UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xþ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~December 3031, ~~2003~~2004 OR


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 033-75156

MEDIANEWS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other Jurisdiction of Incorporation or organization)		76-0425553 (I.R.S. Employer Identification Number)
Delaware (State or other jurisdiction of incorporation or organization)		76-0425553 (I.R.S. Employer Identification Number)
1560 Broadway, Suite 2100 Denver, Colorado (Address of principal executive offices)		80202 (Zip Code)

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

Indicate by check mark whether athe registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ~~and~~ 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. Item (1) Yes X No Item (2) Yes No X*

Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No xX

~~TABLE~~The OFtotal ~~CONTENTS~~number of shares of the registrant’s Class A Common Stock outstanding as of February 11, 2005 was 2,298,346.

PART I
	ITEM 1: FINANCIAL STATEMENTS
	ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
	ITEM 4: CONTROLS AND PROCEDURES
PART II
	ITEM 1: LEGAL PROCEEDINGS
	ITEM 2: CHANGES IN SECURITIES
	ITEM 3: DEFAULTS UPON SENIOR SECURITIES
	ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5: OTHER INFORMATION
	ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EX-31.1 Certification Pursuant to Section 302
EX-31.2 Certification Pursuant to Section 302
EX-31.3 Certification Pursuant to Section 302
EX-32.1 Certification Pursuant to Section 906
EX-32.2 Certification Pursuant to Section 906

*The registrant’s duty to file reports with the Securities and Exchange Commission has been suspended in respect of its fiscal year commencing July 1, 2004 pursuant to Section 15(d) of the Securities Exchange Act of 1934. It is filing this Quarterly Report on Form 10-Q on a voluntary basis.

~~Table~~INDEX ofTO ~~Contents~~MEDIANEWS GROUP, INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2004

INDEX TO MEDIANEWS GROUP, INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2003


Item No.		Page
	PART I – FINANCIAL INFORMATION
1	Financial Statements	3
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
3	Quantitative and Qualitative Disclosure of Market Risk	3
4	Controls and Procedures	3
	PART II – OTHER INFORMATION
1	Legal Proceedings	4
2	Unregistered Sales of Equity Securities and Use of Proceeds	N/A
3	Defaults Upon Senior Securities	N/A
4	Submission of Matters to a Vote of Security Holders	4
5	Other Information	N/A
6	Exhibits	4
Signatures
Stock Purchase Agreement
Certification Pursuant to Section 302
Certification Pursuant Section 302
Certification Pursuant to Section 302
Certification Pursuant to Section 906
Certification Pursuant to Section 906

Item No Page

PART I — FINANCIAL INFORMATION

1		Financial Statements	3
2		Management's Discussion and Analysis of Financial Condition and Results of
		Operations	3
3		Quantitative and Qualitative Disclosure of Market Risk	3
4		Controls and Procedures	3
	PART II — OTHER INFORMATION
1		Legal Proceedings	4
2		Changes in Securities	4
3		Defaults Upon Senior Securities	4
4		Submission of Matters to a Vote of Security Holders	4
5		Other Information	4
6		Exhibits and Reports on Form 8-K	4

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

The information required by this item is filed as part of this report on Form 10-Q. See Index to Financial Information on page 6 of this report on Form 10-Q.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required by this item is filed as part of this report on Form 10-Q. See Index to Financial Information on page 6 of this report on Form 10-Q.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

The information required by this item is filed as part of this report on Form 10-Q. See Index to Financial Information on page 6 of this report on Form 10-Q.

ITEM 4: CONTROLS AND PROCEDURES

As of ~~September~~December 3031, ~~2003~~2004, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, President, and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in ~~Rules~~Rule ~~13a-14 and~~ 15d-1415(e) of the Securities Exchange Act of 1934. (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer, President, and Chief ~~Financial~~ Financial Officer concluded that our disclosure controls and procedures were effective to ~~ensure~~provide reasonable assurance that material information regarding us and our subsidiaries required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. ~~There~~During ~~were~~the period covered by this quarterly report, there have been no changes in our internal control over financial reporting during the last fiscal quarter that ~~have~~ materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

The information required by this item is filed as part of this report on Form 10-Q as Note 4 of the Notes to Condensed Consolidated Financial Statements. See Index to Financial Information on page 6 of this report on Form 10-Q.

ITEM 2: CHANGES IN SECURITIES

There were no changes in the rights of security holders during the quarter for which this report is filed.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the quarter for which this report is filed.

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

~~There~~As ~~were~~of noOctober 13, ~~matters~~2004, ~~submitted~~the toholders aof ~~vote~~93.1% of ~~security~~all ~~holders~~outstanding ~~during~~shares of our Class A Common Stock acted by written consent in lieu of an annual meeting to re-elect Richard B. Scudder, William Dean Singleton, Jean L. Scudder and Howell E. Begle to our board of directors. Following the ~~quarter~~effectiveness ~~for~~of ~~which~~that ~~this~~action, ~~report~~our isboard ~~filed~~of directors consisted of Richard B. Scudder, William Dean Singleton, Jean L. Scudder and Howell E. Begle.

ITEM 56: ~~OTHER INFORMATION~~EXHIBITS

~~None~~See Exhibit Index for list of exhibits filed with this report.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K

There were no reports on Form 8-K during the quarter for which this report is filed.

FORWARD-LOOKING STATEMENTS

This report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements contained herein and elsewhere in this report are based on current expectations. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms “expect,” “anticipate,” “intend,” “believe,” and “project” and similar words or expressions are intended to identify forward-looking statements. These statements speak only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated and should be viewed with caution. Potential risks and uncertainties that could adversely affect our ability to obtain these results, and in most instances are beyond our control, include, without limitation, the following factors: (a) increased consolidation among major retailers, bankruptcy or other events that may adversely affect business operations of major customers and depress the level of local and national advertising, (b) an economic downturn in some or all of our principal newspaper markets that may lead to decreased circulation or decreased local or national advertising, (c) a decline in general newspaper readership patterns as a result of competitive alternative media or ~~other~~ other factors, (d) increases in newsprint costs over the level anticipated, (e) labor ~~disputes~~ disputes which may cause revenue declines or increased labor costs, (f) acquisitions of new businesses or dispositions of existing businesses, (g) costs or difficulties related to the integration of businesses acquired by us may be greater than expected, (h) increases in interest or financing costs, (i) rapid technological changes and frequent new product introductions prevalent in electronic publishing, including the ongoing evolution of the Internet and (j) other unanticipated events and conditions. It is not possible to foresee or identify all such factors. We make no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statements.

SIGNATURES

Pursuant to the requirements of the Securities ~~and~~ Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MEDIANEWS GROUP, INC.
Dated: November 6, 2003		By:	/s/Ronald A. Mayo
Dated: February 11, 2005	By:	/s/Ronald A. Mayo
			Ronald A. Mayo Vice President, Chief Financial Officer and Duly Authorized Officer of Registrant
		Ronald A. Mayo
		Vice President, Chief Financial Officer and Duly Authorized Officer of Registrant

MEDIANEWS GROUP, INC.
Index to Financial Information

			~~Page~~	Page
Item 1: Financial Statements:
Item 1:		Financial Statements
	~~Condensed Consolidated Balance Sheets~~	Condensed Consolidated Balance Sheets		7	7
	~~Condensed Consolidated Statements of Operations~~	Condensed Consolidated Statements of Operations		9	9
	~~Condensed Consolidated Statements of Cash Flows~~	Condensed Consolidated Statements of Cash Flows		10	10
	~~Notes to Condensed Consolidated Financial Statements~~	Notes to Condensed Consolidated Financial Statements		11	11
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations				17
Item 2:		Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3: Quantitative and Qualitative Disclosure of Market Risk				27
Item 3:		Quantitative and Qualitative Disclosure of Market Risk			29

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		(Unaudited)	~~(Unaudited)~~
			September 30,				June 30,
ASSETS		December 31, 2004				June 30, 2004
ASSETS			2003				2003
		(Dollars in thousands)
			(In thousands)
CURRENT ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	1,432			$	64,736
	Cash and cash equivalents		$	6,714			$	3,343
Accounts receivable, less allowance for doubtful accounts of $9,016 at December 31, 2004 and $9,131 at June 30, 2004			94,335				81,925
	Accounts receivable, less allowance for doubtful accounts of $9,470 at September 30, 2003 and $9,393 at June 30, 2003			78,857				80,207
Inventories of newsprint and supplies			18,161				16,526
	Inventories of newsprint and supplies			14,575				14,314
Prepaid expenses and other assets			10,238				8,280
	Prepaid expenses and other assets			8,493				9,122
TOTAL CURRENT ASSETS			124,166				171,467
	TOTAL CURRENT ASSETS			108,639				106,986
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT
Land			37,178				37,226
	Land			38,558				39,954
Buildings and improvements			104,894				104,993
	Buildings and improvements			111,575				111,180
Machinery and equipment			349,076				342,661
	Machinery and equipment			315,482				312,817
Construction in progress			20,895				7,110
	Construction and progress			6,415				2,940
TOTAL PROPERTY, PLANT AND EQUIPMENT			512,043				491,990
	TOTAL PROPERTY, PLANT AND EQUIPMENT			472,030				466,891
Less accumulated depreciation and amortization			(197,076	)			(184,614	)
	Less accumulated depreciation and amortization			(171,649	)			(165,754	)
NET PROPERTY, PLANT AND EQUIPMENT			314,967				307,376
	NET PROPERTY, PLANT AND EQUIPMENT			300,381				301,137
OTHER ASSETS
OTHER ASSETS
Investment in unconsolidated JOAs			164,968				179,846
	Investment in unconsolidated JOAs			219,013				221,640
Equity investments			92,407				92,681
	Equity investments			92,251				93,343
Subscriber accounts, less accumulated amortization of $141,926 at December 31, 2004 and $134,487 at June 30, 2004			56,541				63,980
	Subscriber accounts, less accumulated amortization of $122,704 at September 30, 2003 and $118,572 at June 30, 2003			75,188				79,320
Excess of cost over fair value of net assets acquired			421,521				418,600
	Excess of cost over fair value of net assets acquired			383,642				381,199
Newspaper mastheads			139,266				139,266
	Newspaper mastheads			145,781				145,781
Covenants not to compete and other identifiable intangible assets, less accumulated amortization of $31,229 at December 31, 2004 and $30,745 at June 30, 2004			4,527				5,011
	Covenants not to compete and other identifiable intangible assets, less accumulated amortization of $30,018 at September 30, 2003 and $29,622 at June 30, 2003			4,150				4,547
Other			19,529				19,398
	Other			13,119				14,132
TOTAL OTHER ASSETS			898,759				918,782
	TOTAL OTHER ASSETS			933,144				939,962
TOTAL ASSETS		$	1,337,892			$	1,397,625
	TOTAL ASSETS		$	1,342,164			$	1,348,085

See notes to condensed consolidated financial statements

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		(Unaudited)		~~(Unaudited)~~
				September 30,				June 30,
LIABILITIES AND SHAREHOLDERS’ EQUITY		December 31, 2004				June 30, 2004
LIABILITIES AND SHAREHOLDERS' EQUITY				2003				2003
		(Dollars in thousands, except share data)
				(In thousands, except share data)
CURRENT LIABILITIES
CURRENT LIABILITIES
Trade accounts payable		$	6,665			$	7,180
	Trade accounts payable			$	9,019			$	9,894
Accrued liabilities			58,269				68,230
	Accrued liabilities				67,985				66,817
Unearned income			26,615				26,281
	Unearned income				20,279				20,032
Current portion of long-term debt and obligations under capital leases			4,129				5,278
	Current portion of long-term debt and obligations under capital leases				23,291				3,171
TOTAL CURRENT LIABILITIES			95,678				106,969
	TOTAL CURRENT LIABILITIES				120,574				99,914
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES			848,363				923,189
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES					868,440				901,383
OTHER LIABILITIES			22,235				26,450
OTHER LIABILITIES					32,803				33,947
DEFERRED INCOME TAXES, NET			97,143				88,913
DEFERRED INCOME TAXES, NET					80,724				77,845
MINORITY INTEREST			168,652				165,084
MINORITY INTEREST					174,451				174,988
SHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITY
Common stock, par value $0.001; 3,000,000 shares authorized:
	Common stock, par value $0.001; 3,000,000 shares authorized:
2,314,346 shares issued and 2,298,346 shares outstanding			2				2
		2,314,346 shares issued and 2,298,346 shares outstanding			2				2
Additional paid-in capital			3,631				3,631
	Additional paid-in capital				3,631				3,631
Accumulated other comprehensive loss, net of taxes			(22,021	)			(19,976	)
	Accumulated other comprehensive loss, net of taxes				(18,495	)			(19,351	)
Retained earnings			126,209				105,363
	Retained earnings				82,034				77,726
Common stock in treasury, at cost, 16,000 shares			(2,000	)			(2,000	)
	Common stock in treasury, at cost, 16,000 shares				(2,000	)			(2,000	)
TOTAL SHAREHOLDERS’ EQUITY			105,821				87,020
	TOTAL SHAREHOLDERS’ EQUITY				65,172				60,008
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,337,892			$	1,397,625
	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	1,342,164			$	1,348,085

See notes to condensed consolidated financial statements

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

			Three Months Ended September 30,
		Three Months Ended								Six Months Ended
			2003				2002
		December 31,								December 31,
			(In thousands, except share data)
		2004				2003				2004			2003
REVENUES
		(Dollars in thousands, except share data)
	Advertising		$	137,780			$	134,819
REVENUES
	Circulation			33,471				34,662
Advertising		$	159,189			$	152,459			$	308,213		$	294,484
	Other			13,826				9,838
Circulation			32,629				33,322				65,643			66,793
	TOTAL REVENUES			185,077				179,319
Other			9,798				9,858				19,413			19,439
INCOME FROM UNCONSOLIDATED JOAS				4,769				4,249
TOTAL REVENUES			201,616				195,639				393,269			380,716
COSTS AND EXPENSES
INCOME FROM UNCONSOLIDATED JOAS			9,590				10,974				14,806			15,743
	Cost of sales			58,204				53,101
COST AND EXPENSES
	Selling, general and administrative			90,024				84,896
Cost of sales			60,964				58,998				121,725			117,202
	Depreciation and amortization			10,225				10,076
Selling, general and administrative			93,965				88,391				189,884			178,415
	Interest expense			14,078				16,983
Depreciation and amortization			10,108				9,825				20,217			20,050
	Other (income) expense, net			4,134				(1,709	)
Interest expense			12,103				14,010				24,319			28,088
	TOTAL COSTS AND EXPENSES			176,665				163,347
Other (income) expense, net			(36	)			10,094				5,399			14,228
EQUITY INVESTMENT INCOME, NET				2,172				244
TOTAL COSTS AND EXPENSES			177,104				181,318				361,544			357,983
MINORITY INTEREST				(8,161	)			(8,466	)
EQUITY INVESTMENT INCOME, NET			3,113				3,205				5,237			5,377
INCOME BEFORE INCOME TAXES				7,192				11,999
MINORITY INTEREST			(9,878	)			(11,727	)			(16,478	)		(19,888	)
INCOME TAX EXPENSE				(2,884	)			(4,877	)
INCOME BEFORE INCOME TAXES			27,337				16,773				35,290			23,965
NET INCOME			$	4,308			$	7,122
INCOME TAX EXPENSE			(11,097	)			(6,787	)			(14,444	)		(9,671	)
NET INCOME PER COMMON SHARE:
NET INCOME		$	16,240			$	9,986			$	20,846		$	14,294
	Net income per common share		$	1.87			$	3.10
NET INCOME PER COMMON SHARE:
	Weighted average number of shares outstanding			2,298,346				2,298,346
Net income per common share		$	7.07			$	4.34			$	9.07		$	6.22
Weighted average number of shares outstanding			2,298,346				2,298,346				2,298,346			2,298,346

See notes to condensed consolidated financial statements

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

				Three Months Ended September 30,
		Six Months Ended December 31,
				2003				2002
		2004				2003
				(In thousands)
		(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	~~Net income~~	$	20,846	$	~~4,308~~	$	14,294	$	~~7,122~~
	Adjustments to reconcile net income to net cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		~~Depreciation and amortization~~	22,309		~~11,320~~		22,252		~~11,147~~
Provision for losses on accounts receivable		~~Provision for losses on accounts receivable~~	4,368		~~2,269~~		4,154		~~2,451~~
Amortization of debt discount		~~Amortization of debt discount~~	541		~~249~~		336		~~450~~
		Loss (gain) on sale of assets			84				(652	)
Net (gain) loss on sale of assets			(109	)			224
		Proportionate share of net income from unconsolidated JOAs			(16,182	)			(15,045	)
Loss on early extinguishment of debt			9,236				9,200
		Equity investment income, net			(2,172	)			(244	)
Proportionate share of net income from unconsolidated JOAs			(39,175	)			(38,938	)
		Change in defined benefit plan assets, net of cash contributions			161				(68	)
Distributions from unconsolidated JOAs			47,590				37,791
		Deferred income tax expense			2,298				4,024
Equity investment income, net			(5,237	)			(5,377	)
		Increase in estimated option repurchase price			(30	)			(569	)
Change in defined benefit plan assets, net of cash contributions			498				549
		Minority interest			8,161				8,466
Deferred income tax expense			9,950				8,024
		Unrealized loss on hedging activities, reclassified to earnings from accumulated other comprehensive loss			565				327
Change in estimated option repurchase price			(5,556	)			1,065
		Unrealized loss (gain) on interest rate swaps			869				(2,413	)
Minority interest			16,478				19,888
	Change in operating assets and liabilities				(2,404	)			(5,501	)
Distributions paid to minority interest			(12,342	)			(17,129	)
	NET CASH FLOWS FROM OPERATING ACTIVITIES				9,496				9,495
Unrealized loss on hedging activities, reclassified to earnings from accumulated other comprehensive loss			228				1,213
CASH FLOWS FROM INVESTING ACTIVITIES:
Unrealized loss on swaps			—				1,307
	Distributions from unconsolidated JOAs				18,065				16,656
Change in operating assets and liabilities			(29,029	)			(26,470	)
	Distributions from equity investments				3,314				441
NET CASH FLOWS FROM OPERATING ACTIVITIES			40,596				32,383
	Investments in equity investments				(50	)			(500	)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Business acquisitions				(193	)			—
Distributions from equity investments			5,511				5,614
	Capital expenditures				(5,776	)			(3,154	)
Investments in equity investments			—				(50	)
	Proceeds from the sale of assets				1,352				275
Business acquisitions			(2,879	)			(2,519	)
	NET CASH FLOWS FROM INVESTING ACTIVITIES				16,712				13,718
Capital expenditures			(21,430	)			(24,541	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of assets			322				1,559
	Issuance of long-term debt				11,900				15,700
NET CASH FLOWS FROM INVESTING ACTIVITIES			(18,476	)			(19,937	)
	Reduction of long-term debt and other liabilities				(26,038	)			(27,368	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Distributions paid to minority interest				(8,699	)			(7,006	)
Issuance of long-term debt			406,650				375,998
	NET CASH FLOWS FROM FINANCING ACTIVITIES				(22,837	)			(18,674	)
Reduction of long-term debt and other liabilities			(483,450	)			(379,762	)
INCREASE IN CASH AND CASH EQUIVALENTS					3,371				4,539
Repurchase premiums and related costs associated with long-term debt			(8,624	)			(9,370	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					3,343				2,029
NET CASH FLOWS FROM FINANCING ACTIVITIES			(85,424	)			(13,134	)
CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	6,714			$	6,568
DECREASE IN CASH AND CASH EQUIVALENTS			(63,304	)			(688	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			64,736				3,343
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	1,432			$	2,655

See notes to condensed consolidated financial statements

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1: Significant Accounting Policies and Other Matters

Basis of Quarterly Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and ~~footnotes~~disclosures required by generally accepted accounting principles ~~for~~ for complete consolidated financial statements and should be read in conjunction with the consolidated financial statements and ~~footnotes~~notes thereto included in MediaNews Group, Inc.’s (“MediaNews” or the “Company”) Annual Report on Form 10-K for the year ended June 30, ~~2003~~2004. In the opinion of management, all adjustments ~~(consisting of normal recurring accruals)~~ considered necessary for a fair presentation have been included. ~~Operating~~ Operating results for the three- and six month ~~period~~periods ended ~~September~~December 3031, ~~2003~~2004 are not necessarily indicative of the results that may be expected for future interim periods or for the year ended June 30, ~~2004~~2005.

