JOURNAL REGISTER CO, 424B1, 1997-05-08

JOURNAL REGISTER CO
424B1, 1997-05-08
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE>
FILED PURSUANT TO RULE 424(B)(1)
REGISTRATION NO. 333-23425
PROSPECTUS
9,375,000 SHARES

[LOGO]
COMMON STOCK
-----------------

OF THE 9,375,000 SHARES OF COMMON STOCK BEING OFFERED, 7,500,000 SHARES ARE
BEING OFFERED INITIALLY IN THE
UNITED STATES AND CANADA BY THE U.S. UNDERWRITERS AND 1,875,000 SHARES ARE
BEING OFFERED INITIALLY OUTSIDE THE UNITED STATES AND CANADA BY THE
INTERNATIONAL UNDERWRITERS. SEE "UNDERWRITERS." ALL OF THE SHARES OF COMMON
STOCK OFFERED HEREBY ARE BEING SOLD BY THE COMPANY. PRIOR TO THE
OFFERINGS, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK OF THE
COMPANY. UPON COMPLETION OF THE OFFERINGS AND ASSUMING ISSUANCE OF THE
BONUS SHARES DESCRIBED HEREIN, CERTAIN AFFILIATES OF E.M. WARBURG,
PINCUS & CO., LLC WILL OWN APPROXIMATELY 78.2% OF THE SHARES OF COMMON
STOCK THEN OUTSTANDING. APPROXIMATELY $34.5 MILLION OF THE $119.5
MILLION NET PROCEEDS TO THE COMPANY OF THE OFFERINGS WILL BE
USED TO REPAY INDEBTEDNESS OWED TO AFFILIATES OF E.M. WARBURG,
PINCUS & CO., LLC.
SEE "UNDERWRITERS" FOR A DISCUSSION OF THE FACTORS CONSIDERED IN
DETERMINING THE INITIAL PUBLIC OFFERING PRICE.

- -------------------
THE COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE,
SUBJECT TO OFFICIAL NOTICE OF ISSUANCE, UNDER THE SYMBOL "JRC."
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE $14 A SHARE
-------------------

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
------------------ ------------------ ------------------
<S> <C> <C> <C>
PER SHARE................................................ $14.00 $.88 $13.12
TOTAL(3)................................................. $131,250,000 $8,250,000 $123,000,000
</TABLE>

(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $3.5
MILLION. APPROXIMATELY $34.5 MILLION OF THE PROCEEDS TO COMPANY WILL BE USED
TO REPAY INDEBTEDNESS OWED TO WARBURG, PINCUS.

(3) WARBURG, PINCUS CAPITAL PARTNERS, L.P. ("WPCP"), AN AFFILIATE OF E.M.
WARBURG, PINCUS & CO., LLC, HAS GRANTED TO THE UNDERWRITERS AN OPTION,
EXERCISABLE WITHIN 30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN
AGGREGATE OF 1,406,250 ADDITIONAL SHARES OF COMMON STOCK AT THE PRICE TO
PUBLIC LESS UNDERWRITING DISCOUNTS AND COMMISSIONS FOR THE PURPOSE OF
COVERING OVER-ALLOTMENTS, IF ANY. IF THE UNDERWRITERS EXERCISE SUCH OPTION
IN FULL, THE TOTAL PRICE TO PUBLIC, UNDERWRITING DISCOUNTS AND COMMISSIONS,
PROCEEDS TO COMPANY AND PROCEEDS TO WPCP WILL BE $150,937,500, $9,487,500,
$123,000,000, AND $18,450,000, RESPECTIVELY. SEE "UNDERWRITERS" AND SEE
NOTE (1) ABOVE.
------------------------

THE SHARES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY
THE UNDERWRITERS NAMED HEREIN AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS
BY WILLKIE FARR & GALLAGHER, COUNSEL FOR THE UNDERWRITERS. IT IS EXPECTED THAT
DELIVERY OF THE SHARES WILL BE MADE ON OR ABOUT MAY 13, 1997 AT THE OFFICE OF
MORGAN STANLEY & CO. INCORPORATED, NEW YORK, N.Y., AGAINST PAYMENT THEREFOR IN
IMMEDIATELY AVAILABLE FUNDS.

-----------------
MORGAN STANLEY & CO.
INCORPORATED

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MERRILL LYNCH & CO.

BEAR, STEARNS & CO. INC.
<PAGE>
CHASE SECURITIES INC.
MAY 7, 1997
<PAGE>
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE COMMON STOCK OFFERED IN THE OFFERINGS, NOR DOES
IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OFFERED IN THE OFFERINGS TO ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE IN THE OFFERINGS SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.

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

Until June 1, 1997 (25 days after the date of this Prospectus), all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to deliver
a Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

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

<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>

Prospectus Summary.................................................................... 4
Risk Factors.......................................................................... 12
The Company........................................................................... 18
Use of Proceeds....................................................................... 19
Dividend Policy....................................................................... 19
Dilution.............................................................................. 20
Capitalization........................................................................ 21
Selected Combined Financial and Operating Data........................................ 22
Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 24
Business.............................................................................. 35
Management............................................................................ 50
Certain Transactions.................................................................. 59
Principal and Selling Stockholders.................................................... 60
Description of Capital Stock.......................................................... 62
Shares Eligible for Future Sale....................................................... 65
Underwriters.......................................................................... 66
Legal Matters......................................................................... 69
Experts............................................................................... 69
Additional Information................................................................ 70
Forward-Looking Statements............................................................ 70
Index to Financial Statements......................................................... F-1
</TABLE>

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

The Company intends to furnish to its stockholders annual reports containing
financial statements audited by an independent public accounting firm and
quarterly reports for the first three quarters of each fiscal year containing
interim unaudited financial information.

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

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERINGS
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."

3
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION, INCLUDING "RISK FACTORS" AND
THE HISTORICAL COMBINED FINANCIAL STATEMENTS AND NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. EXCEPT AS OTHERWISE INDICATED HEREIN, THE
INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITERS'
OVER-ALLOTMENT OPTION. EXCEPT AS OTHERWISE INDICATED HEREIN, ALL PRO FORMA
INFORMATION HAS BEEN PREPARED TO GIVE EFFECT TO THE CONVERSION OF THE COMPANY
FROM A LIMITED LIABILITY COMPANY TO A CORPORATION AND THE CONTRIBUTION OF AN
AFFILIATED ENTITY TO THE COMPANY AS IF SUCH TRANSACTIONS HAD OCCURRED AS OF
DECEMBER 31, 1996. PRO FORMA NET INCOME, AS ADJUSTED, GIVES EFFECT TO THE
DECREASE IN INTEREST EXPENSE, NET OF TAXES, ATTRIBUTABLE TO THE APPLICATION OF
THE NET PROCEEDS FROM THE OFFERINGS, AND TO THE MANAGEMENT BONUSES (AS DEFINED
HEREIN). UNLESS THE CONTEXT INDICATES OR REQUIRES OTHERWISE, AS USED IN THIS
PROSPECTUS, THE "COMPANY" MEANS JOURNAL REGISTER COMPANY AND ALL OF ITS
SUBSIDIARIES AND THEIR RESPECTIVE PREDECESSORS. "COMMON STOCK" MEANS THE
COMPANY'S COMMON STOCK, PAR VALUE $.01 PER SHARE. UNLESS OTHERWISE INDICATED,
INDUSTRY DATA CONTAINED HEREIN ARE DERIVED FROM PUBLICLY AVAILABLE INDUSTRY
JOURNALS, REPORTS AND OTHER PUBLICLY AVAILABLE SOURCES, WHICH THE COMPANY HAS
NOT INDEPENDENTLY VERIFIED AND WHICH THE COMPANY BELIEVES TO BE RELIABLE, AND
WHERE SUCH SOURCES WERE NOT AVAILABLE, FROM COMPANY ESTIMATES, WHICH THE COMPANY
BELIEVES TO BE REASONABLE, BUT WHICH CANNOT BE INDEPENDENTLY VERIFIED. DAILY AND
SUNDAY CIRCULATION DATA CONTAINED HEREIN ARE AVERAGES FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1996 ACCORDING TO THE AUDIT BUREAU OF CIRCULATIONS ("ABC") FAS-FAX
REPORT. ALL POPULATION AND HOUSEHOLD INCOME DATA CONTAINED HEREIN ARE AS OF 1996
AND WERE OBTAINED FROM EQUIFAX MDS, 1996. EBITDA IS DEFINED BY THE COMPANY AS
OPERATING INCOME (LOSS) PLUS DEPRECIATION, AMORTIZATION AND OTHER NON-CASH
CHARGES. EBITDA IS NOT INTENDED TO REPRESENT CASH FLOW FROM OPERATIONS AND
SHOULD NOT BE CONSIDERED AS AN ALTERNATIVE TO OPERATING OR NET INCOME COMPUTED
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"), AS AN
INDICATOR OF THE COMPANY'S OPERATING PERFORMANCE, AS AN ALTERNATIVE TO CASH FLOW
FROM OPERATING ACTIVITIES (AS DETERMINED IN ACCORDANCE WITH GAAP) OR AS A
MEASURE OF LIQUIDITY. THE COMPANY BELIEVES THAT EBITDA IS A STANDARD MEASURE
COMMONLY REPORTED AND WIDELY USED BY ANALYSTS, INVESTORS AND OTHER INTERESTED
PARTIES IN THE MEDIA INDUSTRY. HOWEVER, NOT ALL COMPANIES CALCULATE EBITDA USING
THE SAME METHODS; THEREFORE, THE EBITDA FIGURES SET FORTH HEREIN MAY NOT BE
COMPARABLE TO EBITDA REPORTED BY OTHER COMPANIES.

THE COMPANY

Journal Register Company is a leading U.S. newspaper publisher, with total
paid daily circulation of approximately 556,000 and total non-daily distribution
of approximately 2.7 million. The Company owns and operates 18 daily newspapers
and 118 non-daily publications strategically clustered in five geographic areas:
Connecticut; Ohio; Philadelphia and its surrounding areas; the greater St. Louis
area; and central New England. The Company's newspapers are characterized by an
intense focus on coverage of local news and sports and offer compelling graphic
design in colorful, reader-friendly packages.

Since 1993, the Company has successfully completed seven strategic
acquisitions, acquiring six daily newspapers, 52 non-daily publications and one
commercial printing company. The Company has generally increased the revenues
and significantly increased the cash flow and profitability of its acquired
newspapers. For the fiscal year ended December 31, 1996, the Company generated
revenues of $351.1 million, EBITDA of $119.4 million, net income of $28.1
million and pro forma net income, as adjusted, of $35.6 million. In 1996, the
Company's EBITDA as a percentage of revenues ("EBITDA Margin") was approximately
34%, representing the sixth consecutive year of improvement in its EBITDA
Margin. From 1992 through 1996, the Company recorded compound annual growth in
revenues and EBITDA of approximately 8% and 12%, respectively. The Company has
achieved this growth through a combination of expanding revenues in existing
geographic areas, strategic acquisitions and implementing cost controls and
ongoing expense reduction efforts at existing and acquired newspapers.

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

4
<PAGE>
politics, entertainment and culture. The Company maintains high product quality
standards, using extensive process color and compelling graphic design to
attract new readers and to more fully engage existing readers. The Company's
newspapers typically are produced using advanced prepress pagination technology
and are printed on efficient, high-speed presses.

The Company's revenues are derived from advertising (approximately 73% of
1996 revenues), paid circulation (23%), and commercial printing and other (4%).
The Company's advertiser base is predominantly local. The Company's newspapers
seek to produce desirable results for local advertisers by targeting readers
based on certain geographic and demographic characteristics. The Company seeks
to increase readership, and thereby generate traffic for its advertisers, by
focusing on high product quality, local content and creative and interactive
promotions. The Company promotes single copy sales of its newspapers because it
believes that such sales have higher readership than subscription sales, and
that single copy readers tend to be more active consumers of goods and services,
as indicated in a recent Newspaper Association of America ("NAA") study. Single
copy sales also tend to generate higher profits than subscription sales, as
single copy sales generally have higher per unit prices and lower associated
distribution costs. Subscription sales, which provide readers with the
convenience of home delivery, are an important component of the Company's
circulation base. The Company also publishes numerous special sections and niche
and special interest publications. Such publications tend to increase readership
within targeted demographic groups and geographic areas. The Company believes
that as a result of these strategies, its newspapers represent an attractive and
cost-effective medium for its readers and advertisers.

The Company's advertising revenues in 1996 were derived primarily from a
broad group of local retailers (approximately 58%) and classified advertisers
(approximately 38%). No advertiser accounted for more than 2% of the Company's
1996 advertising revenues. The Company believes that because its newspapers rely
on a broad base of local retail and local classified advertising rather than
more volatile national and major account advertising, its advertising revenues
tend to be relatively stable.

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

STRATEGY

The Company's objective is to continue its growth in revenues, cash flow,
profitability and net income. The principal elements of the Company's strategy
are to: (i) expand advertising revenues and readership; (ii) grow by
acquisition; (iii) capture synergies from geographic clustering; and (iv)
implement consistent operating policies and standards.

- EXPAND ADVERTISING REVENUES AND READERSHIP. The Company focuses on
increasing advertising and circulation revenues and expanding readership
at its existing and newly acquired properties. The Company's expansion
strategy includes, among other things, cross-selling advertising space
among publications, developing creative and interactive promotional
campaigns, launching new products and increasing its on-line presence.

- GROW BY ACQUISITION. Since 1993, the Company has completed seven strategic
acquisitions and has generally increased the revenues and significantly
increased the cash flow and profitability of its acquired newspapers. The
Company seeks to acquire publications located within its existing
geographic clusters. However, the Company may acquire publications not
located within existing clusters, but which, in turn, could form the bases
of new clusters. Following the acquisition of a publication, the Company
seeks to implement improvements quickly and efficiently. Typically, these
improvements are aimed at increasing readership, enhancing advertising and
circulation revenues and reducing expenses by implementing strategies
similar to those in use at the Company's existing properties. The Company
believes that there are sufficient potential acquisition candidates to
justify the continued pursuit of its acquisition strategy.

5
<PAGE>
Historically, the Company has financed acquisitions through cash on hand
and borrowings and anticipates that it will finance future acquisitions
through cash on hand, borrowings and/or issuances of capital stock. The
Credit Agreement contains certain restrictions on sources of financing for
acquisitions. In addition, the financial covenants contained in the Credit
Agreement may limit the Company's ability to make acquisitions. See "Risk
Factors--Acquisition Strategy" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations-- Liquidity and Capital
Resources."

- CAPTURE SYNERGIES FROM GEOGRAPHIC CLUSTERING. The Company's strategy of
clustering newspapers and other operations has resulted in significant
synergies and cost savings within each cluster, including cross-selling of
advertising, centralized news-gathering and consolidation of certain
production functions, primarily printing. Such synergies and cost savings
have resulted in the cost effective introduction of new products and
services, improved printing quality, expanded paging and improved
distribution.

- IMPLEMENT CONSISTENT OPERATING POLICIES AND STANDARDS. The Company has
developed certain operating policies and standards which it believes have
resulted in significant improvements in the cash flow and profitability of
existing and acquired newspapers. These policies and standards include
specific guidelines regarding, among other things, local content, product
quality, distribution and customer service, marketing and promotion,
financial controls, centralized purchasing and community involvement.

6
<PAGE>

The following table sets forth information regarding the Company's
newspapers:
<TABLE>
<CAPTION>
1996 1995
------------------------------------- -----------
DAILY SUNDAY NON- DAILY DAILY
YEAR YEAR CIRCU- CIRCU- DISTRI- CIRCU-
PUBLICATION ORIGINATED(1) ACQUIRED LOCATION LATION(2) LATION(2) BUTION(3) LATION(2)
- ------------------- ----------------- ------------- ----------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONNECTICUT
NEW HAVEN
REGISTER....... 1755 1989 New Haven 100,102 116,936 100,226
THE HERALD....... 1881 1995 New Britain 28,061 56,370(4)
THE BRISTOL
PRESS.......... 1871 1994 Bristol 18,238 (4) 20,036
THE REGISTER
CITIZEN........ 1889 1993 Torrington 13,601 12,871 14,857
THE MIDDLETOWN
PRESS.......... 1884 1995 Middletown 12,111 (4)
Non-Daily
Distribution... 675,010

OHIO
THE NEWS-HERALD.. 1878 1987 Lake County 51,752 64,349 53,914
THE MORNING
JOURNAL........ 1921 1987 Lorain 41,272 46,136 43,560
THE TIMES
REPORTER....... 1903 1987 Dover-New 24,316 26,513 25,829
Philadelphia
Non-Daily
Distribution... 54,651

PHILADELPHIA AND
SURROUNDING AREAS
DAILY LOCAL
NEWS........... 1872 1986 West Chester, PA 34,457 32,582 35,201
THE TIMES
HERALD......... 1799 1993 Norristown, PA 25,365 21,583 26,041
THE PHOENIX...... 1888 1986 Phoenixville, PA 4,681 4,841
THE TRENTONIAN... 1945 1985 Trenton, NJ 61,678 48,468 72,460
Non-Daily
Distribution... 164,817

GREATER ST. LOUIS
AREA
Suburban
Newspapers
of Greater St.
Louis
73 editions of
40 JOURNALS.... 1922 1984 St. Louis, MO 1,616,592
THE TELEGRAPH.... 1836 1985 Alton, IL 29,812 32,143 32,000 31,325

CENTRAL NEW ENGLAND
THE HERALD NEWS.. 1872 1985 Fall River, MA 30,319 32,558 31,827
TAUNTON DAILY
GAZETTE........ 1848 1996 Taunton, MA 15,270
THE RECORD....... 1896 1987 Troy, NY 27,216 31,003 30,012
THE CALL......... 1892 1984 Woonsocket, RI 19,807 19,485 22,877
THE TIMES........ 1885 1984 Pawtucket, RI 18,098 20,680
Non-Daily
Distribution... 153,036
----------- ----------- ----------- -----------
TOTALS............. 556,156 540,997 2,696,106 533,686
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

<CAPTION>
1994
-------------------------------------
SUNDAY NON- DAILY DAILY SUNDAY NON- DAILY
CIRCU- DISTRI- CIRCU- CIRCU- DISTRI-
PUBLICATION LATION(2) BUTION(3) LATION(2) LATION(2) BUTION(3)
- ------------------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
CONNECTICUT
NEW HAVEN
REGISTER....... 122,256 100,160 124,177
THE HERALD.......
THE BRISTOL
PRESS..........
THE REGISTER
CITIZEN........ 13,936
THE MIDDLETOWN
PRESS..........
Non-Daily
Distribution...
OHIO
THE NEWS-HERALD.. 65,912 56,388 67,790
THE MORNING
JOURNAL........ 47,275 44,228 48,140
THE TIMES
REPORTER....... 28,412 26,202 29,433

Non-Daily
Distribution...
PHILADELPHIA AND
SURROUNDING AREAS
DAILY LOCAL
NEWS........... 33,298 33,530 33,360
THE TIMES
HERALD......... 22,512 27,915 24,208
THE PHOENIX...... 4,975
THE TRENTONIAN... 57,164 75,437 61,482
Non-Daily
Distribution... 95,591 87,606
GREATER ST. LOUIS
AREA
Suburban
Newspapers
of Greater St.
Louis
73 editions of
40 JOURNALS.... 1,596,601 1,603,132
THE TELEGRAPH.... 33,228 33,327 35,122
CENTRAL NEW ENGLAND
THE HERALD NEWS.. 34,924 33,308 36,539
TAUNTON DAILY
GAZETTE........
THE RECORD....... 33,011 31,533 34,621
THE CALL......... 22,334 24,957 24,619
THE TIMES........ 23,088
Non-Daily
Distribution...
--------- ----------- ----------- ----------- -----------
TOTALS............. 514,262 1,699,266 515,048 519,491 1,698,179
--------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- -----------
</TABLE>

7
<PAGE>
- ------------------------

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

(2) Circulation averages are for the six months ended September 30, 1996, 1995
and 1994 according to the ABC Fas-Fax Report, and circulation averages are
for publications owned by the Company for a full year as of such dates,
other than with respect to the TAUNTON DAILY GAZETTE.

The Company provides the circulation figures set forth in the table on the
previous page and elsewhere in this Prospectus because newspaper circulation
is a traditional statistic provided by newspaper companies as descriptive of
their respective newspapers. The Company does not view circulation as a
primary indicator of operating performance or manage its business to
maximize the circulation of its individual newspapers. See "Selected
Combined Financial and Operating Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Results of
Operations," "Business--Strategy--Expand Advertising Revenues and
Readership" and "Business--Circulation."

(3) Non-daily distribution reflects average distribution for December 1996, 1995
and 1994, as applicable, except as otherwise noted in "Business--Overview of
Operations." Non-daily distribution includes both paid and free
distribution. Non-daily distribution for 1995 and 1994 excludes distribution
of total market coverage publications.

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

BACKGROUND

Affiliates of E.M. Warburg, Pincus & Co., LLC (collectively, "Warburg,
Pincus") have owned the majority of the equity securities of the Company and its
predecessors since 1983. Since 1990, Warburg, Pincus has owned substantially all
of the equity securities of the Company. Warburg, Pincus is a specialized
financial services organization which manages approximately $7.0 billion of
investments in its venture banking activities. Upon completion of the Offerings
and assuming issuance of the Bonus Shares, Warburg, Pincus will own
approximately 78.2% of the Common Stock then outstanding. Warburg, Pincus has
agreed with the Company that, following consummation of the Offerings and with
respect to any matter brought to a stockholder vote, Warburg, Pincus will vote
in its own discretion shares representing no more than 50% of the voting power
of the Company's shares entitled to vote on the applicable matter. The shares
owned by Warburg, Pincus which represent in excess of such 50% will be voted in
the same proportion as the shares voted by the other stockholders on the
applicable matter.

In 1997, the Company was converted from a limited liability company to a
Delaware corporation in connection with the Offerings. The structure of the
Company as a corporation is not expected to cause the financial condition and
operations of the Company to differ materially from its operations as a limited
liability company.

8
<PAGE>
THE OFFERINGS

The offering of 7,500,000 shares of Common Stock initially being offered in
the United States and Canada (the "U.S. Offering") and the offering of 1,875,000
shares of Common Stock initially being offered in a concurrent international
offering outside the United States and Canada (the "International Offering") are
collectively referred to as the "Offerings." The closing of each of the
Offerings is conditioned upon the closing of the other Offering.

<TABLE>
<S> <C>
Common Stock offered

United States Offering..................... 7,500,000 shares

International Offering..................... 1,875,000 shares

Total.................................... 9,375,000 shares(1)

Common Stock to be outstanding after the
Offerings.................................. 48,437,500 shares(2)

New York Stock Exchange symbol............... JRC

Use of Proceeds.............................. For repayment of outstanding indebtedness.
Approximately $34.5 million will be used to
repay indebtedness (including accrued
interest) owed to Warburg, Pincus. See "Use
of Proceeds."
</TABLE>

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

(1) Assumes the Underwriters' over-allotment option is not exercised. If such
over-allotment is exercised, up to an additional 1,406,250 shares will be
sold by Warburg, Pincus Capital Partners, L.P. ("WPCP"), an affiliate of
E.M. Warburg, Pincus & Co., LLC, in the Offerings.

(2) Includes the Bonus Shares (as defined herein). Excludes 4,843,750 shares of
Common Stock reserved for issuance under the Company's 1997 Stock Incentive
Plan (the "1997 Plan"), of which options for 968,750 shares with an exercise
price per share equal to the Price to Public have been granted or will be
issued following completion of the Offerings and of which options to
purchase 968,750 shares with an exercise price per share equal to 150% of
the Price to Public have been granted or will be issued following completion
of the Offerings. See "Management--Compensation Pursuant to Plans--1997
Stock Incentive Plan."

RISK FACTORS

In addition to the other information contained in this Prospectus, the
discussion of risk factors, which begins on page 12 hereof, should be considered
carefully in evaluating an investment in the Common Stock. The risks of
investing in the Common Stock include the following factors: newspaper industry
competition, dependence on local economies, fluctuation of quarterly results,
the Company's acquisition strategy, the price and availability of newsprint, the
Company's indebtedness, the holding company structure, the stockholders'
deficit, the expected charge to second quarter earnings, environmental matters,
potential litigation exposure, influence by existing stockholders, anti-takeover
effect of certain certificate of incorporation and by-laws provisions, absence
of prior public market and possible volatility of stock price, shares eligible
for future sale and dilution.

9
<PAGE>
SUMMARY COMBINED FINANCIAL AND OPERATING DATA

The following summary combined data (except number of newspapers and per
share amounts) for (i) the combined balance sheets of the Company as of December
31, 1992, 1993 and 1994 and the related combined statements of operations and
cash flows for each of the two years in the period ended December 31, 1993 have
been derived from unaudited financial statements which include audited financial
statements of the Company's material subsidiaries, (ii) the combined balance
sheets of the Company as of December 31, 1995 and 1996 and the related combined
statements of operations and cash flows for each of the three years in the
period ended December 31, 1996 have been derived from the audited financial
statements of the Company, and (iii) the combined balance sheet as of March 31,
1997 and the related combined statements of operations and cash flows for the
three months ended March 31, 1996 and 1997 have been derived from the unaudited
financial statements of the Company. In the opinion of management, the unaudited
financial statements include all necessary adjustments (consisting of normal,
recurring accruals) for a fair presentation of the financial position, results
of operations and cash flows for the periods presented. The summary combined
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Combined
Financial Statements and Notes thereto.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT NUMBER OF NEWSPAPERS AND PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Revenues:
Advertising................................. $ 193,064 $ 201,929 $ 224,071 $ 249,534 $ 256,971 $ 58,668 $ 60,419
Circulation................................. 54,607 58,230 65,204 73,797 79,776 19,739 19,830
--------- --------- --------- --------- --------- --------- ---------
Newspaper revenues............................ 247,671 260,159 289,275 323,331 336,747 78,407 80,249
Commercial printing and other................. 13,150 11,710 10,875 15,626 14,373 3,802 2,791
--------- --------- --------- --------- --------- --------- ---------
260,821 271,869 300,150 338,957 351,120 82,209 83,040
Operating expenses:
Salaries and employee benefits.............. 95,522 96,252 105,607 110,651 111,626 28,129 28,663
Newsprint, ink and printing charges......... 32,964 35,285 36,481 48,243 50,110 13,190 9,130
Selling, general and administrative......... 25,770 24,017 25,312 28,678 30,993 7,619 7,641
Depreciation and amortization............... 33,812 24,097 18,605 19,178 20,525 4,956 5,418
Other....................................... 30,622 30,757 34,187 38,743 38,976 9,625 9,543
Unusual items(1)............................ 119,583 241,969 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
338,273 452,377 220,192 245,493 252,230 63,519 60,395
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss)....................... (77,452) (180,508) 79,958 93,464 98,890 18,690 22,645
Net interest and other expense................ (60,876) (55,295) (42,049) (64,028) (56,472) (15,743) (12,989)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before provision for income
taxes, extraordinary items and cumulative
effect of accounting changes................ (138,328) (235,803) 37,909 29,436 42,418 2,947 9,656
Provision for income taxes (benefit).......... (3,726) 3,067 4,126 2,653 14,309 994 3,932
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary items and
cumulative effect of accounting changes..... (134,602) (238,870) 33,783 26,783 28,109 1,953 5,724
Extraordinary items and cumulative effect of
accounting changes(2)....................... 99,146 7,698 (13,100) -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)............................. $ (35,456) $(231,172) $ 20,683 $ 26,783 $ 28,109 $ 1,953 $ 5,724
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Pro forma net income per common share(3)...... -- -- -- -- $ .74 -- $ .15

OTHER DATA:
EBITDA(4)..................................... $ 75,943 $ 85,558 $ 98,563 $ 112,642 $ 119,415 $ 23,646 $ 28,063
EBITDA Margin................................. 29.1% 31.5% 32.8% 33.2% 34.0% 28.8% 33.8%
Capital expenditures.......................... $ 3,896 $ 12,457 $ 8,326 $ 4,859 $ 7,675 $ 1,616 $ 1,531
Net cash provided by operating activities..... 20,404 23,277 46,268 26,778 60,065 8,532 14,439
Net cash used in investing activities......... 3,298 54,995 22,614 50,557 25,700 1,613 1,193
Net cash (used in) provided by financing
activities.................................. (29,495) 32,055 (33,361) 24,384 (34,441) (9,804) (15,713)

Number of daily newspapers, end of period..... 13 15 16 17 18 17 18
Number of non-daily publications, end of
period...................................... 62 65 68 114 118 114 118
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
-----------------------------
PRO FORMA
PRO FORMA(5) AS ADJUSTED(6)
------------- --------------

<S> <C> <C>
BALANCE SHEET DATA:
Total current assets.............................................................. $ 61,989 $ 73,385
Property, plant and equipment, net................................................ 89,331 89,331
Total assets...................................................................... 299,275 311,892
Total current liabilities, less current maturities of long-term debt.............. 38,175 38,175
Total debt, including current maturities.......................................... 639,119 532,194
Stockholders' deficit............................................................. (417,934) (301,392)
</TABLE>

10
<PAGE>
- ------------------------------

(1) As a result of the restructuring of the Company's debt in 1992 and 1993 and
management's assessment of certain of the Company's newspaper properties,
the Company reduced the carrying value of its intangible assets related to
prior acquisitions and reflected this charge as an unusual item in the
financial statements.

(2) Extraordinary items represent gains or losses related to debt
extinguishment. In 1992, a Plan of Reorganization of a subsidiary of the
Company was approved by the court. As a result, certain of that subsidiary's
obligations were discharged, and the Company recognized a gain on
extinguishment of debt of $113.9 million. In connection with certain
refinancings, the Company recognized a net gain of $7.7 million in 1993 and
a loss of $13.1 million in 1994 on extinguishment of debt. In 1992, the
Company incurred a charge of $14.8 million, which was classified as a
cumulative effect of accounting changes relating to the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" and Statement of Financial Accounting Standards No. 106, "Employer's
Accounting for Postretirement Benefits Other Than Pensions."

(3) The pro forma net income per common share was calculated reflecting the
37,962,500 shares which were issued prior to the Offerings but subsequent to
December 31, 1996. If effect were given to the issuance of the shares of
Common Stock in the Offerings and the Bonus Shares (as defined herein) and
to the net interest expense reduction related to the use of proceeds used to
reduce debt and additional debt to pay the cash portion of the Management
Bonuses, the pro forma net income per common share would decrease by less
than $.01 for the year end December 31, 1996 and would be the same for the
three month period ended March 31, 1997. See "The Company" and Notes 2 and
11 of "Notes to Combined Financial Statements."

(4) EBITDA is defined by the Company as operating income (loss) plus
depreciation, amortization and other non-cash charges. EBITDA is not
intended to represent cash flow from operations and should not be considered
as an alternative to operating or net income computed in accordance with
GAAP, as an indicator of the Company's operating performance, as an
alternative to cash flows from operating activities (as determined in
accordance with GAAP) or as a measure of liquidity. The Company believes
that EBITDA is a standard measure commonly reported and widely used by
analysts, investors and other interested parties in the media industry.
Accordingly, this information has been disclosed herein to permit a more
complete comparative analysis of the Company's operating performance
relative to other companies in the industry. However, not all companies
calculate EBITDA using the same methods; therefore, the EBITDA figures set
forth above may not be comparable to EBITDA reported by other companies.
Certain covenants contained in the Company's Credit Agreement are based upon
EBITDA. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 4 of "Notes to Combined Financial
Statements."

