<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           -------------------------
 
                                   FORM 10-K
                           -------------------------
 
<TABLE>
<CAPTION>
(MARK ONE)
<S>        <C>
    /X/           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                     SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR

    / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                         EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                FOR THE TRANSITION PERIOD FROM             TO

                        COMMISSION FILE NUMBER 1-9329
</TABLE>
 
                           -------------------------
                          PULITZER PUBLISHING COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                           -------------------------
 
<TABLE>
<S>                                           <C>
                   DELAWARE                                     430496290
       (State or other jurisdiction of                       (I.R.S. Employer
        incorporation or organization)                    Identification Number)
</TABLE>
 
                           900 NORTH TUCKER BOULEVARD
                           ST. LOUIS, MISSOURI 63101
                    (Address of principal executive offices)
 
                                 (314) 340-8000
              (Registrant's telephone number, including area code)
 
                           -------------------------
 
   Securities registered pursuant to Section 12(b) of the Act: Common Stock,
              par value $.01 per share -- New York Stock Exchange
 
        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.
                            Yes   X         No
                                -----          -----

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  /X/
 
     The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $235,134,621 as of the close of business on
March 20, 1996.
 
     The number of shares of Common Stock, $.01 par value, outstanding as of
March 20, 1996 was 4,736,331.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of the registrant's definitive Proxy Statement to be used in
connection with its Annual Meeting of Stockholders to be held on April 24, 1996
are incorporated by reference into Part III of this Report.
 
     The registrant's fiscal year ends on the last Sunday of December in each
year. For ease of presentation, the registrant has used December 31 as the
fiscal year-end in this Annual Report. Except as otherwise stated, the
information in this Report on Form 10-K is as of December 31, 1995.
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<PAGE>   2
 
                                     PART I
 
ITEM 1. BUSINESS
 
GENERAL
 
     The Company is engaged in newspaper publishing and television and radio
broadcasting. Its newspaper operations consist of two major metropolitan
dailies: the St. Louis Post-Dispatch (the "Post-Dispatch"), the only major daily
newspaper serving the St. Louis metropolitan area; and The Arizona Daily Star
(the "Star"), serving the Tucson metropolitan area. The Company's broadcasting
operations consist of nine network-affiliated television stations located in
Greenville, South Carolina; New Orleans, Louisiana; Lancaster, Pennsylvania;
Winston-Salem, North Carolina; Albuquerque, New Mexico; Louisville, Kentucky;
Omaha, Nebraska; Daytona Beach/Orlando, Florida and Des Moines, Iowa; and two
radio stations located in Phoenix, Arizona.
 
     The Pulitzer Publishing Company was founded by the first Joseph Pulitzer in
1878 to publish the original St. Louis Post-Dispatch and has operated
continuously since that time under the direction of the Pulitzer family. Michael
E. Pulitzer, a grandson of the founder, currently serves as Chairman of the
Board, President and Chief Executive Officer of the Company.
 
     The following table sets forth certain historical financial information
regarding the Company's two business segments, publishing and broadcasting, for
the periods and at the dates indicated. The publishing segment includes amounts
from Pulitzer Community Newspapers ("PCN") prior to its disposition on December
22, 1994. (See "-- Publishing -- Chicago Publications.") The broadcasting
segment includes amounts from WESH-TV and KCCI-TV following their respective
acquisitions on June 30, 1993 and September 9, 1993.
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                               ----------------------------------------------------
                                                 1995       1994       1993       1992       1991
                                               --------   --------   --------   --------   --------
                                                                  (IN THOUSANDS)
<S>                                            <C>       <C>        <C>        <C>        <C>
Operating revenues -- net:
  Publishing.................................. $269,388   $304,779   $290,146   $285,004   $284,353
  Broadcasting................................  202,939    180,800    136,839    113,369    109,019
                                               --------   --------   --------   --------   --------
  Total....................................... $472,327   $485,579   $426,985   $398,373   $393,372
                                               ========   ========   ========   ========   ========
Operating income (loss):
  Publishing.................................. $ 25,393   $ 30,486   $ 23,702   $ 18,179   $  9,041
  Broadcasting................................   65,939     47,963     27,947     23,311     17,793
  Corporate...................................   (4,666)    (3,871)    (3,692)    (4,856)    (3,424)
                                               --------   --------   --------   --------   --------
  Total....................................... $ 86,666   $ 74,578   $ 47,957   $ 36,634   $ 23,410
                                               ========   ========   ========   ========   ========
Depreciation and amortization:
  Publishing.................................. $  4,307   $  6,128   $  6,938   $  8,174   $ 12,322
  Broadcasting................................   22,843     24,358     16,854     10,695     11,451
                                               --------   --------   --------   --------   --------
  Total....................................... $ 27,150   $ 30,486   $ 23,792   $ 18,869   $ 23,773
                                               ========   ========   ========   ========   ========
Operating margins (operating income to
  revenues)
  Publishing(1)...............................    14.1%      14.8%      11.8%      10.5%       5.7%
  Broadcasting................................    32.5%      26.5%      20.4%      20.6%      16.3%
Assets:
  Publishing.................................. $141,441   $136,818   $156,398   $139,694   $101,842
  Broadcasting................................  253,252    254,410    270,250    120,380    121,629
  Corporate...................................  100,380     77,084     34,970     29,914     20,476
                                               --------   --------   --------   --------   --------
  Total....................................... $495,073   $468,312   $461,618   $289,988   $243,947
                                               ========   ========   ========   ========   ========
</TABLE>
 
-------------------------
(1) Operating margins for publishing are stated with St. Louis Agency adjustment
    (which is recorded as an operating expense for financial reporting purposes)
    added back to publishing operating income. See "-- Publishing -- Agency
    Agreements."
 
                                        1
<PAGE>   3
 
OPERATING STRATEGY
 
     Pulitzer's long-term operating strategy for its media assets is to maximize
each property's growth and profitability through maintenance of editorial
excellence, leadership in locally-responsive news, and tight control of costs.
Management believes that editorial excellence and leadership in local provision
of news will, over the long-term, allow Pulitzer to maximize its revenue share
in each of its respective markets. Experienced local managers implement the
Company's strategy in each media market, with centralized Pulitzer management
providing oversight and guidance in all areas of planning and operations.
 
     In addition to internal growth, Pulitzer selectively acquires media
properties which the Company believes are consistent with its operating strategy
and present attractive investment opportunities. Although the Company has no
agreements to acquire additional properties, management believes that the
Company's strong cash flow and conservative capital structure, among other
reasons, will enable the Company to pursue additional acquisitions as
opportunities arise.
 
     Pulitzer believes that cost controls are an important tool in the
management of media properties which are subject to significant fluctuations in
advertising volume. The Company believes that tight control of costs permits it
to respond quickly when positive operating conditions offer opportunities to
expand market share and profitability and, alternatively, when deteriorating
operating conditions require cost reductions to protect profitability. The
Company aggressively employs production technology in all of its media
operations in order to minimize production costs and produce the most attractive
and timely news product for its readers, viewers and listeners.
 
     Pulitzer's media operations are geographically diverse, placing the Company
in the Midwest, Southwest, Southeast, and Northeast regions of the United
States. Due to the close relationship between economic activity and advertising
volume, the Company believes that geographic diversity provides the Company with
valuable protection from regional economic variances.
 
PUBLISHING
 
     The Company intends to continue the tradition of reporting and editorial
excellence that has resulted in 17 Pulitzer Prizes* over the years. While
opportunities to increase revenues in publishing are limited, management
believes that with strict financial controls and cost reductions, newspaper
publishing can produce good financial returns. In addition, given the mature
nature of the newspaper industry, management is continuing to seek ways to
leverage its newspaper assets, such as developing electronic publishing.
Further, the Company is pursuing a number of other initiatives to augment
advertising revenues. These include voice services delivered by phone,
electronic dissemination of information and alternative newspaper delivery
systems to provide advertisers with either targeted or total market coverage.
 
     The Company publishes two major metropolitan daily newspapers, the St.
Louis Post-Dispatch and The Arizona Daily Star. Both daily newspapers have
weekly total market coverage sections to provide advertisers with market
saturation. In addition, both newspapers also offer an electronic news,
information and communication web site on the Internet. Full access to these
"electronic publication" web sites, as well as full Internet access, is provided
on a subscription basis. The Star's service, StarNet, began operations in May,
1995 and had grown to approximately 4,000 subscribers by December 31, 1995. The
service provided by the Post-Dispatch, POSTnet, started in January 1996.
 
     The Company's publishing revenues are derived primarily from advertising
and circulation, averaging approximately 86 percent of total publishing revenue
over the last five years. Advertising rates and rate structures and resulting
revenues vary among publications based, among other things, on circulation, type
of advertising,
 
-------------------------
 
* Pulitzer Prizes are awarded annually at Columbia University by the Pulitzer
  Prize Board, an independent entity affiliated with the Columbia University
  School of Journalism, founded by the first Joseph Pulitzer.
 
                                        2
<PAGE>   4
 
local market conditions and competition. The following table provides a
breakdown of the Company's publishing revenues for the past five years
(including PCN prior to its disposition on December 22, 1994).
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                                         --------------------------------
                                               1995        1994        1993        1992        1991
                                             --------    --------    --------    --------    --------
                                                                  (IN THOUSANDS)
<S>                                          <C>         <C>         <C>         <C>         <C>
Advertising:
  Retail..................................   $ 78,362    $ 88,450    $ 85,860    $ 86,846    $ 88,723
  General.................................      7,645       7,830       7,154       9,476       9,534
  Classified..............................     75,925      84,738      75,670      73,692      75,149
                                             --------    --------    --------    --------    --------
     Total................................    161,932     181,018     168,684     170,014     173,406
  Circulation.............................     76,349      77,941      78,661      77,713      73,430
  Other...................................     31,107      45,820      42,801      37,277      37,517
                                             --------    --------    --------    --------    --------
     Total................................   $269,388    $304,779    $290,146    $285,004    $284,353
                                             ========    ========    ========    ========    ========
</TABLE>
 
ST. LOUIS POST-DISPATCH
 
     Founded in 1878 by the first Joseph Pulitzer, the Post-Dispatch has a long
history of reporting and editorial excellence and innovation in newspaper
publishing under the direction of the Pulitzer family. The Post-Dispatch is a
morning daily and Sunday newspaper serving primarily the greater St. Louis
metropolitan area. St. Louis is the sixteenth largest metropolitan statistical
area in the United States (Source: Sales and Marketing Management). Based on
Audit Bureau of Circulations ("ABC") Publisher's Statement and reports for the
six-month period ended September 30, 1995, the market penetration (i.e.,
percentage of households reached) of the Post-Dispatch's daily and Sunday
editions is seventh and fifth, respectively, in the United States among major
metropolitan newspapers. The newsstand price is $0.50 for the daily paper and
$1.25 for the Sunday edition.
 
     The Post-Dispatch operates under an Agency Agreement between the Company
and The Herald Company, Inc. (the "Herald Company") pursuant to which the
Company performs all activities relating to the day-to-day operations of the
newspaper, but pursuant to which it must share one-half of the Agency's
operating income or one-half of the Agency's operating loss with the Herald
Company. The following table sets forth for the past five years certain
circulation and advertising information for the Post-Dispatch and operating
revenues for the St. Louis Agency, all of which are included in the Company's
consolidated financial statements. See "-- Publishing -- Agency Agreements."
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                                         --------------------------------
                                               1995        1994        1993        1992        1991
                                             --------    --------    --------    --------    --------
<S>                                          <C>         <C>         <C>         <C>         <C>
Post-Dispatch:
  Circulation(1):
     Daily (including Saturday)...........    326,491     335,819     341,797     341,855     364,935
     Sunday...............................    546,745     555,488     564,761     566,095     573,237
  Advertising lineage (in thousands of
     inches):
     Retail...............................        880         912         913         873         878
     General..............................         75          75          62          87          91
     Classified...........................      1,057       1,039         977         921         963
                                             --------    --------    --------    --------    --------
       Total..............................      2,012       2,026       1,952       1,881       1,932
     Part run.............................        594         591         481         313         350
                                             --------    --------    --------    --------    --------
       Total inches.......................      2,606       2,617       2,433       2,194       2,282
                                             ========    ========    ========    ========    ========
  Operating revenues (in thousands):
     Advertising..........................   $130,600    $125,704    $116,951    $115,206    $115,266
     Circulation..........................     64,862      61,207      62,345      61,371      57,522
     Other(2).............................     24,404      23,490      22,387      20,754      19,829
                                             --------    --------    --------    --------    --------
       Total..............................   $219,866    $210,401    $201,683    $197,331    $192,617
                                             ========    ========    ========    ========    ========
</TABLE>
 
-------------------------
(1) Amounts for 1995 based on Company records for the twelve-month period ended
    September 30, 1995. All other years based on ABC Publisher's Statement for
    the twelve-month period ended September 30.
 
(2) Primarily revenues from preprinted inserts.
 
                                        3
<PAGE>   5
 
     The Post-Dispatch has consistently been a leader in technological
innovation in the newspaper industry. It was the first major metropolitan
newspaper in the United States to be printed by the offset process. Currently,
sophisticated computer systems are used for writing, editing, composing and
producing the printing plates used in each edition. In the preparation of news
and color sections, the Post-Dispatch utilizes a Scitex graphics system which
automates the processing of film and color separations. This system is part of
an ongoing project intended to give the Post-Dispatch the capability of
full-page pagination. At presstime, a fiber optic link allows the Post-Dispatch
to send full-page images and then print newspapers simultaneously in its
downtown and suburban plants, thereby allowing it to deliver newspapers to
suburban readers earlier in the morning. In the distribution process, certain
sections of the newspaper as well as advertising supplements are handled using a
sophisticated palletized inserting operation. This allows the Post-Dispatch to
efficiently distribute into selected geographic areas as necessary. The
Company's commitment to the ongoing enhancement of its operating systems has
enabled the Post-Dispatch to offer a continually improving product to both
readers and advertisers while also realizing substantial savings in labor cost.
The Company believes the Post-Dispatch has adequate facilities to sustain up to
a 35 percent increase in daily circulation without incurring significant capital
expenditures.
 
     The Post-Dispatch is distributed primarily through independent home
delivery carriers and single copy dealers. Home delivery accounted for
approximately 75 percent of circulation for the daily Post-Dispatch and
approximately 55 percent of circulation for the Sunday edition during 1995.
 
THE ARIZONA DAILY STAR
 
     Founded in 1877, the Star is published in Tucson, Arizona, by the Company's
wholly-owned subsidiary, Star Publishing Company. The Star, a morning and Sunday
newspaper, and the Tucson Citizen (the "Citizen"), an afternoon newspaper owned
by Gannett Co., Inc. ("Gannett"), are southern Arizona's leading dailies. The
Star and the Citizen are published through an agency operation (the "Tucson
Agency") and have a combined weekday circulation of approximately 144,000.
Tucson is currently the 73rd largest metropolitan statistical area in the
country with a population of approximately 742,300 (Source: Sales and Marketing
Management).
 
     The Tucson Agency operates through TNI Partners, an agency partnership
which is owned half by the Company and half by Gannett. TNI Partners is
responsible for all aspects of the business of the two newspapers other than
editorial opinion and gathering and reporting news. Revenues and expenses are
generally shared equally by the Star and the Citizen. Unlike the St. Louis
Agency, the Company's consolidated financial statements include only its share
of the combined operating revenues and operating expenses of the two newspapers.
See "-- Publishing -- Agency Agreements."
 
     As a result of the Tucson Agency, the financial performance of the
Company's Star Publishing Company subsidiary is directly affected by the
operations and performance of both the Star and the Citizen. The following table
sets forth certain information concerning circulation and combined advertising
linage of the
 
                                        4
<PAGE>   6
 
Star and the Citizen and the Company's share of the operating revenues of the
Star and the Citizen for the past five years.
 
<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                  ---------------------------------------------------
                                                   1995       1994       1993       1992       1991
                                                  -------    -------    -------    -------    -------
<S>                                               <C>        <C>        <C>        <C>        <C>
Circulation(1):
     Star daily................................    97,133     98,050     96,926     94,496     91,661
     Citizen daily.............................    47,203     48,272     49,560     50,146     50,475
     Star Sunday...............................   179,430    179,652    175,321    170,500    166,657
Combined advertising (in thousands of inches):
  Full run (all zones)
     Retail....................................     1,565      1,565      1,675      1,750      1,616
     General...................................        49         50         45         42         60
     Classified................................     1,682      1,608      1,462      1,362      1,222
                                                  -------    -------    -------    -------    -------
       Total...................................     3,296      3,223      3,182      3,154      2,898
     Part run..................................       171        116         98        157        150
                                                  -------    -------    -------    -------    -------
       Total inches............................     3,467      3,339      3,280      3,311      3,048
                                                  =======    =======    =======    =======    =======
Operating revenues (in thousands):
     Advertising...............................   $31,332    $28,459    $25,562    $24,202    $23,569
     Circulation...............................    11,487     11,434     11,065     10,757     10,061
     Other(2)..................................     6,703      5,833      5,298      4,582      4,976
                                                  -------    -------    -------    -------    -------
       Total...................................   $49,522    $45,726    $41,925    $39,541    $38,606
                                                  =======    =======    =======    =======    =======
</TABLE>
 
-------------------------
(1) Amounts for 1995 based on Company records for the 53 week period ended
    December 31. All other years based on ABC Publisher's Statement for the 52
    week period ended December 31.
 
(2) Primarily revenues from preprinted inserts.
 
     In 1995, the Star's daily edition accounted for approximately 67 percent of
the combined daily circulation of the Tucson Agency publications. The Star's
daily and Sunday editions accounted for approximately 60 percent of the agency's
total advertising linage.
 
     The Star and the Citizen are printed at TNI Partners' modern, computerized
facility equipped with two, eight-unit Metro offset presses. Present inserter
equipment enables the significant portion of daily home delivery supplements to
be inserted on line at press speeds. In addition, the writing, editing and
composing functions have been computerized, increasing efficiency and reducing
workforce requirements.
 
     The newsstand prices of the daily editions of the Star and the Citizen are
$0.50 and $0.35, respectively, and the newsstand price of the Sunday edition of
the Star is $1.50. The Star and the Citizen are distributed by independent
contractors.
 
CHICAGO PUBLICATIONS
 
     On December 22, 1994, the Company sold Pulitzer Community Newspapers, Inc.,
a wholly-owned subsidiary with operations in the Chicago area. Since 1986, PCN's
primary operations consisted of the publication of a daily suburban newspaper,
the Daily Southtown, and commercial printing services for several national and
local newspapers. The sale of PCN completed the Company's exit from the Chicago
area after having closed down and partially sold its weekly community newspaper
business, Lerner Newspapers, in October 1992.
 