Joint Operating Agencies

A joint operating agency (“JOA”) performs the production, sales, distribution and administrative functions for two or more newspapers in the same market under the terms of a joint operating agreement. Editorial control and news at each of the individual newspapers, ~~which~~that are party to a joint operating agreement continue to be separate and outside of the related JOA. The Company, through its subsidiaries, York Newspapers, Inc., ~~Charleston Publishing Company,~~ Kearns-Tribune, LLC, and The Denver Post Corporation, participates in JOAs in York, Pennsylvania, ~~Charleston, West Virginia,~~ Salt Lake City, Utah, and Denver, Colorado, respectively. The editorial and related expenses of The Denver Post, The Salt Lake Tribune and York Dispatch are incurred by the Company outside the related JOA. The ~~Charleston~~Company controls ~~JOA, on~~ the ~~other~~York ~~hand, accounts~~JOA ~~for~~prior and ~~pays~~subsequent ~~the~~to ~~editorial~~its ~~expenses~~fiscal ~~for~~year ~~both~~2004 ~~newspapers~~restructuring ~~within the JOA. The Company controls the York JOA~~ and accordingly consolidates its results. However, the editorial costs associated with the York Daily Record, ~~the~~ the other newspaper in the York JOA, ~~which~~were ~~are~~not ~~the~~included ~~responsibility~~in of the ~~JOA~~Company’s results prior to May 1, 2004 ~~minority~~because, ~~partner~~until then, ~~are~~the newspaper was not ~~included~~owned by MediaNews. The Company also owned a 50% interest in ~~our~~a ~~results~~JOA in Charleston, West Virginia through May 7, 2004. See Note 3: Joint Operating Agencies of the Company’s June 30, 2004 Annual Report on Form 10-K and Note 4: Contingent Matters of this Form 10-Q regarding the York and Charleston JOA restructurings.

InThe ~~July 2000,~~Company’s ~~the~~unconsolidated ~~Emerging~~JOAs ~~Issues Task Force~~ (~~“EITF”) reached a consensus on Issue 00-1~~Denver, ~~Balance~~Salt ~~Sheet~~Lake ~~and~~City ~~Income Statement Display under the Equity Method of Investments in Certain Partnerships~~ and ~~Other Unincorporated Joint Ventures (“EITF 00-1”)~~, ~~effective~~through ~~for periods ending after June~~May 157, ~~2000~~2004, ~~which~~ ~~prohibits~~Charleston) the use of pro-rata consolidation except in the extractive and construction industries. Prior to adoption of EITF 00-1, the Company accounted for all of its JOA operations using the pro-rata consolidation method. The Company discontinued pro-rata consolidation upon adoption of EITF 00-1, effective June 30, 2000. Currently, and for all periods presented, the operating results from the Company’s unconsolidated JOAs are reported as a single net amount in the accompanying financial statements in the line item “Income from Unconsolidated JOAs.” This line item includes:

• The Company’s proportionate share of net income from JOAs;, • The amortization of subscriber lists created by the original purchase by the Company of the JOAs’ interests as the subscriber lists are attributable to the Company’s earnings in the JOAs, and • Editorial costs, miscellaneous revenue received outside of the JOA, and other charges incurred by the Company’s subsidiaries directly attributable to the JOAs in providing editorial content and news for the Company’s newspapers party to a JOA.

• Investments ~~The~~in ~~amortization~~unconsolidated ofJOAs ~~subscriber~~are ~~lists~~reported asin the ~~subscriber~~consolidated ~~lists~~balance ~~are~~sheet ~~attributable~~under to the line ~~Company’s~~item ~~earnings~~“Investment in Unconsolidated JOAs” for the JOAs; ~~and~~the Company does not control (see Note 3: Joint Operating Agencies for further discussion).

• Editorial costs, miscellaneous publishing revenue, and other charges incurred by the Company’s subsidiaries directly attributable to the JOAs providing editorial content and news for the Company’s newspapers published by the JOAs.

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

Reclassifications

For comparability, certain prior year balances have been reclassified to conform to current reporting classifications.

Guarantees

Through its wholly-owned subsidiary, Kearns-Tribune, LLC, the Company owns a 6.0% interest in Ponderay Newsprint Company (“Ponderay”) and is also a guarantor, on a several basis, on 6.0% of up to $125.0 million of Ponderay’s credit facility, which is due April 12, 2006. In accordance with ~~Financial~~ Financial Accounting Standard Board (“FASB”) Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of ~~Others (“FIN No. 45”), the Company has no amounts~~ ~~related to the guarantee recorded in its September 30, 2003 financial~~ ~~statements because the guarantee~~

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

~~NOTE~~Others 1:(“FIN ~~Significant~~No. 45”), ~~Accounting~~the ~~Policies~~Company has no amounts related to the guarantee recorded in its financial statements because the guarantee existed prior to and ~~Other~~has ~~Matters~~not ~~(continued)~~been modified since December 31, 2002. The guarantee arose from Ponderay’s April 12, 2000 amended and restated credit agreement that replaced a previous credit facility which had been used to finance the construction of its newsprint mill. The guarantee could be triggered by Ponderay’s failure to meet any of its bank covenants, at which time the Company could be liable for its portion of the guarantee. At December 31, 2004, the Company’s share of the guarantee is approximately $4.3 million. The debt is collateralized by a deed of trust on Ponderay’s real property and a mortgage on all of Ponderay’s other assets.

existed prior to and has not been modified since December 31, 2002. The guarantee arose from Ponderay’s April 12, 2000 amended and restated credit agreement that replaced a previous credit facility which had been used to finance the construction of its newsprint mill. The guarantee could be triggered by Ponderay’s failure to meet any or all of its bank covenants, at which time the Company could be liable for its portion of the guarantee. At September 30, 2003, the Company’s share of the guarantee is $6.4 million. The debt is collateralized by a deed of trust on Ponderay’s real property and a mortgage on all of Ponderay’s other assets.

Income Taxes

At the end of each interim period the Company makes its best estimate regarding the effective tax rate expected to be applicable for the full fiscal year. The rate so determined is used in providing for income taxes on a current year to date basis. Accordingly, the effective tax rates for the three-month and corresponding year to date periods presented in an interim report on Form 10-Q may vary significantly. The effective income tax rate varies from the federal statutory rate because of state income taxes and the non-deductibility of certain expenses.

Seasonality

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

Recently Issued Accounting Standards

In January 2003, the FASB issued Interpretation No. 46 Consolidation of Variable Interest Entities (“FIN No. 46”). FIN No. 46 clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to only certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. For variable interest entities that existed prior to February 1, 2003, the effective date of FIN No. 46 for non-public entities is the end of the first annual reporting period beginning after June 15, 2003, which for the Company is June 30, 2004. The Company’s preliminary assessment indicates that FIN No. 46 will not have a material impact on its financial position or results of operations; however, the Company continues to re-evaluate its assessment based on ongoing guidance.

Effective July 1, 2003, the Company adopted FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS No. 150”), except for the provisions regarding non-controlling interests in limited-life subsidiaries. The provisions of SFAS No. 150 related to non-controlling interests in limited-life subsidiaries has been deferred by FASB for an indefinite period. The Company will evaluate the impact of the provisions related to non-controlling interests in limited-life subsidiaries when the provisions are finalized. Adoption of the other provisions of SFAS No. 150 on July 1, 2003 did not impact the Company’s financial position or results of operations.

NOTE 2: Comprehensive Income

The Company’s comprehensive income consisted of the following:

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
	2003			2002
	2004			2003			2004			2003
	(In thousands)
	(Dollars in thousands)
Net income	$	416,~~308~~240		$	79,~~122~~986		$	20,846		$	14,294
Unrealized gain on hedging activities, net of tax		~~291~~—			~~949~~—			—			291
Unrealized loss on newsprint and interest rate hedging activities, reclassified to earnings, net of tax		~~565~~114			~~327~~648			228			1,213
Comprehensive income	$	5,164		$	8,398
Minimum pension liability adjustment, net of tax		(2,273	)		(379	)		(2,273	)		(379	)
Comprehensive income	$	14,081		$	10,255		$	18,801		$	15,419

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3: Joint Operating Agencies

OnThe ~~January 23,~~following ~~2001,~~tables ~~MediaNews~~present ~~Group~~the ~~and~~summarized ~~E.W.~~results ~~Scripps~~of the Company’s ~~(“Scripps”), owner~~unconsolidated ofJOAs ~~the~~on ~~Rocky~~a combined ~~Mountain~~basis. ~~News,~~The ~~completed~~Salt ~~the~~Lake ~~formation~~City ofJOA ~~the~~data ~~Denver Newspaper~~has ~~Agency~~been ~~(“DNA”~~presented orseparately ~~the~~because, ~~“Denver~~as ~~JOA”)~~of June 30, 2004, it is a ~~partnership,~~significant ~~under~~investee of the ~~terms~~Company ~~of a~~determined ~~joint~~in ~~operating~~accordance ~~agreement~~with Rule 3-09 of Regulation S-X. ~~Upon~~Beginning ~~formation~~in offiscal ~~DNA~~year 2005, ~~MediaNews~~the ~~and~~Denver ~~Scripps~~JOA ~~each contributed~~data ~~substantially~~also ~~all~~is presented separately as a result of ~~their~~the ~~operating~~Charleston ~~assets~~JOA ~~used~~restructuring in ~~the~~May 2004 ~~publication~~(see Note 1: Significant Accounting ofPolicies and Other Matters). The ~~Denver~~fiscal ~~Post~~year ~~and~~2004 data combines the ~~Rocky~~Denver ~~Mountain~~JOA ~~News~~and toCharleston ~~DNA,~~JOA data ~~while~~in ~~each~~the ~~maintained editorial~~column ~~control~~“Other ~~and~~Unconsolidated ~~responsibility~~JOAs.” ~~for~~The ~~news~~Salt ~~and~~Lake ~~editorial~~City ~~costs~~JOA, ~~for~~Denver ~~each~~JOA ofand Other ~~their~~Unconsolidated ~~respective~~JOA ~~newspapers.~~information Inis ~~addition~~presented toat 100%, with the ~~Company~~other partners’s ~~proportionate~~ share of income from ~~DNA,~~ the ~~editorial~~related ~~costs,~~JOAs ~~publishing~~subsequently ~~related~~eliminated. ~~revenues, depreciation~~The of editorial ~~assets~~costs, ~~owned~~miscellaneous revenue received outside of the JOA, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and, through May 7, 2004, the Charleston Daily Mail, are included in the ~~line~~column ~~item~~ “~~Income~~Associated ~~from Unconsolidated~~Revenues ~~JOAs~~and Expenses.” The 20% minority interest associated with The Denver Post Corporation has not been reflected in the tables below.

MediaNews’ subsidiary, Kearns-Tribune, LLC, owns the masthead of The Salt Lake Tribune and a 50% ownership interest in the Newspaper Agency Corporation (“NAC” or the “Salt Lake JOA”). NAC is the managing entity of the JOA agreement between Kearns-Tribune, LLC and the Deseret News Publishing Company. Under the terms of this JOA agreement, NAC is responsible for performing all the business functions of The Salt Lake Tribune and the Deseret Morning News, including advertising and circulation sales, production and distribution; however, NAC does not own any of the fixed assets used in its operations. Instead, each partner owns the fixed assets used in the operations of NAC as tenants in common, outside of the JOA. Therefore, the related depreciation expense is also recorded outside of the JOA. News and editorial costs related to The Salt Lake Tribune are performed separately from NAC and are the sole responsibility of Kearns-Tribune, LLC. While Kearns-Tribune, LLC owns 50% of NAC, net income of NAC is distributed 58% to Kearns-Tribune, LLC and 42% to the Deseret News Publishing Company in part because The Salt Lake Tribune has greater circulation than the Deseret Morning News, and therefore is responsible for a greater portion of the operating cash flows generated by the Salt Lake JOA. The Company records its proportionate share of the results of NAC along with the operations of Kearns-Tribune, LLC, consisting principally of editorial costs, publishing related revenues, amortization of intangibles, depreciation of fixed assets, and other direct costs of The Salt Lake Tribune, in the line item “Income from Unconsolidated JOAs.”


	Three Months Ended December 31, 2004
										Total Income
							Associated			from
	Salt Lake						Revenues and			Unconsolidated
	City JOA			Denver JOA			Expenses			JOAs
	(Dollars in thousands)
*Income Statement Data:*
Total revenues	$	38,096		$	113,383		$	122

Cost of sales		7,748			34,838			8,967
Selling, general and administrative		13,755			49,119			2,534
Depreciation and amortization		—			4,584			1,043
Other		127			70			(8	)

Total costs and expenses		21,630			88,611			12,536

Net income		16,466			24,772			(12,414	)
Partners’ share of income from unconsolidated JOAs		(6,848	)		(12,386	)		—

Income from unconsolidated JOAs	$	9,618		$	12,386		$	(12,414	)	$	9,590

Charleston Publishing Company, a wholly-owned subsidiary of MediaNews, owns a 50% interest in Charleston Newspapers (“Charleston JOA”), which publishes the Charleston Gazette (morning) and Charleston Daily Mail (evening) six days a week and the Sunday Gazette-Mail, under the terms of a JOA agreement. Charleston Publishing Company also owns the rights to the masthead of the Charleston Daily Mail. The managerial responsibility for the news and editorial functions is completely separate from the JOA; accordingly, the Company is responsible for the news and editorial content of the Charleston Daily Mail. However, related editorial expenses are incurred and paid within the Charleston JOA. As a result, all editorial expenses of the Charleston JOA publications are included in the Company’s proportionate share of income from Charleston Newspapers, which is included in “Income from Unconsolidated JOAs.” Amortization of intangibles and other direct costs associated with the JOA incurred by Charleston Publishing Company are also included in “Income from Unconsolidated JOAs.”


	Six Months Ended December 31, 2004
										Total Income
							Associated			from
	Salt Lake						Revenues and			Unconsolidated
	City JOA			Denver JOA			Expenses			JOAs
	(Dollars in thousands)
*Income Statement Data:*
Total revenues	$	73,972		$	219,929		$	247

Cost of sales		15,982			69,332			17,408
Selling, general and administrative		26,347			99,207			5,059
Depreciation and amortization		—			9,328			2,092
Other		166			416			57

Total costs and expenses		42,495			178,283			24,616

Net income		31,477			41,646			(24,369	)
Partners’ share of income from unconsolidated JOAs		(13,125	)		(20,823	)		—

Income from unconsolidated JOAs	$	18,352		$	20,823		$	(24,369	)	$	14,806

York Newspapers, Inc. (“YNI”), a wholly-owned consolidated subsidiary of MediaNews, participates in a JOA, the York Newspaper Company (“YNC”), with York Daily Record, Inc. (“YDR”), under which YNC is responsible for all newspaper publishing operations, other than news and editorial, including production, sales, distribution and administration. YNC publishes The York Dispatch, a daily evening paper, the York Daily Record, a daily morning paper, and the York Sunday News. YNI has a 57.5% interest in YNC and is the controlling partner. The operations of YNC are consolidated with those of the Company, with a minority interest reflected for YDR’s interest in YNC. The operating results of YNC do not include the editorial costs, incurred outside of the JOA associated with the publication of the York Daily Record, which is not owned by the Company.

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3: Joint Operating Agencies (continued)


	Three Months Ended December 31, 2003
											Total Income
				Other			Associated				from
	Salt Lake			Unconsolidated			Revenues and			Unconsolidated
	City JOA			JOAs			Expenses				JOAs
	(Dollars in thousands)
*Income Statement Data:*
Total revenues	$	36,323		$	123,033		$	122

Cost of sales		8,360			37,921			8,265
Selling, general and administrative		12,770			51,061			2,273
Depreciation and amortization		—			5,548			1,107
Other		—			713			259

Total costs and expenses		21,130			95,243			11,904

Net income		15,193			27,790			(11,782	)
Partners’ share of income from unconsolidated JOAs		(6,332	)		(13,895	)		—

Income from unconsolidated JOAs	$	8,861		$	13,895		$	(11,782	)		$	10,974

The following table presents the summarized results of the Company’s unconsolidated JOAs, on a combined basis. NAC data has been presented separately because, as of June 30, 2003, it was a significant subsidiary of the Company as defined by Rule 3-09 of Regulation S-X. The NAC and Other Unconsolidated JOA information is presented at 100%, with the other partners’ share of income from the related JOAs subsequently eliminated. The editorial costs, publishing related revenues, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and the Charleston Daily Mail are included in the line “Associated Revenues and Expenses.” The minority interest associated with The Denver Post has not been reflected in the tables below.


