# UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-Q

# [ X ]   QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES           EXCHANGE ACT OF 1934

# For the quarterly
period ended: September 28, 2008

or

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

| | For
the transition period from _____________ to ________________ Commission File Number:1-31805
| | -----------------------------------------------------------------------------------------------

|JOURNAL COMMUNICATIONS, INC.                          
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|WISCONSIN                                     | 20-0020198                          
|--------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation | (I.R.S. Employer Identification No.)
|or organization)                             
|333 W. State Street, Milwaukee, Wisconsin     | 53203                               
|(Address of principal executive offices)      | (Zip Code)                          

|414-224-2000                                      
|--------------------------------------------------
|Registrants telephone number, including area code

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

# Yes [ X ] No [   ]

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a
smaller reporting company. See definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of
the Exchange Act.

# Large Accelerated Filer 
   Accelerated Filer X       Non-accelerated Filer              Smaller reporting company

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

# Yes [   ] No [ X ]

Number of shares outstanding of each
of the issuers classes of common stock as of July 25, 2008 (excluding 8,676,705
shares of class B common stock held by our subsidiary, The Journal Company):

|Class                | Outstanding at October 29, 2008
|-------------------- | -------------------------------
|Class A Common Stock | 40,366,409                     
|Class B Common Stock | 9,946,167                      
|Class C Common Stock | 3,264,000                      

---

# JOURNAL
COMMUNICATIONS, INC.

# INDEX

|         |                       |                                                                      | Page No.
|-------- | --------------------- | -------------------------------------------------------------------- | --------
|         |                       |                                                                      |         
|Part I.  | Financial Information |                                                                     
|         | Item 1.               | Financial Statements                                                
|         |                       | Unaudited Consolidated Condensed Balance Sheets as of               
|         |                       | September 28, 2008 and December 30, 2007                             | 2       
|         |                       | Unaudited Consolidated Condensed Statements of Earnings             
|         |                       | for the Third Quarter and Three Quarters Ended                      
|         |                       | September 28, 2008 and September 30, 2007                            | 3       
|         |                       | Unaudited Consolidated Condensed Statement of                       
|         |                       | Shareholders Equity for the Three Quarters Ended September 28, 2008 | 4       
|         |                       | Unaudited Consolidated Condensed Statements of                      
|         |                       | Cash Flows for the Three Quarters Ended September 28, 2008          
|         |                       | and September 30, 2007                                               | 5       
|         |                       | Notes to Unaudited Consolidated Condensed                           
|         |                       | Financial Statements as of September 28, 2008                        | 6       
|         | Item 2.               | Managements Discussion and Analysis of Financial Condition         
|         |                       | and Results of Operations                                            | 23      
|         | Item 3.               | Quantitative and Qualitative Disclosure of Market Risk               | 40      
|         | Item 4.               | Controls and Procedures                                              | 40      
|Part II. | Other Information     |                                                                     
|         | Item 1.               | Legal Proceedings                                                    | 40      
|         | Item 1A.              | Risk Factors                                                         | 40      
|         | Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds          | 48      
|         | Item 3.               | Defaults Upon Senior Securities                                      | 48      
|         | Item 4.               | Submission of Matters to a Vote of Security Holders                  | 48      
|         | Item 5.               | Other Information                                                    | 49      
|         | Item 6.               | Exhibits                                                             | 49      

1

---

# PART I. FINANCIAL
INFORMATION

# ITEM 1. FINANCIAL
STATEMENTS

JOURNAL COMMUNICATIONS,
INC.Unaudited Consolidated Condensed Balance Sheets (in thousands, except share and per
share amounts)

|                                                                           | September 28, 2008 | December 30, 2007
|-------------------------------------------------------------------------- | ------------------ | -----------------
|ASSETS                                                                     |                    |                  
|Current assets:                                                            |                    |                  
|Cash and cash equivalents                                                  |                    |                  
|Receivables, less allowance for doubtful accounts                          |                    |                  
|of $3,913 and $4,031                                                       |                    |                  
|Inventories, net                                                           |                    |                  
|Prepaid expenses                                                           |                    |                  
|Deferred income taxes                                                      |                    |                  
|                                                                           |                    |                  
|TOTAL CURRENT ASSETS                                                       |                    |                  
|Property and equipment, at cost, less accumulated depreciation             |                    |                  
|of $232,356 and $221,273                                                   |                    |                  
|Goodwill                                                                   |                    |                  
|Broadcast licenses                                                         |                    |                  
|Other intangible assets, net                                               |                    |                  
|Prepaid pension costs                                                      |                    |                  
|Other assets                                                               |                    |                  
|                                                                           |                    |                  
|TOTAL ASSETS                                                               |                    |                  
|                                                                           |                    |                  
|LIABILITIES AND SHAREHOLDERS EQUITY                                       |                    |                  
|Current liabilities:                                                       |                    |                  
|Accounts payable                                                           |                    |                  
|Accrued compensation                                                       |                    |                  
|Accrued employee benefits                                                  |                    |                  
|Deferred revenue                                                           |                    |                  
|Accrued income taxes                                                       |                    |                  
|Other current liabilities                                                  |                    |                  
|Current portion of long-term liabilities                                   |                    |                  
|                                                                           |                    |                  
|TOTAL CURRENT LIABILITIES                                                  |                    |                  
|Accrued employee benefits                                                  |                    |                  
|Long-term notes payable to banks                                           |                    |                  
|Deferred income taxes                                                      |                    |                  
|Other long-term liabilities                                                |                    |                  
|Shareholders equity:                                                      |                    |                  
|Preferred stock, $0.01 par - authorized 10,000,000 shares; no shares       |                    |                  
|outstanding at September 28, 2008 and December 30, 2007                    |                    |                  
|Common stock, $0.01 par:                                                   |                    |                  
|Class C - authorized 10,000,000 shares; issued and outstanding:            |                    |                  
|3,264,000 shares at September 28, 2008 and December 30, 2007               |                    |                  
|Class B - authorized 120,000,000 shares; issued and outstanding (excluding |                    |                  
|treasury stock): 10,364,032 shares at September 28, 2008 and 11,528,044    |                    |                  
|shares at December 30, 2007                                                |                    |                  
|Class A - authorized 170,000,000 shares; issued and outstanding:           |                    |                  
|39,933,034 shares at September 28, 2008 and 45,351,893                     |                    |                  
|shares at December 30, 2007                                                |                    |                  
|Additional paid-in capital                                                 |                    |                  
|Accumulated other comprehensive loss, net of tax                           |                    |                  
|Retained earnings                                                          |                    |                  
|Treasury stock, at cost (8,676,705 class B shares)                         |                    |                  
|                                                                           |                    |                  
|TOTAL SHAREHOLDERS EQUITY                                                 |                    |                  
|                                                                           |                    |                  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                 |                    |                  
|                                                                           |                    |                  

See accompanying notes
to unaudited consolidated condensed financial statements.

2

---

JOURNAL COMMUNICATIONS,
INC.  Unaudited Consolidated Condensed Statements of Earnings  (in thousands, except per
share amounts)

|                                               | Third Quarter Ended | Three Quarters Ended
|---------------------------------------------- | ------------------- | --------------------
|
|Revenue:                                       |                     |                     
|Publishing                                     |                     |                     
|Broadcasting                                   |                     |                     
|Printing services                              |                     |                     
|Other                                          |                     |                     
|                                               |                     |                     
|Total revenue                                  |                     |                     
|Operating costs and expenses:                  |                     |                     
|Publishing                                     |                     |                     
|Broadcasting                                   |                     |                     
|Printing services                              |                     |                     
|Other                                          |                     |                     
|                                               |                     |                     
|Total operating costs and expenses             |                     |                     
|Selling and administrative expenses            |                     |                     
|Broadcast license impairment                   |                     |                     
|                                               |                     |                     
|Total operating costs and expenses and selling |                     |                     
|and administrative expenses                    |                     |                     
|                                               |                     |                     
|Operating earnings (loss)                      |                     |                     
|Other income and expense:                      |                     |                     
|Interest income                                |                     |                     
|Interest expense                               |                     |                     
|                                               |                     |                     
|Total other income and (expense)               |                     |                     
|                                               |                     |                     
|Earnings (loss) from continuing operations     |                     |                     
|before income taxes                            |                     |                     
|Provision (benefit) for income taxes           |                     |                     
|                                               |                     |                     
|Earnings (loss) from continuing operations     |                     |                     
|Gain from discontinued operations, net of      |                     |                     
|applicable income tax expense of $0, $739,     |                     |                     
|$0, and $43,209, respectively                  |                     |                     
|                                               |                     |                     
|Net earnings (loss)                            |                     |                     
|                                               |                     |                     
|Earnings (loss) per share:                     |                     |                     
|Basic - Class A and B common stock:            |                     |                     
|Continuing operations                          |                     |                     
|Discontinued operations                        |                     |                     
|                                               |                     |                     
|Net earnings (loss)                            |                     |                     
|                                               |                     |                     
|Diluted - Class A and B common stock:          |                     |                     
|Continuing operations                          |                     |                     
|Discontinued operations                        |                     |                     
|                                               |                     |                     
|Net earnings (loss)                            |                     |                     
|                                               |                     |                     
|Basic and diluted - Class C common stock:      |                     |                     
|Continuing operations                          |                     |                     
|Discontinued operations                        |                     |                     
|                                               |                     |                     
|Net earnings                                   |                     |                     
|                                               |                     |                     

See accompanying notes
to unaudited consolidated condensed financial statements.

3

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Journal Communications,
Inc.                             Unaudited Consolidated Condensed Statement of
Shareholders Equity        For the Three Quarters Ended September 28, 2008
       (dollars in thousands, except per-share amounts)

|                                      | Preferred | Common Stock | Additional | Accumulated
Other
Comprehensive | Retained | Treasury
Stock, |   
|------------------------------------- | --------- | ------------ | ---------- | ------------------------------- | -------- | --------------- | --
|
|Balance at December 30, 2007          |           |              | $          | --                              |          | $               | 33
|Net earnings                          |           |              |            |                                 |          |                 |   
|Change in pension and post-retirement |           |             
|(net of tax of $12)                   |           |              |            |                                 |          |                 |   
|Dividends declared:                   |           |             
|Class C ($0.142 per share)            |           |              |            |                                 |          |                 |   
|Class B ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Class A ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Issuance of shares:                   |           |             
|Conversion of class B to class A      |           |              |            |                                 |          |                 |   
|Stock grants                          |           |              |            |                                 |          |                 |   
|Employee stock purchase plan          |           |              |            |                                 |          |                 |   
|Shares purchased and retired          |           |              |            |                                 |          |                 |   
|Shares transferred from employees for |           |              |            |                                 |          |                 |   
|tax withholding                      
|Stock-based compensation              |           |              |            |                                 |          |                 |   
|                                      |           |              |            |                                 |          |                 |   
|Balance at March 30, 2008             |           |              |            | --                              |          |                 | 33
|                                      |           |              |            |                                 |          |                 |   
|Net earnings                          |           |              |            |                                 |          |                 |   
|Change in pension and post-retirement |           |             
|(net of tax of $11)                   |           |              |            |                                 |          |                 |   
|Dividends declared:                   |           |             
|Class C ($0.142 per share)            |           |              |            |                                 |          |                 |   
|Class B ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Class A ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Issuance of shares:                   |           |             
|Conversion of class B to class A      |           |              |            |                                 |          |                 |   
|Stock grants                          |           |              |            |                                 |          |                 |   
|Shares purchased and retired          |           |              |            |                                 |          |                 |   
|Stock-based compensation              |           |              |            |                                 |          |                 |   
|                                      |           |              |            |                                 |          |                 |   
|Balance at June 29, 2008              |           |              |            | --                              |          |                 | 33
|                                      |           |              |            |                                 |          |                 |   
|Net earnings                          |           |              |            |                                 |          |                 |   
|Change in pension and post-retirement |           |             
|(net of tax of $12)                   |           |              |            |                                 |          |                 |   
|Dividends declared:                   |           |             
|Class C ($0.142 per share)            |           |              |            |                                 |          |                 |   
|Class B ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Class A ($0.08 per share)             |           |              |            |                                 |          |                 |   
|Issuance of shares:                   |           |             
|Conversion of class B to class A      |           |              |            |                                 |          |                 |   
|Stock grants                          |           |              |            |                                 |          |                 |   
|Employee stock purchase plan          |           |              |            |                                 |          |                 |   
|Shares purchased and retired          |           |              |            |                                 |          |                 |   
|Stock-based compensation              |           |              |            |                                 |          |                 |   
|                                      |           |              |            |                                 |          |                 |   
|Balance at September 28, 2008         |           |              | $          | --                              |          | $               | 33
|                                      |           |              |            |                                 |          |                 |   

See accompanying notes
to unaudited consolidated condensed financial statements.

4

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JOURNAL COMMUNICATIONS,
INC. Unaudited Consolidated Condensed Statements of Cash Flows  (in thousands)

|                                                                  | Three Quarters Ended
|----------------------------------------------------------------- | --------------------
|
|Cash flow from operating activities:                              |                     
|Net earnings (loss)                                               |                     
|Less gain from discontinued operations                            |                     
|                                                                  |                     
|Earnings (loss) from continuing operations                        |                     
|Adjustments for non-cash items:                                   |                     
|Depreciation                                                      |                     
|Amortization                                                      |                     
|Broadcast license impairment                                      |                     
|Provision for doubtful accounts                                   |                     
|Deferred income taxes                                             |                     
|Non-cash stock-based compensation                                 |                     
|Net (gain) loss from disposal of assets                           |                     
|Net changes in operating assets and liabilities, excluding effect |                     
|of sales and acquisitions of businesses:                          |                     
|Receivables                                                       |                     
|Inventories                                                       |                     
|Accounts payable                                                  |                     
|Other assets and liabilities                                      |                     
|                                                                  |                     
|NET CASH PROVIDED BY OPERATING ACTIVITIES                         |                     
|Cash flow from investing activities:                              |                     
|Capital expenditures for property and equipment                   |                     
|Proceeds from sales of assets                                     |                     
|Proceeds from sales of businesses                                 |                     
|Acquisition of businesses                                         |                     
|                                                                  |                     
|NET CASH PROVIDED BY (USED FOR)                                   |                     
|INVESTING ACTIVITIES                                              |                     
|Cash flow from financing activities:                              |                     
|Proceeds from long-term notes payable to banks                    |                     
|Payments on long-term notes payable to banks                      |                     
|Proceeds from issuance of common stock                            |                     
|Redemption of common stock                                        |                     
|Cash dividends                                                    |                     
|                                                                  |                     
|NET CASH USED FOR FINANCING ACTIVTIES                             |                     
|Cash flow from discontinued operations:                           |                     
|Net operating activities                                          |                     
|Net investing activities                                          |                     
|                                                                  |                     
|NET CASH PROVIDED BY (USED FOR)                                   |                     
|DISCONTINUED OPERATIONS                                           |                     
|                                                                  |                     
|NET DECREASE IN CASH AND CASH EQUIVALENTS                         |                     
|Cash and cash equivalents:                                        |                     
|Beginning of year                                                 |                     
|                                                                  |                     
|At September 28, 2008 and September 30, 2007                      |                     
|                                                                  |                     

See accompanying notes
to unaudited consolidated condensed financial statements.

5

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JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|1 | BASIS
OF PRESENTATION
|- | ---------------------

| | The
accompanying unaudited consolidated condensed financial statements have been prepared by
Journal Communications, Inc. and its wholly owned subsidiaries in accordance with U.S.
generally accepted accounting principles for interim financial information and pursuant
to the rules and regulations of the Securities and Exchange Commission (SEC) and reflect
normal and recurring adjustments, which we believe to be necessary for a fair
presentation. As permitted by these regulations, these statements do not include all of
the information and footnotes required by U.S. generally accepted accounting principles
for annual financial statements. However, we believe that the disclosures are adequate to
make the information presented not misleading. The balance sheet at December 30, 2007 has
been derived from the audited financial statements at that date, but does not include all
the information and footnotes required by U.S. generally accepted accounting principles
for complete financial statements. The operations of Norlight Telecommunications, Inc.,
our former telecommunications segment, and the regional publishing and printing
operations of our community newspapers and shoppers business in Ohio, Louisiana and New
England have been reflected as discontinued operations in our consolidated condensed
financial statements for all periods presented. Adjustments related to NorthStar Print
Group, Inc. have been reflected as discontinued operations in our consolidated condensed
financial statements for the three quarters of 2008. The operating results for the third
quarter and three quarters ended September 28, 2008 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 28, 2008. You should
read these unaudited consolidated condensed financial statements in conjunction with the
consolidated financial statements and the notes thereto included in our Annual Report on
Form 10-K for the year ended December 30, 2007.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | ACCOUNTING
PERIODS
|- | ------------------

| | Our
fiscal year is a 52-53 week year ending on the last Sunday of December in each year. In
addition, we have four quarterly reporting periods, each consisting of 13 weeks and
ending on a Sunday, provided that once every six years, the fourth quarterly reporting
period will be 14 weeks.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | NEW
ACCOUNTING STANDARDS
|- | ------------------------

| | In
December 2007, the FASB issued FASB Statement No. 141 (Revised 2007), Business
Combinations. Statement No. 141R requires that an acquiring entity recognize all
the assets acquired and liabilities assumed in a transaction at the acquisition date fair
value with limited exceptions. Statement No. 141R will change the accounting treatment
for acquisition costs, non-controlling interests, contingent liabilities, in-process
research and development, restructuring costs, and income taxes. In addition, it also
requires a substantial number of new disclosure requirements. Statement No. 141R applies
prospectively to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2008.
Earlier adoption is prohibited. We will adopt Statement No. 141R in the first quarter of
2009. We do not believe the effect of adopting Statement No. 141R will have a material
impact on our consolidated financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of
FASB Statement No. 157, which delays the effective date of Statement No. 157 for
all nonfinancial assets and liabilities, except those that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually) to fiscal
years beginning after November 15, 2008. We do not believe the effect of adopting Staff
Position FAS 157-2 will have a material impact on our consolidated financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful
Life of Intangible Assets. Staff Position FAS 142-3 requires that in
developing assumptions about renewal or extension used to determine the useful life of a
recognized intangible asset, an entity shall consider its own historical experience in
renewing or extending similar arrangements; however, these assumptions should be adjusted
for entity-specific factors. In the absence of that experience, an entity shall consider
the assumptions that market participants would use about renewal or extension (consistent
with the highest and best use of the asset by market participants), adjusted for the
entity-specific factors. For a recognized intangible asset, an entity shall disclose
information that enables users of financial statements to assess the extent to which the
expected future cash flows associated with the asset are affected by the entitys
intent and/or ability to renew or extend the arrangement. This guidance is effective for
financial statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. Early adoption is prohibited. The guidance for
determining the useful life of a recognized intangible asset shall be applied
prospectively to intangible assets acquired after the effective date. The disclosure
requirements shall be applied prospectively to all intangible assets recognized as of,
and subsequent to, the effective date. We will adopt Staff Position FAS 142-3 in the
first quarter of 2009. We do not believe the effect of adopting Staff Position FAS 142-3
will have a material impact on our consolidated financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