     The Company's 1994 consolidated and publishing segment operating results
included substantially a full year of PCN operations. During 1994, advertising,
preprints, circulation and contract printing accounted for approximately 55
percent, 4 percent, 11 percent and 28 percent, respectively, of PCN's total
operating
 
                                        5
<PAGE>   7
 
revenues of $48,652,000. The sale of PCN did not have a significant impact on
the Company's 1995 earnings results.
 
AGENCY AGREEMENTS
 
     Newspapers in approximately 18 cities operate under joint operating or
agency agreements. Agency agreements generally provide for newspapers servicing
the same market to share certain printing and other facilities and to pool
certain revenues and expenses in order to decrease aggregate expenses and
thereby allow the continuing operation of multiple newspapers serving the same
market. The Newspaper Preservation Act of 1970 permits joint operating
agreements between newspapers under certain circumstances without violation of
the Federal antitrust laws.
 
     St. Louis Agency. An agency operation between the Company and the Herald
Company is conducted under the provisions of an Agency Agreement, dated March 1,
1961, as amended. For many years, the Post-Dispatch was the afternoon and Sunday
newspaper serving St. Louis, and the Globe-Democrat was the morning paper and
also published a weekend edition. Although separately owned, from 1961 through
February 1984, the publication of both the Post-Dispatch and the Globe-Democrat
was governed by the St. Louis Agency Agreement. From 1961 to 1979, the two
newspapers controlled their own news, editorial, advertising, circulation,
accounting and promotion departments and Pulitzer managed the production and
printing of both newspapers. In 1979, Pulitzer assumed full responsibility for
advertising, circulation, accounting and promotion for both newspapers. In
February 1984, after a number of years of unfavorable financial results at the
St. Louis Agency, the Globe-Democrat was sold by the Herald Company and the St.
Louis Agency Agreement was revised to eliminate any continuing relationship
between the two newspapers and to permit the repositioning of the daily
Post-Dispatch as a morning newspaper.
 
     Following the renegotiation of the St. Louis Agency Agreement at the time
of the sale of the Globe-Democrat, the Herald Company retained the contractual
right to half the profits or losses (as defined) of the operations of the St.
Louis Agency, which from February 1984 forward consisted solely of the
publication of the Post-Dispatch. The St. Louis Agency Agreement provides for
the Herald Company to share half the cost of, and to share in a portion of the
proceeds from the sale of, capital assets used in the production of the Post-
Dispatch. Under the St. Louis Agency Agreement, Pulitzer supervises, manages and
performs all activities relating to the day-to-day publication of the
Post-Dispatch and is solely responsible for the news and editorial policies of
the newspaper.
 
     The consolidated financial statements of the Company include all the
operating revenues and expenses of the St. Louis Agency. An agency adjustment is
provided as an operating expense which reflects that portion of the operating
income of the St. Louis Agency allocated to the Herald Company. Under the St.
Louis Agency Agreement, for fiscal 1995, 1994, 1993, 1992 and 1991, the Company
paid the Herald Company $12,502,000, $14,706,000, $10,660,000, $11,690,000 and
$7,290,000, respectively, in respect of the Herald Company's share of the
operating income of the St. Louis Agency. As a result of such agency adjustment,
the Company is, and during the term of the St. Louis Agency will continue to be,
entitled to only half the profits (as defined) from the operations of the St.
Louis Agency, the amount of which cannot be determined until the end of each
fiscal year.
 
     The current term of the St. Louis Agency Agreement runs through December
31, 2034, following which either party may elect to renew the agreement for
successive periods of 30 years each.
 
     Tucson Agency. The Tucson Agency Agreement has, since 1940, governed the
joint operations of the Star and Citizen. For financial reporting purposes the
operations of the Tucson Agency are reflected in the Company's consolidated
financial statements differently from the operations of the St. Louis Agency.
The consolidated financial statements of the Company include only the Company's
share of the combined revenues, operating expenses and income of the Star and
Citizen. TNI Partners, as agent for the Company and Gannett, is responsible for
advertising and circulation, printing and delivery and collection of all
revenues of the Star and the Citizen. The Board of Directors of TNI Partners
presently consists of three directors chosen by the Company and three chosen by
Gannett. Budgetary, personnel and other non-news and editorial policy matters,
such as advertising and circulation policies and rates or prices, are determined
by the Board of
 
                                        6
<PAGE>   8
 
Directors of TNI Partners. Each newspaper is responsible for its own news and
editorial content. Revenues and expenses are recorded by TNI Partners, and the
resulting profit is split 50-50 between Pulitzer and Gannett. Both partners have
certain administrative costs which are borne separately. As a result of the
Tucson Agency, the Star and the Citizen benefit from increases and can be
adversely affected by decreases in each other's circulation.
 
     The Tucson Agency Agreement runs through June 1, 2015, and contains renewal
provisions for successive periods of 25 years each.
 
COMPETITION
 
     The Company's publications compete for readership and advertising revenues
in varying degrees with other metropolitan, suburban, neighborhood and national
newspapers and other publications as well as with television, radio, direct mail
and other news and advertising media. Competition for advertising is based upon
circulation levels, readership demographics, price and advertiser results, while
competition for circulation is generally based upon the content, journalistic
quality and price of the publication. In St. Louis and its surrounding suburban
communities, the Post-Dispatch's competition for circulation and advertising
revenues includes paid suburban daily newspapers as well as a chain of community
newspapers and shoppers. These community newspapers and shoppers target selected
geographic markets throughout the St. Louis metropolitan area.
 
     Due to the agency relationship existing in Tucson, the Star and the Citizen
cannot be viewed as competitors for advertising or circulation revenues. The
Star and the Citizen compete primarily against other media and against
Phoenix-area and suburban, neighborhood and national newspapers and
publications.
 
EMPLOYEE RELATIONS
 
     The Company has contracts with substantially all of its production unions
related to the Post-Dispatch, with expiration dates ranging from February 1999
through September 2002. In addition, the Company has a multi-year contract with
the St. Louis Newspaper Guild which expires in January 2003. All of the Post-
Dispatch labor contracts contain no strike provisions.
 
     TNI Partners has a one-year contract, expiring December 31, 1996, with
Tucson Graphic Communications Union Local No. 212, covering certain pressroom
employees.
 
RAW MATERIALS
 
     The publishing segment's results are significantly impacted by the cost of
newsprint which accounted for approximately 24 percent of the segment's total
1995 operating expenses. During 1995 (on a 52-week basis), the Company used
approximately 81,700 metric tons of newsprint in its production process. The
Company's recurring newsprint cost and metric tons of consumption for 1995,
after giving effect to the St. Louis Agency adjustment, were approximately
$31,500,000 and 46,700 metric tons, respectively. In the last five years, the
Company's average cost per ton of newsprint has varied from a low of $445 per
metric ton in 1992 to a high of $675 per metric ton in 1995. During 1995,
newsprint prices increased steadily through the end of the third quarter, with
prices since that time remaining in the range of $745 per metric ton.
 
     The Post-Dispatch obtains the newsprint necessary for its operations from
six separate mills, three of which are located in Canada and three in the United
States. The Post-Dispatch has guaranteed the future supply of certain volume
levels through long-term agreements with three of its newsprint suppliers. The
Company believes that the absence of long-term agreements with the remaining
three newsprint suppliers will not affect the Company's ability to obtain
newsprint at competitive prices.
 
     TNI Partners obtains the newsprint necessary for the Tucson Agency's
operations pursuant to an arrangement with Gannett, the owner of the Citizen.
Gannett purchases newsprint on behalf of TNI Partners under various contractual
arrangements and agreements. Newsprint is also purchased on the spot market.
 
                                        7
<PAGE>   9
 
BROADCASTING
 
     The Company's broadcasting operations currently consist of the ownership
and operation of eight network-affiliated VHF television stations, one
network-affiliated UHF television station, two satellite network television
stations rebroadcasting KOAT and one AM and one FM radio station. Pulitzer
Broadcasting has traditionally focused on mid-sized television markets. The
Company has diversified its revenues by purchasing properties in different
geographic regions of the United States, thus insulating itself, somewhat, from
regional economic downturns. The local management of each of the Company's
broadcasting properties are partially compensated based on the cash flow
performance of their respective stations. Senior management believes that the
success of a local television station is driven by strong local news
programming, and that the Company has developed a particular strength in local
news programming. As is the case with all Company operations, there is major
emphasis on cost control in the broadcasting segment.
 
TELEVISION
 
     The following table sets forth certain information concerning the
television stations which the Company owns and the markets in which they
operate.
 
<TABLE>
<CAPTION>
                                                                                    COMMERCIAL
                                                    DMA-TV                           STATIONS               EXPIRATION
                                                  HOUSEHOLDS     DMA       LOCAL    OPERATING                DATE OF
                           CALL       NETWORK         IN       NATIONAL   MARKET        IN         DATE        FCC
   STATION AND MARKET     LETTERS   AFFILIATION   MARKET(1)    RANK(2)    RANK(3)   MARKET(3)    ACQUIRED    LICENSE
------------------------  -------   -----------   ----------   --------   -------   ----------   --------   ----------
<S>                       <C>       <C>           <C>          <C>        <C>       <C>          <C>        <C>
VHF STATIONS(4):
Greenville/Spartanburg/
  Asheville, SC/NC......  WYFF      NBC             690,760       35         1           7        2/28/83    12/01/96
New Orleans, LA.........  WDSU      NBC             613,030       41         2           8       12/14/89     6/01/97
Harrisburg/Lancaster/
  Lebanon/York, PA......  WGAL      NBC             578,910       44         1           7        8/13/79     8/01/99
Greensboro/
  Winston-Salem/
  High Point, NC........  WXII      NBC             553,310       47         2           7        2/28/83    12/01/96
Daytona Beach/Orlando/
  Melbourne, FL.........  WESH      NBC             997,850       22         2          10        6/30/93     2/01/97
Albuquerque, NM(5)......  KOAT      ABC             552,940       48         1          12         6/1/69    10/01/98
Omaha, NE...............  KETV      ABC             360,760       75         1           5        4/15/76     6/01/98
Des Moines, IA..........  KCCI      CBS             369,410       72         1           4         9/9/93     2/01/98
UHF STATIONS(4):
Louisville, KY..........  WLKY      CBS             543,180       50         3           6        6/23/83     8/01/97
</TABLE>
 
-------------------------
(1) Based upon the Designated Market Area ("DMA") for the station as reported in
    the November, 1995 Nielsen Station Index ("NSI"). DMA is a geographic area
    defined as all counties in which the local stations receive a preponderance
    of total viewing hours. DMA data is a primary factor in determining
    television advertising rates.
 
(2) National DMA rank for each market as reported in the November, 1995 NSI.
 
(3) Based on November, 1995 NSI audience estimates, 7:00am-1:00am,
    Sunday-Saturday. The number of commercial stations operating in market does
    not include public broadcasting stations, satellite stations or translators
    which rebroadcast signals from distant stations.
 
(4) VHF (very high frequency) stations transmit on channels 2 through 13, and
    UHF (ultra high frequency) stations transmit on channels 14 through 69.
    Technical factors, such as station power, antenna location and height and
    topography of the area served, determine geographic market served by a
    television station. In general, a UHF station requires greater power or
    antenna height to cover the same area as a VHF station.
 
                                        8
<PAGE>   10
 
(5) The Company is also the licensee of KOVT, a satellite TV station licensed to
    Silver City, New Mexico and the holder of a construction permit to build a
    satellite TV station, KOFT, in Gallup, New Mexico. On February 1, 1996, the
    FCC granted a Petition for Rule Making filed by Pulitzer requesting that the
    community of license of KOFT be changed from Gallup to Farmington, New
    Mexico. In 1993, the Company purchased the operating assets of KVIO, a
    satellite TV station licensed to Carlsbad, New Mexico. The call letters of
    KVIO were subsequently changed to KOCT.
 
     Average audience share, number of stations serving the market and market
rank for each television station which the Company currently owns for the past
five years are shown in the following table.
 
<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                 ------------------------------------------------------------------------------------------------------
                        1995                 1994                 1993                 1992                 1991
                 ------------------   ------------------   ------------------   ------------------   ------------------
                            STATIONS             STATIONS             STATIONS             STATIONS             STATIONS
                            SERVING              SERVING              SERVING              SERVING              SERVING
                            MARKET/              MARKET/              MARKET/              MARKET/              MARKET/
                 AVERAGE     LOCAL    AVERAGE     LOCAL    AVERAGE     LOCAL    AVERAGE     LOCAL    AVERAGE     LOCAL
                 AUDIENCE   MARKET    AUDIENCE   MARKET    AUDIENCE   MARKET    AUDIENCE   MARKET    AUDIENCE   MARKET
    STATION      SHARE(1)   RANK(2)   SHARE(1)   RANK(2)   SHARE(1)   RANK(2)   SHARE(1)   RANK(2)   SHARE(1)   RANK(2)
---------------- --------   -------   --------   -------   --------   -------   --------   -------   --------   -------
<S>              <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>
WYFF............     26%       7/1        27%       6/1        29%       6/2        30%       6/2        31%       6/1
WDSU............     21        8/2        20        6/2        21        5/2        23        5/2        24        5/2
WGAL............     37        7/1        36        7/1        36        7/1        35        6/1        36        6/1
WXII............     25        7/2        23        7/3        26        7/3        25        7/3        27        7/3
WESH(3).........     23       10/2        21       10/2        23        9/2        25        7/2        25        8/2
KOAT............     32       12/1        30       11/1        32       10/1        33       10/1        32       12/1
KETV............     31        5/1        27        4/1        29        4/1        29        4/1        31        4/1
KCCI(4).........     37        4/1        41        4/1        35        4/1        35        4/1        33        4/1
WLKY............     24        6/3        28        6/3        29        5/1        28        5/1        26        5/3
</TABLE>
 
-------------------------
(1) Represents the number of television households tuned to a specific station
    9:00am-Midnight, Sunday-Saturday, as a percentage of Station Total
    Households. Source: 1994-1995 data from February, May and November Nielsen
    Station Index ("NSI"). Schedules for 1991-1993 include both NSI and Arbitron
    Ratings Audience Estimates information. NOTE: The Arbitron Company ceased to
    provide local television market reports in 1994.
 
(2) Stations serving market and local market rank data for 1994-1995 based on
    November NSI. Schedules for 1991-1993 include both NSI and Arbitron Ratings
    Audience Estimates information.
 
(3) Acquired June 30, 1993.
 
(4) Acquired September 9, 1993.
 
     The Company's television stations are affiliated with national television
networks under ten-year contracts which are automatically renewed for successive
five-year terms unless the Company or network exercises its right to cancel.
Prior to executing new contracts in early 1995, the stations' old network
affiliation agreements were for two year periods with automatic renewal
provisions.
 
     The ratings of the Company's television stations are affected by
fluctuations in the national ratings of its affiliated networks. The Company
believes that such network rating fluctuations are normal for the broadcasting
industry and in the past has not sought to change its network affiliations based
on the decline of the national ratings of an affiliated network.
 
ADVERTISING REVENUES
 
     The principal source of broadcasting revenues for the Company is the sale
of time to advertisers. The Company derives television broadcasting revenues
from local and national spot advertising and network compensation. Local
advertising consists of short announcements and sponsored programs on behalf of
 
                                        9
<PAGE>   11
 
advertisers in the immediate area served by the station. National spot
advertising generally consists of short announcements and sponsored programs on
behalf of national and regional advertisers. Network revenue is based upon a
contractual agreement with a network and is dependent upon the network programs
broadcast by the stations. The following table sets forth the television
broadcasting revenues received by the Company from each of these types of
advertising during the past five years.
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                              -------------------------------------------------------
                                                1995        1994      1993(1)       1992       1991
                                              --------    --------    --------    --------    -------
                                                                  (IN THOUSANDS)
<S>                                           <C>         <C>         <C>         <C>         <C>
Local......................................   $ 88,419    $ 82,463    $ 63,565    $ 49,670    $46,969
National spot..............................     80,760      76,925      52,869      44,594     41,252
Network....................................     17,096       6,557       5,840       5,210      5,988
Other......................................      1,779       1,832       1,665       1,575      1,837
                                              --------    --------    --------    --------    -------
     Total.................................   $188,054    $167,777    $123,939    $101,049    $96,046
                                              ========    ========    ========    ========    =======
</TABLE>
 
-------------------------
(1) The Company acquired television stations WESH and KCCI on June 30, 1993 and
    September 9, 1993, respectively.
 
     The Company believes that its stations are particularly strong in local
news programming, an important revenue source for network-affiliated stations.
Local news programs generate approximately a quarter of each station's revenues.
 
     Local time spots are sold by the Company's sales personnel at each
broadcast station. Company sales departments make extensive use of computers to
track and schedule all commercial spots sold, to maintain the broadcast station
operating schedule, to determine time spot availability and to record accounts
receivable. National spots are sold by the Company's three national sales
representative firms.
 
     Advertising rates are based primarily on audience size, audience share,
demographics and time availability. The Company's ability to maximize
advertising revenues is dependent upon, among other things, its management of
the inventory of advertising time available for sale.
 
PROGRAMMING
 
     The national television networks with which the Company's stations are
affiliated offer a variety of sponsored and unsponsored programs to affiliated
stations. The affiliated stations have the right of first refusal before the
programs may be offered to any other television station in the same city.
 
     When not broadcasting network programs, the Company's stations broadcast
local news programs, movies, syndicated programs acquired from independent
sources and public service programs. Movies and syndicated programs have
frequently been shown previously on network or cable television. Syndicated
programs are programs that are licensed to individual stations for one or more
showings in a particular market as distinguished from programs licensed for
national distribution through one of the major networks.
 
     The Company's stations make programming decisions on the basis of a number
of factors, including program popularity and cost. On occasion, the Company has
not renewed a popular program when syndication costs exceeded the level the
Company believed appropriate compared to the potential advertising revenues to
be derived from the program.
 
RADIO
 
     The Company owns two radio stations serving the Phoenix, Arizona market:
KTAR (AM) and KKLT (FM). Phoenix is the 20th largest Metro Market in the United
States, and the Phoenix Radio Metro Area is served by twelve AM and twenty FM
radio stations. KTAR (AM) ranks first in the Phoenix market and KKLT (FM) ranks
eleventh, with 8 percent and 3.5 percent average quarter hour market shares,
respectively (source: Arbitron Radio Ratings Summary-Fall 1995). KTAR (AM)
operates as a news/talk/sports radio
 
                                       10
<PAGE>   12
 
station while KKLT (FM) has an adult contemporary music format. The FCC licenses
for KTAR (AM) and KKLT (FM) expire on June 1, 1997.
 
     Advertising rates charged by a radio station are based primarily upon the
number of homes in the station's primary market, the number of persons using
radio in the area and the number of persons listening to the station.
Advertising is sold by a national sales representative and by the stations'
advertising sales personnel. The Company's radio stations manage their inventory
of available advertising time in much the same manner as the television
stations. Radio broadcasting net revenues during each of the past five years
were as follows: 1995 -- $14,885,000, 1994 -- $13,023,000; 1993 -- $12,900,000;
1992 -- $12,320,000 and 1991 -- $12,973,000.
 