	Six Months Ended December 31, 2003
										Total Income
				Other		Associated				from
	Salt Lake			Unconsolidated		Revenues and			Unconsolidated
	City JOA			JOAs		Expenses				JOAs
	(Dollars in thousands)
*Income Statement Data:*
Total revenues	$	69,536		$	236,255	$	254

Cost of sales		15,805			75,720		16,293
Selling, general and administrative		25,082			104,117		4,514
Depreciation and amortization		—			10,955		2,202
Other		2			997		440

Total costs and expenses		40,889			191,789		23,449

Net income		28,647			44,466		(23,195	)
Partners’ share of income from unconsolidated JOAs		(11,942	)		(22,233)		—

Income from unconsolidated JOAs	$	16,705		$	22,233	$	(23,195	)		$	15,743

		Three Months Ended September 30, 2003
												Total Income
		Newspaper			Other			Associated				from
		Agency			Unconsolidated			Revenues			Unconsolidated
		Corporation			JOAs			and Expenses				JOAs
		(In thousands)
Income Statement Data:
Total revenues		$	33,213		$	113,222		$	132
Cost of sales			7,445			37,799			8,028
Selling, general and administrative			12,312			53,056			2,241
Depreciation and amortization			—			5,407			1,095
Other			2			284			181
	Total costs and expenses		19,759			96,546			11,545
Net income (loss)			13,454			16,676			(11,413	)
Partners’ share of income from unconsolidated JOAs			(5,610	)		(8,338	)		—
Income from unconsolidated JOAs		$	7,844		$	8,338		$	(11,413	)		$	4,769

		Three Months Ended September 30, 2002
												Total Income
		Newspaper			Other			Associated				From
		Agency			Unconsolidated			Revenues			Unconsolidated
		Corporation			JOAs			and Expenses				JOAs
		(In thousands)
Income Statement Data:
Total revenues		$	30,781		$	112,966		$	230
Cost of sales			6,758			38,292			7,690
Selling, general and administrative			11,397			52,032			2,090
Depreciation and amortization			—			6,799			1,071
Other			50			389			175
	Total costs and expenses		18,205			97,512			11,026
Net income (loss)			12,576			15,454			(10,796	)
Partners’ share of income from unconsolidated JOAs			(5,258	)		(7,727	)		—
Income from unconsolidated JOAs		$	7,318		$	7,727		$	(10,796	)		$	4,249

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 4: Contingent Matters

MediaNews and Salt Lake Tribune Publishing Company (“SLTPC”) continue to be involved in litigation over SLTPC’s option to acquire the assets used in connection with the operation and publication of The Salt Lake Tribune (the “Option Agreement”). ~~Since~~For additional discussion on ~~our~~the ~~report~~litigation, please refer to Note 11: Commitments and Contingencies of the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2003, there have been~~2004. ~~several developments in this litigation as follows:~~

• One Onissue ~~October~~in 2dispute is the exercise price should SLTPC acquire the Tribune Assets (defined as all of the assets used, held for use or usable in connection with the operation and publication of The Salt Lake Tribune). The terms of the Option Agreement specify an appraisal process for determination of the fair market value of the Tribune Assets. In this appraisal process, each party engaged an appraisal firm to value the Tribune Assets at their fair market value. The Company’s appraisal valued the Tribune Assets at $380.0 million, whereas SLTPC’s appraisal valued the Tribune Assets at $218.0 million. Because the Company’s and SLTPC’s appraisals were more than 10% apart, the appraisers appointed by the Company and SLTPC were required to jointly select a third appraiser. Under the terms of the Option Agreement, the final option purchase price is based on the average of the third appraisal valuation with the closer of the first two appraisals. On June 11, 2003, the ~~United~~third ~~States~~appraiser ~~District~~issued ~~Court~~its final report valuing the Tribune Assets at $331.0 million. Because the third appraiser’s valuation is closer to the Company’s appraisal, under the Option Agreement those two appraisals would be averaged together for an option exercise price of $355.5 million for the Tribune Assets. After the third appraiser’s final report was issued, SLTPC filed a lawsuit in the District ofCourt ~~Utah~~on June 24, 2003 (the “appraisal lawsuit”), challenging the valuation performed by the third appraiser and seeking to set aside the third appraisal and the $355.5 exercise price. The District Court ruled that the appraisal process constituted an arbitration under the Federal Arbitration Act (“FAA”) and that any challenge must therefore be made under the procedures set forth in the FAA. The District Court subsequently denied SLTPC’s motion under the FAA procedures seeking to set aside the appraisal, ~~process~~ and, as a consequence of its arbitration rulings, also dismissed the ~~resulting~~appraisal ~~option~~lawsuit. ~~exercise~~SLTPC ~~price~~appealed those rulings to the Tenth Circuit, and ~~vacated~~on aNovember 30, ~~stay~~2004, ~~issued~~the Tenth Circuit reversed the District Court’s rulings. While taking no position on the ~~closing~~merits ~~period~~of inthe ~~July~~dispute ~~2003~~as to the finality of the third appraisal and the validity of the $355.5 million exercise price, the Tenth Circuit held that the Option Agreement’s appraisal procedure did not constitute arbitration within the meaning of the FAA. The Tenth Circuit accordingly reinstated SLTPC’s appraisal lawsuit, which the District Court ~~set~~had dismissed under the reasoning that the appraisal constituted arbitration. In the reinstated appraisal lawsuit, SLTPC seeks relief that includes (a) the ~~closing~~setting ~~date~~aside of ~~October~~the 10third appraisal; (b) the setting aside of all three appraisals, ~~2003~~so that an entirely new appraisal process must be conducted; or (c) alternatively, if the exercise price of $355.5 million is held to be final and binding, monetary damages from the third appraiser for alleged breaches of contractual and fiduciary duties. SLTPC todoes ~~exercise~~not ~~its~~seek ~~option~~damages in the appraisal lawsuit from the Company. No schedule of proceedings has been set at this time in the appraisal lawsuit.

• During Onthe ~~October~~time 9in which the appraisal and exercise price issues were on appeal before the Tenth Circuit, SLTPC’s main action was stayed (and the November 3, 2003 ~~counsel~~trial ~~for~~date was vacated). The District Court has not yet indicated whether that stay will remain in place until SLTPC’s appraisal ~~sent~~lawsuit ahas ~~letter~~been resolved, or whether the main action and the appraisal lawsuit will proceed simultaneously. In the main action, SLTPC’s pending claims against the Company and Kearns Tribune include claims for damages for breach of contract and breach of contractual duties (in the event some or all of the Tribune Assets are not transferred to ~~counsel~~SLTPC) and for ~~MediaNews~~interference ~~notifying~~with contract (arising out of the amendment of the JOA in 2001). The Company ~~that~~and Kearns Tribune have pending counterclaims against SLTPC, ~~would~~which ~~not~~include ~~pay~~claims for damages for breaches of contract and interference with contract. Additionally, the ~~$355~~Company and Kearns Tribune have pending counter claims for declaratory judgment, but no damage claims against Deseret Publishing.5 ~~million~~Deseret Publishing ~~option~~has ~~exercise~~pending ~~price~~claims against SLTPC for damages, and ~~raised~~claims ~~additional~~that ~~objections~~do not seek damages against the Company and Kearns Tribune as to the ~~proposed~~meaning ~~closing~~and ~~documentation~~enforceability of the Option Agreement and related Management and Joint Operating Agreements. ~~Accordingly~~Additionally, nodepending ~~closing~~on ~~occurred~~the outcome of the appraisal lawsuit, the main action may include claims by the parties concerning whether the Option expired when SLTPC did not exercise it on October 10, 2003, ~~and~~(as the ~~option~~Company has ~~now expired~~contended), or ~~assuming~~whether SLTPC still has the ~~option~~opportunity to exercise the Option regardless of whether or not the $355.5 million exercise price is ~~upheld~~found into ~~the~~be ~~Tenth~~binding ~~Circuit~~and conclusive (~~see~~as ~~below~~SLTPC contends). No schedule for proceedings in the main action has been set at this time.

• Also In a stipulation filed on October 17, 2003, which remains subject to the approval of the District Court, MediaNews, Deseret News Publishing Company and SLTPC agreed to a stay and administrative closure of the main action, pending ~~resolution~~before ~~of SLTPC’s appeals (discussed below) of various issues related to~~ the ~~appraisal process and the option exercise price. Prior to the filing of this stipulation, on October 14, 2003, the~~ District Court ~~had~~is ~~vacated~~ the November 3, 2003 trial date in the main litigation in light of SLTPC’s plans to appeal the appraisal and price related issues. All parties’ claims may be reinstated subsequent to SLTPC’s appeal if the parties choose. At this point, a stay of the main litigation would not include the Company’s declaratory judgment action ~~pending before the District Court~~, which seeks a ruling that the defendants, including certain individuals who control SLTPC, do not have any rights as individuals (separate from their corporate entity, SLTPC) to purchase or otherwise acquire the Tribune Assets. The District Court denied without prejudice motions to dismiss and for partial summary judgment filed by the defendants. In ~~that~~this ~~case~~same pending declaratory judgment action, the ~~parties~~defendants ~~await~~filed ~~the~~a ~~decision~~motion ofasking the District ~~Court~~Judge as to ~~motions~~make todisclosures ~~dismiss~~relating ~~filed~~to byhis possible ~~the defendants~~recusal. This

• SLTPC has filed notices of appeal with the United States Court of Appeals for the Tenth Circuit seeking to overturn the District Court’s decisions that the appraisal process constituted an arbitration under the Federal Arbitration Act (“FAA”), that any challenge of the $355.5 million option exercise price must be made under the procedures set forth in the FAA, and that SLTPC had not stated sufficient grounds under the FAA to overturn the $355.5 million option exercise price.

The Company is not in a position at this time to comment on the likely outcome of this litigation. However, the Company does not believe that the litigation will have a materially adverse impact on its financial condition, results of operations, or liquidity. Approximately $1.0 million and $0.8 million was recorded in other (income) expense, net for the three months ended September 30, 2003 and 2002, respectively, related to the cost of defending these lawsuits. The cost of defending these lawsuits has been and may continue to be substantial.

Other

MediaNews sent a notice terminating its newsprint swap agreement with Mirant Americas Energy Marketing, LP (“Mirant Corporation” or “Mirant”) effective September 5, 2003. In October 2003, Mirant filed a lawsuit in U.S. Bankruptcy Court for the Northern District of Texas against the Company seeking enforcement of an automatic stay prohibiting the Company from terminating its swap agreement, seeking to hold MediaNews in civil contempt of the automatic stay provision of the bankruptcy code, seeking to assess sanctions, and seeking declaratory relief. MediaNews does not agree with Mirant’s claims and intends to vigorously defend itself in this matter. MediaNews has not recorded any liability associated with the termination of this swap, except as required by SFAS No. 133, at the time the swap was deemed to be an ineffective hedge.

In November 2003, the Company tentatively agreed to settle its lawsuit with Enron North American Corp. Settlement under the tentative agreement will not have a material impact on the financial condition or results of operations of the Company.

There have been no material changes in the other contingent matters discussed in Note 11: Commitments and Contingencies of the Company’s annual report on Form 10-K for the year ended June 30, 2003.

NOTE 5: Contingent Consideration — Purchase of Original Apartment Magazine

In conjunction with the Company’s October 1, 2002 purchase of the Original Apartment Magazine, the seller is eligible to receive an additional earnout of up to $6.0 million dependent on future operating performance. As of September 30, 2003, the seller earned

MEDIANEWS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

~~NOTE~~motion 5:followed ~~Contingent~~similar ~~Consideration~~motions in the underlying litigation, in which the District Judge made —certain ~~Purchase~~disclosures and declined to recuse himself. The defendants sought review of ~~Original~~the ~~Apartment~~District Court’s ~~Magazine~~order ~~(continued)~~from the Tenth Circuit through a petition for a writ of mandamus, which the Tenth Circuit court denied. The defendants subsequently filed a motion for recusal of the District Judge from the declaratory judgment action. That motion, which was assigned for decision to another United States District Court Judge, was denied on January 27, 2005. No schedule for proceedings in this declaratory judgment action has been set at this time.

~~$2.3 million~~ The ofCompany is not in a position at this time to predict the ~~earnout~~likely outcome of this litigation. However, ~~which~~the isCompany ~~expected~~does tonot bebelieve ~~paid~~that inthe ~~December 2003~~litigation will have a materially adverse impact on its financial condition, results of operations, or liquidity. AtApproximately $0.2 ~~September~~million and $0.4 30million, ~~2003~~respectively, ~~the~~was ~~Company~~recorded ~~has~~in ~~recorded~~other (income) expense, net for the ~~earned~~three and ~~amount~~six ~~under~~months ended December 31, 2004, related to the cost of defending these lawsuits. The cost ~~earnout~~of asdefending anthese ~~adjustment~~lawsuits may continue to ~~goodwill~~be substantial.

~~NOTE 6: Long-Term Debt~~Other

~~The~~In ~~current~~May 2004, ~~portion~~the Company restructured its interest in Charleston Newspapers (“Charleston JOA”). In exchange for $55.0 million (less a net adjustment for 50% of Charleston Newspapers’ net working capital, long-term ~~debt~~employee benefits liabilities and ~~capital~~long-term ~~leases~~debt) asand ofa ~~September~~limited ~~30,~~partnership ~~2003~~interest ~~has~~in ~~increased~~a ~~since~~newly ~~June 30,~~formed ~~2003,~~entity ~~due~~(Charleston ~~primarily~~Newspapers toHoldings, L.P.), the ~~net~~Company contributed ~~effect~~its ~~of amortization~~general ofpartnership ~~Term~~interest ~~Loan~~in ACharleston Newspapers and ~~reductions~~the masthead of ~~availability~~the Charleston ~~under~~Daily ~~the~~Mail to Charleston Newspapers Holdings L.P. The Company’s ~~credit~~ ~~facility.~~former Aspartner ain Charleston ~~result,~~Newspapers ~~amounts~~is the ~~Company~~general ~~previously~~partner ~~expected~~in toCharleston Newspapers Holdings L.P. In addition, ~~refinance~~in conjunction with ~~long-term~~the ~~debt~~restructuring, ~~were~~the ~~reclassified~~Company ~~from~~also ~~long-term~~agreed to ~~current~~continue atto be responsible for ~~September 30,~~the ~~2003.~~news Atand ~~September 30,~~editorial ~~2003,~~content of the ~~Company~~Charleston ~~has~~Daily ~~$38~~Mail.~~0 million~~ ~~of short-term~~Under ~~obligations~~the ~~classified~~Company’s asagreement ~~long-term~~with Charleston Newspapers Holdings L.P., inthe ~~accordance~~Company ~~with~~is ~~SFAS~~reimbursed ~~No. 6,~~for the cost of providing the news ~~Classification~~and editorial content of ~~Short-Term~~the ~~Obligations~~Charleston ~~Expected~~Daily toMail beand ~~Refinanced,~~paid asa ~~the~~ management fee. The Company’s limited ~~plans~~partnership interest does not entitle it to ~~fund~~any ~~these~~share ~~amounts~~of ~~with~~the ~~available~~profits ~~long-term~~or ~~borrowings~~losses ~~from~~of the ~~its~~limited ~~credit facility~~partnership.

OnAlso ~~November~~in May 42004, ~~2003,~~ the Company ~~commenced~~restructured aits ~~cash~~interest ~~tender~~in ~~offer~~The ~~and~~York ~~consent solicitation~~Newspaper ~~(the~~Company (“~~Offer~~York JOA”) ~~for~~through ~~any~~the ~~and~~exercise ~~all~~ of its ~~$300.0 million~~call ~~aggregate principal~~option ~~amount~~to 8acquire the remaining 42.755% ~~Senior~~interest ~~Subordinated~~in ~~Notes~~The ~~due~~York Newspaper ~~2009,~~Company ~~Series B~~and (the ~~“Notes”).~~ ~~The~~masthead ~~Offer~~of isthe ~~subject~~York toDaily ~~the~~Record ~~satisfaction~~for ofapproximately ~~certain~~$38.3 million. ~~conditions,~~After ~~including~~the ~~our~~option ~~receipt~~exercise ofand ~~tenders~~the restructuring of ~~Notes~~the ~~representing~~York aJOA, ~~majority~~the ofCompany became responsible for the ~~aggregate~~news ~~principal~~and ~~amount~~editorial content of the ~~Notes~~York ~~outstanding,~~Daily Record and ~~the~~an ~~completion~~affiliate of aits former partner in The ~~debt~~York ~~financing~~Newspaper onCompany ~~terms~~became ~~acceptable~~responsible tofor providing the ~~Company~~news inand aneditorial ~~amount~~content ~~sufficient~~for ~~to consummate~~The ~~the Offer~~York Dispatch. ~~There~~Under ~~can~~the berestructured noYork ~~assurance~~JOA, ~~however,~~the ~~that~~Company reimburses the ~~Company~~affiliate of its former ~~will~~partner befor ~~successful~~the incost ~~obtaining~~of providing the ~~financing~~news ~~necessary~~and toeditorial ~~consummate~~content ~~the~~of The York Dispatch, plus a ~~Offer~~management fee of $240,000 per year, indexed for inflation.

The Company and the other participants in such restructurings have received civil investigative demands from the Department of Justice seeking information concerning the recent restructurings of the Charleston and York JOAs. In discussions with the Department of Justice, the Company has proposed potential amendments to the agreements governing the York JOA to clarify the rights and obligations of the parties under certain circumstances. The Company anticipates that any such amendments would not be material. The Company believes that the general partner in Charleston Newspapers Holdings L.P. will propose similar amendments to the Charleston JOA.

There have been no other material changes in the other contingent matters discussed in Note 11: Commitments and Contingencies of the Company’s Annual Report on Form 10-K for the year ended June 30, 2004.

~~MANAGEMENT’S~~MEDIANEWS ~~DISCUSSION~~GROUP, INC. AND ~~ANALYSIS~~SUBSIDIARIES NOTES OFTO ~~FINANCIAL~~CONDENSED ~~CONDITION AND~~CONSOLIDATED ~~RESULTS~~FINANCIAL ~~OF OPERATIONS~~STATEMENTS (UNAUDITED)

~~Operating~~NOTE ~~Results~~5: Contingent Consideration — Purchase of Original Apartment Magazine

WeIn ~~have~~conjunction ~~provided~~with ~~below~~the ~~certain~~Company’s ~~summary~~October 1, ~~historical~~2002 ~~financial~~purchase ~~data~~of ~~for~~the Original Apartment Magazine, the seller was eligible to receive an earnout of up to $6.0 million over two years dependent on ~~three~~future ~~months~~operating ~~ended~~performance. On September 30, 2003, ~~and~~year ~~2002~~one of the earnout, ~~including~~the seller earned and was paid $2.3 million of the ~~percentage~~earnout ~~change~~which was recorded as an adjustment to goodwill at ~~between~~September 30, ~~quarters~~2003. ~~For~~Effective ~~comparability~~September 30, ~~certain~~2004, ~~prior~~or year ~~balances~~two ~~have~~of ~~been~~the agreement, the seller earned ~~reclassified~~an additional $2.6 million of the earnout, which was paid in November 2004. This payment was recorded as an adjustment to ~~conform~~goodwill at September 30, 2004 and reflects the final payment to ~~current~~be made ~~reporting~~under ~~classifications~~the earnout agreement. The seller continues to have a separate consulting agreement with the Company through September 2005.