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JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|3 | NEW
ACCOUNTING STANDARDS continued
|- | ----------------------------------

| | In
May 2008, the FASB issued FASB Statement No. 162, The Hierarchy of Generally
Accepted Accounting Principles. Statement No. 162 is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in conformity
with U.S. generally accepted accounting principles for nongovernmental entities.
Statement No. 162 is effective 60 days following the SECs approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting Principles. We do
not believe the effect of adopting Statement No. 162 will have a material impact on our
consolidated financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
June 2008, the FASB issued EITF 03-6-1, Determining Whether Instruments Granted in
Share-Based Payment Transactions are Participating Securities. EITF 03-6-1 requires
that unvested share-based payment awards that contain nonforfeitable rights to dividends
or dividend equivalents (whether paid or unpaid) are participating securities and shall
be included in the computation of earnings per share pursuant to the two-class method.
EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those years. All prior-period earnings per
share data presented shall be adjusted retrospectively to conform to the provisions of
this EITF. Early application is not permitted. We will adopt EITF 03-6-1 in the first
quarter of 2009. We do not believe the effect of adopting EITF 03-6-1 will have a
material impact on our consolidated financial statements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
June 2008, the FASB issued EITF 08-3, Accounting by Lessees for Nonrefundable
Maintenance Deposits. EITF 08-3 requires that all nonrefundable maintenance
deposits should be accounted for as a deposit. When the underlying maintenance is
performed, the deposit is expensed or capitalized in accordance with the lessees
maintenance accounting policy. Once it is determined that an amount on deposit is not
probable of being used to fund future maintenance expense, it is recognized as additional
expense at the time such determination is made. EITF 08-3 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Earlier application is not permitted. We will adopt EITF 08-3
in the first quarter of 2009. We do not believe the effect of adopting EITF 08-3 will
have a material impact on our consolidated financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
September 2008, the FASB issued Staff Position FIN 45-4, Amendment to Disclosure
Requirements of Interpretation 45-Guarantors Accounting and Disclosure Requirements
for Guarantees. Interpretation 45-4 requires disclosures of the current status of
the payment/performance risk of the guarantee. For example, the current status of the
payment/performance risk of a credit-risk-related guarantee could be based on either
recently issued external credit ratings or current internal groupings used by the
guarantor to manage its risk. An entity that uses internal groupings shall disclose how
those groupings are determined and used for managing risk. FIN 45-4 is effective for
reporting periods ending after November 15, 2008. Earlier adoption is encouraged. We will
adopt FIN 45-4 in the fourth quarter of 2008. We do not believe the effect of adopting
FIN 45-4 will have a material impact on our consolidated financial statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair
Value of a Financial Asset when the Market for that Asset is not Active, which
clarifies the application of FASB Statement No. 157, Fair Value Measurements,in
a market that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset when the market for that financial asset
is not active. This pronouncement was effective upon issuance, including prior periods
for which financial statements have not been issued. The adoption of Staff Position FAS 157-3
did not have a material impact on our consolidated
financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|4 | EARNINGS
PER SHARE
|- | ------------------

| | Basic
| | -----

| | We
apply the two-class method for calculating and presenting our basic earnings per share.
As noted in Statement of Financial Accounting Standards No. 128, Earnings per Share
(as amended), the two-class method is an earnings allocation formula that
determines earnings per share for each class of common stock according to dividends
declared (or accumulated) and participation rights in undistributed earnings. Under that
method:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | Income
(loss) from continuing operations (net earnings) is reduced                by
the amount of dividends declared in the current period for each class of
               stock and by the contractual amount of dividends that must be paid during
the                current period.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | The
remaining earnings, which may include earnings from discontinued operations
               (undistributed earnings), are allocated to each class of
common                stock to the extent that each class of stock may share in earnings
if all of the                earnings for the period were distributed.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | The
remaining losses, which may include losses from discontinued operations                (undistributed
losses), are allocated to the class A and B common                stock.
Undistributed losses are not allocated to the class C common stock                because
the class C shares are not contractually obligated to share in the                losses.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | The
total earnings allocated to each class of common stock are then divided by
               the number of weighted average shares outstanding of the class of common
stock                to which the earnings are allocated to determine the earnings per
share for that                class of common stock.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | Basic
earnings per share data are presented for class A and B common stock in
               the aggregate and for class C common stock. The basic earnings per share
for                class A and B common stock are the same; hence, these classes are
reported                together.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
applying the two-class method, we have determined that undistributed earnings should be
allocated equally on a per share basis among each class of common stock due to the lack
of any contractual participation rights of any class to those undistributed earnings.
Undistributed losses are allocated to only the class A and B common stock for the reason
stated above. The weighted average number of shares outstanding for each class of common
stock excludes non-vested restricted stock for basic earnings per share.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|4 | EARNINGS
PER SHARE continued
|- | ----------------------------

| | The
following table sets forth the computation of basic earnings per share under the
two-class method.
| | ------------------------------------------------------------------------------------------------------

|                                                    | Third Quarter Ended | Three Quarters Ended
|--------------------------------------------------- | ------------------- | --------------------
|
|Numerator for basic earnings (loss) from continuing |                     |                     
|operations for each class of common stock:          |                     |                     
|Earnings (loss) from continuing                     |                     |                     
|operations                                          |                     |                     
|Less dividends:                                     |                     |                     
|Class A and B                                       |                     |                     
|Class C                                             |                     |                     
|                                                    |                     |                     
|Total undistributed earnings (loss) from            |                     |                     
|continuing operations                               |                     |                     
|                                                    |                     |                     
|Class A and B undistributed earnings (loss)         |                     |                     
|from continuing operations                          |                     |                     
|Class C undistributed earnings                      |                     |                     
|from continuing operations                          |                     |                     
|                                                    |                     |                     
|Total undistributed earnings (loss)                 |                     |                     
|from continuing operations                          |                     |                     
|                                                    |                     |                     
|Numerator for basic earnings (loss) from continuing |                     |                     
|operations per class A and B common stock:          |                     |                     
|Dividends on class A and B                          |                     |                     
|Class A and B undistributed                         |                     |                     
|earnings (loss)                                     |                     |                     
|                                                    |                     |                     
|Numerator for basic earnings (loss) from            |                     |                     
|continuing operations per class A and               |                     |                     
|B common stock                                      |                     |                     
|                                                    |                     |                     
|Numerator for basic earnings from continuing        |                     |                     
|operations per class C common stock:                |                     |                     
|Dividends on class C                                |                     |                     
|Class C undistributed earnings                      |                     |                     
|                                                    |                     |                     
|Numerator for basic earnings from                   |                     |                     
|continuing operations per class C                   |                     |                     
|common stock                                        |                     |                     
|                                                    |                     |                     
|Denominator for basic earnings (loss) from          |                     |                     
|continuing operations for each class of             |                     |                     
|common stock:                                       |                     |                     
|Weighted average shares outstanding -               |                     |                     
|Class A and B                                       |                     |                     
|Class C                                             |                     |                     
|Basic earnings (loss) per share from                |                     |                     
|continuing operations                               |                     |                     
|Class A and B                                       |                     |                     
|                                                    |                     |                     
|Class C                                             |                     |                     
|                                                    |                     |                     

9

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|4 | EARNINGS
PER SHARE continued
|- | ----------------------------

|                                                 | Third Quarter Ended | Three Quarters Ended
|------------------------------------------------ | ------------------- | --------------------
|
|Numerator for basic earnings from discontinued   |                     |                     
|operations for each class of common stock:       |                     |                     
|Total undistributed earnings from                |                     |                     
|from discontinued opertions                      |                     |                     
|                                                 |                     |                     
|Class A and B undistributed earnings             |                     |                     
|from discontinued opertions                      |                     |                     
|Class C undistributed earnings                   |                     |                     
|from discontinued operations                     |                     |                     
|                                                 |                     |                     
|Total undistributed earnings                     |                     |                     
|from discontinued operations                     |                     |                     
|                                                 |                     |                     
|Denominator for basic earnings from discontinued |                     |                     
|operations for each class of common stock:       |                     |                     
|Weighted average shares outstanding -            |                     |                     
|Class A and B                                    |                     |                     
|Class C                                          |                     |                     
|Basic earnings per share from discontinued       |                     |                     
|operations                                       |                     |                     
|Class A and B                                    |                     |                     
|                                                 |                     |                     
|Class C                                          |                     |                     
|                                                 |                     |                     
|Numerator for basic net earnings for each        |                     |                     
|class of common stock:                           |                     |                     
|Net earnings (loss)                              |                     |                     
|Less dividends:                                  |                     |                     
|Class A and B                                    |                     |                     
|Class C                                          |                     |                     
|                                                 |                     |                     
|Total undistributed net earnings (loss)          |                     |                     
|                                                 |                     |                     
|Class A and B undistributed net                  |                     |                     
|earnings (loss)                                  |                     |                     
|Class C undistributed net earnings               |                     |                     
|                                                 |                     |                     
|Total undistributed net earnings (loss)          |                     |                     
|                                                 |                     |                     
|Numerator for basic net earnings (loss) per      |                     |                     
|class A and B common stock:                      |                     |                     
|Dividends on class A and B                       |                     |                     
|Class A and B undistributed net                  |                     |                     
|earnings (loss)                                  |                     |                     
|                                                 |                     |                     
|Numerator for basic net earnings (loss) per      |                     |                     
|class A and B common stock                       |                     |                     
|                                                 |                     |                     
|Numerator for basic net earnings per             |                     |                     
|class C common stock:                            |                     |                     
|Dividends on class C                             |                     |                     
|Class C undistributed net earnings               |                     |                     
|                                                 |                     |                     
|Numerator for basic net earnings per             |                     |                     
|class C common stock                             |                     |                     
|                                                 |                     |                     

10

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|4 | EARNINGS
PER SHARE continued
|- | ----------------------------

|                                              | Third Quarter Ended | Three Quarters Ended
|--------------------------------------------- | ------------------- | --------------------
|
|Denominator for basic net earnings (loss) for |                     |                     
|each class of common stock:                   |                     |                     
|Weighted average shares outstanding -         |                     |                     
|Class A and B                                 |                     |                     
|Class C                                       |                     |                     
|Basic net earnings (loss) per share           |                     |                     
|Class A and B                                 |                     |                     
|                                              |                     |                     
|Class C                                       |                     |                     
|                                              |                     |                     

| | Diluted
| | -------

| | Diluted
earnings per share is computed based upon the assumption that common shares are issued
upon exercise of our non-statutory stock options when the exercise price is less than the
current market price of our common shares, and common shares will be outstanding upon
expiration of the vesting periods for our non-vested restricted stock. The class C shares
are not converted into class A and B shares because they are anti-dilutive for all
periods presented.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table sets forth the computation of diluted net earnings per share for class A
and B common stock:
| | ----------------------------------------------------------------------------------------------------------------

|                                                     | Third Quarter Ended | Three Quarters Ended
|---------------------------------------------------- | ------------------- | --------------------
|
|Numerator for diluted net earnings (loss) per share: |                     |                     
|Dividends on class A and B                           |                     |                     
|common stock                                         |                     |                     
|Total undistributed earnings (loss)                  |                     |                     
|from continuing operations                           |                     |                     
|Total undistributed earnings                         |                     |                     
|from discontinued operations                         |                     |                     
|                                                     |                     |                     
|Net earnings (loss)                                  |                     |                     
|                                                     |                     |                     
|Denominator for diluted net earnings (loss)          |                     |                     
|per share:                                           |                     |                     
|Weighted average shares                              |                     |                     
|outstanding - class A and B                          |                     |                     
|Impact of non-vested restricted stock                |                     |                     
|                                                     |                     |                     
|Adjusted weighted average                            |                     |                     
|shares outstanding                                   |                     |                     
|                                                     |                     |                     
|Diluted earnings (loss) per share:                   |                     |                     
|Continuing operations                                |                     |                     
|Discontinued operations                              |                     |                     
|                                                     |                     |                     
|Net earnings                                         |                     |                     
|                                                     |                     |                     

| | Diluted
earnings (loss) per share for the class C common stock is the same as basic earnings
(loss) per share for class C common stock because there are no class C common stock
equivalents.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
of the 3,264,000 class C shares outstanding is convertible at any time at the option of
the holder into either (i) 1.363970 class A shares (or a total of 4,451,998 class A
shares) or (ii) 0.248243 class A shares (or a total of 810,265 class A shares) and
1.115727 class B shares (or a total of 3,641,733 class B shares).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|5 | COMPREHENSIVE
INCOME (LOSS)
|- | ---------------------------

| | The
following table sets forth our comprehensive income (loss):
| | ---------------------------------------------------------------

|                            | Third Quarter Ended | Three Quarters Ended
|--------------------------- | ------------------- | --------------------
|
|Net earnings (loss)         |                     |                     
|Change in pension and post- |                     |                     
|retirement (net of tax)     |                     |                     
|                            |                     |                     
|Comprehensive income (loss) |                     |                     
|                            |                     |                     

|6 | STOCK-BASED
COMPENSATION
|- | ------------------------

| | 2007
Journal Communications, Inc. Omnibus Incentive Plan The purpose of the 2007 Journal
Communications, Inc. Omnibus Incentive Plan (2007 Plan) is to promote our success by
linking personal interests of our employees, officers and directors to those of our
shareholders, and by providing participants with an incentive for outstanding
performance. The 2007 Plan is also intended to enhance our ability to attract, motivate
and retain the services of employees, officers, and directors upon whose judgment,
interest, and special effort the successful conduct of our operation is largely
dependent.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Subject
to adjustment as provided in the 2007 Plan, the aggregate number of shares of class A
common stock or class B common stock reserved and available for issuance pursuant to
awards granted under the 2007 Plan is 4,800,000 shares which may be awarded in the form
of nonstatutory or incentive stock options, stock appreciation rights, restricted stock,
restricted or deferred stock units, performance awards, dividend equivalents, other
stock-based awards and cash-based awards. The 2007 Plan replaces the 2003 Equity
Incentive Plan (2003 Plan) and, as of May 3, 2007, all equity grants are made from the
2007 Plan. We will not grant any additional awards under the 2003 Plan. As of September
28, 2008, there are 4,691,511 shares available for issuance under the 2007 Plan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2003
Equity Incentive Plan Our 2003 Plan, which was replaced in May 2007 by our 2007 Plan,
rewarded key employees for achieving designated corporate and individual performance
goals and allowed for issuances to outside directors as part of their board compensation
package. In February 2007, our board of directors approved and adopted an amendment to
our 2003 Plan to provide for the inclusion of stock-settled stock appreciation rights as
a permitted form of award under the Plan. Awards to outside directors could have been
granted in any one or a combination of stock appreciation rights, stock grants,
non-statutory stock options, performance unit grants and stock unit grants. Incentive
stock options could have been granted to employees.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the third quarter and three quarters ended September 28, 2008, we recognized $298 and
$1,232, respectively, in stock-based compensation expense. Total income tax benefit
recognized related to stock-based compensation for the third quarter and three quarters
ended September 28, 2008 was $122 and $653, respectively. We recognize stock-based
compensation expense on a straight-line basis over the service period based upon the fair
value of the award on the grant date. As of September 28, 2008, total unrecognized
compensation cost related to stock-based compensation awards was $1,950, net of estimated
forfeitures, which we expect to recognize over a weighted average period of 1.2 years.
Stock-based compensation expense is reported in selling and administrative expenses in
our consolidated statements of earnings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Non-statutory
stock options The compensation committee of our board of directors has granted
non-statutory stock options to employees and directors at a purchase price equal to at
least the fair market value of our class B common stock on the grant date for an exercise
term determined by the committee, not to exceed 10 years from the grant date. It is our
policy to issue new class B common stock upon the exercise of non-statutory stock
options.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2003 and 2004, our directors and certain of our employees were granted options to
purchase class B common stock. These options are exercisable and will remain exercisable
for a period of up to seven years from the grant date. There have been no options granted
since 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|6 | STOCK-BASED
COMPENSATION continued
|- | ----------------------------------

| | A
summary of stock option activity during the three quarters of 2008 is:
| | ------------------------------------------------------------------------

|                                                 
|-------------------------------------------------
|Outstanding at December 30, 2007                 
|Expired                                          
|                                                 
|Outstanding and exercisable at September 28, 2008
|                                                 

| | The
aggregate intrinsic value of stock options outstanding and exercisable at the end of the
third quarter of 2008 is zero because the fair market value of our class B common stock
on September 28, 2008 was lower than the weighted average exercise price of the options.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Stock
appreciation rights A stock appreciation right, or SAR, represents the right to
receive an amount equal to the excess of the fair value of a share of our class B common
stock on the exercise date over the base value of the SAR, which shall not be less than
the fair value of a share of our class B common stock on the grant date. Each SAR is
settled only in shares of our class B common stock. The term during which any SAR may be
exercised is 10 years from the grant date, or such shorter period as determined by the
compensation committee of our board of directors.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our
SARs vest over a three year graded vesting schedule and it is our policy to recognize
compensation cost for awards with graded vesting on a straight-line basis over the
vesting period for the entire award. We ensure the compensation cost recognized at any
date is at least equal to the portion of the grant-date value of the award that is vested
at that date. The fixed price SARs have a fixed base value equal to the closing price of
our class A common stock on the date of grant. The escalating price SARs have an
escalating base value that starts with the closing price of our class A common stock on
the date of grant and increases by six percent per year for each year that the SARs
remain outstanding, starting on the first anniversary of the grant date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
value for SARs granted in the three quarters of 2008 was calculated using the
Black-Scholes option pricing model, with the following weighted-average assumptions:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dividend yield                                               | 2.70% 
|------------------------------------------------------------ | ------
|Expected volatility                                          | 26.00%
|Risk-free rate of return of fixed price SARs                 | 3.41% 
|Risk-free rate of return of escalating price SARs            | 3.54% 
|Expected life of fixed price SARs (in years)                 | 7.0   
|Expected life of escalating price SARs (in years)            | 7.5   
|Weighted average fair value of fixed price SARs granted      | $1.81 
|Weighted average fair value of escalating price SARs granted | $1.03 

| | Because
we have no historical options or SARs exercise experience, the expected life of the fixed
price SARs was based on the midpoint between the vesting date and the end of the
contractual term and adjusted for the retirement provisions of our 2007 Plan. The
expected life of the escalating price SARs was determined by adding a half of a year to
the fixed price SARs to compensate for their higher exercise price.  The risk free
rate of return was based on the United States Treasury yield curve in effect on the date
of grant for the respective life of the SAR.  The dividend yield was based on the
most recent annualized quarterly dividend payment divided by the average trailing
twelve-month daily stock price and annualizing the rate.  The expected volatility
was based on the historical volatility of our common stock and was benchmarked to our
peershistorical volatility over the same time period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|6 | STOCK-BASED
COMPENSATION continued
|- | ----------------------------------