COMPETITION
 
     Competition for television and radio audiences is based primarily on
programming content. Programming content for the Company's television stations
is significantly affected by network affiliation and by local programming
activities. Competition for advertising is based on audience size, audience
share, audience demographics, time availability and price. The Company's
television stations compete for audience and advertising with other television
stations and with radio stations, cable television and other news, advertising
and entertainment media serving the same markets. In addition, the Company's
television stations compete for audience and, to a lesser extent, advertising,
with other forms of home entertainment such as home video recorders and direct
broadcast satellite service. Cable systems, which operate generally on a
subscriber payment basis, compete by carrying television signals from outside
the broadcast market and by distributing signals from outside the broadcast
market and by distributing programming that is originated exclusively for cable
systems. The Company's television stations are also affected by local
competitive conditions, including the number of stations serving a particular
area and the programming content of those stations.
 
     The Company believes that the competitive position of its radio and
television properties is enhanced by the Company's policy of operating its
broadcasting properties with a view to long-term growth. Strong local news
programming is an important factor for the competitive position of the Company's
television stations. The Company's system for managing advertising inventory of
its television and radio stations is also an important factor in its ability to
compete effectively for advertising revenues.
 
     The Company's radio stations compete for audience and advertising with
other radio and television stations in the Phoenix area and with other print,
advertising and entertainment media. The Company's radio stations compete for
audience primarily on the basis of their broadcasting format.
 
FEDERAL REGULATION OF BROADCASTING
 
     Television and radio broadcasting are subject to the jurisdiction of the
Federal Communications Commission ("FCC") pursuant to the Communications Act of
1934, as amended (the "Communications Act"). The Communications Act prohibits
the public dissemination of radio and television broadcasts except in accordance
with a license issued by the FCC and empowers the FCC to issue, revoke, modify
and renew broadcasting licenses and adopt such regulations as may be necessary
to carry out the provisions of the Communication Act. The recently enacted
Telecommunications Act of 1996 ("Telecommunications Act") effected sweeping
changes in the Communications Act, many of which will influence the Company's
broadcasting operations.
 
BROADCAST LICENSES
 
     Under the amendments to the Communications Act provided for in the new
legislation, broadcasting licenses for both radio and television stations will
now be granted for a maximum period of eight years. Such licenses are renewable
upon application, and the Telecommunications Act fundamentally changed the
manner in which the FCC processes renewal applications. Petitions to deny
license renewals may still be filed against licensees by interested parties,
including members of the public. However, competing applicants no longer may
file for the frequency being used by the renewal applicant during the period
when a renewal application is pending. In addition, the new law provides that
the FCC must grant renewal if it finds that the station has
 
                                       11
<PAGE>   13
 
served the public interest during its previous license term and has not
otherwise engaged in serious violations (or a pattern of lesser violations) of
the Communications Act or the FCC's Rules.
 
     These changes in renewal procedures, and the longer license terms, apply to
renewal applications filed after May 1, 1995. The Company will file applications
to renew the licenses of stations WYFF-TV, Greenville, South Carolina, and
WXII-TV, Greensboro, North Carolina, respectively on August 1, 1996. The renewal
application for the license for Station WESH-TV, Daytona Beach, Florida, will be
filed on December 1, 1996.
 
MULTIPLE OWNERSHIP
 
     While requiring FCC review every two years, the Telecommunications Act
substantially liberalized the FCC's regulations governing the multiple, common
and cross ownership of broadcast stations. The new law lifts the numerical
restrictions on the number of radio stations a licensee may own nationwide;
however, it restricts the number of stations a licensee may own in any
individual market based upon the total number of stations in the market; the mix
of stations in different services (e.g., AM or FM) that a licensee owns; and, in
the smallest communities, a limitation that a licensee may not own more than 50
percent of all stations in the market.
 
     The Telecommunications Act also eliminates the cap on the number of TV
stations a party may own nationwide, provided that the total number of
households reached by any individual owner's stations do not exceed 35 percent
of the national household audience. With respect to the local market, the new
law requires the FCC to conduct a proceeding to determine whether to preserve or
eliminate its present rule forbidding the common ownership of two television
stations in the same market. Moreover, the law permits the use of so-called
Local Marketing Agreements (or "LMAs") between television stations in the same
market to the extent they are allowed by the FCC's rules. The agreements permit
one station in a market to lease and program the broadcast time and sell the
advertising time on another station in the market.
 
     The AM-FM radio ownership rules prohibit granting a license to operate an
AM or FM radio station or television station to an applicant who already owns,
operates or controls or has an interest in a daily newspaper in the community in
which the broadcast license is requested. In addition, they generally prohibit
ownership of a VHF television station and either an AM or FM radio station in
the same market. While the Telecommunications Act left the first restriction in
place, it expanded considerably the FCC's authority to grant waivers of the
television/radio cross-ownership rule in the top 50 markets.
 
     Further, the Telecommunications Act repeals the law which prohibited a
cable television system from carrying the signal of a television broadcast
station if such system owns, operates, controls or has an interest in a
broadcast television station which serves substantially the same area that the
cable television system is serving. Although the FCC rule prohibiting such
cross-ownership remains in place, it is expected that the FCC will undertake a
proceeding to eliminate the rule.
 
     A controversy exists among television broadcasters, cable companies and
program producers relating to rules requiring cable television systems ("cable
systems") to carry the signals of local television stations. On March 11, 1993,
the FCC adopted rules concerning the mandatory signal carriage ("must carry")
rights of commercial and noncommercial television stations that are local to the
area serviced by a cable system and the requirement prohibiting cable operators
and other multichannel video programming providers from carrying television
stations without obtaining their consent in some circumstances ("retransmission
consent"). That same year, a three-judge panel of the United States District
Court found that the FCC rules governing must carry and retransmission consent
are constitutional. On appeal, the United States Supreme Court vacated the
District Court decision and remanded the case back to the three-judge panel for
further proceedings. On December 12, 1995, the three-judge district court panel
(one judge dissenting) upheld the must-carry rules against the cable industry's
First Amendment challenge. Following those proceedings, the Supreme Court on
February 20, 1996, announced that it would hear the cable industry's challenge
to the district court's ruling. While the case is pending, the must-carry
provisions of the 1992 Cable Act remain in effect, as do the Commission's
must-carry rules and retransmission consent requirements.
 
                                       12
<PAGE>   14
 
OTHER RECENTLY ADOPTED RULE CHANGES
 
     It has been the policy of the FCC to rely increasingly upon the interplay
of marketplace forces in lieu of direct government regulation and to encourage
increasing competition among different electronic communication media. This
policy was ratified by the Telecommunications Act which effected other changes
that may affect the competitive environment in the local markets served by the
Company's broadcast stations.
 
     One such change authorizes local telephone companies to provide video
programming to subscribers in their local telephone service areas either as
cable operators or over their own networks known as "open video systems." The
new law provides that a telephone company offering video programming will be
regulated according to the method of delivering programming. However, under the
law, whether the telephone company operates as a cable operator or an open video
system operator, it will be subject to must carry and retransmission consent
obligations and the Commission's rules on sports exclusivity, network
nonduplication, and syndicated exclusivity. In addition, the Telecommunications
Act requires the FCC to adopt certain additional safeguards for broadcasters
which forbid a telephone company that provides video programming from
discriminating against broadcasters in favor of an affiliated programmer in
subscriber communications and placement on any on-screen program guide or menu.
In addition, a telephone company video provider must ensure that broadcasters
and other copyright holders are able to identify their programming, and if such
identifying information is carried as part of the programming signal, the
telephone company must transmit it without alteration.
 
     The FCC has granted several applications proposing to establish direct
broadcast satellite systems ("DBS"). Several other new technologies are in their
developmental stages, such as High Definition Television capable of transmitting
television pictures with higher resolution, truer color and wider aspect ratios,
and Digital Audio Broadcasting capable of transmitting radio signals on a
terrestrial basis and by space satellites. The potential impact of these
technologies on the Company's business cannot be predicted.
 
     The Telecommunications Act provides that if the FCC issues licenses for
advanced television (ATV) services, only incumbent broadcast licensees and
construction permit holders will be eligible initially for these licenses. The
new law requires the Commission to adopt regulations that permit broadcasters to
use such digital ATV spectrum for ancillary or supplementary services, provided
that such secondary services may not impair the quality of the ATV signal.
 
     This spectrum flexibility scheme would be highly advantageous for incumbent
television station owners such as the Company. It ensures that the Company will
not face competing applications from the general public as it applies for its
ATV licenses in the future. However, licenses for ATV services issued to
incumbent broadcast licensees or permittees must be preconditioned with a
requirement that either the ATV license or the original broadcast license be
surrendered to the FCC for reallocation or reassignment.
 
     The advantages of this new law could be limited by proposals currently
pending in Congress to require broadcasters to bid for the new authorizations
for ATV spectrum at auction and use their payments to help to reduce the federal
government's budget deficit, or to require broadcasters to make the transition
to digital spectrum more quickly in order to recapture broadcasters' current
spectrum for auction. If implemented, such a proposal would substantially
increase the costs incurred by broadcasters to make the transition to the new
technology.
 
     In connection with the Senate's passage of the Telecommunications Act, the
Republican leadership and Committee chairmen responsible for the measure in both
chambers sent a letter to the Chairman of the FCC requesting that the Commission
take no action on the licensing of new ATV spectrum until Congress has addressed
the spectrum auction proposal. The FCC responded that it would forbear from
issuing any licenses pending further legislation from Congress and that, in any
event, it did not expect to be in a position to issue ATV authorizations any
earlier than 1997. The broadcast industry is expected to mount a vigorous
opposition to the auction proposal.
 
                                       13
<PAGE>   15
 
LIMITATIONS ON OWNERSHIP OF THE COMPANY'S STOCK
 
     The Communications Act prohibits the assignment or transfer of broadcasting
licenses, including the transfer of control of any corporation holding such
licenses, without the prior approval of the FCC. The Communications Act would
prohibit the company from continuing to control broadcast licenses if, in the
absence of FCC approval, more than one-fourth of the Company's capital stock
were acquired or voted directly or indirectly by alien individuals,
corporations, or governments, or if it otherwise fell under alien influence or
control in a manner determined by the FCC to be contrary to the public interest.
 
     Because of the multiple, common and cross ownership rules, if a holder of
the Company's common stock or Class B common stock acquired an attributable
interest in the Company and had an attributable interest in other broadcast
stations, a cable television operation or a daily newspaper, there could be a
violation of FCC regulations depending upon the number and location of the other
broadcasting stations, cable television operations or daily newspapers
attributable to such holder.
 
     The information contained under this heading does not purport to be
complete summary of all the provisions of the Communications Act and the rules
and regulations of the FCC thereunder or of pending proposals for the other
regulation of broadcasting and related activities. For a complete statement of
such provisions, reference is made to the Communications Act, to such rules and
regulations and to such pending proposals.
 
EMPLOYEES
 
     At December 31, 1995, the Company had approximately 2,500 full-time
employees, of whom approximately 1,300 were engaged in publishing and 1,200 in
broadcasting. In St. Louis, a majority of the approximately 1,100 full-time
employees engaged in publishing are represented by unions. In addition, certain
employees of the broadcasting segment and TNI Partners are represented by
unions. The Company considers its relationship with its employees to be good.
 
ITEM 2. PROPERTIES
 
     The corporate headquarters of the Company is located at 900 North Tucker
Boulevard, Saint Louis, Missouri. The general character, location and
approximate size of the principal physical properties used by the Company at
December 31, 1995, are set forth below. Leases on the properties indicated as
leased by the Company expire at various dates through July 2012.
 
     The Company believes that all of its owned and leased properties are in
good condition, well maintained and adequate for its current and immediately
foreseeable operating needs. The Company currently has two
 
                                       14
<PAGE>   16
 
building projects nearing completion to address the long-term operating
requirements of its New Orleans televison station and Phoenix radio stations.
 
<TABLE>
<CAPTION>
                                                                              APPROXIMATE AREA
                                                                               IN SQUARE FEET
                                                                             ------------------
                      GENERAL CHARACTER OF PROPERTY                           OWNED     LEASED
--------------------------------------------------------------------------   -------    -------
<S>                                                                          <C>        <C>
Publishing:
  Printing plants, business and editorial offices, and warehouse space
     located in:
     St. Louis, Missouri*.................................................   536,100    115,300
     Tucson, Arizona**....................................................   265,000     24,500
     Washington, D.C. ....................................................        --      2,250
Broadcasting:
  Business offices, studios, garages and transmitters located in:
     St. Louis, Missouri..................................................        --      5,300
     Albuquerque, New Mexico..............................................    39,700      8,400
     Omaha, Nebraska......................................................    37,900        600
     Lancaster, Pennsylvania..............................................    55,200      2,200
     Winston-Salem, North Carolina........................................    41,100        800
     Greenville, South Carolina...........................................    53,600      3,600
     Louisville, Kentucky.................................................    20,800         --
     New Orleans, Louisiana...............................................    27,500     14,500
     Phoenix, Arizona.....................................................     1,450     10,450
     Orlando, Florida.....................................................    61,300      1,300
     Daytona Beach, Florida...............................................    28,100         --
     Des Moines, Iowa.....................................................    53,350         --
</TABLE>
 
-------------------------
 * Property is subject to the provisions of the St. Louis Agency Agreement.
 
** The 265,000 square foot facility in Tucson, Arizona, is used in the
   production of the Star and the Citizen and is jointly owned with Gannett
   pursuant to the Tucson Agency. Approximately 900 square feet of the leased
   properties in Tucson, Arizona, are leased by the Company for use as a bureau
   office for the Star. The remaining leased facilities are leased by TNI
   Partners pursuant to the Tucson Agency.
 
ITEM 3. LITIGATION
 
     The Company becomes involved from time to time in various claims and
lawsuits incidental to the ordinary course of its business, including such
matters as libel, slander and defamation actions and complaints alleging
discrimination. In addition, the Company is involved from time to time in
various governmental and administrative proceedings relating, among other
things, to renewal of broadcast licenses. While the results of litigation cannot
be predicted, management believes the ultimate outcome of such litigation will
not have a material adverse effect on the consolidated financial statements of
the Company and its subsidiaries.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     Not Applicable.
 
                                       15
<PAGE>   17
 
                                    PART II
 
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
        STOCKHOLDER MATTERS
 
     The Company's common stock is listed and traded on the New York Stock
Exchange under the symbol "PTZ."
 
     At March 20, 1996, there were approximately 421 record holders of the
Company's common stock and 2 record holders of its Class B common stock.
 
     The following table sets forth the range of high and low sales prices and
dividends paid for each quarterly period in the past two years:
<TABLE>
<CAPTION>
                               1994**                           LOW       HIGH     DIVIDEND*
        ----------------------------------------------------   ------    ------    ---------
        <S>                                                    <C>       <C>       <C>
        First Quarter.......................................   $30.60    $27.90     $ 0.115
        Second Quarter......................................    29.90     27.70       0.115
        Third Quarter.......................................    31.00     27.80       0.115
        Fourth Quarter......................................    31.20     26.40       0.115
 
<CAPTION>
                                1995                            LOW       HIGH     DIVIDEND*
        ----------------------------------------------------   ------    ------    ---------
        <S>                                                    <C>       <C>       <C>
        First Quarter.......................................   $36.75    $30.75     $ 0.135
        Second Quarter......................................    45.25     36.50       0.135
        Third Quarter.......................................    53.00     40.63       0.135
        Fourth Quarter......................................    52.25     43.88       0.135
</TABLE>
 
-------------------------
 * In 1995 and 1994, the Company paid cash dividends of $0.54 and $0.46,
   respectively, per share of common stock and Class B common stock (see Note 5
   of Notes to Consolidated Financial Statements for restrictions on dividends).
 
** The high and low sales prices and dividends per share have been adjusted for
   1994 to reflect the impact of a five-for-four stock split, effected in the
   form of a 25 percent common and Class B common stock dividend, declared by
   the Company's Board of Directors on January 4, 1995.
 
                                       16
<PAGE>   18
 
ITEM 6. SELECTED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                             --------------------------------------------------------
                                               1995        1994        1993        1992        1991
                                             --------    --------    --------    --------    --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                          <C>         <C>         <C>         <C>         <C>
Operating Revenues -- net.................   $472,327    $485,579    $426,985    $398,373    $393,372
                                             --------    --------    --------    --------    --------
Operating Expenses
  Operations..............................    190,013     191,570     180,998     170,307     184,784
  Selling, general and administrative.....    155,996     174,239     163,578     160,873     154,115
  St. Louis Agency adjustment.............     12,502      14,706      10,660      11,690       7,290
  Depreciation and amortization...........     27,150      30,486      23,792      18,869      23,773
                                             --------    --------    --------    --------    --------
     Total operating expenses.............    385,661     411,001     379,028     361,739     369,962
                                             --------    --------    --------    --------    --------
Operating income..........................     86,666      74,578      47,957      36,634      23,410
Interest income...........................      5,203       1,971       1,090       1,156       1,618
Interest expense..........................    (10,171)    (12,009)     (9,823)     (7,801)     (9,443)
Gain on sale of publishing property.......                  2,791
Net other expense.........................     (2,330)     (1,461)     (1,011)       (756)       (661)
                                             --------    --------    --------    --------    --------
Income before provision for income taxes
  and cumulative effects of changes in
  accounting principles...................     79,368      65,870      38,213      29,233      14,924
Provision for income taxes................     30,046      25,960      15,260       5,331       4,365
                                             --------    --------    --------    --------    --------
Income before cumulative effects of
  changes in accounting principles........     49,322      39,910      22,953      23,902      10,559
Cumulative effects of changes in
  accounting principles, net of applicable
  income taxes............................                   (719)        360     (25,147)
                                             --------    --------    --------    --------    --------
Net income (loss).........................   $ 49,322    $ 39,191    $ 23,313    $ (1,245)   $ 10,559
                                             ========    ========    ========    ========    ========
Earnings (loss) per share of stock (common
  and Class B common):(1)
Income before cumulative effects of
  changes in accounting principles........   $   3.02    $   2.45    $   1.51    $   1.65    $   0.73
Cumulative effects of changes in
  accounting principles...................                  (0.04)       0.02       (1.74)
                                             --------    --------    --------    --------    --------
     Earnings (loss) per share............   $   3.02    $   2.41    $   1.53    $  (0.09)   $   0.73
                                             ========    ========    ========    ========    ========
Dividends per share of common and Class B
  common stock(1).........................   $   0.54    $   0.46    $   0.43    $   0.39    $   0.38
                                             ========    ========    ========    ========    ========
Weighted average number of shares (common
  and Class B common stock)
  outstanding(1)..........................     16,350      16,241      15,278      14,424      14,404
                                             ========    ========    ========    ========    ========
OTHER DATA
Working capital...........................   $128,853    $ 96,729    $ 60,688    $ 45,989    $ 32,044
Total assets(2)...........................    495,073     468,312     461,618     289,988     243,947
Long-term debt, less current
  maturities(3)...........................    114,500     128,750     161,920      57,661      74,372
Stockholders' equity(4)...................    198,771     155,019     122,143      67,074      72,851
</TABLE>
 
-------------------------
(1) In 1994, shares outstanding, dividends per share and earnings per share were
    adjusted for 1994 and restated for 1993 -- 1991 to reflect the impact of a
    five-for-four stock split, effected in the form of a
 
                                       17
<PAGE>   19
 
ITEM 6. SELECTED FINANCIAL DATA -- CONTINUED

    25 percent common and Class B common stock dividend, declared by the
    Company's Board of Directors on January 4, 1995. In 1992, shares
    outstanding, dividends per share and earnings per share were adjusted for
    1992 and restated for 1991 to reflect the impact of 10 percent common and
    Class B common stock dividend declared by the Company's Board of    
    Directors on January 4, 1993.
 