(5)Reflects the conversion of the Company from a limited liability company to a
Delaware corporation. As a result of such conversion, the membership
interests in the limited liability company were exchanged for shares of
Common Stock.

(6) Adjusted to give effect to the Offerings and the application of the net
proceeds therefrom. Also, reflects the charge for discontinuation of the
StarShare Plan (as defined herein) and for the Management Bonuses and
related incurrence of indebtedness. See "Risk Factors--Charge to Second
Quarter Earnings," "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Management Bonus Plan" and
"Management."

11
<PAGE>
RISK FACTORS

PRIOR TO MAKING AN INVESTMENT DECISION, PROSPECTIVE PURCHASERS SHOULD
CONSIDER CAREFULLY AND EVALUATE, IN ADDITION TO OTHER INFORMATION CONTAINED IN
THIS PROSPECTUS, THE FOLLOWING RISK FACTORS:

NEWSPAPER INDUSTRY COMPETITION

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

DEPENDENCE ON LOCAL ECONOMIES

The Company's advertising revenues and, to a lesser extent, circulation
revenues are dependent on a variety of factors specific to the communities which
the Company's newspapers serve. These factors include, among others, the size
and demographic characteristics of the local population, local economic
conditions in general, and the related retail segments in particular, and local
weather conditions. If the local economy, prevailing retail environment or
weather conditions of the communities which the Company's newspapers serve were
to be adversely affected, there could be no assurance that the Company's
financial condition or results of operations would not be adversely affected.
For a discussion of recent population and household income trends in the areas
which are served by the Company's newspapers, see "Business--Overview of
Operations."

FLUCTUATION OF QUARTERLY RESULTS

Newspaper companies tend to follow a distinct and recurring seasonal
pattern. The first quarter of the year (January-March) tends to be the weakest
quarter because advertising volume is then at its lowest level. Correspondingly,
the fourth quarter (October-December) tends to be the strongest quarter, as it
includes heavy holiday season advertising. The Company expects that seasonal
fluctuations will continue to affect its results of operations in future
periods. Results of operations in any period should not be considered indicative
of the results to be expected for any future periods.

The following table sets forth certain unaudited quarterly financial data,
for each of the past nine quarters ended March 31, 1997. Operating results for
any quarter are not necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
1995 1996 1997
------------------------------------------ ------------------------------------------ ---------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR
--------- --------- --------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $ 73,101 $ 85,690 $ 87,002 $ 93,164 $ 82,209 $ 90,367 $ 86,630 $ 91,914 83,040
Operating income.............. 17,257 25,825 23,026 27,356 18,690 25,926 24,479 29,795 22,645
Net income.................... 2,415 9,639 6,387 8,342 1,953 7,967 6,855 11,334 5,724
EBITDA(1)..................... 21,690 30,447 27,962 32,543 23,646 31,228 29,416 35,125 28,063
EBITDA Margin................. 29.7% 35.5% 32.1% 34.9% 28.8% 34.6% 34.0% 38.2% 33.8%
</TABLE>

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

(1) See Note (4) to "Summary Combined Financial and Operating Data."

12
<PAGE>
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations-- Quarterly Results."

ACQUISITION STRATEGY

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

PRICE AND AVAILABILITY OF NEWSPRINT

The basic raw material for newspapers is newsprint. The Company's newsprint
consumption (excluding paper consumed in the Company's commercial printing
operations) totaled approximately $41 million in 1996, which was approximately
12% of the Company's newspaper revenues. In 1996, the Company consumed
approximately 61,000 metric tons of newsprint. The average price per metric ton
of newsprint based on East Coast transaction prices in 1995, 1996 and March 1997
was $668, $645 and $535, respectively, as reported by the trade publication PULP
AND PAPER WEEKLY. The Company has no long-term contracts to purchase newsprint.
Generally, the Company has in the past and currently purchases all of its
newsprint from two suppliers, Abitibi-Price Inc. and Kruger Inc. Historically,
the percentage of the Company's newsprint supplied by each of such suppliers has
varied. The Company believes that it would not be materially adversely effected
if it were no longer able to purchase its newsprint supply from its two current
suppliers and that, in such event, other newsprint suppliers would be readily
available to the Company. In the future, the Company may purchase newsprint from
other suppliers. The inability of the Company to obtain an adequate supply of
newsprint in the future could have a material adverse effect on the financial
condition or results of operations of the Company. Historically, the price of
newsprint has been cyclical and volatile. In 1995 and 1996, the Company's
average cost of newsprint consumed reflected increases of approximately 34% and
13%, compared to the previous year, respectively. In December 1996, newsprint
suppliers announced a newsprint price increase planned to take effect in
February 1997; this increase was delayed. The initial announcements indicated
the increase would be $75 per metric ton. The Company has been informed by its
suppliers that they will implement some portion of the announced price increase.
The Company believes that if any price increase is sustained in the industry,
the Company will also be impacted by such increase. The Company is unable to
predict whether, or to what extent, any increase will be sustained. Significant
increases in newsprint costs could have a material adverse effect on the
financial condition or results of operations of the Company. The Company seeks
to manage the effects of increases in prices of newsprint through a combination
of, among other things, technology

13
<PAGE>
improvements, including web width reductions, inventory management and
advertising and circulation price increases. The Company also has reduced fringe
circulation in response to increased newsprint prices, as it is the Company's
experience that such circulation does not provide adequate response for
advertisers. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Overview--Operating Expenses" and "Business--Raw
Materials."

INDEBTEDNESS

The Company has a substantial amount of indebtedness. As of March 31, 1997,
after giving effect to the Offerings, the application of the net proceeds
therefrom and the payment of the Management Bonuses, the consolidated
indebtedness of the Company would have been approximately $532.2 million, which
represents a multiple of 4.3 times the Company's twelve months trailing EBITDA
of approximately $123.8 million. As of March 31, 1997, after giving effect to
the Offerings, the application of the net proceeds therefrom and the payment of
the Management Bonuses and the amount related to the discontinuation of the
StarShare Plan, the Company would have had a net stockholders' deficit of
approximately $301.4 million and a total capitalization of $230.8 million, and,
thus, the percentage of the Company's indebtedness to total capitalization would
have been 230.6%. The Company may incur additional indebtedness to fund
operations, capital expenditures or future acquisitions. See "-- Stockholders'
Deficit," "Use of Proceeds", "Capitalization," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Management Bonus Plan."

The Company believes that cash provided by operating activities will be
sufficient to fund its operations and to meet payment requirements under its
Senior Secured Term Loans (collectively, the "Term Loan") and Senior Secured
Revolving Credit Facility (the "Revolver," and together with the Term Loan, the
"Senior Facilities") under the Credit Agreement (as defined herein). However, a
decline in cash provided by operating activities, which could result from
factors beyond the Company's control, such as unfavorable economic conditions,
an overall decline in advertising expenditures or increased competition, could
impair the Company's ability to service its debt. The Credit Agreement requires
the maintenance of certain financial ratios and imposes certain operating and
financial restrictions on the Company which restrict, among other things, the
Company's ability to declare dividends, redeem stock, incur indebtedness, create
liens, sell assets, consummate mergers and make capital expenditures,
investments and acquisitions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
and Notes 4 and 11 of "Notes to Combined Financial Statements."

HOLDING COMPANY STRUCTURE

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

STOCKHOLDERS' DEFICIT

As of March 31, 1997, after giving effect to the Offerings, the application
of the net proceeds therefrom and the payment of the Management Bonuses and the
amount related to the discontinuation of

14
<PAGE>
the StarShare Plan, the stockholders' deficit of the Company would have been
approximately $301.4 million. There can be no assurance as to when or if such
deficit will be eliminated. The Company believes that the deficit does not have
a material adverse effect on its liquidity or financial condition. In each of
the financial periods covered by the Financial Statements, the stockholders'
deficit of the Company decreased as a result of increases in net income. The
stockholders' deficit increased in the period between December 31, 1993 and
December 31, 1994 due to a redemption of preferred stock, which involved a
charge of approximately $61.6 million. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Financial Statements."

CHARGE TO SECOND QUARTER EARNINGS

The Company expects to incur a charge to pre-tax earnings of approximately
$31.0 million in the second quarter of 1997. The charge consists of an amount
for the Management Bonuses and an amount for the discontinuation of the
StarShare Plan. The Management Bonuses are expected to account for approximately
$28.0 million of such charge, comprised of 1,100,000 shares of Common Stock (the
"Bonus Shares"), the per share value of which, upon award, was equal to the
Price to Public set forth on the cover page of this Prospectus (the "Price to
Public") of $14.00, plus a cash portion of approximately $12.6 million. The
Company expects that the cash portion of the Management Bonuses will be used to
satisfy recipients' tax obligations arising from the Management Bonuses. The
discontinuation of the StarShare Plan (as defined herein) will account for
approximately $3.0 million of such charge. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Management Bonus
Plan," "Management--Compensation Pursuant to Plans--Management Bonus Plan,"
"Management--Executive Compensation" and "Certain Transactions."

ENVIRONMENTAL MATTERS

The Company's operations are subject to federal, state and local
environmental laws and regulations pertaining to air and water quality, storage
tanks and the management and disposal of wastes at its facilities. To the best
of the Company's knowledge, its operations are in material compliance with
applicable environmental laws and regulations as currently interpreted. The
Company cannot predict with any certainty whether future events, such as changes
in existing laws and regulations or the discovery of conditions not currently
known to the Company, may give rise to additional costs which could be material.
Furthermore, actions by federal, state and local governments concerning
environmental matters could result in laws or regulations that could have a
material adverse effect on the financial condition or results of operations of
the Company. The Company is not aware of any pending legislation by federal,
state or local governments relating to environmental matters which, if enacted,
would reasonably be expected to have a material adverse effect on the financial
condition or results of operations of the Company. See "Business--Environmental
Matters."

POTENTIAL LITIGATION EXPOSURE

The Company and its subsidiaries are involved in a number of litigation
matters which have arisen in the ordinary course of business. The Company
believes that the outcome of these legal proceedings will not have a material
adverse effect on the Company's financial condition or results of operations.
For the periods covered by the Financial Statements contained herein, the
Company has not paid damages in connection with litigation matters that have had
a material adverse effect on the financial condition or results of operations of
the Company. See "Business--Legal Proceedings."

INFLUENCE BY EXISTING STOCKHOLDER

Upon completion of the Offerings and assuming issuance of the Bonus Shares,
Warburg, Pincus will beneficially own approximately 78.2% of the outstanding
shares of the Common Stock. Warburg, Pincus has agreed with the Company that,
following completion of the Offerings and with respect to any matter

15
<PAGE>
brought to a stockholder vote, Warburg, Pincus will vote in its own discretion
shares representing no more than 50% of the voting power of the Company's shares
entitled to vote on the applicable matter. The shares owned by Warburg, Pincus
which represent in excess of such 50% will be voted in the same proportion as
the shares voted by the other stockholders on the applicable matter.
Notwithstanding such agreement, it is probable that Warburg, Pincus will
continue to be able to elect the Company's Board of Directors (the "Board of
Directors") and take, or block, other corporate actions requiring stockholder
approval, as well as to dictate the direction and policies of the Company. The
concentration of ownership, whether or not the agreement is in effect, also
could delay, deter or prevent a sale of the Company or a majority of the
outstanding stock of the Company. The controlling stock ownership of the Company
by Warburg, Pincus could result in changes in the Company's structure, even if
not deemed to be in the best interest of the minority stockholders of the
Company. See "Principal and Selling Stockholders."

ANTI-TAKEOVER EFFECT OF CERTAIN CERTIFICATE
OF INCORPORATION AND BY-LAWS PROVISIONS

Certain provisions of the Company's Certificate of Incorporation (the
"Certificate") and By-laws (the "By-laws") may have the effect of delaying,
deterring or preventing a sale of the Company or a majority of the outstanding
stock of the Company. Such provisions may also render the removal of directors
and management more difficult. Specifically, the By-laws provide for a
classified Board of Directors serving staggered three-year terms, restrictions
on who may call a special meeting of stockholders, a prohibition on stockholder
action by written consent and certain advance notice requirements for
stockholder nominations of candidates for election to the Board of Directors and
certain other stockholder proposals. The Certificate does not include an
election to opt out of the Delaware anti-takeover statute. In addition, the
Certificate authorizes the issuance of preferred stock, par value $.01 per share
(the "Preferred Stock"), without stockholder approval and upon such terms as the
Board of Directors may determine. The issuance of Preferred Stock may also have
the effect of delaying, deterring or preventing a sale of the Company or a
majority of the outstanding stock of the Company. The rights of the holders of
Common Stock will be subject to, and may be adversely affected by, the rights of
holders of Preferred Stock that may be issued in the future. The Company has no
present plans to issue any shares of Preferred Stock. See "Description of
Capital Stock."

ABSENCE OF PRIOR PUBLIC MARKET;
POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offerings, there has been no public market for the Common
Stock. Although the Common Stock has been approved for listing on the New York
Stock Exchange, subject to official notice of issuance, there can be no
assurance that an active trading market for the Common Stock will develop or be
sustained following the Offerings or that the market price of the Common Stock
will not decline below the initial public offering price. The initial public
offering price was determined by negotiation between the Company and the
representatives of the Underwriters based upon several factors and may not be
indicative of future market prices. The price at which the Common Stock will
trade will depend upon a number of factors, some of which are beyond the
Company's control. Such factors include, but are not limited to, the Company's
historical and anticipated operating results, general market and economic
conditions, quarterly fluctuations in the Company's financial and operating
results, announcements by the Company or others and developments affecting the
Company, its publications, its advertisers, readers and suppliers, the markets
in which it competes or the newspaper industry generally. In addition, the stock
market has from time to time experienced extreme price and volume fluctuations.
These broad market fluctuations may have an adverse effect on the market price
of the Common Stock. See "Underwriters-- Pricing of the Offerings."

16
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Future sales of Common Stock by existing stockholders under Rule 144 ("Rule
144") of the Securities Act of 1933, as amended (the "Securities Act"), or
otherwise could have an adverse effect on the price of the Common Stock. The
shares of Common Stock sold in the Offerings will be eligible for immediate
resale, except to the extent acquired by "affiliates" of the Company, as such
term is defined in Rule 144. Additionally, the Bonus Shares and 37,962,500
shares of Common Stock will be eligible for sale in the public market pursuant
to Rule 144 or Rule 701 ("Rule 701") under the Securities Act, or otherwise, 180
days after the effective date of the Registration Statement of which this
Prospectus is a part upon expiration of lock-up agreements with the
Underwriters. Sales of such shares in the public market or the perception that
such sales may occur, could adversely affect the market price of the Common
Stock or impair the Company's ability to raise additional capital in the future
through the sale of equity securities. Any additional shares outstanding upon
completion of these Offerings will be eligible for sale pursuant to Rule 144
upon the expiration of the applicable holding period. Promptly after completion
of the Offerings, the Company has covenanted to file with the Securities and
Exchange Commission (the "Commission") a registration statement covering the
Bonus Shares and the shares of Common Stock underlying grants available under
the 1997 Plan. In addition, Warburg, Pincus and certain individuals
(collectively, the "Individuals") who, immediately prior to completion of the
Offerings, owned in the aggregate less than 1% of the shares of Common Stock
outstanding, have rights under certain circumstances to require the Company to
register a total of 37,962,500 shares of Common Stock, in certain cases, after
expiration of lock-up agreements. See "Management--Compensation Pursuant to
Plans," "Description of Capital Stock--Registration Rights," "Shares Eligible
for Future Sale" and "Underwriters."

DILUTION

Investors purchasing Common Stock in the Offerings will incur substantial
and immediate dilution in the amount of approximately $22.86 in net tangible
book value per share of Common Stock from the initial public offering price. See
"Dilution."

17
<PAGE>
THE COMPANY

The Company is a leading U.S. newspaper publisher, with total paid daily
circulation of approximately 556,000 and total non-daily distribution of
approximately 2.7 million. The Company owns and operates 18 daily newspapers and
118 non-daily publications strategically clustered in five geographic areas:
Connecticut; Ohio; Philadelphia and its surrounding areas; the greater St. Louis
area; and central New England. The Company's newspapers are characterized by an
intense focus on coverage of local news and sports and offer compelling graphic
design in colorful, reader-friendly packages.

Warburg, Pincus has owned the majority of the equity securities of the
Company and its predecessors since 1983. Since 1990, Warburg, Pincus has owned
substantially all of the equity securities of the Company. Upon completion of
the Offerings and assuming issuance of the Bonus Shares, Warburg, Pincus will
own approximately 78.2% of the Common Stock then outstanding.

Beginning in 1983, Warburg, Pincus acquired and owned newspaper publications
in partnership with the prior management of the Company's predecessors. In 1990,
Warburg, Pincus acquired substantially all of the equity securities of these
ventures, and such ventures have been operated by current management since such
time. In 1992 and 1993, certain of the Company's subsidiaries underwent certain
debt restructuring transactions. See Note 2 of "Selected Combined Financial and
Operating Data." In 1997, the Company was converted from a limited liability
company into a Delaware corporation in connection with the Offerings. See Note
11 of "Notes to Combined Financial Statements."

The Company's principal executive office is located at State Street Square,
50 West State Street, Trenton, New Jersey 08608-1298, and its telephone number
is (609) 396-2200. The Company's Internet address is
http://www.journalregister.com.

18
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of Common Stock in the
Offerings are estimated to be $119.5 million, after deducting underwriting
discounts and commissions and estimated offering expenses. The Company will not
receive any proceeds from the sale of Common Stock by WPCP if the Underwriters'
over-allotment option is exercised.

The Company intends to use the net proceeds of the Offerings to repay
indebtedness. Approximately $85.0 million of such proceeds will be used to repay
a portion of the amounts outstanding under the Term Loan and the Revolver, which
bear interest at floating rates which were each approximately 7.75% per annum
(as of January 1, 1997). The Term Loan has a final maturity of December 31,
2002, and all borrowings under the Revolver must be repaid by December 31, 2003.
Paydowns on the Revolver increase the availability thereof, subject to the
requirement that all borrowings must be repaid by December 31, 2003. In
connection with the Offerings, the Credit Agreement will be amended and
restated. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources." Approximately $34.5
million of the net proceeds will be used to retire all of the outstanding
principal amount of and accrued and unpaid interest on the Company's
Subordinated Notes due to Warburg, Pincus, which bear interest at a rate of
10.0% per annum and mature on June 30, 2002 (the "Subordinated Notes"). The
Company intends to use cash on hand and/or borrowings under the Revolver to fund
the cash portion of the Management Bonuses. The Management Bonuses will total
approximately $28.0 million, comprised of 1,100,000 Bonus Shares, valued, upon
award, at the Price to Public of $14.00 per share, plus a cash portion of
approximately $12.6 million. The Company expects that the cash portion of the
Management Bonuses will be used to satisfy recipients' tax obligations arising
from the Management Bonuses. See "Risk Factors--Charge to Second Quarter
Earnings," "Management-- Compensation Pursuant to Plans--Management Bonus Plan,"
"Certain Transactions" and Notes 4 and 11 of "Notes to Combined Financial
Statements."

DIVIDEND POLICY

The Company has not paid dividends on the Common Stock and does not
anticipate paying dividends on the Common Stock in the foreseeable future. The
Company intends to retain future earnings for reinvestment in the Company. In
addition, the Credit Agreement places limitations on the Company's ability to
pay dividends or make any other distributions on the Common Stock. See Note 4 of
"Notes to Combined Financial Statements." Any future determination as to the
payment of dividends will be subject to such prohibitions and limitations, will
be at the discretion of the Board of Directors and will depend on the Company's
results of operations, financial condition, capital requirements and other
factors deemed relevant by the Board of Directors. See "Risk Factors--Holding
Company Structure" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

19
<PAGE>
DILUTION

The pro forma net tangible book deficit of the Company as of March 31, 1997
was $545.6 million, or approximately $14.37 per share of Common Stock. Net
tangible book deficit per share represents the amount of total tangible assets
less total liabilities, as of March 31, 1997, divided by the aggregate number of
shares of Common Stock to be issued in connection with the conversion of the
Company from a limited liability company to a Delaware corporation. After giving
effect to the sale by the Company of the 9,375,000 shares of Common Stock in the
Offerings, payment of Management Bonuses including issuance of Bonus Shares and
the charge related to the discontinuation of the StarShare Plan, the net
tangible book deficit of the Company on March 31, 1997 would have been $429.0
million or $8.86 per share. This represents an immediate decrease in net
tangible book deficit of $5.51 per share of Common Stock to existing
stockholders and an immediate dilution of approximately $22.86 per share to new
investors purchasing shares in the Offerings. The following table illustrates
the per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share................................. $ 14.00
Net tangible book (deficit) per share before the Offerings............ $ (14.37)
Increase per share attributable to the Offerings...................... 5.51
---------
Net tangible book (deficit) per share after the Offerings............... (8.86)
---------
Dilution per share to new investors..................................... $ (22.86)
---------
---------
</TABLE>

The following table sets forth on a pro forma basis reflecting the
completion of the Offerings as of March 31, 1997, the number of shares of Common
Stock purchased from the Company, the total consideration paid to the Company
and the average price per share paid by existing stockholders and by the new
investors purchasing shares of Common Stock from the Company in the Offerings
(before deducting the underwriting discount and estimated offering expenses):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ----------- ---------- ----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C>
Existing stockholders................................. 37,962,500 78% $ 224,271 61% $ 5.91
New investors......................................... 9,375,000 20 131,250 35 $ 14.00
Management............................................ 1,100,000 2 15,400 4 $ 14.00
------------ ----- ---------- -----
Total................................................. 48,437,500 100% $ 370,921 100%
------------ ----- ---------- -----
------------ ----- ---------- -----
</TABLE>

The foregoing calculations reflect the issuance of the Bonus Shares to
certain management employees, assume no exercise of the Underwriters'
over-allotment option and exclude shares subject to options granted under the
1997 Plan that will be issued following completion of the Offerings. See
"Management--Compensation Pursuant to Plans--1997 Stock Incentive Plan."

20
<PAGE>
CAPITALIZATION

The following table sets forth the historical, pro forma and pro forma as
adjusted capitalization of the Company as of March 31, 1997. The pro forma
capitalization reflects the conversion of the Company from a limited liability
company to a Delaware corporation. The pro forma as adjusted capitalization
reflects the Offerings, and the application of the estimated net proceeds
therefrom, the discontinuation of the StarShare Plan and the payment of the
Management Bonuses. See "The Company," "Use of Proceeds" and
"Management--Compensation Pursuant to Plans--Management Bonus Plan." This table
should be read in conjunction with the financial statements and notes thereto
included elsewhere in this Prospectus. See "Combined Financial Statements" and
Notes thereto.
<TABLE>
<CAPTION>
MARCH 31, 1997
-----------------------------------
<S> <C> <C> <C>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ---------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt (including current maturities):
Term Loan................................................................. $ 487,995 $ 487,995 $ 397,995
Revolver.................................................................. 116,000 116,000 133,216
Subordinated Notes and accrued interest due to stockholders............... 34,141 34,141 --
Other debt................................................................ 983 983 983
---------- ---------- -----------
Total debt.............................................................. 639,119 639,119 532,194

Stockholders' equity (deficit):
Membership interests...................................................... 2,104 -- --
Common stock, par value $.01 per share, 300,000,000 shares authorized,
37,962,500 shares issued and outstanding pro forma and 48,437,500 shares
issued and outstanding as adjusted(1)................................... -- 380 484
Additional paid-in capital................................................ 222,167 223,891 358,712
Accumulated deficit....................................................... (642,205) (642,205) (660,588)
---------- ---------- -----------
Total stockholders' deficit............................................. (417,934) (417,934) (301,392)
---------- ---------- -----------
Total capitalization........................................................ $ 221,185 $ 221,185 $ 230,802
---------- ---------- -----------
---------- ---------- -----------
</TABLE>

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

(1) Includes the issuance of the Bonus Shares. Excludes 4,843,750 shares of
Common Stock reserved for issuance under the 1997 Plan, of which options for
1,937,500 shares have been granted or will be issued following completion of
the Offerings. See "Management--Compensation Pursuant to Plans."

21
<PAGE>
SELECTED COMBINED FINANCIAL AND OPERATING DATA

The following summary combined data (except number of newspapers and per
share amounts) for (i) the combined balance sheets of the Company as of December
31, 1992, 1993 and 1994 and the related combined statements of operations and
cash flows for each of the two years in the period ended December 31, 1993 have
been derived from unaudited financial statements which include audited financial
statements of the Company's material subsidiaries, (ii) the combined balance
sheets of the Company as of December 31, 1995 and 1996 and the related combined
statements of operations and cash flows for each of the three years in the
period ended December 31, 1996 have been derived from the audited financial
statements of the Company, and (iii) the combined balance sheet as of March 31,
1997 and the related combined statement of operations and cash flows for the
three months ended March 31, 1996 and 1997 have been derived from the unaudited
financial statements of the Company. In the opinion of management, the unaudited
financial statements include all necessary adjustments (consisting of normal,
recurring accruals) for a fair presentation of the financial position, results
of operations and cash flows for the periods presented. The selected combined
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Combined
Financial Statements and Notes thereto.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT NUMBER OF NEWSPAPERS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Advertising.............................. $ 193,064 $ 201,929 $ 224,071 $ 249,534 $ 256,971 $ 58,668 $ 60,419
Circulation.............................. 54,607 58,230 65,204 73,797 79,776 19,739 19,830
--------- --------- --------- --------- --------- --------- ---------
Newspaper revenues......................... 247,671 260,159 289,275 323,331 336,747 78,407 80,249
Commercial printing and other.............. 13,150 11,710 10,875 15,626 14,373 3,802 2,791
--------- --------- --------- --------- --------- --------- ---------
260,821 271,869 300,150 338,957 351,120 82,209 83,040
Operating expenses:
Salaries and employee benefits........... 95,522 96,252 105,607 110,651 111,626 28,129 28,663
Newsprint, ink and printing charges...... 32,964 35,285 36,481 48,243 50,110 13,190 9,130
Selling, general and administrative...... 25,770 24,017 25,312 28,678 30,993 7,619 7,641
Depreciation and amortization............ 33,812 24,097 18,605 19,178 20,525 4,956 5,418
Other.................................... 30,622 30,757 34,187 38,743 38,976 9,625 9,543
Unusual items(1)......................... 119,583 241,969 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
338,273 452,377 220,192 245,493 252,230 63,519 60,395
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss).................... (77,452) (180,508) 79,958 93,464 98,890 18,690 22,645
Net interest and other expense............. (60,876) (55,295) (42,049) (64,028) (56,472) (15,743) (12,989)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before provision for income
taxes, extraordinary items and cumulative
effect of accounting changes............. (138,328) (235,803) 37,909 29,436 42,418 2,947 9,656
Provision for income taxes (benefit)....... (3,726) 3,067 4,126 2,653 14,309 994 3,932
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary items
and cumulative effect of accounting
changes.................................. (134,602) (238,870) 33,783 26,783 28,109 1,953 5,724
Extraordinary items and cumulative effect
of accounting changes(2)................. 99,146 7,698 (13,100) -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income (loss).......................... $ (35,456) $(231,172) $ 20,683 $ 26,783 $ 28,109 $ 1,953 $ 5,724
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Pro forma net income per common share(3)... -- -- -- -- $ .74 -- $ .15

OTHER DATA:
EBITDA(4).................................. $ 75,943 $ 85,558 $ 98,563 $ 112,642 $ 119,415 $ 23,646 $ 28,063
EBITDA Margin.............................. 29.1% 31.5% 32.8% 33.2% 34.0% 28.8% 33.8%

Capital expenditures....................... $ 3,896 $ 12,457 $ 8,326 $ 4,859 $ 7,675 $ 1,616 $ 1,531
Net cash provided by operating
activities............................... 20,404 23,277 46,268 26,778 60,065 8,532 14,439
Net cash used in investing activities...... 3,298 54,995 22,614 50,557 25,700 1,613 1,193
Net cash (used in) provided by financing
activities............................... (29,495) 32,055 (33,361) 24,384 (34,441) (9,804) (15,713)

Number of daily newspapers, end of period.. 13 15 16 17 18 17 18
Number of non-daily publications, end of
period................................... 62 65 68 114 118 114 118
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- -----------
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>

BALANCE SHEET DATA:
Total current assets................................. $ 57,248 $ 57,901 $ 56,959 $ 73,456 $ 66,035 $ 61,989
Property, plant and equipment, net................... 105,012 104,958 100,842 99,036 91,713 89,331
Total assets......................................... 447,734 244,428 245,290 306,434 305,985 299,275
Total current liabilities, less current maturities of
long-term debt..................................... 54,167 31,028 33,734 44,582 37,720 38,175
Total debt, including current maturities............. 570,777 625,317 664,298 689,256 654,825 639,119
Members' deficit(5).................................. (206,462) (437,634) (478,548) (451,767) (423,658) (417,934)
</TABLE>

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

(2) Extraordinary items represent gains or losses related to debt
extinguishment. In 1992, a Plan of Reorganization of a subsidiary of the
Company was approved by the court. As a result, certain of that subsidiary's
obligations were discharged, and the Company recognized a gain on
extinguishment of debt of $113.9 million. In connection with certain
refinancings, the Company recognized a net gain of $7.7 million in 1993 and
a loss of $13.1 million in 1994 on extinguishment of debt. In 1992, the
Company incurred a charge of $14.8 million, which was classified as a
cumulative effect of accounting changes relating to the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" and Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."

(3) The pro forma net income per common share was calculated reflecting the
37,962,500 shares which were issued prior to the Offerings but subsequent to
December 31, 1996. If effect were given to the issuance of the shares of
Common Stock in the Offerings and the Bonus Shares and to the net interest
expense reduction related to the use of proceeds used to reduce debt and
additional debt to pay the cash portion of the Management Bonuses, the pro
forma net income per common share would decrease by less than $.01 for the
year end December 31, 1996 and would be the same for the three month period
ended March 31, 1997. See "The Company" and Notes 2 and 11 of "Notes to the
Combined Financial Statements."

(4) See Note (4) to "Summary Combined Financial and Operating Data."

(5) During 1994, the Company was converted into a limited liability company. In
connection with such conversion, the Company's preferred stock and dividends
in arrears thereon were redeemed for approximately $61.6 million. For the
years ended December 31, 1992 and 1993, Members' deficit refers to
Stockholders' deficit.

23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

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

OVERVIEW

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

The Company currently owns and operates 18 daily newspapers and 118
non-daily publications strategically clustered in five geographic areas:
Connecticut; Ohio; Philadelphia and its surrounding areas; the greater St. Louis
area; and central New England. The Company has total paid daily circulation of
556,000, total paid Sunday circulation of 541,000, and total non-daily
distribution of 2.7 million.

The Company's objective is to continue its growth in revenues, EBITDA,
EBITDA Margin and net income. The principal elements of the Company's strategy
are to: (i) expand advertising revenues and readership; (ii) grow by
acquisition; (iii) capture synergies from geographic clustering; and (iv)
implement consistent operating policies and standards. Since 1993, the Company
has successfully completed seven strategic acquisitions, acquiring six daily
newspapers, 52 non-daily publications and one commercial printing company which
prints several of the non-daily publications acquired.

The Company believes that small metropolitan and suburban daily newspapers
and suburban and community non-daily newspapers are generally effective in
addressing the needs of local readers and advertisers under widely varying
economic conditions. The Company believes that because its newspapers rely on a
broad base of local retail and local classified advertising rather than more
volatile national and major account advertising, its advertising revenues tend
to be relatively stable.

