
     Ultimate rate                                                                                    6.50%                6.50%
     Year ultimate rate reached                                                                        2000                 2000

Effects of a change in the assumed rate of health
benefit costs
   Effect of a 1% increase on
     Total of service cost and interest cost                                                            $33                  $33
     Post-Retirement benefit obligation                                                                $394                 $390
   Effect of a 1% decrease on
     Total of service cost and interest cost                                                          $(27)                $(31)
     Post-Retirement benefit obligation                                                              $(347)               $(350)



</TABLE>

         The  Company  also has  defined  contribution  plans  covering  certain
employees.  Company  contributions  to these plans are based on a percentage  of
participants'  salaries and  amounted to  approximately  $706,000,  $377,000 and
$325,000 in 1999, 1998 and 1997, respectively.

         The Company  contributes to various  multi-employer  union administered
pension plans.  Contributions to these plans amounted to approximately $160,000,
$110,000 and $68,000 in 1999, 1998 and 1997, respectively.









                                       45
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999


10.      INCOME TAXES

         The provision for income taxes on income before  extraordinary  item is
as follows:

<TABLE>
<CAPTION>


                                                                                    (in thousands)
                                                                      1999                1998                1997
                                                                 ----------------    ----------------   -----------------
<S>                                                               <C>                 <C>               <C>

Current tax expense:
   Federal                                                             $ 23,592            $ 16,492          $   8,035
   State                                                                  2,145               3,389              2,970
                                                                 ----------------    ----------------   -----------------
Total current                                                            25,737              19,881             11,005
Deferred tax expense (benefit):
   Federal                                                                5,244              10,157              5,027
   State                                                                    713              (1,926)              (248)
                                                                 ----------------    ----------------   -----------------
Total deferred                                                            5,957               8,231              4,779
                                                                 ----------------    ----------------   -----------------
Total provision for taxes                                              $ 31,694            $ 28,112           $ 15,784
                                                                 ================    ================   =================

</TABLE>

         The reconciliation of income tax computed at the U.S. federal statutory
tax rate to income tax expense is as follows:

<TABLE>
<CAPTION>

                                                                                    (in thousands)
                                                                       1999               1998              1997
                                                                  ----------------   ----------------  ----------------
<S>                                                               <C>                <C>                <C>

Tax at U.S. statutory rates                                             $ 27,855           $ 25,811          $ 13,564
State taxes, net of federal effect                                         1,858                951             1,769
Non deductible goodwill amortization                                       1,976                 --                --
Other                                                                          5              1,350               451
                                                                  ----------------   ----------------  ----------------
                                                                        $ 31,694            $28,112          $ 15,784
                                                                  ================   ================  ================

</TABLE>

         State net operating loss carryforwards were utilized as follows:  $12.4
million in 1999, $13.5 million in 1998 and $700,000 in 1997.

         At December 26,  1999,  certain  subsidiaries  had net  operating  loss
carryforwards  available ranging from approximately  $21,000 to $62.2 million in
various  state and local  jurisdictions.  Substantial  portions  of the  related
deferred tax assets are offset by valuation  allowances.  The  carryforwards  at
December 26, 1999 expire in various years through 2014.
















                                       46
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999


10.      INCOME TAXES (CONTINUED)

         Deferred income taxes reflect the net effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets as of December 26 and December
31, respectively, are as follows:

<TABLE>
<CAPTION>

                                                                         (in thousands)
                                                                   1999                 1998
                                                           ------------------------------------------
<S>                                                        <C>                          <C>