(2) During 1993 the Company acquired television stations WESH and KCCI for
    approximately $164.7 million.
 
(3) As of December 31, 1993, approximately $118.6 million of new long-term debt
    financing was outstanding related to the acquisition of WESH and KCCI.
 
(4) On July 9, 1993, the Company sold 1.35 million shares of common stock in a
    public offering. The $37 million in net proceeds from the offering was used
    to partially finance the acquisition of WESH and KCCI in 1993.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
GENERAL
 
     The Company's operating revenues are significantly influenced by a number
of factors, including overall advertising expenditures, the appeal of
newspapers, television and radio in comparison to other forms of advertising,
the performance of the Company in comparison to its competitors in specific
markets, the strength of the national economy and general economic conditions
and population growth in the markets served by the Company.
 
     The Company's business tends to be seasonal, with peak revenues and profits
generally occurring in the fourth and, to a lesser extent, second quarters of
each year as a result of increased advertising activity during the Christmas and
spring holiday periods. The first quarter is historically the weakest quarter
for revenues and profits.
 
1995 COMPARED WITH 1994
 
CONSOLIDATED
 
     Operating revenues for the year ended December 31, 1995 decreased 2.7
percent to $472.3 million from $485.6 million in 1994. The revenue comparison
was affected by the sale of Pulitzer Community Newspapers, Inc. ("PCN") on
December 22, 1994. The Company's 1994 results included substantially a full year
of PCN operations while no amounts for PCN were included in the 1995 results. In
addition, the revenue comparison was favorably affected by an extra week of
operations in 1995; fiscal 1995 contained 53 weeks, versus 52 weeks in fiscal
1994. On a comparable basis (i.e., excluding the extra week from 1995 and PCN
from 1994), consolidated revenues would have increased 6.2 percent. The increase
reflected gains in both broadcasting and publishing revenues.
 
     Operating expenses, excluding the St. Louis Agency adjustment, were $373.2
million compared to $396.3 million in 1994, a decrease of 5.8 percent. On a
comparable basis, excluding the extra week from 1995 and PCN from 1994,
operating expenses increased 5.2 percent. This increase was primarily
attributable to increased newsprint costs of $15.1 million, higher overall
personnel costs of $2.1 million, increased promotion expense of $934,000,
increased purchased supplement costs of $783,000, and the reversal in the prior
year of an accrual due to the settlement of a sales tax issue ($437,000).
Expense increases were partially offset by lower depreciation and amortization
of $1.4 million and lower programming rights expense of $1.2 million.
 
     Operating income for fiscal 1995 increased 16.2 percent to $86.7 million
from $74.6 million in 1994. On a comparable basis, excluding the extra week from
1995 and PCN from 1994, operating income increased 15.7 percent. The 1995
increase reflected improvements in the broadcasting segment's operating income,
resulting from increased revenues.
 
                                       18
<PAGE>   20
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

     Interest expense decreased $1.8 million in 1995 compared to 1994, due to
lower debt levels. The Company's average debt level for 1995 decreased to $133.2
million from $160.1 million in the prior year. The Company's average interest
rate for 1995 was unchanged from the prior year at 7.5 percent. Interest income
for the year increased $3.2 million, due to both a higher average balance of
invested funds and higher short-term interest rates.
 
     The effective income tax rate for 1995 decreased to 37.9 percent from 39.4
percent in the prior year. The rates in both 1995 and 1994 were affected by
non-recurring items. Income tax expense for 1995 was reduced by a $911,000
positive adjustment related to the fourth-quarter settlement of a state tax
examination. The 1994 rate included the effect of approximately $1.8 million in
tax expense related to the gain on the sale of Pulitzer Community Newspapers,
Inc. In addition, 1994 income tax expense was reduced by a $500,000 positive
adjustment related to the fourth-quarter settlement of the 1992 federal tax
examination. Excluding these non-recurring items from both years, the effective
income tax rates for 1995 and 1994 would have been 39 percent and 39.2 percent,
respectively. The Company expects the estimated tax rate for 1996 will again be
in the 39 percent range.
 
     As discussed in Note 9 to the Consolidated Financial Statements, effective
January 1, 1994 the Company adopted the provisions of Statement of Financial
Accounting Standards No. 112 ("SFAS 112"), Employers' Accounting for
Postemployment Benefits,and recorded its initial liability thereunder, resulting
in a one-time after-tax charge of $719,000. After recording the one-time charge,
the Company's ongoing expense under SFAS 112 does not differ significantly from
the prior pay-as-you-go basis.
 
     On December 22, 1994, the Company sold its Chicago publishing subsidiary,
PCN, for approximately $33.7 million. The gain on the sale of PCN added
approximately $1 million ($2.8 million less income taxes of $1.8 million), or
$0.06 per share, to 1994 net income. Other than the net gain of $1 million, the
sale of PCN had no effect on the net income comparisons because earnings
provided by PCN in 1994 were offset in 1995 by the after-tax investment income
generated by the sale proceeds.
 
     For the year ended December 31, 1995, the Company reported net income of
$49.3 million, or $3.02 per share, compared with net income of $39.2 million, or
$2.41 per share, in the prior year. Comparability of the earnings results was
affected by several non-recurring items which included the positive income tax
adjustments in both years, the SFAS 112 adjustment in 1994 and the PCN gain in
1994. Excluding the non-recurring items from both years, 1995 net income
increased to $48.4 million, or $2.96 per share, from $38.4 million, or $2.36 per
share, for the prior year. The gain in net income reflected an improvement in
the broadcasting segment's operating profits and a reduction in interest
expense.
 
     In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123 ("SFAS 123"), Accounting for
Stock-Based Compensation, which requires adoption in 1996. The new standard
defines a fair value method of accounting for stock options and similar equity
instruments. Under the fair value method, compensation cost is measured at the
grant date based on the fair value of the award and is recognized over the
service period, which is usually the vesting period. Pursuant to the new
standard, companies are encouraged, but not required, to adopt the fair value
method of accounting for employee stock-based transactions. Companies are also
permitted to continue to account for such transactions under Accounting
Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees, but would be required to disclose pro forma net income and, if
presented, earnings per share as if the company had applied the new method of
accounting. The Company will adopt the disclosure requirements of SFAS 123 in
fiscal year 1996 but will continue to recognize and measure compensation for its
restricted stock and stock option plans in accordance with the existing
provisions of APB 25, resulting in no impact on the Company's financial
statements.
 
                                       19
<PAGE>   21
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

PUBLISHING
 
     Operating revenues from the Company's publishing segment for 1995 decreased
11.6 percent to $269.4 million from $304.8 million in 1994. On a comparable
basis, excluding the extra week from 1995 and PCN from 1994, publishing revenues
increased 3.4 percent. This increase reflected both higher advertising revenues,
particularly classified, at both newspaper properties and higher circulation
revenues.
 
     Newspaper advertising revenues, on a comparable basis, excluding the extra
week from 1995 and PCN from 1994, increased $5.2 million, or 3.4 percent, in
1995. The current year increase was generated by higher average rates which
contributed $7.2 million but which was partially offset by a decline in
advertising volume totaling $2 million. In the first quarter of 1995, both the
St. Louis Post-Dispatch ("Post-Dispatch") and The Arizona Daily Star ("Star")
implemented rate increases for most advertising categories, ranging from 4
percent to 6 percent and 6 percent to 8 percent, respectively. In November 1995,
additional rate increases, ranging from 7.5 percent to 9.5 percent, were
implemented at the Star. On January 1, 1996, rate increases, averaging 6 percent
for most advertising categories, were implemented at the Post-Dispatch.
 
     Circulation revenues, on a comparable basis, excluding the extra week from
1995 and PCN from 1994, increased $2.3 million, or 3.1 percent, in 1995. The
current year increase resulted from circulation price increases which
contributed $4.3 million but which was partially offset by average circulation
decreases of $2 million. Average daily and Sunday circulation of the
Post-Dispatch for the fourth quarter of 1995 was 324,425 and 543,063 compared to
331,676 and 552,647 for the corresponding 1994 period, decreases of 2.2 percent
and 1.7 percent, respectively. Effective February 5, 1995, the home-delivered
price of the Sunday Post-Dispatch was increased $1.00 per month. In addition,
the home-delivered price of the daily Star was increased $0.80 per month,
effective March 27, 1995.
 
     Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, decreased to $231.5 million in 1995 from $259.6 million
in 1994, a decrease of 10.8 percent. On a comparable basis, excluding the extra
week from 1995 and PCN from 1994, operating expenses increased 6.9 percent. The
higher expenses, on a comparable basis, resulted primarily from increased
newsprint cost of $15.1 million, reflecting the impact of significant newsprint
price increases, and increased purchased supplement costs of $783,000.
 
     Operating income from the Company's publishing activities decreased 16.7
percent to $25.4 million in 1995 from $30.5 million in 1994. On a comparable
basis, excluding the extra week from 1995 and PCN from 1994, operating income
from the publishing segment decreased 12.3 percent. The decline resulted from
the significant increase in newsprint costs which exceeded revenue gains on a
comparable basis.
 
     On a comparable basis, excluding the extra week from 1995 and PCN from
1994, increasing newsprint prices added approximately $15.1 million to 1995
newsprint expense ($8.7 million after giving effect to the St. Louis Agency
adjustment). Since the most recent price increase on September 1, 1995, the
Company's average cost per metric ton for newsprint has remained in the range of
$745. The Company has not been notified by its newsprint suppliers of price
increases in 1996. On a 52-week basis, the Company's 1995 newsprint cost and
metric tons consumed, after giving effect to the St. Louis Agency adjustment,
were approximately $31.5 million and 46,700 tons, respectively.
 
BROADCASTING
 
     Broadcasting operating revenues for 1995 increased 12.2 percent to $202.9
million from $180.8 million in 1994. On a comparable basis, excluding the extra
week from 1995, operating revenues increased 10.2 percent. Local spot
advertising increased 5.9 percent and national spot advertising increased 3.4
percent. In addition, network compensation revenue increased $10.2 million due
to new ten-year network affiliation agreements executed in early 1995. During
1995, approximately $2 million of this network revenue increase was invested
 
                                       20
<PAGE>   22
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

back into the Company's stations to strengthen their local news operations.
These costs were reflected in the ongoing annual expenses of the broadcasting
operations.
 
     Reported broadcasting operating revenues included political advertising of
$2.9 million and $8.5 million in 1995 and 1994, respectively.
 
     Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 3.1 percent
to $137 million in 1995 from $132.8 million in 1994. On a comparable basis,
excluding the extra week from 1995, operating expenses increased 2.1 percent.
Major increases in comparable expenses were overall personnel costs of $3
million and promotion expense of $805,000. Also contributing to the current year
expense increase was the prior year reversal of an accrual due to the settlement
of a sales tax issue ($437,000). Partially offsetting these increases were
declines in depreciation and amortization of $1.5 million and programming rights
expense of $1.2 million.
 
     Operating income from the broadcasting segment in 1995 increased 37.5
percent to $65.9 million from $48 million in the prior year. On a comparable
basis, excluding the extra week from 1995, operating income from the
broadcasting segment increased 32.6 percent. The 1995 increase resulted from a
combination of increased advertising revenues and higher network compensation.
 
1994 COMPARED WITH 1993
 
CONSOLIDATED
 
     Operating revenues for the year ended December 31, 1994 increased 13.7
percent to $485.6 million from $427 million in 1993. The revenue comparison was
affected by the acquisitions of television stations WESH and KCCI on June 30,
1993 and September 9, 1993, respectively. The Company's 1994 results included
full periods for WESH and KCCI while the prior year included the results of the
two television stations only after their respective acquisition dates. Excluding
WESH (first six months only) and KCCI (first nine months only) from the
comparison, consolidated revenues would have increased 7.9 percent. These
increases reflected gains in both broadcasting and publishing revenues.
 
     Operating expenses, excluding the St. Louis Agency adjustment, were $396.3
million compared to $368.4 million in 1993, an increase of 7.6 percent.
Excluding WESH (first six months only) and KCCI (first nine months only) from
the comparison, consolidated operating expenses would have increased 1.5
percent. Major increases in comparable expenses included overall personnel costs
of $3.2 million, circulation delivery expense of $1.1 million, national
advertising representative commissions of $783,000 and newsprint expense of
$396,000. Expense increases were partially offset by a decline in programming
rights expense of $2.9 million and the reversal of an accrual due to the
settlement of a sales tax issue ($437,000).
 
     Operating income for fiscal 1994 increased 55.5 percent to $74.6 million
from $48 million in 1993. Excluding WESH (first six months only) and KCCI (first
nine months) from the comparison, operating income would have increased 50.7
percent. The increase reflected improvements in operating income in both the
publishing and broadcasting segments due to a combination of increased revenues
and cost control.
 
     Interest expense increased $2.2 million in 1994 compared to 1993, due to
higher debt levels in 1994. The Company's average debt level for 1994 increased
to $160.1 million from $119.7 million in the prior year, due to borrowings
related to the 1993 acquisitions of WESH and KCCI. Lower rates on the WESH and
KCCI borrowings reduced the Company's average interest rate for 1994 to 7.5
percent from 7.8 percent in the prior year. Interest expense also included a
declining interest factor related to annual payments (1990-1994) under a
non-competition agreement entered into in connection with the 1989 acquisition
of television station WDSU in New Orleans. Interest income for the year
increased $881,000, due to both higher average balances of invested funds and
higher interest rates.
 
                                       21
<PAGE>   23
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

     The effective income tax rate for 1994 decreased to 39.4 percent from 39.9
percent in the prior year. The rates in both 1994 and 1993 were affected by
non-recurring items. The 1994 rate included the effect of approximately $1.8
million in tax expense related to the gain on the sale of Pulitzer Community
Newspapers, Inc. In addition, 1994 income tax expense was reduced by a $500,000
positive adjustment related to the fourth-quarter settlement of the 1992 federal
tax examination. The 1993 effective tax rate was lowered by a $225,000
adjustment to the tax provision, reflecting a change in the Company's deferred
income tax rates as a result of the Revenue Reconciliation Act of 1993.
Excluding these non-recurring items from both years, the effective income tax
rates for 1994 and 1993 would have been 39.2 percent and 40.5 percent,
respectively. The lower 1994 rate reflected the Company's reduced exposure to
further tax adjustments for open tax years, following the settlement of the
1990-1992 federal tax examinations during 1994, and the impact of 1993 tax law
changes in the deductibility of the amortization of intangibles. The effective
tax rates in both years also reflected the effect of approximately $500,000 of
non-deductible goodwill amortization expense.
 
     Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 112 ("SFAS 112"), Employers' Accounting
for Postemployment Benefits, and recorded its initial liability thereunder,
resulting in a one-time after-tax charge of $719,000 (see Note 9 of the Notes to
Consolidated Financial Statements). After recording the one-time charge, the
Company's 1994 expense under SFAS 112 did not differ significantly from the
prior year pay-as-you-go amount.
 
     On December 22, 1994, the Company sold its Chicago publishing subsidiary,
Pulitzer Community Newspapers, Inc. ("PCN"), for approximately $33.7 million.
The gain on the sale of PCN added approximately $1 million ($2.8 million less
income taxes of $1.8 million), or $0.06 per share, to 1994 net income.
 
     For the year ended December 31, 1994, the Company reported net income of
$39.2 million, or $2.41 per share, compared with net income of $23.3 million, or
$1.53 per share, in the prior year. Net income for 1994 included the
non-recurring SFAS 112 charge of $719,000, or $0.04 per share. In 1993, the
Company adopted Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes, resulting in a positive adjustment to income of $360,000, or
$0.02 per share.
 
     Excluding the cumulative effects of accounting changes from both years and
the 1994 one-time gain from the sale of PCN, 1994 net income increased to $38.9
million, or $2.39 per share, from $23 million, or $1.51 per share, for the prior
year. The 1994 gain in net income reflected improvements in operating profits in
both the publishing and broadcasting segments due to a combination of increased
revenues and cost control. The Company's earnings per share comparison for the
year-to-date period was affected by the larger average number of shares
outstanding in 1994 as a result of the public offering of 1.35 million shares in
July 1993.
 
PUBLISHING
 
     Operating revenues from the Company's publishing segment for 1994 increased
5 percent to $304.8 million from $290.1 million in 1993, primarily reflecting
increased revenues from advertising, particularly classified, at all three
newspaper locations.
 
     Newspaper advertising revenues increased $12.3 million, or 7.3 percent, in
1994. The 1994 increase resulted from higher advertising volume which
contributed $9.3 million and higher average rates which contributed $3 million.
In January 1994, all publishing properties increased rates for certain
advertising categories, ranging from 3 percent to 6.5 percent. In the first
quarter of 1995, both the St. Louis Post-Dispatch ("Post-Dispatch")and The
Arizona Daily Star ("Star") implemented rate increases for most advertising
categories, ranging from 4 percent to 6 percent and 6 percent to 8 percent,
respectively.
 
     Circulation revenues decreased $720,000, or 0.9 percent, in 1994. The
slight revenue decline for 1994 resulted from average circulation decreases at
the Post-Dispatch while average circulation rates were virtually unchanged from
the prior year. Average daily and Sunday circulation of the Post-Dispatch for
the fourth
 
                                       22
<PAGE>   24
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

quarter of 1994 was 331,676 and 552,647 compared to 342,687 and 561,744,
respectively, for the corresponding 1993 period.
 
     Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, increased to $259.6 million in 1994 from $255.8 million
in 1993, an increase of 1.5 percent. The increase was principally attributable
to higher circulation delivery expense of $1.1 million, increases in overall
personnel costs of $746,000 and an increase in newsprint expense of $396,000,
due to higher newsprint consumption.
 