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

SOURCES OF REVENUES

The Company's revenues are derived from advertising (73.2% of 1996
revenues), paid circulation (22.7%) and commercial printing and other (4.1%).

The Company has a broad and diverse advertiser base, of which no advertiser
accounted for more than 2.0% of the Company's 1996 advertising revenues.
Substantially all of the Company's advertising revenues in 1996 were derived
from local retailers (58.3%) and classified advertisers (37.6%). Changes in
advertising rates are driven primarily by results achieved for advertisers,
local economic conditions and competition. The Company generally seeks to
increase advertising rates annually and has generally done so at the majority of
its newspapers for each of the past five years.

Circulation revenues are derived from home delivery sales to subscribers and
single copy sales made through retail outlets and vending machines. In 1996,
71.5% of circulation revenues were derived from subscription sales and 28.5%
were derived from single copy sales. Single copy rates currently range from $.35
to $.50 per daily copy and from $.50 to $1.75 per Sunday copy. The Company
implements creative and

24
<PAGE>
interactive programs and promotions to increase readership and circulation,
through both subscription and single copy sales. Circulation has generally
declined throughout the newspaper industry in recent years, and the Company's
newspapers have generally experienced this trend, even as operating performance
has improved. The Company seeks to maximize the overall operating performance of
its newspapers rather than maximizing circulation, and does not view circulation
as a primary indicator of operating performance.

OPERATING EXPENSES

Operating expenses (excluding depreciation and amortization) represented
66.0% of the Company's revenues in 1996. The Company's primary expenses are:
salaries and employee benefits (31.8% of 1996 revenues); newsprint, ink and
printing charges (14.3%); selling, general and administrative expenses (8.8%),
which include insurance, telecommunication services, bad debt expense, promotion
expense and agency commissions; and other expenses (11.1%), which include, among
other items, costs related to newspaper delivery, editorial expenses such as
correspondents, wire services, syndicated columnists, supplies and production
costs other than newsprint, ink and printing charges, such as printing plates
and composing charges. The Company is focused on minimizing expenses and has
successfully reduced operating expenses (excluding non-cash charges) as a
percentage of revenues in each of the past six years.

Salaries and employee benefits are the Company's largest operating expense.
The Company has been able to control salaries and employee benefit expenses as a
result of efficiencies realized from implementing new technology as well as its
focus on synergies from its strategy of clustering operations. In 1996, salaries
and employee benefits increased .9% due to acquisitions, but decreased as a
percentage of revenues. For operations owned for the full twelve months in both
1995 and 1996, salaries and employee benefit expenses declined by 5.1%.

Newsprint represents the single largest raw material expense of the Company
and, after salaries and employee benefit expenses, is its most significant
operating expense. Newsprint expense increased significantly in 1995 on an
industry-wide basis, peaking at $770 per metric ton in the first quarter of 1996
(based on average East Coast transaction prices), as reported by the trade
publication PULP AND PAPER WEEKLY. Prices began to decrease in the second
quarter of 1996 and, by December 1996, had decreased to $510 per metric ton
(based on East Coast transaction prices). In December 1996, newsprint suppliers
announced a newsprint price increase to take effect in February 1997; this
increase was delayed. The initial announcements indicated the increase would be
$75 per metric ton. The Company has been informed by its suppliers that they
will implement some portion of the announced price increase. The Company
believes that if any price increase is sustained in the industry, the Company
will also be impacted by such increase. The Company is unable to predict
whether, or to what extent, any increase will be sustained. The Company has in
the past implemented programs to reduce newsprint consumption to offset
newsprint price increases. For example, in 1995 the Company began reducing web
widths at a majority of its newspapers, which has resulted in reduced page sizes
and produced a corresponding decrease in newsprint consumption by approximately
8%. As part of its effort to control expenses, the Company actively manages its
newsprint inventory based on anticipated changes in newsprint prices and adjusts
advertising and circulation rates to offset, in part, the effects of changes in
newsprint prices. See "Risk Factors--Price and Availability of Newsprint" and
"Business--Raw Materials."

25
<PAGE>
RESULTS OF OPERATIONS

The following table presents selected combined financial information for the
years ended December 31, 1994, 1995 and 1996 and for the three months ended
March 31, 1996 and 1997 and the approximate percentage of revenues represented
thereby:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEAR ENDED DECEMBER 31, 31,
---------------------------------------------------------------------------- ------------------------
% OF % OF % OF % OF
1994 REVENUES 1995 REVENUES 1996 REVENUES 1996 REVENUES
--------- ------------- --------- ------------- --------- ------------- --------- -------------
(IN THOUSANDS, EXCEPT NUMBER OF NEWSPAPERS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues:
Advertising....... $ 224,071 74.7% $ 249,534 73.6% $ 256,971 73.2% $ 58,668 71.4%
Circulation....... 65,204 21.7 73,797 21.8 79,776 22.7 19,739 24.0
--------- ----- --------- ----- --------- ----- --------- -----
Newspaper
revenues.......... 289,275 96.4 323,331 95.4 336,747 95.9 78,407 95.4
Commercial printing
and other......... 10,875 3.6 15,626 4.6 14,373 4.1 3,802 4.6
--------- ----- --------- ----- --------- ----- --------- -----
300,150 100.0 338,957 100.0 351,120 100.0 82,209 100.0
Operating expenses:
Salaries and
employee
benefits........ 105,607 35.2 110,651 32.6 111,626 31.8 28,129 34.2
Newsprint, ink and
printing
charges......... 36,481 12.2 48,243 14.2 50,110 14.3 13,190 16.1
Selling, general
and
administrative... 25,312 8.4 28,678 8.5 30,993 8.8 7,619 9.3
Depreciation and
amortization.... 18,605 6.2 19,178 5.7 20,525 5.8 4,956 6.0
Other............. 34,187 11.4 38,743 11.4 38,976 11.1 9,625 11.7
--------- ----- --------- ----- --------- ----- --------- -----
220,192 73.4 245,493 72.4 252,230 71.8 63,519 77.3
--------- ----- --------- ----- --------- ----- --------- -----
Operating income.... 79,958 26.6 93,464 27.6 98,890 28.2 18,690 22.7
Net interest and
other expense..... (42,049) (14.0) (64,028) (18.9) (56,472) (16.1) (15,743) (19.1)
--------- ----- --------- ----- --------- ----- --------- -----
Income before
provision for
income taxes and
extraordinary
item.............. 37,909 12.6 29,436 8.7 42,418 12.1 2,947 3.6
Provision for income
taxes............. 4,126 1.4 2,653 .8 14,309 4.1 994 1.2
--------- ----- --------- ----- --------- ----- --------- -----
Income before
extraordinary
items............. 33,783 11.2 26,783 7.9 28,109 8.0 1,953 2.4
Extraordinary item:
Loss on
extinguishment
of debt......... (13,100) (4.4) -- -- -- -- -- --
--------- ----- --------- ----- --------- ----- --------- -----
Net income.......... $ 20,683 6.8% $ 26,783 7.9% $ 28,109 8.0% $ 1,953 2.4%
--------- ----- --------- ----- --------- ----- --------- -----
--------- ----- --------- ----- --------- ----- --------- -----

OTHER DATA:
EBITDA(1)........... $ 98,563 32.8% $ 112,642 33.2% $ 119,415 34.0% $ 23,646 28.8%
Net cash provided by
operating
activities........ $ 46,268 $ 26,778 $ 60,065 $ 8,532
Net cash used in
investing
activities........ 22,614 50,557 25,700 1,613
Net cash (used in)
provided by
financing
activities........ (33,361) 24,384 (34,441) (9,804)
Number of daily
newspapers, end of
period............ 16 17 18 17
Number of non-daily
publications, end
of period......... 68 114 118 114

% OF
1997 REVENUES
--------- -------------

<S> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues:
Advertising....... $ 60,419 72.8%
Circulation....... 19,830 23.9
--------- -----
Newspaper
revenues.......... 80,249 96.7
Commercial printing
and other......... 2,791 3.3
--------- -----
83,040 100.0
Operating expenses:
Salaries and
employee
benefits........ 28,663 34.5
Newsprint, ink and
printing
charges......... 9,130 11.0
Selling, general
and
administrative... 7,641 9.2
Depreciation and
amortization.... 5,418 6.5
Other............. 9,543 11.5
--------- -----
60,395 72.7
--------- -----
Operating income.... 22,645 27.3
Net interest and
other expense..... (12,989) (15.6)
--------- -----
Income before
provision for
income taxes and
extraordinary
item.............. 9,656 11.7
Provision for income
taxes............. 3,932 4.8
--------- -----
Income before
extraordinary
items............. 5,724 6.9
Extraordinary item:
Loss on
extinguishment
of debt......... -- --
--------- -----
Net income.......... $ 5,724 6.9%
--------- -----
--------- -----
OTHER DATA:
EBITDA(1)........... $ 28,063 33.8%
Net cash provided by
operating
activities........ $ 14,439
Net cash used in
investing
activities........ 1,193
Net cash (used in)
provided by
financing
activities........ (15,713)
Number of daily
newspapers, end of
period............ 18
Number of non-daily
publications, end
of period......... 118
</TABLE>

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

(1) See Note (4) to "Summary Combined Financial and Operating Data."

The Company's revenues increased from $260.8 million in 1992 to $351.1
million in 1996. EBITDA has grown from $75.9 million to $119.4 million over the
same period. Growth in revenues and EBITDA was mainly attributable to
acquisitions consummated since 1993, expansion in advertising and circulation
revenues and the Company's continued focus on expense controls. During 1992 and
1993, the Company

26
<PAGE>
evaluated its intangible assets based on facts and circumstances existing at the
time. The Company's evaluation considered the outlook for the newspaper
properties it owned, its capital structure and the industry conditions existing
at the time. As a result of this evaluation, the Company reduced its intangible
assets by $119.6 million and $242.0 million in 1992 and 1993, respectively.

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

The Company's results for the three months ended March 31, 1997 discussed
below include the results of the TAUNTON DAILY GAZETTE (the "Taunton
acquisition") from its acquisition date of December 13, 1996.

REVENUES. In the three months ended March 31, 1997, revenues increased
$831,000, or 1.0% to $83.0 million from $82.2 million in the first quarter of
1996. Newspaper revenues increased $1.8 million, or 2.4%, to $80.2 million in
the first quarter of 1997 from $78.4 million in the first quarter of 1996
primarily due to an increase in advertising revenues. Advertising revenues
increased $1.7 million, or 3.0%, to $60.4 million in the first quarter of 1997,
from $58.7 million in the first quarter of 1996 primarily due to volume
increases and the Taunton acquisition. Circulation revenues increased
approximately $100,000, to $19.8 million in the first quarter of 1997 from $19.7
million in the first quarter of 1996. Commercial printing and other revenues
decreased approximately $1.0 million or 26.6%, from $3.8 million in the first
quarter of 1996 to $2.8 million in the first quarter of 1997, reflecting the
continued highly competitive conditions in the commercial printing industry.
Commercial printing and other represented 3.4% of the Company's revenues in the
first quarter of 1997 compared to 4.6% in the first quarter of 1996.

SALARIES AND EMPLOYEE BENEFIT EXPENSES. In the first quarter of 1997,
salaries and employee benefit expenses accounted for 34.5% of the Company's
revenues, as compared to 34.2% in the first quarter of 1996. Salaries and
employee benefit expenses increased approximately $534,000, or 1.9%, to $28.7
million in the first quarter of 1997 from $28.1 million in the first quarter of
1996 due to the Taunton acquisition.

NEWSPRINT, INK AND PRINTING CHARGES. In the first quarter of 1997,
newsprint, ink and printing charges accounted for 11.0% of the Company's
revenues, as compared to 16.0% in the first quarter of 1996. Newsprint, ink and
printing charges decreased $4.1 million, or 30.8%, in the first quarter of 1997
to $9.1 million from $13.2 million in the first quarter of 1996, primarily as a
result of a decrease in the average price per ton of newsprint in the first
quarter of 1997 as compared to the first quarter of 1996, which accounted for
approximately $3.0 million of this decrease. The Company reduced the width of
several of its newspapers after March 31, 1996, which resulted in savings of
approximately $200,000 in the first quarter of 1997, as compared to the first
quarter of 1996. See "Business--Raw Materials." The other significant decrease
related to a reduction in commercial printing jobs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. In the first quarter of 1997,
selling, general and administrative expenses accounted for 9.2% of the Company's
revenues, as compared to 9.3% in the first quarter of 1996. Selling, general and
administrative expenses for the first quarter of 1997 were basically flat
compared with the first quarter of 1996, at approximately $7.6 million in both
periods.

DEPRECIATION AND AMORTIZATION EXPENSE. In the first quarter of 1997,
depreciation and amortization expense accounted for 6.5% of the Company's
revenues, as compared to 6.0% in the first quarter of 1996. Depreciation and
amortization expense increased approximately $462,000, or 9.3%, to $5.4 million
in the first quarter of 1997 from $5.0 million in the first quarter of 1996;
this was primarily due to an increase in amortization expense primarily due to
the amortization of intangible assets, most of which related to the Taunton
acquisition.

OTHER EXPENSES. In the first quarter of 1997, other expenses accounted for
11.5% of the Company's revenues, as compared to 11.7% in the first quarter of
1996. Other expenses were basically flat for the first quarter of 1997 as
compared to the first quarter of 1996, decreasing $81,000.

27
<PAGE>
OPERATING INCOME. Operating income increased 21.2% to $22.6 million in the
first quarter of 1997 from $18.7 million in the first quarter of 1996. As a
percentage of revenues, operating income increased from 22.7% in the first
quarter of 1996 to 27.3% in the first quarter of 1997.

NET INTEREST EXPENSE. Net interest expense was approximately $12.9 million
in the first quarter of 1997, a decrease of 16.4% from net interest expense of
$15.5 million in the first quarter of 1996. The decrease of $2.5 million
reflects a decrease in average borrowing rates and an approximately $41.0
million decrease in average debt outstanding during the first quarter of 1997.

PROVISION FOR INCOME TAXES. The Company reported effective tax rates of
33.7% and 40.7% for the quarters ended March 31, 1996 and 1997, respectively. In
1996, the effective tax rate was lower than the combined federal and state
statutory rates primarily due to the recognition of tax benefits which had been
offset by a valuation allowance in previous years. See Note 6 of "Notes to
Combined Financial Statements (Unaudited)." In the first quarter of 1997, the
effective tax rate substantially approximates the combined federal and state
statutory rates. The Company intends to implement various tax strategies in the
second half of 1997 which the Company expects will result in an effective tax
rate of approximately 37% for 1998.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

REVENUES. In 1996, revenues increased $12.1 million, or 3.6%, to $351.1
million from $339.0 million in 1995, primarily as a result of acquisitions.
Revenues in 1995 reflect the results of operations since the 1995 acquisitions
of New England Acquisition Corp. (42 non-daily publications and one commercial
printing company), THE HERALD and THE MIDDLETOWN PRESS, as compared to the full
12 months of results for each of these acquired companies in 1996. Newspaper
revenues for operations owned during the full 12 months in both periods were
basically flat, at $304.2 million in 1995 and $304.0 million in 1996.
Advertising revenues increased $7.5 million, or 3.0%, to $257.0 million in 1996
from $249.5 million in 1995. For newspapers operated during the full 12 months
in both periods, advertising revenues declined 1.0% to $231.7 million in 1996
from $234.1 million in 1995. In 1996, advertising revenues were negatively
impacted by record-breaking snowfalls in the first quarter in the eastern United
States and the soft retail environment in such areas. Circulation revenues
increased $6.0 million, or 8.1%, to $79.8 million in 1996 from $73.8 million in
1995. For newspapers operated during the full 12 months in both periods,
circulation revenues increased $2.2 million or 3.3%, from $70.1 million in 1995
to $72.3 million in 1996, as a result of increased subscription and single copy
rates. Commercial printing and other revenues decreased $1.2 million or 8.0%,
from $15.6 million in 1995 to $14.4 million in 1996, reflecting highly
competitive conditions in the commercial printing industry offset, in part, by a
full year of revenues in 1996 attributable to the commercial printing business
acquired in 1995. Commercial printing and other revenues represented 4.1% of the
Company's revenues in 1996.

SALARIES AND EMPLOYEE BENEFIT EXPENSES. In 1996, salaries and employee
benefit expenses accounted for 31.8% of the Company's revenues, as compared to
32.6% in 1995. Salaries and employee benefit expenses increased $1.0 million to
$111.6 million in 1996 from $110.6 million in 1995, primarily as a result of the
1995 acquisitions, which added approximately 450 full-time and 240 part-time
employees. For operations owned during the full 12 months in both periods,
salaries and employee benefit expenses decreased $5.2 million or 5.1% in 1996 as
compared to 1995, due to a reduction in the number of employees resulting from
operating efficiencies.

NEWSPRINT, INK AND PRINTING CHARGES. In 1996, newsprint, ink and printing
charges accounted for 14.3% of the Company's revenues, as compared to 14.2% in
1995. Newsprint, ink and printing charges increased $1.9 million, or 3.9%, in
1996 to $50.1 million from $48.2 million in 1995, as a result of the 1995
acquisitions. For operations owned during the full 12 months in both periods,
newsprint, ink and printing charges were basically flat, at $43.5 million in
1995 and $43.4 million in 1996, primarily due to an increase of approximately
3.0% in newsprint expense (excluding paper consumed in the Company's commercial
printing operations) offset by a decrease in commercial printing expense. The
3.0% increase in newsprint

28
<PAGE>
expense is a result of a 13.0% increase in the average price of newsprint offset
by a decrease in volume. The consumption decrease was primarily related to
web-width reductions at a majority of the Company's newspapers which reduced
page sizes and produced a corresponding decrease in newsprint consumption of
approximately 8%. The Company also reduced fringe circulation, as it is the
Company's belief that such circulation does not provide adequate response for
advertisers.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. In 1996, selling, general,
and administrative expenses accounted for 8.8% of the Company's revenues, as
compared to 8.5% in 1995. Selling, general and administrative expenses increased
$2.3 million, or 8.1%, to $31.0 million in 1996 from $28.7 million in 1995,
primarily due to acquisitions. For operations owned during the full 12 months in
both periods, selling, general and administrative expenses increased $413,000 or
1.5%, from $26.7 million to $27.1 million.

DEPRECIATION AND AMORTIZATION EXPENSE. In 1996, depreciation and
amortization expense accounted for 5.8% of the Company's revenues, as compared
to 5.7% in 1995. Depreciation and amortization expense increased $1.3 million,
or 7.0%, to $20.5 million in 1996 from $19.2 million in 1995, primarily as a
result of acquisitions made during the period.

OTHER EXPENSES. In 1996, other expenses accounted for 11.1% of the
Company's revenues, as compared to 11.4% in 1995. Other expenses increased
$233,000, or .6%, to $39.0 million in 1996 from $38.8 million in 1995. For
operations owned during the full 12 months in both periods, other expenses
decreased $2.5 million, or 7.1%, from $35.1 million to $32.6 million primarily
as a result of cost controls related to the Company's clustering strategy.

OPERATING INCOME. Operating income increased 5.8% to $98.9 million in 1996
from $93.5 million in 1995. As a percentage of revenues, operating income
increased from 27.6% in 1995 to 28.2% in 1996 primarily for the reasons
discussed above.

NET INTEREST EXPENSE. Net interest expense was $56.3 million in 1996, an
11.1% decrease from $63.3 million in 1995. The decrease of $7.0 million
reflected a decrease in average borrowing rates and a decrease in average debt
outstanding during 1996 of approximately $18.0 million.

PROVISION FOR INCOME TAXES. The Company reported effective tax rates of
9.0% in 1995 and 33.7% in 1996, which were lower than the combined federal and
state statutory rates. In both years, this was primarily due to the recognition
of tax benefits which had been offset by a valuation allowance in previous
years. See Note 7 of "Notes to Combined Financial Statements." The Company
expects to report an effective tax rate which is higher than those effective
rates previously reported, but lower than the combined federal and state
statutory rates as a result of the various tax strategies which the Company
intends to implement.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

REVENUES. In 1995, revenues increased $38.8 million, or 12.9%, to $339.0
million from $300.2 million in 1994, primarily as a result of acquisitions and
advertising and circulation rate increases. Revenues in 1994 reflect the results
of operations since the 1994 acquisition of THE BRISTOL PRESS, as compared to
the full 12 months of results for this company in 1995. Revenues in 1995 reflect
the results of operations since the 1995 acquisitions of New England Acquisition
Corp., THE HERALD and THE MIDDLETOWN PRESS. Newspaper revenues for operations
owned during the full 12 months in both periods, increased $13.0 million, or
4.6% from $283.7 million to $296.7 million. Advertising revenues increased $25.4
million, or 11.4%, to $249.5 million in 1995 from $224.1 million in 1994
primarily due to the results of acquisitions and rate increases. For newspapers
operated during the full 12 months in both periods, advertising revenues
increased $9.1 million, or 4.2%, due to an increase in rates of approximately
6.7% offset by a volume decrease of approximately 2.5%. Circulation revenues
increased $8.6 million, or 13.2%, to $73.8 million in 1995 from $65.2 million in
1994. For newspapers operated during the full 12 months in both periods,
circulation

29
<PAGE>
revenues increased $3.9 million, or 6.1%, from $63.8 in 1994 to $67.7 million in
1995 as a result of increased prices and the introduction in the first quarter
of 1994 of Sunday editions for the two newspapers acquired in 1993, THE TIMES
HERALD and THE REGISTER CITIZEN.

SALARIES AND EMPLOYEE BENEFIT EXPENSES. In 1995, salaries and employee
benefit expenses accounted for 32.6% of the Company's revenues, as compared to
35.2% in 1994. Salaries and employee benefit expenses increased $5.0 million, or
4.8%, to $110.6 million in 1995 from $105.6 million in 1994 as a result of
acquisitions during both periods. The acquisitions in 1994 and 1995 increased
the number of employees by approximately 525 full-time and 260 part-time. For
operations owned during the full 12 months in both periods, salaries and
employee benefit expenses decreased $3.6 million, or 3.4%, in 1995 as compared
to 1994, due to a reduction in the number of employees resulting from operating
efficiencies.

NEWSPRINT, INK AND PRINTING CHARGES. In 1995, newsprint, ink and printing
charges accounted for 14.2% of the Company's revenues, as compared to 12.2% in
1994. Newsprint, ink and printing charges increased $11.7 million, or 32.2%, to
$48.2 million in 1995 from $36.5 million in 1994, as a result of higher average
newsprint prices and increased paper expense related to the commercial printing
operation acquired in May 1995, partially offset by decreased consumption. For
operations owned during the full 12 months in both periods, newsprint, ink and
printing charges increased $6.3 million, or 17.7%, from $36.1 million in 1994 to
$42.4 million in 1995 resulting from an approximately 33.0% increase in the
price per ton of newsprint partially offset by a decrease in consumption of
approximately 6.0% and a decrease in commercial printing expenses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. In 1995, selling, general and
administrative expenses accounted for 8.5% of the Company's revenues, as
compared to 8.4% in 1994. Selling, general and administrative expenses increased
$3.4 million, or 13.3%, to $28.7 million in 1995 from $25.3 million in 1994, due
to acquisitions. For operations owned during the full 12 months in both periods,
selling, general and administrative expenses increased $1.1 million, or 4.8%,
from $24.8 million to $25.9 million.

DEPRECIATION AND AMORTIZATION EXPENSE. In 1995, depreciation and
amortization expense accounted for 5.7% of the Company's revenues, as compared
to 6.2% in 1994. Depreciation and amortization expense increased approximately
$573,000, or 3.1%, to $19.2 million in 1995 from $18.6 million in 1994,
primarily as a result of acquisitions made during the period.

OTHER EXPENSES. In 1995, other expenses accounted for 11.4% of the
Company's revenues, which was the same as in 1994. Other expenses increased $4.5
million, or 13.3%, to $38.7 million in 1995 from $34.2 million in 1994,
primarily due to acquisitions. For operations owned during the full 12 months in
both periods, other expenses increased $1.1 million, or 3.3%, from $32.9 million
to $34.0 million due, in part, to increased distribution expenses.

OPERATING INCOME. Operating income increased 16.9% to $93.5 million in 1995
from $80.0 million in 1994. As a percentage of revenues, operating income
increased from 26.6% in 1994 to 27.6% in 1995 primarily for reasons discussed
above.

NET INTEREST EXPENSE. Net interest expense was $63.3 million in 1995, a
52.7% increase over net interest expense of $41.5 million in 1994. The increase
of $21.8 million reflected approximately $70.2 million higher average debt
outstanding in 1995 related to the redemption of preferred stock, acquisitions,
and an increase in average borrowing rates.

PROVISION FOR INCOME TAXES. The Company reported effective tax rates of
10.8% in 1994 and 9.0% in 1995, which were lower than the combined federal and
state statutory rates. In both years, this was primarily a result of the
reversal of certain temporary differences as well as the use of federal and
state net operating loss carryforwards. The related deferred tax benefits had
been offset by a valuation allowance in previous years. See Note 7 of "Notes to
Combined Financial Statements."

30
<PAGE>
QUARTERLY RESULTS

The following table sets forth certain unaudited quarterly financial data
for each of the past nine quarters ended March 31, 1997. Operating results for
any quarter are not necessarily indicative of results for any future period.
<TABLE>
<CAPTION>
1995 1996 1997
------------------------------------------ ------------------------------------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR
--------- --------- --------- --------- --------- --------- --------- --------- ---------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................. $ 73,101 $ 85,690 $ 87,002 $ 93,164 $ 82,209 $ 90,367 $ 86,630 $ 91,914 $ 83,040
Operating income......... 17,257 25,825 23,026 27,356 18,690 25,926 24,479 29,795 22,645
Net income............... 2,415 9,639 6,387 8,342 1,953 7,967 6,855 11,334 5,724
EBITDA(1)................ 21,690 30,447 27,962 32,543 23,646 31,228 29,416 35,125 28,063
EBITDA Margin............ 29.7% 35.5% 32.1% 34.9% 28.8% 34.6% 34.0% 38.2% 33.8%
</TABLE>

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

(1) See Note (4) to "Summary Combined Financial and Operating Data."

Newspaper companies tend to follow a distinct and recurring seasonal
pattern. The first quarter of the year (January-March) tends to be the weakest
quarter because advertising volume is then at its lowest level. Correspondingly,
the fourth quarter (October-December) tends to be the strongest quarter as it
includes heavy holiday season advertising. The timing of acquisitions has also
affected quarterly operating results. In addition, advertising and circulation
revenues for the Company were adversely affected in 1996 by record-breaking
snowfalls in the eastern United States and the soft local retail environments.

LIQUIDITY AND CAPITAL RESOURCES

The Company's operations have historically generated strong positive cash
flow. The Company believes cash flow from operations will be sufficient to fund
its operations, capital expenditures and long-term debt obligations. The Company
believes that cash flow from operations and future borrowings, if available, and
its ability to issue Common Stock as consideration for future acquisitions, will
provide it with the flexibility to fund its acquisition strategy while
continuing to meet its operating needs, capital expenditures and long-term debt
obligations. See "Business--Legal Proceedings" and "Business-- Environmental
Matters."

CASH FLOWS FROM OPERATIONS. Net cash provided by operating activities
totaled $14.4 million in the quarter ended March 31, 1997 as compared to $8.5
million in the quarter ended March 31, 1996. This increase of $5.9 million was
due primarily to the increase in net income and a net increase in payables. Net
cash provided by operating activities totaled $60.1 million in 1996 as compared
to $26.8 million in 1995. This increase of $33.3 million was related primarily
to a decrease in newsprint inventory and a net increase in payables.

CASH FLOWS FROM INVESTING ACTIVITIES. Capital expenditures totaled
approximately $1.5 million in the quarter ended March 31, 1997 and $1.6 million
in the quarter ended March 31, 1996. The Company's capital expenditure programs
(excluding acquisitions) totaled $7.7 million in 1996, $4.9 million in 1995 and
$8.3 million in 1994. The Company has a capital expenditure program (excluding
acquisitions) of approximately $9.0 million planned for 1997, which will include
spending on technology, including prepress and business systems; computer
hardware; other machinery and equipment; plant and properties; and vehicles and
other assets. The Company believes its capital expenditure program is sufficient
to maintain its current level and quality of operations. The Company reviews its
capital expenditure program periodically and modifies it as required to meet
current needs. It is expected that the 1997 capital expenditure program will be
funded from operating cash flow. The success of the Company's operations in
Philadelphia and surrounding areas may necessitate the construction of a
centralized production facility within the next two to three years. Costs for
this facility are estimated to be $25.0 million overall. The Company expects to
fund this construction project with cash flow from operations and borrowings.

31
<PAGE>
The Company has been able to maintain a low ratio of capital expenditures to
depreciation and amortization expenses due to its: (i) maintenance program for
existing presses and facilities; (ii) ability to transfer redundant presses,
mechanical and computer equipment and other capital items among the Company's
locations; and (iii) strategy of evaluating acquisitions partially based on the
condition of the facilities and production equipment. In 1996, the Company had
capital expenditures of $7.7 million and depreciation and amortization of $20.5
million.

CASH FLOWS FROM FINANCING ACTIVITIES. Net cash used in financing activities
was $15.7 million in the quarter ended March 31, 1997 and $9.8 million in the
quarter ended March 31, 1996. Long-term debt repayments of $16.5 million were
made from cash flow during the quarter ended March 31, 1997. Net cash (used in)
provided by financing activities was ($34.4) million during 1996 and $24.4
million during 1995. Long-term debt reflects debt repayments totaling
approximately $55.7 million from cash flow during 1996, offset by borrowings
under the Revolver for the December 1996 acquisition of the TAUNTON DAILY
GAZETTE. As of December 31, 1996, the Company had $654.8 million of outstanding
debt which is due and payable in installments through 2003. Of the Company's
outstanding indebtedness at December 31, 1996, $119.0 million was outstanding
under the Revolver. As of December 31, 1996, the Company had $26.0 million
unused and available under the Revolver. Borrowings under the Revolver are to be
repaid by 2003 and at December 31, 1996, interest was calculated at 2.0% above
LIBOR for substantially all borrowings under the Revolver.

As of March 31, 1997, after giving effect to the Offerings, the use of
proceeds therefrom and the payment of the Management Bonuses, the Company would
have had outstanding indebtedness of $532.2 million.

The Company manages its exposure to interest rate fluctuations for its
variable rate debt by entering into interest rate protection agreements. The
Company is required under its Credit Agreement to have interest rate protection
for a minimum of 50.0% of its outstanding balance under the Credit Agreement.
During 1996, the Company entered into interest rate swap and collar agreements.
During 1996, the Company's weighted average effective interest rate on its
outstanding balance was 8.4%. This takes into account the interest rate
protection agreements in effect during 1996. The Company has similar interest
rate protection agreements in place for 1997.

The following sets forth the material terms of the Company's credit
agreement (as amended and restated, the "Credit Agreement").

Substantially concurrent with the completion of the Offerings, the Company
will enter into the amended and restated Credit Agreement with the banks and
other financial institutions signatories thereto (collectively, the "Banks") and
The Chase Manhattan Bank, as agent for the Banks. The Credit Agreement provides
for the $398.0 million Term Loan and the $235.0 million Revolver. See
"Underwriters." The Term Loan has a final maturity on May 5, 2003, and the
Revolver matures on December 31, 2003.