		Summary Historical Financial Data
		Three Months Ended September 30,
		2003			2002			2003 vs. 2002
		(Dollars in thousands)
INCOME STATEMENT DATA
Total Revenues		$	185,077		$	179,319			3.2	%
Income from Unconsolidated JOAs			4,769			4,249			12.2
Cost of Sales			58,204			53,101			9.6
Selling, General and Administrative			90,024			84,896			6.0
Depreciation and Amortization			10,225			10,076			1.5
Interest Expense			14,078			16,983			(17.1	)
Other (Income) Expense, Net			4,134			(1,709	)		(c	)
	Total Costs and Expenses		176,665			163,347			8.2
Equity Investment Income, Net			2,172			244			(c	)
Minority Interest			(8,161	)		(8,466	)		(3.6	)
Net Income			4,308			7,122			(39.5	)
CASH FLOW DATA
Cash Flows from:
	Operating Activities	$	9,496		$	9,495			—	%
	Investing Activities		16,712			13,718			21.8
	Financing Activities		(22,837	)		(18,674	)		22.3
NON-GAAP FINANCIAL DATA(a)
Adjusted EBITDA		$	36,849		$	41,322			(10.8	)%
Minority Interest in Adjusted EBITDA			(11,275	)		(11,450	)		(1.5	)
Combined Adjusted EBITDA of Unconsolidated JOAs			8,892			9,119			(2.5	)
Distributions from Texas-New Mexico Newspapers Partnership(b)			2,796			—			(c	)
Adjusted EBITDA Available to Company		$	37,262		$	38,991			(4.4	)%

NOTE 6: Long-Term Debt

~~See~~ Long-term ~~footnotes~~debt on(excluding capital leases) consisted of the following ~~page.~~:


				December 31,			June 30,
				2004
				(Dollars in thousands)
Bank Credit Facility (Revolving Portion)		(I	)	$	126,000		$	—
Bank Term Loan A		(I	)		100,000			—
Bank Term Loan C		(I	)		148,006			—
Bank Term Loan B		(I	)		—			248,750
Various Notes, payable through 2013	(II)				25,920			27,303
8.625% Senior Subordinated Notes, due 2011	(III)				—			199,388
6.875% Senior Subordinated Notes, due 2013	(IV)				297,611			297,513
6.375% Senior Subordinated Notes, due 2014		(V	)		148,729			148,680

					846,266			921,634
Less current portion of long-term debt					(3,960	)		(5,083	)

				$	842,306		$	916,551

On August 30, 2004, the Company entered into an amendment and restatement of its December 30, 2003 bank credit facility (the “amended facility”). The amended facility maintains the $350.0 million revolving credit facility and provides for a $100.0 million term loan “A” and a $148.8 million term loan “C,” both of which were used to refinance the term loan “B” facility. The term loan “A” bears interest at rates based upon, at the Company’s option, Eurodollar or base rates (derived from prime), plus a borrowing margin based on the Company’s leverage ratio. The Eurodollar and base rate borrowing margins on term loan “A” are set at 1.50% and 0.50%, respectively, through August 30, 2005, after which borrowings will bear interest at the Eurodollar or base rate, at the Company’s option, plus a borrowing margin based on the pricing grid used for the revolving credit facility. Term loan “A” requires quarterly principal payments as follows: $5.0 million beginning in March 2008 through December 2008; $7.5 million from March 2009 through December 2009; and $12.5 million from March 2010 through September 2010, with the remaining balance due at maturity on December 30, 2010. The term loan “C” bears interest based upon, at the Company’s option, Eurodollar or base rates, plus a borrowing margin of 1.5% or 0.5%, respectively. Term loan “C” requires quarterly principal payments as follows: $0.4 million beginning in September 2004 through December 2009, increasing to $35.1 million from March through September 2010, with the remaining balance due at maturity on December 30, 2010. Amounts repaid under the term loan “A” and “C” facilities will not be available for re-borrowing. The Company incurred debt issuance costs of $0.3 million related to the amended facility. All other borrowing conditions of the bank credit facility entered into on December 30, 2003, as described in Note 6: Long-Term Debt of the Company’s June 30, 2004 Annual Report on Form 10-K, continue to apply and have not been amended.

~~The~~II. ~~following~~In ~~table~~connection iswith ~~provided~~various toacquisitions, ~~reconcile~~the ~~Cash~~Company’s ~~Flows~~subsidiaries ~~from~~have ~~Operating Activities~~issued ~~(GAAP~~notes ~~measure)~~payable to ~~Adjusted~~prior ~~EBITDA~~owners ~~(non-GAAP~~and ~~measure)~~assumed certain debt obligations. III. In ~~addition~~March 1999, ~~see~~ ~~footnotes~~Garden ~~(a)~~State, ~~(b)~~the predecessor issuer of MediaNews Group, Inc., issued $200.0 million of 8.625% Senior Subordinated Notes due 2011, or “8.625% Notes.” On July 1, 2004, the Company repurchased all outstanding 8.625% Notes using cash on hand and borrowings under its bank credit facility. The Company paid $8.6 million in premiums and related costs associated with the redemption of the 8.625% Notes which was charged to “other (cincome) expense, ~~and~~net” during the three months ended September 30, 2004. IV. On November 25, 2003, the Company completed the sale of $300.0 million of its 6.875% Senior Subordinated Notes due 2013 (dor “6.875% Notes”) ~~below~~. See Note 6: Long-Term Debt of the Company’s June 30, 2004 Annual Report on Form 10-K for afurther description. V. On January 26, 2004, the Company completed the sale of $150.0 million of its 6.375% Senior Subordinated Notes due 2014 (or “6.375% Notes”). The Company used the ~~non-GAAP measures~~proceeds ~~presented~~of inthe sale of $146.9 million to temporarily prepay all borrowings under the ~~table~~new ~~below~~bank credit facility. Such prepayment was reborrowed and used, along with cash on hand, to repurchase all of its outstanding $200.0 million 8.625% Notes on July 1, 2004. See Note 6: Long-Term Debt of the ~~previous~~Company’s ~~page~~June 30, 2004 Annual Report on Form 10-K for further description.

	Three Months Ended September 30,
	2003			2002
	(In thousands)
NON-GAAP FINANCIAL DATA(a)
Cash Flows from Operating Activities (GAAP measure)	$	9,496		$	9,495
Net Change in Operating Assets and Liabilities		2,404			5,501
Interest Expense		14,078			16,983
Bad Debt Expense		(2,269	)		(2,451	)
Pension Income (Expense), Net of Cash Contributions		(161	)		68
Direct Costs of the Unconsolidated JOAs, Incurred Outside of the Unconsolidated JOAs(d)		11,413			10,796
Net Cash Related to Other (Income), Expense		1,888			930
Adjusted EBITDA		36,849			41,322
Minority Interest in Adjusted EBITDA		(11,275	)		(11,450	)
Combined Adjusted EBITDA of Unconsolidated JOAs		8,892			9,119
Distributions from Texas-New Mexico Newspapers Partnership(b)		2,796			—
Adjusted EBITDA Available to Company	$	37,262		$	38,991

Maturities of long-term debt for the next five fiscal years ending June 30 and thereafter beginning with the fiscal year ended June 30, 2005 (except for June 30, 2005, which is only reflective of the six months remaining) are shown below (in thousands):

(footnotes from preceding page and the table above)


2005	$	1,884
2006		3,723
2007		3,715
2008		13,510
2009		28,363
Thereafter		795,071

	$	846,266

~~(a)~~ The ~~Adjusted~~table ~~EBITDA~~above ~~and~~does ~~Adjusted EBITDA Available to Company are~~ not ~~measures~~include ofcapital ~~performance~~lease ~~recognized~~obligations ~~under GAAP. However, we believe that they are indicators and measurements~~ of ~~our leverage capacity and debt service ability~~$6. Adjusted EBITDA and Adjusted EBITDA Available to Company should not be considered as an alternative to measure profitability, liquidity, or performance, nor should they be considered an alternative to net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in our condensed consolidated financial statements2 million. Adjusted EBITDA is calculated by deducting cost of sales and SG&A expense from total revenues. Adjusted EBITDA Available to Company is calculated by: (i) reducing Adjusted EBITDA by the minorities’ interest in the Adjusted EBITDA generated from the California Newspapers Partnership, York Newspaper Company and The Denver Post Corporation, our less than 100% owned consolidated subsidiaries (“Minority Interest in Adjusted EBITDA”); (ii) increasing Adjusted EBITDA by our combined proportionate share of the Adjusted EBITDA generated by our unconsolidated JOAs in Denver, Salt Lake City and Charleston (“Combined Adjusted EBITDA of Unconsolidated JOAs”); and (iii) increasing Adjusted EBITDA by Distributions from the Texas-New Mexico Newspapers Partnership (see footnote b). (b) The Texas-New Mexico Newspapers Partnership agreement, effective March 3, 2003, requires the partnership to make monthly distributions equal to the earnings of the partnership before depreciation and amortization (EBITDA). These distributions have been included in Adjusted EBITDA Available to Company, as they are an integral part of our cash flows from operations. (c) Not meaningful. (d) Direct Costs of the Unconsolidated JOAs, Incurred Outside of the Unconsolidated JOAs includes the editorial costs, publishing related revenues, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and the Charleston Daily Mail. See Note 3: Joint Operating Agencies in the footnotes to our condensed consolidated financial statements for further description and analysis of this adjustment.

The fair market values of the 6.875% Notes and 6.375% Notes at December 31, 2004 were approximately $307.5 million and $148.5 million, respectively. The carrying value of the Company’s bank debt, which has interest rates tied to prime or the Eurodollar, approximates its fair value. Management cannot practicably estimate the fair value of the remaining long-term debt because of the lack of quoted market prices for these types of securities and its inability to estimate the fair value without incurring the excessive costs of obtaining an appraisal. The carrying amount represents the Company’s original issue price net of remaining original issue discounts, if applicable.

In January 1998, the Company entered into an option agreement in association with the acquisition financing related to one of its newspapers. The option entitles the holder to purchase the assets used in the publication of one of the Company’s newspaper properties, which the option holder can currently exercise or put to the Company based on a predetermined formula. At December 31, 2004, the option repurchase price is valued at approximately $5.9 million and is recorded as a component of other long-term liabilities (at September 30, 2004 and June 30, 2004, the option repurchase price was valued at approximately $6.4 million and $11.4 million, respectively). The $0.5 million and $5.5 million reduction in the liability was credited to other (income) expense, net during the three and six month periods ended December 31, 2004, respectively. The purchase price of the option can increase or decrease significantly each quarter based on the performance of the publication because a significant component of the option repurchase formula is the twenty-four month trailing cash flows of the publication. If the option is put to the Company, the Company expects to fund the payment with available borrowings from its bank credit facility. As a result, in accordance with SFAS No. 6, Classification of Short-Term Obligations Expected to be

~~Summary~~Refinanced, ~~Supplemental~~the ~~Non~~option repurchase price remains classified in the Company’s balance sheet as long-~~GAAP~~term. ~~Financial~~The ~~Data~~option expires in January 2010 at which time if the option remains outstanding, the Company would be required to repurchase the option.

~~Joint~~NOTE ~~operating~~7: ~~agencies,~~Employee orBenefit ~~JOAs, represent an operating structure that~~Plans ~~is unique to the newspaper industry. Prior to EITF 00-1, which eliminated the~~ ~~use of pro-rata consolidation except in the extractive and construction~~ ~~industries, we reported the results of our JOA interests on a pro-rata~~ consolidated basis. Under this method, we consolidated, on a line-item basis, our proportionate share of the JOAs’ operations. Although pro-rata consolidation is no longer considered an acceptable method for our financial reporting under GAAP, we believe it provides a meaningful presentation of the results of our operations and the amount of operating cash flow available to the Company to meet debt service and capital expenditure requirements. Our JOA agreements do not restrict cash distributions to the owners and in general our JOAs make monthly or quarterly distributions. We use pro-rata consolidation to internally evaluate our performance and present it here because our Bank Credit Agreement and our publicly traded notes define cash flows (Adjusted EBITDA and Adjusted EBITDA Available to Company) from operations for covenant purposes using pro-rata consolidation. We also believe financial analysts and investors use the pro-rata consolidation and the resulting Adjusted EBITDA, combined with capital spending requirements, and leverage analysis to evaluate our performance. This information should be used in conjunction with GAAP performance measures in order to evaluate our overall prospects and performance. Net income determined using pro-rata consolidation is identical to net income determined under GAAP.

InComponents ~~the table below, we have presented the results~~ of ~~operations~~Net ofPeriodic ~~our JOAs~~Benefit ~~using~~Cost ~~pro-rata consolidation. Our JOAs include York Newspaper Company, Charleston Newspapers, Denver Newspaper Agency, and the Newspaper Agency Corporation~~ (~~Salt~~Pension ~~Lake City). See Notes 1~~ and 3Other ~~to the condensed consolidated~~Benefits): ~~financial statements for additional discussion of the GAAP accounting for our~~ ~~JOAs. For comparability, certain prior year balances have been reclassified to~~ ~~conform to current reporting classifications.~~

THE INFORMATION IN THE FOLLOWING TABLE IS NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT COMPLY WITH ARTICLE 11 OF REGULATION S-X FOR PRO FORMA FINANCIAL DATA


	Pension Plans
	Three Months Ended December 31,						Six Months Ended December 31,
	2004			2003			2004			2003
	(Dollars in thousands)
Service cost	$	279		$	286		$	558		$	572
Interest cost		1,487			1,422			2,974			2,844
Expected return on plan assets		(1,591	)		(1,760	)		(3,182	)		(3,520	)
Amortization of deferral		115			115			230			230
Amortization of net loss		510			402			1,020			804
Curtailment loss		443			—			443			—

Net periodic benefit cost	$	1,243		$	465		$	2,043		$	930

				Summary Supplemental Non-GAAP Financial Data
		Other Benefits
				Three Months Ended September 30,
		Three Months Ended December 31,							Six Months Ended December 31,
				2003				2002			2003 vs. 2002
		2004			2003				2004			2003
		(Dollars in thousands)		~~(Dollars in thousands)~~
PRO-RATA CONSOLIDATED INCOME STATEMENT DATA
Service cost		$	87		$	83			$	174		$	166
Total Revenues				$	256,573			$	249,646			2.8	%
Interest cost			81			82				162			164
Cost of Sales					88,487				83,038			6.6
Expected return on plan assets			—			—				—			—
Selling, General and Administrative					124,313				118,138			5.2
Amortization of deferral			—			(1	)			—			(2	)
Depreciation and Amortization					13,878				14,410			(3.7	)
Amortization of net loss			16			23				32			46
Interest Expense					14,129				17,040			(17.1	)
Curtailment loss			28			—				28			—
Other (Income) Expense, Net					4,444				(1,417	)		(c	)
Net periodic benefit cost		$	212		$	187			$	396		$	374
	Total Costs and Expenses				245,251				231,209			6.1
Minority Interest					(6,302	)			(6,683	)		(5.7	)
Net Income					4,308				7,122			(39.5	)
CASH FLOW DATA (GAAP BASIS)
Cash Flows from:
	Operating Activities			$	9,496			$	9,495			—	%
	Investing Activities				16,712				13,718			21.8
	Financial Activities				(22,837	)			(18,674	)		22.3
PRO-RATA OTHER DATA(e)
Adjusted EBITDA				$	43,773			$	48,470			(9.7	)%
Minority Interest in Adjusted EBITDA					(9,307	)			(9,479	)		(1.8	)
Distributions from Texas-New Mexico Newspapers Partnership					2,796				—			(c	)
Adjusted EBITDA Available to Company				$	37,262			$	38,991			(4.4	)%

~~See~~Employer ~~footnotes on the following two pages.~~Contributions

The Company expects to contribute between $2.0 million and $3.0 million to its pension plans in fiscal year 2005. As of December 31, 2004, contributions of approximately $1.3 million have been made.

Effective January 1, 2005, the Company will no longer provide post-retirement health care coverage for the majority of Kearns-Tribune, LLC employees retiring after that date. In conjunction with the partial freeze of this plan, the Company recognized a small curtailment loss for the three and six months ended December 31, 2004.

Effective April 1, 2005, the Company will freeze the defined benefit pension plan benefits associated with the employees of one of the Company’s subsidiaries. In conjunction with the freeze of the accrual of benefits for these employees, the Company recognized a curtailment loss of approximately $0.4 million for the three and six months ended December 31, 2004.

~~The~~NOTE ~~following~~8: ~~table~~Other ~~is provided to reconcile the summary Income Statement~~Transactions ~~Data presented on a historical GAAP basis to the Non-GAAP Income Statement Data~~ ~~presented on a pro-rata consolidation basis. See footnotes (1) and (2) below~~ ~~for a description of the adjustments. See footnote (a) on~~ ~~page 18 for a description of our method of calculating Adjusted EBITDA. All amounts below are shown in thousands.~~

		Three Months Ended September 30, 2003
					Adjustment to
					Eliminate 42.5%			Unconsolidated JOAs
		As Presented			Minority Interest			Pro-Rata			As Presented on a
		Under GAAP			in York JOA(1)			Adjustment(2)			Pro-Rata Basis
Total Revenues		$	185,077		$	(4,551	)	$	76,047		$	256,573
Income from Unconsolidated JOAs			4,769			—			(4,769	)		—
Cost of Sales			58,204			(962	)		31,245			88,487
Selling, General and Administrative			90,024			(1,621	)		35,910			124,313
Depreciation and Amortization			10,225			(145	)		3,798			13,878
Interest Expense			14,078			(25	)		76			14,129
Other (Income) Expense, Net			4,134			61			249			4,444
	Total Costs and Expenses		176,665			(2,692	)		71,278			245,251
Minority Interest			(8,161	)		1,859			—			(6,302	)
Net Income			4,308			—			—			4,308
Adjusted EBITDA		$	36,849		$	(1,968	)	$	8,892		$	43,773

Effective September 30, 2004, the Company elected not to extend the Joint Sales Agreement (or “JSA”) and purchase agreement between the Piedmont Television Holding LLC (or “Piedmont”) station, KTBY, and the Company’s Anchorage, Alaska affiliate, KTVA, and as a result, the agreements were terminated. The termination of the JSA is not expected to have any material impact on the operations or valuation of the Company’s television station, KTVA. For further discussion, see Note 5: Acquisitions, Dispositions and Other Transactions of the Company’s June 30, 2004 Annual Report on Form 10-K.