| | A
summary of SAR activity during the three quarters of 2008 is:
| | ---------------------------------------------------------------

|                                 
|---------------------------------
|Outstanding at December 30, 2007 
|Granted                          
|                                 
|Outstanding at September 28, 2008
|                                 
|Exercisable at September 28, 2008
|                                 

| | The
aggregate intrinsic value of the SARs outstanding and exercisable at the end of the third
quarter of 2008 is zero because the fair market value of our class B common stock on
September 28, 2008 was lower than the weighted average exercise price of the SARs.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Stock
grants The compensation committee of our board of directors has granted class B common
stock to employees and directors under our 2003 Plan and our 2007 Plan. Each stock grant
may have been accompanied by restrictions, or may have been made without any
restrictions, as the compensation committee of our board of directors determined. Such
restrictions could have included requirements that the participant remain in our
continuous employment for a specified period of time, or that we or the participant meet
designated performance goals. We value non-vested restricted stock grants at the closing
market prices of our class A common stock on the grant date. A summary of stock grant
activity during the three quarters of 2008 is:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                
|--------------------------------
|Non-vested at December 30, 2007 
|Granted                         
|Vested                          
|Forfeited                       
|                                
|Non-vested at September 28, 2008
|                                

| | Our
non-vested restricted stock grants vest either three or five years from the grant date.
We expect our non-vested restricted stock grants to fully vest over the weighted average
remaining service period of 1.4 years. The total fair value of shares vesting during the
three quarters of 2008 was $977. There were 100,894 vested unrestricted and non-vested
restricted stock grants issued to our directors and employees in the first three quarters
of 2007 at a weighted average fair value of $13.46, of which none of the non-vested
restricted shares have since vested.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Employee
stock purchase plan The 2003 Employee Stock Purchase Plan permits eligible employees to
purchase our class B common stock at 90% of the fair market value measured as of the
closing market price of our class A common stock on the day of purchase. We recognize
compensation expense equal to the 10% discount of the fair market value. Subject to
certain adjustments, 3,000,000 shares of our class B common stock are authorized for sale
under this plan. There were 91,138 class B common shares sold to employees under this
plan in the three quarters of 2008 at a weighted average fair value of $5.79. As of
September 28, 2008, there are 2,642,989shares available for sale under the plan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|7 | INCOME
TAXES
|- | ------------

| | We
file tax returns in the United States federal jurisdiction, as well as approximately 15
state and local jurisdictions. The statute of limitations for assessing additional taxes
is three years for federal purposes and typically between three and four years for state
and local purposes. Accordingly, our 2005 through 2007 tax returns are open for federal
purposes, and our 2004 through 2007 tax returns remain open for state tax purposes,
unless the statute of limitations has been previously extended. Currently, we are under
audit in Wisconsin.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of September 28, 2008, our liability for unrecognized tax benefits was $4,370, which, if
recognized, $4,257 would have an impact on our effective tax rate. During the third
quarter of 2008, our liability for unrecognized tax benefits decreased by $724 primarily
due to a reduction for state audit settlements of $460 and net reductions for tax
positions of $264. Our liability includes $3,288 accrued for tax positions and $1,082
accrued for interest expense and penalties. During the three quarters of 2008, we
recognized $67 in interest expense. We recognize interest income/expense and penalties
related to unrecognized tax benefits in our provision for income taxes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is possible for $68 of unrecognized tax benefits and related interest to be recognized
within the next 12 months due to settlements with taxing authorities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
August 1, 2008, we appealed an income and franchise tax audit assessment issued by the
Wisconsin Department of Revenue for the years 1998 through 2002. We disagree with this
assessment and have asked the Wisconsin Tax Appeals Commission to reverse the Wisconsin
Department of Revenues action and return to us our prepayment of $9,452. We have
$504 accrued for interest income related to this prepayment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8 | INVENTORIES
|- | -----------

| | Inventories
are stated at the lower of cost (first in, first out method) or market. Inventories at
September 28, 2008 and December 30, 2007 consisted of the following:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                          | September 28, 2008 | December 30, 2007
|------------------------- | ------------------ | -----------------
|Paper and supplies        |                    |                  
|Work in process           |                    |                  
|Finished goods            |                    |                  
|Less obsolescence reserve |                    |                  
|                          |                    |                  
|Inventories, net          |                    |                  
|                          |                    |                  

|9 | NOTES
PAYABLE TO BANKS
|- | ----------------------

| | We
have a $475,000 unsecured revolving facility that expires on June 2, 2011. The interest
rate on borrowings is either LIBOR plus a margin that ranges from 37.5 basis points to
87.5 basis points, depending on our leverage, or the base rate, which equals the higher
of the prime rate set by U.S. Bank, N.A. or the Federal Funds Rate plus 100 basis points.
As of September 28, 2008 and December 30, 2007, we had borrowings of $223,150 and
$178,885, respectively, under the facility at a weighted average rate of 3.38% and 5.55%,
respectively. The increase in our borrowings was primarily used for repurchases of our
class A common stock. Fees in connection with the facility of $1,717 are being amortized
over the term of the facility using the straight-line method. This agreement includes the
following two financial covenants:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     
A consolidated funded debt ratio of not greater than 4-to-1, as determined for the four
fiscal quarter period preceding the date of determination. This ratio compares, for any
period, our funded debt to our earnings before interest, taxes, depreciation and
amortization, as adjusted for non-operational impairment charges recorded as a result of
FASB Statement No. 142, Goodwill and Other Intangible Assets. As of September
28, 2008, our consolidated funded debt ratio was 2.53-to-1, resulting in a current
maximum borrowing capacity of $353,272.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     
An interest coverage ratio of not less than 3-to-1, as determined for the four fiscal
quarter period preceding the date of determination. This ratio compares, for any period,
our earnings before interest, taxes, depreciation and amortization, as adjusted for
non-operational impairment charges recorded as a result of FASB Statement No. 142, Goodwill
and Other Intangible Assets, to our interest expense. As of September 28, 2008, our
interest coverage ratio was 10.56-to-1.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|10 | GUARANTEES
|-- | ----------

| | We
provided a guarantee to the landlord of our former New England community newspapers and
shopper business, which was sold in 2007, with respect to tenant liabilities and
obligations associated with a lease which expires in December 2016. Our maximum potential
obligation pursuant to the guarantee is $1,417 as of September 28, 2008.  As part of
the sales transaction, we received a guarantee from the buyer of our New England business
that they will satisfy all the liabilities and obligations of the assigned lease.  In
the event that they fail to satisfy their liabilities and obligations and the landlord
invokes our guarantee, we have the right of indemnification from the buyer.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11 | EMPLOYEE
BENEFIT PLANS
|-- | ----------------------

| | The
components of our net periodic benefit costs for our defined benefit and non-qualified
pension plans and our postretirement health benefit plan are as follows:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | Pension Benefits
|------------------------------------------- | ----------------
|
|
|Service cost                                |                 
|Interest cost                               |                 
|Expected return on plan assets              |                 
|Amortization of:                            |                 
|Unrecognized prior service cost             |                 
|Unrecognized net loss                       |                 
|                                            |                 
|Net periodic benefit cost included in total |                 
|operating costs and expenses,               |                 
|selling and administrative expenses         |                 
|and discontinued operations                 |                 
|                                            |                 

| | In
the first quarter of 2007, a pension plan curtailment gain of $390 was recorded as the
result of the sale of Norlight Telecommunications, Inc. (Norlight) to Q-Comm Corporation
(Q-Comm) on February 26, 2007 and reflected a reduction in future pension benefit
accruals for all non-union employees of Norlight. The curtailment gain was recorded in
discontinued operations and is not reflected in the above table. Due to this pension plan
change, the measurement of the net periodic benefit cost in the first quarter of 2007
from February 26, 2007 until the sale of all three regional publishing and printing
operations of our community newspapers and shoppers business, which was completed in the
third quarter of 2007, was based upon a 5.75% discount rate.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the second quarter of 2007, a pension curtailment gain of $58 was recorded as a result of
the sale of the Journal Community Publishing Groups Central Ohio Advertiser Network
(Ohio publishing and printing) to Gannett Co, Inc. on June 26, 2007. The curtailment gain
reflects a reduction in future pension benefit accruals for the pension participants of
the Ohio publishing and printing operations. The curtailment gain was recorded in
discontinued operations and is not reflected in the above table.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the third quarter of 2007, a pension plan curtailment gain of $184 was recorded as a
result of the sale of Journal Community Publishing Groups Louisiana publishing
operations to an affiliate of Target Media Partners on July 6, 2007 and the sale of
Journal Community Publishing Groups New England publishing and printing operations
to Hersam Acorn Community Publishing, LLC on August 2, 2007. The curtailment gain
reflects a reduction in future pension benefit accruals for the pension participants of
these operations. The curtailment gain was recorded in discontinued operations and is not
reflected in the above table.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
fund our defined benefit pension plan at the minimum amount required by the Pension
Protection Act of 2006. We have not made any defined benefit pension plan contributions
to date in 2008 and are not required to make any contributions for the remainder of 2008.
We do not expect to have any required cash contributions under the Pension Protection Act of 2006 to the pension plan trust in
2009.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|11 | EMPLOYEE
BENEFIT PLANS continued
|-- | --------------------------------

| | The
net periodic pension benefit cost related to the three regional publishing and printing
operations reported in discontinued operations was $19 and $173 for the third quarter and
three quarters of 2007, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | Other Postretirement Benefits
|------------------------------------------- | -----------------------------
|
|
|Service cost                                |                              
|Interest cost                               |                              
|Amortization of:                            |                              
|Unrecognized prior service cost             |                              
|Unrecognized net transition obligation      |                              
|Unrecognized net loss                       |                              
|                                            |                              
|Net periodic benefit cost included in total |                              
|operating costs and expenses and            |                              
|selling and administrative expenses         |                              
|                                            |                              

|12 | GOODWILL
AND OTHER INTANGIBLE ASSETS
|-- | ------------------------------------

| | Interim
Impairment Test      An interim  impairment  test  results  from the  application  of the
 impairment  testing  provisions  of FASB      Statement  No. 142  Goodwill  and Other
 Intangible  Assets.  Impairment  testing is  customarily  performed      annually,  and
last had been  performed  as of the  beginning  of the fourth  quarter  2007,  at which
time no      goodwill or indefinite-lived  intangible asset impairment was indicated.
 Due to deteriorating  macro-economic      factors, a prolonged adverse change in the
business climate,  deteriorating  market conditions and results and      a further
 decline in our stock price,  we performed an interim  impairment test as of September
28, 2008. Our      long-lived  assets  include  goodwill  related  to our  reporting
 units  and  broadcast  licenses  and  other      identifiable assets at individual
television and radio stations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes of testing the carrying  values of goodwill  related to our reporting  units,
 we determined fair      value by using an income and a market  valuation  approach.  The
income  approach uses expected cash flows for      each  reporting  unit.  The cash
 flows  were  then  discounted  for risk and time  value.  In  addition,  the
     present  value of the  projected  residual  value was  estimated  and added to the
 present  value of the cash      flows.  The market  approach for the broadcast
 reporting  unit was based on a reasonable  fair value estimate      considering  the
strength of the each  broadcast  signal,  current  market  conditions,  market  multiples
and      recent  transaction  activity  and  inquiry.  The  market  approach  for the
 daily  newspaper  and  community      newspapers and shoppers  reporting  units was
based on price multiples of publicly traded stocks of comparable      companies  to
derive fair value.  Each  approach was  weighted  equally to determine a fair value
 estimate of      each reporting unit.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We
based our fair value estimates,  in large measure, on projected  financial  information
which we believe to      be reasonable.  However,  actual future results may differ from
those  projections,  and those differences may      be  material.  The  valuation
 methodology  used to  estimate  the fair  value of our  total  company  and our
     reporting units requires inputs and assumptions  (i.e. market growth,  operating
profit margins,  and discount      rates) that reflect current market  conditions as well
as management  judgment.  The current economic downturn      has negatively  impacted
many of those inputs and  assumptions.  While our September 28, 2008 interim goodwill
     impairment  test did not result in an impairment  charge,  our market
 capitalization  has declined since that      time and the economic  outlook has
 deteriorated.  If market  conditions  and  operational  performance of our
     reporting  units  continues to deteriorate  and management  concludes that our
operating  results or our stock      price will not  improve  within a  reasonable
 period of time,  we may be  required  to  recognize  a goodwill      impairment  charge
in the near term,  which  could  have a  material  impact on our  financial  condition
 and      results of operations.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
broadcast  licenses at individual  television and radio  stations,  we used an income
approach to estimate      fair value. The fair value estimates of our broadcast licenses
contain significant  assumptions  incorporating      variables  that  are  based  on past
 experiences  and  judgments  about  future  performance  using  industry      normalized
 information  for an average  station  within a market  with the type of signal  that
each  subject      station  produces.  These  variables  include,  but are not limited
to: the forecasted  revenue growth rate of      each  market  (including  market
 population,  household  income and retail  sales),  market  share and profit
     margins  of an  average  station  within  a  market,  estimated  capital
 expenditures  and  start-up  costs      risk-adjusted  discount  rate,  likely  media
 competition  within  the market and  expected  growth  rates into      perpetuity to
estimate  terminal values.  Our interim  impairment tests in the third quarter of 2008
indicated      that four  television  broadcast  licenses  and 13 radio  broadcast
 licenses  were  impaired.  We  recorded a      $38,762  non-cash  impairment  charge in
the third  quarter of 2008.  Adverse  changes in  expected  operating      results and/or
further  deterioration  of economic,  market or business  conditions could result in
additional      non-cash  impairment charges on our broadcast  licenses in future
periods,  which could have a material impact      on our financial condition and results
of operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

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JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|12 | GOODWILL
AND OTHER INTANGIBLE ASSETS continued
|-- | ----------------------------------------------

| | Definite-lived
Intangibles Our definite-lived intangible assets consist primarily of network affiliation
agreements, customer lists, non-compete agreements and trade names. We amortize the
network affiliation agreements over a period of 25 years based on our good relationships
with the networks, our long history of renewing these agreements and because 25 years is
deemed to be the length of time before a material modification of the underlying contract
would occur. We amortize the customer lists over a period of five to 15 years, the
non-compete agreements over the terms of the contracts and the tradenames over a period
of 25 years.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Amortization
expense was $520 and $1,516 for the third quarter and three quarters ended September 28,
2008, respectively, and $497 and $1,448 for the third quarter and three quarters ended
September 30, 2007, respectively. Estimated amortization expense for our next five fiscal
years is $1,991 for 2008, $1,831 for 2009, $1,782 for 2010, $1,424 for 2011 and $1,342
for 2012.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
gross carrying amount, accumulated amortization and net carrying amount of the major
classes of definite-lived intangible assets as of September 28, 2008 and December 30,
2007 are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               | Gross
Carrying
Amount | Accumulated
Amortization | Net
Carrying
Amount
|------------------------------ | --------------------- | ------------------------ | -------------------
|September 28, 2008             |                       |                          |                    
|Network affiliation agreements |                       |                          | $                  
|Customer lists                 |                       |                          |                    
|Non-compete agreements         |                       |                          |                    
|Other                          |                       |                          |                    
|                               |                       |                          |                    
|Total                          |                       |                          | $                  
|                               |                       |                          |                    
|December 30, 2007              |                       |                         
|Network affiliation agreements |                       |                          | $                  
|Customer lists                 |                       |                          |                    
|Non-compete agreements         |                       |                          |                    
|Other                          |                       |                          |                    
|                               |                       |                          |                    
|Total                          |                       |                          | $                  
|                               |                       |                          |                    

| | Indefinite-lived
Intangibles Broadcast licenses are deemed to have indefinite useful lives because we have
renewed these agreements without issue in the past and we intend to renew them
indefinitely in the future. Accordingly, we expect the cash flows from our broadcast
licenses to continue indefinitely.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
net carrying amount of our broadcast licenses was $193,245 and $223,529 as of September
28, 2008 and December 30, 2007, respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------

| | The
non-cash impairment charge was partially offset by the acquisitions of the broadcast
licenses for KPSE-LP, Channel 50, in Palm Springs, California and KWBA-TV, analog Channel
58 and digital Channel 44, in Sierra Vista, Arizona (Tucson market).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Goodwill
The adjustments in the carrying amount of goodwill for the three quarters ended September
28, 2008 are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------

|                                  | Goodwill at
December 30, 2007 | Adjustments | Goodwill at
September 28, 2008
|--------------------------------- | ----------------------------- | ----------- | ------------------------------
|Reporting unit                    |                               |             |                               
|Daily newspaper                   |                               |             | $                             
|Community newspapers and shoppers |                               |             |                               
|Broadcasting                      |                               |             |                               
|                                  |                               |             |                               
|Total                             |                               |             | $                             
|                                  |                               |             |                               