     Operating income from the Company's publishing activities increased 28.6
percent to $30.5 million from $23.7 million in 1993, reflecting a combination of
increased revenues and cost control.
 
BROADCASTING
 
     Broadcasting operating revenues for 1994 increased 32.1 percent to $180.8
million from $136.8 million in 1993. The revenue comparison was affected by the
Company's acquisition of television stations WESH and KCCI on June 30, 1993 and
September 9, 1993, respectively. Excluding WESH (first six months only) and KCCI
(first nine months only) from the comparison, broadcasting revenues would have
increased 14.1 percent in 1994. On a comparable basis, local spot advertising
would have increased 9.2 percent; national spot advertising would have increased
23 percent; and network compensation would have declined 4 percent. Political
advertising, including WESH and KCCI, increased $8.1 million in 1994.
 
     Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 22 percent
to $132.8 million in 1994 from $108.9 million in 1993. Excluding WESH (first six
months only) and KCCI (first nine months only) from the comparisons, operating
expenses would have increased 1.4 percent in 1994. Major increases in comparable
expenses were overall personnel costs of $2.4 million, national advertising
representative commissions of $783,000 and promotion expense of $395,000.
Partially offsetting these increases were a decline in programming rights
expense of $2.9 million and the reversal of an accrual due to the settlement of
a sales tax issue ($437,000).
 
     Operating income from broadcasting operations in 1994 increased 71.6
percent to $48 million from $27.9 million in the prior year. Excluding WESH
(first six months only) and KCCI (first nine months only), broadcasting
operating income would have increased 63.2 percent in 1994, due to a combination
of increased advertising revenues and cost control.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Outstanding debt, inclusive of the short-term portion of long-term debt, as
of December 31, 1995, was $128.8 million, compared with $143 million at December
31, 1994. The decrease since the prior year end reflected a scheduled repayment
of $14.3 million under the Company's Senior Note Agreement maturing in 1997. As
of December 31, 1995, the Company's long-term borrowings consisted of $128.8
million of fixed-rate senior notes with The Prudential Insurance Company of
America ("Prudential").
 
     The Company's Senior Note Agreements with Prudential require it to maintain
certain financial ratios, place restrictions on the payment of dividends and
prohibit new borrowings, except as permitted thereunder.
 
     As of December 31, 1995, commitments for capital expenditures were
approximately $7.8 million, relating to normal capital equipment replacements
and a portion of the costs for new facilities for television station WDSU in New
Orleans and the radio operations in Phoenix. Commitments for film contracts and
license fees as of December 31, 1995 were approximately $26.6 million. In
addition, as of December 31, 1995, the Company had capital contribution
commitments of approximately $6.3 million related to investments in two limited
partnerships.
 
                                       23
<PAGE>   25
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED

     At December 31, 1995, the Company had working capital of $128.9 million and
a current ratio of 3.22 to 1. This compares to working capital of $96.7 million
and a current ratio of 2.55 to 1 at December 31, 1994.
 
     The Company from time to time considers acquisitions of broadcasting,
newspaper and other properties when favorable investment opportunities are
identified. Although, the Company has no agreements to acquire additional
properties, in the event an investment opportunity is identified, management
expects that it would be able to arrange financing on terms and conditions
satisfactory to the Company.
 
     The Company generally expects to generate sufficient cash from operations
to cover ordinary capital expenditures, film contract and license fees, working
capital requirements, debt installments and dividend payments.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The following consolidated financial statements of Pulitzer Publishing
Company and Subsidiaries are filed as part of this report. Supplementary
unaudited data with respect to the quarterly results of operations of the
Company are set forth in the Notes to Consolidated Financial Statements.
 
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
     Independent Auditors' Report
 
     Statements of Consolidated Income for each of the Three Years in the Period
        Ended December 31, 1995
 
     Statements of Consolidated Financial Position at December 31, 1995 and 1994
 
     Statements of Consolidated Stockholders' Equity for each of the Three Years
        in the Period Ended December 31, 1995
 
     Statements of Consolidated Cash Flows for each of the Three Years in the
        Period Ended December 31, 1995
 
     Notes to Consolidated Financial Statements for the Three Years in the
        Period Ended December 31, 1995
 
                                       24
<PAGE>   26
 
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders of
Pulitzer Publishing Company:
 
     We have audited the accompanying statements of consolidated financial
position of Pulitzer Publishing Company and subsidiaries as of December 31, 1995
and 1994, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. 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, such consolidated financial statements present fairly, in
all material respects, the financial position of the companies at December 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
 
     As discussed in Note 10 to the consolidated financial statements, in 1994
the Company changed its method of accounting for postemployment benefits to
conform with Statement of Financial Accounting Standards No. 112, Employers'
Accounting for Postemployment Benefits. As discussed in Note 11 to the
consolidated financial statements, in 1993 the Company changed its method of
accounting for income taxes to conform with Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes.
 
DELOITTE & TOUCHE LLP
 
Saint Louis, Missouri
February 9, 1996
 
                                       25
<PAGE>   27
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                       STATEMENTS OF CONSOLIDATED INCOME
 
<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                                                 --------------------------------
                                                                   1995        1994        1993
                                                                 --------    --------    --------
                                                                 (IN THOUSANDS, EXCEPT PER SHARE
                                                                              DATA)
<S>                                                              <C>         <C>         <C>
OPERATING REVENUES -- NET:
  Publishing:
     Advertising...............................................  $161,932    $181,018    $168,684
     Circulation...............................................    76,349      77,941      78,661
     Other.....................................................    31,107      45,820      42,801
  Broadcasting.................................................   202,939     180,800     136,839
                                                                 --------    --------    --------
          Total operating revenues.............................   472,327     485,579     426,985
                                                                 --------    --------    --------
OPERATING EXPENSES:
  Publishing operations........................................   125,811     130,219     128,220
  Broadcasting operations......................................    64,202      61,351      52,778
  Selling, general and administrative..........................   155,996     174,239     163,578
  St. Louis Agency adjustment (Note 2).........................    12,502      14,706      10,660
  Depreciation and amortization................................    27,150      30,486      23,792
                                                                 --------    --------    --------
          Total operating expenses.............................   385,661     411,001     379,028
                                                                 --------    --------    --------
  Operating income.............................................    86,666      74,578      47,957
  Interest income..............................................     5,203       1,971       1,090
  Interest expense.............................................   (10,171)    (12,009)     (9,823)
  Gain on sale of publishing property (Note 3).................                 2,791
  Net other expense............................................    (2,330)     (1,461)     (1,011)
                                                                 --------    --------    --------
INCOME BEFORE PROVISION FOR INCOME TAXES AND CUMULATIVE EFFECTS
  OF CHANGES IN ACCOUNTING PRINCIPLES..........................    79,368      65,870      38,213
PROVISION FOR INCOME TAXES (Note 10)...........................    30,046      25,960      15,260
                                                                 --------    --------    --------
INCOME BEFORE CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING
  PRINCIPLES...................................................    49,322      39,910      22,953
CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING PRINCIPLES, NET OF
  APPLICABLE INCOME TAXES
  (Notes 9 and 10).............................................                  (719)        360
                                                                 --------    --------    --------
NET INCOME.....................................................  $ 49,322    $ 39,191    $ 23,313
                                                                 ========    ========    ========
EARNINGS PER SHARE OF STOCK (COMMON AND CLASS B COMMON):
  Income before cumulative effects of changes in accounting
     principles................................................     $3.02       $2.45       $1.51
  Cumulative effects of changes in accounting principles.......                 (0.04)       0.02
                                                                    -----       -----       -----
          Total................................................     $3.02       $2.41       $1.53
                                                                    =====       =====       =====
WEIGHTED AVERAGE NUMBER OF SHARES (COMMON AND CLASS B COMMON
  STOCK OUTSTANDING) (Note 7)..................................    16,350      16,241      15,278
                                                                   ======      ======      ======
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       26
<PAGE>   28
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                 STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
 
<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                   ----------------------
                                                                                     1995         1994
                                                                                   ---------    ---------
                                                                                       (IN THOUSANDS)
<S>                                                                                <C>          <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.....................................................   $ 100,380    $  77,084
  Trade accounts receivable (less allowance for doubtful accounts of $2,009 and
    $2,135).....................................................................      64,524       62,943
  Inventory.....................................................................       6,190        3,069
  Prepaid expenses and other....................................................       7,041        6,783
  Program rights................................................................       8,824        9,263
                                                                                   ---------    ---------
      Total current assets......................................................     186,959      159,142
                                                                                   ---------    ---------
PROPERTIES:
  Land..........................................................................      11,779       11,261
  Buildings.....................................................................      60,794       58,795
  Machinery and equipment.......................................................     173,165      161,305
  Construction in progress......................................................       8,745        4,444
                                                                                   ---------    ---------
      Total.....................................................................     254,483      235,805
  Less accumulated depreciation.................................................     135,296      119,911
                                                                                   ---------    ---------
      Properties -- net.........................................................     119,187      115,894
                                                                                   ---------    ---------
INTANGIBLE AND OTHER ASSETS:
  Intangible assets -- net of applicable amortization (Note 4)..................     117,470      125,415
  Receivable from The Herald Company (Notes 2 and 9)............................      43,696       44,059
  Other.........................................................................      27,761       23,802
                                                                                   ---------    ---------
      Total intangible and other assets.........................................     188,927      193,276
                                                                                   ---------    ---------
         TOTAL..................................................................   $ 495,073    $ 468,312
                                                                                   =========    =========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Trade accounts payable........................................................   $  14,145    $  14,458
  Current portion of long-term debt (Note 5)....................................      14,250       14,250
  Salaries, wages and commissions...............................................      11,757       11,541
  Income taxes payable..........................................................       2,618        6,331
  Program contracts payable.....................................................       8,664        8,864
  Interest payable..............................................................       3,415        3,480
  Pension obligations...........................................................       1,023        2,827
  Other.........................................................................       2,234          662
                                                                                   ---------    ---------
      Total current liabilities.................................................      58,106       62,413
                                                                                   ---------    ---------
LONG-TERM DEBT (Note 5).........................................................     114,500      128,750
                                                                                   ---------    ---------
PENSION OBLIGATIONS (Note 8)....................................................      24,631       23,593
                                                                                   ---------    ---------
POSTRETIREMENT AND POSTEMPLOYMENT BENEFIT OBLIGATIONS (Note 9)..................      92,856       91,966
                                                                                   ---------    ---------
OTHER LONG-TERM LIABILITIES.....................................................       6,209        6,571
                                                                                   ---------    ---------
COMMITMENTS AND CONTINGENCIES (Note 6)..........................................
STOCKHOLDERS' EQUITY (Note 7):
  Preferred stock, $.01 par value; 25,000,000 shares authorized; issued and
    outstanding -- none
  Common stock, $.01 par value; 100,000,000 shares authorized; issued --
    4,704,268 in 1995 and 4,444,099 in 1994.....................................          47           44
  Class B common stock, convertible, $.01 par value; 50,000,000 shares
    authorized; issued -- 20,474,050 in 1995 and 20,608,832 in 1994.............         205          206
  Additional paid-in capital....................................................     125,539      122,070
  Retained earnings.............................................................     260,816      220,322
                                                                                   ---------    ---------
      Total.....................................................................     386,607      342,642
  Treasury stock -- at cost; 16,712 and 11,462 shares of common stock in 1995
    and 1994, respectively, and 8,775,638 shares of Class B common stock in 1995
    and 1994....................................................................    (187,836)    (187,623)
                                                                                   ---------    ---------
      Total stockholders' equity................................................     198,771      155,019
                                                                                   ---------    ---------
         TOTAL..................................................................   $ 495,073    $ 468,312
                                                                                   =========    =========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       27
<PAGE>   29
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                       STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                     CLASS
                                                       B      ADDITIONAL                              TOTAL
                                            COMMON   COMMON    PAID-IN     RETAINED   TREASURY    STOCKHOLDERS'
                                            STOCK    STOCK     CAPITAL     EARNINGS     STOCK        EQUITY
                                            ------   ------   ----------   --------   ---------   -------------
                                                                      (IN THOUSANDS)
<S>                                         <C>      <C>      <C>          <C>        <C>         <C>
BALANCES AT JANUARY 1, 1993...............   $ 21     $165     $ 82,527    $171,980   $(187,619)    $  67,074
  Issuance of common stock grants.........                           88                                    88
  Common stock options exercised..........                        1,007                                 1,007
  Tax benefit from stock options
    exercised.............................                          210                                   210
  Net income..............................                                   23,313                    23,313
  Cash dividends declared and paid $.43
    per share of common and Class B
    common................................                                   (6,628)                   (6,628)
  Issuance of common stock................     14                37,069                                37,083
  Purchase of treasury stock..............                                                   (4)           (4)
                                            ------    ----     --------    --------   ---------      --------
BALANCES AT DECEMBER 31, 1993.............     35      165      120,901     188,665    (187,623)      122,143
  Issuance of common stock grants.........                          101                                   101
  Common stock options exercised..........                          898                                   898
  Conversion of Class B common stock to
    common stock..........................
  Tax benefit from stock options
    exercised.............................                          220                                   220
  Net income..............................                                   39,191                    39,191
  Cash dividends declared and paid $.46
    per share of common and Class B
    common................................                                   (7,534)                   (7,534)
  Five-for-four stock split in the form of
    a 25 percent stock dividend (Note
    7)....................................      9       41          (50)
                                            ------    ----     --------    --------   ---------      --------
BALANCES AT DECEMBER 31, 1994.............     44      206      122,070     220,322    (187,623)      155,019
  Issuance of common stock grants.........                          218                                   218
  Common stock options exercised..........      2                 2,327                                 2,329
  Conversion of Class B common stock to
    common stock..........................      1       (1)
  Tax benefit from stock options
    exercised.............................                          924                                   924
  Net income..............................                                   49,322                    49,322
  Cash dividends declared and paid $.54
    per share of common and Class B
    common................................                                   (8,828)                   (8,828)
  Purchase of treasury stock..............                                                 (213)         (213)
                                            ------    ----     --------    --------   ---------      --------
BALANCES AT DECEMBER 31, 1995.............   $ 47     $205     $125,539    $260,816   $(187,836)    $ 198,771
                                            ======    ====     ========    ========   =========      ========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                COMMON STOCK              CLASS B COMMON STOCK
                                                           ----------------------        ----------------------
                                                                         HELD IN                       HELD IN
                                                           ISSUED        TREASURY        ISSUED        TREASURY
                                                           ------        --------        ------        --------
                                                                              (IN THOUSANDS)
<S>                                                      <C>            <C>           <C>             <C>
SHARE ACTIVITY:
BALANCES AT JANUARY 1, 1993.............................   2,115             (9)         16,488         (7,021)
  Issuance of common stock grants.......................       3
  Common stock options exercised........................      44
  Issuance of common stock..............................   1,350
                                                           -----            ---          ------         ------
BALANCES AT DECEMBER 31, 1993...........................   3,512             (9)         16,488         (7,021)
  Issuance of common stock grants.......................       3
  Common stock options exercised........................      40
  Conversion of Class B common stock to common stock....       1                             (1)
  Five-for-four stock split in the form of a 25 percent
    stock dividend (Note 7).............................     888             (2)          4,122         (1,755)
                                                           -----            ---          ------         ------
BALANCES AT DECEMBER 31, 1994...........................   4,444            (11)         20,609         (8,776)
  Issuance of common stock grants.......................       6
  Common stock options exercised........................     119
  Conversion of Class B common stock to common stock....     135                           (135)
  Purchase of treasury stock............................                     (6)
                                                           -----            ---          ------         ------
BALANCES AT DECEMBER 31, 1995...........................   4,704            (17)         20,474         (8,776)
                                                           =====            ===          ======         ======
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       28
<PAGE>   30
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                     STATEMENTS OF CONSOLIDATED CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                              YEARS ENDED DECEMBER 31,
                                                                           -------------------------------
                                                                             1995       1994        1993
                                                                           --------    -------    --------
                                                                                   (IN THOUSANDS)
<S>                                                                        <C>         <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.............................................................. $ 49,322    $39,191    $ 23,313
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Cumulative effect of change in accounting principles, net of
     applicable income taxes..............................................                 719        (360)
    Depreciation..........................................................   19,281     20,466      16,405
    Amortization of intangibles...........................................    7,869     10,020       7,387
    Incremental increase in postretirement and postemployment benefit
     obligations..........................................................      890       (496)      2,870
    Deferred income taxes.................................................   (1,847)    (4,617)     (1,585)
    Gain on sale of publishing property...................................              (2,791)
    Changes in assets and liabilities (net of the effects of the sale of
     publishing property and purchase of broadcast properties) (Note 3)
     which provided (used) cash:
      Trade accounts receivable...........................................   (1,581)    (8,269)     (1,959)
      Inventory...........................................................   (3,121)     1,540          62
      Other assets........................................................    1,152      3,567      (3,481)
      Trade accounts payable and other liabilities........................      454      8,490       3,532
      Income taxes payable................................................   (3,713)     2,059       2,536
      Program rights--net of contracts payable............................      250        170         148
                                                                           --------    -------    --------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................................   68,956     70,049      48,868
                                                                           --------    -------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures....................................................  (22,934)   (13,313)    (13,589)
  Investment in joint ventures and limited partnerships...................   (3,637)    (5,593)
  Sale of publishing property, net of cash sold...........................              30,486
  Purchase of broadcasting property assets................................                        (166,065)
  (Increase) decrease in notes receivable.................................    1,875         18         116
                                                                           --------    -------    --------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES.......................  (24,696)    11,598    (179,538)
                                                                           --------    -------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt................................                         160,000
  Proceeds from sale of common stock......................................                          37,083
  Repayments on long-term debt............................................  (14,250)   (32,897)    (55,732)
  Dividends paid..........................................................   (8,828)    (7,534)     (6,628)
  Proceeds from exercise of stock options.................................    2,327        898       1,007
  Purchase of treasury stock..............................................     (213)                    (4)
                                                                           --------    -------    --------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES.......................  (20,964)   (39,533)    135,726
                                                                           --------    -------    --------
NET INCREASE IN CASH AND CASH EQUIVALENTS.................................   23,296     42,114       5,056
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............................   77,084     34,970      29,914
                                                                           --------    -------    --------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................................. $100,380    $77,084    $ 34,970
                                                                           ========    =======    ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid (received) during the year for:
    Interest.............................................................. $ 10,147    $13,067    $  6,495
    Income taxes..........................................................   35,862     28,369      14,638
    Income tax refunds....................................................   (1,280)       (70)       (330)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITY:
  Increase (decrease) in minimum pension liability and related intangible
    asset (Notes 4 and 8).................................................     (227)    (1,629)      1,283
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       29
<PAGE>   31
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Basis of Consolidation -- The consolidated financial statements include the
accounts of Pulitzer Publishing Company (the "Company") and its subsidiary
companies. All significant intercompany transactions have been eliminated from
the consolidated financial statements.
 