Deferred tax liabilities:
   Property, plant and equipment                                   $ 12,518                 $ 13,966
   Intangibles                                                       11,321                    4,891
   Retiree benefits                                                     259                        -
                                                                -----------            -------------
Total deferred tax liabilities                                       24,098                   18,857
Deferred tax assets:
   Retiree benefits                                                      --                       54
   Net operating loss carryforwards                                   3,878                    3,251
   Other                                                              5,020                    5,127
                                                                 ----------                ---------
Total deferred tax assets                                             8,898                    8,432
Valuation allowance                                                   2,370                    1,082
                                                                 ----------                ---------
Net deferred tax assets                                               6,528                    7,350
                                                                 ----------                ---------
Net deferred tax liabilities                                      $  17,570                 $ 11,507
                                                                  =========                 ========


</TABLE>

         As part of the  acquisitions in 1999 and the acquisition of the Goodson
properties  in 1998,  the Company  recorded  net  deferred  tax  liabilities  of
approximately $69,000 and $2.0 million, respectively.

         The Company's valuation allowances for deferred tax assets increased by
approximately  $1.3 million in 1999 and decreased by  approximately  $700,000 in
1998.

         The Company's federal income tax returns, which consisted, prior to the
Offering,  of three separate  consolidated  groups and two individual  entities,
have not been  examined by the  Internal  Revenue  Service.  Effective  with the
Offering  that occurred in May 1997,  the Company  files its federal  income tax
return as one consolidated group.

11.      COMMITMENTS AND CONTINGENCIES

         The Company  leases  office space and  equipment  under  noncancellable
operating leases. These leases contain several renewal options for periods up to
five years.  The Company's  future minimum lease payments under operating leases
at December 26, 1999 are as follows:

                                                         (in thousands)

         2000..............................................  $2,508
         2001..............................................  $1,379
         2002..............................................  $  958
         2003..............................................  $  796
         2004............................................... $  556
         Thereafter........................................  $   52

         Total rent expense was $3.3 million,  $3.1 million and $2.0 million for
the years ended December 26, 1999, December 31, 1998 and 1997, respectively.





                                       47

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

11.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         In 1999, the Company began the planning phases for the  construction of
a new  Philadelphia  printing  facility.  In conjunction  with the  Philadelphia
plant,  the Company  entered into an  agreement  for the  construction  of a new
printing  press.  The cost of the press is  approximately  $15.0 million with an
estimated in service date in 2001.

         The Company is involved in certain litigation matters which have arisen
in the ordinary course of business. In the opinion of management, the outcome of
these  legal  proceedings  should  not have a  material  adverse  impact  on the
Company's financial position or results of operations.

12.      ACQUISITIONS

         On June 7, 1999, the Company acquired certain assets and liabilities of
THE FARMINGTON VALLEY POST in Avon,  Connecticut,  a suburban monthly newspaper.
On July 13, 1999, the Company  acquired  certain assets and  liabilities of TOWN
TALK  SOUTHERN,  TOWN TALK  EASTERN and the DELAWARE  COUNTY  JOURNAL in Ridley,
Pennsylvania.  On August 13,  1999,  the Company  acquired the stock of Hometown
News, Inc., in West Warwick, Rhode Island,  comprising a daily, weekly and three
non-daily  publications.  On September  1, 1999,  the Company  acquired  certain
assets and  liabilities of CONNECTICUT  MAGAZINE,  in Trumbull,  Connecticut,  a
monthly  publication.  The Company applied the purchase method of accounting for
these  transactions.  Accordingly,  the total acquisition cost, on a preliminary
basis,  was  allocated to the  tangible  assets and  liabilities  based on their
relative  estimated  fair value on the  effective  dates of the  acquisition  of
approximately $2.1 million and $800,000,  respectively. In connection with these
acquisitions, intangible assets of approximately $14.1 million were recorded for
the excess of the purchase price over the value of  identifiable  net assets and
are being  amortized  according  to the  Company's  policy.  The  results of the
acquired companies have been included in the consolidated  financial  statements
since the acquisition date.

         On January 2, 1998, the Company acquired for approximately $3.8 million
certain assets and liabilities of HVM, L.L.C. in New Milford, Connecticut, which
publishes a group of  newspapers,  shoppers and monthly  magazines.  The Company
applied the purchase method of accounting for this transaction.