18

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|12 | GOODWILL
AND OTHER INTANGIBLE ASSETS continued
|-- | ----------------------------------------------

| | The
adjustments in the carrying amount of goodwill for the three quarters ended September 28,
2008 represents the acquisition of KPSE-LP, Channel 50, in Palm Springs, California,
KWBA-TV, analog Channel 58 and digital Channel 44, in Sierra Vista, Arizona (Tucson
market) and the acquisitions of four community newspapers.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13 | DISCONTINUED
OPERATIONS
|-- | -----------------------

| | NorthStar
Print Group, Inc. In the first quarter of 2008, we recorded a gain on discontinued
operations of $400 for a reduction in the reserve related to a settlement with the
Environmental Protection Agency. This assessment was paid in the third quarter of 2008.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Community
newspapers and shoppers In 2007, Journal Community Publishing Group, Inc., our community
newspapers and shopper business of our publishing segment, completed the sale of its New
England- Ohio- and Louisiana-based publishing and printing businesses. Proceeds, net of
transaction expenses, were $28,613 and resulted in a gain on discontinued operations
before income taxes of $3,369.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table summarizes the three regional publishing and printing businessesresults
of operations, which are included in discontinued operations in our consolidated
condensed statement of earnings for the third quarter and three quarters of 2007:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                    | Third Quarter Ended | Three Quarters Ended
|----------------------------------- | ------------------- | --------------------
|
|Revenue                             |                     |                     
|Earnings (loss) before income taxes |                     |                     

| | Norlight
Telecommunications, Inc. On February 26, 2007, Q-Comm acquired 100% of the stock of
Norlight, our former telecommunications subsidiary and segment. Proceeds, net of
transaction expenses, were $175.9 million and resulted in a gain on discontinued
operations before income taxes of $101.8 million.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table summarizes Norlights results of operations, which are included in
the gain from discontinued operations in our consolidated condensed statement of earnings
for the third quarter and three quarters of 2007:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                    | Third Quarter Ended | Three Quarters Ended
|----------------------------------- | ------------------- | --------------------
|
|Revenue                             |                     |                     
|Earnings (loss) before income taxes |                     |                     

|14 | ACQUISITIONS
|-- | ------------

| | On
January 9, 2008, Journal Community Publishing Group, Inc., our community newspapers and
shoppers business, acquired the IolaHerald and Manawa Advocate in
Waupaca County in Wisconsin. These are weekly paid publications. On March 19, 2008,
Journal Community Publishing group, Inc. acquired two shoppers, the Clintonville
Shoppers Guide and the Wittenberg Northerner ShoppingNews, in
Waupaca County, Wisconsin. The total cash purchase price for these publications was
$1,632. The acquisitions deepen our media offerings and extend our reach in north central
Wisconsin.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
January 28, 2008, Journal Broadcast Corporation and Journal Broadcast Group, Inc., our
broadcasting businesses, completed the asset purchase of My Network affiliate KPSE-LP,
Channel 50, in Palm Springs, California from Mirage Media LLC for $4,661. The acquisition
of KPSE allows us to better serve advertisers and viewers in the Coachella Valley and
builds a stronger presence in Palm Springs and the surrounding area.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|14 | ACQUISITIONS
continued
|-- | ----------------------

| | On
July 1, 2008, Journal Broadcast Corporation and Journal Broadcast Group, Inc., our
broadcasting businesses, entered into an asset purchase agreement with Banks-Boise, Inc.
to purchase CW Network affiliate KNIN-TV, Analog Channel 9 and Digital Channel 10, in
Boise, Idaho for $8,000. The purchase is subject to regulatory approval and customary
closing conditions. The acquisition of KNIN-TV will give us an opportunity to build out
cross-platform businesses in Boise and with two television stations and six radio
stations in this market, we believe we will better serve advertisers and viewers and
build an even stronger presence in the community.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
July 22, 2008, Journal Broadcast Corporation and Journal Broadcast Group, Inc., our
broadcasting businesses, completed the asset purchase of CW Network affiliate, KWBA-TV,
Analog Channel 58, Digital Channel 44, in Sierra Vista, Arizona, from Cascade
Broadcasting Group, LLC and Tucson Communications, L.L.C. for $12,004. KWBA-TV serves the
Tucson, Arizona market. We believe owning cross-platform businesses in this growth market
will help us increase our local news focus and better serve our viewers and listeners.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
purchase price allocation for KPSE-LP and the preliminary purchase price allocation for
KWBA-TV are as follows:
| | -------------------------------------------------------------------------------------------------------------------

|                              | Television Stations
|----------------------------- | -------------------
|
|Prepaid expenses              |                    
|Property and equipment        |                    
|Goodwill                      |                    
|Broadcast licenses            |                    
|Network affiliation agreement |                    
|Customer lists                |                    
|Other assets                  |                    
|Accounts payable              |                    
|Other liabilities             |                    
|                              |                    
|Total purchase price          |                    
|                              |                    

| | The
goodwill and the broadcast licenses which we acquired are not subject to amortization for
financial reporting purposes. These intangible assets are, however, amortized and
deductible for income tax purposes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
weighted-average amortization period (in years) for the network affiliation agreement and
the customer lists is as follows:
| | -------------------------------------------------------------------------------------------------------------------------------

|Network affiliation agreement |  |  |  | 25 | 
|----------------------------- |  |  |  | -- | 
|Customer lists                |  |  |  | 5  | 
|Total                         |  |  |  | 18 | 

| | All
of the above-mentioned acquisitions were accounted for using the purchase method.
Accordingly, the operating results and cash flows of the acquired businesses are included
in our consolidated financial statements from the respective date of acquisition.  The impact of the acquired businesses on our operating results
for the third quarter and three quarters ended September 28, 2008 was not material.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15 | WORKFORCE
REDUCTIONS
|-- | --------------------

| | On
July 2, 2008, our daily newspaper, reported as part of our publishing segment, announced
a plan to reduce its workforce by about 10%, continuing its efforts to align its costs
with declining revenues. During the three quarters of 2008, we recorded a pre-tax charge
of $3,779 for separation benefits, the majority of which we recorded in the third quarter
of 2008. We paid $2,656 in separation benefits during the three quarters of 2008. We
estimate an additional pre-tax charge for the plan announced in July 2008 of
approximately $550, which will be recorded primarily in the fourth quarter of 2008. We
expect to pay the remaining separation benefits in the fourth quarter of 2008 and in
early 2009. The charge was recorded in opertaing costs and expenses and selling and
administrative expenses in the consolidated statements of earnings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|15 | WORKFORCE
REDUCTIONS continued
|-- | ------------------------------

| | During
the three quarters of 2008, our broadcasting business recorded a pre-tax charge of $544
for separation benefits. We paid $429 in separation benefits during the three quarters of
2008 and expect to pay our remaining liablity of $115 in the fourth quarter of 2008. The
charge was recorded in operating costs and expenses and selling and administrative
expenses in the consolidated statements of earnings.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16 | SEGMENT
INFORMATION
|-- | -------------------

| | Our
business segments are based on the organizational structure used by management for making
operating and investment decisions and for assessing performance. Our reportable business
segments are: (i) publishing; (ii) broadcasting; (iii) printing services; and (iv) other.
As of September 28, 2008, our publishing segment consisted of the Milwaukee Journal
Sentinel, which serves as the only major daily newspaper for the Milwaukee
metropolitan area, and 50 community newspapers and shoppers in Wisconsin and Florida. Our
broadcasting segment consists of 35 radio stations and 12 television stations in 12
states and the operation of a television station under a local marketing agreement. We
also provide a wide range of commercial printing services, including printing of
publications, professional journals and documentation material, through our printing
services segment. Our other segment consists of a direct marketing services business and
corporate expenses and eliminations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following tables summarize revenue, operating earnings (loss), depreciation and
amortization and capital expenditures from continuing operations for the third quarter
and three quarters ended September 28, 2008 and September 30, 2007 and identifiable total
assets at September 28, 2008 and December 30, 2007.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              | Third Quarter Ended | Three Quarters Ended
|----------------------------- | ------------------- | --------------------
|
|Revenue                       |                     |                     
|Publishing                    |                     |                     
|Broadcasting                  |                     |                     
|Printing services             |                     |                     
|Other                         |                     |                     
|                              |                     |                     
|                              |                     |                     
|                              |                     |                     
|Operating earnings (loss)     |                     |                     
|Publishing                    |                     |                     
|Broadcasting                  |                     |                     
|Printing services             |                     |                     
|Other                         |                     |                     
|                              |                     |                     
|                              |                     |                     
|                              |                     |                     
|Depreciation and amortization |                     |                     
|Publishing                    |                     |                     
|Broadcasting                  |                     |                     
|Printing services             |                     |                     
|Other                         |                     |                     
|                              |                     |                     
|                              |                     |                     
|                              |                     |                     
|Capital expenditures          |                     |                     
|Publishing                    |                     |                     
|Broadcasting                  |                     |                     
|Printing services             |                     |                     
|Other                         |                     |                     
|                              |                     |                     
|                              |                     |                     
|                              |                     |                     

|                          | September 28, 2008 | December 30, 2007
|------------------------- | ------------------ | -----------------
|Identifiable total assets |                    |                  
|Publishing                |                    |                  
|Broadcasting              |                    |                  
|Printing service          |                    |                  
|Other                     |                    |                  
|                          |                    |                  
|                          |                    |                  
|                          |                    |                  

21

---

JOURNAL COMMUNICATIONS,
INC. Notes to Unaudited Consolidated Condensed Financial Statements  (in thousands,
except per share amounts)

|17 | SUBSEQUENT
EVENT
|-- | ----------------

| | On
October 6, 2008, Journal Community Publishing Group, Inc., our community newspapers and
shopper business of our publishing segment, purchased the assets of Waupaca Publishing
Company for approximately $7,000, subject to certain closing adjustments. The purchase
consists of several Waupaca-area weekly paid newspapers including the Waupaca County
Post, The Chronicle (Weyauwega/Fremont), the Picture Post, and the Tri-County
Advertiser. It also includes the monthly paid niche publications Wisconsin State
Farmer, Wisconsin Horsemens News, and Silent Sports magazine. The
purchase includes additional print publications and associated internet websites as well
as Waupaca Publishing Companys commercial printing business and the related real
estate and buildings. We believe this purchase combined with our existing paid weekly
newspapers in the area will provide additional media offerings in Waupaca County,
Wisconsin for our readers and advertisers and will extend our niche media offerings,
which help our advertisers reach specialized audiences.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

# ITEM 2.    MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our
financial condition and results of operations should be read together with our unaudited
consolidated condensed financial statements for the third quarter and three quarters ended
September 28, 2008, including the notes thereto.

More information regarding us is
available at our website at www.journalcommunications.com. We are not including the
information contained in our website as a part of, or incorporating it by reference into,
this Quarterly Report on Form 10-Q. Our Annual Report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and any amendments to those reports are made
available to the public at no charge, other than a readers own internet access
charges, through a link appearing on our website. We provide access to such material
through our website as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the Securities and Exchange Commission.

# Forward-Looking
Statements

We make certain statements in this
Quarterly Report on Form 10-Q (including the information that we incorporate by reference
herein) that are forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. We intend these forward-looking
statements to be covered by the safe harbor provisions for forward-looking statements
contained in that Act, and we are including this statement for purposes of those safe
harbor provisions. These forward-looking statements generally include all statements other
than statements of historical fact, including statements regarding our future financial
position, business strategy, budgets, projected revenues and expenses, expected regulatory
actions and plans and objectives of management for future operations. We often use words
such as may, will, intend, anticipate,
believe, or should and similar expressions in this Quarterly
Report on Form 10-Q to identify forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control. These risks,
uncertainties and other factors could cause actual results to differ materially from those
expressed or implied by those forward-looking statements. Among such risks, uncertainties
and other factors that may impact us are the following:

| | changes
in  advertising  demand or the buying  strategies  of  advertisers  or the  migration  of
certain  advertising  to the Internet;
|- | ----------------------------------------------------------------------------------------------------------------------------------------

| | changes
in newsprint prices and other costs of materials;
|- | ---------------------------------------------------------

| | changes
in federal or state laws and regulations or their interpretations (including changes in
regulations governing the number and types of broadcast and cable system properties,
newspapers and licenses that a person may control in a given market or in total);
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | changes
in legislation or customs relating to the collection, management and aggregation and use
of consumer information through telemarketing and electronic communication efforts;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | the
availability of quality broadcast programming at competitive prices;
|- | ------------------------------------------------------------------------

| | changes
in network affiliation agreements;
|- | ------------------------------------------

| | quality
and rating of network over-the-air broadcast programs, including programs changing
networks and changing competitive dynamics regarding how and when programs are made
available to our viewers;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | effects
of the loss of commercial inventory resulting from uninterrupted television news coverage
and potential advertising cancellations due to war or terrorist acts;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | effects
of the rapidly changing nature of the publishing, broadcasting and printing industries,
including general business issues, competitive issues and the introduction of new
technologies;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | an
other than temporary decline in operating results and enterprise value that could lead to
further non-cash impairment charges due to the impairment of goodwill, broadcast
licenses, other intangible assets and property, plant and equipment;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | the
impacts of changing economic and financial market conditions and interest rates on our
liquidity, on the value of our pension plan assets and on the availability of capital;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | changes
in interest rates;
|- | --------------------------

| | the
outcome of pending or future litigation;
|- | --------------------------------------------

| | energy
costs;
|- | -------------

| | the
availability and effect of acquisitions, investments, dispositions and other capital
expenditures including share repurchases on our results of operations, financial
condition or stock price; and
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

| | changes
in general economic conditions.
|- | ---------------------------------------

A detailed discussion of the risks
and uncertainties that could cause actual results and events to differ materially from any
forward-looking statements is included in Part II, Item 1A. Risk Factors of
this Quarterly Report on Form 10-Q. We caution you not to place undue reliance on these
forward-looking statements, which we have made as of the date of this Quarterly Report on
Form 10-Q.

# Overview

Our business segments are based on
the organizational structure used by management for making operating and investment
decisions and for assessing performance. Our reportable business segments are: (i)
publishing; (ii) broadcasting; (iii) printing services; and (iv) other. Our publishing
segment consists of the Milwaukee Journal Sentinel, which serves as the only major
daily newspaper for the Milwaukee metropolitan area, and 55 community newspapers and
shoppers in Wisconsin and Florida. Our broadcasting segment consists of 35 radio stations
and 12television stations in 12 states and the operation of a television station
under a local marketing agreement. Our interactive media assets include about 120 online
enterprises that are associated with our publishing and broadcasting segments. We also
provide a wide range of commercial printing services, including printing of publications,
professional journals and documentation material, through our printing services segment.
Our other segment consists of a direct marketing services business and corporate expenses
and eliminations.

Over the past few years, fundamentals
in the newspaper industry have deteriorated significantly. Continuing weakness in
automotive advertising (driven primarily by the domestic automobile industry), reductions
in retail and classified run-of-press (ROP) advertising (due in part to department store
consolidation, weakened employment and real estate economics and a migration of
advertising to the Internet), circulation declines and online competition have negatively
impacted newspaper industry revenues. Additionally, the continued housing market downturn
has adversely impacted the newspaper industry, including real estate classified
advertising as well as the home improvement, furniture and financial services advertising
categories. These conditions, along with a weakening economy, persisted in the third
quarter of 2008 and we expect them to continue in future periods.

Revenues in the broadcast industry
are derived primarily from the sale of advertising time to local, national and political
advertisers and to a lesser extent from barter, digital revenues, retransmission fees,
network compensation and other revenues. The broadcast industry continues to experience
softness in television and radio advertising resulting from general economic pressure now
impacting local and national economies, primarily in the housing, automobile and retail
segments.

Our publishing business was
challenged in the third quarter of 2008 due to the continued softening of business
conditions driven by the secular and cyclical influences affecting the newspaper industry.
Classified advertising revenue decreased $4.0 million in the third quarter of 2008
compared to the third quarter of 2007 in all categories. Retail advertising also decreased
in the third quarter of 2008 compared to the third quarter of 2007 with weakness in a
number of categories, including home improvement, automotive, communications, department
stores, real estate, furniture/furnishings and airline and travel. Interactive revenue
increased 14.4% to $3.9 million at our publishing businesses in the third quarter of 2008
compared to the third quarter of 2007. Our daily newspaper recorded a $3.7 million
workforce reduction charge in the third quarter of 2008. Our publishing businesses
experienced a 27.1% increase in newsprint pricing in the third quarter of 2008 and
newsprint costs increased $0.7 million compared to the third quarter of 2007. Our
publishing businesses focused on expense controls and, despite the newsprint increase and
excluding the workforce reduction charge, total operating expenses decreased by 2.1% in
the third quarter of 2008 compared to the third quarter of 2007. The expense decrease was
primarily due to a decrease in payroll and employee benefit costs.

Revenue from broadcasting in the
third quarter of 2008 increased 0.6% due to increases in political and issue and Olympic
advertising revenue, an increase in revenue from our newly acquired television stations,
KPSE-LP and KWBA-TV, in Palm Springs, CA and Sierra Vista, AZ (Tucson market),
respectively, and an increase in interactive revenue. These revenue increases were
partially offset by decreases in local and national advertising revenue. Our broadcasting
business recorded a workforce reduction charge of $0.3 million in the third quarter of
2008. Total revenue and operating expenses were $0.9 million and $0.7 million,
respectively, related to our newly acquired television stations. Excluding the non-cash
impairment charge, total operating expenses were essentially even in the third quarter of
2008 compared to the third quarter of 2007, including the newly acquired stations, as we
remained diligent in focusing on cost reductions.

Revenue at our printing services
business decreased 12.2% in the third quarter of 2008 compared to the third quarter of
2007 primarily due to a decrease in revenue from printing catalogs and documentation
materials. Operating earnings at our printing services business decreased primarily due to
the decrease in revenue. In the fourth quarter of 2008, due to the changing mix and volume
of business, full time employees were reduced by 10.0%. Revenue at our direct marketing
services business decreased 6.8% in the third quarter of 2008 compared to the third
quarter of 2007 primarily due to a decrease in mailing services revenue.

Interim Impairment Test An
interim  impairment  test  results  from the  application  of the  impairment  testing
 provisions  of FASB      Statement  No. 142  Goodwill  and Other  Intangible
 Assets.  Impairment  testing is  customarily  performed      annually,  and last
had been  performed  as of the  beginning  of the fourth  quarter  2007,  at which time
no      goodwill or indefinite-lived  intangible asset impairment was indicated.  Due to
deteriorating  macro-economic      factors, a prolonged adverse change in the business
climate,  deteriorating  market conditions and results and      a further  decline in our
stock price,  we performed an interim  impairment test as of September 28, 2008. Our
     long-lived  assets  include  goodwill  related  to our  reporting  units  and
 broadcast  licenses  and  other      identifiable assets at individual television and
radio stations.

24

---

For purposes of testing the carrying
 values of goodwill  related to our reporting  units,  we determined fair      value by
using an income and a market  valuation  approach.  The income  approach uses expected
cash flows for      each  reporting  unit.  The cash  flows  were  then  discounted  for
risk and time  value.  In  addition,  the      present  value of the  projected  residual
 value was  estimated  and added to the  present  value of the cash      flows.  The
market  approach for the broadcast  reporting  unit was based on a reasonable  fair value
estimate      considering  the strength of the each  broadcast  signal,  current  market
 conditions,  market  multiples and      recent  transaction  activity  and  inquiry.
 The  market  approach  for the  daily  newspaper  and  community      newspapers and
shoppers  reporting  units was based on price multiples of publicly traded stocks of
comparable      companies  to derive fair value.  Each  approach was  weighted  equally
to determine a fair value  estimate of      each reporting unit.

We based our fair value estimates,
 in large measure, on projected  financial  information which we believe to      be
reasonable.  However,  actual future results may differ from those  projections,  and
those differences may      be  material.  The  valuation  methodology  used to  estimate
 the fair  value of our  total  company  and our      reporting units requires inputs and
assumptions  (i.e. market growth,  operating profit margins,  and discount      rates)
that reflect current market  conditions as well as management  judgment.  The current
economic downturn      has negatively  impacted many of those inputs and  assumptions.
 While our September 28, 2008 interim goodwill      impairment  test did not result in an
impairment  charge,  our market  capitalization  has declined since that      time and
the economic  outlook has  deteriorated.  If market  conditions  and  operational
 performance of our      reporting  units  continues to deteriorate  and management
 concludes that our operating  results or our stock      price will not  improve  within
a  reasonable  period of time,  we may be  required  to  recognize  a goodwill
     impairment  charge in the near term,  which  could  have a  material  impact on our
 financial  condition  and      results of operations.