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

<TABLE>
<S> <C>
1997........................................................ $33,105,000(1)
1998........................................................ 57,060,000
1999........................................................ 65,730,000
2000........................................................ 74,650,000
2001........................................................ 83,340,000
Thereafter.................................................. 84,110,000
</TABLE>

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

(1) Does not include $13,535,000 of principal payments scheduled and paid in
March 1997 prior to the execution of the Credit Agreement.

The Revolver has a step-down of availability of $40.0 million on each of
December 31, 2000, 2001 and 2002. The final $115.0 million of availability
expires and, if outstanding, is due on December 31, 2003.

32
<PAGE>
Generally, the Company may repay drawdowns on the Revolver without penalty
or premium. Prepayments are required in the event of certain dispositions,
equity issuances and incurrences of subordinated indebtedness. In addition,
commencing in the year 2000, the Credit Agreement requires a mandatory
prepayment of the debt equal to 50% of the prior year's Excess Cash Flow (as
defined in the Credit Agreement).

The Senior Facilities are secured by substantially all of the assets of the
Company and the common stock and assets of the Company's subsidiaries.

The amounts outstanding under the Senior Facilities bear interest at (i)
1/4% to 0% above the higher of the Prime Rate or 1/2% above the Federal Funds
Rate or (ii) 1 1/2% to 1/2% above LIBOR. The interest rate spreads are dependent
upon the debt to twelve months trailing cash flow ratio (as defined in the
Credit Agreement) and reduce as such ratio declines.

An annual commitment fee of 3/8% to 1/4% is incurred on the unused portion
of the commitment under the Revolver. The commitment fee spreads are dependent
upon the debt to twelve months trailing cash flow ratio and reduce as such ratio
declines.

The Credit Agreement requires the Company to maintain interest rate
protection for at least 50% of the outstanding debt in order to manage interest
rate risk. The Credit Agreement contains certain financial covenants, including,
but not limited to, a minimum fixed charge coverage test, a minimum interest
coverage test and a total debt to cash flow ratio test. In addition, the Credit
Agreement contains other customary affirmative and negative covenants relating
to (among other things) limitations on other indebtedness, liens, investments,
restricted payments, dividends, redemption of stock, mergers and acquisitions,
certain changes in control, sales of assets, capital expenditures,
sale-leasebacks, insurance, mortgages, transactions with affiliates and conduct
of business, with customary exceptions and baskets. The Credit Agreement
contains customary events of default, including failure to make payments when
due, defaults under other agreements or instruments of indebtedness,
noncompliance with covenants, breaches of representations and warranties,
bankruptcy, receivership, judgments in excess of specified amounts, impairment
of security interests in collateral and certain changes of control. See Notes 4
and 11 of "Notes to Combined Financial Statements."

MANAGEMENT BONUS PLAN

In recognition of certain management employees' prior services to the
Company, the Company adopted a bonus plan (the "Management Bonus Plan") pursuant
to which it awarded, upon pricing of the Offerings, one-time special bonuses
(each, a "Management Bonus" and collectively, the "Management Bonuses"). The
Management Bonuses are comprised of 1,100,000 shares of Common Stock (the "Bonus
Shares"), valued at the time of award at the Price to Public of $14.00, and a
cash portion that the Company expects will be used to satisfy recipients' tax
obligations arising from the Management Bonuses. The Bonus Shares have not yet
been issued to the recipients of the Management Bonuses. The Management Bonus
Plan provides that such Bonus Shares will be issued upon the effectiveness of a
registration statement covering the Bonus Shares, which registration statement
the Company has covenanted to file as promptly as practicable. Each Management
Bonus is comprised of approximately 45% cash and 55% Common Stock. The
Management Bonuses total $28.0 million, comprised of $15.4 million in shares of
Common Stock and $12.6 million in cash. The Management Bonuses were awarded to
36 employees of the Company, none of whom is an affiliate of Warburg, Pincus.
Mr. Jelenic, Ms. Clifton, Messrs. Rush and Mailman and Ms. Dresser, the chief
executive officer and four other most highly compensated executive officers of
the Company (see "Management--Executive Compensation"), were awarded Management
Bonuses with a total value of approximately $10.3 million, $5.2 million, $1.2
million, $1.2 million and $1.2 million, respectively.

The Company expects to incur a charge to pre-tax earnings of approximately
$31.0 million in the second quarter of 1997. The Management Bonuses are expected
to account for approximately $28.0 million of such charge. The discontinuation
of the StarShare Plan will account for approximately

33
<PAGE>
$3.0 million of such charge. See "Risk Factors--Charge to Second Quarter
Earnings," "Management-- Compensation Pursuant to Plans--Management Bonus Plan,"
"Management--Executive Compensation" and "Certain Transactions."

RECENT ACQUISITIONS

During 1995 and 1996, the Company acquired four newspaper properties
including three daily newspapers and 48 non-daily publications. Management based
their acquisition decisions on the target's cash flow potential, fit with the
Company's clustering approach, position within applicable circulation area,
potential to increase revenues, state of plant and equipment, and potential for
expense reduction. The Company obtained appraisals for the subscription lists
for two of these acquisitions, and the remaining assets of such acquired
properties were valued based on internal valuations of the Company. The assets
of the other two acquisitions were valued based on internal valuations of the
Company. The following sets forth these acquisitions: (i) on December 13, 1996,
the Company acquired for approximately $18.0 million certain assets and
liabilities of the TAUNTON DAILY GAZETTE; (ii) on May 5, 1995, the Company
acquired for $31.0 million certain assets and liabilities of New England
Acquisition Corp. (42 non-daily publications and one commercial printing
company); (iii) on June 21, 1995, the Company acquired the stock of THE HERALD
(New Britain) for $11.0 million plus the assumption of certain noncurrent
liabilities; (iv) on August 31, 1995, the Company acquired for $5.5 million
certain assets and liabilities of THE MIDDLETOWN PRESS. The cost of each of
these acquisitions was funded through a combination of borrowings and available
cash.

INFLATION

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

34
<PAGE>
BUSINESS

GENERAL

Since 1993, the Company has successfully completed seven strategic
acquisitions, acquiring six daily newspapers, 52 non-daily publications and one
commercial printing company. The Company has generally increased the revenues
and significantly increased the cash flow and profitability of its acquired
newspapers. For the fiscal year ended December 31, 1996, the Company generated
revenues of $351.1 million, EBITDA of $119.4 million, net income of $28.1
million and pro forma net income, as adjusted, of $35.6 million. In 1996, the
Company's EBITDA as a percentage of revenues was approximately 34%, representing
the sixth consecutive year of improvement in its EBITDA Margin. From 1992
through 1996, the Company recorded compound annual growth in revenues and EBITDA
of approximately 8% and 12%, respectively. The Company has achieved this growth
through a combination of expanding revenues in existing geographic areas,
strategic acquisitions and implementing cost controls and ongoing expense
reduction efforts at existing and acquired newspapers.

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

The Company manages its newspapers to best serve the needs of its local
readers and advertisers. The editorial content of its newspapers is tailored to
the specific interests of each community served and includes coverage of local
youth, high school, college and professional sports, as well as local business,
politics, entertainment, and culture. The Company maintains high product quality
standards, using extensive process color and compelling graphic design to
attract new readers and to more fully engage existing readers. The Company's
newspapers typically are produced using advanced prepress pagination technology
and are printed on efficient, high-speed presses.

The Company's revenues are derived from advertising (approximately 73% of
1996 revenues), paid circulation, including single copy sales and prepaid
subscriptions (23%), and commercial printing and other (4%). The Company's
advertiser base is predominantly local. The Company's newspapers seek to produce
desirable results for local advertisers by targeting readers based on certain
geographic and demographic characteristics. The Company seeks to increase
readership, and thereby generate traffic for its advertisers, by focusing on
high product quality, local content and creative and interactive promotions. The
Company promotes single copy sales of its newspapers because it believes that
such sales have higher readership than subscription sales and that single copy
readers tend to be more active consumers of goods and services, as indicated by
a recent NAA study. Single copy sales also tend to generate higher profits than
subscription sales, as single copy sales generally have higher per unit prices
and lower associated distribution costs. Subscription sales, which provide
readers with the convenience of home delivery, are an important component of the
Company's circulation base. The Company also publishes numerous special sections
and niche and special interest publications. Such publications tend to increase
readership within targeted demographic groups and geographic areas. The Company
believes that as a result of these strategies, its newspapers represent an
attractive and cost-effective medium for its readers and advertisers.

35
<PAGE>
The Company's advertising revenues in 1996 were derived primarily from a
broad group of local retailers (approximately 58%) and classified advertisers
(approximately 38%). No advertiser accounted for more than 2% of the Company's
1996 advertising revenues. The Company believes that because its newspapers rely
on a broad base of local retail and local classified advertising rather than
more volatile national and major account advertising, its advertising revenues
tend to be relatively stable.

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

INDUSTRY OVERVIEW

Newspaper publishing is one of the oldest and largest segments of the media
industry. Newspapers are an important medium for local advertising, accounting
for approximately 22% of all media advertising expenditures in 1996 according to
preliminary information provided by the NAA. The newspaper industry in the
United States is comprised of the following segments: national and major
metropolitan dailies; small metropolitan and suburban dailies; and suburban and
community non-dailies. The Company is in the business of operating small
metropolitan and suburban daily newspapers and suburban and community non-daily
newspapers.

In many communities, the local newspaper provides a combination of social
and economic linkages which make it attractive for readers and advertisers
alike. The Company believes that small metropolitan and suburban dailies as well
as suburban and community non-dailies and similar publications are generally
effective in addressing the needs of local readers and advertisers under widely
varying economic conditions, and thereby provide relatively stable revenues and
cash flow. The Company believes that because small metropolitan and suburban
daily newspapers rely on a broad base of local retail and local classified
advertising rather than more volatile national and major account advertising,
their advertising revenues tend to be relatively stable. In addition, the
Company believes such newspapers tend to publish information which is of
particular interest to the local reader and which national and major
metropolitan newspapers, television and radio generally do not report to the
same extent. Most small metropolitan and suburban daily newspapers are the only
daily local newspaper in the communities they serve. Further, the Company
believes that relatively few daily newspapers have been established in recent
years due to the high cost of starting a daily newspaper operation and building
a franchise identity.

Free circulation "total market coverage" publications ("TMC") and shoppers
are often published primarily to supplement the circulation and penetration of
daily newspapers and, to some extent, non-daily newspapers. These publications
provide nearly 100% penetration in their areas of distribution when combined
with the circulation of the newspaper serving such geographic area and generally
derive revenues solely from advertising. These publications typically have
limited or no news or editorial content.

The newspaper industry has recently begun to offer on-line versions of
newspapers which many publishers, including the Company, believe will provide
the opportunity for newspaper companies to broaden their presence within areas
served, to leverage franchise identity and to build advertising revenues. Since
1995, the Company has published an on-line version of the NEW HAVEN REGISTER.
The Company currently plans to establish an on-line editorial presence and a
full on-line classified advertising service for each of its daily newspapers and
the JOURNALS by the end of 1997. The Company has to date developed and
maintained, and believes it can significantly expand, its on-line presence with
minimal capital expenditures.

STRATEGY

36
<PAGE>
- EXPAND ADVERTISING REVENUES AND READERSHIP. The Company focuses on
increasing advertising and circulation revenues and expanding readership
at its existing and newly acquired properties. More specifically, the
Company seeks to:

INCREASE ADVERTISING REVENUES. Much attention and effort is devoted to
increasing the advertising revenues of individual newspapers through a
combination of special promotions, market research, presentations and
sales training, as well as cross-selling opportunities within geographic
clusters. The Company seeks to attract new advertisers and increase the
level of advertising from existing accounts. Its sales strategies
primarily involve programs designed to expand advertisers' reach and
penetration in desirable geographic areas or to target specific
demographic groups. These programs emphasize the cross-selling of
advertising into the Company's other newspapers located within the same
geographic cluster; the publication of special sections and niche and
special interest publications which allow advertisers to target specific
demographic groups; the development of new advertising positions such as
front-page "skyboxes"; and the expansion of advertising positions which
allow the use of full color.

EXPAND READERSHIP. The Company continually seeks to improve its
publications in order to attract new readers and to more fully engage
existing readers. These quality enhancements have included, among others:
converting from afternoon to morning publication; upgrading and expanding
printing facilities and printing presses; increasing the use of color and
color photographs, including their use on all section front pages, and in
many cases, on additional pages within the newspaper; continually
improving graphic design and, when appropriate, implementing complete
redesigns; adding reader services such as mutual fund listings, complete
listings of stock market quotations and highlighting local stocks of
interest; introducing color weather maps and complete entertainment
sections; introducing new editions zoned to particular geographic areas
and the selective opening of news bureaus to support the zoned editions;
developing Newspaper in Education programs which bring newspapers into
the classroom; and developing creative and interactive promotional
campaigns, often in partnership with its local advertisers.

LAUNCH NEW PRODUCTS. The Company focuses on introducing new products to
increase readership and advertising revenues at each of its existing
properties. New products have historically included both paid and
non-paid circulation publications. New paid publications include Sunday
editions of daily newspapers and new non-daily newspapers. Other new
products include more frequent publication of non-daily newspapers; zoned
editions of daily newspapers; niche publications covering subjects of
interest to residents of particular geographic areas and members of
particular demographic groups; special interest publications covering
subjects such as children and parenting, employment, health, seniors and
real estate; and shoppers.

EXPAND ON-LINE PRESENCE. The Company seeks to increase its overall
readership in the geographic areas it serves, leverage its franchise
identity and build advertising revenues through expanding its on-line
presence. Since 1995, the Company has published an electronic version of
the NEW HAVEN REGISTER, which the Company believes has become an
important source of news and information about Connecticut on the
Internet (http://www.ctcentral.com). The Company currently plans to
establish an on-line editorial presence and a full on-line classified
advertising service for each of its daily newspapers and the JOURNALS by
the end of 1997. The Company has to date developed, and believes it can
significantly expand, its on-line presence with minimal capital
expenditures.

37
<PAGE>
expense reduction; and (vi) synergies with the Company's existing
geographic clusters or with other potential acquisitions. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Recent Acquisitions."

Following the acquisition of a publication, the Company seeks to implement
product improvements and expense reductions quickly and efficiently.
Typically, improvements are aimed at increasing readership, enhancing
advertising and circulation revenues and increasing profitability. Such
improvements have historically included: (i) increased coverage of local
news and sports; (ii) product redesigns; (iii) increased paging, sections
and use of color and color photographs; (iv) the addition of daily
business sections with full stock market price listings, color weather
maps, Sunday editions, zoned editions and morning publication; and (v)
creative and interactive promotional campaigns. The Company also seeks to
reduce expenses by implementing operating policies and standards, many of
which are similar to those in use at existing properties.

The Company seeks to acquire publications located within its existing
geographic clusters. However, the Company may acquire publications not
located within existing clusters, but which, in turn, could form the bases
of new clusters. The Company believes that there are sufficient potential
acquisition candidates to justify the continued pursuit of its acquisition
strategy. However, the Company is unable to predict the number or timing
of future acquisition opportunities or whether such opportunities will
meet the Company's acquisition criteria set forth in clauses (i) through
(vi) in the second preceding paragraph.

Historically, the Company has financed acquisitions through cash on hand
and/or borrowings and anticipates that it will finance future acquisitions
through cash on hand, borrowings and/or issuances of capital stock. The
Credit Agreement contains certain restrictions on sources of financing for
acquisitions. In addition, the financial covenants contained in the Credit
Agreement may limit the Company's ability to make acquisitions. The
Company does not currently have pending any agreements, negotiations or
understandings with respect to material acquisitions pending consummation
of the Offerings or otherwise. See "Risk Factors--Acquisition Strategy"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations-- Liquidity and Capital Resources."

FOCUS ON LOCAL CONTENT. Each newspaper has a strong focus on coverage of
local news and sports, tailored to the communities it serves.
Substantially all of the Company's daily newspapers publish a minimum of
24 pages in a minimum of four sections, and each section has a process
color front page. The editorial content emphasizes key issues and topics
of interest to the local community, and includes coverage of local youth,
high school, college and professional sports, as well as local business,
politics, entertainment and culture. The newspapers typically include
complete listings of stock market quotations and stocks of local
interest, color weather maps, entertainment sections, and in many cases,
are zoned to serve more fully particular geographic segments of their
circulation areas.

38
<PAGE>
MAINTAIN AND IMPROVE PRODUCT QUALITY. The Company focuses on optimizing
its production resources to reduce costs and increase quality, with an
emphasis on capturing production synergies within each cluster of
operations. The Company maintains high standards of product quality
through offset printing, extensive use of process color and design
excellence. The Company's newspapers are typically produced using
advanced prepress pagination technology, which allows design flexibility
as well as high quality reproduction of color graphics. The Company
believes that its product quality, combined with its emphasis on local
content, attract new readers and increase effectiveness for advertisers.

ENHANCE DISTRIBUTION AND CUSTOMER SERVICE. Substantially all of the
Company's daily newspapers have morning distribution. The Company
implements comprehensive customer service and quality control programs to
ensure that its newspapers are delivered complete, on time and in good
condition. The Company promotes single copy sales because it believes
that such sales have higher readership than subscription sales and that
single copy readers tend to be more active consumers of goods and
services, as indicated by a recent NAA study. In addition, the Company
tracks rates of newspaper returns and customer service calls through
formal reports, which are reviewed weekly in an effort to optimize the
number of newspapers available for sale and to improve delivery and
customer service. The Company further implements carrier retention
programs to enhance delivery of its newspapers and utilizes distribution
methods which make its newspapers readily available to customers.

FACILITATE MARKETING AND PROMOTION. The Company's marketing programs
include third party market research; sophisticated value-added sales
presentations; special section and niche and special interest publication
development; and creative and interactive promotional campaigns designed
to encourage strong reader involvement and generate traffic for
advertisers. In many cases, the Company develops campaigns in partnership
with local advertisers which seek to increase traffic for the advertiser
and readership of the Company's newspapers.

IMPLEMENT FINANCIAL CONTROLS. For each of its operations, the Company's
corporate management team utilizes a detailed annual budgeting process,
reviews complete monthly financial statements and maintains strict cost
controls. The Company also strives to maintain low overhead expenses and
centrally purchases, among other things, newsprint, ink, office equipment
and supplies, production equipment and telecommunication services.

PROMOTE COMMUNITY INVOLVEMENT. The Company believes that each of its
newspapers is an integral part of the communities it serves. Local
management often participates on the boards of directors of local
institutions; newspaper staff identify and address community issues; and,
in many cases, management and employees also champion local service
organizations, both editorially and through direct personal involvement.

OVERVIEW OF OPERATIONS

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

CONNECTICUT. The Company owns the NEW HAVEN REGISTER, an approximately
100,000 circulation daily newspaper, four suburban daily newspapers, 51
non-daily publications and one commercial printing company. The suburban daily
newspapers in this cluster are THE HERALD (New Britain), THE BRISTOL PRESS, THE
REGISTER CITIZEN (Torrington) and THE MIDDLETOWN PRESS. The five daily
newspapers have aggregate daily and Sunday circulation of approximately 172,000
and 186,000, respectively. The 51 suburban and community non-daily publications
have aggregate distribution of approximately 675,000. Combined, the Company's
Connecticut daily newspapers and non-daily publications serve a state-wide
audience with concentrations in the northwest (Litchfield County) through
Hartford and its suburban areas to the greater New Haven area and the
Connecticut shoreline from New Haven northeast to New London. The Connecticut
cluster accounted for approximately 35% of the Company's 1996 revenues.

39
<PAGE>
The following table sets forth information regarding the Company's
publications in Connecticut:

<TABLE>
<CAPTION>
YEAR YEAR DAILY SUNDAY NON-DAILY
PUBLICATION ORIGINATED(1) ACQUIRED LOCATION CIRCULATION(2) CIRCULATION(2) DISTRIBUTION(3)
- -------------------------- ----------------- ------------- --------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
NEW HAVEN REGISTER........ 1755 1989 New Haven 100,102 116,936
THE HERALD................ 1881 1995 New Britain 28,061 56,370(4)
THE BRISTOL PRESS......... 1871 1994 Bristol 18,238 (4)
THE REGISTER CITIZEN...... 1889 1993 Torrington 13,601 12,871
THE MIDDLETOWN PRESS...... 1884 1995 Middletown 12,111 (4)
Shore Line Newspapers
13 publications......... 1877 1995 Guilford 131,867
Elm City Newspapers
8 publications.......... 1931 1995 Milford 48,865
Imprint Newspapers
15 publications......... 1931 1995 Bristol 142,563
Foothills Trader
3 publications.......... 1965 1995 Torrington 50,000
CONNECTICUT'S COUNTY
KIDS.................... 1989 1996 Westport 40,000
EAST HARTFORD GAZETTE..... 1885 1995 East Hartford 20,000
THOMASTON EXPRESS......... 1874 1994 Thomaston 1,401
TMC (9 publications)...... 240,314
------------- ------------- -------

TOTALS.................... 172,113 186,177 675,010
------------- ------------- -------
------------- ------------- -------
</TABLE>

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

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

(2) Circulation averages for the six months ended September 30, 1996, according
to ABC Fas-Fax Report.

(3) Non-daily distribution includes both paid (60,156) and free (614,854)
distribution. Paid and free non-daily distribution for Shore Line and Elm
City Newspapers reflects the monthly average for September 1996. All other
non-daily distribution reflects average distribution for December 1996.

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

The NEW HAVEN REGISTER is the Company's largest newspaper based on daily
circulation and is the second largest daily circulation newspaper in
Connecticut. The NEW HAVEN REGISTER serves a primary circulation area comprised
of the majority of New Haven County and portions of Middlesex and New London
Counties. This area (including portions of Fairfield County which are served by
related non-daily publications) has a population of 773,215 and had population
growth of approximately 7% from 1980 to 1996. Such area has an average household
income of $65,031, which is 22% above the national average of $53,176, and a
retail environment of approximately 6,800 stores. This area features a number of
large and well established institutions, including Yale University and Yale-New
Haven Hospital. As a result of its proximity to the large media markets of New
York City, Boston and Hartford, New Haven has only one locally licensed
television station (which serves a state-wide, rather than a local, audience)
and a fragmented radio market. Consequently, the Company believes that the NEW
HAVEN REGISTER is a powerful local news and advertising franchise for the
greater New Haven area.

THE HERALD, THE BRISTOL PRESS and THE MIDDLETOWN PRESS serve contiguous
areas between New Haven and Hartford. THE BRISTOL PRESS serves an area which has
a population of 319,807 and had population growth of approximately 5% from 1980
to 1996. This area has an average household income of $73,517, which is 38%
above the national average. THE MIDDLETOWN PRESS serves an area which has a
population of 99,333 and had population growth of approximately 15% from 1980 to
1996. This area has an average household income of $62,258, which is 17% above
the national average. THE HERALD serves an area which has a population of
106,347 and had population growth of approximately 1% from 1980 to 1996. This
area

40
<PAGE>
has an average household income of $52,910. THE REGISTER CITIZEN serves an area
which has a population of 243,424 and had population growth of approximately 12%
from 1980 to 1996. This area has an average household income of $71,175, which
is 34% above the national average.

The Connecticut publications benefit from considerable cross-selling of
advertising as well as from news-gathering and production synergies. The NEW
HAVEN REGISTER gathers state-wide news for all of the Company's Connecticut
newspapers; the newspapers cross-sell advertising through a one-order, one-bill
system; and THE HERALD and THE MIDDLETOWN PRESS are printed at one facility, as
are THE REGISTER CITIZEN and THE BRISTOL PRESS. Moreover, in August 1996, in
order to take advantage of the contiguous nature of the geographic areas served
by THE HERALD, THE BRISTOL PRESS and THE MIDDLETOWN PRESS, the Company started a
Sunday newspaper, THE HERALD PRESS, serving readers of these three dailies with
three zoned editions and having Sunday circulation of approximately 56,370.

OHIO. The Company owns three daily newspapers and a commercial printing
operation in Ohio. The daily newspapers are THE NEWS-HERALD (Lake County), THE
MORNING JOURNAL (Lorain) and THE TIMES REPORTER (Dover-New Philadelphia). The
Ohio newspapers have aggregate daily and Sunday circulation of approximately
117,000 and 137,000, respectively. The Ohio cluster accounted for approximately
19% of the Company's 1996 revenues.

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

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

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

(2) Circulation averages for the six months ended September 30, 1996, according
to ABC Fas-Fax Report.

(3) Non-daily distribution is solely free distribution and reflects average
distribution for December 1996.

THE NEWS-HERALD and THE MORNING JOURNAL serve areas located directly east
and west of Cleveland, respectively. THE NEWS-HERALD, which is one of Ohio's
largest suburban newspapers, serves communities located in Lake and Geauga
Counties, two of Ohio's four most affluent counties. Lake and Geauga Counties
have populations of 222,797 and 83,173, respectively, and had population growth
of approximately 5% and 12%, respectively, from 1980 to 1996. Lake and Geauga
Counties have average household incomes of $55,321 and $82,042, respectively.
THE MORNING JOURNAL serves an area which has a population of 148,382 and had
population growth of approximately 2% from 1980 to 1996. This area has an
average household income of $47,977. THE TIMES REPORTER serves the rural
communities of Dover and New Philadelphia, which are located 75 miles south of
Cleveland. THE TIMES REPORTER serves an area which has a population of 103,433
and had population growth of approximately 5% from 1980 to 1996. This area has
an average household income of $37,447. The Company believes that each of its
three Ohio newspapers benefits from a fragmented local media environment. The
Company further believes that THE NEWS-HERALD and THE MORNING JOURNAL compete
effectively with Cleveland's major metropolitan newspaper due to their focus on
coverage of local news and sports. The Company's Ohio cluster benefits from a
variety of synergistic opportunities, including the cross-selling of advertising
and editorial coverage.

41
<PAGE>
PHILADELPHIA AND SURROUNDING AREAS. The Company owns four daily newspapers
and 11 non-daily publications serving areas surrounding Philadelphia,
Pennsylvania. These publications include, in Pennsylvania, the DAILY LOCAL NEWS
(West Chester), THE TIMES HERALD (Norristown), THE PHOENIX (Phoenixville) and a
group of non-daily newspapers serving Philadelphia's affluent Main Line; and, in
New Jersey, THE TRENTONIAN (Trenton). The four daily newspapers have aggregate
daily and Sunday circulation of approximately 126,000 and 103,000, respectively.
This cluster's non-daily distribution totals approximately 165,000. This cluster
accounted for approximately 17% of the Company's 1996 revenues.

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

<TABLE>
<CAPTION>
YEAR YEAR DAILY SUNDAY NON-DAILY
PUBLICATION ORIGINATED (1) ACQUIRED LOCATION CIRCULATION(2) CIRCULATION(2) DISTRIBUTION(3)
- -------------------------- ----------------- ------------- ------------------ ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
DAILY LOCAL NEWS.......... 1872 1986 West Chester, PA 34,457 32,582
THE TIMES HERALD.......... 1799 1993 Norristown, PA 25,365 21,583
THE PHOENIX............... 1888 1986 Phoenixville, PA 4,681
THE TRENTONIAN............ 1945 1985 Trenton, NJ 61,678 48,468
Suburban Philadelphia
7 publications.......... 1885 1986 Suburban 92,100
Philadelphia
TMC (4 publications)...... 72,717
------------- ------------- -------
TOTALS.................... 126,181 102,633 164,817
------------- ------------- -------
------------- ------------- -------
</TABLE>

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

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

(2) Circulation averages for the six months ended September 30, 1996, according
to ABC Fas-Fax Report.

(3) Non-daily distribution includes both paid (11,025) and free (153,792)
distribution. Non-daily distribution reflects average distribution for
December 1996.

The Company's Pennsylvania publications are all located within 30 miles of
Philadelphia. These newspapers serve geographic areas with highly desirable
demographics: The DAILY LOCAL NEWS serves an area which has a population of
386,951 and had population growth of approximately 29% from 1980 to 1996. This
area has an average household income of $80,100, which is 51% above the national
average. THE TIMES HERALD serves an area which has a population of 170,108 and
had population growth of approximately 3% from 1980 to 1996. This area has an
average household income of $76,456, which is 44% above the national average.
THE PHOENIX serves an area which has a population of 99,564 and had population
growth of approximately 14% from 1980 to 1996. This area has an average
household income of $82,722, which is 56% above the national average. The
Company's weekly newspaper group in suburban Philadelphia serves an area which
has a population of 316,585 and had population growth of approximately 17% from
1980 to 1996. This area has an average household income of $98,770, which is 86%
above the national average. Each of the Company's Pennsylvania properties is
located within 20 miles of the area's largest retail complex, the King of
Prussia Plaza and Court, which is the largest mall on the East Coast of the
United States in terms of total square footage. THE TRENTONIAN is published in
Trenton, the capital of New Jersey, located 40 miles north of Philadelphia and
75 miles south of New York City. THE TRENTONIAN serves an area which has a
population of 295,088 and had population growth of approximately 8% from 1980 to
1996. This area has an average household income of $65,780, which is 24% above
the national average. THE TRENTONIAN's tabloid format and emphasis on local
sports allows it to compete effectively with the other local daily newspaper in
Trenton. Unlike Sunday circulation figures for most of the Company's other
newspapers, the Sunday circulation figures for the newspapers in this cluster
are less than those for the corresponding daily circulation. This is due, in
part, to the fact that the Sunday editions located in this cluster, including
that of the largest newspaper in this cluster in terms of circulation, THE
TRENTONIAN, were generally commenced more recently than those located in other
clusters and several years later than the

42
<PAGE>
daily editions of such newspapers. The Sunday circulation figures in this
cluster are below those for daily newspapers also as a result of the fact that
THE TRENTONIAN is distributed in a tabloid format, which format, in the
Company's opinion, generally has higher circulation during the week than on
weekends due to its higher percentage of single copy sales. The Company believes
that its newspapers in this cluster compete effectively in the areas they serve
with Philadelphia's major metropolitan newspapers and radio stations due to
their focus on local news and sports. The Company's Philadelphia cluster
cross-sells advertising. The nature of the cluster has allowed for the
implementation of significant cost saving programs. For example, THE TIMES
HERALD and several non-daily suburban publications share printing facilities, as
do the DAILY LOCAL NEWS and THE PHOENIX. THE TRENTONIAN's television guide is
printed at the DAILY LOCAL NEWS facility. All of these publications share
certain news-gathering resources.

GREATER ST. LOUIS AREA. The Company owns the JOURNALS, the largest group of
suburban and community non-daily newspapers in the United States (in terms of
total distribution), one daily newspaper and a commercial printing operation in
the greater St. Louis area. The JOURNALS are a group of 40 newspapers which are
distributed two to three times each week in the St. Louis suburban areas,
including communities in Illinois, with total weekly distribution of
approximately 1.6 million. The Company's daily newspaper in this cluster, THE
TELEGRAPH (Alton, IL), has daily and Sunday circulation of approximately 30,000
and 32,000, respectively. This cluster accounted for approximately 16% of the
Company's 1996 revenues.

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

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

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

(2) Circulation averages for the six months ended September 30, 1996, according
to ABC Fas-Fax Report.

(3) Non-daily distribution includes both paid (9,263) and free (1,639,329)
distribution and reflects September 1996 net distribution.