         On  March  9,  1998,  the  Company  acquired  THE  SARATOGIAN,  a daily
newspaper  in  Saratoga  Springs,  New York  and the  COMMUNITY  NEWS,  a weekly
newspaper  serving  Clifton  Park,  New York.  The Company  applied the purchase
method of accounting for this transaction.

         On  July  15,  1998,  the  Company  completed  its  acquisition  of the
Pennsylvania,  New York and Ohio newspaper  businesses of The Goodson  Newspaper
Group (including Mark Goodson Enterprises,  Ltd.) for approximately $300 million
in cash (the "Goodson Acquisition").  The Company applied the purchase method of
accounting for this  transaction.  Accordingly,  the total acquisition cost, was
allocated  to the  tangible  assets and  liabilities  acquired  based upon their
estimated  fair  market  value  on the  effective  date  of the  acquisition  of
approximately $17.1 million and $7.9 million, respectively. Intangible assets of
approximately  $300 million were recorded for the subscriber lists and excess of
the  purchase  price  over the value of  identifiable  net  assets and are being
amortized in accordance with the Company's policy.






                                       48

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999

         The  following  table  presents  the  unaudited   proforma  results  of
operations of the Company as though the Goodson Acquisition  occurred on January
1, 1997.


                                                         (in thousands)
                                                        1998        1997
                                                        ----        ----

         Net Revenues                                 $464,330     $428,416
         Income before extraordinary item               40,413       12,024
         Net Income                                     35,918       12,024
         Net income per share (basic and diluted):

         Income before extraordinary item             $    .83     $    .27
         Net income                                   $    .74     $    .27


         The proforma  results are not  necessarily  indicative of what actually
would have occurred if the acquisition had been in effect for the entire periods
presented and are not intended to be a projection of future results.

         On September 21, 1998, the Company completed its acquisition of Taconic
Media,  Dutchess  County,  NY.  The  Company  applied  the  purchase  method  of
accounting for this  transaction.  Accordingly,  the total acquisition cost, was
allocated to the assets and  liabilities  based on the relative  estimated  fair
values on the effective date of the acquisition.

         Intangible assets of $344.0 million related to the aforementioned  1998
acquisitions  were recorded and are being  amortized  according to the Company's
policy.  The  results  of the  acquired  companies  have  been  included  in the
consolidated financial statements since the acquisition date.

         On December 22, 1997,  the Company  acquired  for  approximately  $12.8
million certain assets and liabilities of the InterCounty  Newspaper  Group. The
InterCounty   Newspaper   Group  includes  17  weekly   newspapers  in  suburban
Philadelphia and central and southern New Jersey with total weekly  distribution
of approximately  100,000. The Company applied the purchase method of accounting
for this transaction.  Accordingly,  the total acquisition cost was allocated to
the tangible  assets and  liabilities,  respectively,  of InterCounty  Newspaper
Group based on their relative estimated fair values on the effective date of the
acquisition of approximately $6.2 million and $1.8 million, respectively.

         On  December  12,  1997,  the  Company   acquired  certain  assets  and
liabilities  of the  LADUE  NEWS in  Ladue,  MO, a 44  times-per-year  newspaper
serving  suburban  St.  Louis.  The  Company  applied  the  purchase  method  of
accounting for this  transaction.  Accordingly,  the total  acquisition cost was
allocated to the assets and liabilities,  respectively,  of the LADUE NEWS based
on  their  relative   estimated  fair  values  on  the  effective  date  of  the
acquisition.

         Intangible assets of $14.1 million related to the  aforementioned  1997
acquisitions  were recorded for the excess of the purchase  price over the value
of identifiable  net assets and are being  amortized  according to the Company's
policy.