For broadcast  licenses at
individual  television and radio  stations,  we used an income approach to estimate
     fair value. The fair value estimates of our broadcast licenses contain significant
 assumptions  incorporating      variables  that  are  based  on past  experiences  and
 judgments  about  future  performance  using  industry      normalized  information  for
an average  station  within a market  with the type of signal  that each  subject
     station  produces.  These  variables  include,  but are not limited to: the
forecasted  revenue growth rate of      each  market  (including  market  population,
 household  income and retail  sales),  market  share and profit      margins  of an
 average  station  within  a  market,  estimated  capital  expenditures  and  start-up
 costs       risk-adjusted  discount  rate,  likely  media  competition  within  the
market and  expected  growth  rates into      perpetuity to estimate  terminal values.
 Our interim  impairment tests in the third quarter of 2008 indicated      that four
 television  broadcast  licenses  and 13 radio  broadcast  licenses  were  impaired.  We
 recorded a      $38,762  non-cash  impairment  charge in the third  quarter of 2008.
 Adverse  changes in  expected  operating      results and/or further  deterioration  of
economic,  market or business  conditions could result in additional      non-cash
 impairment charges on our broadcast  licenses in future periods,  which could have a
material impact      on our financial condition and results of operations.

Subsequent Event  On October 6,
2008, Journal Community Publishing Group, Inc., our community newspapers and shopper
business of our publishing segment, purchased the assets of Waupaca Publishing Company
for approximately $7.0 million, subject to certain closing adjustments. The purchase
consists of several Waupaca-area newspapers and additional print publications and
associated Internet websites as well as Waupaca Publishing Companys commercial
printing business and the related real estate and buildings. We believe this purchase,
combined with our existing paid weekly newspapers in the area, will provide additional
media offerings in Waupaca County, Wisconsin for our readers and advertisers and will
extend our niche media offerings.

# Results of Operations

# Third Quarter Ended
September 28, 2008 compared to the Third Quarter Ended September 30, 2007

| | Continuing
Operations
| | ---------------------

Our consolidated revenue in the third
quarter of 2008 was $136.3 million, a decrease of $8.1 million, or 5.6%, compared to
$144.4 million in the third quarter of 2007. Our consolidated operating costs and expenses
in the third quarter of 2008 were $80.5 million, an increase of $1.0 million, or 1.2%,
compared to $79.5 million in the third quarter of 2007. Our consolidated selling and
administrative expenses in the third quarter of 2008 were $44.0 million, an increase of
$0.6 million, or 1.3%, compared to $43.4 million in the third quarter of 2007. Our
broadcast license impairment was $38.8 million in the third quarter of 2008.

25

---

The following table presents our
total revenue by segment, total operating costs and expenses, selling and administrative
expenses, broadcast license impairment and total operating earnings (loss) as a percent of
total revenue for the third quarter of 2008 and the third quarter of 2007:

|                                               | 2008 | Percent of
Total
Revenue | 2007 | Percent of
Total
Revenue
|---------------------------------------------- | ---- | ------------------------ | ---- | ------------------------
|
|Revenue:                                       |      |                          |      |                         
|Publishing                                     |      |                          | $    | 59.5                    
|Broadcasting                                   |      |                          |      | 54.0                    
|Printing services                              |      |                          |      | 16.1                    
|Other                                          |      |                          |      | 6.7                     
|                                               |      |                          |      |                         
|Total revenue                                  |      |                          |      | 136.3                   
|Total operating costs and expenses             |      |                          |      | 80.5                    
|Selling and administrative expenses            |      |                          |      | 44.0                    
|Broadcast license impairment                   |      |                          |      | 38.8                    
|                                               |      |                          |      |                         
|Total operating costs and expenses and selling |      |                         
|and administrative expenses                    |      |                          |      | 163.3                   
|                                               |      |                          |      |                         
|Total operating earnings (loss)                |      |                          | $    | (27.0                   
|                                               |      |                          |      |                         

The decrease in total revenue was due
to a decrease in classified ROP advertising in all categories at our publishing
businesses, a decrease in local advertising revenue at our television and radio stations,
a decrease in revenue from printing catalogs at our printing services business, a decrease
in retail ROP and preprint advertising at our publishing businesses, a decrease in
national advertising revenue at our television and radio stations, a decrease in national
ROP and preprint advertising revenue at our daily newspaper, a decrease in developmental
revenue at our television and radio stations and a decrease in mailing services revenue at
our direct marketing services business. These revenue decreases were partially offset by
an increase in political and issue and Olympic advertising revenue at our television
stations, an increase in commercial printing revenue at our daily newspaper and an
increase in interactive advertising revenue at our publishing and broadcasting businesses.

The increase in total operating costs
and expenses was due to a workforce reduction charge at our daily newspaper and television
and radio stations, an increase in newsprint and paper costs, operating costs and expenses
related to our newly acquired television stations, KPSE-LP and KWBA-TV, and an increase in
interactive fees related to the increase in interactive revenue. These expense increases
were partially offset by decreases in payroll and employee benefits at our daily newspaper
(excluding the workforce reduction charge in the third quarter of 2008), at our printing
services business, our community newspapers and shoppers and our direct marketing services
businesses. Outside printing costs decreased at our daily newspaper due to the decrease in
direct marketing advertising revenue and at our community newspapers and shoppers business
due to the decrease in advertising revenue in our Florida publications.

The increase in selling and
administrative expenses is primarily due to a workforce reduction charge at our daily
newspaper, an insurance settlement in the third quarter of 2007 at our daily newspaper,
selling and administrative expenses related to our newly acquired television stations and
a workforce reduction charge at our broadcasting business. These expense increases were
partially offset by decreases in payroll and employee benefit costs (excluding the
workforce reduction charges) at our daily newspaper and television and radio stations, at
our community newspapers and shoppers business and our printing services business.

We recorded a $38.8 million non-cash
impairment charge in the third quarter of 2008 for four television broadcast licenses and
13 radio broadcast licenses. We did not record non-cash impairment charges in the third
quarter of 2007.

26

---

Our consolidated operating loss in
the third quarter of 2008 was $27.0 million, a decrease of $48.5 million compared to
operating earnings of $21.5 million in the third quarter of 2007. The following table
presents our operating earnings (loss) by segment for the third quarter of 2008 and the
third quarter of 2007:

|                                | 2008 | Percent of
Total
Operating
Earnings | 2007 | Percent of
Total
Operating
Earnings
|------------------------------- | ---- | ----------------------------------- | ---- | -----------------------------------
|
|Publishing                      |      |                                     | $    | 1.1                                
|Broadcasting                    |      |                                     |      | (29.1                              
|Printing services               |      |                                     |      | 0.8                                
|Other                           |      |                                     |      | 0.2                                
|                                |      |                                     |      |                                    
|Total operating earnings (loss) |      |                                     | $    | (27.0                              
|                                |      |                                     |      |                                    

The decrease in total operating
earnings was primarily due to the $38.8 million non-cash impairment charge for broadcast
licenses and the decrease in revenue in our publishing, printing services and direct
marketing services businesses.

Our consolidated Adjusted EBITDA in
the third quarter of 2008 was $19.1 million, a decrease of $9.6 million, or 33.3%,
compared to $28.7 million in the third quarter of 2007. We define Adjusted EBITDA as net
earnings (loss) excluding gain from discontinued operations, net, provision (benefit) for
income taxes, total other expense, net (which is entirely comprised of interest income and
expense), depreciation and amortization and non-cash impairment charges. Management uses
adjusted EBITDA, among other things, to evaluate our operating performance and to value
prospective acquisitions. Adjusted EBITDA is not a measure of performance calculated in
accordance with accounting principles generally accepted in the United States. Adjusted
EBITDA should not be considered in isolation of, or as a substitute for, net earnings as
an indicator of operating performance or cash flows from operating activities as a measure
of liquidity. Adjusted EBITDA, as we calculate it, may not be comparable to EBITDA
measures reported by other companies.

The following table presents a
reconciliation of our consolidated net earnings to consolidated Adjusted EBITDA for the
third quarter of 2008 and the third quarter of 2007:

|                                       | 2008 | 2007
|-------------------------------------- | ---- | ----
|
|Net earnings (loss)                    |      |     
|Gain from discontinued operations, net |      |     
|Provision (benefit) for income taxes   |      |     
|Total other expense, net               |      |     
|Depreciation                           |      |     
|Amortization                           |      |     
|Broadcast license impairment           |      |     
|                                       |      |     
|Adjusted EBITDA                        |      |     
|                                       |      |     

The decrease in Adjusted EBITDA is
consistent with decreases in operating earnings in our publishing and printing services
segments for the reasons described above.

| | Publishing
| | ----------

Revenue from publishing in the third
quarter of 2008 was $59.5 million, a decrease of $5.7 million, or 8.8%, compared to $65.2
million in the third quarter of 2007. Operating earnings from publishing were $1.1
million, a decrease of $8.3 million, or 87.7%, compared to $9.4 million in the third
quarter of 2007.

27

---

The following table presents our
publishing revenue by category and operating earnings for the third quarter of 2008 and
the third quarter of 2007:

|                            | 2008 | 2007 |  
|--------------------------- | ---- | ---- | -
|
|
|Advertising revenue:        |      |      |  
|Retail                      |      |      | $
|Classified                  |      |      |  
|National                    |      |      |  
|Direct marketing            |      |      |  
|Other                       |      |      |  
|                            |      |      |  
|Total advertising revenue.. |      |      |  
|Circulation revenue         |      |      |  
|Other revenue               |      |      |  
|                            |      |      |  
|Total revenue               |      |      | $
|                            |      |      |  
|Operating earnings          |      |      | $
|                            |      |      |  

Advertising revenue in the third
quarter of 2008 accounted for 70.5% of total publishing revenue compared to 74.4% in the
third quarter of 2007.

Retail advertising revenue in the
third quarter of 2008 was $26.8 million, a decrease of $1.8 million, or 6.3%, compared to
$28.6 million in the third quarter of 2007. The $1.3 million decrease at our daily
newspaper was primarily due to a decrease in ROP advertising in nearly all categories. The
most significant decreases were in the finance/insurance, home improvement, real estate,
health services, communications, business services and automotive categories. Retail
preprint advertising decreased in the home improvement, department stores and furniture
categories. These decreases were partially offset by increases in event marketing related
to a special promotion with the Milwaukee Brewers and interactive advertising in the third
quarter of 2008. The $0.5 million decrease at our community newspapers and shoppers was
primarily due to decreases in automotive and real estate advertising, partially offset by
revenue from newly acquired publications in Northern Wisconsin and Florida.

Classified advertising revenue in the
third quarter of 2008 was $12.6 million, a decrease of $4.0 million, or 24.0%, compared to
$16.6 million in the third quarter of 2007. Decreases in ROP, MKE and Market Place
classified advertising at our daily newspaper were partially offset by an increase in
interactive classified advertising. The $4.1 million decrease in ROP, MKE and
Market Place classified advertising revenue at our daily newspaper was primarily due to
decreases in the following categories: employment advertising of $2.0 million, real estate
advertising of $1.3 million and automotive advertising of $0.8 million and the
discontinuation of the MKE product. Employment advertising accounted for 38.8% of
classified advertising revenue at the daily newspaper in the third quarter of 2008. The
$0.2 million decrease at our community newspapers and shoppers was primarily due to
decreases in automotive advertising, partially offset by revenue from newly acquired
publications in Northern Wisconsin and Florida.

In the third quarter of 2008, our
daily newspaper discontinued publishing MKE, the free weekly publication aimed at
young adults. The publication was launched in 2004. Advertising revenue peaked in 2006 and
it has decreased consistently since then. The weak advertising climate, competition with
other websites and publications and increasing costs prompted the decision.

Interactive advertising revenue is
reported in the various advertising revenue categories. Total retail and classified
interactive advertising revenue at our publishing businesses was $3.8 million in the third
quarter of 2008, an increase of $0.5 million, or 14.4%, compared to $3.3 million in the
third quarter of 2007 primarily due to an increase in online classified advertising,
including ancillary services from our Jobnoggin.com co-branded employment site with
Monster®, and sponsorship advertising.

National advertising revenue in the
third quarter of 2008 was $1.7 million, a decrease of $0.7 million, or 29.0%, compared to
$2.4 million in the third quarter of 2007. The decrease was due to a decrease in ROP
advertising in the airline and travel, communications and dining and entertainment
categories and a decrease in preprint advertising in the business services category.

Direct marketing revenue, consisting
of revenue from direct mail products of our daily newspaper, was $0.7 million in the third
quarter of 2008, a decrease of $0.1 million, or 12.6%, compared to $0.8 million in the
third quarter of 2007.

Other advertising revenue, consisting
of revenue from company-sponsored event advertising at our community newspapers and
shoppers, was $0.1 million in the third quarter of 2008 and the third quarter of 2007.

Circulation revenue in the third
quarter of 2008 accounted for 22.1% of total publishing revenue compared to 20.1% in the
third quarter of 2007. Circulation revenue of $13.2 million in the third quarter of 2008
increased $0.1 million, or 0.2%, compared to $13.1 million in the third quarter of 2007
primarily due to an increase in the daily average rate per copy at our daily newspaper
reflecting price increases put into effect earlier in 2008, partially offset by decreases
in average net paid circulation for the daily and Sunday editions.

28

---

Other revenue, which consists of
revenue from promotional, distribution and commercial printing at our daily newspaper and
commercial printing at the printing plant for our community newspapers and shoppers,
accounted for 7.4% of total publishing revenue in the third quarter of 2008 compared to
5.5% in the third quarter of 2007. Other revenue in the third quarter of 2008 was $4.4
million, an increase of $0.8 million, or 23.3%, compared to $3.6 million in the third
quarter of 2007. The $1.0 million increase at our daily newspaper was primarily due to an
increase in commercial printing revenue from new customers; the Chicago Reader,
which was added in the fourth quarter of 2007 and La Raza, which was added in the
second quarter of 2008. The Chicago Reader recently filed Chapter 11 bankruptcy. We
recorded a $0.2 million reserve for our pre-bankruptcy accounts receivable. We continue to
print on a pre-payment basis. Commercial printing revenue decreased $0.2 million at our
community newspapers and shoppers primarily due to the loss of a customer and a decrease
in the number of pages printed for existing customers.

Publishing operating earnings in the
third quarter of 2008 were $1.1 million, a decrease of $8.3 million, or 87.7%, compared to
$9.4 million in the third quarter of 2007. Operating earnings decreased $8.3 million in
the third quarter of 2008 at the daily newspaper primarily due to a workforce reduction
charge of $3.7 million, the impact of the decrease in classified and retail ROP
advertising, an increase in newsprint costs, a $0.7 million insurance settlement in the
third quarter of 2007, a $0.3 million increase in interactive online fees due to the
increase in interactive revenue, and an increase in bad debt expense related to the
bankruptcy filing of a commercial printing customer. These operating earnings decreases
were partially offset by a $2.3 million decrease in payroll and employee benefit costs.
Operating earnings was essentially even in the third quarter of 2008 compared to the third
quarter of 2007 at our community newspapers and shoppers. Cost control initiatives,
primarily in payroll and employee benefit costs, and earnings from the new acquisitions in
Northern Wisconsin and Florida offset the decrease in revenue. Total newsprint and paper
costs for our publishing businesses in the third quarter of 2008 were $7.0 million, an
increase of $0.6 million, or 10.0%, compared to $6.4 million in the third quarter of 2007
primarily due to a 27.1% increase in average newsprint pricing per metric ton, partially
offset by an 11.2% decrease in newsprint consumption. Consumption of metric tonnes of
newsprint in the third quarter of 2008 decreased primarily due to decreases in ROP
advertising, waste, average net paid circulation and editorial pages at our daily
newspaper and a decrease in ROP advertising at our community newspapers and shoppers. We
believe our consumption of newsprint will continue to be lower in 2008 compared to 2007.
However, we expect our average newsprint pricing per metric ton will increase during the
remainder of 2008 compared to 2007.

| | Broadcasting
| | ------------

Revenue from broadcasting in the
third quarter of 2008 was $54.0 million, an increase of $0.3 million, or 0.6%, compared to
$53.7 million in the third quarter of 2007. Operating loss from broadcasting in the third
quarter of 2008 was $29.1 million, a decrease of $38.8 million compared to operating
earnings of $9.7 million in the third quarter of 2007.

The following table presents our
broadcasting revenue and operating earnings (loss) for the third quarter of 2008 and the
third quarter of 2007:

|                             | 2008 | 2007 | Percent
|---------------------------- | ---- | ---- | -------
|
|
|Revenue                      |      |      | $      
|                             |      |      |        
|Broadcast license impairment |      |      | $      
|                             |      |      |        
|Operating earnings (loss)    |      |      | $      
|                             |      |      |        

Revenue from our television stations
in the third quarter of 2008 was $32.3 million, an increase of $1.1 million, or 3.4%,
compared to $31.2 million in the third quarter of 2007. The revenue increase was primarily
from our television markets of Milwaukee, Green Bay and Lansing and our newly acquired
stations. Partially offsetting these revenue increases were decreases in the Fort
Myers/Naples, Las Vegas, Boise and Omaha markets. The increase was due to a $3.0 million
increase in political and issue advertising revenue and a $2.3 million increase in Olympic
advertising revenue, partially offset by a $2.6 million decrease in local advertising
revenue and $1.6 million decrease in national advertising revenue. Developmental revenue
decreased $0.2 million in the third quarter of 2008 compared to the third quarter of 2007.
Interactive revenue increased $0.1 million the third quarter of 2008 compared to the third
quarter of 2007. Both developmental and interactive revenue are reported in local
advertising revenue. Developmental revenue refers to non-transactional revenue that
targets non-traditional advertisers.

The operating loss from our
television stations in the third quarter of 2008 was $17.0 million, a decrease of $20.4
million compared to operating earnings of $3.4 million in the third quarter of 2007. The
decrease in operating earnings was primarily due to a $21.1 million non-cash impairment
charge for four television broadcast licenses in the third quarter of 2008. Excluding the non-cash impairment charge, operating
expenses at our television stations increased $0.4 million in the third quarter of 2008
compared to the third quarter of 2007 primarily due to $0.7 million in expenses related to
our newly acquired television stations and a workforce reduction charge of $0.1 million.
On a same station basis, television operating expenses decreased $0.3 million, or 1.1%, in
the third quarter of 2008 compared to the third quarter of 2007 primarily due to a
decrease in payroll and employee benefit costs.

29

---

Revenue from our radio stations in
the third quarter of 2008 was $21.7 million, a decrease of $0.8 million, or 3.3%, compared
to $22.5 million in the third quarter of 2007. Revenue decreased in all of our radio
markets, except Milwaukee. The decrease was due to a $0.7 million decrease in local
advertising revenue and a $0.2 million decrease in national advertising revenue, partially
offset by an increase in other advertising revenue of $0.1 million. Developmental revenue
decreased $0.3 million in the third quarter of 2008 compared to the third quarter of 2007.
Interactive revenue increased $0.1 million the third quarter of 2008 compared to the third
quarter of 2007. Both developmental and interactive revenue are reported in local
advertising revenue.