The JOURNALs have total distribution of approximately 949,000 mid-week and
approximately 638,000 on Sunday, for total weekly distribution of approximately
1.6 million. The JOURNALS reach approximately 90% of the homes in the greater
St. Louis area. The JOURNALS serve an area which has a population of
approximately 2.4 million and had population growth of approximately 5% from
1980 to 1996. This area has an average household income of $57,585. According to
EDITOR & PUBLISHER magazine, St. Louis is the 17th largest metropolitan area in
the United States. The JOURNALS have received national recognition and have been
studied by domestic and foreign publishers as a model of successful neighborhood
newspapers. Due to St. Louis' character as a city of neighborhoods--92
municipalities comprise St. Louis County alone, the Company believes the
JOURNALS offer local retailers a cost-effective way to reach targeted
demographic groups, which enables the JOURNALS to compete effectively with the
major metropolitan daily and other weekly newspapers in the area. The Company
believes that the area's largest radio station competes primarily for major
accounts rather than small advertisers and, thus, is not a significant direct
competitor. The Company believes that the JOURNALS' targeted, highly localized
approach places the JOURNALS in a strong competitive position. THE TELEGRAPH
serves a community located in southeast Illinois, within the greater St.

43
<PAGE>
Louis area and which is connected by a new bridge to St. Louis. THE TELEGRAPH
serves an area which has a population of 120,628, which is essentially unchanged
since 1980. This area has an average household income of $41,784.

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

CENTRAL NEW ENGLAND. The Company owns five daily and 11 non-daily
publications in the central New England area. The Company's publications in this
cluster include THE HERALD NEWS (Fall River, MA), the TAUNTON DAILY GAZETTE
(Taunton, MA), THE RECORD (Troy, NY), THE CALL (Woonsocket, RI), THE TIMES
(Pawtucket, RI) and a group of weekly newspapers serving the Narragansett, Rhode
Island area. The five daily newspapers have aggregate daily circulation of
approximately 111,000 and aggregate Sunday circulation of approximately 83,000.
The non-daily publications in this cluster have total distribution of
approximately 153,000. The central New England cluster accounted for
approximately 13% of the Company's 1996 revenues.

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

<TABLE>
<CAPTION>
YEAR YEAR DAILY SUNDAY NON-DAILY
PUBLICATION ORIGINATED(1) ACQUIRED LOCATION CIRCULATION(2) CIRCULATION(2) DISTRIBUTION(3)
- ---------------------------- --------------- ------------- ----------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
THE HERALD NEWS............. 1872 1985 Fall River, MA 30,319 32,558
TAUNTON DAILY GAZETTE....... 1848 1996 Taunton, MA 15,270
THE RECORD.................. 1896 1987 Troy, NY 27,216 31,003
THE CALL.................... 1892 1984 Woonsocket, RI 19,807 19,485
THE TIMES................... 1885 1984 Pawtucket, RI 18,098
Southern Rhode Island
Newspapers
5 non-daily publications.. 1854 1995 Wakefield, RI 30,436
THE CUMBERLAND SHOPPER...... 1996 1996 Pawtucket and 10,000
Woonsocket, RI
TMC (5 publications)........ 112,600
------------- ------ -------
TOTALS...................... 110,710 83,046 153,036
------------- ------ -------
------------- ------ -------
</TABLE>

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

(2) Circulation averages for the six months ended September 30, 1996, according
to ABC Fas-Fax Report.

(3) Non-daily distribution includes both paid (30,436) and free (122,600)
distribution. Paid and free non-daily distribution for Southern Rhode Island
Newspapers (except THE COVENTRY COURIER) reflects the June 30, 1996 CAC
Audit report. The other non-daily distribution figures reflect average
distribution for December 1996.

THE HERALD NEWS and the TAUNTON DAILY GAZETTE are situated 14 miles apart.
Each is approximately 50 miles south of Boston, Massachusetts and 20 miles east
of Providence, Rhode Island. The region's largest shopping mall, located in
Taunton, contains one million square feet of retail space and approximately 150
stores. THE HERALD NEWS serves an area which has a population of 163,500 and had
population growth of approximately 1% from 1980 to 1996. This area has an
average household income of $43,854. The TAUNTON DAILY GAZETTE serves an area
which has a population of 112,108 and had population growth of approximately 13%
from 1980 to 1996. This area has an average household income of $50,685. THE
CALL

44
<PAGE>
serves an area which has a population of 171,676 and had population growth of
approximately 9% from
1980 to 1996. This area has an average household income of $54,799. THE TIMES
serves an area which has a population of 184,025 and had population growth of
approximately 4% from 1980 to 1996. This area has an average household income of
$48,698. Southern Rhode Island Newspapers serve an area which has a population
of 151,484 and had population growth of approximately 24% from 1980 to 1996.
This area has an average household income of $68,087, which is 28% above the
national average. THE RECORD (Troy, NY) serves an area which has a population of
182,484 and had population growth of approximately 5% from 1980 to 1996. This
area has an average household income of $47,455. No local television stations
exist in the communities which the central New England newspapers serve.
Further, the Company believes that its central New England properties benefit
from fragmented local radio markets. As a result, the Company believes that each
of its newspapers is a significant media outlet in its respective community,
thereby making these newspapers attractive vehicles for area advertisers. The
central New England newspapers benefit from advertising cross-selling; moreover,
the Company's Massachusetts and Rhode Island newspapers benefit from significant
production and editorial synergies. For example, THE TIMES and THE HERALD NEWS
are printed at the same facility. Moreover, THE TIMES, THE CALL and the group of
paid suburban and community non-daily newspapers serving southern Rhode Island
all share certain news gathering resources. The Company believes that
significant synergistic opportunities may be available between the TAUNTON DAILY
GAZETTE, the Company's most recent acquisition, and THE HERALD NEWS.

ADVERTISING

Substantially all the Company's advertising revenues are derived from a
diverse group of local retailers and classified advertisers. The Company
believes that because its newspapers rely on a broad base of local retail and
local classified advertising rather than more volatile national and major
account advertising, its advertising revenues tend to be relatively stable.
Local advertising is more stable than national advertising because a community's
need for local services provides a stable base of local businesses and because
local advertisers generally have fewer effective advertising vehicles from which
to choose. Advertising revenues accounted for approximately 73% of the Company's
total revenues for 1996. The Company's advertising rate structures vary among
its publications and are a function of various factors, including results
achieved for advertisers, local market conditions and competition, as well as
circulation, readership, demographics and type of advertising (whether
classified or display). In 1996, local and regional advertising accounted for
the largest share of the Company's advertising revenues (42%), followed by
classified advertising (38%), pre-printed inserts (16%), legal advertising (2%)
and national advertising (2%). The Company's advertising revenues are not
reliant upon any one company or industry, but rather are supported by a variety
of companies and industries, including realtors, car dealerships, grocery stores
and other local businesses. No advertiser accounted for more than 2% of the
Company's total 1996 advertising revenues. The Company's corporate management
works with its local newspaper management to approve advertising rates and to
establish goals for each year during a detailed budget process. Local management
is given little latitude for discounting from the approved rates. Corporate
management also works with local advertising staff to develop marketing kits,
presentations and third-party research studies. A portion of the compensation
for the Company's publishers is based upon increasing advertising revenues. The
Company stresses the timely collection of receivables, and sales compensation
depends in part upon performance relative to goals and timely collection of
advertising receivables. Additionally, corporate management facilitates the
sharing of advertising resources and information across the Company's
publications. See "Risk Factors--Dependence on Local Economies."

CIRCULATION

Substantially all of the Company's circulation revenues are derived from
home delivery sales of publications to subscribers and single copy sales made
through retailers and vending racks. Circulation accounted for approximately 23%
of the Company's total revenues in 1996. Approximately 71% of 1996 circulation
revenues were derived from subscription sales and approximately 29% from single
copy sales.

45
<PAGE>
Single copy sales rates currently range from $.35 to $.50 per daily copy and
$.50 to $1.75 per Sunday copy. The Company promotes single copy sales of its
newspapers because it believes that such sales have higher readership than
subscription sales and that single copy readers tend to be more active consumers
of goods and services, as indicated by a recent NAA study. Single copy sales
also tend to generate a higher profit than subscription sales, as single copy
sales generally have higher per unit prices and lower associated distribution
costs. In 1996, the Company had total daily circulation of approximately
556,000, Sunday circulation of approximately 541,000 and non-daily distribution
of approximately 2.7 million, most of which is distributed free of charge. The
Company's corporate management works with its local newspaper management to
establish subscription and single copy rates. In addition, the Company tracks
rates of newspaper returns and customer service calls through formal reports
which are reviewed weekly in an effort to optimize the number of newspapers
available for sale and to improve delivery and customer service. The Company
also implements creative and interactive programs and promotions to increase
readership, through both subscription and single copy sales. Circulation has
generally declined throughout the newspaper industry in recent years, and the
Company's newspapers have generally experienced this trend, even as overall
operating performance of its newspapers has improved. The Company seeks to
maximize the overall operating performance rather than maximizing circulation of
its individual newspapers.

OTHER OPERATIONS

The Company owns and operates three commercial printing facilities: Imprint
Printing in North Haven, Connecticut; Midwest Offset in New Philadelphia, Ohio;
and Mississippi Valley Offset in St. Louis, Missouri. These operations also
print certain of the Company's publications. The commercial printing operations
accounted for approximately 4% of the Company's 1996 revenues. The Company also
owns Integrated Newspaper Systems, Inc., a company which develops application
software for the newspaper industry.

EMPLOYEE RELATIONS

The Company employs approximately 4,250 employees (including approximately
1,370 part-time employees) in 10 states and has agreements with 16 local
collective bargaining agents representing, in the aggregate, approximately 380
full-time and 210 part-time employees. Of such 4,250 employees, approximately
100 hold positions in management/administration, approximately 875 hold
positions in editorial, approximately 800 hold positions in advertising and
approximately 2,475 hold positions in production/operations. Other than a
one-day strike by employees at THE TIMES HERALD of Norristown, Pennsylvania
occurring immediately after the Company's acquisition of such newspaper in
September 1993, the Company has not experienced any strikes or general work
stoppages in the past five years. The Company is in the process of negotiating
collective bargaining agreements with respect to approximately 100 full-time and
80 part-time employees. In the next 12 months, contracts with six collective
bargaining units, representing, in the aggregate, 100 of the Company's
employees, are scheduled for renegotiation. The Company believes that its
relations with its employees are satisfactory.

RAW MATERIALS

46
<PAGE>
newsprint at price levels lower than those which are available to individually
owned small metropolitan and suburban daily newspapers and suburban and
community non-daily publications and consistent with price levels generally
available to the largest newsprint purchasers. The available sources of
newsprint have been, and the Company believes will continue to be, adequate to
supply the Company's needs. The inability of the Company to obtain an adequate
supply of newsprint in the future could have a material adverse effect on the
financial condition and results of operations of the Company. Historically, the
price of newsprint has been cyclical and volatile. In 1995 and 1996, the
Company's average cost of newsprint reflected increases of approximately 34% and
13%, compared to the previous year, respectively. In December 1996, newsprint
suppliers announced a newsprint price increase planned to take effect in
February 1997; this increase was delayed. The initial announcements indicated
that the increase would be $75 per metric ton. The Company has been informed by
its suppliers that they will implement some portion of the announced price
increase. The Company believes that if any price increase is sustained in the
industry, the Company will also be impacted by such increase. The Company is
unable to predict whether, or to what extent, any increase will be sustained.
The Company seeks to manage the effects of increases in prices of newsprint
through a combination of, among other things, technology improvements, including
web width reductions, inventory management and advertising and circulation price
increases. The Company also has reduced fringe circulation in response to
increased newsprint prices, as it is the Company's experience that such
circulation does not provide adequate response for advertisers. See "Risk
Factors--Price and Availability of Newsprint" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

SEASONALITY

Newspaper companies tend to follow a distinct and recurring seasonal
pattern. The first quarter of the year (January-March) tends to be the weakest
quarter because advertising volume is then at its lowest level. Correspondingly,
the fourth quarter (October-December) tends to be the strongest quarter as it
includes heavy holiday season advertising. See "Risk Factors--Fluctuation of
Quarterly Results" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Quarterly Results."

COMPETITION

While many of the Company's small metropolitan and suburban daily newspapers
are the only daily newspapers of general circulation published in their
respective communities, they compete within their own geographic areas with
other daily newspapers of general circulation published in adjacent or nearby
cities and towns. Competition for advertising expenditures and paid circulation
comes from local, regional and national newspapers, shoppers, television, radio,
direct mail, on-line services and other forms of communication and advertising
media. Since 1995, the Company has been developing on-line publications based on
its newspapers and is seeking to attract advertising for its on-line
publications. The Company has published an on-line version of the NEW HAVEN
REGISTER since 1995. The Company intends to establish an on-line editorial
presence and a full on-line classified advertising service for each of its daily
newspapers and the JOURNALS by the end of 1997. Competition for newspaper
advertising expenditures is largely based upon advertiser results, readership,
advertising rates, demographics and circulation levels, while competition for
circulation and readership is based largely upon the content of the newspaper,
its price and the effectiveness of its distribution. The Company's non-daily
publications, including shoppers and real estate guides, primarily compete with
direct mail advertising, shared mail packages and other private advertising
delivery services. As with daily newspapers, competition for advertising
expenditures for suburban and community non-daily publications is largely based
upon advertiser results, readership, advertising rates, demographics and
circulation levels. The Company believes that, because of the relative
competitive position of its suburban and community non-daily publications in the
communities which they serve, such publications generally have been able to
compete effectively with other forms of media

47
<PAGE>
advertising. Commercial printing, a highly competitive business, is largely
driven by price and quality. See "Risk Factors--Newspaper Industry Competition."

LEGAL PROCEEDINGS

The Company is involved in a number of litigation matters which have arisen
in the ordinary course of business. The Company believes that the outcome of
these legal proceedings will not have a material adverse effect on the Company's
financial condition or results of operations. See "Risk Factors--Potential
Litigation Exposure."

ENVIRONMENTAL MATTERS

As is the case with other newspaper and similar publication companies, the
Company is subject to a wide range of federal, state and local environmental
laws and regulations pertaining to air and water quality, storage tanks, and the
management and disposal of wastes at its facilities. To the best of the
Company's knowledge, its operations are in material compliance with applicable
environmental laws and regulations as currently interpreted. The Company
believes that continued compliance with these laws and regulations will not have
a material adverse effect on the Company's financial condition or results of
operations. The Company is in the process of developing a remediation plan for
possible groundwater contamination which has been detected at one of its
facilities. The Company is assessing the potential remediation costs. The
Company believes that the remediation of any such groundwater contamination will
not have a material adverse effect on its financial condition or results of
operations. See "Risk Factors--Environmental Matters."

REGULATION

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

48
<PAGE>
PROPERTIES AND FACILITIES

The Company owns and operates 69 facilities used in the course of producing
and publishing its daily and non-daily publications. Approximately 38 of the
Company's facilities are leased for terms ranging from one to five years. These
leased facilities range in size from approximately 250 to 22,000 square feet.
The location and approximate size of the principal physical properties used by
the Company at December 31, 1996, as well as the expiration date of the leases
relating to such properties which the Company leases, are set forth below:

<TABLE>
<CAPTION>
APPROXIMATE AREA IN SQUARE FEET
--------------------------------------
<S> <C> <C> <C>
LEASE EXPIRATION
LOCATION OWNED SQUARE FEET LEASED SQUARE FEET DATE
- --------------------------------- ------------------ ------------------ --------------------
New Haven, CT.................... 205,000(1)(3)
New Britain, CT.................. 44,899(1)(3)
Bristol, CT...................... 40,000(1)(4)
Torrington, CT................... 36,120(1)(3)
Middletown, CT................... 30,000(1)(4)
North Haven, CT.................. 24,000(3) 10,000(5) 12/31/97
Guilford, CT..................... 18,400(1)
West Hartford, CT................ 14,200(1)
Milford, CT...................... 11,745(1)
Willoughby, OH................... 113,400(1)(3)
Lorain, OH....................... 68,770(1)(3)
New Philadelphia, OH............. 85,567(1)(3)
Trenton, NJ...................... 54,642(1)(3) 18,889(2) 11/30/00
West Chester, PA................. 34,000(1)(3)
Norristown, PA................... 40,000(1)(3)
Phoenixville, PA................. 10,696(1)(4)
Wayne, PA........................ 11,980(1)(4)
Fall River, MA................... 57,571(1)(3)
Taunton, MA...................... 21,100(1)(4)
Troy, NY......................... 50,000(1)(4)
Woonsocket, RI................... 49,338(1)(3)
Pawtucket, RI.................... 41,096(1)(4)
Wakefield, RI.................... 11,750(1)(4)
St. Louis, MO.................... 69,415(1)(3) 22,043(1) 12/31/00
Woodson Terrace, MO.............. 5,000(1) 02/09/99
St. Charles, MO.................. 4,298(1) 06/30/99
Collinsville, IL................. 14,587(1)
Granite City, IL................. 17,550(1)
Belleville, IL................... 8,400(1)
Alton, IL........................ 48,000(1)(3)
</TABLE>

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

(1) Offices

(2) Corporate headquarters

(3) Printing plant

(4) Production facility

(5) Warehouse

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

49
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning the directors,
executive officers and other senior management of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Robert M. Jelenic.................................... 46 Chairman, President, Chief Executive Officer and
Director
Jean B. Clifton...................................... 36 Executive Vice President, Chief Financial Officer,
Treasurer, Secretary and Director
Allen J. Mailman..................................... 50 Vice President, Technology
Trish K. Dresser..................................... 38 Vice President, Marketing and Promotion
William J. Higginson................................. 41 Vice President, Production
William J. Rush...................................... 60 Vice President of the Company and Publisher and Chief
Executive Officer, NEW HAVEN REGISTER
John Collins......................................... 44 Vice President, Budgets and Planning
Diane B. Pardee...................................... 37 Vice President, Corporate Communications
Douglas M. Karp...................................... 41 Director
Sidney Lapidus....................................... 59 Director
John L. Vogelstein................................... 62 Director
</TABLE>

Following completion of the Offerings, the Company intends to elect two
additional persons, each of whom will be independent directors, to the Board of
Directors.

ROBERT M. JELENIC is the Chairman, President and Chief Executive Officer of
the Company. He has been President and Chief Executive Officer since the
inception of the Company in 1990 and has been a director of the Company and its
predecessors for more than the past five years. A Chartered Accountant, Mr.
Jelenic began his business career with Arthur Andersen in Toronto, Canada. Mr.
Jelenic has 21 years of senior management experience in the newspaper industry,
including 12 years with the Toronto Sun Publishing Corp. Mr. Jelenic is a
director of the NAA.

JEAN B. CLIFTON is Executive Vice President, Chief Financial Officer,
Treasurer and Secretary of the Company, positions she has held since the
inception of the Company, and has been a director of the Company and its
predecessors for more than the past five years. Prior to joining the Company,
Ms. Clifton, a Certified Public Accountant, had been employed by Arthur Young &
Co. (a predecessor to Ernst & Young LLP). She has 11 years of senior management
experience in the newspaper industry. Ms. Clifton is a member of the Postal
Affairs Committee and the Employee Benefits Committee of the NAA.

ALLEN J. MAILMAN is Vice President of Technology of the Company, a position
he has held since March 1994. From the Company's inception in 1990 to March
1994, Mr. Mailman was Corporate Director of Information Services of the Company.
He has 22 years of management experience in the newspaper industry, including 14
years with Newhouse Publications.

TRISH K. DRESSER is Vice President of Marketing and Promotion of the
Company, a position she has held since June 1995. From the Company's inception
in 1990 until June 1995, Ms. Dresser was Corporate Director of Promotions of the
Company. She has 12 years of experience in the newspaper industry, including
five years with the Toronto Sun Publishing Corp.

WILLIAM J. HIGGINSON is Vice President of Production of the Company, a
position he has held since July 1995. From January 1994 to July 1995, he was
Corporate Production Director of the Company and, from 1991 to January 1994, was
Production Director of the NEW HAVEN REGISTER. Mr. Higginson has 24 years of
experience in the newspaper industry.

50
<PAGE>
WILLIAM J. RUSH is Vice President of the Company, a position he has held
since January 1996, and Publisher and Chief Executive Officer of the NEW HAVEN
REGISTER, a position he has held since 1990. Mr. Rush, with 39 years of
experience in the newspaper industry, has held, at various times, the top
executive position at seven newspapers in three states.

JOHN COLLINS is Vice President of Budgets and Planning of the Company, a
position he has held since April 1996. From June 1995 to April 1996, Mr. Collins
was Vice President, Finance of the Company and, from December 1991 to June 1995,
was Chief Financial Officer of the NEW HAVEN REGISTER. He has 19 years of
experience in the newspaper industry, including 10 years with Times Mirror
Corporation.

DIANE B. PARDEE is Vice President of Corporate Communications of the
Company, a position she has held since August 1996. Prior to her present
position, she was Director of Corporate Communications of the Company from
September 1993 to August 1996, Director of Public Affairs for the Business
Committee for the Arts, Inc. from April 1992 to June 1993 and prior to that, she
was Editor-in-Chief of UNIQUE HOMES magazine.

DOUGLAS M. KARP has been a director of the Company since March 1997. Mr.
Karp has been a General Partner of Warburg, Pincus & Co. ("WP") and a Member and
Managing Director of E.M. Warburg, Pincus & Co., LLC ("EMWP") and its
predecessors since 1991. He is a director of LCI International, Inc., TresCom
International, Inc., TV Filme, Inc. and several privately held companies.

SIDNEY LAPIDUS has been a director of the Company and its predecessors for
more than the past five years. Mr. Lapidus has been a General Partner of WP and
a Member and Managing Director of EMWP and its predecessors since 1982, where he
has been employed since 1967. He is a director of Caribiner International, Inc.,
Grubb & Ellis Company, Knoll, Inc., Pacific Greystone Corporation, Panavision
Inc. and several privately held companies.

JOHN L. VOGELSTEIN has been a director of the Company and its predecessors
for more than the past five years. Mr. Vogelstein is a General Partner of WP and
a Member, Vice Chairman and President of EMWP, where he has been employed since
1967. Mr. Vogelstein is a director of ADVO Inc., Aegis Group plc., Golden Books
Family Entertainment, Inc., Knoll, Inc., LCI International, Inc., Mattel, Inc.,
Value Health, Inc., Vanstar Corporation and several privately held companies.

Prior to completion of the Offerings, the Board of Directors will be divided
into three classes serving staggered three-year terms. At each annual meeting of
stockholders of the Company, successors to the class of directors whose term
expires at such meeting will be elected to serve for three-year terms and until
their successors are elected and qualified.

COMMITTEES OF THE BOARD OF DIRECTORS

After the completion of the Offerings, the Board of Directors of the Company
will have two standing committees: an Audit Committee and a Compensation
Committee.

The Audit Committee will have general responsibility for supervising
financial controls, as well as responsibility for accounting and audit
activities of the Company. The Audit Committee will annually review the
qualifications of the Company's independent certified public accountants, make
recommendations to the Board of Directors as to their selection and review the
planning, fees and results of their audit. The Audit Committee will consist
solely of independent directors as and when elected. The Compensation Committee
will be responsible for reviewing and approving the amount and type of
consideration to be paid to senior management and for administering the 1997
Plan and will consist solely of non-employee directors. See "--Compensation
Pursuant to Plans--1997 Stock Incentive Plan."

51
<PAGE>
DIRECTORS' ANNUAL COMPENSATION

The Company will reimburse its directors for all reasonable expenses
incurred in connection with their attendance at Board of Directors meetings.
Following the completion of the Offerings, independent directors will receive an
annual fee of $10,000, a fee of $1,000 for each Board of Directors meeting
attended in person and a fee of $500 for each Board of Directors meeting
attended by telephone conference call. Under the 1997 Plan, the Company will
grant independent directors during the term of their directorships non-qualified
options to purchase 10,000 shares of Common Stock annually on terms and
conditions specified by the committee administering such plan. As of the date
hereof, there are three non-employee directors of the Company, each of whom is
affiliated with Warburg, Pincus. See "-- Compensation Pursuant to Plans--1997
Stock Incentive Plan."

52
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth information concerning compensation paid by
the Company to its Chief Executive Officer and to each of its four most highly
compensated executive officers (other than the Chief Executive Officer) whose
total compensation exceeded $100,000 for the year ended December 31, 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------- ----------------
<S> <C> <C> <C> <C> <C>
NAME AND LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) PAYOUTS($)(2) COMPENSATION(3)
- -------------------------------------------- --------- ---------- ----------- ---------------- ----------------
Robert M. Jelenic,.......................... 1996 $ 800,000 $ 200,000 $ 326,667 $ 24,000
Chairman, President, Chief Executive 1995 775,000 200,000 252,000 4,500
Officer and Director 1994 750,000 150,000 0 4,500

Jean B. Clifton,............................ 1996 425,000 125,000 143,850 12,750
Executive Vice President, Chief 1995 405,000 125,000 110,250 4,500
Financial Officer, Treasurer, 1994 390,000 100,000 0 4,500
Secretary and Director

William J. Rush,............................ 1996 265,000 15,000 76,050 7,950
Vice President of the Company and 1995 245,000 15,000 58,050 4,500
Publisher and Chief Executive 1994 235,000 12,500 0 4,500
Officer, NEW HAVEN REGISTER

Allen J. Mailman,........................... 1996 180,000 7,500 48,250 5,400
Vice President of Technology 1995 165,000 10,000 36,450 4,500
1994 159,167 5,000 0 4,500

Trish K. Dresser,........................... 1996 165,000 7,500 25,933 4,950
Vice President of Marketing and Promotion 1995 142,500 12,000 19,800 4,275
1994 122,000 2,500 0 3,660
</TABLE>

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

(1) All other annual compensation has been omitted because such compensation
(which related only to perquisites and personal benefits) did not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
each listed executive officer.

(2) Prior to the Offerings, the Company maintained a bonus plan (the "StarShare
Plan"), which commenced in January 1992 and in which key employees were
eligible to participate. Each participant received award units (the
"StarShare Units") based on target percentages of his or her base salary.
Each StarShare Unit represented a proportionate share of an aggregate dollar
amount. Such dollar amount was based on certain performance measures related
to the Company's compound annual growth in cash flow and revenue and
reduction in debt and/or equity redemption over a three-year performance
period. See Note (2) to Long-Term Incentive Plan Award Table. In general,
StarShare Units granted under the StarShare Plan vested at the end of the
third anniversary of the grant. Following the applicable vesting period, the
values of the StarShare Units were paid to the participants in three annual
installments, with interest paid on the second and third payments at the
applicable treasury note rate from the first applicable payment date. The
Company presently intends to discontinue the StarShare Plan prior to
completion of the Offerings, and StarShare Units will not be convertible
into or exercisable for shares of Common Stock following completion of the
Offerings.

(3) These amounts represent the Company's matching contributions under the
Company's 401(k) Plan and Supplemental 401(k) Plan.

53
<PAGE>
LONG-TERM INCENTIVE PLAN AWARD

The following table sets forth the awards under the StarShare Plan in 1996:

<TABLE>
<CAPTION>
NUMBER OF ESTIMATED FUTURE PAYOUTS UNDER
SHARES, PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
UNITS OR OTHER PERIOD -----------------------------------------
OTHER RIGHTS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) OR PAYOUT(1) ($ OR #) ($ OR #) ($ OR #)(2)
- ------------------------------------------ ------------- ----------------- --------------- ---------- ------------

<S> <C> <C> <C> <C> <C>
Robert M. Jelenic,........................ 32,000 March 15, 1999 $ 0 $ 320,000 $ 1,200,000
Chairman, President, Chief Executive
Officer and Director

Jean B. Clifton,.......................... 14,875 March 15, 1999 0 148,750 557,813
Executive Vice President, Chief
Financial Officer, Treasurer,
Secretary and Director

William J. Rush,.......................... 7,950 March 15, 1999 0 79,500 298,125
Vice President of the Company and
Publisher and Chief Executive Officer,
NEW HAVEN REGISTER

Allen J. Mailman,......................... 5,400 March 15, 1999 0 54,000 202,500
Vice President of Technology

Trish K. Dresser,......................... 4,950 March 15, 1999 0 49,500 185,625
Vice President of Marketing and
Promotion
</TABLE>

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

(1) See Note (2) to Summary Compensation Table.

(2) To achieve maximum payout the Company's compound annual growth rate of
EBITDA for the three-year performance period must exceed 20% (without taking
into account acquisitions) and the Company's debt reduction and/or equity
redemption over such period must exceed $400 million.

54
<PAGE>
COMPENSATION PURSUANT TO PLANS

MANAGEMENT BONUS PLAN

In recognition of certain management employees' prior services to the
Company, the Company adopted the Management Bonus Plan pursuant to which it
awarded, upon pricing of the Offerings, the Management Bonuses. The Management
Bonuses are comprised of 1,100,000 shares of Common Stock valued upon award at
$14.00 per share, and a cash portion that the Company expects will be used to
satisfy recipients' tax obligations arising from the Management Bonuses. The
Bonus Shares have not yet been issued to the recipients of the Management
Bonuses. The Management Bonus Plan provides that such Bonus Shares will be
issued upon the effectiveness of a registration statement covering the Bonus
Shares, which registration statement the Company has covenanted to file as
promptly as practicable. Each Management Bonus will consist of approximately 45%
cash and 55% Common Stock. The Management Bonuses will total $28.0 million,
comprised of $15.4 million in shares of Common Stock and $12.6 million in cash.
The Management Bonuses were awarded to 36 employees of the Company, none of whom
is an affiliate of Warburg, Pincus. Mr. Jelenic, Ms. Clifton, Messrs. Rush and
Mailman and Ms. Dresser, the chief executive officer and four other most highly
compensated executive officers of the Company (see "--Executive Compensation"),
were awarded Management Bonuses with a total value of approximately $10.3
million, $5.2 million, $1.2 million, $1.2 million and $1.2 million,
respectively. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Management Bonus Plan" and "Certain Transactions."

1997 STOCK INCENTIVE PLAN

Prior to completion of the Offerings, the Board of Directors adopted and the
stockholders approved the Company's 1997 Plan. Set forth below is a discussion
of the material terms of the 1997 Plan.

Subject to adjustment as provided in the 1997 Plan, the 1997 Plan authorizes
the granting of up to 4,843,750 shares of Common Stock through (i) incentive
stock options ("ISOs") and non-qualified stock options ("NQOs") (in each case,
with or without related stock appreciation rights ("SARs")), to acquire Common
Stock, (ii) awards of restricted shares of Common Stock ("Restricted Stock"),
and (iii) performance units ("Performance Units") (collectively, "Awards") to
such directors, officers and other employees of, and consultants to, the Company
and its subsidiaries and affiliates as may be designated by the Compensation
Committee or such other committee of the Board as the Board may designate (the
"Committee"). All directors, officers, employees of, and consultants to the
Company, its subsidiaries and affiliates who are responsible for or contribute
to the management, growth and profitability of the business of the Company, its
subsidiaries and affiliates are eligible to receive Awards under the 1997 Plan;
provided, that (i) consultants are not eligible to receive grants of incentive
stock options and (ii) directors are eligible to receive only NQOs, as described
below, and Restricted Stock. Approximately 180 persons will be eligible to be
granted Awards under the 1997 Plan. No participant in the 1997 Plan may be
granted Awards covering in excess of 700,000 shares of Common Stock in any
fiscal year. The aggregate number of shares available for Awards and the
per-participant limitation are 4,843,750 and 2,000,000, respectively, subject to
adjustment for changes in capitalization, such as stock dividends or stock
splits. It is expected that Mr. Jelenic, Ms. Clifton, Messrs. Rush and Mailman
and Ms. Dresser will receive options to purchase 322,917, 161,458, 26,237,
28,255 and 28,255 shares of Common Stock, respectively, at an exercise price per
share equal to the Price to Public and options to purchase 322,917, 161,458,
26,237, 28,255 and 28,255 shares of Common Stock, respectively, at an exercise
price per share equal to 150% of the Price to Public.