		Three Months Ended September 30, 2002
					Adjustment to
					Eliminate 42.5%			Unconsolidated JOAs
		As Presented			Minority Interest			Pro-Rata			As Presented on a
		Under GAAP			in York JOA(1)			Adjustment(2)			Pro-Rata Basis
Total Revenues		$	179,319		$	(4,264	)	$	74,591		$	249,646
Income from Unconsolidated JOAs			4,249			—			(4,249	)		—
Cost of Sales			53,101			(819	)		30,756			83,038
Selling, General and Administrative			84,896			(1,474	)		34,716			118,138
Depreciation and Amortization			10,076			(136	)		4,470			14,410
Interest Expense			16,983			(26	)		83			17,040
Other (Income) Expense, Net			(1,709	)		(25	)		317			(1,417	)
	Total Costs and Expenses		163,347			(2,480	)		70,342			231,209
Minority Interest			(8,466	)		1,783			—			(6,683	)
Net Income			7,122			—			—			7,122
Adjusted EBITDA		$	41,322		$	(1,971	)	$	9,119		$	48,470

NOTE 9: Equity Investments (Non-JOA)

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

The following table represents the summary financial data, on a combined basis, for the Company’s non-JOA equity investments (the entities represented in the table below are included at 100%). For a listing of the Company’s equity investments, see Note 2: Significant Accounting Policies and Other Matters – Investments of the Company’s June 30, 2004 Annual Report on Form 10-K.


	Three Months Ended December 31,				Six Months Ended December 31,
	2004		2003		2004		2003
			(Dollars in thousands)
Total revenues	$	70,512	$	67,235	$	121,441	$	119,220
Net income	$	10,551	$	8,694	$	17,763	$	16,550

NOTE 10: Commitments

In December 2004, the Company entered into a contract with a newsprint vendor to purchase newsprint based on market price beginning January 1, 2005 (24,000 metric tons for calendar year 2005) and continuing through December 31, 2009 (36,000 metric tons per year for calendar years 2006-2009).

NOTE 11: Subsequent Events

Purchase of The Park Record

On January 4, 2005, the Company entered into a Stock Purchase Agreement, pursuant to which the Company purchased all of the outstanding common stock of Diversified Suburban Newspapers, Inc. (“Diversified”). Diversified was 50% owned by The Singleton Family Revocable Trust at the time of purchase. Diversified is the publisher of The Park Record, in Park City, Utah. The purchase price was approximately $8.0 million, subject to adjustment to reflect final working capital balances. The Company received a fairness opinion on the purchase price. The transaction was unanimously approved by the disinterested directors of the Company.

The Singleton Family Revocable Trust holds 254,858.99 shares of the Company’s Class A Common Stock, representing 11.09% of total shares of Class A Common Stock outstanding. W. Dean Singleton, Vice Chairman, Chief Executive Officer and a director of the Company, and Howell Begle, Assistant Secretary, General Counsel and a director of the Company, are trustees of The Singleton Family Revocable Trust. W. Dean Singleton is a beneficiary of The Singleton Family Revocable Trust.

Commitments

The Company owns 80% and Media General, Inc. (“Media General”) owns 20% of The Denver Post Corporation. The Denver Post Shareholders’ Agreement provides the Company with a call option on Media General’s 20% interest in The Denver Post Corporation. The call option became exercisable on July 1, 2004 and expires June 30, 2005. In January 2005, the Company delivered notice to Media General exercising its call option. No amount has been recorded in the Company’s December 31, 2004 financial statements related to the exercise of the call option. The exercise price will be based on the fair

market value of The ~~following~~Denver ~~table~~Post isCorporation, ~~provided~~less todebt ~~reconcile~~of ~~Cash~~The ~~Flows~~Denver ~~from~~Post ~~Operating~~Corporation, ~~Activities~~determined ~~(GAAP~~through ~~measure)~~an toappraisal ~~Adjusted~~process ~~EBITDA~~specified ~~presented~~in onThe aDenver ~~pro-rata~~Post Shareholders’ Agreement. The ~~consolidated~~terms ~~basis~~of ~~(non-GAAP~~the ~~measure)~~appraisal process require the Company and Media General to each engage a qualified independent appraisal firm. InIf ~~addition~~the two independent appraisals of The Denver Post Corporation are within 20% of each other, ~~see~~the ~~footnotes~~average ~~(a)~~of the two appraisals will be used to determine the exercise price. However, ~~(b)~~if the two appraisals are not within 20% of each other, the two qualified ~~(c),~~independent ~~(d) on~~appraisers ~~page 18~~will ~~and~~select ~~(e)~~ a third qualified independent appraiser to determine the fair market value. The average of the two closest of the three appraisals or the middle appraisal if it is equidistant from the high and ~~(f) below~~low ~~for~~of athe ~~description~~three appraisals will be used to determine the exercise price. The Denver Post Shareholders’ Agreement provides that the closing of such transaction is to take place within 15 business days of the ~~non-GAAP~~completion of the appraisal process. The Company ~~measures~~currently ~~presented~~anticipates that the closing will occur in the ~~table~~fourth ~~below~~quarter ~~and~~of onits ~~page 19~~fiscal year 2005.

	Three Months Ended September 30,
	2003			2002
	(In thousands)
NON-GAAP FINANCIAL DATA(e)
Cash Flows from Operating Activities (GAAP measure)	$	9,496		$	9,495
Net Change in Operating Assets and Liabilities		2,404			5,501
Interest Expense		14,078			16,983
Bad Debt Expense		(2,269	)		(2,451	)
Pension Income (Expense), Net of Cash Contributions		(161	)		68
Net Cash Related to Other (Income), Expense		1,888			930
Combined Adjusted EBITDA of Unconsolidated JOAs(f)		8,892			9,119
Direct Costs of the Unconsolidated JOAs, Incurred Outside of the JOAs(d)		11,413			10,796
Minority Interest in Adjusted EBITDA of York Newspaper Company		(1,968	)		(1,971	)
Adjusted EBITDA		43,773			48,470
Minority Interest in Adjusted EBITDA		(9,307	)		(9,479	)
Distributions from Texas-New Mexico Newspapers Partnership		2,796			—
Adjusted EBITDA Available to Company	$	37,262		$	38,991

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Operating Results

We have provided below certain summary historical financial data for the three and six months ended December 31, 2004 and 2003, including the percentage change between periods.


	Three Months Ended December 31,									Six Months Ended December 31,
							2004 vs.									2004 vs.
	2004			2003			2003			2004			2003			2003
							(Dollars in thousands)
INCOME STATEMENT DATA:
Total Revenues	$	201,616		$	195,639			3.1	%	$	393,269		$	380,716			3.3	%

Income from Unconsolidated JOAs		9,590			10,974			(12.6	)		14,806			15,743			(6.0	)

Cost of Sales		60,964			58,998			3.3			121,725			117,202			3.9
Selling, General and Administrative		93,965			88,391			6.3			189,884			178,415			6.4
Depreciation and Amortization		10,108			9,825			2.9			20,217			20,050			0.8
Interest Expense		12,103			14,010			(13.6	)		24,319			28,088			(13.4	)
Other (Income) Expense, Net		(36	)		10,094			(100.4	)		5,399			14,228			(62.1	)

Total Costs and Expenses		177,104			181,318			(2.3	)		361,544			357,983			1.0

Equity Investment Income, Net		3,113			3,205			(2.9	)		5,237			5,377			(2.6	)

Minority Interest		(9,878	)		(11,727	)		(15.8	)		(16,478	)		(19,888	)		(17.1	)

Net Income		16,240			9,986			62.6			20,846			14,294			45.8

CASH FLOW DATA:
Cash Flows from:
Operating Activities	$	33,122		$	13,521					$	40,596		$	32,383
Investing Activities		(16,946	)		(18,584	)					(18,476	)		(19,937	)
Financing Activities		(16,949	)		1,004						(85,424	)		(13,134	)

NON-GAAP FINANCIAL DATA(a):
Adjusted EBITDA	$	46,687		$	48,250			(3.2	)%	$	81,660		$	85,099			(4.0	)%
Minority Interest in Adjusted EBITDA		(12,899	)		(15,351	)		(16.0	)		(22,164	)		(26,626	)		(16.8	)
Combined Adjusted EBITDA of Unconsolidated JOAs		13,023			15,471			(15.8	)		21,923			24,363			(10.0	)
EBITDA of Texas-New Mexico Newspapers Partnership(b)		2,743			2,977			(7.9	)		5,033			5,394			(6.7	)

Adjusted EBITDA Available to Company	$	49,554		$	51,347			(3.5	)%	$	86,452		$	88,230			(2.0	)%

(a)		Non-GAAP Financial Data. Adjusted EBITDA and Adjusted EBITDA Available to Company are not measures of performance recognized under GAAP. However, we believe that they are indicators and measurements of our leverage capacity and debt service ability. Adjusted EBITDA and Adjusted EBITDA Available to Company should not be considered as an alternative to measure profitability, liquidity, or performance, nor should they be considered an alternative to net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in our condensed consolidated financial statements. Adjusted EBITDA is calculated by deducting cost of sales and SG&A expense from total revenues. Adjusted EBITDA Available to Company is calculated by: (i) reducing Adjusted EBITDA by the minorities’ interest in the Adjusted EBITDA generated from the California Newspapers Partnership, The Denver Post Corporation, and through April 30, 2004, The York Newspaper Company, our less than 100% owned consolidated subsidiaries (“Minority Interest in Adjusted EBITDA”); (ii) increasing Adjusted EBITDA by our combined proportionate share of the Adjusted EBITDA generated by our unconsolidated JOAs in Denver, Salt Lake City and through May 7, 2004, Charleston (“Combined Adjusted EBITDA of Unconsolidated JOAs”); and (iii) increasing Adjusted EBITDA by our proportionate share of EBITDA of the Texas-New Mexico Newspapers Partnership (see footnote b). See “Reconciliation of GAAP and Non-GAAP Financial Information — Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA (Non-GAAP measure)” for a reconciliation of Non-GAAP financial information.

(b)		EBITDA of Texas-New Mexico Newspapers Partnership. The Texas-New Mexico Newspapers Partnership agreement requires the partnership to make distributions equal to the earnings of the partnership before depreciation and amortization (EBITDA). EBITDA of Texas-New Mexico Newspapers Partnership has been included in Adjusted EBITDA Available to Company, as it is an integral part of our cash flows from operations as defined by our debt covenants. Previously, we had included distributions from the Texas-New Mexico Newspapers Partnership in Adjusted EBITDA Available to Company. However, now we include our 33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership. This change was made in order to better conform to the definition of operating cash flows in our debt agreements. All periods presented reflect this change.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Summary Supplemental Non-GAAP Financial Data

Joint operating agencies, or JOAs, represent an operating structure that is unique to the newspaper industry. Prior to EITF 00-1, which eliminated the use of pro-rata consolidation except in the extractive and construction industries, we reported the results of our JOA interests on a pro-rata consolidated basis. Under this method, we consolidated, on a line-item basis, our proportionate share of the JOAs’ operations. Although pro-rata consolidation is no longer considered an acceptable method for our financial reporting under GAAP, we believe it provides a meaningful presentation of the results of our operations and the amount of operating cash flow available to meet debt service and capital expenditure requirements. Our JOA agreements do not restrict cash distributions to the owners and in general our JOAs make monthly distributions. We use pro-rata consolidation to internally evaluate our performance and present it here because our bank credit agreement and the indentures governing our senior subordinated notes define cash flows from operations for covenant purposes using pro-rata consolidation. We also believe financial analysts and investors use pro-rata consolidation and the resulting Adjusted EBITDA, combined with capital spending requirements, and leverage analysis to evaluate our performance. This information should be used in conjunction with GAAP performance measures in order to evaluate our overall prospects and performance. Net income determined using pro-rata consolidation is identical to net income determined under GAAP.

In the table below, we have presented the results of operations of our JOAs using pro-rata consolidation. Our JOAs include The York Newspaper Company, Denver Newspaper Agency, and the Salt Lake City JOA for all periods presented, and Charleston Newspapers through May 7, 2004. See Notes 1 and 3 to the condensed consolidated financial statements for additional discussion and analysis of the GAAP accounting for our JOAs.

THE INFORMATION IN THE FOLLOWING TABLE IS NOT PRESENTED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT COMPLY WITH ARTICLE 11 OF REGULATION S-X FOR PRO
FORMA FINANCIAL DATA


	Three Months Ended December 31,									Six Months Ended December 31,
							2004 vs.									2004 vs.
	2004			2003			2003			2004			2003			2003
	(Dollars in thousands)
PRO-RATA CONSOLIDATED INCOME STATEMENT DATA:
Total Revenues	$	280,590		$	273,468			2.6	%	$	546,479		$	530,041			3.1	%

Cost of Sales		91,843			90,065			2.0			183,068			178,552			2.5
Selling, General and Administrative		129,037			122,034			5.7			259,828			246,347			5.5
Depreciation and Amortization		13,442			13,643			(1.5	)		26,972			27,521			(2.0	)
Interest Expense		12,156			14,061			(13.5	)		24,413			28,190			(13.4	)
Other (Income) Expense, Net		10			10,526			(99.9	)		5,667			14,970			(62.1	)

Total Costs and Expenses		246,488			250,329			(1.5	)		499,948			495,580			0.9

Minority Interest		(9,878	)		(9,571	)		3.2			(16,478	)		(15,873	)		3.8

Net Income		16,240			9,986			62.6			20,846			14,294			45.8

CASH FLOW DATA (GAAP BASIS):
Cash Flows from:
Operating Activities	$	33,122		$	13,521					$	40,596		$	32,383
Investing Activities		(16,946	)		(18,584	)					(18,476	)		(19,937	)
Financing Activities		(16,949	)		1,004						(85,424	)		(13,134	)

PRO-RATA OTHER DATA(a):
Adjusted EBITDA	$	59,710		$	61,369			(2.7	)%	$	103,583		$	105,142			(1.5	)%
Minority Interest in Adjusted EBITDA		(12,899	)		(12,999	)		(0.8	)		(22,164	)		(22,306	)		(0.6	)
EBITDA of Texas-New Mexico Newspapers Partnership(b)		2,743			2,977			(7.9	)		5,033			5,394			(6.7	)

Adjusted EBITDA Available to Company	$	49,554		$	51,347			(3.5	)%	$	86,452		$	88,230			(2.0	)%

See “Reconciliation of GAAP and Non-GAAP Financial Information — Reconciliation of Income Statement Data presented on a historical GAAP basis to Non-GAAP Income Statement Data presented on a pro-rata consolidation basis” and “Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA presented on a pro-rata consolidation basis (Non-GAAP measure)” for a reconciliation of Non-GAAP financial information.

(a)		See footnote (a) under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operating Results” for discussion of Adjusted EBITDA, EBITDA of Texas-New Mexico Newspapers Partnership and Adjusted EBITDA Available to Company. The Minority Interest in Adjusted EBITDA shown above is calculated in the same manner as described in footnote (a) under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operating Results” except that Minority Interest in Adjusted EBITDA shown here on a pro-rata basis includes only the minority interest in Adjusted EBITDA of the California Newspapers Partnership and The Denver Post Corporation, as pro-rata consolidation takes into account the minority interest associated with The York Newspaper Company through April 30, 2004 when we acquired The York Newspaper Company minority interest.

(b)		See footnote (b) under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operating Results” for discussion of EBITDA of Texas-New Mexico Newspapers Partnership.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Critical Accounting Policies

The preparation of financial statements in accordance with generally accepted accounting principles at times requires the use of estimates and assumptions. We ~~use~~make our estimates, based on historical experience, actuarial studies and other assumptions, as appropriate, to assess the carrying values of assets and liabilities and disclosure of contingent matters. We re-evaluate our estimates on an ongoing basis. Actual results could differ from these estimates. Critical accounting policies for us include revenue recognition; accounts receivable allowances; recoverability of our long-lived assets, including goodwill and other intangible assets, which are based on such factors as estimated future cash flows and current fair value estimates; ~~pension~~ and pension and retiree medical benefits, which require the use of various estimates concerning the work force, interest rates, plan investment return, and involve the use of advice from consulting actuaries. Our accounting for federal and state income taxes is sensitive to interpretation of various laws and regulations and the ~~valuations~~ valuation of deferred tax assets. The notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, ~~2003~~2004 contain a more complete discussion of our significant accounting policies.

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

Our investments in unconsolidated JOAs (Denver, Salt Lake and through May 7, 2004, Charleston) are included in the condensed consolidated balance sheet under the line item “Investment in Unconsolidated JOAs,.” ~~for the JOAs we do not control.~~ The operating results of our unconsolidated JOAs are reported as a single net amount, in the accompanying financial statements in the line item “Income from Unconsolidated JOAs.” This line item includes:

• Our proportionate share of net income from JOAs;, • The amortization of subscriber lists created by the original purchase by us of the JOAs’ interests as the subscriber lists are attributable to our earnings in the JOAs, and • Editorial costs, miscellaneous revenue received outside of the JOA, and other charges incurred by our consolidated subsidiaries directly attributable to providing editorial content and news for our newspapers party to a JOA.

~~• The amortization of subscriber lists created by the original purchase by us of the JOA interest as the subscriber lists are attributable to our earnings in the JOAs; and~~Seasonality

• Newspaper ~~Editorial~~companies ~~costs~~tend to follow a distinct and recurring seasonal pattern, ~~miscellaneous~~with ~~publishing~~higher advertising ~~revenue~~revenues in months containing significant events or holidays. Accordingly, ~~and~~the ~~other~~fourth calendar ~~charges~~quarter, ~~incurred~~or byour second fiscal quarter, is our ~~wholly-owned~~strongest ~~subsidiaries~~revenue ~~directly~~quarter ~~attributable~~of the year. Due to ~~providing~~generally ~~editorial~~poor ~~content~~weather and ~~news~~lack ~~for~~of holidays, the first calendar quarter, or our ~~newspapers~~third ~~published~~fiscal quarter, byis our weakest revenue quarter of the ~~JOAs~~year.

~~COMPARISON~~Comparison OFof ~~THE~~the ~~THREE~~Three ~~MONTHS~~and ~~ENDED~~Six ~~SEPTEMBER~~Months 30Ended December 31, ~~2003~~2004 ~~AND~~and ~~2002~~2003

Certain transactions in fiscal year ~~2003~~2004 had an impact on the comparisons of our results for the three and six months ended ~~September~~December 3031, ~~2003~~2004 and ~~2002~~2003. ~~Acquisition~~ ~~transactions~~We ~~that~~restructured ~~affect~~our ~~comparisons~~interests ~~include~~in the ~~California~~ ~~Newspapers~~Charleston ~~Partnership’s~~JOA ~~October~~(effective May 17, ~~2002~~2004) ~~purchases of The Reporter in Vacaville, California~~ and the ~~Original~~York ~~Apartment~~JOA ~~Magazine~~(which inincluded ~~southern California~~exercising ~~and~~our ~~the~~option ~~January 31, 2003 purchase of the Paradise Post in Paradise,~~to ~~California.~~buy Inout ~~addition to~~ the ~~acquisition~~minority ~~transactions~~partner’s ~~described,~~interest ~~comparisons between the quarters ended September 30, 2003~~ and ~~2002~~purchasing ~~are also affected by~~ the ~~formation~~ masthead of the ~~Texas-New~~York ~~Mexico~~Daily ~~Newspapers Partnership~~ Record effective ~~March~~April 330, ~~2003,~~ ~~after~~2004). ~~which~~We wealso nopurchased ~~longer~~two ~~consolidate~~weekly ~~the~~newspapers ~~results~~distributed ofin ~~the~~and ~~New~~around ~~Mexico~~Long ~~newspaper~~Beach, ~~properties~~California: ~~that we contributed to~~ the ~~partnership.~~Grunion ~~Our~~Gazette ~~investment in the Texas-New Mexico Newspapers Partnership is accounted for under the equity method of accounting~~ and ~~the~~Downtown ~~partnership’s~~Gazette ~~results are included in “Equity Investment Income, Net~~(January 2004).”

