Philadelphia Newspapers, LLC

Insert Verification Preparation

September 2006

Assessment of Inserting Operation

Review Capacity and Capability of Inserting Operation

•Equipment

•Machine Controls and Software

•Practices and Procedures

•Reporting Capacity

Equipment

• GMA SLS 1000’s•3 SLS 1000 Sunday Machines with 23 insert head positions

•Average 60 – 70 preprint orders per week

•Average 17-20 million pieces per week

•179 zones with average circulation of 2,300 copies

•7 SLS 1000 Daily Machines with 11-12 insert head positions

Assessment of Inserting Operation

Assessment of Inserting Operation

Machine Controls & Software

•Package Montoring System (PMS) last updated 1996

•Burt Packaging Manager

Assessment of Inserting OperationReview Procedures

•Inserting integrity

•Package identification

•Delivery to field personnel

•Handling of replacement packages

Communication and Information to Various Groups

•Advertising

•Circulation

Assessment of Inserting Operation

Initial Steps

Capital Investment

• 2004 - Installed new inserting machine controls on Sunday machines (3 SLS 1000’s)

• 2005 – Installed new machine controls on daily machines (7 SLS 1000’s)

Day of WeekSunday

Wed/Thur/Fri

Circulation415,400279,748

Avg Preprint Zone2,3211,563

HD Zones 179179

Preprint Zones - Current

The Inquirer Current Preprint ZoningEffective August 2005

Day of WeekSunday

Wed/Thur/Fri

Circulation411,162266,789

Avg Preprint Zone1,9771,283

HD Zones 208208

Note: 93% of our subscriber base is zip code pure.

Preprint Zones – Proposed

The Inquirer New Proposed Preprint ZoningEffective October 2006

Where We Started

Benefits of New Machine Controls•Download preprint information directly from Burt to Enternet

• Real time information for each inserter station

•Interface to ¾ wrap ink jet printers to identify bundle zone codes

•Automatic bundle size settings to stacker

•Provide detailed information to Advertising

•Archiving of information

Current MapZone: PBICheck Box List Quantity Check Box

Inserts Received Duplicates MissingTRAVEL

BESTBUY-1 XBOSCOVS XCABELAS XCI RCUIT/1 XCOMP_USA XFIRESTONE XGERHARDS XGREAT-ESC XHOMEDEPOT XJ CPENNEY/1 XK-MART XKOHL-S XOFFI CEMAX XOLDNAVY XREDNERS XRITZ-CAMER XSEARS/1 XSEARS/2 XSPORTS_AUT XTOY_R_US XCOMIC/ 1

CHECKS XDI CKS--1 XECKERD XIMPACTI NS XNEWSAMER/1 XNEWSAMER/2 XPARADE-MAG XRAYMOREFLA XSPIDERMAN XSTAPLES XTARGET-STR X

RECAP OF 09/10/06

Zip Code Total Received Missing Duplicates Not Listed Duplicates NotesPLD 19010PBI 08003 32 31 1 0 0 0NGD 08080MBA 19444 35 34 1 4 1 0ZAQ 19130ZAI 19119PBN 19047NCN 08030,59,08106 33 33 0 0 1 0PBR 19067NBH 08057PCK 19373 Chester Co.MAL 19038 34 31 3 0 2 0NGE 08014,27,56,85 25 23 2 0 0 0PDI 19037,63,65NBK 08077 28 26 2 0 0 0NGE 08014,27,56,85 25 24 1 2 0 0PLH 19066PDI 19037,63,65MBB 19446,86 35 35 0 0 0 0NBH 08057PLG 19041PLC 19008 30 29 1 0 0 0NBE 08053 35 35 0 0 0 0PLK 19083 30 29 1 0 0 0ZBM 19154 32 32 0 0 0 0PLM 19087MAW 19420,23,26,90Total 374 362 12 6 4 0

96.8% 3.2% 1.6% 1.1%

Results

Inserting Accuracy

•Machine Reports – 98% miss accuracy, 99% double accuracy

•Internal Audits – Range of 95% to 99% depending on weekly volume

Next Steps

1. Increased system integration from inserting to delivery to customer

2. Improve process of replacement / shortages packages