     Fiscal Year -- The Company's fiscal year ends on the last Sunday of the
calendar year, which in 1995 resulted in a 14-week fourth quarter and a 53-week
year. In 1994 and 1993, the fourth quarter was 13 weeks and the year was 52
weeks. For ease of presentation, the Company has used December 31 as the
year-end.
 
     Cash Equivalents -- For purposes of reporting cash flows, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
 
     Inventory Valuation -- Inventory, which consists primarily of newsprint, is
stated at the lower of cost (determined primarily using the last-in, first-out
method) or market. If the first-in, first-out cost method had been used,
inventory would have been $2,064,000 and $546,000 higher than reported at
December 31, 1995 and 1994, respectively. Ink and other miscellaneous supplies
are expensed as purchased.
 
     Program Rights -- Program rights represent license agreements for the right
to broadcast programs over license periods which generally run from one to five
years. The total cost of each agreement is recorded as an asset and liability
when the license period begins and the program is available for broadcast.
Program rights covering periods greater than one year are amortized over the
license period using an accelerated method as the programs are broadcast. In the
event that a determination is made that programs will not be used prior to the
expiration of the license agreement, unamortized amounts are then charged to
operations. Payments are made in installments as provided for in the license
agreements. Program rights expected to be amortized in the succeeding year and
payments due within one year are classified as current assets and current
liabilities, respectively.
 
     Property and Depreciation -- Property is recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
individual assets. Buildings are depreciated over 20 to 50 years and all other
property over lives ranging from 3 to 15 years.
 
     Intangible Assets -- Intangible assets are stated net of applicable
amortization. Intangibles in the amount of $1,520,000, related to acquisitions
prior to the effective date of Accounting Principles Board Opinion No. 17
("Opinion No. 17"), are not being amortized because, in the opinion of
management, their value is of undeterminable duration. In addition, the
intangible asset relating to the Company's additional minimum pension liability
under Statement of Financial Accounting Standards No. 87 is adjusted, as
necessary, when a new determination of the amount of the additional minimum
pension liability is made annually. Intangibles consisting of goodwill,
television licenses and network affiliations acquired subsequent to the
effective date of Opinion No. 17 are being amortized over 40 years while all
other intangible assets are being amortized over 4 to 21 years with the
exception of all the intangible assets acquired in conjunction with the 1993
acquisition of WESH and KCCI (see Note 3) which are all being amortized over 15
years.
 
     Long-Lived Assets -- The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in
March 1995. This statement is effective for years beginning after December 15,
1995. The general requirements of this statement are applicable to the
properties and intangible assets of the Company and require impairment to be
considered whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company anticipates
adopting this standard on January 1, 1996, and does not expect that it will have
a material impact on its financial position or results of operations.
 
                                       30
<PAGE>   32
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
     Income Taxes -- Deferred tax assets and liabilities are recorded for the
expected future tax consequences of events that have been included in either the
financial statements or tax returns of the Company. Under this asset and
liability approach, deferred tax assets and liabilities are determined based on
temporary differences between the financial statement and tax bases of assets
and liabilities by applying enacted statutory tax rates applicable to future
years in which the differences are expected to reverse.
 
     Earnings Per Share of Stock -- Earnings per share of stock is computed
using the weighted average number of Common and Class B shares outstanding
during the applicable period, adjusted for the stock splits described in Note 7.
 
     Employee Benefit Plans -- The Company and its subsidiaries have several
noncontributory pension plans covering substantially all of their employees.
Benefits under the plans are generally based on salary and years of service.
Plan funding strategies are influenced by tax regulations. Plan assets consist
primarily of government bonds and corporate equity securities.
 
     The Company provides retiree medical and life insurance benefits under
varying postretirement plans at several of its operating locations. The
significant portion of these benefits result from plans at the St. Louis
Post-Dispatch. All of the Company's postretirement benefits are funded on a
pay-as-you-go basis.
 
     The Company provides postemployment disability benefits to certain employee
groups of the St. Louis Post-Dispatch. These disability benefits paid to former
employees prior to retirement are funded on a pay-as-you-go basis.
 
     Stock-Based Compensation Plans -- In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 123
("SFAS 123"), Accounting for Stock-Based Compensation, which requires adoption
in 1996. The new standard defines a fair value method of accounting for stock
options and similar equity instruments. Under the fair value method,
compensation cost is measured at the grant date based on the fair value of the
award and is recognized over the service period, which is usually the vesting
period. Pursuant to the new standard, companies are encouraged, but not
required, to adopt the fair value method of accounting for employee stock-based
transactions. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25 ("APB 25"),
Accounting for Stock Issued to Employees, but would be required to disclose pro
forma net income and, if presented, earnings per share as if the company had
applied the new method of accounting. The accounting requirements of the new
method are effective for all employee awards granted after the beginning of the
fiscal year of adoption, whereas the disclosure requirements apply to all awards
granted subsequent to December 31, 1994. The Company will adopt the disclosure
requirements of SFAS 123 in fiscal year 1996 but will continue to recognize and
measure compensation for its restricted stock and stock option plans in
accordance with the existing provisions of APB 25.
 
     Use of Management Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. The reported amounts of
revenues and expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual results may
differ from those estimates.
 
     Reclassifications -- Certain reclassifications have been made to the 1994
and 1993 consolidated financial statements to conform with the 1995
presentation.
 
                                       31
<PAGE>   33
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
2. AGENCY AGREEMENTS
 
     An agency operation between the Company and The Herald Company is conducted
under the provisions of an Agency Agreement, dated March 1, 1961, as amended.
For many years, the Post-Dispatch (owned by the Company) was the afternoon and
Sunday newspaper serving St. Louis, and the Globe-Democrat (formerly owned by
The Herald Company) was the morning paper and also published a weekend edition.
Although separately owned, from 1961 through February 1984, the publication of
both the Post-Dispatch and the Globe-Democrat was governed by the St. Louis
Agency Agreement. From 1961 to 1979, the two newspapers controlled their own
news, editorial, advertising, circulation, accounting and promotion
responsibility for advertising, circulation, accounting and promotion for both
newspapers. In February 1984, after a number of years of unfavorable financial
results at the St. Louis Agency, the Globe-Democrat was sold by The Herald
Company and the St. Louis Agency Agreement was revised to eliminate any
continuing relationship between the two newspapers and to permit the
repositioning of the daily Post-Dispatch as a morning newspaper. Following the
renegotiation of the St. Louis Agency Agreement at the time of the sale of the
Globe-Democrat, The Herald Company retained the contractual right to receive
one-half the profits (as defined), and the obligation to share one-half the
losses (as defined), of the operations of the St. Louis Agency, which from
February 1984 forward consisted solely of the publication of the Post-Dispatch.
The St. Louis Agency Agreement also provides for The Herald Company to share
one-half the cost of, and to share in a portion of the proceeds from the sale
of, capital assets used in the production of the Post-Dispatch. Under the St.
Louis Agency Agreement, Pulitzer supervises, manages and performs all activities
relating to the day-to-day publication of the Post-Dispatch and is solely
responsible for the news and editorial policies of the newspaper. The
consolidated financial statements of the Company include all the operating
revenues and expenses of the St. Louis Agency relating to the Post-Dispatch.
 
     In Tucson, Arizona, a separate partnership, TNI Partners, ("TNI"), acting
as agent for the Star (a newspaper owned by the Company) and the Citizen (a
newspaper owned by Gannett Co., Inc.), is responsible for printing, delivery,
advertising, and circulation of the Star and the Citizen. TNI collects all of
the receipts and income relating to the Star and the Citizen and pays all
operating expenses incident to the partnership's operations and publication of
the newspapers. Each newspaper is solely responsible for its own news and
editorial content. Net income or net loss of TNI is generally allocated equally
to the Star and the Citizen. The Company's consolidated financial statements
include its share of TNI's revenues and expenses.
 
3. ACQUISITION AND DISPOSITION OF PROPERTIES
 
     On December 22, 1994, the Company sold its wholly-owned subsidiary,
Pulitzer Community Newspapers ("PCN"), Chicago, Illinois, for approximately
$33,746,000. A gain of $2,791,000 ($1,051,000 after taxes or $0.06 per share)
was recognized on this transaction. The Company's 1994 statement of consolidated
income includes substantially a full year of operating results for PCN.
 
     During 1993, the Company acquired in a purchase transaction substantially
all of the assets and operations of two television stations, WESH, Daytona
Beach/Orlando, Florida and KCCI, Des Moines, Iowa, for a purchase price of
$164,765,000, including approximately $7,765,000 in net receivables, plus
acquisition costs of approximately $1,300,000. The closing dates for WESH and
KCCI were June 30, 1993 and September 9, 1993, respectively. The results of
operations of WESH and KCCI are included in the Company's Statement of
Consolidated Income from their respective closing dates.
 
     The following supplemental unaudited pro forma information shows the
results of operations of the Company for the year ended December 31, 1993
adjusted for the acquisition of WESH and KCCI assuming such transaction and the
related debt and equity financing had been consummated at the beginning of 1993.
 
                                       32
<PAGE>   34
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
The unaudited pro forma financial information is not necessarily indicative
either of results of operations that would have occurred had the transaction
occurred at the beginning of 1993, or of future results of operations.
 
<TABLE>
<CAPTION>
                                                                             YEAR ENDED
                                                                            DECEMBER 31,
                                                                                1993
                                                                           --------------
                                                                            (UNAUDITED)
                                                                           (IN THOUSANDS,
                                                                             EXCEPT PER
                                                                            SHARE DATA)
        <S>                                                                <C>
        Operating revenues -- net..........................................    $450,116
        Operating income...................................................    $ 48,646
        Income before cumulative effect of change in accounting
          principle........................................................    $ 21,026
        Net income.........................................................    $ 21,386
        Earnings per share of stock (common and Class B common):
          Income before cumulative effect of change in accounting
             principle.....................................................    $   1.30
          Net Income.......................................................    $   1.32
        Weighted average number of shares (common and Class B common)
          outstanding......................................................      16,186
</TABLE>
 
4. INTANGIBLE ASSETS
 
     Intangible assets consist of:
 
<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                    --------------------
                                                                      1995        1994
                                                                    --------    --------
                                                                       (IN THOUSANDS)
        <S>                                                         <C>         <C>
        Television licenses and network affiliations.............   $107,115    $107,115
        Goodwill.................................................     12,393      12,393
        Intangible pension asset (Note 8)........................      2,977       3,204
        Other....................................................     42,491      42,491
                                                                    --------    --------
               Total.............................................    164,976     165,203
        Less accumulated amortization............................     47,506      39,788
                                                                    --------    --------
        Total intangible assets -- net...........................   $117,470    $125,415
                                                                    ========    ========
</TABLE>
 
5. FINANCING ARRANGEMENTS
 
     Long-term debt consists of:
 
<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                    --------------------
                                                                      1995        1994
                                                                    --------    --------
                                                                       (IN THOUSANDS)
        <S>                                                         <C>         <C>
        Senior notes maturing in equal annual installments:
          8.8% due through 1997..................................   $ 28,750    $ 43,000
          6.76% due 1998-2001....................................     50,000      50,000
          7.22% due 2002-2005....................................     50,000      50,000
                                                                    --------    --------
               Total.............................................    128,750     143,000
        Less current portion.....................................     14,250      14,250
                                                                    --------    --------
        Total long-term debt.....................................   $114,500    $128,750
                                                                    ========    ========
</TABLE>
 
                                       33
<PAGE>   35
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
     The terms of the various senior note agreements contain certain covenants
and conditions including the maintenance of cash flow and various other
financial ratios, limitations on the incurrence of other debt and limitations on
the amount of restricted payments (which generally includes dividends, stock
purchases and redemptions).
 
     Under the terms of the most restrictive borrowing covenants, in general,
the Company may pay annual dividends not to exceed the sum of $10,000,000, plus
75% of consolidated net earnings commencing January 1, 1993, less the sum of all
dividends paid or declared and redemptions in excess of sales of Company stock
after December 31, 1992.
 
6. COMMITMENTS AND CONTINGENCIES
 
     At December 31, 1995, the Company and its subsidiaries had construction and
equipment commitments of approximately $7,782,000 and commitments for program
contracts payable and license fees of approximately $26,570,000.
 
     The Company is an investor in several limited partnerships and joint
venture arrangements requiring future capital contributions. As of December 31,
1995, the Company's unfunded capital contribution commitment related to these
investments was approximately $6,268,000.
 
     The Company and its subsidiaries are defendants in a number of lawsuits,
some of which claim substantial amounts. While the results of litigation cannot
be predicted, management believes the ultimate outcome of such litigation will
not have a material adverse effect on the consolidated financial statements of
the Company and its subsidiaries.
 
     In connection with the September 1986 purchase of the Company's Class B
common stock, the Company agreed to make an additional payment to the selling
stockholders in the event that prior to May 13, 2001, the stockholders receive
dividends or distributions in excess of specified amounts in connection with the
sale of more than 85% of the voting securities or equity of the Company, a
merger, or a complete or partial liquidation or similar corporate transaction.
Any payment pursuant to this requirement would be based upon a percentage of the
dividend or distribution per share in excess of $20.96 increased by 15%
compounded annually beginning May 12, 1986.
 
7. STOCKHOLDERS' EQUITY
 
     Each share of the Company's common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes on all matters. Holders
of substantially all outstanding shares of Class B common stock, which
represents 95.9% of the combined voting power of the Company, have deposited
their shares in a voting trust (the "Voting Trust").
 
     During 1995, the Voting Trust Agreement dated January 17, 1991 was
terminated and a new Voting Trust Agreement with similar terms was entered into.
 
     The trustees generally hold all voting rights with respect to the shares of
Class B common stock subject to the Voting Trust; however, in connection with
certain matters, including any proposal for a merger, consolidation,
recapitalization or dissolution of the Company or disposition of all or
substantially all its assets, the calling of a special meeting of stockholders
and the removal of directors, the Trustees may not vote the shares deposited in
the Voting Trust except in accordance with written instructions from the holders
of the Voting Trust Certificates. The Voting Trust may be terminated with the
written consent of holders of two-thirds of all outstanding Voting Trust
Certificates. Unless extended or terminated by the parties thereto, the Voting
Trust expires on January 16, 2001.
 
                                       34
<PAGE>   36
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
     On May 11, 1994, the Company's stockholders adopted the Pulitzer Publishing
Company 1994 Stock Option Plan (the "1994 Plan"), replacing the Pulitzer
Publishing Company 1986 Employee Stock Option Plan (the "1986 Plan"). The 1994
Plan provides for the issuance to key employees and outside directors of
incentive stock options to purchase up to a maximum of 1,875,000 shares of
common stock. Under the 1994 Plan, options to purchase 1,000 shares of common
stock will be automatically granted to outside directors on the date following
each annual meeting of the Company's stockholders and will vest on the date of
the next annual meeting of the Company's stockholders. Total shares available
for issue to outside directors under this automatic grant feature are limited to
a maximum of 125,000. The issuance of all other options will be administered by
the Compensation Committee of the Board of Directors, subject to the 1994 Plan's
terms and conditions. Specifically, the exercise price per share may not be less
than the fair market value of a share of common stock at the date of grant. In
addition, exercise periods may not exceed ten years and the minimum vesting
period is established at six months from the date of grant. Option awards to an
individual employee may not exceed 187,500 shares in a calendar year.
 
     Prior to 1994, the Company issued incentive stock options to key employees
under the 1986 Plan. As provided by the 1986 Plan, certain option awards were
granted with tandem stock appreciation rights which allow the employee to elect
an alternative payment equal to the appreciation of the stock value instead of
exercising the option. Outstanding options issued under the 1986 Plan have an
exercise term of ten years from the date of grant and vest in equal installments
over a three-year period.
 
     Stock option transactions during 1995, 1994 and 1993 are summarized as
follows:
 
<TABLE>
<CAPTION>
                                                                 SHARES      PRICE RANGE
                                                                --------    -------------
        <S>                                                     <C>         <C>
        Common Stock Options:
          Outstanding, January 1, 1993.......................    601,213    $12.36-$24.91
          Granted............................................    285,494    $24.00-$29.30
          Cancelled..........................................    (33,425)   $12.36-$24.73
          Exercised..........................................    (55,536)   $12.36-$24.91
                                                                ---------
        Outstanding, December 31, 1993.......................    797,746    $12.36-$29.30
          Granted............................................    173,737    $28.70-$29.00
          Cancelled..........................................    (22,871)   $15.64-$29.30
          Exercised..........................................    (49,834)   $12.36-$24.73
                                                                ---------
          Outstanding, December 31, 1994.....................    898,778    $12.36-$29.30
          Granted............................................    144,640    $40.63-$45.88
          Cancelled..........................................    (29,724)   $15.64-$29.30
          Exercised..........................................   (118,728)   $12.36-$29.30
                                                                ---------
          Outstanding, December 31, 1995.....................    894,966    $12.36-$45.88
                                                                =========
        Exercisable at:
          December 31, 1994..................................    560,548    $12.36-$29.30
                                                                =========
          December 31, 1995..................................    605,258    $12.36-$29.30
                                                                =========
</TABLE>
 
                                       35
<PAGE>   37
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
     At December 31, 1995, 1,565,165 shares remain available for grant under the
Stock Plan.
 
<TABLE>
<CAPTION>
                                                                 SHARES         PRICE
                                                                --------    -------------
        <S>                                                     <C>         <C>
        Common Stock Appreciation Rights:
          Outstanding, January 1, 1993.......................     50,875           $19.82
          Exercised..........................................    (22,687)          $19.82
                                                                ---------           
          Outstanding, December 31, 1993 and 1994............     28,188           $19.82
          Cancelled..........................................     (7,637)          $19.82
          Exercised..........................................    (20,551)          $19.82
                                                                ---------
          Outstanding, December 31, 1995.....................         --
                                                                =========
</TABLE>
 
     On May 11, 1994, the Company's stockholders adopted the Pulitzer Publishing
Company 1994 Key Employees' Restricted Stock Purchase Plan (the "1994 Stock
Plan") which replaced the Pulitzer Publishing Company 1986 Key Employees'
Restricted Stock Purchase Plan ("1986 Stock Plan"). The 1994 Stock Plan provides
that an employee may receive, at the discretion of the Compensation Committee, a
grant or right to purchase at a particular price, shares of common stock subject
to restrictions on transferability. A maximum of 312,500 shares of common stock
may be granted or purchased by employees. In addition, no more than 62,500
shares of common stock may be issued to an employee in any calendar year.
 