                                       49

<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999


13.      MEMBERSHIP INTERESTS

         On March 11,  1997,  membership  interests  in JRC, LLC and the capital
stock of INSI Holdings, Inc. were converted to 37,962,500 shares of Common Stock
(see Note 1, Organization and Basis of Presentation).

<TABLE>
<CAPTION>

                                                      Membership Interests
                                      Par      ------------------------------------     Membership        Paid-in
                                      Value    Authorized     Issued    Outstanding     Interest          Capital
                                     --------------------------------------------------------------------------------
<S>                                  <C>       <C>           <C>        <C>             <C>             <C>

  Journal Register Company, LLC:
    Class A Membership Interest       $ 1.00    1,000,000    1,000,000   1,000,000      $1,000,000
    Class B Membership Interest       $ 1.00    1,000,000    1,000,000   1,000,000       1,000,000
    Additional paid-in capital                                                                  --       $216,982,319
                                                                                        ----------      -------------
                                                                                         2,000,000        216,982,319
  INS Holdings, Inc.:
    Common stock voting               $  .10        2,000       2,000        2,000             200
    Common stock non-voting           $  .10    1,000,000   1,000,000    1,000,000         100,000
    Preferred Stock, Class A          $ 1.00        4,000       4,000        4,000           4,000
    Additional paid-in-capital                                                                  --           5,185,016
                                                                                       ------------      --------------
                                                                                           104,200           5,185,016
                                                                                       ------------      --------------
                                                                                        $2,104,200        $222,167,335
                                                                                       ============      ==============

</TABLE>


14.      SUBSEQUENT EVENTS (UNAUDITED)

         On February 28, 2000, the Company announced its intent to sell its Ohio
and St. Louis area newspapers. The Ohio properties include four daily newspapers
with a total daily  circulation  of  approximately  126,000.  The  Missouri  and
Illinois  properties  include the  Suburban  Newspapers  of Greater  St.  Louis,
representing  non-daily  distribution of  approximately  1.7 million and a daily
newspaper in Alton, Illinois, with daily circulation of approximately 28,000 and
Sunday  circulation  of  approximately  30,000.  For the year ended December 26,
1999,  the Ohio and St.  Louis  area  newspapers  generated  approximately  $135
million in revenue.

         Since  December  26, 1999 and as of March 17,  2000,  the  Company,  in
accordance  with its stock  repurchase  program,  has  repurchased an additional
707,200  shares  of its  Common  Stock on the  open  market  at a total  cost of
approximately  $9.9 million.  Shares under the program are to be  repurchased at
management's  discretion,  either in the open market or in privately  negotiated
transactions.

         The decision to repurchase  stock depends on price,  market  conditions
and other factors.  There is no minimum  number of shares to be purchased  under
the program.  Purchases  under the program will be financed  with the  Company's
free cash flow or borrowings under the Company's revolving credit facility.






                                       50
<PAGE>



                            JOURNAL REGISTER COMPANY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 26, 1999


15.      QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following is a summary of the quarterly  results of operations  for
years ended December 26, 1999 and December 31, 1998:


<TABLE>
<CAPTION>

                                             March               June               September          December(2)
                                          -------------     ----------------     ----------------    -----------------
                                                             (In thousands, except per share data)
<S>                                       <C>               <C>                  <C>                  <C>

1999
----
Revenues                                    $  109,902          $121,166             $119,545            $118,952
Operating income                            $   26,749          $ 35,982             $ 32,509            $ 36,692
Net income                                  $    7,940          $ 13,852             $ 11,515            $ 14,358

Net income per common share:
     (basic and diluted)                    $     0.17          $   0.30             $   0.25            $   0.31

1998
----
Revenues                                    $   89,661          $101,881             $114,046            $121,192
Operating income                            $   22,302          $ 31,739             $ 27,807            $ 37,219
Net income                                  $    8,563          $ 14,606             $  3,615            $ 14,355