The Committee will administer the 1997 Plan, approve the eligible
participants who will receive Awards, determine the form and terms of the Awards
and have the power to fix vesting periods. Subject to certain limitations, the
Committee may from time to time delegate some of its authority under the 1997
Plan.

55
<PAGE>
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
provides that publicly traded companies may not deduct compensation paid to the
chief executive officer or any of the four most highly compensated other
officers ("Covered Employees") to the extent it exceeds $1,000,000 in any one
tax year, unless the payments are made based upon the attainment of objective
performance goals that are established by a committee of the Board, comprised
solely of two or more outside directors of the Company, based upon business
criteria and other material terms approved by stockholders. This limitation will
apply to the Company following completion of the Offerings but does not apply to
the Management Bonuses. The 1997 Plan is designed so that options and SARs
granted with a fair market value exercise price, and awards of Common Stock
designated as "Performance Awards" (as described below), that are made to
Covered Employees will be considered performance-based and hence fully
deductible. However, the Committee will have the discretion to grant awards to
Covered Employees that will not qualify for the exemption from Section 162(m).
Moreover, in certain cases such as death or disability (as described below),
Performance Awards may become payable even though the performance goals are not
met, in which event the Performance Awards will not be exempt from Section
162(m) and the Company might lose part or all of its tax deduction.

Under the terms of the 1997 Plan, the Committee may from time to time grant
options to purchase shares of Common Stock at a price (generally payable in cash
and/or shares of Common Stock) determined by the Committee which in the case of
ISOs may not be less than the Fair Market Value (as defined in the 1997 Plan) of
the shares of Common Stock, as determined by the mean between the highest and
lowest sales prices on the New York Stock Exchange or such other exchange on
which the Common Stock is listed on the date the option is granted. Generally,
options may not be exercised later than ten years after the date of grant. The
Committee may also grant SARs related to the options granted under the 1997
Plan. A SAR would entitle the holder thereof to receive, upon exercise, the
appreciation from the option price to the fair market value of the shares of
Common Stock on the date of exercise, such appreciation being payable in cash
and/or in shares of Common Stock as determined by the Committee. Exercise of a
SAR cancels the related option to the extent of such exercise, and the shares of
Common Stock related thereto are not available for future grants under the 1997
Plan.

The Committee will determine the times at which an option may be exercised.
Except as otherwise determined and as set forth below, an option may only be
exercised during employment or generally during the three months following
termination of employment for any reason other than death, permanent disability,
retirement or cause. Upon termination of employment for cause, an option may no
longer be exercised. Stock options generally may be exercised during the period
of one year after death if the optionee is still in the employ of the Company or
any of its subsidiaries or affiliates at the time of death, to the extent
exercisable at the time of termination by death. After termination of an
optionee's employment with the Company or any of its subsidiaries or affiliates
on account of permanent disability, stock options generally may be exercised
during the period of three years after the date of termination to the extent
exercisable at the time of termination; provided, that in the event of death
prior to expiration of the option term following termination of employment for
permanent disability, options generally may be exercised during the period of
one year following the date of death, to the extent exercisable at the time of
death. After an optionee retires from the Company or any of its subsidiaries or
affiliates, the optionee's stock options generally may thereafter be exercised
to the extent to which they were exercisable at the time of the optionee's
retirement and may be exercised at any time during the one-year period following
retirement (or such shorter period as the Committee determines); provided, that
in the event of death prior to the expiration of the option, options generally
may be exercised during the period of one year following the date of death.

The 1997 Plan provides that the Committee may establish option exercise
procedures for purposes of permitting an optionee to defer receipt of
compensation beyond the date of the option exercise.

Under the 1997 Plan, the Committee may also make awards of Restricted Stock.
The Committee may condition the grant or vesting of such awards on the
attainment of certain performance goals and/or upon

56
<PAGE>
the participant's continued service with the Company or any of its subsidiaries
or affiliates. During the period (the "Restricted Period") commencing with the
grant of Restricted Stock and ending on attainment of the applicable performance
goals or satisfaction of the requisite period of service, the participant is not
permitted to sell, transfer, assign or otherwise dispose of the Restricted
Stock. The participant generally has the right during the Restricted Period to
vote the Restricted Stock and to receive cash dividends paid thereon. However,
the Committee may determine that such cash dividends be deferred and reinvested
in additional Restricted Stock and that dividends payable in Common Stock be
paid in Restricted Stock. Upon termination of employment prior to the end of the
Restricted Period, the Restricted Stock will be forfeited, although the
Committee may waive any remaining restrictions upon termination of employment
due to retirement or involuntary termination of employment other than for cause.

The Committee may award performance units ("Performance Units"). The
Committee may condition the vesting of such Performance Units on the attainment
of specified levels of one or more performance goals described below and/or upon
the continued service of the participant. The Performance Units may not be sold,
assigned or otherwise transferred during the period (the "Performance Cycle")
over which the Performance Units are to be earned. Upon termination of
employment prior to the end of the Performance Cycle, the Performance Units will
be forfeited, although the Committee may waive any remaining payment
limitations, except as described in the immediately following paragraph, upon
termination of employment due to retirement or involuntary termination other
than for cause. Subject to the Committee's approval, a participant may,
generally prior to commencement of the Performance Cycle, elect to defer receipt
of cash or shares in settlement of the Performance Units. At the end of the
Performance Cycle, the Committee will determine which Performance Units have
been earned and will cause to be delivered to the participant a number of shares
equal to the number of Performance Units deemed by the Committee to have been
earned or cash equal to the fair market value of such shares.

The Committee may designate an award of Restricted Stock or Performance
Units to a Covered Employee as a qualified performance-based award ("Performance
Award") and condition the vesting of such awards upon the attainment of
specified levels of one or more of the following performance goals: earnings per
share and/or return on equity. The Committee will not have the power to waive
achievement of such goals, except upon the death or disability of the
participant.

The 1997 Plan provides that the Committee may establish procedures for the
distribution of shares distributable pursuant to Performance Units for purposes
of permitting an awardee to defer compensation.

At the time any Award under the 1997 Plan is granted, the Committee may
grant the participant the right to receive a cash payment in an amount specified
by the Committee, to be paid when the award results in compensation income to
the participant and to help the participant pay the resulting taxes.

The 1997 Plan also provides that each director of the Company who is not
otherwise an employee of the Company or any of its subsidiaries or affiliates
and is not an officer, director or employee of EMWP or Warburg, Pincus will
receive, during the term of his directorship, an annual grant of non-qualified
options to purchase 10,000 shares of Common Stock on terms and conditions
specified by the Committee.

The 1997 Plan provides for the use of authorized but unissued shares or
treasury shares. To the extent that treasury shares are not used, authorized but
unissued shares of Common Stock of the Company have been reserved for issuance
upon exercise of options or distribution of Awards granted under the 1997 Plan.

No Awards may be granted under the 1997 Plan after May 6, 2007, but Awards
theretofore granted may extend beyond that date. The 1997 Plan may be amended or
discontinued by the Board of Directors at any time, but no termination may
impair the rights of any holders of options or awards granted prior thereto
without such holder's consent. Subject to certain limitations, the Committee may
amend to the terms of any Award retroactively or prospectively, but the 1997
Plan does not permit the Committee to cause a Performance Award to fail to be
exempt from Section 162(m) or impair the rights of any holder

57
<PAGE>
without the holder's consent. The Committee has the power to interpret the 1997
Plan and to make all other determinations necessary or advisable for its
administration.

Except as otherwise described herein, benefits under the 1997 Plan to the
Chief Executive Officer and the other executive officers named in the Executive
Compensation Table above, to the current executive officers of the Company and
to the other employees of the Company are not currently determinable because the
1997 Plan is discretionary.

PENSION PLAN

Mr. Rush participates in the Journal News, Inc. Retirement Plan (the "JNI
Retirement Plan"), which is a noncontributory defined benefit pension plan
covering substantially all non-union employees of certain of the Company's
subsidiaries. The JNI Retirement Plan provides for normal retirement benefits on
the later of the date on which the participant attains age 65 or the fifth
anniversary of such participant's becoming a JNI Retirement Plan participant.
Annual normal retirement benefits are based on career average pay and generally
consists of the sum of the following: (i) for each year after 1993, 1% of the
participant's "covered compensation" plus 1.5% of compensation in excess of
"covered compensation," (ii) if the participant also participated in the
predecessor pension plan, 1.5% of the participant's average annual compensation
for 1988-1993, times years of service through October 31, 1993, minus 1.25% of
the participant's Social Security benefit, times years of service through
October 31, 1993 (up to 40) and (iii) for the period from November 1, 1993
through December 31, 1993, 1% of compensation for such period, up to $3,786,
plus 1.5% of the compensation for such period in excess of $3,786. "Covered
compensation" is the average of the taxable Social Security wage bases for the
35 years ending in the year of retirement. As of December 31, 1996, Mr. Rush had
10 years of credited service. Mr. Rush's annual normal retirement benefit based
upon 15 years of credited service is projected to be $71,862.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company did not have a compensation committee during 1996. Officers'
compensation was determined by Messrs. Jelenic and Vogelstein. Upon completion
of the Offerings, the Board of Directors will form a Compensation Committee
which will be responsible for reviewing and approving the amount and type of
consideration to be paid to senior management and for administering the 1997
Plan. See "-- Compensation Pursuant to Plans--1997 Stock Incentive Plan." The
members of the Company's Compensation Committee of the Board of Directors will
be Messrs. Karp and Vogelstein. See "Certain Transactions."

58
<PAGE>
CERTAIN TRANSACTIONS

On December 21, 1994, the Company issued approximately $55.0 million of
Senior Subordinated Notes and $55.0 million of Subordinated Notes to Warburg,
Pincus. The Company repaid the Senior Subordinated Notes in full during 1995.
The Company believes that the terms of such Senior Subordinated Notes and such
Subordinated Notes were at least as favorable as those which would have been
obtainable by the Company from an unaffiliated source. The Company repaid $27.5
million principal amount of Subordinated Notes during 1995. The Company intends
to repay the remaining outstanding principal amount of and accrued and unpaid
interest on the Subordinated Notes from the net proceeds to the Company of the
Offerings. See "Use of Proceeds" and Note 4 of "Notes to Combined Financial
Statements."

On December 21, 1994, the Company redeemed all of its issued and outstanding
Senior Preferred Stock held by Warburg, Pincus for its face value of
approximately $18.0 million plus dividends in arrears of approximately $20.0
million. In addition, the Company redeemed all of its issued and outstanding
Serial Preferred Stock held by Warburg, Pincus for its face value of
approximately $23.0 million. The Company believes that the terms of such Senior
Preferred Stock were at least as favorable as those which would have been
obtainable by the Company from an unaffiliated source.

A predecessor (the "Predecessor") of the Company and each of the
stockholders of two subsidiaries (collectively, the "Exchange Subsidiaries") of
the Company entered into an Exchange Agreement (the "Exchange Agreement") dated
as of December 21, 1994. Pursuant to the Exchange Agreement, the Predecessor, a
limited liability company, issued to Warburg, Pincus an aggregate of 997,410
Class A Membership Interests and 997,410 Class B Membership Interests in the
Predecessor in exchange for the stock of the Exchange Subsidiaries held by
Warburg, Pincus.

Warburg, Pincus has agreed with the Company that, following completion of
the Offerings and with respect to any matter brought to a stockholder vote,
Warburg, Pincus will vote in its own discretion shares representing no more than
50% of the voting power of the Company's shares entitled to vote on the
applicable matter. The shares owned by Warburg, Pincus which represent in excess
of such 50% will be voted in the same proportion as the shares voted by the
other stockholders on the applicable matter.

Pursuant to a Registration Rights Agreement (the "Registration Rights
Agreement"), Warburg, Pincus and the Individuals are entitled to certain
registration rights with respect to their respective shares of capital stock of
the Company. See "Description of Capital Stock--Registration Rights."

In recognition of certain management employees' prior services to the
Company, the Company intends to pay the Management Bonuses pursuant to the
Management Bonus Plan. The Company has agreed to file a registration statement
covering the Bonus Shares following completion of the Offerings. See
"Management--Compensation Pursuant to Plans--Management Bonus Plan."

In addition, it is expected that Mr. Jelenic, Ms. Clifton, Messrs. Rush and
Mailman and Ms. Dresser will be granted options to purchase 322,917, 161,458,
26,237, 28,255 and 28,255 shares of Common Stock, respectively, at an exercise
price per share equal to the Price to Public and options to purchase 322,917,
161,458, 26,237, 28,255, and 28,255 shares of Common Stock, respectively, at an
exercise price per share equal to 150% of the Price to Public. See
"Management--Compensation Pursuant to Plans--1997 Stock Incentive Plan."

59
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with regard to the
beneficial ownership of the Common Stock as of March 31, 1997 and as adjusted to
reflect the sale of the shares of Common Stock offered in the Offerings, by (i)
each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director and each executive
officer listed in the summary compensation table and (iii) all directors and
executive officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER THE
THE OFFERINGS(1)(2) OFFERINGS(1)(2)(3)
------------------------- -------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ---------------------------------------------------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Warburg, Pincus Capital Company, L.P.(4)(5)
466 Lexington Avenue
New York, NY 10017...................................... 24,248,774 63.9% 24,248,774 50.1%
Warburg, Pincus Capital Partners, L.P.(4)(5)
466 Lexington Avenue
New York, NY 10017...................................... 1,529,054 4.0 1,529,054 3.2
Warburg, Pincus Investors, L.P.(4)(5)
466 Lexington Avenue
New York, NY 10017...................................... 12,086,349 31.8 12,086,349 24.9
Douglas M. Karp(4)(5)..................................... 37,864,177 99.7 37,864,177 78.2
Sidney Lapidus(4)(5)...................................... 37,864,177 99.7 37,864,177 78.2
John L. Vogelstein(4)(5).................................. 37,864,177 99.7 37,864,177 78.2
Robert M. Jelenic(6)...................................... -- -- 406,102 0.8
Jean B. Clifton(6)........................................ -- -- 203,051 0.4
William J. Rush(6)........................................ -- -- 46,148 0.1
Allen J. Mailman(6)....................................... -- -- 46,148 0.1
Trish K. Dresser(6)....................................... -- -- 46,148 0.1
Directors and executive
officers as a group
(8 persons)............................................. 37,864,177 99.7 38,611,774 79.7
</TABLE>

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

(1) Beneficial ownership is determined in accordance with the rules of the
Commission. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of Common Stock subject
to options and warrants held by that person that are currently exercisable
or exercisable within 60 days of the date of this Prospectus are deemed
outstanding. Such shares, however, are not deemed outstanding for the
purposes of computing the percentage ownership of any other person. Except
as otherwise indicated, the persons in this table have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.

(2) Based upon 37,962,500 shares of Common Stock outstanding prior to the
Offerings and 48,437,500 shares of Common Stock outstanding after completion
of the Offerings, including the Bonus Shares.

(3) Assumes no exercise of the Underwriters' over-allotment option. In the event
such option is exercised, WPCP will beneficially own 122,804 shares or 0.3%
of the Common Stock after the Offerings.

(4) The sole general partner of WPCP, Warburg, Pincus Capital Company, L.P.
("WPCC") and Warburg, Pincus Investors, L.P. ("Investors") is WP, a New York
general partnership. EMWP manages WPCP, WPCC and Investors. The members of
EMWP are substantially the same as the partners of WP. Lionel I. Pincus is
the Managing Partner of WP and the Managing Member of EMWP and may be deemed
to control both WP and EMWP. WP has a 20% interest in the profits of WPCP,
WPCC and

60
<PAGE>
Investors as the general partner. Douglas M. Karp and Sidney Lapidus,
directors of the Company, are Members and Managing Directors of EMWP and
General Partners of WP. John L. Vogelstein, a director of the Company, is a
Member, Vice Chairman and President of EMWP and a General Partner of WP. As
such, Messrs. Karp, Lapidus and Vogelstein may be deemed to have an indirect
pecuniary interest (within the meaning of Rule 16a-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") ) in an indeterminate
portion of the shares beneficially owned by WPCP, WPCC, Investors and WP.
See Note 5 below.

(5) All of the shares indicated as owned by Messrs. Karp, Lapidus and Vogelstein
are owned directly by WPCC, WPCP or Investors and are included because of
their affiliation with WPCC, WPCP and Investors. Messrs. Karp, Lapidus and
Vogelstein disclaim "beneficial ownership" of these shares within the
meaning of Rule 13d-3 under the Exchange Act. The address of Messrs. Karp,
Lapidus and Vogelstein is c/o E.M. Warburg, Pincus & Co., LLC, 466 Lexington
Avenue, New York, New York 10017. See Note 4 above.

(6) All shares indicated as owned by such person on this table represent Bonus
Shares and, thus, assume the issuance of the Bonus Shares.

61
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of the Company and certain
provisions of the Certificate and By-laws is a summary and is qualified in its
entirety by the provisions of the Certificate and By-laws, copies of which have
been filed as exhibits to the Registration Statement of which this Prospectus is
a part.

Upon completion of the Offerings and assuming issuance of the Bonus Shares,
the authorized capital stock of the Company will consist of (i) 300,000,000
shares of Common Stock, par value $.01 per share, of which 48,437,500 shares
will be outstanding, and (ii) 1,000,000 shares of Preferred Stock, of which no
shares will be outstanding.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share in all matters to
be voted on by the stockholders of the Company and do not have cumulative voting
rights. Accordingly, holders of a majority of the outstanding shares of Common
Stock entitled to vote in any election of directors may elect all of the
directors standing for election. Warburg, Pincus has agreed with the Company
that, following completion of the Offerings and with respect to any matter
brought to a stockholder vote, Warburg, Pincus will vote in its own discretion
shares representing no more than 50% of the voting power of the Company's shares
entitled to vote on the applicable matter. The shares owned by Warburg, Pincus
which represent in excess of such 50% will be voted in the same proportion as
the shares voted by the other stockholders on the applicable matter. See "Risk
Factors--Influence by Existing Stockholder."

Subject to preferences that may be applicable to any Preferred Stock
outstanding at the time, holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after payment of the
Company's liabilities and the liquidation preference, if any, of any outstanding
Preferred Stock. Holders of shares of Common Stock have no preemptive,
subscription, redemption or conversion rights. There are no redemption or
sinking fund provisions applicable to the Common Stock. All of the outstanding
shares of Common Stock are, and the shares offered by the Company in the
Offerings will be, when issued and paid for, fully paid and non-assessable. The
rights, preferences and privileges of holders of Common Stock are subject to,
and may be adversely affected by, the rights of the holders of shares of any
series of Preferred Stock which the Company may designate and issue in the
future.

At present, there is no established trading market for the Common Stock. The
Common Stock has been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.

PREFERRED STOCK

The Board of Directors is authorized to issue from time to time 1,000,000
shares of Preferred Stock in one or more series, and to fix the rights,
designations, powers, preferences, qualifications, limitations and restrictions
thereof, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation preferences and the
number of shares constituting any series, all without stockholder approval. The
ability to issue Preferred Stock could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring or making a proposal to acquire, the Company or a majority of the
outstanding stock of the Company. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by, the rights of holders of
Preferred Stock that may be issued in the future. The Company has no present
plans to issue any shares of Preferred Stock. See "Risk Factors--Anti-Takeover
Effect of Certain Certificate of Incorporation and By-laws Provisions."

62
<PAGE>
LIMITATIONS ON DIRECTORS' LIABILITY

The Certificate and By-laws limit the liability of directors to the maximum
extent permitted by Delaware law. Delaware law currently provides that directors
of the Company will not be personally liable for monetary damages for breach of
their fiduciary duties as directors or officers, except liability for (i) breach
of the directors' and officers' duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) the unlawful
payment of a dividend or unlawful stock purchase or redemption and (iv) any
transaction from which directors or officers derive an improper personal
benefit. Delaware law does not permit a corporation to eliminate a director's
duty of care, and this provision of the Certificate has no effect on the
availability of equitable remedies, such as injunction or rescission, based upon
a director's breach of the duty of care.

These provisions will not limit liability under state or federal securities
laws. The Company believes that these provisions will assist the Company in
attracting and retaining qualified individuals to serve as directors.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

The Company is subject to the provisions of Section 203 ("Section 203") of
the Delaware General Corporation Law (the "DGCL"). Under Section 203, certain
"business combinations" (as defined herein) between a Delaware corporation whose
stock generally is publicly traded or held of record by more than 2,000
stockholders and an "interested stockholder" (as defined herein) are prohibited
for a three-year period following the date that such a stockholder became an
interested stockholder, unless (i) the corporation has elected in its
certificate of incorporation not to be governed by Section 203 (the Company did
not make such an election), (ii) the business combination was approved by the
board of directors of the corporation before the other party to the business
combination became an interested stockholder, (iii) upon consummation of the
transaction that made it an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
commencement of the transaction (excluding voting stock owned by directors who
are also officers or stock held in employee benefit plans in which the employees
do not have the right to determine confidentially whether such stock will be
tendered in a tender or exchange offer) or (iv) the business combination was
approved by the board of directors of the corporation and ratified by two-thirds
of the voting stock which the interested stockholder did not own. The three-year
prohibition also does not apply to certain business combinations proposed by an
interested stockholder following the announcement or notification of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of the majority of the corporation's
directors. The term business combination is defined generally to include mergers
or consolidations between a Delaware corporation and an interested stockholder,
transactions with an interested stockholder involving the assets or stock of the
corporation or its majority-owned subsidiaries and transactions which increase
an interested stockholder's percentage ownership of stock. The term interested
stockholder is defined generally as a stockholder who, together with affiliates
and associates, owns (or, within three years prior, did own) 15% or more of a
Delaware corporation's voting stock. Section 203 could prohibit or delay a
merger, takeover or other change in control of the Company and therefore could
discourage attempts to acquire the Company or a majority of the outstanding
stock of the Company.

REGISTRATION RIGHTS

Under the terms of the Registration Rights Agreement, if the Company
proposes to register any of its securities under the Securities Act, Warburg,
Pincus is entitled to notice of such registration and to include its Registrable
Shares (as defined therein) in such registration, subject to the right of an
underwriter participating in the offering to limit the number of shares included
in such registration. In addition,

63
<PAGE>
Warburg, Pincus has the right, so long as it owns at least 10% of the then
outstanding shares of Common Stock, to require the Company to register any or
all of its Registrable Shares on two occasions. Moreover, pursuant to the
Registration Rights Agreement, the Individuals are entitled, under certain
circumstances, to registration of their shares of Common Stock in connection
with the exercise by Warburg, Pincus of its registration rights. All expenses
relating to the filing of such registration statements, excluding underwriting
discounts and selling commissions attributable to the Registrable Shares and the
fees and expenses of the holder's own counsel, will be paid by the Company. The
Company is required to use its best efforts to effect such registrations,
subject to certain conditions and limitations.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar of the Common Stock is The Bank of New
York.

64
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to completion of the Offerings, there has been no public market for
the Common Stock. Sales of substantial amounts of Common Stock in the public
market or the perception that such sales may occur, could have an adverse effect
on the price of the Common Stock.

Upon completion of the Offerings and assuming issuance of the Bonus Shares,
the Company will have outstanding 48,437,500 shares of Common Stock. All the
shares of Common Stock sold in the Offerings will be eligible for immediate
resale, except to the extent acquired by "affiliates" of the Company, as such
term is defined in Rule 144, or subject to a lock-up agreement as described
below. Following the completion of the Offerings, the Company has covenanted to
file with the Commission a Registration Statement covering the Bonus Shares and
the shares of Common Stock underlying grants available under the 1997 Plan.

The remaining 37,962,500 shares of Common Stock outstanding upon completion
of the Offerings (taking into account issuance of the Bonus Shares) will be
"restricted securities" as that term is defined in Rule 144. Restricted
securities may be sold in the public market only if registered or if they
qualify for an exemption from registration under Rule 144 or Rule 701 under the
Securities Act. Sales of restricted securities in the public market, or the
availability of such shares for sale, could have an adverse effect on the price
of the Common Stock.

The Company, all of its directors, executive officers, the other recipients
of Bonus Shares and Warburg, Pincus have agreed that they will enter into
contractual lock-up agreements providing that they will not offer, sell,
contract to sell or sell any option or consent to purchase, purchase any option
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exchangeable for Common Stock or enter into any
swap or similar agreement that transfers, in whole or in part, the economic risk
of ownership of the Common Stock, whether any of the foregoing transactions are
to be settled by delivery of Common Stock or other such securities, in cash or
otherwise, for a period of 180 days after the date of this Prospectus without
the prior written consent of Morgan Stanley & Co. Incorporated, except (i) in
the case of the Company, upon exercise of outstanding stock options and except
for the issuance of options pursuant to the 1997 Plan and (ii) in the case of
WPCP, the shares of Common Stock to be sold pursuant to the Underwriters'
over-allotment option. As a result of these contractual restrictions,
notwithstanding possible earlier eligibility for sale under the provisions of
Rule 144 or Rule 701, or otherwise, shares subject to lock-up agreements will
not be saleable until such agreements expire. Taking into account the lock-up
agreements, the number of shares that will be available for sale in the public
market, subject to the restrictions of Rule 144, will be as follows: (i)
9,375,000 shares will be eligible for immediate sale as of the date of this
Prospectus and (ii) 39,062,500 shares will be eligible for sale beginning 180
days after the date hereof (taking into account issuance of the Bonus Shares).

Following the expiration of the lock-up agreements, the Bonus Shares and
1,937,500 shares subject to options which are expected to be issued pursuant to
the 1997 Plan will also be available for sale in the public market pursuant to
Rule 701 under the Securities Act. Rule 701 permits resales of such shares in
reliance upon Rule 144, but without compliance with certain restrictions,
including the holding period requirement, of Rule 144. In general, under Rule
144 as currently in effect, beginning 90 days after the date of this Prospectus,
a person (or persons whose shares are aggregated) who has beneficially owned
restricted securities for the applicable holding period (including the holding
period of any prior owner except an affiliate) would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:
(i) 1% of the then outstanding shares of Common Stock (approximately 484,375
shares of Common Stock immediately after completion of the Offerings and
assuming issuance of the Bonus Shares) or (ii) the average weekly trading volume
of the Common Stock during the four calendar weeks preceding the filing of a
Form 144 with respect to such sale. Sales under Rule 144 are also subject to
notice requirements and to the availability of current public information about
the Company. In addition, Warburg, Pincus and the Individuals have rights under
certain circumstances to require the Company to register a total of 37,962,500
shares of Common Stock after expiration of lock-up agreements. See "Description
of Capital Stock--Registration Rights."

65
<PAGE>
UNDERWRITERS

Under the terms and subject to the conditions in the Underwriting Agreement
dated the date of this Prospectus (the "Underwriting Agreement"), the Company
has agreed to sell an aggregate of 9,375,000 shares of Common Stock and the U.S.
Underwriters named below, for whom Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Bear, Stearns & Co. Inc. and Chase Securities Inc. are serving as
U.S. Representatives, have severally agreed to purchase, and the International
Underwriters named below, for whom Morgan Stanley & Co. International Limited,
Donaldson, Lufkin & Jenrette Securities Corporation, Merrill Lynch
International, Bear, Stearns International Limited and Chase Manhattan
International Limited are serving as International Representatives, have
severally agreed to purchase, the respective number of shares of Common Stock
set forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- ----------------------------------------------------------------------------------------------------- ----------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated.................................................................. 1,110,000
Donaldson, Lufkin & Jenrette Securities Corporation................................................ 1,110,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................................................. 1,110,000
Bear, Stearns & Co. Inc............................................................................ 1,110,000
Chase Securities Inc............................................................................... 1,110,000
ABN Amro Chicago Corporation....................................................................... 150,000
Advest, Inc........................................................................................ 75,000
Sanford C. Bernstein & Co., Inc.................................................................... 75,000
Alex. Brown & Sons Incorporated.................................................................... 150,000
CIBC Wood Gundy Securities Corp.................................................................... 75,000
A.G. Edwards & Sons, Inc........................................................................... 150,000
First of Michigan Corporation...................................................................... 75,000
Furman Selz LLC.................................................................................... 75,000
Janney Montgomery Scott Inc........................................................................ 75,000
Edward D. Jones & Co., L.P......................................................................... 75,000
Legg Mason Wood Walker, Incorporated............................................................... 75,000
McDonald & Company Securities, Inc................................................................. 75,000
Neuberger & Berman, LLC............................................................................ 75,000
Oppenheimer & Co., Inc............................................................................. 150,000
PaineWebber Incorporated........................................................................... 150,000
Prudential Securities Incorporated................................................................. 150,000
Ragen Mackenzie Incorporated....................................................................... 75,000
Smith Barney Inc................................................................................... 150,000
Wheat, First Securities, Inc....................................................................... 75,000
----------
Subtotal......................................................................................... 7,500,000
----------
International Underwriters:
Morgan Stanley & Co. International Limited......................................................... 300,000
Donaldson, Lufkin & Jenrette Securities Corporation................................................ 300,000
Merrill Lynch International........................................................................ 300,000
Bear, Stearns International Limited................................................................ 300,000
Chase Manhattan International Limited.............................................................. 300,000
Commerzbank Aktiengesellschaft..................................................................... 93,750
Daiwa Europe Limited .............................................................................. 93,750
HSBC Investment Bank Plc........................................................................... 93,750
Societe Generale................................................................................... 93,750
----------
Subtotal......................................................................................... 1,875,000
----------
Total.......................................................................................... 9,375,000
----------
----------
</TABLE>

66
<PAGE>
The U.S. Underwriters and the International Underwriters are collectively
referred to as the "Underwriters." The Underwriting Agreement provides that the
obligations of the several Underwriters to pay for and accept delivery of the
shares of Common Stock offered hereby are subject to the approval of
certain legal matters by counsel and to certain other conditions. The
Underwriters are obligated to take and pay for all the shares of Common Stock
offered in the Offerings (other than those covered by the Underwriters'
over-allotment option), if any such shares are taken.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, each U.S. Underwriter has represented and agreed that, with
certain exceptions, (i) it is not purchasing any U.S. Shares (as defined herein)
being sold by it for the account of anyone other than a United States or
Canadian Person (as defined herein) and (ii) it has not offered or sold, and
will not offer or sell, directly or indirectly, any U.S. Shares or distribute
any prospectus relating to the U.S. Shares outside the United States or Canada
or to anyone other than a United States or Canadian Person. Pursuant to the
Agreement Between U.S. Underwriters and International Underwriters, each
International Underwriter has represented and agreed that, with certain
exceptions, (i) it is not purchasing any International Shares (as defined
herein) being sold by it for the account of any United States or Canadian Person
and (ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any International Shares or distribute any prospectus relating to
the International Shares within the United States or Canada or to any United
States or Canadian Person. With respect to any Underwriter that is a U.S.
Underwriter and an International Underwriter, the foregoing representations and
agreements (i) made by it in its capacity as a U.S. Underwriter shall apply only
to shares purchased by it in its capacity as a U.S. Underwriter and (ii) made by
it in its capacity as an International Underwriter shall apply only to shares
purchased by it in its capacity as an International Underwriter. The foregoing
limitations do not apply to stabilization transactions or to certain other
transactions specified in the Agreement Between U.S. Underwriters and
International Underwriters. As used herein, "United States or Canadian Person"
means any national or resident of the United States or Canada or any
corporation, pension, profit-sharing, or other trust or other entity organized
under the laws of the United States or Canada or of any political subdivision
thereof (other than a branch located outside the United States and Canada of any
United States or Canadian Person) and includes any United States or Canadian
branch of a person who is otherwise not a United States or Canadian Person. All
shares of Common Stock to be purchased by the U.S. Underwriters and the
International Underwriters under the Underwriting Agreement are referred to
herein as the "U.S. Shares" and the "International Shares," respectively.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, sales may be made between the U.S. Underwriters and International
Underwriters of any number of shares of Common Stock to be purchased pursuant to
the Underwriting Agreement as may be mutually agreed. The per share price of any
shares so sold shall be the Price to Public set forth on the cover page hereof,
in United States dollars, less an amount not greater than the per share amount
of the concession to dealers set forth below.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, each U.S. Underwriter has represented that it has not offered or
sold, and has agreed not to offer or sell, any shares of Common Stock, directly
or indirectly, in Canada in contravention of the securities laws of Canada or
any province or territory thereof and has represented that any offer of shares
of Common Stock in Canada will be made only pursuant to an exemption from the
requirements to file a prospectus in the province or territory of Canada in
which such offer is made. Each U.S. Underwriter has further agreed to send any
dealer who purchases from it any shares of Common Stock a notice stating in
substance that, by purchasing such shares of Common Stock, such dealer
represents and agrees that it has not offered or sold, and will not offer or
sell, directly or indirectly, any of such shares of Common Stock in Canada or
to, or for the benefit of, any resident of Canada in contravention of the
securities laws of Canada or any province or territory thereof and that any
offer of shares of Common Stock in Canada will be made only pursuant to an
exemption from the requirement to file a prospectus in the province or territory
of Canada in which such

67
<PAGE>
offer is made, and that such dealer will deliver to any other dealer to whom it
sells any of such shares of Common Stock a notice to the foregoing effect.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, each International Underwriter has represented and agreed that (i)
it has not offered or sold and during the period of six months from the closing
date of the Offerings will not offer or sell any shares of Common Stock in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing, or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations (1995)
(the "Regulations"); (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by it in relation to the shares of Common Stock offered hereby
in, from, or otherwise involving the United Kingdom; and (iii) it has only
issued or passed on and will only issue or pass on to any person in the United
Kingdom any document received by it in connection with the issue of the shares
of Common Stock if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995,
or is a person to whom such document may otherwise lawfully be issued or passed
on.