     Prior to 1994, the Company granted stock awards under the 1986 Stock Plan.
For grants awarded under both the 1994 and 1986 Stock Plans, compensation
expense is recognized over the vesting period of the grants. Stock Purchase Plan
transactions for 1995, 1994 and 1993 are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                 SHARES      PRICE RANGE
                                                                --------    -------------
        <S>                                                     <C>         <C>
        Common Stock Grants:
          Outstanding, January 1, 1993.......................      4,125    $15.63
          Granted............................................      3,250    $26.99
          Vested.............................................     (7,375)   $15.63-$26.99
                                                                ---------
          Outstanding, December 31, 1993.....................         --
          Granted............................................      3,632    $26.99-$28.53
          Vested.............................................       (455)   $26.99
                                                                ---------
          Outstanding, December 31, 1994.....................      3,177    $26.99-$28.53
          Granted............................................      6,660    $32.71
          Vested.............................................     (5,595)   $26.99-$32.71
                                                                ---------
          Outstanding, December 31, 1995.....................      4,242    $26.99-$32.71
                                                                =========
</TABLE>
 
     At December 31, 1995, 302,208 shares remain available for grant or purchase
under the 1994 Stock Plan.
 
     On January 4, 1995, the Board of Directors declared a five-for-four stock
split of the Company's common and Class B common stock payable in the form of a
25% stock dividend. The dividend was distributed on January 24, 1995 to
stockholders of record on January 13, 1995. Even though this stock split was
declared subsequent to December 31, 1994, the Company's capital balances and
share amounts have been adjusted in 1994 to reflect the split.
 
                                       36
<PAGE>   38
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
8. PENSION PLANS
 
     The pension cost components for 1995, 1994 and 1993 were as follows:
 
<TABLE>
<CAPTION>
                                                                      YEARS ENDED DECEMBER 31,
                                                                   ------------------------------
                                                                     1995       1994       1993
                                                                   --------    -------    -------
                                                                           (IN THOUSANDS)
<S>                                                                <C>         <C>        <C>
Service cost (for benefits earned during the year)..............   $  3,834    $ 4,463    $ 3,486
Interest cost on projected benefit obligation...................      8,057      7,515      6,936
Actual loss (return) on plan assets.............................    (17,541)     1,437     (7,038)
Net amortization and deferrals..................................     11,365     (7,779)     1,007
                                                                   --------    -------    -------
Net periodic pension cost.......................................   $  5,715    $ 5,636    $ 4,391
                                                                   ========    =======    =======
</TABLE>
 
     The funded status of the Company's pension plans at December 31, 1995 and
1994 were as follows:
 
<TABLE>
<CAPTION>
                                                                             1995        1994
                                                                           --------    --------
                                                                              (IN THOUSANDS)
<S>                                                                        <C>         <C>
Actuarial present value of:
  Vested benefit obligation.............................................   $106,552    $ 93,726
                                                                           ========    ========
  Accumulated benefit obligation........................................   $107,441    $ 94,392
                                                                           ========    ========
Projected benefit obligation............................................   $116,331    $105,719
Plan assets at fair value...............................................     94,032      75,276
                                                                           --------    --------
Plan assets less than projected benefit obligation......................    (22,299)    (30,443)
Unrecognized transition obligation, net.................................      1,760       1,982
Unrecognized net loss (gain)............................................     (1,881)      5,525
Unrecognized prior service cost.........................................       (257)       (280)
Additional minimum liability............................................     (2,977)     (3,204)
                                                                           --------    --------
Pension obligations.....................................................   $(25,654)   $(26,420)
                                                                           ========    ========
</TABLE>
 
The projected benefit obligation was determined using assumed discount rates of
7.25% and 8% at December 31, 1995 and 1994, respectively. The expected long-term
rate of return on plan assets was 8.5% for both 1995 and 1994. For those plans
that pay benefits based on final compensation levels, the actuarial assumptions
for overall annual rate of increase in future salary levels was 5% for December
31, 1995 and ranged from 6% to 6.5% for December 31, 1994.
 
     Certain of the Company's employees participate in multi-employer retirement
plans sponsored by their respective unions. Amounts charged to operations,
representing the Company's required contributions to these plans in 1995, 1994
and 1993 were approximately $731,000, $715,000 and $822,000, respectively.
 
     The Company also sponsors an employee savings plan under Section 401(k) of
the Internal Revenue Code. This plan covers substantially all employees.
Contributions by the Company amounted to approximately $1,494,000, $1,735,000
and $1,582,000 for 1995, 1994 and 1993, respectively.
 
                                       37
<PAGE>   39
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
9. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
 
     Net periodic postretirement benefit cost components for 1995, 1994 and 1993
were as follows:
 
<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                                ---------------------------
                                                                 1995       1994      1993
                                                                -------    ------    ------
                                                                      (IN THOUSANDS)
        <S>                                                     <C>        <C>       <C>
        Service cost (for benefits earned during the year)...   $   933    $1,462    $1,547
        Interest cost on accumulated postretirement benefit
          obligation.........................................     5,799     5,898     6,802
        Net amortization, deferrals and other components.....    (1,787)       13       404
                                                                -------    ------    ------
        Net periodic postretirement benefit cost.............   $ 4,945    $7,373    $8,753
                                                                =======    ======    ======
</TABLE>
 
     The Company funds its postretirement benefit obligation on a pay-as-you-go
basis, and, for 1995, 1994 and 1993 made payments of $4,071,000, $3,484,000 and
$3,561,000, respectively.
 
     The status of the Company's postretirement benefit plans at December 31,
1995 and 1994 were as follows:
 
<TABLE>
<CAPTION>
                                                                       1995       1994
                                                                      -------    -------
                                                                        (IN THOUSANDS)
        <S>                                                           <C>        <C>
        Retirees and surviving beneficiaries.......................   $45,400    $39,336
        Actives eligible to retire.................................    18,917     16,396
        Other actives..............................................    12,893     16,181
                                                                      -------    -------
        Accumulated postretirement benefit obligation..............    77,210     71,913
        Unrecognized prior service gain............................     8,563     10,039
        Unrecognized net gain (loss)...............................     4,918      7,853
                                                                      -------    -------
        Accrued postretirement benefit cost........................   $90,691    $89,805
                                                                      =======    =======
</TABLE>
 
     The preceding amounts for the December 31, 1995 and 1994 accrued
postretirement benefit cost and the 1995, 1994 and 1993 net periodic
postretirement benefit expense have not been reduced for The Herald Company's
share of the respective amounts. However, pursuant to the St. Louis Agency
Agreement (see Note 2), the Company has recorded a receivable for The Herald
Company's share of the accrued postretirement benefit cost as of December 31,
1995 and 1994.
 
     For 1995 measurement purposes, health care cost trend rates of 11%, 10% and
9% were assumed for indemnity plans, PPO plans and HMO plans, respectively;
these rates were assumed to decrease gradually to 6%, through the year 2008 and
remain at that level thereafter. For 1994 measurement purposes, health care cost
trend rates of 13%, 11% and 10% were assumed for indemnity plans, PPO plans and
HMO plans, respectively; these rates were assumed to decrease gradually to 6%,
through the year 2008 and remain at that level thereafter. The health care cost
trend rate assumptions have a significant effect on the amount of obligation and
expense reported. A 1% increase in these annual trend rates would have increased
the accrued postretirement benefit cost at December 31, 1995 by approximately
$1,370,000 and the 1995 annual net periodic postretirement benefit cost by
approximately $1,374,000.
 
     Administrative costs related to indemnity plans were assumed to increase at
a constant annual rate of 6% and 5% for 1995 and 1994, respectively. The assumed
discount rate used in estimating the accumulated postretirement benefit
obligation was 8% and 7% for 1995 and 1994, respectively.
 
     Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits ("SFAS 112"), to account for
 
                                       38
<PAGE>   40
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
certain disability benefits at the St. Louis Post-Dispatch. SFAS 112 requires
that the cost of these benefits provided to former employees prior to retirement
be recognized on the accrual basis of accounting. Previously, the Company
recognized its postemployment benefit costs when paid. The cumulative effect of
adopting SFAS 112 was a reduction of 1994 net income of approximately $719,000
or $0.04 per share. After recording the cumulative effect adjustment, the
Company's on-going expense under the new standard does not differ significantly
from the prior pay-as-you-go basis.
 
     Under SFAS 112, the Company accrues the disability benefits when it becomes
probable that such benefits will be paid and when sufficient information exists
to make reasonable estimates of the amounts to be paid. As required by the
standard, prior year financial statements have not been restated to reflect the
change in accounting method.
 
     The Company's postemployment benefit obligation was $2,165,000 and
$2,161,000 at December 31, 1995 and 1994, respectively.
 
10. INCOME TAXES
 
     Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
109"). This change in accounting method was applied by recording a positive
cumulative effect adjustment of $360,000 or $0.02 per share in the first quarter
of 1993. The positive earnings impact of the cumulative effect adjustment
resulted principally from the recalculation of certain deferred income taxes at
the then current lower federal statutory rate as opposed to the higher tax rates
which were in effect when certain of the deferred income taxes originated.
 
     Provisions for income taxes (benefits) consist of the following:
 
<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                              -----------------------------
                                                               1995       1994       1993
                                                              -------    -------    -------
                                                                     (IN THOUSANDS)
        <S>                                                   <C>        <C>        <C>
        Current:
          Federal..........................................   $28,352    $25,156    $14,666
          State and local..................................     3,541      3,372      2,179
        Deferred:
          Federal..........................................    (1,641)    (2,264)    (1,419)
          State and local..................................      (206)      (304)      (166)
                                                              -------    -------    -------
             Total.........................................   $30,046    $25,960    $15,260
                                                              =======    =======    =======
</TABLE>
 
     Under the Revenue Reconciliation Act of 1993, the marginal corporate tax
rate was increased from 34% to 35%. The deferred tax benefit for 1993 was
increased by approximately $225,000 to reflect this change.
 
                                       39
<PAGE>   41
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
     Factors causing the effective tax rate to differ from the statutory Federal
income tax rate were:
 
<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                                ------------------------
                                                                1995      1994      1993
                                                                ----      ----      ----
                                                                     (IN THOUSANDS)
        <S>                                                     <C>       <C>       <C>
        Statutory rate.....................................      35%       35%       35%
        Favorable resolution of prior year federal
          and state tax issues.............................      (1)       (1)
        Amortization of intangibles........................                 1
        State and local income taxes,
          net of U.S. Federal income tax benefit...........       3         3         4
        Other-net..........................................       1         1         1
                                                                 --        --        --
             Effective rate................................      38%       39%       40%
                                                                 ==        ==        ==
</TABLE>
 
     The Company's deferred tax assets and liabilities, net, which have been
included in other assets in the statements of consolidated financial position as
of December 31, 1995 and 1994, consisted of the following:
 
<TABLE>
<CAPTION>
                                                                       1995       1994
                                                                      -------    -------
                                                                        (IN THOUSANDS)
        <S>                                                           <C>        <C>
        Deferred tax assets:
          Pensions and employee benefits...........................   $ 8,960    $ 8,240
          Postretirement benefit costs.............................    19,367     19,144
          Other....................................................       795        305
                                                                      -------    -------
             Total.................................................    29,122     27,689
                                                                      -------    -------
        Deferred tax liabilities:
          Depreciation.............................................     9,042      9,295
          Amortization.............................................     2,235      2,396
                                                                      -------    -------
             Total.................................................    11,277     11,691
                                                                      -------    -------
        Net deferred tax asset.....................................   $17,845    $15,998
                                                                      =======    =======
</TABLE>
 
     During 1994, the Company settled federal tax examinations for 1990 through
1992 and paid additional taxes of approximately $2,048,000. This payment
represented an extension of the tax amortization period for certain prior year
acquisition intangibles. Accordingly, a deferred tax asset for the amount of the
payment was recorded during 1994.
 
     The Company had no valuation allowance for deferred tax assets as of
December 31, 1995, 1994 and 1993.
 
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The Company has estimated the following fair value amounts for its
financial instruments using available market information and appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The
 
                                       40
<PAGE>   42
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
use of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
 
<TABLE>
<CAPTION>
                                                   DECEMBER 31, 1995        DECEMBER 31, 1994
                                                 ---------------------    ---------------------
                                                             ESTIMATED                ESTIMATED
                                                 CARRYING      FAIR       CARRYING      FAIR
                                                  AMOUNT       VALUE       AMOUNT       VALUE
                                                 --------    ---------    --------    ---------
                                                                 (IN THOUSANDS)
        <S>                                      <C>         <C>          <C>         <C>
        Assets:
          Cash and cash equivalents...........   $100,380    $ 100,380    $ 77,084    $  77,084
          Accounts receivable.................     64,524       64,524      62,943       62,943
        Liabilities:
          Accounts payable....................     14,145       14,145      14,458       14,458
          Program contracts payable...........      8,664        8,664       8,864        8,864
          Long-term debt......................    128,750      132,833     143,000      136,930
</TABLE>
 
     Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and
Program Contracts Payable -- The carrying amounts of these items are a
reasonable estimate of their fair value.
 
     Long-Term Debt -- Interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining maturities are
used to estimate fair value.
 
     The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1995 and 1994. Although
management is not aware of any facts that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and current
estimates of fair value may differ from the amounts presented herein.
 
                                       41
<PAGE>   43
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
12. BUSINESS SEGMENTS
 
     The Company's operations are divided into two business segments, publishing
and broadcasting. The following is a summary of operations, assets and other
data.
 
<TABLE>
<CAPTION>
                                                                  AS OF AND FOR THE YEARS ENDED
                                                                           DECEMBER 31,
                                                                 --------------------------------
                                                                   1995        1994        1993
                                                                 --------    --------    --------
                                                                          (IN THOUSANDS)
<S>                                                              <C>         <C>         <C>
OPERATING REVENUES:
  Publishing(a)...............................................   $269,388    $304,779    $290,146
  Broadcasting................................................    202,939     180,800     136,839
                                                                 --------    --------    --------
       Total..................................................   $472,327    $485,579    $426,985
                                                                 ========    ========    ========
OPERATING INCOME (LOSS):
  Publishing(a)...............................................   $ 25,393    $ 30,486    $ 23,702
  Broadcasting................................................     65,939      47,963      27,947
  Corporate...................................................     (4,666)     (3,871)     (3,692)
                                                                 --------    --------    --------
       Total..................................................   $ 86,666    $ 74,578    $ 47,957
                                                                 ========    ========    ========
TOTAL ASSETS:
  Publishing..................................................   $141,441    $136,818    $156,398
  Broadcasting................................................    253,252     254,410     270,250
  Corporate...................................................    100,380      77,084      34,970
                                                                 --------    --------    --------
       Total..................................................   $495,073    $468,312    $461,618
                                                                 ========    ========    ========
CAPITAL EXPENDITURES:
  Publishing..................................................   $  6,627    $  6,097    $  6,198
  Broadcasting................................................     16,307       7,216       7,391
                                                                 --------    --------    --------
       Total..................................................   $ 22,934    $ 13,313    $ 13,589
                                                                 ========    ========    ========
DEPRECIATION & AMORTIZATION:
  Publishing(a)...............................................   $  4,307    $  6,128    $  6,938
  Broadcasting................................................     22,843      24,358      16,854
                                                                 --------    --------    --------
       Total..................................................   $ 27,150    $ 30,486    $ 23,792
                                                                 ========    ========    ========
OPERATING MARGINS
  (Operating income to revenues):
  Publishing(a)(b)............................................      14.1%       14.8%       11.8%
  Broadcasting................................................      32.5%       26.5%       20.4%
</TABLE>
 
-------------------------
(a) Publishing operations for 1994 and 1993 include the results of Pulitzer
    Community Newspapers, Inc., which was sold on December 22, 1994 (See Note
    3).
 
(b) Operating margins for publishing stated with St. Louis Agency adjustment
    (which is recorded as an operating expense in the accompanying consolidated
    financial statements) added back to publishing operating income.
 
                                       42
<PAGE>   44
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
 
     Operating results for the years ended December 31, 1995 and 1994 by
quarters are as follows:
 
<TABLE>
<CAPTION>
                                                1ST QUARTER    2ND QUARTER    3RD QUARTER    4TH QUARTER     TOTAL
                                                -----------    -----------    -----------    -----------    --------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>             <C>           <C>           <C>             <C>
1995
OPERATING REVENUES -- NET:...................    $ 108,523      $ 120,626      $ 111,607      $ 131,571     $472,327
                                                  --------       --------       --------       --------     --------
OPERATING EXPENSES:
  Operations.................................       44,189         46,652         47,089         52,083      190,013
  Selling, general and administrative........       37,871         38,349         38,228         41,548      155,996
  St. Louis Agency adjustment................        3,288          3,402          2,079          3,733       12,502
  Depreciation and amortization..............        6,709          6,722          6,803          6,916       27,150
                                                  --------       --------       --------       --------     --------
    Total operating expenses.................       92,057         95,125         94,199        104,280      385,661
                                                  --------       --------       --------       --------     --------
  Operating income...........................       16,466         25,501         17,408         27,291       86,666
                                                  --------       --------       --------       --------     --------
  Interest income............................        1,259          1,212          1,253          1,479        5,203
  Interest expense...........................       (2,712)        (2,493)        (2,400)        (2,566)     (10,171)
  Net other expense..........................         (457)          (707)          (491)          (675)      (2,330)
                                                  --------       --------       --------       --------     --------
INCOME BEFORE PROVISION FOR INCOME TAXES.....       14,556         23,513         15,770         25,529       79,368
PROVISION FOR INCOME TAXES...................        5,703          9,197          6,073          9,073       30,046
                                                  --------       --------       --------       --------     --------
NET INCOME...................................    $   8,853      $  14,316      $   9,697      $  16,456     $ 49,322
                                                  ========       ========       ========       ========     ========
EARNINGS PER SHARE OF STOCK (Common and Class
  B Common)..................................    $    0.54      $    0.88      $    0.59      $    1.00     $   3.02
                                                  ========       ========       ========       ========     ========
WEIGHTED AVERAGE NUMBER OF SHARES (Common and
  Class B Common Stock Outstanding)..........       16,290         16,363         16,378         16,384       16,350
                                                  ========       ========       ========       ========     ========
<CAPTION>
                                                1ST QUARTER    2ND QUARTER    3RD QUARTER    4TH QUARTER     TOTAL
                                                -----------    -----------    -----------    -----------    --------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>             <C>           <C>           <C>             <C>
1994
OPERATING REVENUES -- NET:...................    $ 111,391      $ 122,730      $ 116,944      $ 134,514     $485,579
                                                  --------       --------       --------       --------     --------
OPERATING EXPENSES:
  Operations.................................       46,697         46,638         46,870         51,365      191,570
  Selling, general and administrative........       42,933         43,448         42,378         45,480      174,239
  St. Louis Agency adjustment................        2,719          4,233          3,452          4,302       14,706
  Depreciation and amortization..............        7,562          7,580          7,604          7,740       30,486
                                                  --------       --------       --------       --------     --------
    Total operating expenses.................       99,911        101,899        100,304        108,887      411,001
                                                  --------       --------       --------       --------     --------
  Operating income...........................       11,480         20,831         16,640         25,627       74,578
                                                  --------       --------       --------       --------     --------
  Interest income............................          377            430            514            650        1,971
  Interest expense...........................       (3,316)        (3,084)        (2,682)        (2,927)     (12,009)
  Net other expense..........................         (248)          (445)          (347)         2,370        1,330
                                                  --------       --------       --------       --------     --------
INCOME BEFORE PROVISION FOR INCOME TAXES AND
  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE..................................        8,293         17,732         14,125         25,720       65,870
PROVISION FOR INCOME TAXES...................        3,410          7,232          5,771          9,547       25,960
                                                  --------       --------       --------       --------     --------
</TABLE>
 
                                       43
<PAGE>   45
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 -- CONTINUED
 
<TABLE>
<CAPTION>
                                                1ST QUARTER    2ND QUARTER    3RD QUARTER    4TH QUARTER     TOTAL
                                                -----------    -----------    -----------    -----------    --------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>            <C>            <C>            <C>            <C>
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
  ACCOUNTING PRINCIPLE.......................        4,883         10,500          8,354         16,173       39,910
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE, NET OF APPLICABLE INCOME
  TAXES......................................         (719)                                                     (719)
                                                ----------     ----------     ----------     ----------     --------
NET INCOME...................................    $   4,164      $  10,500      $   8,354      $  16,173     $ 39,191
                                                ==========     ==========     ==========     ==========     ========
EARNINGS PER SHARE OF STOCK
  (Common and Class B Common)
Income before cumulative effect of change in
  accounting principle.......................    $    0.30      $    0.65      $    0.51      $    0.99     $   2.45
Cumulative effect of change in accounting
  principle..................................        (0.04)                                                    (0.04)
                                                ----------     ----------     -----------    ----------     --------
    Total....................................    $    0.26      $    0.65      $    0.51      $    0.99     $   2.41
                                                ==========     ==========     ==========     ==========     ========
WEIGHTED AVERAGE NUMBER OF SHARES (Common and
  Class B Common Stock Outstanding)..........       16,221         16,238         16,249         16,261       16,241
                                                ==========     ==========     ==========     ==========     ========
</TABLE>
 
     In the fourth quarter of 1995, a state tax examination was settled
favorably resulting in a reduction of income tax expense of approximately
$900,000 or $0.06 per share for the quarter.
 