The operating loss from our radio
stations in the third quarter of 2008 was $12.1 million, a decrease of $18.4 million
compared to operating earnings of $6.3 million in the third quarter of 2007. The decrease
in operating earnings was primarily due to a $17.7 million non-cash impairment charge for
13 radio broadcast licenses in the third quarter of 2008. Excluding the non-cash impairment charge, operating expenses at our radio
stations in the third quarter of 2008 were essentially even compared to the third quarter
of 2007, including the third quarter of 2008 workforce reduction charge of $0.2 million.

| | Printing
Services
| | -----------------

Revenue from printing services in the
third quarter of 2008 was $16.1 million, a decrease of $2.2 million, or 12.2%, compared to
$18.3 million in the third quarter of 2007. Operating earnings from printing services in
the third quarter of 2008 were $0.8 million, a decrease of $1.6 million, or 65.7%,
compared to $2.4 million in the third quarter of 2007.

The decrease in printing services
revenue was primarily due to a decrease in revenue from printing catalogs and
documentation materials for Dell Computer Corporation (Dell), partially offset by an
increase in revenue from printing publications. We believe our revenue from Dell in the
remainder of 2008 and through the end of the third quarter of 2009 will continue to
decline.

The decrease in printing services
operating earnings was primarily due to the decrease in revenue, partially offset by a
decrease in payroll and employee benefit costs.

| | Other
| | -----

Other revenue in the third quarter of
2008 was $6.7 million, a decrease of $0.5 million, or 7.1%, compared to $7.2 million in
the third quarter of 2007. Other operating earnings in the third quarter of 2008 were $0.2
million, an increase of $0.2 million compared to break even in the third quarter of 2007.

The following table presents our
other revenue and operating earnings for the third quarter of 2008 and the third quarter
of 2007:

|                          | 2008 | 2007 |  
|------------------------- | ---- | ---- | -
|
|
|Revenue                   |      |      | $
|                          |      |      |  
|Operating earnings (loss) |      |      | $
|                          |      |      |  

The decrease in other revenue in the
third quarter of 2008 compared to the third quarter of 2007 was primarily due to a
decrease in mailing services revenue, partially offset by an increase in offset and laser
printing revenue. Included in revenue and operating costs and expenses from our direct
marketing services business is $3.9 million and $4.1 million of postage amounts billed to
customers in the third quarter of 2008 and the third quarter of 2007, respectively.

The increase in operating earnings
was primarily due to a decrease in corporate expenses.

| | Other
Income and Expense and Taxes
| | ----------------------------------

Interest income was insignificant in
the third quarter of 2008 and the third quarter of 2007. Interest expense was $1.9 million
in both the third quarter of 2008 and the third quarter of 2007. The decrease in our
weighted average interest rate was offset by an increase in the average debt outstanding
due to repurchases of our class A common stock and acquisitions of businesses.
Amortization of deferred financing costs was $0.1 million in the third quarter of 2008 and
the third quarter of 2007.

Our effective tax benefit rate for
continuing operations was 40.8% in the third quarter of 2008 compared to an effective tax
provision rate of 39.5% in the third quarter of 2007. The difference is primarily due to a
decrease in our liability for unrecognized tax benefits for positions taken in prior
years, the settlement of certain state income tax audits and the impact of the non-cash
impairment charge.

30

---

| | Discontinued
Operations
| | -----------------------

On June 25, 2007, July 6, 2007 and
August 2, 2007, we sold our Ohio publishing and printing operations, our Louisiana
publishing operation and our New England publishing and printing operations, respectively.
The operations of the three regional publishing and printing operations of our community
newspapers and shoppers business have been reflected as discontinued operations in our
consolidated financial statements for all periods presented.

There were no results from
discontinued operations in the third quarter of 2008. Gain from discontinued operations,
net of income taxes, was $1.3 million in the third quarter of 2007. Income tax expense
related to discontinued operations was $0.7 million in the third quarter of 2007.

| | Net
Earnings (Loss)
| | -------------------

Our net loss in the third quarter of
2008 was $17.1 million, a decrease of $30.2 million compared to net earnings of $13.1
million in the third quarter of 2007. The decrease was due to the $23.5 million after-tax
non-cash impairment charge, the decrease in operating earnings from continuing operations
for the reasons described above and the decrease in gain from discontinued operations in
the third quarter of 2007.

| | Diluted
Earnings per Share for Class A and B Common Stock
| | ---------------------------------------------------------

Diluted loss per share for class A
and B common stock from continuing operations was $0.35 in the third quarter of 2008
compared to diluted earnings per share of $0.18 in the third quarter of 2007. Diluted
earnings per share for class A and B common stock from discontinued operations were $0.00
in the third quarter of 2008 compared to $0.02 in the third quarter of 2007. Diluted net
loss per share for class A and B common stock was $0.35 in the third quarter of 2008
compared to diluted net earnings per share of $0.20 in the third quarter of 2007. Our
diluted loss per share was unfavorably impacted in the third quarter of 2008 and the third
quarter of 2007 by our share repurchases.

# Three Quarters Ended
September 28, 2008 compared to the Three Quarters Ended September 30, 2007

| | Continuing
Operations
| | ---------------------

Our consolidated revenue in the three
quarters of 2008 was $410.6 million, a decrease of $24.4 million, or 5.6%, compared to
$435.0 million in the three quarters of 2007. Our consolidated operating costs and
expenses in the three quarters of 2008 were $236.9 million, a decrease of $1.8 million, or
0.7%, compared to $238.7 million in the three quarters of 2007. Our consolidated selling
and administrative expenses in the three quarters of 2008 were $132.6 million, a decrease
of $2.9 million, or 2.2%, compared to $135.5 million in the three quarters of 2007. Our
broadcast license impairment was $38.8 million in the three quarters of 2008.

The following table presents our
total revenue by segment, total operating costs and expenses, selling and administrative
expenses, broadcast license impairment and total operating earnings as a percent of total
revenue for the three quarters of 2008 and the three quarters of 2007:

|                                               | 2008 | Percent of
Total
Revenue | 2007 | Percent of
Total
Revenue
|---------------------------------------------- | ---- | ------------------------ | ---- | ------------------------
|
|Revenue:                                       |      |                          |      |                         
|Publishing                                     |      |                          | $    | 182.0                   
|Broadcasting                                   |      |                          |      | 156.8                   
|Printing services                              |      |                          |      | 49.4                    
|Other                                          |      |                          |      | 22.4                    
|                                               |      |                          |      |                         
|Total revenue                                  |      |                          |      | 410.6                   
|Total operating costs and expenses             |      |                          |      | 236.9                   
|Selling and administrative expenses            |      |                          |      | 132.6                   
|Broadcast license impairment                   |      |                          |      | 38.8                    
|                                               |      |                          |      |                         
|Total operating costs and expenses and selling |      |                         
|and administrative expenses                    |      |                          |      | 408.3                   
|                                               |      |                          |      |                         
|Total operating earnings                       |      |                          | $    | 2.3                     
|                                               |      |                          |      |                         

The decrease in total revenue was due
to a decrease in classified ROP advertising in all categories at our publishing
businesses, a decrease in local advertising revenue at our television and radio stations,
a decrease in retail ROP and preprint advertising at our publishing businesses, a decrease
in national advertising revenue at our television and radio stations, a decrease in
revenue from printing catalogs at our printing services business, a decrease in national
ROP and preprint advertising revenue at our daily newspaper, a decrease in circulation
revenue at our daily newspaper, a decrease in direct marketing advertising revenue at our
daily newspaper and a decrease in mailing services revenue at our direct marketing
services business. These revenue decreases were partially offset by an increase in
political and issue and Olympic advertising revenue at our television stations, an
increase in interactive advertising revenue at our publishing and broadcasting businesses,
an increase in commercial printing revenue at our daily newspaper and an increase in
developmental revenue at our broadcasting business.

31

---

The decrease in total operating costs
and expenses was due to a decrease in outside printing costs at our daily newspaper due to
the decrease in direct marketing advertising revenue and at our community newspapers and
shoppers business due to the decrease in advertising revenue in our Florida publications,
a decrease in payroll and employee benefit costs at our radio stations, publishing, direct
marketing services and printing services businesses, a decrease in newsprint and paper
costs at our publishing businesses, and web-width reduction costs at our daily newspaper
in the three quarters of 2007. These expense decreases were partially offset by the
workforce reduction charge at our daily newspaper and television and radio stations and
operating costs and expenses related to our newly acquired television stations and an
increase in depreciation expense due to our investment in digital and high-definition
equipment and the new building constructed in Las Vegas, Nevada.

The decrease in selling and
administrative expenses is primarily due to decreases in payroll and employee benefit
costs, excluding the workforce reduction charges, at our publishing and broadcasting
businesses, a decrease in advertising and promotion expenses at our radio stations and
various other cost reductions across all of our businesses. These expense decreases were
partially offset by workforce reduction charges at our daily newspaper and television and
radio stations, a gain on the sale of the Hartland, Wisconsin printing facility and an
insurance settlement in the three quarters of 2007 at our daily newspaper, and selling and
administrative expenses related to our newly acquired television stations.

We recorded a $38.8 million non-cash
impairment charge in the three quarters of 2008 for four television broadcast licenses and
13 radio broadcast licenses. We did not record non-cash impairment charges in the three
quarters of 2007.

Our consolidated operating earnings
in the three quarters of 2008 were $2.3 million, a decrease of $58.5 million, or 96.3%,
compared to $60.8 million in the three quarters of 2007. The following table presents our
operating earnings (loss) by segment for the three quarters of 2008 and the three quarters
of 2007:

|                         | 2008 | Percent of
Total
Operating
Earnings | 2007 | Percent of
Total
Operating
Earnings
|------------------------ | ---- | ----------------------------------- | ---- | -----------------------------------
|
|Publishing               |      |                                     | $    | 11.1                               
|Broadcasting             |      |                                     |      | (12.2                              
|Printing services        |      |                                     |      | 2.4                                
|Other                    |      |                                     |      | 1.0                                
|                         |      |                                     |      |                                    
|Total operating earnings |      |                                     | $    | 2.3                                
|                         |      |                                     |      |                                    

The decrease in total operating
earnings was primarily due to the non-cash impairment charge for broadcast licenses and
the decrease in revenue in our publishing, broadcasting and printing services businesses.

Our consolidated adjusted EBITDA in
the three quarters of 2008 was $63.0 million, a decrease of $19.8 million, or 23.9%,
compared to $82.8 million in the three quarters of 2007. The following table presents a
reconciliation of our consolidated net earnings to consolidated adjusted EBITDA for the
three quarters of 2008 and the three quarters of 2007:

|                                       | 2008 | 2007
|-------------------------------------- | ---- | ----
|
|Net earnings (loss)                    |      |     
|Gain from discontinued operations, net |      |     
|Provision for income taxes             |      |     
|Total other expense, net               |      |     
|Depreciation                           |      |     
|Amortization                           |      |     
|Broadcast license impairment           |      |     
|                                       |      |     
|Adjusted EBITDA                        |      |     
|                                       |      |     

The decrease in adjusted EBITDA is
consistent with decreases in operating earnings in our publishing, broadcasting and
printing services segments for the reasons described above.

32

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| | Publishing
| | ----------

Revenue from publishing in the three
quarters of 2008 was $182.0 million, a decrease of $17.2 million, or 8.6%, compared to
$199.2 million in the three quarters of 2007. Operating earnings from publishing were
$11.1 million, a decrease of $13.5 million, or 54.9%, compared to $24.6 million in the
three quarters of 2007.

The following table presents our
publishing revenue by category and operating earnings for the three quarters of 2008 and
the three quarters of 2007:

|                            | 2008 | 2007 |  
|--------------------------- | ---- | ---- | -
|
|
|Advertising revenue:        |      |      |  
|Retail                      |      |      | $
|Classified                  |      |      |  
|National                    |      |      |  
|Direct marketing            |      |      |  
|Other                       |      |      |  
|                            |      |      |  
|Total advertising revenue.. |      |      |  
|Circulation revenue         |      |      |  
|Other revenue               |      |      |  
|                            |      |      |  
|Total revenue               |      |      | $
|                            |      |      |  
|Operating earnings          |      |      | $
|                            |      |      |  

Advertising revenue in the three
quarters of 2008 accounted for 71.2% of total publishing revenue compared to 74.2% in the
three quarters of 2007.

Retail advertising revenue in the
three quarters of 2008 was $82.0 million, a decrease of $5.0 million, or 5.7%, compared to
$87.0 million in the three quarters of 2007. The $3.7 million decrease at our daily
newspaper was primarily due to a decrease in ROP advertising in nearly all categories. The
most significant decreases were in the automotive, home improvement, communications, real
estate, and finance/insurance categories, partially offset by an increase in ROP
advertising in the dining and entertainment category. Retail preprint advertising
decreased in the communications, airline and travel, dining and entertainment, business
services, and health services categories, partially offset by an increase in the small to
mid-sized retailers and finance/insurance categories. These decreases were partially
offset by an increase in interactive, event marketing related to a promotion with the
Milwaukee Brewers, Market Place and specialty magazine advertising in the three quarters
of 2008. The $1.3 million decrease at our community newspapers and shoppers was primarily
due to decreases in automotive, real estate and health care advertising, partially offset
by revenue from the newly acquired publications in Northern Wisconsin and Florida and an
increase in revenue at our community newspapers surrounding Milwaukee, Wisconsin.

Classified advertising revenue in the
three quarters of 2008 was $39.8 million, a decrease of $11.0 million, or 21.7%, compared
to $50.8 million in the three quarters of 2007. Decreases in ROP, Market Place and
MKE classified advertising at our daily newspaper were partially offset by an
increase in interactive classified advertising. The $11.2 million decrease in ROP, Market
Place and MKEclassified advertising revenue at our daily newspaper was primarily
due to decreases in the following categories: employment advertising of $5.7 million, real
estate advertising of $3.7 million and automotive advertising of $2.0 million and the
discontinuation of the MKE product. The other classified advertising category for
ROP, Market Place and MKE increased $0.2 million in the three quarters of 2008
compared to the three quarters of 2007. Employment advertising accounted for 40.5% of
classified advertising revenue at the daily newspaper in the three quarters of 2008. The
revenue decreases were partially offset by an increase in interactive advertising in the
three quarters of 2008. The $0.5 million decrease in classified advertising revenue at our
community newspapers and shoppers is primarily due to a decrease in automotive
advertising.

In the third quarter of 2008, our
daily newspaper discontinued publishing MKE, the free weekly publication aimed at
young adults. The publication was launched in 2004. Advertising revenue peaked in 2006 and
it has decreased consistently since then. The weak advertising climate, competition with
other websites and publications and increasing costs prompted the decision.

Interactive advertising revenue is
reported in the various advertising revenue categories. Total retail and classified
interactive advertising revenue at our publishing businesses was $11.3 million in the
three quarters of 2008, an increase of $1.4 million, or 14.5%, compared to $9.9 million in
the three quarters of 2007 primarily due to an increase in online classified advertising,
including ancillary services from our Jobnoggin.com co-branded employment site with
Monster®, and sponsorship advertising.

National advertising revenue in the
three quarters of 2008 was $5.3 million, a decrease of $1.5 million, or 22.3%, compared to
$6.8 million in the three quarters of 2007. The decrease was due to a decrease in ROP
advertising in the communications, airline and travel, dining and entertainment, business
services and health services categories and a decrease in preprint advertising in the
business services categories.

33

---

Direct marketing revenue, consisting
of revenue from direct mail products of our daily newspaper, was $2.3 million in the three
quarters of 2008, a decrease of $0.7 million, or 21.4%, compared to $3.0 million in the
three quarters of 2007 primarily due to a decrease in direct mail products sold and a
decrease in postage amounts billed to customers.

Other advertising revenue,
consisting of revenue from company-sponsored event advertising at our community
newspapers and shoppers, was $0.3 million in the three quarters of 2008 and the three
quarters of 2007.

Circulation revenue in the three
quarters of 2008 accounted for 21.2% of total publishing revenue compared to 19.7% in the
three quarters of 2007. Circulation revenue of $38.5 million in the three quarters of 2008
decreased $0.7 million, or 1.8%, compared to $39.2 million in the three quarters of 2007
primarily due to decreases in average net paid circulation for the Sunday and daily
editions, partially offset by an increase in the daily average rate per copy at our daily
newspaper reflecting prices increases put into effect earlier in 2008.

Other revenue, which consists of
revenue from promotional, distribution and commercial printing revenue at our daily
newspaper and commercial printing at the printing plants for our community newspapers and
shoppers, accounted for 7.6% of total publishing revenue in the three quarters of 2008
compared to 6.1% in the three quarters of 2007. Other revenue in the three quarters of
2008 was $13.8 million, an increase of $1.7 million, or 14.1%, compared to $12.1 million
in the three quarters of 2007. The $2.3 million increase at our daily newspaper was
primarily due to an increase in commercial printing revenue from new customers; the
Chicago Reader, which was added in the fourth quarter of 2007 and La Raza,
which was added in the second quarter of 2008. The Chicago Reader recently filed
Chapter 11 bankruptcy. We recorded a $0.2 million reserve for our pre-bankruptcy accounts
receivable. We continue to print on a pre-payment basis. Commercial printing revenue
decreased $0.6 million at our community newspapers and shoppers primarily due to the loss
of a customer and a decrease in the number of pages printed for existing customers.

In May 2008, our daily newspaper
signed a three-year agreement and began printing La Raza, a Spanish language
newspaper, for distribution in the greater Chicago, Illinois area.

Publishing operating earnings were
$11.1 million, a decrease of $13.5 million, or 54.9%, compared to $24.6 million in the
three quarters of 2007. Operating earnings decreased $12.6 million in the three quarters
of 2008 at the daily newspaper primarily due to the impact of the decrease in classified
and retail ROP advertising, a workforce reduction charge of $3.8 million, an increase in
interactive online fees of $1.1 million due to the increase in interactive revenue and a
$0.7 million insurance settlement in the three quarters of 2007. These operating earnings
decreases were partially offset by a $4.9 million decrease in payroll and employee benefit
costs, an $0.8 million decrease in postage expense, web-width reduction costs of $0.5
million in the three quarters of 2007, a $0.4 million decrease in total newsprint and
paper costs and various other cost reductions. Operating earnings decreased $0.9 million
in the three quarters of 2008 at our community newspapers and shoppers primarily due a
$0.9 million gain on the sale of the Hartland, Wisconsin printing facility in the three
quarters of 2007, the impact of the decrease in revenue, a $0.4 million contract
termination charge in the three quarters of 2008 and an increase in employee benefit
costs, partially offset by earnings from the new acquisitions in Northern Wisconsin and
Florida. Operating earnings increased at our community newspapers surrounding Milwaukee,
Wisconsin in the three quarters of 2008 due to a decrease of $1.3 million in operating
expenses in the three quarters of 2008 compared to the three quarters of 2007. Total
newsprint and paper costs for our publishing businesses in the three quarters of 2008 were
$19.7 million, a decrease of $0.6 million, or 2.8%, compared to $20.3 million in the three
quarters of 2007 primarily due to a 10.1% decrease in newsprint consumption, partially
offset by a 10.1% increase in average newsprint pricing per metric ton. Consumption of
metric tonnes of newsprint in the three quarters of 2008 decreased primarily due to
decreases in ROP advertising, average net paid circulation and a reduction in waste at our
daily newspaper and a decrease in ROP advertising at our community newspapers and
shoppers. We believe our consumption of newsprint will continue to be lower in 2008
compared to 2007. However, we expect our average newsprint pricing per metric ton will
increase during the remainder of 2008 compared to 2007.

| | Broadcasting
| | ------------

Revenue from broadcasting in the
three quarters of 2008 was $156.8 million, a decrease of $4.6 million, or 2.8%, compared
to $161.4 million in the three quarters of 2007. The operating loss from broadcasting in
the three quarters of 2008 was $12.2 million, a decrease of $43.2 million compared to
operating earnings of $31.0 million in the three quarters of 2007.