Revenues

~~Revenues~~On ~~for~~a ~~the~~same ~~quarter~~newspaper ~~ended~~basis ~~September 30,~~(after ~~2003~~adjusting ~~were $185.1 million as compared to $179.3 million~~ for the ~~same~~aforementioned ~~quarter of~~ fiscal year ~~2003.~~2004 ~~The change~~Gazette ~~represents an increase of $5.8 million~~transaction), orthe ~~3.2%.~~following ~~The~~changes ~~aforementioned transactions~~occurred in ~~fiscal~~our ~~year~~significant ~~2003~~revenue ~~had~~categories for the ~~net impact of increasing reported~~three ~~revenues~~and bysix ~~$3.4 million~~month ~~for~~periods ~~the quarter~~ ended ~~September~~December 3031, ~~2003,~~2004 as compared to the same periods in prior year.

2224

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

~~COMPARISON~~ Advertising OFRevenues. ~~THE~~Advertising ~~THREE~~revenues ~~MONTHS~~increased ~~ENDED~~by ~~SEPTEMBER~~approximately 303.9% for both the three and six month periods ended December 31, ~~2003~~2004, ~~AND~~as ~~2002~~compared ~~(continued)~~to the same periods in prior fiscal year. The increase in advertising revenue was due principally to increases in classified and preprint advertising categories, as well as increases in revenues from our Internet operations, offset in part by small decreases in retail and national advertising. For the three and six month periods ended December 31, 2004, employment and real estate classified advertising increased at the majority of our newspapers. However, gains in employment and real estate categories were somewhat offset by declines in automotive classified advertising.

~~period~~ Circulation Revenues. Circulation revenues decreased by 3.0% and 2.2% for the three and six month periods ended December 31, 2004 as compared to the same periods in prior fiscal year. OnThe decrease awas ~~same~~primarily ~~newspaper~~due ~~basis~~to ~~(after~~competitive ~~adjusting~~pricing ~~for~~pressures ~~the~~at some of our California newspapers, ~~aforementioned~~which ~~fiscal~~resulted ~~year~~in ~~2003~~our ~~transactions)~~offering greater discounts to acquire new subscribers with long-term orders, as ~~the~~well ~~following~~as ~~changes~~reducing ~~occurred~~our subscription rates to retain our current subscribers. In addition, we ~~between~~implemented ~~the~~strategic ~~three~~pricing ~~months~~efforts ~~ended~~in ~~September 30~~Connecticut, ~~2003~~which ~~and~~included ~~2002:~~offering discounts to new subscribers, in an attempt to achieve circulation volume goals.

Advertising Revenues. Advertising revenues increased by approximately 1.1%. The slight increase in advertising revenue was due principally to increases in national (15.5%) and preprint (11.1%) advertising, offset in part by a 4.9% decrease in classified advertising. Classified employment advertising continues to experience declines, principally in our San Francisco Bay Area market, due to the economic slowdown that has been experienced throughout the United States. We also experienced small declines in classified automotive.

Circulation Revenues. Circulation revenues decreased by 1.8% as we have continued to grow circulation in a slow economy by offering greater pricing options to acquire new readers.

Other Revenues. Other revenues increased 15.9% in part due to our obtaining new commercial printing contracts in northern California. Also contributing to the increase were revenues from our Internet operation, which increased 33.0% or $1.0 million as a result of the continued strong market acceptance of the combined print and online packages that we offer to our advertisers and our online employment category.

Income from Unconsolidated JOAs

~~Income~~The ~~from~~aforementioned Charleston restructuring had the net impact of decreasing income from unconsolidated JOAs ~~represents~~by ~~(1)~~$0.5 ~~our~~million ~~share~~and of$0.9 million for the ~~net~~three ~~income from~~and ~~our~~six ~~unconsolidated~~months ~~JOA~~ended ~~operations~~December 31, ~~which~~2004. asExcluding ofthe ~~September 30,~~impact ~~2003~~of ~~and~~the ~~2002 includes~~ Charleston ~~Newspapers~~restructuring, the ~~Denver~~decrease ~~Newspaper~~for ~~Agency~~the ~~(“DNA”),~~three and ~~the~~six ~~Newspaper~~months ~~Agency~~ended ~~Corporation~~December 31, ~~(“NAC”)~~2004 was primarily due to a decline in ~~Salt~~net ~~Lake~~income ~~City;~~at ~~(2)~~ the ~~amortization~~Denver ofJOA, ~~subscriber~~offset ~~lists~~in ~~created~~part by improved operating performance at the ~~original~~Salt ~~purchase~~Lake byJOA. ~~us;~~Revenues ~~and~~at ~~(3) editorial costs,~~the ~~miscellaneous~~Denver ~~publishing~~JOA were ~~revenue~~flat and ~~other~~expenses ~~charges~~were ~~incurred~~up by2.2% ~~our subsidiaries~~for ~~that~~the ~~were~~three ~~directly~~months ~~attributable~~ended toDecember 31, ~~providing~~2004 ~~editorial~~as ~~content~~compared ~~and~~to the ~~news~~prior ~~for~~year, ~~our~~while ~~newspapers~~revenues ~~published~~and byexpenses ~~the~~were ~~JOAs~~up 1.1% ~~Income~~and ~~from~~2.1%, ~~unconsolidated~~respectively, ~~JOAs~~ for the ~~quarters~~six months ended ~~September~~December 3031, ~~2003~~2004 ~~and~~as ~~2002~~compared ~~was~~to $4the prior year.~~8 million~~ Revenues and ~~$4.2~~expenses at the Salt Lake JOA ~~million,~~both ~~respectively.~~increased ~~The~~by $04.~~6 million~~9% ~~increase~~for ~~was~~the ~~due~~three ~~primarily~~months ended December 31, 2004 as compared to the prior year, ~~improved~~while ~~results~~revenues atand ~~the~~expenses ~~Denver~~were ~~Newspaper~~up ~~Agency~~5.9% and ~~the~~5.2%, ~~Newspaper~~respectively, ~~Agency Corporation~~for ~~during~~ the ~~first~~six ~~quarter~~months ofended ~~fiscal~~December 31, ~~year~~ 2004 as compared to the ~~same period~~prior ~~of fiscal~~ year ~~2003~~. The ~~improved~~ results atof the ~~Denver~~JOAs ~~Newspaper~~described ~~Agency and~~above ~~the~~have ~~Newspaper~~been ~~Agency~~adjusted for ~~Corporation~~the ~~were~~associated ~~partially~~revenues ~~offset~~and byexpenses adescribed ~~small decline~~ in ~~results~~our atcritical ~~Charleston~~accounting ~~Newspapers~~policies.

Cost of Sales

~~Cost of sales for the quarter ended September 30, 2003 were $58.2 million as compared to $53.1 million for the same quarter of fiscal year 2003.~~ The ~~change~~ ~~represents~~aforementioned anYork ~~increase~~restructuring ofand ~~$5.1 million~~weekly ornewspapers ~~9.6%.~~purchased ~~The aforementioned transactions~~ in fiscal year ~~2003~~2004 had the net impact of increasing cost of sales by $1.1 million and $2.01 million for the ~~quarter~~three and six month periods ended ~~September~~December 3031, ~~2003~~2004, as compared to the same ~~period~~periods in prior fiscal year. Excluding ~~the~~these ~~aforementioned~~ transactions, cost of sales for the three and six month periods increased 6.1.5% and 2.0%, respectively. The current year increase in cost of sales was due in part to ana 8.5% and 9.5% increase in our average price per metric ton of newsprint ~~consumption~~ ~~(7.9%)~~consumed ~~during~~for the ~~first~~three ~~quarter~~and ofsix ~~fiscal~~month periods ~~year~~ended December 31, 2004, as compared to the ~~first~~same ~~quarter~~periods ofin ~~fiscal~~prior year ~~2003~~. ~~Also~~Our ~~contributing~~average toprice was ~~the~~approximately ~~increase~~$523 ~~was~~and ~~a 10.1%~~$520 ~~increase~~per inmetric ~~our~~ton ~~average~~for ~~price~~the ~~per~~three ~~metric~~and ~~ton~~six ofmonth ~~newsprint~~periods ~~consumed.~~ended ~~Our~~December ~~average~~31, ~~price~~2004, ~~was~~respectively, ~~approximately~~as compared to $~~468~~482 and $475 per metric ton ~~during~~for the ~~first~~same ~~quarter~~periods ~~of fiscal~~in fiscal year 2004. asPartially ~~compared~~offsetting tothe ~~$425~~impact ~~for~~of ~~the~~higher ~~same~~newsprint ~~period~~prices inwas ~~fiscal~~a ~~year~~small ~~2003~~decrease in our newsprint consumption.

Selling, General and Administrative

~~Selling,~~The ~~general~~aforementioned York restructuring and ~~administrative~~weekly ~~(“SG&A”)~~newspapers ~~expense~~purchased ~~for~~in ~~the~~fiscal ~~quarter~~year ~~ended~~2004 ~~September 30,~~had ~~2003~~the ~~was~~net impact of increasing SG&A by $~~90.~~0.7 million asand ~~compared to~~ $841.94 million for the ~~same~~three and six month ~~quarter~~periods ofended December 31, 2004, as compared to the same periods in prior fiscal year ~~2003~~. ~~The~~Excluding these ~~change~~transactions, ~~represents~~SG&A anincreased ~~increase~~5.4% ofand $5.~~1 million, or~~ 6.0%. The ~~aforementioned~~current ~~transactions~~year increase was primarily the result of increases in ~~fiscal~~employee ~~year~~costs, ~~2003~~including ~~had~~health ~~the~~care ~~net~~and ~~impact~~retirement benefits, the curtailment of ~~increasing~~the ~~SG&A~~pension byplan ~~$2.5 million~~at ~~for~~one ~~the~~of ~~quarter~~our ~~ended September 30~~subsidiaries, ~~2003,~~as well as increased costs directly ~~compared~~associated towith the ~~same~~growth ~~period~~ in ~~prior~~our ~~year.~~advertising ~~Excluding~~revenues ~~the~~and ~~aforementioned~~Internet operations. Expenses related ~~transactions,~~to ~~SG&A~~our Internet operations increased 3$0.4 million, or 13.9%, and $1.1 million, or 17.8%, respectively, for the three and six months ended December 31, 2004.

~~The~~Interest ~~increase in SG&A expense was in part the result of increased costs~~Expense ~~associated with the growth experienced in our Internet operations, increased~~ ~~benefit costs, including health insurance, pension expense, and 401(k) matching~~ ~~benefits.~~

23 The decrease in interest expense was the result of a decrease in average debt outstanding due to debt paydowns in fiscal year 2004 and continued paydowns in fiscal year 2005, as well as a reduction in the weighted average cost of debt in fiscal year 2005 compared to fiscal year 2004. For the three month period ended December 31, 2004, our average debt outstanding

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

~~COMPARISON~~decreased OF$29.8 million, ~~THE~~or ~~THREE~~3.3%, ~~MONTHS~~and ~~ENDED~~our ~~SEPTEMBER~~weighted 30average interest rate decreased 52 basis points, as compared to the same period in prior year. For the six month period ended December 31, 2004, our average debt outstanding decreased $24.7 million or 2.8%, and our weighted average interest rate decreased 64 basis points as compared to the same period in prior year. The lower weighted average cost of debt was a result of the November 2003 ~~AND~~refinancing ~~2002~~of our 8 3/4% Senior Subordinated Notes with our 6 7/8% Senior Subordinated Notes, the restructuring of our bank credit agreement (~~continued~~December 2003 and August 2004) and the July 2004 repurchase of our 8 5/8% Senior Subordinated Notes funded out of proceeds from our 6 3/8% Senior Subordinated Notes (issued in January 2004), and borrowings from our bank credit facility. These lower interest rates were offset in part by increases in LIBOR over the prior year (the average daily one month rate for LIBOR increased 101 and 75 basis points, respectively, for the three and six month periods ended December 31, 2004 as compared to the same periods in prior year), which is used to determine the interest rates under our bank credit facility. Interest expense was also favorably impacted in the prior year by net settlements related to our interest rate swap agreements. The net settlements of our interest rate swap agreements had the effect of decreasing interest expense by $0.9 million and $1.8 million for the three and six month periods ended December 31, 2003. We had no interest rate swap agreements during the three or six month periods ended December 31, 2004. Excluding the impact of the interest rate swaps in the prior year, our weighted average interest rate decreased by approximately 97 and 103 basis points, respectively.

Interest Expense

Interest expense for the quarter ended September 30, 2003 was $14.1 million as compared to $17.0 million for the same quarter of fiscal year 2003. The change represents a decrease of $2.9 million, or 17.1%. The decrease was the result of a $60.0 million, or 6.3% decrease in average debt outstanding due to debt paydowns, net of acquisitions, in fiscal year 2003, and continued paydowns in fiscal year 2004. The decrease in interest expense was also the result of a 79 basis point reduction in weighted average cost of debt in fiscal year 2004 compared to fiscal year 2003, primarily associated with lower short-term interest rates and refinancing the 9.0% Subordinated Promissory Note with a bank term loan, as was more fully described in our June 30, 2003 annual report on Form 10-K. Interest expense was also impacted by net settlements related to our interest rate swap agreements. The net settlements of our interest rate swap agreements had the effect of decreasing interest expense by $0.9 million and $0.5 million in the first quarter of fiscal years 2004 and 2003, respectively.

Other (Income) Expense, Net

~~Other (income) expense, net for the quarter ended September 30, 2003 was $4.1 million as compared to $(1.7) million for the same quarter of fiscal year 2003.~~ We include in other (income) expense, net costs ~~which~~or ~~were~~income ~~not~~items ~~related~~that ~~to ongoing~~are operations. The charges incurred during the first quarter of fiscal year 2004 related to litigation expense of $1.0 million associated with the acquisition of Kearns-Tribune, LLC (Salt Lake City), $0.2 million related to the ongoing accretion of the cost to repurchase an option held by a third party to acquire one of our newspapers, $0.7 million in costs associated with our unsuccessful bid for Freedom Communications, Inc., $1.8 million related to hedging activities, which did not ~~qualify for hedge accounting under SFAS No. 133 and a net $0.4 million for various other costs not~~ related to ~~ongoing~~ current operations. ~~The primary change in other (income) expense, net for the quarter~~ ~~ended September 30, 2003 as compared to the same period in prior year, was~~ ~~related to hedging activities, which did not qualify for hedge accounting under~~ ~~SFAS No. 133. For the quarter ended, September 30, 2002, hedging activities resulted in income of $3.1 million.~~

~~Net~~ The ~~Income~~charges incurred for the three month period ended December 31, 2004 relate to litigation expense of $0.2 million associated with the acquisition of Kearns-Tribune, LLC (~~Loss~~Salt Lake City), $(0.7) million reduction related to the periodic change in the estimated cost to repurchase an option held by a third party to acquire one of our newspapers, $0.2 million related to hedging activities that did not qualify for hedge accounting under SFAS No. 133, and $0.3 million related to various other costs not related to ongoing operations.

WeThe ~~reported~~charges ~~net~~incurred ~~income~~ for the ~~quarter~~six month period ended ~~September~~December 3031, ~~2003~~2004 ofrelate ~~$4.3 million as compared~~ to ~~net~~litigation expense ~~income~~ of $70.14 million ~~for~~associated with the ~~same~~acquisition ~~quarter~~ of ~~fiscal~~ ~~year~~Kearns-Tribune, ~~2003.~~LLC In(Salt ~~addition~~Lake ~~to the changes described above~~City), $(5.8) ~~net~~million ~~income~~change ~~was impacted~~related byto athe ~~$1.9 million~~periodic ~~improvement~~change in ~~year~~the ~~over~~estimated ~~year~~cost ~~equity~~to ~~investment~~repurchase an option ~~income~~held ~~(non-JOA),~~by ~~primarily~~a ~~related~~third party to ~~the~~acquire ~~Texas-New~~one ~~Mexico~~of ~~Newspapers Partnership~~our newspapers, $09.32 million ~~decrease~~for inthe ~~minority~~repurchase ~~interest expense~~ premiums and aunamortized ~~$2.0 million~~discounts ~~decrease~~associated inwith ~~income~~the ~~tax~~early ~~expense,~~redemption of ~~which~~our ~~approximately~~8 5/8% Notes, $10.74 million ~~was~~ related to ~~deferred~~hedging ~~income~~activities ~~taxes.~~that ~~Our~~did ~~effective~~not ~~tax~~qualify ~~rate~~for ~~was~~hedge ~~40.1%~~accounting atunder ~~September 30,~~SFAS ~~2003~~No. 133, asand $1.2 million ~~compared~~related to ~~40.6%~~various atother ~~September 30,~~costs ~~2002~~not related to ongoing operations.

~~LIQUIDITY~~Liquidity ~~AND~~and ~~CAPITAL~~Capital ~~RESOURCES~~Resources

Our sources of liquidity are existing cash and other working capital, cash flows provided from operating activities, distributions from JOAs and partnerships and the borrowing capacity under our bank credit facility. Our operations, consistent with the newspaper industry, require little investment in inventory, as less than 30 days of newsprint is generally maintained on hand. From time to time, we increase our newsprint inventories in anticipation of price increases. In ~~fourth~~ ~~quarter of our fiscal year 2003 and continuing into the first quarter of fiscal year 2004, we built newsprint inventories to delay the impact to us of an announced price increase. In~~ general, our receivables have been collected on a timely basis.

~~Net~~The increase in net cash flows from operating activities ~~were~~of ~~approximately~~ $98.52 million was largely ~~for~~attributable ~~both~~to ~~the~~an ~~three~~increase ~~months~~in ~~ended~~distributions ~~September 30,~~from ~~2003~~unconsolidated JOAs and ~~September 30,~~decreases ~~2002. For~~in ~~the~~distributions ~~period~~paid ~~ended~~to ~~September 30,~~minority ~~2003~~interest, aoffset ~~$4.5 million decrease~~ in ~~Adjusted~~part ~~EBITDA (primarily~~by ~~related~~decreases toassociated ~~the~~with ~~changes~~increased working ~~described~~capital, ~~above~~due inprincipally ~~revenues,~~to ~~cost~~increases ofin ~~sales, and~~accounts ~~SG&A,~~receivable and ~~the~~other ~~formation~~current ofassets ~~the~~due to ~~Texas-New~~timing ~~Mexico~~of ~~Newspapers~~cash ~~Partnership~~receipts, ~~offset~~ increases in ~~part~~newsprint byinventory ~~the~~in ~~aforementioned~~anticipation ~~fiscal~~of ~~year~~future ~~2003 acquisitions)~~price increases, ~~was~~and ~~mostly offset~~timing byof apayments ~~$3.1 million~~of ~~change~~accounts ~~related~~payable toand ~~timing~~accrued ~~differences in working capital accounts~~liabilities.