     In the fourth quarter of 1994, a federal tax examination for 1992 was
settled; that settlement, together with the settlements earlier in the year of
federal tax examinations for 1990 and 1991, resulted in reduced income tax
expense of approximately $500,000, or $0.03 per share, in the 1994 fourth
quarter. Due to the Company's reduced exposure to further tax adjustments for
open tax years, and the impact of 1993 tax law changes in the deductibility of
the amortization of intangibles, the 1994 estimated tax rate was lowered from
approximately 41 percent (estimated earlier in the year) to approximately 39
percent, resulting in a gain of approximately $1,000,000, or $0.06 a share.
 
     Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the total for the year.
 
                                       44
<PAGE>   46
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information set forth under the caption "Management" in the Company's
definitive Proxy Statement to be used in connection with the 1996 Annual Meeting
of Stockholders is incorporated herein by reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information set forth under the caption "Executive Compensation" in the
Company's definitive Proxy Statement to be used in connection with the 1996
Annual Meeting of Stockholders is incorporated herein by reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information set forth under the caption "Principal Stockholders" in the
Company's definitive Proxy Statement to be used in connection with the 1996
Annual Meeting of Stockholders is incorporated herein by reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information set forth under the caption "Compensation Committee
Interlocks and Insider Participation" in the Company's definitive Proxy
Statement to be used in connection with the 1996 Annual Meeting of Stockholders
is incorporated herein by reference.
 
                                       45
<PAGE>   47
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
(a) DOCUMENT LIST
 
     1. Financial Statements
 
          The following financial statements are set forth in Part II, Item 8 of
     this report.
 
     PULITZER PUBLISHING COMPANY AND SUBSIDIARIES:
 
          (i) Independent Auditors' Report.
 
          (ii) Statements of Consolidated Income for each of the Three Years in
     the Period Ended December 31, 1995.
 
          (iii) Statements of Consolidated Financial Position at December 31,
     1995 and 1994.
 
          (iv) Statements of Consolidated Stockholders' Equity for each of the
     Three Years in the Period Ended December 31, 1995.
 
          (v) Statements of Consolidated Cash Flows for each of the Three Years
     in the Period Ended December 31, 1995.
 
          (vi) Notes to Consolidated Financial Statements for the Three Years in
     the Period Ended December 31, 1995.
 
     2. Supplementary Data and Financial Statement Schedules
 
          (i) Supplementary unaudited data with respect to quarterly results of
     operations is set forth in Part II, Item 8 of this Report.
 
          (ii) The following financial statement schedule and opinion thereon
     are filed as a part of this Report:
 
<TABLE>
<CAPTION>
                                                                           SEQUENTIAL PAGE
                                                                           ---------------
        <S>                                                                <C>
        Independent Auditors' Report....................................          49
        Schedule II -- Valuation and Qualifying Accounts and Reserves...          50
</TABLE>
 
     All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore have
been omitted.
 
                                       46
<PAGE>   48
 
     3. Exhibits Required by Securities and Exchange Commission Regulation S-K
 
     (a) The following exhibits are filed as part of this report:
 
<TABLE>
<CAPTION>
EXHIBIT NO.                                                                         SEQUENTIAL PAGE
-----------                                                                         ---------------
<S>          <C>                                                                    <C>
 9.1         Voting Trust Agreement, dated June 19, 1995 between the holders of
             voting trust certificates and Michael E. Pulitzer, Emily Rauh Pulitzer,
             Ronald H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins, William F.
             Woo and David Moore. ..................................................        53
 9.2         Termination Agreement, dated June 19, 1995 between the holders of
             voting trust certificates and Michael E. Pulitzer, Emily Rauh Pulitzer,
             Ronald H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins, William F.
             Woo and David Moore. ..................................................        86
10.8.1       Amendment, dated October 25, 1995, to Pulitzer Retirement Savings
             Plan. .................................................................        97
10.14        Pulitzer Publishing Company Senior Executive Deferred Compensation
             Plan. .................................................................       100
21           Subsidiaries of Registrant.............................................       104
23           Independent Auditors' Consent..........................................       105
24           Power of Attorney......................................................       106
27           Financial Data Schedule................................................       107
</TABLE>
 
     (b) The following exhibits are incorporated herein by reference:
 
<TABLE>
<S>      <C>  <C>
3.1       --  Restated Certificate of Incorporation of the Company.(iii)
3.2       --  By-Laws of the Company restated as of June 23, 1993.(ix)
4.1       --  Form of Certificate for Common Stock.(iii)
10.1      --  Agreement, dated January 1, 1961, between the Pulitzer Publishing Company, a
              Missouri corporation, and the Globe-Democrat Publishing Company, as amended on
              September 4, 1975, April 12, 1979 and December 22, 1983.(i)
10.2.1    --  Amended and Restated Joint Operating Agreement, dated December 30, 1988 between
              Star Publishing Company and Citizen Publishing Company.(v)
10.2.2    --  Partnership Agreement, dated December 30, 1988 between Star Publishing Company and
              Citizen Publishing Company.(v)
10.3      --  Agreement, dated as of May 12, 1986, among the Pulitzer Publishing Company,
              Clement C. Moore, II, Gordon C. Weir, William E. Weir, James R. Weir, Kenward G.
              Elmslie, Stephen E. Nash and Manufacturers Hanover Trust Company, as Trustees and
              Christopher Mayer.(i)
10.4      --  Letter Agreement, dated September 29, 1986, among the Pulitzer Publishing Company,
              Trust Under Agreement Made by David E. Moore, Frederick D. Pulitzer, Michael E.
              Pulitzer, Jr., Robert S. Pulitzer, Joseph Pulitzer, IV, Joseph Pulitzer, Jr.,
              Michael E. Pulitzer, Stephen E. Nash and Manufacturers Hanover Trust Company, as
              Trustees, Kenward G. Elmslie, Gordon C. Weir, William E. Weir, James R. Weir,
              Peter W. Quesada, T. Ricardo Quesada, Elinor P. Hempelmann, The Moore Foundation,
              Inc., Mariemont Corporation, Z Press Inc. and Clement C. Moore, II.(ii)
10.5      --  Letter Agreement, dated May 12, 1986, among the Pulitzer Publishing Company, Peter
              W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada and Elinor P.
              Hempelmann.(i)
10.6      --  Agreement, dated as of September 29, 1986, among the Pulitzer Publishing Company,
              Peter W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada and Elinor
              Hempelmann.(ii)
10.7.1    --  Amendment, dated March 9, 1992, to the Pulitzer Publishing Annual Incentive
              Plan.(vi)
10.7.2    --  Annual Incentive Compensation Plan.(iii)
10.8.2    --  Amendment, dated January 24, 1995, to Pulitzer Retirement Savings Plan.(xi)
10.8.3    --  Amended and restated Pulitzer Retirement Savings Plan.(xi)
10.9      --  Amended and restated Joseph Pulitzer Pension Plan.(xi)
10.10     --  Amended and restated Pulitzer Publishing Company Pension Plan.(xi)
</TABLE>
 
                                       47
<PAGE>   49
 
<TABLE>
<S>      <C>  <C>
10.11     --  Restated Supplemental Executive Benefit Pension Plan.(vii)
10.12     --  Employment Agreement, dated October 1, 1986, between the Pulitzer Publishing
              Company and Joseph Pulitzer, Jr.(i)
10.13     --  Employment Agreement, dated January 2, 1986, between the Pulitzer Publishing
              Company and Michael E. Pulitzer.(i)
10.15     --  Consulting Agreement, dated May 1, 1993, between Pulitzer Publishing Company and
              Glenn A. Christopher.(ix)
10.16     --  Supplemental Executive Retirement Pay Agreement dated June 5, 1984, between the
              Pulitzer Publishing Company and Glenn A. Christopher.(i)
10.17     --  Letter Agreement, dated October 26, 1984, between the Pulitzer Publishing Company
              and Glenn A. Christopher.(i)
10.18     --  Letter Agreement, dated October 21, 1986, between the Pulitzer Publishing Company
              and David E. Moore.(i)
10.19     --  Pulitzer Publishing Company 1994 Key Employees' Restricted Stock Purchase Plan.(x)
10.20.1   --  Amendment, dated April 20, 1995, to Pulitzer Publishing Company 1994 Stock Option
              Plan.(xii)
10.20.2   --  Pulitzer Publishing Company 1994 Stock Option Plan.(x)
10.21     --  Registration Rights Agreement.(i)
10.22     --  Note Agreement, dated April 22, 1987, between the Pulitzer Publishing Company and
              The Prudential Insurance Company of America.(iv)
10.23     --  Employment Agreement, dated May 10, 1955, between the Pulitzer Publishing Company
              and Joseph Pulitzer, Jr.(ii)
10.24     --  Note Agreement, dated June 30, 1993, between Pulitzer Publishing Company and The
              Prudential Insurance Company of America.(viii)
</TABLE>
 
-------------------------
(i)   Incorporated by reference to Registration Statement on Form S-1 (No.
      33-9953) filed with the Securities and Exchange Commission on November 4,
      1986.
 
(ii)  Incorporated by reference to Amendment No. 1 to Registration Statement on
      Form S-1 (No. 33-9953) filed with the Securities and Exchange Commission
      on December 9, 1986.
 
(iii) Incorporated by reference to Amendment No. 2 to Registration Statement on
      Form S-1 (No. 33-9953) filed with the Securities and Exchange Commission
      on December 11, 1986.
 
(iv) Incorporated by reference to Current Report on Form 8-K dated May 4, 1987.
 
(v)  Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1988.
 
(vi) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1991.
 
(vii) Incorporated by reference to Annual Report on Form 10-K for the fiscal
      year ended December 31, 1992.
 
(viii) Incorporated by reference to Quarterly Report on Form 10-Q for the
       quarterly period ended June 30, 1993.
 
(ix) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1993.
 
(x)  Incorporated by reference to the Company's definitive Proxy Statement used
     in connection with the 1994 Annual Meeting of Stockholders.
 
(xi) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1994.
 
(xii) Incorporated by reference to the Company's definitive Proxy Statement used
      in connection with the 1995 Annual Meeting of Stockholders.
 
     (c) Reports on Form 8-K.
 
          The Company did not file any reports on Form 8-K during the fourth
     quarter of fiscal year 1995.
 
                                       48
<PAGE>   50
 
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders
  of Pulitzer Publishing Company:
 
We have audited the consolidated financial statements of Pulitzer Publishing
Company and its subsidiaries as of December 31, 1995 and 1994, and for each of
the three years in the period ended December 31, 1995, and have issued our
report thereon dated February 9, 1996; such report is included elsewhere in this
Form 10-K. Our audits also included the consolidated financial statement
schedule of Pulitzer Publishing Company and its subsidiaries, listed in the
accompanying index at Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
 
DELOITTE & TOUCHE LLP
 
Saint Louis, Missouri
February 9, 1996
 
                                       49
<PAGE>   51
 
                                                                     SCHEDULE II
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
           SCHEDULE II -- VALUATION & QUALIFYING ACCOUNTS & RESERVES
               FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 & 1993
 
<TABLE>
<CAPTION>
                                          BALANCE AT     CHARGED TO    CHARGED TO                     BALANCE
                                           BEGINNING      COSTS &        OTHER                       AT END OF
              DESCRIPTION                  OF PERIOD      EXPENSES      ACCOUNTS      DEDUCTIONS      PERIOD
---------------------------------------   -----------    ----------    ----------     ----------     ---------
                                                                     (IN THOUSANDS)
<S>                                       <C>            <C>           <C>            <C>            <C>
YEAR ENDED DECEMBER 31, 1995
Valuation Accounts:
  Allowance for Doubtful Accounts......     $ 2,135        $1,538         $247(a)       $1,911(b)     $ 2,009
Reserves:
  Accrued Medical Plan.................         789         4,907            0           5,135(c)         561
  Workers Compensation.................       2,327         1,192            0           1,514          2,005
YEAR ENDED DECEMBER 31, 1994
Valuation Accounts:
  Allowance for Doubtful Accounts......     $ 2,575        $2,010         $159(a)       $2,609(b)     $ 2,135
Reserves:
  Accrued Medical Plan.................         526         6,070            0           5,807(c)         789
  Workers Compensation.................       1,765         2,023            0           1,461          2,327
YEAR ENDED DECEMBER 31, 1993
Valuation Accounts:
  Allowance for Doubtful Accounts......     $ 2,357        $1,935         $625(a)       $2,342(b)     $ 2,575
Reserves:
  Accrued Medical Plan.................       2,000         3,850            0           5,324(c)         526
  Workers Compensation.................       1,100         1,922            0           1,257          1,765
</TABLE>
 
-------------------------
(a) -- Accounts reinstated, cash recoveries, etc.
 
(b) -- Accounts written off, except 1994 which also includes $761 related to
sale of PCN.
 
(c) -- Amount represents:
 
<TABLE>
<CAPTION>
                                           1995      1994      1993
                                          ------    ------    ------
            <S>                           <C>       <C>       <C>
            Claims paid................   $4,660    $5,383    $5,101
            Service fees...............      548       460       522
            Cash refunds...............      (73)      (36)     (299)
                                          ------    ------    ------
                                          $5,135    $5,807    $5,324
                                          ======    ======    ======
</TABLE>
 
                                       50
<PAGE>   52
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 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, on the 26th day of March, 1996.
 
                                          PULITZER PUBLISHING COMPANY
 
                                          By:       /s/ Michael E. Pulitzer
                                          --------------------------------------
                                                     Michael E. Pulitzer,
                                                    Chairman, President and
                                                    Chief Executive Officer
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant in
the capacities indicated on the dates indicated.
 
<TABLE>
<CAPTION>
              SIGNATURE                                 TITLE                        DATE
-------------------------------------     ---------------------------------     ---------------
<C>                                       <C>                                   <S>
       /s/ Michael E. Pulitzer            Director, Chairman, President and     March 26, 1996
-------------------------------------          Chief Executive Officer
        (Michael E. Pulitzer)               (Principal Executive Officer)
        /s/ Ronald H. Ridgway                   Director; Senior Vice           March 26, 1996
-------------------------------------           President -- Finance
         (Ronald H. Ridgway)                  (Principal Financial and
                                                 Accounting Officer)
           Ken J. Elkins*                       Director; Senior Vice           March 26, 1996
-------------------------------------               President --
           (Ken J. Elkins)                     Broadcasting Operations
           David E. Moore*                            Director                  March 26, 1996
-------------------------------------
          (David E. Moore)
      Nicholas G. Penniman IV*                  Director; Senior Vice           March 26, 1996
-------------------------------------     President -- Newspaper Operations
      (Nicholas G. Penniman IV)
         Peter J. Repetti *                           Director                  March 26, 1996
-------------------------------------
         (Peter J. Repetti)
        Emily Rauh Pulitzer*                          Director                  March 26, 1996
-------------------------------------
        (Emily Rauh Pulitzer)
           Alice B. Hayes*                            Director                  March 26, 1996
-------------------------------------
          (Alice B. Hayes)
       James M. Snowden, Jr.*                         Director                  March 26, 1996
-------------------------------------
       (James M. Snowden, Jr.)
</TABLE>
 
                                          By:        /s/ Ronald H. Ridgway
                                          --------------------------------------
                                                      Ronald H. Ridgway*
                                                    attorney-in-fact
 
                                       51
<PAGE>   53
 
                          PULITZER PUBLISHING COMPANY
 
                 REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
                               DECEMBER 31, 1995
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT NO.                                                                           SEQUENTIAL PAGE
-----------                                                                           ---------------
<S>           <C>                                                                     <C>
9.1           Voting Trust Agreement, dated June 19, 1995 between the holders of
              voting trust certificates and Michael E. Pulitzer, Emily Rauh
              Pulitzer, Ronald H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins,
              William F. Woo and David Moore........................................        53
9.2           Termination Agreement, dated June 19, 1995 between the holders of
              voting trust certificates and Michael E. Pulitzer, Emily Rauh
              Pulitzer, Ronald H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins,
              William F. Woo and David Moore........................................        86
10.8.1        Amendment, dated October 25, 1995, to Pulitzer Retirement Savings
              Plan..................................................................        97
10.14         Pulitzer Publishing Company Senior Executive Deferred Compensation
              Plan..................................................................        100
21            Subsidiaries of Registrant............................................        104
23            Independent Auditors' Consent.........................................        105
24            Power of Attorney.....................................................        106
27            Financial Data Schedule...............................................        107
</TABLE>
 
                                       52