Focused on Commitment

The President and Chairman of the Board's report to shareholders and associates

Chairman of the Board Dave Threshie and Freedom President and CEO Sam Wolgemuth

NAVIGATION

Table of Contents

High Desert Hero

A Paradigm of Time

The Perfect Political Storm

A Bravo Performance

An Inside Job

Freedom Orange County Information

Freedom Newspapers

Freedom Broadcasting

Freedom Magazines

Board of Directors

Corporate Executives

Freedom's Family of Information & Entertainment Providers

2000 Annual Report Home

Freedom Communications, Inc.


Beverly Haut and Linda Franklin
Chief Legal Officer Glenn Fuller says of legal assistant Beverly Haut: "Every successful organization has one – the person who keeps information flowing, makes sure things get done efficiently and that people are where they need to be when they need to be there. The person whose absence results in chaos and confusion. Without Beverly, the Legal Department could not provide the service to Freedom operations they have come to enjoy."

When you are trying to raise the funds to do acquisitions, myriad tasks have to take place. At corporate headquarters, Linda Franklin played a crucial role in getting the "behind-the-scene" tasks completed – especially Freedom's presentation to current and prospective bankers. She not only coordinated the meeting and accommodations for 50 bankers, she also standardized and streamlined the six presentations of Freedom executives into one smooth slide show.


Jon Forte
When Freedom's Corporate accounting group was depleted by planned absences and transfers, Internal Audit Director Jon Forte stepped in as one of the key people to take care of a number of important projects like the Gaston Gazette's new building and press and related financing. He also was key to Freedom's acquisition due diligence review process, saving Freedom millions of dollars in purchase price adjustments.


Melissa McBride and Krista McRae
When Freedom Communications began the bidding process on a number of newspaper groups, Community Newspapers Controller and Financial Analyst Melissa McBride was in the thick of things. "Melissa did a huge amount of extra work with the acquisitions. The folks in finance know how she really went the extra mile in our diligence efforts and then in the post-closing integrations," said Division President Jonathan Segal.

Freedom VP of Human Resources Barbara Adams says of Krista McRae, "If you knew her, you'd want to clone her. Krista has grown into new roles as an HRIS trainer, 401k and pension administrator, acquisition team member, project leader and compensation administrator. She's a key player in our business." 		Dear Friends,

Eastern North Carolina doesn't usually get blizzards. But on January 25, 2000, a coastal storm dumped six inches of snow on the area. Given the absence of snow removal equipment, things mostly shut down, awaiting a thaw. That is, except for the associates at Freedom's five newspapers there, for whom the snow was another opportunity to provide support to their communities.

Just after noon, police scanners alerted our newsrooms to an emergency. A serious truck accident had closed the main road connecting New Bern and Jacksonville, 35 miles apart.

Elliott Potter, editor of The Daily News in Jacksonville, got a call from his counterpart at The Sun Journal in New Bern to confirm the story and to coordinate their coverage. They discussed access to the accident site and decided to send a reporter and a photographer from New Bern and share the results. This seemingly small step marked a significant change from the past when events in the area had too often been covered by as many as four Freedom teams, each representing their own papers.

It is steps like this one, taken voluntarily by associates, that are making possible the creation of something truly unique, an integrated Freedom Community Newspaper group in Eastern North Carolina, committed to serving each other and their individual communities.

Freedom is a special place, formed by the passions of a values-driven entrepreneur, R.C. Hoiles, who started into the newspaper business almost 100 years ago. R.C. believed fervently in human liberty and let the guiding light of respect for individual freedom implant a culture in our company that flourishes to this day.

Freedom is a good place to work. Many associates will say, it's the best media company they know of. Not because it is the biggest – it's not. Or the fastest growing – no. Or the most visible – it's a well-kept secret. It's because of who we are and what we stand for.

That legacy is a prize and a challenge. We are proud that Freedom is, for many, an employer of choice. But we are humbled by the fact that we still have a long way to go to make that promise a reality for every one of our 8,000 associates.

What follows are highlights of the year 2000 chapter of the Freedom Communications story. It's a story of challenge and achievement – of individual commitment and group success. It is a story of problems confronted and progress made. And it's a story without an ending, for the story of Freedom is a continuing one.

The Freedom Board of Directors

Early in the year, four new directors were elected to Freedom's Board: former Freedom President/CEO James N. Rosse; fourth generation Hoiles family member, Raymond C.H. Bryan; veteran Tribune Company publisher, Byron J. Campbell; and Lebhar-Friedman, Inc. CEO, J. Roger Friedman. Retiring from the board were Directors Sarah Andersen, Richard Capen, Michael Yanney and Abraham Zaleznik. While 2000 was an important year of progress for the company, it was also a year of uncertainty. As we looked toward the future, the Board of Directors and management sketched out a vision for Freedom. We restated the company's purpose:

"To stand for human liberty and to be the indispensable partner in the vitality and growth of every community we serve."

We reaffirmed Freedom's foundational values: Respect for Individual Freedom; Self-Responsibility; Integrity; Community Service; and, Life-Long Learning.