The Underwriters propose to offer part of the shares of Common Stock
directly to the public at the Price to Public set forth on the cover page hereof
and part to certain dealers at a price which represents a concession not in
excess of $.52 per share below the public offering price. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $.10 per
share to other Underwriters or to certain dealers.

Pursuant to the Underwriting Agreement, WPCP has granted the U.S.
Underwriters an option, exercisable for 30 days from the date of this
Prospectus, to purchase up to an aggregate of 1,406,250 additional shares of
Common Stock at the Price to Public on the cover page hereof, less Underwriting
Discounts and Commissions. The U.S. Underwriters may exercise such option to
purchase solely for the purpose of covering over-allotments, if any, made in
connection with the Offerings. To the extent such option is exercised, each U.S.
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares of Common Stock as
the number set forth next to such U.S. Underwriter's name in the preceding table
bears to the total number of shares of Common Stock offered by the U.S.
Underwriters hereby.

The Company, all of its executive officers and directors, other recipients
of awards of Bonus Shares and Warburg, Pincus have agreed that, without the
prior written consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, they will not (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right, or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for the shares Common Stock (in the case of
Warburg, Pincus, whether such shares or any such securities are now owned by
Warburg, Pincus or acquired after the date of the Prospectus) or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the shares of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of the shares Common Stock or such other securities, in cash
or otherwise, for a period of 180 days after the date of this Prospectus, other
than the sale to the Underwriters of any shares of Common Stock pursuant to the
Underwriting Agreements.

The Company, Warburg, Pincus and the Underwriters have agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act.

Certain affiliates of Chase Securities Inc. have limited partnership
interests in WPCP (less than 3%), Investors (less than 1%) and WPCC (less than
3%). In addition, The Chase Manhattan Bank, an affiliate of Chase Securities
Inc., is Agent on, and a lender under, the Credit Agreement, and receives
customary

68
<PAGE>
fees for its service as such. The Chase Manhattan Bank also engages in various
general financing and banking transactions with the Company and its affiliates.

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriters may over-allot in
connection with the offering, creating a short position in the Common Stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the Common Stock, the Underwriters may bid for, and purchase, shares of
Common Stock in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the
Common Stock in the offering, if the syndicate repurchases previously
distributed Common Stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.

The Representatives of the Underwriters have informed the Company that the
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

PRICING OF THE OFFERINGS

Prior to completion of the Offerings, there has been no public market for
the Common Stock. The initial public offering price has been determined by
negotiations between the Company and the Representatives of the Underwriters.
Among the factors considered in determining the initial public offering price
were the information set forth in this Prospectus and otherwise available to the
Representatives, the future prospects of the Company and the newspaper industry
in general, revenues, earnings, and certain other financial and operating
information of the Company in recent periods and the price-earnings ratios,
market prices of securities, profitability and certain financial and operating
information of companies engaged in activities similar to those of the Company.

LEGAL MATTERS

The validity of the shares of Common Stock offered in the Offerings will be
passed upon for the Company by Wachtell, Lipton, Rosen & Katz, New York, New
York. Certain legal matters in connection with the Offerings will be passed upon
for the Underwriters by Willkie Farr & Gallagher, New York, New York.

EXPERTS

The balance sheet of Journal Register Company at March 11, 1997 and the
combined financial statements (including the schedule) of Journal Register
Company, LLC and Affiliates at December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996, appearing in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein and
in the Registration Statement. The financial statements referred to above are
included in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

69
<PAGE>
ADDITIONAL INFORMATION

The Company has filed with the Commission under the Securities Act a
Registration Statement (the "Registration Statement") on Form S-1 with respect
to the Common Stock offered in the Offerings. This Prospectus does not contain
all of the information set forth in the Registration Statement in accordance
with the rules and regulations of the Commission. For further information
pertaining to the Company and the Common Stock offered in the Offerings,
reference is made to the Registration Statement, including the exhibits thereto
and the financial statements, notes and schedule filed as a part thereof.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete and, in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. The Registration Statement may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's Regional Offices in
New York (Seven World Trade Center, 13th Floor, New York, New York 10048) and
Chicago (Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661). Copies of such material can be obtained from the public reference
section of the Commission at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such materials can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 or on the Internet at
http://www.sec.gov.

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements, which are
statements other than historical information or statements of current condition.
Some forward-looking statements may be identified by use of terms such as
"believes," "anticipates," "intends" or "expects." The forward-looking
statements contained in this Prospectus are generally located in the material
set forth under the headings "Prospectus Summary," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business," but may be found in other locations as well. These forward-looking
statements relate to the plans and objectives of the Company for future
operations. In light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this Prospectus
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved. Many factors could
cause the Company's actual results to differ materially from those in the
forward-looking statements, including, among other things: (i) a decline in
general economic conditions, (ii) the unavailability or material increase in
price of newsprint, (iii) an adverse judgment in pending or future litigation,
(iv) increased competitive pressure from current competitors and future market
entrants, and (v) sales of substantial amounts of the Common Stock in the public
markets following the Offerings, or the perception that such sales could occur.
The foregoing review of important factors should not be construed as exhaustive
and should be read in conjunction with other cautionary statements that are
included in this Prospectus. The Company undertakes no obligation to release
publicly the results of any future revisions it may make to forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

70
<PAGE>
INDEX TO FINANCIAL STATEMENTS

CONTENTS

<TABLE>
<S> <C>
Journal Register Company

Report of Independent Auditors....................................................... F-2

Balance Sheet as of March 11, 1997................................................... F-3

Note to Balance Sheet................................................................ F-4

Journal Register Company, LLC and Affiliates

Report of Independent Auditors....................................................... F-5

Combined Balance Sheets as of December 31, 1995 and 1996............................. F-6

Combined Statements of Income for each of the three years in the period ended
December 31, 1996.................................................................. F-7

Combined Statements of Members' Deficit for each of the three years ended in the
period ended December 31, 1996..................................................... F-8

Combined Statements of Cash Flows for each of the three years in the period ended
December 31, 1996.................................................................. F-9

Notes to Combined Financial Statements............................................... F-10

Combined Balance Sheets as of December 31, 1996 and March 31, 1997 (unaudited)....... F-22

Combined Statements of Income for the three months ended March 31, 1996 and 1997
(unaudited)........................................................................ F-23

Combined Statements of Cash Flows for the three months ended March 31, 1996 and 1997
(unaudited)........................................................................ F-24

Notes to Combined Financial Statements (unaudited)................................... F-25
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Journal Register Company

We have audited the accompanying balance sheet of Journal Register Company as of
March 11, 1997. The balance sheet is the responsibility of the Company's
management. Our responsibility is to express an opinion on this balance sheet
based on our audit.

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

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Journal Register Company at March
11, 1997 in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

MetroPark, New Jersey
March 12, 1997

F-2
<PAGE>
JOURNAL REGISTER COMPANY
BALANCE SHEET
MARCH 11, 1997

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash................................................................................. $ 100
---------
---------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par, 500 shares authorized, none issued and outstanding........ $ --
Common stock, $.01 par, 500 shares authorized, 100 shares issued and outstanding..... 1
Additional paid-in capital........................................................... 99
---------
Total stockholders' equity........................................................... $ 100
---------
---------
</TABLE>

See accompanying note.

F-3
<PAGE>
JOURNAL REGISTER COMPANY
NOTE TO BALANCE SHEET
MARCH 11, 1997

ORGANIZATION AND BASIS OF PRESENTATION

Journal Register Company (the "Company") was incorporated on March 11, 1997. In
conjunction with the formation of the Company, a company under common control
named Journal Register Company, was renamed Journal Register Newspapers, Inc.
The Company intends to file with the Securities and Exchange Commission a
Registration Statement on Form S-1 for the sale of shares of common stock of the
Company. Prior to the issuance of shares pursuant to the Registration Statement,
certain companies under common control with the Company will be combined with
the Company. Substantially all of the membership interests and equity securities
of these companies are owned by entities controlled by affiliates of E.M.
Warburg, Pincus & Co., LLC. Since the companies are under common control, this
transaction will be accounted for in a manner similar to a pooling of interests.

F-4
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Journal Register Company, LLC and Affiliates

We have audited the accompanying combined balance sheets of Journal Register
Company, LLC and Affiliates as of December 31, 1996 and 1995, and the related
combined statements of income, members' deficit and cash flows for each of the
three years in the period ended December 31, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Journal
Register Company, LLC and Affiliates at December 31, 1996 and 1995, and the
combined results of their operations and their cash flows for each of the three
years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

/s/ Ernst & Young LLP

MetroPark, New Jersey
March 5, 1997

F-5
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES
COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
1996
PRO FORMA
DECEMBER 31, UNAUDITED
-------------------------------- STOCKHOLDERS'
1995 1996 EQUITY
--------------- --------------- ---------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................. $ 8,622,605 $ 8,546,396
Accounts receivable, less allowance for doubtful accounts
of $2,874,271 in 1995 and $4,172,936 in 1996............. 43,383,073 44,063,981
Inventories................................................ 16,631,351 6,204,002
Deferred income taxes...................................... -- 2,950,798
Other current assets....................................... 4,819,139 4,270,098
--------------- ---------------
Total current assets......................................... 73,456,168 66,035,275
Property, plant and equipment:
Land....................................................... 7,253,772 7,260,008
Buildings and improvements................................. 58,565,573 59,001,100
Machinery and equipment.................................... 129,799,039 135,936,921
--------------- ---------------
195,618,384 202,198,029
Less accumulated depreciation.............................. (96,582,342) (110,484,723)
--------------- ---------------
Property, plant and equipment, net........................... 99,036,042 91,713,306
Deferred income taxes........................................ -- 222,316
Intangible and other assets, net of accumulated amortization
of $10,952,402 in 1995 and $17,610,762 in 1996............. 133,941,759 148,014,311
--------------- ---------------
$ 306,433,969 $ 305,985,208
--------------- ---------------
--------------- ---------------
LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Current maturities of long-term debt....................... $ 58,252,361 $ 54,173,894
Accounts payable........................................... 9,822,674 7,200,381
Income taxes payable....................................... 2,137,919 1,195,534
Accrued interest........................................... 9,565,772 7,498,261
Deferred subscription revenue.............................. 6,220,345 5,878,837
Other accrued expenses and current liabilities............. 16,835,692 15,946,505
--------------- ---------------
Total current liabilities.................................... 102,834,763 91,893,412
Senior debt, less current maturities......................... 599,780,000 566,390,000
Subordinated notes and accrued interest due to members....... 30,290,310 33,319,341
Deferred income taxes........................................ 1,662,602 --
Accrued retiree benefits and other liabilities............... 12,830,257 11,602,809
Income taxes payable......................................... 10,802,709 26,437,689
Commitments and contingencies (NOTE 8)
Members' deficit:
Common stock, $.01 par, 300,000,000 shares authorized and
37,962,500 shares issued and outstanding................. -- -- $ 379,625
Membership interests....................................... 2,104,200 2,104,200 --
Additional paid-in capital................................. 222,167,335 222,167,335 223,891,910
Accumulated deficit........................................ (676,038,207) (647,929,578) (647,929,578)
--------------- --------------- ---------------
Net members' deficit......................................... (451,766,672) (423,658,043) (423,658,043)
--------------- --------------- ---------------
$ 306,433,969 $ 305,985,208
--------------- ---------------
--------------- ---------------
</TABLE>

See accompanying notes.

F-6
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES
COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
<S> <C> <C> <C>
1994 1995 1996
-------------- -------------- --------------
Revenues:
Advertising................................................... $ 224,071,191 $ 249,533,751 $ 256,971,648
Circulation................................................... 65,204,313 73,797,189 79,775,654
-------------- -------------- --------------
Newspaper revenues.............................................. 289,275,504 323,330,940 336,747,302
Commercial printing and other................................... 10,875,057 15,626,106 14,372,773
-------------- -------------- --------------
300,150,561 338,957,046 351,120,075

Operating expenses:
Salaries and employee benefits................................ 105,606,718 110,651,094 111,626,137
Newsprint, ink and printing charges........................... 36,481,069 48,243,571 50,110,087
Selling, general and administrative........................... 25,312,179 28,678,214 30,992,643
Depreciation and amortization................................. 18,605,116 19,177,764 20,525,352
Other......................................................... 34,187,475 38,742,660 38,976,064
-------------- -------------- --------------
220,192,557 245,493,303 252,230,283
-------------- -------------- --------------
Operating income................................................ 79,958,004 93,463,743 98,889,792

Other income (expense):
Interest expense.............................................. (41,791,327) (63,468,099) (56,409,520)
Interest income............................................... 330,117 158,212 106,805
Other......................................................... (587,971) (717,961) (169,154)
-------------- -------------- --------------
Income before provision for income taxes and extraordinary
item.......................................................... 37,908,823 29,435,895 42,417,923
Provision for income taxes...................................... 4,126,326 2,653,294 14,309,294
-------------- -------------- --------------
Income before extraordinary item................................ 33,782,497 26,782,601 28,108,629

Extraordinary item:
Loss on extinguishment of debt................................ 13,099,981 -- --
-------------- -------------- --------------
Net income...................................................... $ 20,682,516 $ 26,782,601 $ 28,108,629
-------------- -------------- --------------
-------------- -------------- --------------
Pro forma-unaudited
Historical net income......................................... $ 28,108,629
--------------
--------------
Pro forma net income per common share......................... $ .74
--------------
--------------
Pro forma common shares outstanding........................... 37,962,500
--------------
--------------
</TABLE>

See accompanying notes.

F-7
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

COMBINED STATEMENTS OF MEMBERS' DEFICIT

<TABLE>
<CAPTION>
PREFERRED MEMBERSHIP ADDITIONAL ACCUMULATED
STOCK INTEREST PAID-IN-CAPITAL DEFICIT TOTAL
---------- ----------- -------------- -------------- --------------

<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993.............. $ 411,875 $2,104,200 $283,352,872 $ (723,503,324) $ (437,634,377)

Net income................................ 20,682,516 20,682,516

Redemption of Preferred Stock............. (411,875) -- (61,185,537) -- (61,597,412)

Balance at December 31, 1994.............. -- 2,104,200 222,167,335 (702,820,808) (478,549,273)

Net income................................ 26,782,601 26,782,601
---------- ----------- -------------- -------------- --------------

Balance at December 31, 1995.............. -- 2,104,200 222,167,335 (676,038,207) (451,766,672)

Net income................................ 28,108,629 28,108,629
---------- ----------- -------------- -------------- --------------

Balance at December 31, 1996.............. -- $2,104,200 $222,167,335 $ 647,929,578 $ (423,658,043)
---------- ----------- -------------- -------------- --------------
---------- ----------- -------------- -------------- --------------
</TABLE>

See accompanying notes.

F-8
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income......................................................... $ 20,682,516 $ 26,782,601 $ 28,108,629
Adjustments to reconcile net income to net cash provided by
operating activities:
Loss on debt extinguishment...................................... 13,099,981 -- --
Provision for losses on accounts receivable...................... 1,926,668 2,871,631 3,914,496
Depreciation and amortization.................................... 18,605,116 19,177,764 20,525,352
Net (gain) loss on disposal of property, plant and equipment..... 82,817 263,465 (110,197)
Increase in income taxes payable................................. 1,103,527 497,516 14,692,595
(Decrease) increase in accrued interest.......................... (3,104,305) 8,760,434 (2,067,511)
(Decrease) in deferred income taxes.............................. (21,641) (482,695) (4,835,716)
(Increase) in accounts receivable................................ (7,623,838) (6,947,008) (3,971,885)
Decrease (increase) in inventories............................... (3,248,860) (7,209,388) 10,475,816
(Decrease) increase in accounts payable.......................... 7,157,704 (5,320,331) (2,663,768)
(Decrease) increase in deferred subscription revenue............. 2,084,094 182,721 (401,370)
(Decrease) in accrued retiree benefits and other liabilities..... (663,135) (1,802,611) (1,227,448)
(Increase) decrease in other assets, net of increase (decrease)
in other liabilities........................................... (3,812,587) (9,996,494) (2,374,167)
------------- ------------- -------------
Net cash provided by operating activities.......................... 46,268,057 26,777,605 60,064,826

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment......................... (8,325,764) (4,859,023) (7,674,504)
Net proceeds from sale of property, plant and equipment............ 211,941 40,715 236,643
Purchase of newspaper properties................................... (14,500,000) (45,738,379) (18,262,205)
------------- ------------- -------------
Net cash used in investing activities.............................. (22,613,823) (50,556,687) (25,700,066)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of debt:
Senior Facilities................................................ 559,000,000 133,000,000 7,000,000
Deferred loan costs.............................................. (10,462,253) -- --
Accretion on Subordinated Notes.................................. 6,981,454 2,745,390 3,029,031
Repayments of:
Senior debt...................................................... (527,282,676) (29,000,000) (44,470,000)
Subordinated Notes............................................... -- (82,361,724) --
Redemption of preferred stock:
Preferred stock.................................................. (41,187,500) -- --
Preferred stock dividends........................................ (20,409,912) -- --
------------- ------------- -------------
Net cash (used in) provided by financing activities................ (33,360,887) 24,383,666 (34,440,969)
------------- ------------- -------------
(Decrease) increase in cash and cash equivalents................... (9,706,653) 604,584 (76,209)
Cash and cash equivalents, beginning of year....................... 17,724,674 8,018,021 8,622,605
------------- ------------- -------------
Cash and cash equivalents, end of year............................. $ 8,018,021 $ 8,622,605 $ 8,546,396
------------- ------------- -------------
------------- ------------- -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest......................................................... $ 37,119,772 $ 51,672,881 $ 54,244,177
Income taxes..................................................... 3,044,440 1,940,148 4,452,415

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
Issuance of additional Subordinated Notes.......................... $ 6,981,454 $ 2,745,390 $ 3,029,031
</TABLE>

See accompanying notes.

F-9
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1996

1. ORGANIZATION AND BASIS OF PRESENTATION

The combined financial statements include Journal Register Company, LLC
("JRC, LLC") and all of its wholly owned affiliates, INS Holdings, Inc. ("INSI")
and Journal Register Company (now known as Journal Register Newspapers, Inc.)
("JRC"). The Company is used to refer to the combination of JRC, INSI and JRC,
LLC.

JRC, LLC was organized in New York in December 1994 for the purpose of
acquiring and operating newspaper companies; it commenced operations in December
1994. Effective December 21, 1994, the stockholders of Journal News, Inc.
("JNI") and Journal Company, Inc. ("JCI"), affiliates of the Company
(collectively the "Companies"), entered into an exchange agreement (the
"Exchange Agreement") with the Company, whereby JRC, LLC issued 2 million
membership interests, representing all the issued and outstanding membership
interests in JRC, LLC, to the stockholders of the Companies in exchange for all
of the issued and outstanding common stock of the Companies. Since the combined
Companies were under common control, this transaction was accounted for in a
manner similar to a pooling of interests and the accompanying combined financial
statements include the accounts and operations of JNI and JCI for all periods
presented. Affiliates of E.M. Warburg, Pincus & Co., LLC (collectively "Warburg,
Pincus") own substantially all of the membership interests of JRC, LLC.

JRC is jointly owned by the operating subsidiaries of JRC, LLC and manages
the newspaper subsidiaries of JRC, LLC on an expense reimbursement basis. INSI,
which is owned by Warburg, Pincus, is a company that develops application
software for the newspaper industry and provides services to the Company's
subsidiaries and unrelated companies. (See Note 11, Subsequent Events
(unaudited).)

The Company primarily publishes small metropolitan and suburban daily and
suburban and community non-daily newspapers serving markets in Connecticut,
Ohio, Philadelphia and its surrounding areas, the greater St. Louis area and
central New England and has commercial printing operations in Connecticut, Ohio
and Missouri.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION

The combined financial statements include the accounts of JRC, LLC and all
of its wholly owned affiliates, JRC and INSI. All significant intercompany
accounts and transactions have been eliminated.

USE OF ESTIMATES

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

COMBINED STATEMENTS OF CASH FLOWS

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

F-10
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PRO FORMA EARNINGS PER SHARE (UNAUDITED)

The pro forma net income per common share was calculated based upon the
37,962,500 shares which will be issued prior to the proposed offerings but
subsequent to December 31, 1996. If effect were given to the 9,375,000 shares
that will be issued in the proposed offerings for which the proceeds will be
used to repay debt and the additional 1,100,000 shares to be issued to
management as part of special bonuses (see Footnote 11, Subsequent Events
(unaudited)), the shares outstanding would be 48,437,500 and net income would
increase to $35,603,239, resulting in net income per common share of $.74. The
net income of $35,603,239 reflects net interest expense reduction ($11.3
million, or $7.5 million net of tax) resulting from the use of proceeds to
reduce debt and additional debt required to pay the special management bonuses.
The interest expense reduction includes savings net of tax of $1.3 million
associated with the lower interest rate based on the pro forma reduction in
outstanding borrowings used to calculate the Company's interest rate (see Note
4, Long-Term Debt).

INVENTORIES

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

PROPERTY, PLANT AND EQUIPMENT

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

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

<TABLE>
<S> <C>
Buildings and improvements.................................... 5 to 30
years
Machinery and equipment....................................... 3 to 20
years
</TABLE>

INTANGIBLE ASSETS AND OTHER ASSETS

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

The balance of intangible assets at December 31, 1996 was comprised of
subscriber lists and excess cost over the value of identifiable net assets of
companies acquired. These assets are being amortized over a period of 4 to 40
years and are amortized by the straight-line method.

In the beginning of 1996, the Company adopted SFAS No. 121 "ACCOUNTING FOR
THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED
OF." The adoption of SFAS No. 121 did not materially impact the financial
statements. In accordance with SFAS No. 121 the Company reviews the
recoverability of intangibles and other long-lived assets whenever events and
circumstances indicate that

F-11
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the carrying amount may not be recoverable. The carrying amount of the
long-lived assets is reduced by the difference between the carrying amount and
estimated fair value.

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

INCOME TAXES

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

Each of JCI, JNI, JRC, INSI and JRC, LLC files its own federal income tax
returns on a consolidated or separate basis as appropriate.

DEFERRED SUBSCRIPTION REVENUE

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

INTEREST RATE PROTECTION AGREEMENTS

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

CONCENTRATION OF RISK

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

F-12
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

3. INTANGIBLE AND OTHER ASSETS

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

<TABLE>
<CAPTION>
1995 1996
-------------- --------------
<S> <C> <C>
Excess of cost over the value of identifiable net assets and
subscriber lists........................................... $ 114,888,103 $ 125,846,862
Prepaid pension cost......................................... 5,984,261 7,152,779
Other........................................................ 13,069,395 15,014,670
-------------- --------------
$ 133,941,759 $ 148,014,311
-------------- --------------
-------------- --------------
</TABLE>

4. LONG-TERM DEBT

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

<TABLE>
<CAPTION>
1995 1996
-------------- --------------
<S> <C> <C>
Senior Secured Term Loans.................................... $ 546,000,000 $ 501,530,000
Senior Secured Revolving Credit Facility..................... 112,000,000 119,000,000
Subordinated Notes and accrued interest due to members....... 30,290,310 33,319,341
Other debt................................................... 965,216 975,742
-------------- --------------
689,255,526 654,825,083
Less current portion......................................... (58,252,361) (54,173,894)
-------------- --------------
$ 631,003,165 $ 600,651,189
-------------- --------------
-------------- --------------
</TABLE>

Effective December 21, 1994 (the "Effective Date") JRC, LLC entered into a
definitive credit agreement (as amended the "Credit Agreement") to obtain Senior
Secured Term Loans (the "Term Loan") and a Senior Secured Revolving Credit
Facility (the "Revolver"). At December 31, 1996, JRC, LLC had approximately
$501.5 million outstanding under the Term Loan and $119.0 million outstanding
under the Revolver. JRC, LLC had $26.0 million unused and available under the
Revolver at December 31, 1996. The Term Loan matures on December 31, 2002 and
the Revolver matures on December 31, 2003. (See Note 11, Subsequent Events
(unaudited).)

During 1996, the Company had net borrowings under the Revolver of $7.0
million. The Company borrowed approximately $18.0 million under the Revolver to
fund the acquisition of the TAUNTON DAILY GAZETTE (see Note 9, Acquisitions)
which was offset by $11.0 million of net paydowns of the Revolver.

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

<TABLE>
<S> <C>
1997.......................................................... $54,140,000
1998.......................................................... 70,060,000
1999.......................................................... 80,980,000
2000.......................................................... 91,900,000
2001.......................................................... 102,590,000
Thereafter.................................................... 101,860,000
</TABLE>

The Revolver has a step-down of availability of $25.0 million on each of
December 31, 2000, 2001 and 2002. The final $70.0 million of availability
expires and, if outstanding, is due on December 31, 2003.

F-13
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

4. LONG-TERM DEBT (CONTINUED)

In addition, commencing in the year 2000, the Credit Agreement requires a
mandatory prepayment of the debt equal to 75.0% of Excess Cash Flows, as defined
in the Credit Agreement.

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

The amounts outstanding under the Senior Facilities bear interest at (i)
1 1/8% to 0% above the higher of the Prime Rate or 1/2% above the Federal Funds
Rate (collectively the "Base Rate") or (ii) 2 3/8% to 1% above the London
Interbank Offered Rate ("LIBOR"). The interest rate spreads are dependent upon
the debt to twelve months trailing cash flow ratio (as defined in the Credit
Agreement) and reduce as such ratio declines. As of December 31, 1996, the
Company was paying interest at 2% above LIBOR. As of December 31, 1994 and 1995
the Company was paying 2 3/8% above LIBOR. At December 31, 1996 the Company had
outstanding $615.5 million of LIBOR loans and $5 million of Base Rate loans. The
average all-in interest rates on the Senior Facilities were approximately 6.5%,
9.1% and 8.4% for the years ended December 31, 1994, 1995 and 1996,
respectively. The average all-in interest rates reflect the effects of "IRPAs".

An annual commitment fee of 1/2% is incurred on the unused portion of the
commitment under the Revolver.

The Credit Agreement requires the Companies to maintain interest rate
protection for at least fifty percent of the outstanding debt in order to manage
interest rate risk. In accordance with this requirement, the Companies
participated in various interest rate protection agreements whereby the
Companies have assumed a fixed rate of interest and a counterparty has assumed
the variable rate (the "SWAPs"). The aggregate notional principal amount of such
SWAPs is $445.0 million. The Companies have also entered into interest rate
collar agreements with an aggregate notional principal amount of $141.0 million.
The agreements are with major financial institutions which are expected to fully
perform under the terms of the agreements thereby mitigating the credit risk
from the transactions. The notional amounts of such IRPAs are used to measure
interest to be paid or received with respect to such IRPAs and do not represent
the amount of exposure to credit risk. Pursuant to the SWAP agreements, the
Company agrees to exchange with certain banks at specific dates the difference
between fixed rate in the SWAP agreements and LIBOR floating rate applied to the
notional principal amount. Under the collar agreements, the Company assumes the
fixed rate position on an agreed upon ceiling rate and receives payment if the
LIBOR exceeds such fixed rate. Alternatively, the Company assumes the LIBOR
fixed rate position and makes payments to the banks if LIBOR is below the fixed
floor rate. No payments are made if the LIBOR remains between the fixed ceiling
and fixed floor rates.

Interest rate protection agreements relating to the Company's borrowings
include the SWAP agreements with notional principal amounts of $300.0 million
and $145.0 million, maturing on January 30, 1999 and January 30, 1997,
respectively; and with fixed rates of approximately 6.22% and 5.14%,
respectively. Interest rate protection agreements also include collars with
aggregate notional principal amounts of $141.0 million and ceiling interest
rates ranging from 7.29% through 7.41% and floor interest rates of 5.48%. The
collars expire on various dates between April 30, 1998 and June 30, 1998. If the

F-14
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

4. LONG-TERM DEBT (CONTINUED)
SWAPs were marked to market at December 31, 1996, they would result in a net
loss of approximately $1.3 million. If the collars were marked to market at
December 31, 1996 they would result in a net loss of approximately $195,000. The
fair value as of December 31, 1996 of the IRPAs was obtained from the Company's
bank.

As of December 31, 1996, the Company has a contract for a collar with a
notional principal amount of $145.0 million. The collar replaces the $145.0
million SWAP, identified above, that expired on January 30, 1997. The collar is
effective January 30, 1997 and expires April 30, 1998, and has a ceiling rate of
7.31% and floor rate of 5.48%. The notional principal amount of the collar
amortizes at the end of each quarter in $17.5 million increments. If the $145.0
million collar was marked to market at December 31, 1996 it would result in a
$188,000 loss.

The estimated fair value of the Term Loan and Revolver approximates their
carrying value since the interest rates are variable.

In connection with the refinancings in 1994, the Company recognized a net
loss of approximately $13.1 million on the early extinguishment of debt which
was classified as an extraordinary item.

As of December 31, 1995 and 1996, affiliates of Warburg, Pincus owned
approximately $30.3 million and $33.3 million, respectively, of the Company's
Subordinated Notes. The Subordinated Notes bear interest at 10.0% per annum.