Net income per common share:
  (basic and diluted)
  Income before extraordinary item (1)      $     0.18          $   0.30             $    .17             $   .30
  Net income                                $     0.18          $   0.30             $    .07             $   .30


</TABLE>


(1)  Extraordinary item recorded in the third quarter of 1998 was related to the
     extinguishment of debt.
(2)  December 1999 quarterly results reflect operations for the period September
     1, 1999 through December 26, 1999








                                       51

<PAGE>

<TABLE>
<CAPTION>

                            JOURNAL REGISTER COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)


                                                     Balance At                         Charges to                     Balance At
                                                    Beginning of                        Costs and                       End of
        Description                                    Period        Adjustments(1)      Expenses      Deductions(2)    Period
        -----------                                 ------------     --------------     ----------     ------------    -----------
<S>                                                 <C>              <C>                <C>            <C>             <C>

YEAR ENDED DECEMBER 31, 1999
Allowance for doubtful accounts                        $4,632          $  141             $  4,257         $ 2,737       $ 6,293
Valuation allowance for deferred tax assets            $1,082              --             $  1,288              --       $ 2,370

YEAR ENDED DECEMBER 31, 1998
Allowance for doubtful accounts                        $4,055          $ 1,092            $  4,464         $ 4,979       $ 4,632
Valuation allowance for deferred tax assets            $1,792               --                  --         $   710       $ 1,082

YEAR ENDED DECEMBER 31, 1997
Allowance for doubtful accounts                        $4,173          $   847            $  3,291         $ 4,256       $ 4,055
Valuation allowance for deferred tax assets            $2,350               --                  --         $   558       $ 1,792



</TABLE>

----------------------------

(1)   Allowance  for  doubtful accounts additions related to 1999, 1998 and 1997
      acquisitions.

(2)   Write-off of uncollectable accounts to the allowance for doubtful accounts
      and reduction of the valuation allowance for deferred tax assets.




















                                      S-1
<PAGE>




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

         None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Information  with  respect  to  executive  officers  of the  Company is
presented in Item 4 of this Report under the caption "Executive  Officers of the
Registrant."

         The information  appearing under the captions "Proposal 1 - Election of
Directors",  "Certain  Transactions"  and "Section  16(a)  Beneficial  Ownership
Reporting  Compliance"  in the  Company's  Proxy  Statement  for its 2000 Annual
Meeting of Stockholders (the "2000 Proxy  Statement") is incorporated  herein by
reference.

ITEM 11.  EXECUTIVE COMPENSATION.

         Information appearing under the caption "Executive Compensation" in the
2000 Proxy Statement is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         Information   appearing  under  the  caption  "Security   Ownership  of
Beneficial  Owners and  Management" in the 2000 Proxy  Statement is incorporated
herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Information  appearing under the caption "Certain  Transactions" in the
2000 Proxy Statement is incorporated herein by reference.


                                     PART IV

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

(a)      1.  Financial Statements.
             --------------------

        The financial statements are included in Part II, Item 8 of this Report.

         2.  Financial Statement Schedules and Supplementary Information
             Required to be Submitted.
             -----------------------------------------------------------

         Schedule of Valuation and Qualifying  Accounts on Schedule II, included
         in Part II, Item 8 of the report.

         All other schedules have been omitted because they are  inapplicable or
         the  required  information  is  shown  in  the  consolidated  financial
         statements or related notes.

(b)      Reports On Form 8-K.
         -------------------

         A report on Form 8-K was filed by the  Company  on  October  27,  1999,
pursuant  to Item 8 thereof,  reporting  the  Company's  decision  to change the
Company's  fiscal  year end from a  calendar  year  period to a 5-week,  4-week,
4-week reporting period.

         A report on Form 8-K was filed by the  Company on  November  24,  1999,
pursuant to Item 8 thereof,  and in connection  with the  Company's  October 27,
1999 Form 8-K filing,  whereby the  Company  approved a change in the  Company's
fiscal year end from December 31, 1999 to December 26, 1999.