Consistent with our purpose and values, we created a vision for the future: to be an employer of choice; to be customer focused; and, to be a high-growth company.

Employer of Choice

Recognizing that nothing is more important, a great deal of attention was given to the development of an integrated people strategy. We started with the conviction that the only sustainable competitive advantage is people. We recognized that to put that advantage to work for us, exceptional people would have to be recruited, developed, rewarded and retained.

Believing that associate morale is a critical test of our success in making Freedom an employer of choice, a major project was undertaken to measure and report on morale, and to improve it. Gallup's Q12 survey was selected since their extensive database links high scores with key measures of business success; low employee turnover and high productivity, customer satisfaction and unit profitability.

Q12 was offered to every Freedom associate. In this initial survey, Freedom's composite score of 3.55 (out of 5.0) ranked us at about the 50th percentile of the thousands of companies that form Gallup's database. The scores at Freedom's 39 discrete businesses range from a low of 3.23 to a high of 4.18. Broken down to our 369 individual work groups, the lowest score was 2.21 and the highest, 4.63. Gallup's database contains results from 41,495 work groups and our results match theirs to a very high degree. 25 percent of our work groups score in their top 25 percent. 27 percent of our work groups score in Gallup's bottom 25 percent.

In response to these results, our work groups have met to identify specific problems that stand in the way of improvement and get to work on them. We understand that if Freedom is going to build its leadership in a challenging business environment, our scores must improve. We intend to retest every year to measure our progress.

We continued and expanded our critical training and development programs including Freedom Academy, Freedom School and a wide range of training and development programs that included hundreds of associates.

Late in 2000, organizational performance and business development expert Dr. Carol Geffner joined the company as its Chief Learning Officer. Dr. Geffner is responsible for developing an integrated people strategy that will align Freedom's core values, business objectives and associates' development needs.

In commemoration of Founder's Day 2000, "The Spirit of Freedom," a special book honoring the large and small contributions of our people, was mailed to every Freedom associate in November as part of Founder's Day, to honor the legacy values of R.C. Hoiles and his family heirs.

Customer Focused

The second important part of Freedom's strategic vision is for the company to be committed to satisfying the needs of our customers. In short, we want to be the preferred media choice in every community we serve.

Already, this vision is being realized. In many of Freedom's newspaper communities, our products garner half of the total local advertising revenue and reach two-thirds of the households. In most of our television markets, Freedom holds a top two position in audience and local advertising. And almost all of Freedom's magazines hold the lead in their respective markets.

A Year of Growth

Growth is the reward we get for serving our customers well and high growth is the third key element in our strategic vision for the company.

2000 was a year of strong growth for Freedom, as revenue advanced 9 percent, marking the eighth consecutive year of revenue increases. The company's operating cash-flow grew 12 percent, to its highest level ever. Exceptional performance was achieved at Broadcasting, where cash flow increased by 40 percent. Other strong performers were community newspapers in the Texas Valley, at Seymour, Sedalia, Marysville and the Magazine group.

In what was a record year for newspapers transactions, Freedom made the biggest acquisition in its history, purchasing Thomson's Arizona Group – The Tribune in Mesa/Scottsdale, The Yuma Daily Sun and The Daily News Sun in Sun City – and The Telegraph in Alton, Illinois. These newspapers added 1,000 associates to the company, boosted Freedom's daily newspaper circulation by 160,000 subscribers and added $100 million to annual revenue. The Orange County Register extended its reach into upscale markets with the acquisition of Coast magazine.

A Company-Wide Tour

During his first year as CEO, Sam Wolgemuth, accompanied by his wife, Mary Gayle, visited almost every Freedom entity and met thousands of associates. In a speech given 56 times, he made five promises and asked associates to make the same promises to each other and to him: To always challenge ourselves; To honor each other; To embrace Freedom's values; To invest in relationships; and To live gratefully.

The Year Ahead

Dedication to the continuing achievement of Freedom's strategic vision is our highest priority. During 2001 we will roll out a detailed plan to realize the dream of becoming an employer of choice. The plan will be rooted in a commitment to the development of every associate. And we will measure our progress by retaking Gallup's Q12 survey and using the results to guide continuing actions.


We will focus our attention outward – on our customers. We want to be certain that we are, in fact, the indispensable partner in every one of the communities we serve. We intend to make that promise a reality in new media as well. We are grateful for the trust placed on us by our customers and are committed to meeting their needs more effectively than ever before.

In 2001 our growth ambitions are meeting the reality of the business cycle. The tougher times we face will provide us with an opportunity to refine our efforts and become more efficient. It is our goal to use this challenging time to improve our position in every one of our markets. We will do that by continually earning the trust of our customers, and by innovating to meet their needs. High growth will be the reward we get for doing that well.

And finally, we will be true to our values, continuing to light the torch of freedom by speaking passionately and consistently for human liberty. We will honor our rich legacy by standing for what is right and what is true.

Sincerely,

Sam Wolgemuth, President and CEO


R. D. Threshie, Jr., Chairman of the Board