34

---

The following table presents our
broadcasting revenue and operating earnings (loss) for the three quarters of 2008 and the
three quarters of 2007:

|                             | 2008 | 2007 | Percent
|---------------------------- | ---- | ---- | -------
|
|
|Revenue                      |      |      | $      
|                             |      |      |        
|Broadcast license impairment |      |      | $      
|                             |      |      |        
|Operating earnings (loss)    |      |      | $      
|                             |      |      |        

Revenue from our television stations
in the three quarters of 2008 was $97.2 million, a decrease of $1.5 million, or 1.5%,
compared to $98.7 million in the three quarters of 2007. The revenue decrease was
primarily from our larger television markets of Las Vegas, Fort Myers/Naples and Tucson
and was partially offset by an increase in revenue in our Milwaukee, Lansing and Green Bay
markets and our newly acquired stations. The decrease was due to a $5.5 million decrease
in local advertising revenue and a $3.0 million decrease in national advertising revenue,
partially offset by a $4.6 million increase in political and issue advertising revenue, a
$2.3 million increase in Olympic advertising revenue and a $0.1 million increase in other
revenue. Interactive and developmental revenue, which are reported in local advertising
revenue, increased $0.5 million and $0.4 million, respectively, in the three quarters of
2008 compared to the three quarters of 2007. Developmental revenue refers to
non-transactional revenue that targets non-traditional advertisers.

The operating loss from our
television stations in the three quarters of 2008 was $8.8 million, a decrease of $24.4
million compared to operating earnings of $15.6 million in the three quarters of 2007. The
decrease in operating earnings was primarily due to a $21.1 million non-cash impairment
charge for four television broadcast licenses. Excluding the non-cash impairment charge, operating expenses at our television
stations increased $1.8 million in the three quarters of 2008 compared to the third
quarter of 2007 primarily due to $1.1 million in expenses related to our newly acquired
television stations. On a same station basis, television operating expenses increased $0.7
million, or 0.8%, in the three quarters of 2008 compared to the three quarters of 2007
primarily due to an increase in depreciation expense due to our investment in digital and
high-definition equipment and the new building constructed in Las Vegas, Nevada and a
workforce reduction charge of $0.2 million.

Revenue from our radio stations in
the three quarters of 2008 was $59.6 million, a decrease of $3.1 million, or 4.9%,
compared to $62.7 million in the three quarters of 2007. Revenue decreased in all of our
radio markets, except for Omaha. The decrease was due to a $2.2 million decrease in local
advertising revenue, a $0.7 million decrease in national advertising revenue and a $0.2
million decrease in political and issue advertising revenue. Developmental revenue
decreased $0.1 million in the three quarters of 2008 compared to the three quarters of
2007. Interactive revenue increased $0.2 million the three quarters of 2008 compared to
the three quarters of 2007. Both developmental and interactive revenue are reported in
local advertising revenue.

The operating loss from our radio
stations in the three quarters of 2008 was $3.4 million, a decrease of $18.8 million
compared to operating earnings of $15.4 million in the three quarters of 2007. The
decrease in operating earnings was primarily due to a $17.7 million non-cash impairment
charge for 13 radio broadcast licenses and the impact of the decrease in revenue.
Excluding the non-cash impairment charge, operating expenses at our radio stations decreased $2.3 million in the three quarters of
2008 compared to the three quarters of 2007 primarily due to decreases in payroll and
employee benefit costs, advertising and promotion expenses, commission and bonus expenses
and various other cost reductions, partially offset by the workforce reduction charge of
$0.3 million.

In the first quarter of 2008, our
Milwaukee, Wisconsin radio station, WTMJ-AM, agreed to an extension of a radio
broadcasting rights agreement with the Milwaukee Brewers baseball team.

| | Printing
Services
| | -----------------

Revenue from printing services in the
three quarters of 2008 was $49.4 million, a decrease of $2.3 million, or 4.5%, compared to
$51.7 million in the three quarters of 2007. Operating earnings from printing services in
the three quarters of 2008 were $2.4 million, a decrease of $2.0 million, or 45.9%,
compared to $4.4 million in the three quarters of 2007.

The decrease in printing services
revenue was primarily due to a decrease in revenue from printing catalogs, partially
offset by an increase in revenue from printing publications and documentation materials
for Dell. We believe our revenue from Dell in the remainder of 2008 and through the end of
the third quarter of 2009 will continue to decline.

The decrease in printing services
operating earnings was primarily due to the impact from the decrease in revenue, an
increase in employee benefit costs and a favorable adjustment from the termination of a
sublease agreement in the three quarters of 2007, partially offset by a decrease in
payroll costs and production efficiencies.

35

---

| | Other
| | -----

Other revenue in the three quarters
of 2008 was $22.4 million, a decrease of $0.3 million, or 1.3%, compared to $22.7 million
in the three quarters of 2007. Other operating earnings were $1.0 million in the three
quarters of 2008, an increase of $0.2 million, or 29.3%, compared to $0.8 million in the
three quarters of 2007.

The following table presents our
other revenue and operating earnings (loss) for the three quarters of 2008 and the three
quarters of 2007:

|                          | 2008 | 2007 |  
|------------------------- | ---- | ---- | -
|
|
|Revenue                   |      |      | $
|                          |      |      |  
|Operating earnings (loss) |      |      | $
|                          |      |      |  

The decrease in other revenue in the
three quarters of 2008 compared to the three quarters of 2007 was primarily due to a
decrease in mailing services revenue, partially offset by an increase in offset and laser
printing revenue at our direct marketing services business. Included in revenue and
operating costs and expenses from our direct marketing services business is $13.0 million
and $12.9 million of postage amounts billed to customers in the three quarters of 2008 and
the three quarters of 2007, respectively.

The increase in operating earnings
was primarily due to a decrease in payroll and employee benefits costs, partially offset
by the impact of the decrease in revenue at our direct marketing services business.

| | Other
Income and Expense and Taxes
| | ----------------------------------

Interest income was insignificant in
the three quarters of 2008 and the three quarters of 2007. Interest expense was $6.1
million in the three quarters of 2008 compared to $6.9 million in the three quarters of
2007. The decrease is primarily due to a decrease in our weighted average interest rate
partially offset by an increase in the average debt outstanding due to repurchases of our
class A common stock and acquisitions of businesses. Amortization of deferred financing
costs was $0.3 million in the three quarters of 2008 and the three quarters of 2007.

Our effective tax benefit rate for
continuing operations was 53.0% in the three quarters of 2008 compared to an effective tax
provision rate of 39.2% in the three quarters of 2007. The difference is primarily due to
a decrease in our liability for unrecognized tax benefits for positions taken in prior
years, the settlement of certain state income tax audits and the impact of the non-cash
impairment charge.

| | Discontinued
Operations
| | -----------------------

On February 26, 2007, Q-Comm
Corporation acquired 100% of the stock of Norlight Telecommunications, Inc. (Norlight). On
June 25, 2007, July 6, 2007 and August 2, 2007, we sold our Ohio publishing and printing
operations, our Louisiana publishing operation and our New England publishing and printing
operations, respectively. The operations of Norlight and the three regional publishing and
printing operations of our community newspapers and shoppers business have been reflected
as discontinued operations in our consolidated financial statements for all periods
presented.

Gain from discontinued operations,
net of income taxes, was $0.4 million in the three quarters of 2008 compared to $67.8
million in three quarters of 2007. Income tax expense related to discontinued operations
was $43.2 million in the three quarters of 2007.

In the three quarters of 2008, we
recorded a gain on discontinued operations of $0.4 million for a reduction in the reserve
related to a settlement between the Environmental Protection Agency and NorthStar Print
Group, Inc.

We recorded a $64.2 million net gain
on the sale of Norlight and the three regional publishing and printing operations of our
community newspapers and shoppers business in the three quarters of 2007. We recorded $3.6
million net gain from the operating results of our discontinued operations in the three
quarters of 2007.

| | Net
Earnings (Loss)
| | -------------------

Our net loss in the three quarters of
2008 was $1.4 million, a decrease of $102.0 million, compared to net earnings of $100.6
million in the three quarters of 2007. The decrease was due to the decrease in gain from
discontinued operations in the three quarters of 2007 and the $23.5 million after-tax non
cash impairment charge and the decrease in operating earnings from continuing operations
for the reasons described above

36

---

| | Diluted
Earnings per Share for Class A and B Common Stock
| | ---------------------------------------------------------

Diluted loss per share for class A
and B common stock from continuing operations was $0.06 in the three quarters of 2008
compared to diluted earnings per share of $0.48 in the three quarters of 2007. Diluted
earnings per share from discontinued operations for class A and B common stock were $0.01
in the three quarters of 2008 compared to $1.01 in the three quarters of 2007. Diluted net
loss per share for class A and B common stock was $0.05 in the three quarters of 2008
compared to diluted earnings per share of $1.49 in the three quarters of 2007. Our diluted
loss per share was unfavorably impacted in the third quarter of 2008 and the third quarter
of 2007 by our share repurchases.

# Liquidity and Capital
Resources

Cash balances were $4.7 million at
September 28, 2008. We believe our expected cash flows from operations and borrowings
available under our credit facility will meet our needs for the next twelve months.

We have a $475.0 million unsecured
revolving credit facility that expires on June 2, 2011. The interest rate on borrowings is
either LIBOR plus a margin that ranges from 37.5 basis points to 87.5 basis points,
depending on our leverage, or the base rate, which equals the higher of the prime rate set
by U.S. Bank, N.A. or the Federal Funds Rate plus 100 basis points. As of September 28,
2008, we had borrowings of $223.2 million under the facility at a weighted average rate of
3.38%. Fees in connection with the facility of $1.7 million are being amortized over the
term of the facility using the straight-line method which approximates the
effective-interest method. This agreement includes the following two financial covenants:

| | A
consolidated funded debt ratio of not greater than 4-to-1, as determined for the four
fiscal quarter period preceding the date of determination. This ratio compares, for any
period, our funded debt to our earnings before interest, taxes, depreciation and
amortization, as adjusted for non-operational impairment charges recorded as a result of
FASB Statement No. 142, Goodwill and Other Intangible Assets. As of September
28, 2008, our consolidated funded debt ratio was 2.53-to-1, resulting in a current
maximum borrowing capacity of $353.3 million.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | An
interest coverage ratio of not less than 3-to-1, as determined for the four fiscal
quarter period preceding the date of determination. This ratio compares, for any period,
our earnings before interest, taxes, depreciation and amortization, as adjusted for
non-operational impairment charges recorded as a result of FASB Statement No. 142, Goodwill
and Other Intangible Assets, to our interest expense. As of September 28, 2008, our
interest coverage ratio was 10.56-to-1.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our ability to remain in compliance
with these financial covenants may be impacted by a number of factors, including our
ability to continue to generate sufficient revenues and cash flows, as well as interest
rates and other risks and uncertainties set forth in Part II, Item 1A. Risk
Factors. If it is determined we are not in compliance with these financial
covenants, the lenders in our credit facility syndicate will be entitled to take certain
actions, including acceleration of all amounts due under the facility.

Given the current economic crisis,
including the current instability of financial institutions, one or more of the lenders in
our credit facility syndicate could fail, refuse to fund future draws thereunder or take
other positions adverse to us. In such an event, our liquidity could be severely
restrained with an adverse impact on our ability to continue the stock repurchase program,
pursue strategic acquisitions and to pay dividends. We continue to monitor our current
lenders and compliance with our credit agreement terms and are working on possible
strategies in the event one or more of our lenders is unable or unwilling to fund future
demands.

We have $1.7 million of standby
letters of credit for business insurance purposes.

| | Dividends
| | ---------

On February 12, 2008, our board of
directors increased the quarterly dividend on our class A and class B shares from $0.075
to $0.08 per share. We have a long history of paying dividends. Our board of directors
consistently reviews our dividend payment policy and our ability to pay dividends at each
quarterly board of directors meeting.

| | Acquisitions
| | ------------

On January 9, 2008, Journal Community
Publishing Group, Inc., our community newspapers and shoppers business, acquired the
IolaHerald and Manawa Advocate in Waupaca County in Wisconsin. These are
weekly paid publications. On March 19, 2008, Journal Community Publishing Group, Inc.
acquired two shoppers, the Clintonville Shoppers Guide and the Wittenberg
Northerner Shopping News, in Waupaca County, Wisconsin. The total cash purchase price
for these publications was $1.6 million. The acquisitions deepen our media offerings and
extend our reach in north central Wisconsin.

On January 28, 2008, Journal
Broadcast Corporation and Journal Broadcast Group, Inc., our broadcasting businesses,
completed the asset purchase of My Network affiliate KPSE-LP, Channel 50, in Palm Springs,
California from Mirage Media LLC for $4.7 million. We also own KMIR-TV, the NBC affiliate,
in Palm Springs. The acquisition of KPSE allows us to better serve advertisers and viewers
in the Coachella Valley and builds a stronger presence in Palm Springs and the surrounding
area.

37

---

On July 1, 2008, Journal Broadcast
Corporation and Journal Broadcast Group, Inc., our broadcasting businesses, entered into
an asset purchase agreement with Banks-Boise, Inc. to purchase CW Network affiliate
KNIN-TV, Analog Channel 9 and Digital Channel 10, in Boise, Idaho for $8.0 million. The
purchase is subject to regulatory approval and customary closing conditions. We currently
own KIVI-TV, the ABC affiliate, and six radio stations in Boise. The acquisition of
KNIN-TV will give us an opportunity to build out cross-platform businesses in Boise and
with two television stations and six radio stations in this market, we believe we will
better serve advertisers and viewers and build an even stronger presence in the community.

On July 22, 2008, Journal Broadcast
Corporation and Journal Broadcast Group, Inc., our broadcasting businesses, completed the
asset purchase of CW Network affiliate, KWBA-TV, Analog Channel 58, Digital Channel 44, in
Sierra Vista, Arizona, from Cascade Broadcasting Group, LLC and Tucson Communications,
L.L.C. for $12.0 million. KWBA-TV serves the Tucson, Arizona market. We also own KGUN-TV,
the ABC affiliate, and four radio stations in Tucson. We believe owning cross-platform
businesses in this growth market will help us increase our local news focus and better
serve our viewers and listeners.

On October 6, 2008, Journal Community
Publishing Group, Inc., our community newspapers and shopper business of our publishing
segment, purchased the assets of Waupaca Publishing Company for approximately $7.0
million, subject to certain closing adjustments. The purchase consists of several
Waupaca-area weekly paid newspapers including the Waupaca County Post, The
Chronicle(Weyauwega/Fremont), the Picture Post, and the Tri-County
Advertiser. It also includes the monthly paid niche publications Wisconsin State
Farmer, Wisconsin Horsemens News, and Silent Sports magazine. The
purchase includes additional print publications and associated internet websites as well
as Waupaca Publishing Companys commercial printing business and the related real
estate and buildings. We believe this purchase combined with our existing paid weekly
newspapers in the area will provide additional media offerings in Waupaca County,
Wisconsin for our readers and advertisers and will extend our niche media offerings, which
will help our advertisers reach specialized audiences.

| | Share
Repurchase Authorizations
| | -------------------------------

In the three quarters of 2008, we
purchased 6.7 million shares of our class A common stock pursuant to our October 2007 and
May 2008 board of directors authorizations for $44.6 million, or an average of $6.61
per share, excluding commissions. We completed our repurchases under the October 2007
authorization in March 2008.

The May 2008 authorization is for the
repurchase of up to five million additional shares of our class A common stock over the
following 18 months. As of the end of the third quarter of 2008, 2.4 million shares of our
class A common stock remain available to be purchased under our May 2008 authorization. We
intend to reduce the pace at which we have previously repurchased our class A shares to be
more conservative during the current economic environment.

# Cash Flow

| | Continuing
Operations
| | ---------------------

Cash provided by operating activities
was $45.2 million in the three quarters of 2008 compared to $39.7 million in the three
quarters of 2007. The increase was primarily due to an increase in cash provided by
working capital in the three quarters of 2008 compared to the three quarters of 2007.

Cash used for investing activities
was $33.4 million in the three quarters of 2008 compared to cash provided by investing
activities of $172.8 million in the three quarters of 2007. Capital expenditures were
$15.1 million in the three quarters of 2008 compared to $23.5 million in the three
quarters of 2007. In an effort to reduce costs and reduce debt, we are monitoring all of
our planned capital expenditures for the remainder of 2008 and may delay spending on
non-critical projects. Our capital expenditures at our daily newspaper are primarily
targeted towards equipment and building improvements. Our capital expenditures in our
broadcasting business are targeted towards technology upgrades, including investments in
digital radio and high-definition equipment for certain of our television stations and
building improvements. We believe these expenditures will help us to better serve our
advertisers, viewers and listeners and to facilitate our cost control initiatives.
Proceeds from the sale of Norlight, the three regional publishing and printing operations
of our community newspapers and shoppers business and KOMJ-AM in Omaha, Nebraska were
$205.2 million in the three quarters of 2007. During the three quarters of 2008, we
acquired KPSE-LP for $4.7 million, KWBA-TV for $12.0 million and three community
newspapers and three community shoppers for $1.6 million. We remitted the final purchase
payment of $10.0 million to Emmis Communications Corporation to acquire the FCC license of
KMTV-TV and our daily newspaper acquired two magazines for $1.6 million in the three
quarters of 2007.

Cash used for financing activities
was $14.1 million in the three quarters of 2008 compared to $180.1 million in the three
quarters of 2007. Borrowings under our credit facility in the three quarters of 2008 were
$162.2 million and we made payments of $117.9 million compared to borrowings of $265.5
million and payments of $351.3 million in the three quarters of 2007, reflecting the
immediate use of proceeds received from the sale of Norlight. In the three quarters of
2008 and the three quarters of 2007, we paid $44.8 million and $79.0 million,
respectively, to purchase our class A common stock. We paid cash dividends of $14.0
million and $15.6 million in the three quarters of 2008 and the three quarters of 2007,
respectively.