5. PENSION PLANS

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

F-15
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

5. PENSION PLANS (CONTINUED)
The following table sets forth the plans' funded status and the amount
recognized in the Company's combined balance sheet as of December 31:

<TABLE>
<CAPTION>
1995 1996
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
OVERFUNDED UNDERFUNDED OVERFUNDED UNDERFUNDED
------------- ------------- ------------- -------------
Actuarial present value of benefit obligation:
Vested benefit obligation......................... $ 41,814,000 $ 10,185,000 $ 43,197,000 $ 10,234,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Accumulated benefit obligation.................... $ 42,458,000 $ 10,418,000 $ 44,209,000 $ 10,462,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Projected benefit obligation........................ $ 42,907,000 $ 10,745,000 $ 44,489,000 $ 10,641,000
Fair value of plan assets........................... 55,777,489 8,646,188 60,027,445 9,027,442
------------- ------------- ------------- -------------
Plan assets in excess of (less than) projected
benefit obligation................................ 12,870,489 (2,098,812) 15,538,445 (1,613,558)
Unrecognized net transition (asset) obligation being
amortized over 15 years........................... (324,042) 856,148 (274,820) 716,721
Adjustment required to recognize minimum
liability......................................... -- (546,151) -- (399,756)
Unrecognized net (gain) loss........................ (2,877,298) 218,477 (4,833,514) (112,682)
Unrecognized prior service cost..................... (3,684,888) (387,395) (3,277,332) (426,321)
------------- ------------- ------------- -------------
Prepaid (accrued) pension cost...................... $ 5,984,261 $ (1,957,733) $ 7,152,779 $ (1,835,596)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

Assumptions used in determining the funded status of the pension plans are
as follows:

<TABLE>
<CAPTION>
1995 1996
---------- -----------
<S> <C> <C>
Discount rate........................................................ 7.50% 7.75%
Average rate of increase in compensation levels...................... 3.0 3.0
Expected long-term rate of return on assets.......................... 9.0 9.0
Mortality rates...................................................... 71GAT 83GAM
Unloaded
</TABLE>

Components of net periodic pension income include:

<TABLE>
<CAPTION>
1994 1995 1996
------------- ------------- -------------
<S> <C> <C> <C>
Service cost..................................... $ 1,146,853 $ 954,671 $ 1,366,184
Interest cost.................................... 2,919,187 3,126,405 3,864,310
Expected return on plan assets................... (4,398,713) (4,631,255) (5,704,717)
Net amortization................................. (261,625) (363,963) (280,076)
Other............................................ 55,298 92,964 --
------------- ------------- -------------
Net periodic pension income...................... $ (539,000) $ (821,178) $ (754,299)
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

Net amortization consists of amortization of net assets or obligations at
transition, subsequent plan amendments and of subsequent net gains and losses.

F-16
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

5. PENSION PLANS (CONTINUED)
The Company also has defined contribution pension plans covering certain
employees. Contributions to these plans are based on a percentage of
participants' salaries and amounted to approximately $497,000, $438,000 and
$417,000 in 1994, 1995, and 1996, respectively.

The Company contributes to various multi-employer union administered pension
plans. Contributions to these plans amounted to approximately $133,000, $98,000
and $71,000 in 1994, 1995 and 1996, respectively.

6. POSTRETIREMENT BENEFITS

The following table sets forth the postretirement medical plans' funded
status as of December 31:

<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees............................................................................ $ 7,111,000 $ 6,807,000
Fully eligible active plan participants............................................. 113,200 126,800
Other active plan participants...................................................... 178,600 169,400
------------ ------------
7,402,800 7,103,200
Plan assets at fair value............................................................. -- --
------------ ------------
Accumulated postretirement benefit obligation in excess of plan assets................ 7,402,800 7,103,200
Unrecognized net gain................................................................. 226,502 321,420
Unrecognized prior service cost....................................................... 768,600 785,900
------------ ------------
Accrued postretirement benefit obligation............................................. $ 8,397,902 $ 8,210,520
------------ ------------
------------ ------------
</TABLE>

Net periodic postretirement benefit costs include the following components:

<TABLE>
<CAPTION>
1994 1995 1996
---------- ----------- ----------
<S> <C> <C> <C>
Service cost--benefits earned during the period............................. $ 11,500 $ 11,000 $ 10,800
Interest cost on accumulated postretirement benefit obligation.............. 495,600 460,600 525,300
Other....................................................................... 1,773 (127,700) (96,100)
---------- ----------- ----------
$ 508,873 $ 343,900 $ 440,000
---------- ----------- ----------
---------- ----------- ----------
</TABLE>

Future benefit costs were estimated assuming medical costs would increase at
a 10% annual rate during 1996 and decreasing 1.0% per year to a 6.5% annual
increase in the year 2000 and beyond. The discount rate used to estimate the
accumulated postretirement obligation was 8.75%, 7.5% and 7.75% at December 31,
1994, 1995 and 1996, respectively. If the assumed trend rate were to change by
1.0% the accumulated postretirement benefit obligation would change by
approximately $352,000 and the net periodic postretirement benefit costs would
change by approximately $33,400.

F-17
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

7. INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
------------ ------------ -------------
<S> <C> <C> <C>
Current tax expense:
Federal............................................................. $ 600,192 $ 23,299 $ 9,812,276
State............................................................... 3,547,775 2,414,365 9,332,734
------------ ------------ -------------
Total current......................................................... 4,147,967 2,437,664 19,145,010
Deferred tax expense (benefit):
Federal............................................................. -- -- (4,321,652)
State............................................................... (21,641) 215,630 (514,064)
------------ ------------ -------------
Total deferred........................................................ (21,641) 215,630 (4,835,716)
------------ ------------ -------------
Total provision for taxes............................................. $ 4,126,326 $ 2,653,294 $ 14,309,294
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

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

<TABLE>
<CAPTION>
1994 1995 1996
-------------- ------------- -------------
<S> <C> <C> <C>
Tax at U.S. statutory rates........................................ $ 13,315,827 $ 10,302,563 $ 14,846,273
State taxes, net of federal effect................................. 2,291,992 1,709,497 5,732,136
Reduction in valuation allowance................................... (11,811,378) (9,892,560) (6,632,116)
Other.............................................................. 329,885 533,794 363,001
-------------- ------------- -------------
$ 4,126,326 $ 2,653,294 $ 14,309,294
-------------- ------------- -------------
-------------- ------------- -------------
</TABLE>

The reduction in the valuation allowance in 1996 reflects the recognition of
approximately $4,332,000 in deferred tax benefits expected to be realized in
future years, as well as the reversal of certain temporary differences. The
decrease in the valuation allowance in 1994 and 1995 reflects the use of
approximately $20.7 million and $6.1 million respectively, of federal net
operating loss carryforwards, as well as the reversal of certain temporary
differences in each of these years.

State net operating loss carryforwards were utilized as follows: $4.4
million in 1994, $5.5 million in 1995 and $300,000 in 1996.

At December 31, 1996, certain subsidiaries have remaining net operating loss
carryforwards available ranging from approximately $20,000 to $73.8 million in
various state and local jurisdictions. Substantial portions of the related
deferred tax assets are offset by valuation allowances. The carryforwards at
December 31, 1996 expire in various years through 2011.

Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

F-18
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

7. INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax liabilities and assets as
of December 31 are as follows:

<TABLE>
<CAPTION>
1995 1996
------------- -------------
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment................................ $ 15,491,049 $ 14,986,274
Other........................................................ -- 394,159
------------- -------------
Total deferred tax liabilities................................. 15,491,049 15,380,433
Deferred tax assets:
Intangible assets............................................ 10,848,566 7,865,686
Retiree benefits............................................. 1,554,823 1,015,199
Net operating loss carryforwards............................. 2,778,381 2,791,250
Deferred interest expense.................................... 5,766,896 5,467,656
Other........................................................ 2,913,590 3,763,363
------------- -------------
Total deferred tax assets...................................... 23,862,256 20,903,154
Valuation allowance............................................ 10,033,809 2,349,607
------------- -------------
Net deferred tax assets........................................ 13,828,447 18,553,547
------------- -------------
Net deferred tax (assets) liabilities.......................... $ 1,662,602 $ (3,173,114)
------------- -------------
------------- -------------
</TABLE>

The Company's valuation allowances for deferred tax assets decreased by
approximately $8.6 million in 1995 and $7.7 million in 1996.

The Company's federal income tax returns, which consist of filings for three
separate consolidated groups and two individual entities, have not been examined
by the Internal Revenue Service.

8. COMMITMENTS AND CONTINGENCIES

The Company leases office space and equipment under noncancellable operating
leases which expire over the next five years. These leases contain several
renewal options for periods up to five years. The Company's future minimum lease
payments under operating leases at December 31, 1996 are as follows:

Total rent expense was $1.3 million, $1.4 million and $1.4 million for the
years ended December 31, 1994, 1995 and 1996, respectively.

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

F-19
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

9. ACQUISITIONS

On December 13, 1996, the Company acquired for approximately $18.0 million
certain assets and liabilities of a daily newspaper, published in Taunton,
Massachusetts. The Company applied the purchase method of accounting for this
transaction. Accordingly, the total acquisition cost was preliminarily allocated
to the assets and liabilities of the TAUNTON DAILY GAZETTE based on their
relative estimated fair values on the effective date of the acquisition of $1.8
million and $500,000, respectively. Intangible assets of approximately $17.0
million were recorded for the subscriber list and excess of the purchase price
over the value of identifiable net assets and are being amortized on a
straight-line basis over four to 40 years.

On May 5, 1995, the Company acquired for $31.0 million certain assets and
liabilities of a group of newspapers, which include 42 publications and a
commercial printing company, located in Connecticut and Rhode Island
(collectively, the "New England Acquisition Corp."). The Company applied the
purchase method of accounting for this transaction. Accordingly, the total
acquisition cost was allocated to the assets and liabilities of the New England
Acquisition Corp. based on their relative estimated fair values on the effective
date of the acquisition of approximately $5.0 million and $2.1 million,
respectively.

On June 21, 1995, the Company acquired the stock of the THE HERALD (New
Britain) for $11.0 million plus the assumption of certain noncurrent
liabilities. THE HERALD publishes a daily newspaper in Connecticut. The Company
applied the purchase method of accounting for this transaction. The estimated
fair values of identifiable net assets and liabilities on the effective date of
the acquisition were $2.5 million and $7.5 million, respectively.

On August 31, 1995, the Company acquired for $5.5 million certain assets and
liabilities of the THE MIDDLETOWN PRESS, a daily newspaper published in
Middletown, Connecticut. The Company applied the purchase method of accounting
for this transaction. The estimated fair values of identifiable assets and
liabilities on the effective date of the acquisition were $4.1 million and
$500,000, respectively.

Intangible assets of $45.9 million related to the aforementioned 1995
acquisitions were recorded for the subscriber lists and excess of the purchase
price over the value of identifiable net assets and are being amortized on a
straight-line basis over 4 to 40 years.

F-20
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996

10. MEMBERSHIP INTERESTS

Membership Interests and Capital Stock of JRC, LLC and Affiliates at
December 31, 1994, 1995 and 1996 is summarized as follows:

<TABLE>
<CAPTION>
MEMBERSHIP INTERESTS/SHARES ADDITIONAL
PAR ---------------------------------------- MEMBERSHIP PAID-IN
VALUE AUTHORIZED ISSUED OUTSTANDING INTEREST CAPITAL
--------- ---------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Journal Register Company, LLC:
Class A Membership Interest........... $ 1.00 1,000,000 1,000,000 1,000,000 $ 1,000,000
Class B Membership Interest........... $ 1.00 1,000,000 1,000,000 1,000,000 1,000,000
Additional paid-in capital............ -- $ 216,982,319
------------ --------------
2,000,000 216,982,319
INS Holdings, Inc.:
Common stock voting................... $ .10 2,000 2,000 2,000 200 --
Common stock non-voting............... $ .10 1,000,000 1,000,000 1,000,000 100,000 --
Preferred Stock, Class A.............. $ 1.00 4,000 4,000 4,000 4,000
Additional paid-in capital............ -- 5,185,016
------------ --------------
104,200 5,185,016
------------ --------------
$ 2,104,200 $ 222,167,335
------------ --------------
------------ --------------
</TABLE>

In connection with the Exchange Agreement mentioned in Note 1 to the
combined financial statements, on December 21, 1994 the Company exchanged 2
million of its membership interests, representing all the issued and outstanding
membership interests of the Company, for all the issued and outstanding shares
of common stock of each of JNI and JCI.

JCI redeemed all of the issued and outstanding shares of its Senior
Preferred Stock on December 21, 1994 (the "Redemption Date") for its face value
of $18.2 million plus dividends in arrears of approximately $20.4 million. In
addition, JCI redeemed all of the issued and outstanding shares of its Serial
Preferred Stock on the Redemption Date for its face value of $23.0 million.

11. SUBSEQUENT EVENTS (UNAUDITED)

On March 11, 1997, Journal Register Company was incorporated. In conjunction
with the formation of Journal Register Company, a company under common control
named Journal Register Company (see Note 1, Organization and Basis of
Presentation), was renamed Journal Register Newspapers, Inc. Journal Register
Company intends to file with the Securities and Exchange Commission a
Registration Statement on Form S-1 for the sale of shares of common stock. Prior
to the issuance of shares pursuant to the Registration Statement, certain
entities (INS Holdings, Inc., Journal Register Newspapers, Inc. and JRC, LLC)
under common control with the Company will be combined with Journal Register
Company. Substantially all of the membership interests and equity securities of
these entities are owned by Warburg, Pincus. Since the companies are under
common control, this transaction will be accounted for similar to a pooling of
interests.

The Company intends to adopt a bonus plan to pay special bonuses to certain
employees totalling approximately $28.0 million assuming a price to public in
the proposed offerings pursuant to the Registration Statement described above of
$14.00. The Company expects to incur a charge to pre-tax earnings of
approximately $31.0 million in the second quarter of 1997. The Company expects
that the bonus plan will account for approximately $28.0 million of such charge;
however, the amount of such charge will depend on the price to public. The
discontinuation of the Company's long-term incentive plan will account for
approximately $3.0 million of such charge. The charge of $31.0 million was not
reflected in the pro forma earnings per share information since it represents a
one-time charge in conjunction with the offering. In addition, the Company
intends to adopt a stock incentive plan. Such plan will be accounted for in
accordance with APB Opinion No. 25.

In connection with the aforementioned public offering, the Company expects
to amend the terms of, and restate, the Credit Agreement.

F-21
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

COMBINED BALANCE SHEETS

DECEMBER 31, 1996 AND MARCH 31, 1997

<TABLE>
<CAPTION>
MARCH 31,
1997
PRO FORMA
DECEMBER 31, MARCH 31, STOCKHOLDERS'
1996 1997 EQUITY
-------------- -------------- ---------------
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 8,546,396 $ 6,079,172
Accounts receivable, less allowance
for doubtful accounts of $4,172,936 at December 31, 1996 and
$4,760,334 at March 31, 1997................................ 44,063,981 41,914,883
Inventories................................................... 6,204,002 6,285,690
Deferred income taxes......................................... 2,950,798 2,849,718
Other current assets.......................................... 4,270,098 4,859,362
-------------- --------------
Total current assets............................................ 66,035,275 61,988,825

Property, plant and equipment:
Land.......................................................... 7,260,008 7,249,658
Buildings and improvements.................................... 59,001,100 59,379,943
Machinery and equipment....................................... 135,936,921 136,791,411
-------------- --------------
202,198,029 203,421,012
Less accumulated depreciation................................. 110,484,723 114,090,020
-------------- --------------
Property, plant and equipment, net.............................. 91,713,306 89,330,992
Deferred income taxes........................................... 222,316 --
Intangible and other assets, net of accumulated amortization of
$17,610,762 at December 31, 1996 and $19,315,541 at March 31,
1997.......................................................... 148,014,311 147,955,077
-------------- --------------
$ 305,985,208 $ 299,274,894
-------------- --------------
-------------- --------------
LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Current maturities of long-term debt.......................... $ 54,173,894 $ 58,154,621
Accounts payable.............................................. 7,200,381 7,690,234
Income taxes payable.......................................... 1,195,534 476,397
Accrued interest.............................................. 7,498,261 7,270,155
Deferred subscription revenue................................. 5,878,837 5,601,342
Other accrued expenses and current liabilities................ 15,946,505 17,136,606
-------------- --------------
Total current liabilities....................................... 91,893,412 96,329,355
Senior debt, less current maturities............................ 566,390,000 545,875,000
Subordinated notes and accrued interest due to members.......... 33,319,341 34,140,914
Deferred income taxes........................................... -- 687,404
Accrued retiree benefits and other liabilities.................. 11,602,809 11,130,451
Income taxes payable............................................ 26,437,689 29,045,701
Commitments and contingencies
Members' deficit:
Common stock, $.01 par value, 300,000,000 shares authorized
and 37,962,500 shares issued and outstanding................ $ 379,625
Membership interests.......................................... 2,104,200 2,104,200 --
Additional paid-in capital.................................... 222,167,335 222,167,335 223,891,910
Accumulated deficit........................................... (647,929,578) (642,205,466) (642,205,466)
-------------- -------------- ---------------
Net members' deficit............................................ (423,658,043) (417,933,931) $ (417,933,931)
-------------- -------------- ---------------
---------------
$ 305,985,208 $ 299,274,894
-------------- --------------
-------------- --------------
</TABLE>

See accompanying notes.

F-22
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

COMBINED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1997

(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
Revenues:
Advertising...................................................................... $ 58,668,448 $ 60,419,663
Circulation...................................................................... 19,739,034 19,829,684
------------- -------------
Newspaper revenues................................................................. 78,407,482 80,249,347
Commercial printing and other...................................................... 3,801,960 2,791,049
------------- -------------
82,209,442 83,040,396

Operating expenses:
Salaries and employee benefits................................................... 28,129,000 28,662,953
Newsprint, ink and printing charges.............................................. 13,190,394 9,130,050
Selling, general and administrative.............................................. 7,619,237 7,641,156
Depreciation and amortization.................................................... 4,956,489 5,418,231
Other............................................................................ 9,624,345 9,543,316
------------- -------------
63,519,465 60,395,706
Operating income................................................................... 18,689,977 22,644,690

Other income (expense):
Interest expense................................................................. (15,494,084) (12,960,201)
Interest Income.................................................................. 15,915 13,130
Other............................................................................ (265,150) (41,507)
------------- -------------
(15,743,319) (12,988,578)
------------- -------------
Income before provision for income taxes........................................... 2,946,658 9,656,112
Provision for income taxes......................................................... 993,908 3,932,000
------------- -------------
Net income......................................................................... $ 1,952,750 $ 5,724,112
------------- -------------
------------- -------------
Pro forma
Historical net income............................................................ $ 5,724,112
Pro forma net income per common share............................................ $ .15
-------------
-------------
Pro forma common shares outstanding.............................................. 37,962,500
-------------
-------------
</TABLE>

See accompanying notes.

F-23
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1997

(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------
1996 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income...................................................................... $ 1,952,750 $ 5,724,112
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization................................................. 4,956,489 5,418,231
Provision for losses on accounts receivable................................... 776,724 524,428
(Gain) loss on sale of property, plant and equipment.......................... 14,929 (139,400)
Increase (decrease) in deferred income tax provision.......................... (347,365) 1,010,800
Decrease in accounts receivable............................................... 1,773,124 1,624,670
(Increase) decrease in inventories............................................ 995,600 (81,688)
Increase (decrease) in accounts payable....................................... (1,871,181) 489,853
Increase in income taxes payable.............................................. 23,127 1,888,875
(Decrease) in accrued interest................................................ (1,313,141) (228,106)
(Decrease) increase in deferred subscription revenue.......................... 15,249 (277,495)
(Decrease) in accrued retirees benefits and other liabilities................. (394,092) (472,358)
Decrease (increase) in other assets, net of increase (decrease) in other
liabilities................................................................. 1,949,789 (1,042,799)
-------------- --------------
Net cash provided by operating activities....................................... 8,532,002 14,439,123

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of machinery and equipment................................... 2,807 337,875
Additions to property, plant and equipment...................................... (1,615,967) (1,530,795)
-------------- --------------
Net cash used in investing activities........................................... (1,613,160) (1,192,920)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of:
Senior bank debt.............................................................. 16,000,000 --
Accretion of subordinated notes............................................... 750,857 821,573
Repayment of Senior bank debt................................................... (26,555,000) (16,535,000)
-------------- --------------
Net cash used in financing activities......................................... (9,804,143) (15,713,427)

Net decrease in cash and cash equivalents......................................... (2,885,301) (2,467,224)

Cash and cash equivalents, beginning of the period................................ 8,622,605 8,546,396
-------------- --------------

Cash and cash equivalents, end of the period...................................... $ 5,737,304 $ 6,079,172
-------------- --------------
-------------- --------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:
Interest...................................................................... $ 15,788,363 $ 12,305,090
Income taxes.................................................................. 1,318,146 1,032,325

SUPPLEMENTAL DISCLOSURE OF NON CASH FINANCING ACTIVITIES
Issuance of additional Subordinated Notes....................................... $ 750,857 $ 821,573
</TABLE>

See accompanying notes.

F-24
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

MARCH 31, 1997
(UNAUDITED)

1. UNAUDITED COMBINED FINANCIAL STATEMENTS

The combined financial statements are unaudited and are subject to year-end
adjustments. However, in the opinion of management, all known adjustments (which
consist primarily of normal recurring accruals) have been made and present
fairly the combined operating results for the unaudited periods. Because of the
seasonal nature of the Company's business, results for interim periods are not
indicative of results to be expected for the fiscal year. These financial
statements should be read in conjunction with the audited financial statements
contained herein.

2. BASIS OF PRESENTATION

The accompanying unaudited combined financial statements include Journal
Register Company, LLC ("JRC, LLC") and all of its wholly owned affiliates, INS
Holdings, Inc. ("INSI") and Journal Register Company (now known as Journal
Register Newspapers, Inc.) ("JRC"). The Company is used to refer to the
combination of JRC, INSI and JRC, LLC.

JRC, LLC was organized in New York in December 1994 for the purpose of
acquiring and operating newspaper companies; it commenced operations in December
1994. Effective December 21, 1994, the stockholders of Journal News, Inc.
("JNI") and Journal Company, Inc. ("JCI"), affiliates of the Company
(collectively the "Companies"), entered into an exchange agreement (the
"Exchange Agreement") with the Company, whereby JRC, LLC issued 2 million
membership interests, representing all the issued and outstanding membership
interests in JRC, LLC, to the stockholders of the Companies in exchange for all
of the issued and outstanding common stock of the Company. Since the combined
Companies were under common control, this transaction was accounted for in a
manner similar to a pooling of interests and the accompanying combined financial
statements include the accounts and operations of JNI and JCI for all periods
presented. Affiliates of E.M. Warburg, Pincus & Co., LLC (collectively "Warburg,
Pincus") own substantially all of the membership interests of JRC, LLC.

3. USE OF ESTIMATES

F-25
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 1997
(UNAUDITED)

4. PRO FORMA STOCKHOLDERS' EQUITY

Pro forma stockholders' equity reflects 37,962,500 of unregistered shares of
common stock to be issued to the existing shareholders in exchange for their
membership interests.

5. PRO FORMA EARNINGS PER SHARE

The pro forma net income per common share was calculated based upon the
37,962,500 shares which will be issued prior to the proposed offerings but
subsequent to December 31, 1996. If effect were given to the 9,375,000 shares
issued in the proposed offerings for which the proceeds will be used to repay
debt and the additional 1,100,000 shares to be issued to management as part of
special bonuses (see Note 7, Subsequent Events), the shares would be 48,437,500
and net income would increase to $7,291,171, resulting in net income per common
share of $.15. The net income of $7,291,171 reflects net interest expense
reduction ($2.6 million and $1.6 million net of tax) resulting from the use of
proceeds to reduce debt and additional debt required to pay the special
management bonuses. The interest expense reduction includes savings net of tax
effect of $200,000 associated with the lower interest rate based on the pro
forma reduction in outstanding borrowings used to calculate the Company's
interest rate spread.

6. INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
1996 1997
------------ -------------
<S> <C> <C>
Current tax expense:
Federal............................................................................ $ 670,873 $ 2,112,159
State.............................................................................. 670,400 809,041
------------ -------------
Total Current........................................................................ 1,341,273 2,921,200
------------ -------------
------------ -------------
Deferred tax expense (benefit):
Federal............................................................................ (310,438) 974,841
State.............................................................................. (36,927) 35,959
Total Deferred....................................................................... (347,365) 1,010,800
------------ -------------
Total provision for taxes............................................................ $ 993,908 $ 3,932,000
------------ -------------
------------ -------------
</TABLE>

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

<TABLE>
<CAPTION>
1996 1997
------------ -------------
<S> <C> <C>
Tax at U.S. statutory rate........................................................... $ 1,031,330 $ 3,379,639
State taxes, net of federal effect................................................... 411,757 549,250
Reduction in valuation allowance..................................................... (476,406) --
Other................................................................................ 27,227 3,111
------------ -------------
$ 993,908 $ 3,932,000
------------ -------------
------------ -------------
</TABLE>

F-26
<PAGE>
JOURNAL REGISTER COMPANY, LLC AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 1997
(UNAUDITED)

7. SUBSEQUENT EVENTS

The Company intends to adopt a bonus plan to pay special bonuses to certain
employees totaling approximately $28.0 million assuming a price to public in the
proposed offerings pursuant to the Registration Statement described above of
$14.00. The Company expects to incur a charge to pre-tax earnings of
approximately $31.0 million in the second quarter of 1997. The Company expects
that the bonus plan will account for approximately $28.0 million of such charge;
however, the amount of such charge will depend on the price to public. The
discontinuation of the Company's long-term incentive plan will account for
approximately $3.0 million of such charge. The charge of $31.0 million was not
reflected in the pro forma information since it represents a one-time charge in
conjunction with the offering. In addition, the Company intends to adopt a stock
incentive plan. Such plan will be accounted for in accordance with APB Opinion
No. 25.

In connection with the aforementioned public offering, the Company expects
to amend the terms of, and restate, the Credit Agreement.

F-27
<PAGE>
[LOGO]
<PAGE>
PROSPECTUS
9,375,000 SHARES

[LOGO]
COMMON STOCK
-----------------

OF THE 9,375,000 SHARES OF COMMON STOCK BEING OFFERED, 1,875,000 SHARES ARE
BEING OFFERED INITIALLY OUTSIDE THE
UNITED STATES AND CANADA BY THE INTERNATIONAL UNDERWRITERS AND 7,500,000
SHARES ARE BEING OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE
U.S. UNDERWRITERS. SEE "UNDERWRITERS." ALL OF THE SHARES OF COMMON STOCK
OFFERED HEREBY ARE BEING SOLD BY THE COMPANY. PRIOR TO THE OFFERINGS,
THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK OF THE COMPANY. UPON
COMPLETION OF THE OFFERINGS AND ASSUMING ISSUANCE OF THE BONUS SHARES
DESCRIBED HEREIN, CERTAIN AFFILIATES OF E.M. WARBURG, PINCUS & CO.,
LLC WILL OWN APPROXIMATELY 78.2% OF THE SHARES OF COMMON STOCK THEN
OUTSTANDING. APPROXIMATELY $34.5 MILLION OF THE $119.5 MILLION NET
PROCEEDS TO THE COMPANY OF THE OFFERINGS WILL BE
USED TO REPAY INDEBTEDNESS OWED TO AFFILIATES OF E.M. WARBURG,
PINCUS & CO., LLC.
SEE "UNDERWRITERS" FOR A DISCUSSION OF THE FACTORS CONSIDERED IN
DETERMINING THE INITIAL PUBLIC OFFERING PRICE.
-------------------

THE COMMON STOCK HAS BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK EXCHANGE,
SUBJECT TO OFFICIAL NOTICE OF ISSUANCE, UNDER THE SYMBOL "JRC."
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE $14 A SHARE
-------------------

- ---------
(1) THE COMPANY AND CERTAIN AFFILIATES OF E.M. WARBURG, PINCUS & CO., LLC
(COLLECTIVELY, "WARBURG, PINCUS") HAVE AGREED TO INDEMNIFY THE UNDERWRITERS
AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. WARBURG, PINCUS CURRENTLY OWNS SUBSTANTIALLY ALL OF
THE EQUITY SECURITIES OF THE COMPANY. UPON COMPLETION OF THE OFFERINGS AND
ASSUMING ISSUANCE OF THE BONUS SHARES DESCRIBED HEREIN, WARBURG, PINCUS
WILL OWN APPROXIMATELY 78.2% OF THE SHARES OF COMMON STOCK THEN
OUTSTANDING. IT IS PROBABLE THAT, FOLLOWING COMPLETION OF THE OFFERINGS,
WARBURG, PINCUS WILL CONTINUE TO BE ABLE TO ELECT THE COMPANY'S BOARD OF
DIRECTORS AND TAKE, OR BLOCK, OTHER CORPORATE ACTIONS REQUIRING STOCKHOLDER
APPROVAL, AS WELL AS DICTATE THE DIRECTION AND POLICIES OF THE COMPANY. SEE
"RISK FACTORS--INFLUENCE BY EXISTING STOCKHOLDER." UPON COMPLETION OF THE
OFFERINGS AND ASSUMING ISSUANCE OF THE BONUS SHARES DESCRIBED HEREIN,
OFFICERS AND DIRECTORS OF THE COMPANY (OTHER THAN DIRECTORS WHO ARE
AFFILIATED WITH WARBURG, PINCUS) WILL OWN, IN THE AGGREGATE, APPROXIMATELY
1.5% OF THE SHARES OF COMMON STOCK THEN OUTSTANDING.
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT $3.5
MILLION. APPROXIMATELY $34.5 MILLION OF THE PROCEEDS TO COMPANY WILL BE USED
TO REPAY INDEBTEDNESS OWED TO WARBURG, PINCUS.
(3) WARBURG, PINCUS CAPITAL PARTNERS, L.P. ("WPCP"), AN AFFILIATE OF E.M.
WARBURG, PINCUS & CO., LLC, HAS GRANTED TO THE UNDERWRITERS AN OPTION,
EXERCISABLE WITHIN 30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN
AGGREGATE OF 1,406,250 ADDITIONAL SHARES OF COMMON STOCK AT THE PRICE TO
PUBLIC LESS UNDERWRITING DISCOUNTS AND COMMISSIONS FOR THE PURPOSE OF
COVERING OVER-ALLOTMENTS, IF ANY. IF THE UNDERWRITERS EXERCISE SUCH OPTION
IN FULL, THE TOTAL PRICE TO PUBLIC, UNDERWRITING DISCOUNTS AND COMMISSIONS,
PROCEEDS TO COMPANY AND PROCEEDS TO WPCP WILL BE $150,937,500, $9,487,500,
$123,000,000, AND $18,450,000, RESPECTIVELY. SEE "UNDERWRITERS" AND SEE
NOTE (1) ABOVE.
------------------------
THE SHARES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY
THE UNDERWRITERS NAMED HEREIN AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS
BY WILLKIE FARR & GALLAGHER, COUNSEL FOR THE UNDERWRITERS. IT IS EXPECTED THAT
DELIVERY OF THE SHARES WILL BE MADE ON OR ABOUT MAY 13, 1997 AT THE OFFICE OF
MORGAN STANLEY & CO. INCORPORATED, NEW YORK, N.Y., AGAINST PAYMENT THEREFOR IN
IMMEDIATELY AVAILABLE FUNDS.

-----------------
MORGAN STANLEY & CO.
INTERNATIONAL

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MERRILL LYNCH INTERNATIONAL

BEAR, STEARNS INTERNATIONAL LIMITED

CHASE MANHATTAN INTERNATIONAL LIMITED

MAY 7, 1997