~~Net~~The net cash ~~flows~~outflows ~~from~~related to investing activities ~~were~~improved by $161.75 million, ~~for~~primarily ~~the three~~due ~~months~~to ~~ended~~a ~~September 30, 2003 and~~ $131.79 million decrease in net capital expenditures for the ~~three~~six months ended ~~September~~ December 3031, ~~2002~~2004 as compared to the corresponding period in the prior year. ~~The~~Approximately $312.0 million ~~change~~of ~~was~~the current ~~primarily~~year ~~the~~capital ~~result~~expenditures ofare arelated ~~$1.4 million~~to ~~increase~~our inshare ~~distributions~~of ~~from~~the ~~unconsolidated~~costs ~~JOAs,~~associated awith ~~$2.9 million~~the ~~increase~~construction inof ~~distributions~~a ~~from~~new ~~equity~~printing ~~investments,~~facility ~~primarily~~for ~~related~~the toSalt Lake City JOA.

24 Net cash flows from financing activities for the six months ended December 31, 2004 included using cash on hand and available borrowings under the revolver portion of our credit facility to repurchase all of our outstanding $200.0 million

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

~~LIQUIDITY~~8 ~~AND~~5/8% ~~CAPITAL~~Senior ~~RESOURCES~~Subordinated Notes for $208.6 million (~~continued~~including $8.6 million of repurchase premiums). In addition, activity for the six months ended December 31, 2004 included normal borrowings and paydowns on long-term debt. Prior year’s net paydown consisted of $291.9 million of net proceeds from the issuance of $300.0 million of our 6 7/8% Senior Subordinated Notes due 2013, which were used along with available borrowings to repurchase all of our outstanding $300.0 million 8 3/4% Senior Subordinated Notes due 2009 for $309.4 million (including $9.4 million of repurchase premiums) and the refinancing of our bank credit facility, as well as normal borrowings and paydowns on long-term debt. Total paydowns on long-term debt were $21.9 million, net of refinancing costs and repurchase premiums, for the six months ended December 31, 2004, as compared to $15.3 million for the same period in prior year.

distributions from the Texas-New Mexico Newspaper Partnership which was formed in March 2003, and a $1.1 million increase in proceeds related to the sale of certain assets, offset in part by a $2.6 million increase in capital expenditures.

Net cash flows from financing activities were $(22.8) million for the three months ended September 30, 2003 and $(18.7) million for the three months ended September 30, 2002. The change of approximately $(4.1) million was the result of our paying down a net $14.1 million of long-term debt in the first quarter of fiscal 2004, compared to paying down a net $11.7 million during the same period of fiscal 2003, offset in part by a $1.7 million increase in distributions to minority interest due to an increase in distributable cash from operations.

Liquidity

~~Based~~On ~~upon~~August 30, ~~current and expected future operating results~~2004, we ~~believe~~amended ~~we will~~and ~~have~~restated ~~sufficient~~our ~~cash~~December 30, ~~flows~~2003 ~~from~~bank ~~operations~~credit facility to ~~fund~~take advantage ~~scheduled~~of ~~payments~~lower ~~of principal~~pricing ~~and~~available ~~interest~~in ~~and~~the tobank ~~meet~~loan ~~anticipated~~market. ~~capital~~Our ~~expenditure~~amended ~~and~~bank ~~working~~credit facility ~~capital~~provides ~~requirements~~ for atborrowings ~~least~~of ~~the~~up ~~next~~to ~~twelve months~~$598. ~~As of September~~8 30million, ~~2003,~~ weconsisting ~~had~~of a $~~116~~350.0 million ~~available~~revolving ~~for future borrowings under our bank~~ credit facility, ~~net~~a of $5100.70 million interm ~~outstanding~~loan ~~letters~~“A” ofand ~~credit,~~a ~~which should~~$148.8 million beterm ~~more~~loan ~~than~~“C.” ~~sufficient~~During tothe ~~fund~~next ~~unanticipated capital needs or other~~twelve ~~cash~~months ~~requirements~~we ~~should~~will ~~they~~make ~~arise.~~scheduled ~~The~~quarterly ~~available~~principal ~~borrowings~~payments of $~~116.~~0.4 million at ~~September 30,~~under ~~2003~~term ~~will~~loan be“C,” which ~~impacted~~we ~~over~~intend ~~the~~to ~~next~~pay ~~twelve~~from ~~months~~operating bycash ~~the following~~flows. ~~scheduled~~Any ~~principal~~ payments on ~~long-~~the term ~~debt:~~loan ~~quarterly~~cannot ~~installments~~be reborrowed, regardless of ~~$15.0 million~~whether ~~due~~such onpayments ~~one~~are ofscheduled ~~our~~or ~~bank term~~voluntary. ~~loans~~At on December 31, ~~2003~~2004, the ~~and~~balances ~~$9.375 million~~outstanding ~~due~~under ~~quarterly~~the onrevolving ~~March 31, June 30,~~credit ~~and~~portion ~~September 30,~~of ~~2004;~~our ~~and~~bank ~~quarterly~~credit ~~reductions~~facility, interm ~~the commitment~~loan ~~under~~“A” ~~the~~and ~~bank~~term ~~credit~~loan ~~facility~~“C” ofwere $3126.0 million ~~on December 31~~, ~~2003 and~~ $25100.0 million onand ~~March~~$148.0 31million, ~~June 30,~~respectively. ~~and~~As ~~September~~of December 3031, 2004~~. However~~, we ~~expect~~had ~~that cash~~$215.4 million ~~flows~~available ~~from~~for ~~operations,~~future ~~net~~borrowings ofunder ~~capital~~the ~~expenditures,~~revolver ~~will offset a large~~ portion of ~~these reductions. We plan to fund the scheduled principal payments with available borrowings from~~ our new bank credit facility, tonet ~~the~~of ~~extent there is availability~~$8.6 million ~~Our bank credit facility is more fully described~~ in ~~the~~outstanding ~~notes~~letters ~~to the consolidated financial statements~~ of ~~our June 30, 2003 Annual Report on Form 10-K~~credit.

WeIn ~~may~~January 1998, ~~from~~we ~~time~~entered tointo ~~time~~an ~~seek~~option toagreement ~~retire~~in ~~our~~association ~~outstanding~~with ~~debt~~the ~~through cash~~acquisition ~~purchases~~financing inrelated ~~the~~to ~~open~~one ~~market~~of our newspapers. The option, ~~privately~~which ~~negotiated~~is ~~transactions~~currently exercisable or puttable ~~otherwise.~~based ~~Such~~on ~~repurchases,~~a ifpredetermined ~~any~~formula, ~~will~~entitles ~~depend~~the onholder ~~prevailing~~to ~~market~~purchase the assets used in the ~~conditions,~~publication of one of our ~~liquidity~~daily ~~requirements~~newspapers. The option repurchase price at December 31, ~~contractual~~2004 ~~restrictions~~is valued at approximately $5.9 million and is recorded as a component of other ~~factors~~ long-term liabilities. If ~~The~~the ~~amounts~~option ~~involved~~were ~~may~~put to us, the payment would be ~~material~~funded from unused commitments under our bank credit facility. InAs ~~addition~~a result, wein ~~may~~accordance ~~issue~~with SFAS No. 6, Classification of Short-Term ~~additional~~Obligations ~~debt~~Expected ifto ~~prevailing~~be ~~market~~Refinanced, ~~conditions~~the ~~are~~option ~~favorable~~repurchase toprice ~~doing~~remains soclassified in our balance sheet as long-term.

OnThe ~~November 4,~~Denver ~~2003,~~Post weShareholders’ ~~commenced~~Agreement aprovides ~~cash~~us ~~tender~~with ~~offer~~a ~~and~~call ~~consent solicitation~~option ~~(the~~on ~~“Offer)~~Media ~~for~~General’s ~~any~~20% interest ~~and~~in ~~all~~The ofDenver ~~our~~Post ~~$300~~Corporation.~~0 million~~ ~~aggregate principal~~Our ~~amount~~call ~~8.75%~~option ~~Senior~~became ~~Subordinated~~exercisable ~~Notes~~on ~~due 2009~~July 1, ~~Series B~~2004 ~~(the~~and ~~“Notes”)~~expires June 30, 2005. The ~~Offer~~exercise price is ~~subject~~based toon the ~~satisfaction~~appraised fair market value of ~~certain~~The ~~conditions,~~Denver ~~including~~Post ~~our~~Corporation, ~~receipt~~less debt of ~~tenders~~The ofDenver ~~Notes~~Post ~~representing~~Corporation. aNo ~~majority~~amounts ofare ~~the~~recorded in our December ~~aggregate~~31, ~~principal~~2004 ~~amount~~financial ofstatements related to the ~~Notes~~call ~~outstanding~~option. ~~and~~In ~~the~~January 2005, ~~completion~~we ofdelivered ato Media ~~debt~~General ~~financing~~a onnotice ~~terms~~exercising ~~acceptable~~our tocall usoption. inThe anDenver ~~amount~~Post ~~sufficient~~Shareholders’ toAgreement ~~consummate~~provides that the ~~Offer.~~closing ~~There~~of ~~can~~such betransaction nois ~~assurance,~~to ~~however,~~take ~~that~~place wewithin ~~will~~15 bebusiness ~~successful~~days ~~in obtaining~~of the ~~financing~~completion ~~necessary~~of ~~to consummate~~ the appraisal ~~Offer~~process. We ~~are~~currently ~~commencing the~~anticipate ~~Offer~~that ~~and~~the ~~debt~~closing ~~financing~~will occur in ~~order~~the tofourth ~~take~~quarter ~~advantage~~ of ~~current favorable~~ ~~long-term~~fiscal ~~interest~~year ~~rates~~2005.

~~Our~~Stephens ~~ability~~Media toGroup ~~make~~(“SMG”), ~~payments~~a ~~on,~~26.28% topartner ~~repurchase~~in ~~and~~the toCalifornia ~~refinance~~Newspapers ~~our~~Partnership ~~indebtedness~~(“CNP”), ~~and~~has toa ~~fund~~right ~~planned~~to ~~capital~~require ~~expenditures~~CNP ~~will depend on our ability~~ to ~~generate~~redeem ~~free~~its ~~cash~~interest ~~flow~~ in ~~the future. This~~CNP, toat aits ~~certain~~fair ~~extent,~~market isvalue ~~subject~~(plus tointerest ~~general~~through ~~economic~~closing), ~~financial,~~any ~~competitive,~~time ~~legislative~~after January 1, ~~regulatory~~2005. ~~and~~If ~~other factors~~such ~~that~~right ~~are~~is ~~beyond~~exercised, ~~our~~SMG’s interest ~~control.~~must ~~Based~~be onredeemed ~~our~~within ~~current~~two ~~level~~years of ~~operations, we~~the ~~believe~~determination ~~our~~of ~~cash~~its ~~flow~~fair ~~from~~market ~~operations,~~value. ~~available~~We ~~cash~~are not ~~and~~currently ~~available borrowings~~aware ~~under~~of ~~our~~any ~~bank~~intentions ~~credit~~on ~~facility~~the ~~will~~part beof ~~adequate~~SMG to ~~meet~~exercise ~~our~~its ~~future~~put. No amounts are ~~liquidity~~recorded ~~needs~~in ~~for~~our atfinancial ~~least~~statements ~~the~~related ~~next~~to ~~twelve~~SMG’s ~~months~~put right.

~~Off~~ Our ~~Balance~~ability ~~Sheet~~to ~~Arrangements~~service our debt and ~~Contractual~~fund ~~Obligations~~planned capital expenditures depends on our ability to generate operating cash flows in the future. Based on current levels, we believe our cash flow from operations, cash on hand and borrowings available under our bank credit facility will be adequate to meet our future liquidity needs for at least the next twelve months.

~~Our~~We ~~various~~estimate ~~contractual~~minimum ~~obligations~~contributions ~~and~~to ~~funding~~our ~~commitments~~defined ~~and~~benefit pension plans in fiscal year 2005 ~~off-balance~~will ~~sheet~~be ~~arrangements~~approximately ~~have~~$2.0 million ~~not~~to ~~materially~~$3.0 million, ~~changed~~of ~~from~~which ~~the~~$1.3 million ~~disclosure~~ has been made inthrough December 31, ~~our~~2004. ~~annual~~We ~~report~~also onexpect ~~Form~~federal ~~10-K~~and ~~for~~state ~~the~~income tax payments to increase during fiscal year ~~ended~~2005 ~~June~~related to the impact of alternative minimum taxes. We have paid approximately $4.5 million in federal and state income tax payments through December 3031, ~~2003,~~2004 ~~except~~and estimate we will pay ~~for~~an ~~the~~additional ~~current~~$6.0 million ~~portion~~to $8.0 million through the end of ~~long-~~our fiscal year 2005, as compared to $1.8 million in fiscal year 2004.

2527

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Off -Balance Sheet Arrangements and Contractual Obligations ~~(continued)~~

~~term~~ Our ~~debt.~~various ~~The~~contractual ~~current~~obligations ~~portion~~and offunding ~~long-term~~commitments ~~debt~~related ~~increased due~~ to ~~the net effect of borrowings and reductions of availability on~~ our ~~credit facility. As a result, amounts we previously expected to refinance with~~ long-term debt ~~were~~have ~~reclassified~~changed ~~from~~since ~~long-term~~our ~~debt~~Annual toReport ~~current~~on atForm ~~September 30,~~10-K ~~2003.~~for Atthe ~~September 30,~~year ~~2003,~~ended ~~we have $38.0~~June ~~million~~30, of2004 ~~short-term~~as ~~obligations~~more ~~classified as~~fully ~~long-term,~~described inabove ~~accordance~~and ~~with~~in ~~SFAS~~Note ~~No.~~ 6,: ~~Classification of Short~~Long-Term ~~Obligations~~ ~~Expected~~Debt toof beour ~~Refinanced,~~notes ~~as we plan~~ to ~~fund~~the ~~these~~condensed ~~amounts~~consolidated ~~with~~financial ~~available long-term borrowings from our bank credit facility~~statements.

~~RECENTLY~~ Our ~~ISSUED~~other ~~ACCOUNTING~~contractual ~~STANDARDS~~obligations have not materially changed from the disclosure made in our Annual Report on Form 10-K for the year ended June 30, 2004, except for a purchase commitment we entered into with SP Newsprint Co. beginning January 1, 2005 (24,000 metric tons) for calendar year 2005 and continuing through December 31, 2009 (36,000 metric tons per year for calendar years 2006-2009). Tons purchased will be at market prices.

~~See~~Additionally, ~~Note~~as 1:discussed ~~Recently~~under ~~Issued~~“Liquidity,” ~~Accounting~~on ~~Standards~~January 24, 2005, the Company delivered notice to Media General of ~~our~~exercise ~~notes~~of its call option to ~~the condensed~~purchase ~~consolidated~~Media ~~financial~~General’s ~~statements~~20% ~~for~~interest ~~further~~in The ~~discussion~~Denver Post Corporation.

Capital Expenditures

	Capital Expenditures
	Three Months Ended September 30, 2003 Actual
	Six Months Ended December 31, 2004
	(In thousands)
	(Dollars in thousands)
	Wholly-		Non Wholly-
	Wholly-Owned
	Owned		Owned Subsidiaries
	Subsidiaries and		Non Wholly-Owned			Our Share of
	Subsidiaries		and JOAs			Total
	Consolidated JOAs		Subsidiaries			Unconsolidated JOAs			Total
Carryover Projects from Prior Year	$	1,457	$	925		$	2,382
Total Capital Projects	$	16,459	$	4,971		$	1,162		$	22,592
Capital Projects		2,569		2,665			5,234
Less Minority Partners’ Share		—		(2,252	)		(232	)		(2,484	)
		4,026		3,590			7,616
Our Share of Capital Projects	$	16,459	$	2,719		$	930		$	20,108
Less Partners’ Share		—		(2,082	)		(2,082	)
	$	4,026	$	1,508		$	5,534

Reconciliation of Capital Expenditures to Cash Flow Statement for the Three Months Ended September 30, 2003
Total Capital Expenditures	$	5,534
Proportionate Share of Capital Expenditures at Unconsolidated JOAs, Less Minority’s Share of Capital Expenditures at Consolidated Subsidiaries		242
Expenditures per Condensed Consolidated Statement of Cash Flows (Unaudited)	$	5,776

Near Term Outlook

26Newsprint Prices

In July 2004, newsprint suppliers announced a $50 per metric ton increase to be effective September 1, 2004. Newsprint suppliers were only able to implement part of the announced increase, and we began to pay a $20 price increase beginning in January 2005. In December 2004, newsprint suppliers announced another price increase of $35 per metric ton to be effective March 1, 2005. However, we are uncertain as to how much, if any, of the March 1, 2005 price increase will take hold in the market. The January 2005 RISI (“Resource Information Systems, Inc.”) price index for 30 pound newsprint was $570 per metric ton compared to $515 per metric ton in January 2004. As a large buyer of newsprint, our cost of newsprint continues to be below the RISI price index.

QUANTITATIVE AND QUALITATIVE
DISCLOSURE OF MARKET RISK

Debt ~~and Related Interest Rate Swaps~~

We are exposed to market risk arising from changes in interest rates associated with our bank debt, which includes ~~the~~a bank term loan and bank credit facility. ~~Our bank debt bears interest at rates based upon, at our~~ ~~option, Eurodollar or prime rates, plus a spread based on our leverage ratio.~~ ~~The nature and position of our bank debt and interest rate swaps have not~~ ~~materially changed from the disclosure made in our annual report on Form 10-K for the year ended June 30, 2003.~~

~~Newsprint~~ The ~~Prices~~following table provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity dates. Weighted-average variable rates are based on implied forward rates as derived from appropriate annual spot rate observations as of December 31, 2004.

ToInterest ~~mitigate~~Rate ~~the influence of newsprint price fluctuations, we have~~Sensitivity ~~periodically~~Principal ~~entered~~or ~~into~~Notional ~~fixed~~Amount ~~price~~by ~~newsprint~~Expected ~~contracts. We did not enter~~Maturity ~~into~~Average ~~any~~Interest ~~new fixed price contracts during the quarter ended September 30, 2003.~~Rate

In June 2003, newsprint suppliers announced a $50 per metric ton price increase to be effective August 1, 2003. The August 1 announced increase was the third during the last twelve months. Of the first two announced increases, only $60 per metric ton of the proposed total of $100 per metric ton took hold, and recently, newsprint suppliers have retroactively reduced the August 1 announced increase to $35 per metric ton. North American newsprint suppliers continue to take downtime in an attempt to more closely match supply with the demand from newspaper publishers. As of October 31, 2003, we are not paying any of the August 1, 2003 announced price increase; however, we expect some amount of the remaining $35 per metric ton price increase to take effect in our fiscal second quarter. The October 2003 RISI (Resource Information Systems, Inc.) price index for 30 pound newsprint was $505 per metric ton compared to $475 in October 2002.