                                       52

<PAGE>




(c)      Index to Exhibits.
         ------------------

         The following is a list of all Exhibits filed as part of this Report:

      Exhibit No.                                 Description
      -----------                                 -----------

         *2.1             Master  Agreement,  dated as of May 17,  1998,  by and
                          among each of the persons  listed on Annex A and Annex
                          B  thereto,  Richard  G.  Schneidman,   as  Designated
                          Stockholder, and the Company (filed as Exhibit 99.2 to
                          the Company's Current Report on Form 8-K/A, dated June
                          30, 1998).
       *3(i)              Amended and Restated Certificate of Incorporation
                          (filed as Exhibit 3(i) to Journal Register Company's
                          Form 10-Q/A Amendment No. 1 for the fiscal quarter
                          ended June 30, 1997 (the "June 1997 Form 10-Q")).
       *3(ii)             Amended and Restated By-laws (filed as Exhibit 3(ii)
                          to the September 1999 Form 10-Q).
       *4.1               Company Common Stock Certificate (filed as Exhibit 4.1
                          to Journal Register Company's Registration Statement
                          on Form S-1, Registration No. 333-23425 (the "Form
                          S-1")).
      *10.1               1997 Stock Incentive Plan (filed as Exhibit 10.2 to
                          the June 1997 Form 10-Q).+
      *10.2               Management Bonus Plan (filed as Exhibit 10.3 to the
                          June 1997 Form 10-Q).+
      *10.3               Supplemental 401(k) Plan (filed as Exhibit 10.4 to the
                          Form S-1).+
      *10.4               Voting Agreement by and among Journal Register
                          Company, Warburg, Pincus Capital Company, L.P.,
                          Warburg, Pincus Capital Partners, L.P. and Warburg,
                          Pincus Investors, L.P. (filed as Exhibit 10.5 to the
                          June 1997 Form 10-Q).
      *10.5               Registration Rights Agreement by and among Journal
                          Register Company, Warburg, Pincus Capital Company,
                          L.P., Warburg, Pincus Capital Partners, L.P. and
                          Warburg, Pincus Investors, L.P. (filed as Exhibit 10.6
                          to the June 1997 Form 10-Q).
      *10.6               Credit Agreement among Journal Register Company,  each
                          of the banks and other financial  institutions that is
                          a signatory thereto or which, pursuant to Section 2.01
                          (c)  or  Section  (b)  thereto,   becomes  a  "Lender"
                          thereunder   and  the   Chase   Manhattan   Bank,   as
                          administrative agent for the lenders (filed as Exhibit
                          10.7 to the September 30, 1998 Form 10-Q).

     **21.1               Subsidiaries of Journal Register Company.
     **23.1               Consent of Ernst & Young LLP.
     **24                 Power of Attorney (appears on signature page).
     **27.1               Financial Data Schedule.


   +    Management contract or compensatory plan or arrangement.
   *    Incorporated by reference.
   **   Filed herewith.







                                       53

<PAGE>





                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Trenton, State of New Jersey, on the 24th day of March, 2000.

                                     JOURNAL REGISTER COMPANY


                                     By: /S/ ROBERT M.JELENIC
                                         ---------------------------------------
                                         Chairman, President and Chief Executive
                                         Officer

         KNOWN BY ALL MEN BY THESE  PRESENTS,  that each person whose  signature
appears  below  constitutes  and  appoints  both  Robert M.  Jelenic and Jean B.
Clifton  his true and  lawful  attorney-in-fact  and  agent,  with full power of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all capacities,  to sign any and all amendments to this Annual Report on
Form 10-K, and to file the same,  with all exhibits  thereto and other documents
in connection therewith,  with the Securities and Exchange Commission,  granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises,  as fully as he might or  could do in  person,  hereby  ratifying  and
confirming all that said  attorney-in-fact and agent or their or his substitutes
or substitute, may lawfully do or cause to be done by virtue hereof.