	Years Ended June 30,																					Fair Value December 31,
	2005(a)			2006			2007			2008			2009			Thereafter			Total			2004
													(Dollars in thousands)
Liabilities
Long-Term Debt including Current Portion
Fixed Rate	$	—		$	—		$	—		$	—		$	—		$	446,340		$	446,340		$	456,000
Average Interest Rate		6.45	%		6.45	%		6.45	%		6.45	%		6.45	%		6.45	%

Variable Rate	$	744		$	1,488		$	1,488		$	11,488		$	26,488		$	332,310		$	374,006		$	374,006
Average Interest Rate		4.04	%		4.04	%		4.04	%		4.04	%		4.04	%		4.04	%

Total																			$	820,346	(b)

(a)		June 30, 2005 is only reflective of the amount due in the six months remaining in fiscal year 2005.

(b)		The long-term debt (including current portion) of $820.3 million from the Market Risk table above differs from total long-term debt of $846.3 million reported in Note 6: Long-Term Debt of the notes to the condensed consolidated financial statements due to $26.0 million related to various notes payable due through 2013. The Market Risk table above excludes these long-term obligations as we could not practicably estimate fair value due to the lack of quoted market prices for these types of instruments and our inability to estimate the fair value without incurring the excessive costs of obtaining an appraisal.

Newsprint

See Near Term Outlook for further discussion regarding newsprint prices.

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION

Reconciliation of GAAP and Non-GAAP Financial Information

The following tables have been provided to reconcile the Non-GAAP financial information (Adjusted EBITDA and Pro-Rata Consolidation Income Statement Data) presented under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operating Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary Supplemental Non-GAAP Financial Data” of this report on Form 10-Q to their most directly comparable GAAP measures (Cash Flows from Operating Activities and GAAP Income Statement Data).

Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA (Non-GAAP measure).


	Three Months Ended December 31,						Six Months Ended December 31,
	2004			2003			2004			2003
				(Dollars in thousands)
NON-GAAP FINANCIAL DATA(a)
Cash Flows from Operating Activities (GAAP measure)	$	33,122		$	13,521		$	40,596		$	32,383

Net Change in Operating Assets and Liabilities		14,475			24,066			29,029			26,470
Distributions Paid to Minority Interest		4,546			8,430			12,342			17,129
Distributions from Unconsolidated JOAs		(30,126	)		(19,726	)		(47,590	)		(37,791	)
Interest Expense		12,103			14,010			24,319			28,088
Bad Debt Expense		(2,152	)		(1,885	)		(4,368	)		(4,154	)
Pension Expense, Net of Cash Contributions		(190	)		(388	)		(498	)		(549	)
Direct Costs of the Unconsolidated JOAs, Incurred Outside of the Unconsolidated JOAs(b)		12,414			11,782			24,369			23,195
Net Cash Related to Other (Income), Expense		2,495			(1,560	)		3,461			328

Adjusted EBITDA		46,687			48,250			81,660			85,099
Minority Interest in Adjusted EBITDA		(12,899	)		(15,351	)		(22,164	)		(26,626	)
Combined Adjusted EBITDA of Unconsolidated JOAs		13,023			15,471			21,923			24,363
EBITDA of Texas-New Mexico Newspapers Partnership(c)		2,743			2,977			5,033			5,394

Adjusted EBITDA Available to Company	$	49,554		$	51,347		$	86,452		$	88,230

		Footnotes for table above.

(a)		Non-GAAP Financial Data. Adjusted EBITDA and Adjusted EBITDA Available to Company are not measures of performance recognized under GAAP. However, we believe that they are indicators and measurements of our leverage capacity and debt service ability. Adjusted EBITDA and Adjusted EBITDA Available to Company should not be considered as an alternative to measure profitability, liquidity, or performance, nor should they be considered an alternative to net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in our condensed consolidated financial statements. Adjusted EBITDA is calculated by deducting cost of sales and SG&A expense from total revenues. Adjusted EBITDA Available to Company is calculated by: (i) reducing Adjusted EBITDA by the minorities’ interest in the Adjusted EBITDA generated from the California Newspapers Partnership, The Denver Post Corporation, and through April 30, 2004, The York Newspaper Company, our less than 100% owned consolidated subsidiaries (“Minority Interest in Adjusted EBITDA”); (ii) increasing Adjusted EBITDA by our combined proportionate share of the Adjusted EBITDA generated by our unconsolidated JOAs in Denver, Salt Lake City and, through May 7, 2004, Charleston (“Combined Adjusted EBITDA of Unconsolidated JOAs”); and (iii) increasing Adjusted EBITDA by our proportionate share of EBITDA of the Texas-New Mexico Newspapers Partnership (see footnote c).

(b)		Direct Costs of the Unconsolidated JOAs Incurred Outside of the Unconsolidated JOA. Includes the editorial costs, revenues received outside of the JOAs, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and through May 7, 2004, the Charleston Daily Mail. See Note 1: Significant Accounting Policies and Other Matters — Joint Operating Agencies and Note 3: Joint Operating Agencies in the footnotes to our condensed consolidated financial statements for further description and analysis of this adjustment.

(c)		EBITDA of Texas-New Mexico Newspapers Partnership. The Texas-New Mexico Newspapers Partnership agreement requires the partnership to make distributions equal to the earnings of the partnership before depreciation and amortization (EBITDA). EBITDA of Texas-New Mexico Newspapers Partnership has been included in Adjusted EBITDA Available to Company, as it is an integral part of our cash flows from operations as defined by our debt covenants. Previously, we had included distributions from the Texas-New Mexico Newspapers Partnership in Adjusted EBITDA Available to Company. However, now we include our 33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership. This change was made in order to better conform to the definition of operating cash flows in our debt agreements. All periods presented reflect this change.

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION

Reconciliation of Income Statement Data presented on a historical GAAP basis to Non-GAAP Income Statement Data presented on a pro-rata consolidation basis. Dollar amounts shown are in thousands.


	Three Months Ended December 31, 2004
				Adjustment to
				Eliminate 42.5%		Unconsolidated
	As Presented			Minority Interest		JOAs Pro-Rata			As Presented on a
	Under GAAP			in York JOA(1)		Adjustment(2)			Pro-Rata Basis
Total Revenues	$	201,616		$	—	$	78,974		$	280,590

Income from Unconsolidated JOAs		9,590			—		(9,590	)		—

Cost of Sales		60,964			—		30,879			91,843
Selling, General and Administrative		93,965			—		35,072			129,037
Depreciation and Amortization		10,108			—		3,334			13,442
Interest Expense		12,103			—		53			12,156
Other (Income) Expense, Net		(36	)		—		46			10

Total Costs and Expenses		177,104			—		69,384			246,488

Minority Interest		(9,878	)		—		—			(9,878	)

Net Income		16,240			—		—			16,240

Adjusted EBITDA	$	46,687		$	—	$	13,023		$	59,710


	Six Months Ended December 31, 2004
				Adjustment to
				Eliminate 42.5%		Unconsolidated
	As Presented			Minority Interest		JOAs Pro-Rata			As Presented on a
	Under GAAP			in York JOA(1)		Adjustment(2)			Pro-Rata Basis
Total Revenues	$	393,269		$	—	$	153,210		$	546,479

Income from Unconsolidated JOAs		14,806			—		(14,806	)		—

Cost of Sales		121,725			—		61,343			183,068
Selling, General and Administrative		189,884			—		69,944			259,828
Depreciation and Amortization		20,217			—		6,755			26,972
Interest Expense		24,319			—		94			24,413
Other (Income) Expense, Net		5,399			—		268			5,667

Total Costs and Expenses		361,544			—		138,404			499,948

Minority Interest		(16,478	)		—		—			(16,478	)

Net Income		20,846			—		—			20,846

Adjusted EBITDA	$	81,660		$	—	$	21,923		$	103,583


	Three Months Ended December 31, 2003
				Adjustment to
				Eliminate 42.5%			Unconsolidated
	As Presented			Minority Interest			JOAs Pro-Rata			As Presented on a
	Under GAAP			in York JOA(1)			Adjustment(2)			Pro-Rata Basis
Total Revenues	$	195,639		$	(4,928	)	$	82,757		$	273,468

Income from Unconsolidated JOAs		10,974			—			(10,974	)		—

Cost of Sales		58,998			(1,008	)		32,075			90,065
Selling, General and Administrative		88,391			(1,568	)		35,211			122,034
Depreciation and Amortization		9,825			(63	)		3,881			13,643
Interest Expense		14,010			(23	)		74			14,061
Other (Income) Expense, Net		10,094			(110	)		542			10,526

Total Costs and Expenses		181,318			(2,772	)		71,783			250,329

Minority Interest		(11,727	)		2,156			—			(9,571	)

Net Income		9,986			—			—			9,986

Adjusted EBITDA	$	48,250		$	(2,352	)	$	15,471		$	61,369

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION


	Six Months Ended December 31, 2003
				Adjustment to
				Eliminate 42.5%			Unconsolidated
	As Presented			Minority Interest			JOAs Pro-Rata			As Presented on a
	Under GAAP			in York JOA(1)			Adjustment(2)			Pro-Rata Basis
Total Revenues	$	380,716		$	(9,479	)	$	158,804		$	530,041

Income from Unconsolidated JOAs		15,743			—			(15,743	)		—

Cost of Sales		117,202			(1,970	)		63,320			178,552
Selling, General and Administrative		178,415			(3,189	)		71,121			246,347
Depreciation and Amortization		20,050			(208	)		7,679			27,521
Interest Expense		28,088			(48	)		150			28,190
Other (Income) Expense, Net		14,228			(49	)		791			14,970

Total Costs and Expenses		357,983			(5,464	)		143,061			495,580

Minority Interest		(19,888	)		4,015			—			(15,873	)

Net Income		14,294			—			—			14,294

Adjusted EBITDA	$	85,099		$	(4,320	)	$	24,363		$	105,142

		Footnotes for preceding tables.

(1)		Adjustment to Eliminate 42.5% Minority Interest in York JOA. Eliminates The York Newspaper Company JOA minority partner’s 42.5% share from the individual line items with a corresponding adjustment to GAAP minority interest through April 30, 2004. Effective April 30, 2004, we acquired the minority interest in The York Newspaper Company. The difference between the minority interest adjustment provided in the reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA presented on a pro-rata consolidation basis (non-GAAP measure) and the pro-rata minority interest adjustment above is that certain items (Depreciation and Amortization, Interest Expense and Other (Income) Expense, Net) are excluded from Minority Interest in Adjusted EBITDA.

(2)		Unconsolidated JOAs Pro-Rata Adjustment. The adjustment to pro-rata consolidate our unconsolidated JOAs includes our proportionate share, on a line item basis, of the income statements of our unconsolidated JOAs. Our interest in the earnings of Newspaper Agency Corporation (Salt Lake City) is 58%, while our interests in Denver Newspaper Agency and Charleston Newspapers (through May 7, 2004) are 50%. This adjustment also includes the editorial costs, revenues received outside of the JOA, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and the Charleston Daily Mail (through May 7, 2004). See Note 1: Significant Accounting Policies and Other Matters — Joint Operating Agencies and Note 3: Joint Operating Agencies in the footnotes to our condensed consolidated financial statements for further description and analysis of the components of this adjustment.

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION

Reconciliation of Cash Flows from Operating Activities (GAAP measure) to Adjusted EBITDA presented on a pro-rata consolidation basis (Non-GAAP measure).


	Three Months Ended December 31,						Six Months Ended December 31,
	2004			2003			2004			2003
				(Dollars in thousands)
NON-GAAP FINANCIAL DATA(a)
Cash Flows from Operating Activities (GAAP measure)	$	33,122		$	13,521		$	40,596		$	32,383

Net Change in Operating Assets and Liabilities		14,475			24,066			29,029			26,470
Distributions Paid to Minority Interest		4,546			8,430			12,342			17,129
Distributions from Unconsolidated JOAs		(30,126	)		(19,726	)		(47,590	)		(37,791	)
Interest Expense		12,103			14,010			24,319			28,088
Bad Debt Expense		(2,152	)		(1,885	)		(4,368	)		(4,154	)
Pension Expense, Net of Cash Contributions		(190	)		(388	)		(498	)		(549	)
Net Cash Related to Other (Income), Expense		2,495			(1,560	)		3,461			328
Combined Adjusted EBITDA of Unconsolidated JOAs(b)		13,023			15,471			21,923			24,363
Direct Costs of the Unconsolidated JOAs, Incurred Outside of the Unconsolidated JOAs(c)		12,414			11,782			24,369			23,195
Minority Interest in Adjusted EBITDA of The York Newspaper Company (d)		—			(2,352	)		—			(4,320	)

Adjusted EBITDA		59,710			61,369			103,583			105,142
Minority Interest in Adjusted EBITDA		(12,899	)		(12,999	)		(22,164	)		(22,306	)
EBITDA of Texas-New Mexico Newspapers Partnership(e)		2,743			2,977			5,033			5,394

Adjusted EBITDA Available to Company	$	49,554		$	51,347		$	86,452		$	88,230

		Footnotes for table above.

(a)		Non-GAAP Financial Data. Adjusted EBITDA and Adjusted EBITDA Available to Company are not measures of performance recognized under GAAP. However, we believe that they are indicators and measurements of our leverage capacity and debt service ability. Adjusted EBITDA and Adjusted EBITDA Available to Company should not be considered as an alternative to measure profitability, liquidity, or performance, nor should they be considered an alternative to net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in our condensed consolidated financial statements. Adjusted EBITDA is calculated by deducting cost of sales and SG&A expense from total revenues. Adjusted EBITDA Available to Company is calculated by: (i) reducing Adjusted EBITDA by the minorities’ interest in the Adjusted EBITDA generated from the California Newspapers Partnership and The Denver Post Corporation, our less than 100% owned consolidated subsidiaries (“Minority Interest in Adjusted EBITDA”); (ii) increasing Adjusted EBITDA by our proportionate share of EBITDA of the Texas-New Mexico Newspapers Partnership (see footnote e). Note that pro-rata consolidation already takes into account our proportionate share of the results from our unconsolidated JOAs and takes into account the minority interest associated with The York Newspaper Company, through April 30, 2004 when we acquired The York Newspaper Company minority interest.

(b)		Combined Adjusted EBITDA of Unconsolidated JOAs. Calculated by deducting cost of sales and SG&A expense from total revenues from the Unconsolidated JOAs Pro-Rata Adjustment column presented under “- Reconciliation of Income Statement Data presented on a historical GAAP basis to Non-GAAP Income Statement Data presented on a pro-rata consolidation basis.”

(c)		Direct Costs of the Unconsolidated JOAs Incurred Outside of the Unconsolidated JOA. Includes the editorial costs, revenues received outside of the JOA, depreciation, amortization, and other direct costs incurred outside of the JOAs by our consolidated subsidiaries associated with The Salt Lake Tribune, The Denver Post, and through May 7, 2004, the Charleston Daily Mail. See Note 1: Significant Accounting Policies and Other Matters — Joint Operating Agencies and Note 3: Joint Operating Agencies in the footnotes to our condensed consolidated financial statements for further description and analysis of this adjustment.

(d)		Minority Interest in Adjusted EBITDA of The York Newspaper Company is calculated as total revenues, less cost of sales and SG&A expense from the Adjustment to Eliminate 42.5% Minority Interest in York JOA column presented under “- Reconciliation of Income Statement Data presented on a historical GAAP basis to Non-GAAP Income Statement Data presented on a pro-rata consolidation basis.”

(e)		EBITDA of Texas-New Mexico Newspapers Partnership. The Texas-New Mexico Newspapers Partnership agreement requires the partnership to make distributions equal to the earnings of the partnership before depreciation and amortization (EBITDA). EBITDA of Texas-New Mexico Newspapers Partnership has been included in Adjusted EBITDA Available to Company, as it is an integral part of our cash flows from operations as defined by our debt covenants. Previously, we had included distributions from the Texas-New Mexico Newspapers Partnership in Adjusted EBITDA Available to Company. However, now we include our 33.8% share of the EBITDA of Texas-New Mexico Newspapers Partnership. This change was made in order to better conform to the definition of operating cash flows in our debt agreements. All periods presented reflect this change.

EXHIBIT INDEX

Exhibits


3.1		Second Restated and Amended Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the registrant’s Form 8-K filed January 14, 2004)

3.2		Amended and Restated Bylaws of MediaNews Group, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s June 30, 2004 Form 10-K)

4.1		Registration Rights Agreement dated May 20, 1994, between Affiliated Newspapers Investments, Inc. (the predecessor to the registrant) and BT Securities Corporation (incorporated by reference to Exhibit 4.3 to Form S-1/A of Affiliated Newspapers Investments, Inc., filed May 6, 1994 (File No. 33-75158))

4.2		Indenture dated as of November 25, 2003 between MediaNews Group, Inc., as Issuer, and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.4 to the registrant’s Form 8-K filed January 14, 2004)

4.3		Registration Rights Agreement dated as of November 25, 2003 between MediaNews Group, Inc., as Issuer, and Deutsche Bank Securities, Inc., Banc of America Securities LLC, Wachovia Capital Markets, LLC, BNY Capital Markets, Inc., Fleet Securities, Inc. and McDonald Investments, Inc., (incorporated by reference to Exhibit 4.2 to the registrant’s Form 10-Q for the period ended December 31, 2003)

4.4		Form of MediaNews Group, Inc.’s 6 7/8% Senior Subordinated Notes due 2013 (contained in the Indenture filed as Exhibit 4.4 to the registrant’s Form 8-K filed January 14, 2004)

4.5		Indenture dated as of January 26, 2004 between MediaNews Group, Inc., as Issuer, and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.4 to the registrant’s Form 10-Q for the period ended December 31, 2003)

4.6		Registration Rights Agreement dated as of January 26, 2004 between MediaNews Group, Inc., as Issuer, and Deutsche Bank Securities Inc., Banc of America Securities LLC, Wachovia Capital Markets, LLC, Credit Lyonnais Securities (USA) Inc., and Stephens Inc. (incorporated by reference to Exhibit 4.5 to the registrant’s Form 10-Q for the period ended December 31, 2003)

4.7		Form of MediaNews Group, Inc.’s 6 3/8% Senior Subordinated Notes due 2014 (contained in the Indenture filed as Exhibit 4.5)

10.1		Stock Purchase Agreement dated January 4, 2005, by and among MediaNews Group, Inc., as purchasers, and Diversified Suburban Newspapers, Inc., as sellers

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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