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on the 24th day of March, 2000.




          Signature                               Title(s)
          ---------                               --------


/S/ ROBERT M. JELENIC          Chairman, President, Chief Executive Officer and
-----------------------        Director (Principal Executive Officer)
   Robert M. Jelenic

/S/ JEAN B. CLIFTON            Executive Vice President, Chief Financial Officer
-----------------------        (Principal Financial and Accounting Officer),
   Jean B. Clifton              Secretary and Director


/S/ JOHN L. VOGELSTEIN         Director
-----------------------
   John L. Vogelstein

/S/ DOUGLAS M. KARP            Director
-----------------------
  Douglas M. Karp


/S/ GARY D. NUSBAUM            Director
-----------------------
   Gary D. Nusbaum

/S/ JOHN R.  PURCELL           Director
-----------------------
   John R. Purcell

/S/ JOSEPH A. LAWRENCE         Director
-----------------------
 Joseph A. Lawrence






                                       54

<PAGE>




                                  Exhibit Index

      Exhibit No.                                 Description
      -----------                                 ------------

         *2.1             Master  Agreement,  dated as of May 17,  1998,  by and
                          among each of the persons  listed on Annex A and Annex
                          B  thereto,  Richard  G.  Schneidman,   as  Designated
                          Stockholder, and the Company (filed as Exhibit 99.2 to
                          the Company's Current Report on Form 8-K/A, dated June
                          30, 1998).

       *3(i)              Amended and Restated Certificate of Incorporation
                          (filed as Exhibit 3(i) to Journal Register Company's
                          Form 10-Q/A Amendment No. 1 for the fiscal quarter
                          ended June 30, 1997 (the "June 1997 Form 10-Q")).
       *3(ii)             Amended and Restated By-laws (filed as Exhibit 3(ii)
                          to the September 1999 Form 10-Q).
       *4.1               Company Common Stock Certificate (filed as Exhibit 4.1
                          to Journal Register Company's Registration Statement
                          on Form S-1, Registration No. 333-23425
                          (the "Form S-1")).
      *10.1               1997 Stock Incentive Plan (filed as Exhibit 10.2 to
                          the June 1997 Form 10-Q).+
      *10.2               Management Bonus Plan (filed as Exhibit 10.3 to the
                          June 1997 Form 10-Q).+
      *10.3               Supplemental 401(k) Plan (filed as Exhibit 10.4 to the
                          Form S-1).+
      *10.4               Voting Agreement by and among Journal Register
                          Company, Warburg, Pincus Capital Company, L.P.,
                          Warburg, Pincus Capital Partners, L.P. and Warburg,
                          Pincus Investors, L.P. (filed as Exhibit 10.5 to the
                          June 1997 Form 10-Q).
      *10.5               Registration Rights Agreement by and among Journal
                          Register Company, Warburg, Pincus Capital Company,
                          L.P., Warburg, Pincus Capital Partners, L.P. and
                          Warburg, Pincus Investors, L.P. (filed as Exhibit
                          10.6 to the June 1997 Form 10-Q).
      *10.6               Credit Agreement among Journal Register Company,  each
                          of the banks and other financial  institutions that is
                          a signatory thereto or which, pursuant to Section 2.01
                          (c)  or  Section  (b)  thereto,   becomes  a  "Lender"
                          thereunder   and  the   Chase   Manhattan   Bank,   as
                          administrative agent for the lenders (filed as Exhibit
                          10.7 to the September 30, 1998 Form 10-Q).

     **21.1               Subsidiaries of Journal Register Company.
     **23.1               Consent of Ernst & Young LLP.
     **24                 Power of Attorney (appears on signature page).
     **27.1               Financial Data Schedule.


   +    Management contract or compensatory plan or arrangement.
   *    Incorporated by reference.
   **   Filed herewith.





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