38

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| | Discontinued
Operations
| | -----------------------

There was no cash used by
discontinued operations in the three quarters of 2008 compared to cash used by
discontinued operations of $33.6 million in the three quarters of 2007 primarily due to
income tax payments related to the gain on the sale of Norlight in February 2007. Capital
expenditures, which related primarily to Norlight, were $0.7 million in the three quarters
of 2007.

# New Accounting Standards

In December 2007, the FASB issued
FASB Statement No. 141 (Revised 2007), Business Combinations. Statement No.
141R requires that an acquiring entity recognize all the assets acquired and liabilities
assumed in a transaction at the acquisition date fair value with limited exceptions.
Statement No. 141R will change the accounting treatment for acquisition costs,
non-controlling interests, contingent liabilities, in-process research and development,
restructuring costs, and income taxes. In addition, it also requires a substantial number
of new disclosure requirements. Statement No. 141R applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2008. Earlier adoption is
prohibited. We will adopt Statement No. 141R in the first quarter of 2009. We do not
believe the effect of adopting Statement No. 141R will have a material impact on our
consolidated financial statements.

In February 2008, the FASB issued
FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, which
delays the effective date of Statement No. 157 for all nonfinancial assets and
liabilities, except those that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually) to fiscal years beginning after
November 15, 2008. We do not believe the effect of adopting Staff Position FAS 157-2 will
have a material impact on our consolidated financial statements.

In April 2008, the FASB issued Staff
Position FAS 142-3, Determination of the Useful Life of Intangible Assets.
Staff Position FAS 142-3 requires that in developing assumptions about renewal or
extension used to determine the useful life of a recognized intangible asset, an entity
shall consider its own historical experience in renewing or extending similar
arrangements; however, these assumptions should be adjusted for entity-specific factors.
In the absence of that experience, an entity shall consider the assumptions that market
participants would use about renewal or extension (consistent with the highest and best
use of the asset by market participants), adjusted for the entity-specific factors. For a
recognized intangible asset, an entity shall disclose information that enables users of
financial statements to assess the extent to which the expected future cash flows
associated with the asset are affected by the entitys intent and/or ability to renew
or extend the arrangement. This guidance is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. The guidance for determining the useful life of a
recognized intangible asset shall be applied prospectively to intangible assets acquired
after the effective date. The disclosure requirements shall be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date. We will
adopt Staff Position FAS 142-3 in the first quarter of 2009. We do not believe the effect
of adopting Staff Position FAS 142-3 will have a material impact on our consolidated
financial statements.

In May 2008, the FASB issued FASB
Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles.
Statement No. 162 is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with U.S. generally accepted
accounting principles for nongovernmental entities. Statement No. 162 is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles. We do not believe the effect of adopting
Statement No. 162 will have a material impact on our consolidated financial statements.

In June 2008, the FASB issued EITF
03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions
Are Participating Securities. EITF 03-6-1 requires that unvested share-based payment
awards that contain nonforfeitable rights to dividends or dividend equivalents (whether
paid or unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method. EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those years. All prior-period earnings per share data presented
shall be adjusted retrospectively to conform to the provisions of this EITF. Early
application is not permitted. We will adopt EITF 03-6-1 in the first quarter of 2009. We
do not believe the effect of adopting EITF 03-6-1 will have a material impact on our
consolidated financial statements.

In June 2008, the FASB issued EITF
08-3, Accounting by Lessees for Nonrefundable Maintenance Deposits. EITF 08-3
requires that all nonrefundable maintenance deposits should be accounted for as a deposit.
When the underlying maintenance is performed, the deposit is expensed or capitalized in
accordance with the lessees maintenance accounting policy. Once it is determined
that an amount on deposit is not probable of being used to fund future maintenance
expense, it is recognized as additional expense at the time such determination is made.
EITF 08-3 is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Earlier application is
not permitted. We will adopt EITF 08-3 in the first quarter of 2009. We do not believe the
effect of adopting EITF 08-3 will have a material impact on our consolidated financial
statements.

In September 2008, the FASB issued
Staff Position FIN 45-4, Amendment to Disclosure Requirements of Interpretation
45-Guarantors Accounting and Disclosure Requirements for Guarantees.
Interpretation 45-4 requires disclosures of the current status of the payment/performance
risk of the guarantee. For example, the current status of the payment/performance risk of
a credit-risk-related guarantee could be based on either recently issued external credit
ratings or current internal groupings used by the guarantor to manage its risk. An entity
that uses internal groupings shall disclose how those groupings are determined and used
for management risk. FIN 45-4 is effective for reporting periods ending after November 15,
2008. Earlier adoption is encouraged. We will adopt FIN 45-4 in the fourth quarter of
2008. We do not believe the effect of adopting FIN 45-4 will have a material impact on our
consolidated financial statements.

39

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In October 2008, the FASB issued FASB
Staff Position (FSP) FAS 157-3, Determining the Fair Value of a Financial Asset when
the Market for that Asset is not Active, which clarifies the application of FASB
Statement No. 157, Fair Value Measurements, in a market that is not active and
provides an example to illustrate key considerations in determining the fair value of a
financial asset when the market for that financial asset is not active. This pronouncement
shall be effective upon issuance, including prior periods for which financial statements
have not been issued. The adoption of Staff Position FAS 157-3
did not have a material impact on our consolidated financial statements.

# Critical Accounting
Policies

There are no material changes to the disclosures
regarding critical accounting policies made in our Annual Report on Form 10-K for the year
ended December 30, 2007.

# ITEM 3.    QUANTITATIVE AND
QUALITATIVE DISCLOSURE OF MARKET RISK

There are no material changes to the
disclosures regarding interest rate risk and foreign currency exchange risk made in our
Annual Report on Form 10-K for the year ended December 30, 2007.

# ITEM 4.    CONTROLS AND
PROCEDURES

We carried out an evaluation, under
the supervision and with the participation of our Disclosure Committee, including our
Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in Securities
Exchange Act of 1934, as amended, Rule 13a-15(e)) as of the end of the period covered by
this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed in our Securitites Exchange
Act reports is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms, and that such information is accumulated and
communicated to them to allow timely decisions regarding required disclosure.

There has been no change in our
internal control over financial reporting that occurred during our last fiscal quarter
that has materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

# PART II. OTHER
INFORMATION

# ITEM 1.    LEGAL PROCEEDINGS

None.

# ITEM 1A.    RISK FACTORS

The risk factors below include any
material changes to and supersede the risk factors affecting our business previously
disclosed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K
for the fiscal year ended December 30, 2007.

*   *   *

You should carefully consider the
following risk factors and warnings before making an investment decision. If any of the
risks below actually occur, our business, financial condition, results of operations or
prospects could be materially adversely affected. In that case, the price of our
securities could decline and you could lose all or part of your investment. You should
also refer to the other information set forth or incorporated by reference in this
document.

# Risks Relating to Our
Diversified Media Business

# Decreases in
advertising spending, resulting from economic downturn, war, terrorism, advertiser
consolidation or other factors, could adversely affect our financial condition and results
of operations.

40

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Approximately 71% of our revenue in
2007, and approximately 70% of our revenue for the three quarters ended September 28,
2008, was generated from the sale of local, regional and national advertising appearing in
our newspapers and shoppers and for broadcast on our radio and television stations.
Advertisers generally reduce their advertising spending during economic downturns and some
advertisers may go out of business or declare bankruptcy. The merger or consolidation of
advertisers also generally leads to a reduced amount of collective advertising spending. A
recession or economic downturn, as well as a consolidation of advertisers, could have an
adverse effect on our financial condition and results of operations. In addition, our
advertising revenue tends to decline in times of national or local crisis because our
radio and television stations broadcast more news coverage and sell less advertising time.
For example, the threatened outbreak of hostilities in Iraq in March 2003 and the war
itself had a negative impact on our broadcast results due to reduced spending levels by
some advertisers, cancellations by some advertisers for the duration of war coverage and
elimination of advertising inventory available from our television networks during their
continuous coverage of the war. As a result, the war in Iraq, additional terrorist attacks
or other wars involving the United States or any other local or national crisis could
adversely affect our financial condition and results of operations.

Additionally, some of our printed
publications and our radio and television stations generate a large percentage of their
advertising revenue from a limited number of sources, including the automotive industry,
political advertising and professional sports contracts. As a result, even in the absence
of a recession or economic downturn, adverse changes specifically affecting these
advertising sources could significantly reduce advertising revenue and have a material
adverse affect on our financial condition and results of operations.

In addition, our advertising revenue
and circulation revenue depend upon a variety of other factors specific to the communities
that we serve. Changes in those factors could negatively affect those revenues. These
factors include, among others, the size and demographic characteristics of the local
population, the concentration of retail stores and local economic conditions in general.
If the population demographics, prevailing retail environment or local economic conditions
of a community served by us were to change adversely, revenue could decline and our
financial condition and results of operations could be adversely affected. This is
especially true with respect to the metropolitan Milwaukee market, which is served by our
daily newspaper, theMilwaukee Journal Sentinel, one of our television stations,
two of our radio stations, a number of our community newspapers and shoppers and more than
40 websites, and, collectively, from which we derived approximately 49% of our revenue in
2007 and approximately 48% of our revenue for the three quarters ended September 28, 2008.

# Our diversified media
businesses operate in highly competitive markets, and during a time of rapid competitive
changes,  we may lose market share and advertising revenue to competing newspapers, radio
and television stations or other types  of media competitors, as well as through
consolidation of media competitors or changes in advertisers media buying
 strategies.

Our diversified media businesses
operate in highly competitive markets. Our newspapers, shoppers, radio stations,
television stations and Internet sites compete for audiences and advertising revenue with
other newspapers, shoppers, radio stations, television stations and Internet sites as well
as with other media such as magazines, cable television, satellite television, satellite
radio, outdoor advertising, direct mail and the evolving on-line advertising space. Some
of our current and potential competitors have greater financial, marketing, programming
and broadcasting resources than we do or, even if smaller, the ability to create on-line
niche products and communities and may respond faster or more aggressively to changing
competitive dynamics. This competition has intensified as a result of digital media
technologies. While the amount of advertising in our Internet sites has continued to
increase, we may experience a decrease in advertising revenues if we are unable to attract
advertising to our Internet sites in volumes sufficient to offset decreases in advertising
in our traditional media products, for which rates are generally higher than for Internet
advertising.

In newspapers and shoppers, our
revenue primarily consists of advertising and paid circulation. Competition for
advertising expenditures and paid circulation comes from local, regional and national
newspapers, shoppers, magazines, broadcast and cable television, radio, direct mail,
yellow pages, the Internet and other media. Competition for newspaper advertising revenue
is based largely upon advertiser results, advertising rates, readership, demographics and
circulation levels, while competition for circulation revenue is based largely upon the
content of the newspaper, its price, editorial quality and customer service. On occasion,
our businesses compete with each other for regional and local advertising, particularly in
the Milwaukee market. Our local and regional competitors in community newspapers and
shoppers are typically unique to each market, but we have many competitors for advertising
revenue that are larger and have greater financial and distribution resources than us.
Circulation revenue and our ability to achieve price increases for our print products are
affected by competition from other publications and other forms of media available in our
various markets, declining consumer spending on discretionary items like newspapers,
decreasing amounts of free time, and declining frequency of regular newspaper buying among
young people. We may incur increasing costs competing for advertising expenditures and
paid circulation. If we are not able to compete effectively for advertising expenditures
and paid circulation, our revenue may decline and our financial condition and results of
operations may be adversely affected.

Our radio and television broadcasting
businesses compete for audiences and advertising revenue primarily on the basis of
programming content and advertising rates. Our ability to maintain market share and
competitive advertising rates depends in part on audience acceptance of our network,
syndicated and local programming. Changes in market demographics, the entry of competitive
stations to our markets, the introduction of competitive local news or other programming
by cable, satellite or other news providers, or the adoption of competitive formats by
existing radio stations could result in lower ratings and have a material adverse effect
on our financial condition and results of operations. Changes in ratings technology or
methodology or metrics used by advertisers or other changes in advertisers media
buying strategies also could have a material adverse effect on our financial condition and
results of operations.

41

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Further, our operations may be
adversely affected by consolidation in the broadcast industry, especially if competing
stations in our markets are acquired by competitors who have a greater national scope, can
offer a greater variety of national and syndicated programming for listeners and viewers
and have enhanced opportunities for advertisers to reach broader markets. In 2003 the FCC
completed a comprehensive review of its ownership rules and adopted revised rules. These
rules were stayed in September 2003 and most of the revised rules were remanded to the FCC
for additional analysis and justification. In December 2007, the FCC adopted an Order that
modified only the newspaper broadcast cross-ownership rule to permit cross-ownership of
one newspaper and one television or radio station in the top twenty markets under certain
circumstances. The FCC declined to make changes to any other broadcast ownership rules.
The FCCs Order is subject to reconsideration and appeal. We cannot predict the
outcome of any further administrative or judicial proceedings related to the rules.

# Seasonal and cyclical
changes in advertising volume affect our quarterly revenue and results of operations and
may cause our stock price to be volatile.

Our quarterly revenue and results of
operations are subject to seasonal and cyclical fluctuations that we expect to continue to
affect our results of operations in future periods. Our first quarter of the year tends to
be our weakest quarter because advertising volume is typically at its lowest levels
following the holiday season. Our fourth quarter tends to be our strongest quarter
primarily because of revenue from holiday season advertising. Our quarterly revenue also
varies based on the dynamics of the television broadcast industry. In particular, we
experience fluctuations, primarily during our third and fourth quarters, during political
voting periods as advertising dramatically increases. Also, since NBC has exclusive rights
to broadcast the Olympics through 2012, our NBC affiliated stations experience increased
viewership and revenue during Olympic broadcasts in the first or third quarters of the
years in which the Olympics are held. Other factors that affect our quarterly revenue and
results of operations may be beyond our control, including changes in the pricing policies
of our competitors, the hiring and retention of key personnel, wage and cost pressures,
changes in newsprint prices, changes in the buying strategies of advertisers and general
economic factors. These quarterly fluctuations in revenue and results of operations may
cause our stock price to be volatile.

# We may not be able to
acquire radio stations, television stations, newspapers or assets related to our
Internet-based growth strategy, successfully manage acquired properties, or increase our
profits from these operations.

Our diversified media business has in
the past expanded through acquisitions of radio and television stations and community
newspapers and shoppers in selected markets. We intend to pursue continued growth through
selected acquisitions, including acquisitions and investments related to our
Internet-based growth strategy, if we are able to identify strategic acquisition
candidates, negotiate definitive agreements on acceptable terms and, as necessary, secure
additional financing.

Our acquisition strategy includes
certain risks. For example:

| |  | we
may not be able to identify suitable acquisition  candidates or, if identified,
 negotiate  successfully            their acquisition;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------

| |  | we
may not be able to secure additional financing necessary to complete acquisitions;
| | - | -------------------------------------------------------------------------------------

| |  | we
may  encounter  unforeseen  expenses,  difficulties,  complications  or  delays in
 connection  with the            integration of acquired entities and the expansion of
operations;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | we
may fail to achieve anticipated financial benefits from acquisitions;
| | - | ------------------------------------------------------------------------

| |  | we
may encounter regulatory changes or delays or other impediments in connection with
proposed transactions;
| | - | ------------------------------------------------------------------------------------------------------------

| |  | our
acquisition strategy may divert management's attention from the day-to-day operation of
our businesses;
| | - | -----------------------------------------------------------------------------------------------------------

| |  | key
personnel at acquired companies may leave employment; and
| | - | -------------------------------------------------------------

| |  | we
may be required to focus resources on integration of operations rather than more
profitable areas.
| | - | -----------------------------------------------------------------------------------------------------

In addition, we compete for certain
acquisition targets with companies having greater financial resources. We cannot assure
you that we will be able to successfully make future acquisitions or what effects those
acquisitions may have on our financial condition and results of operations.

42

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We have in the past and may in the
future cluster multiple radio and television stations in markets that we believe have
demographic characteristics and growth potential suitable to further our business
objectives. Multiple stations in the same geographic market area could make our results of
operations more vulnerable to adverse local economic or demographic changes than they
would otherwise be if our stations were located in geographically diverse areas.

We anticipate that we would finance
potential acquisitions through cash provided by operating activities and/or borrowings,
which would reduce our cash available for other purposes. We cannot assure you, however,
that we would be able to obtain needed financing in the event strategic acquisition
opportunities are identified. We may also consider financing acquisitions by issuing
additional shares of class A common stock, which would dilute current shareholders
ownership. Another potential source of financing for future acquisitions is to incur more
debt, which would lead to increased leverage and debt service requirements. Inherent in
any future acquisitions is the risk of transitioning company cultures and facilities,
which could have a material adverse effect on our financial condition and results of
operations, particularly during the period immediately following any acquisitions.

# Decreases or slow
growth in circulation may adversely affect our revenues.

Advertising and circulation revenues
are affected by circulation, readership levels and overall audience reach. Our daily
newspaper, and the newspaper industry as a whole, is experiencing difficulty maintaining
and increasing print circulation and related revenues. This is due to, among other
factors, increased competition from new media products and sources other than traditional
newspapers (often free to users), and shifting preferences among some consumers to receive
all or a portion of their news other than from a newspaper.

A prolonged decrease in circulation
copies could have a material effect on our revenues, particularly if we are not able to
otherwise grow our readership levels and overall audience reach. To maintain our
circulation base, we may incur additional costs, and we may not be able to recover these
costs through circulation and advertising revenues.

# Our publishing
business may suffer if there is a significant increase in the cost of newsprint or a
reduction in the availability of newsprint.

The basic raw material for newspapers
and shoppers is newsprint. Our newsprint consumption related to our publications totaled
$26.6 million in 2007, which was 10.0% of our total publishing revenue, and totaled $19.7
million for the three quarters ended September 28, 2008, which was 10.8% of our total
publishing revenue. We currently purchase our newsprint primarily from one supplier, with
our current pricing agreement ending in December 2011. Our inability to obtain an adequate
supply of newsprint in the future or significant increases in newsprint costs could have a
material adverse effect on our financial condition and results of operations.

# Changes relating to
consumer information collection and use could adversely affect our ability to collect and
use data, which could harm our business.

Public concern over methods of
information-gathering has led to the enactment of legislation in most jurisdictions that
restricts the collection and use of consumer information. Our publishing business relies
in part on telemarketing sales, which are affected by recent do not call
legislation at both the federal and state levels. We also engage in e-mail marketing and
the collection and use of consumer information in connection with our publishing and
broadcasting businesses and our growing Internet efforts. Further legislation, industry
regulations, the issuance of judicial interpretations or a change in customs relating to
the collection, management, aggregation and use of consumer information could materially
increase the cost of collecting that data, or limit our ability to provide information to
our customers or otherwise utilize telemarketing or e-mail marketing, and could adversely
affect our results of operations.

# If we are unable to
respond to changes in technology and evolving industry standards, our radio stations may
not be able to effectively compete.

The broadcast media industry is
subject to the emergence of new media technologies and evolving industry standards.
Several new technologies are being developed that may compete with our radio stations,
including:

| |  | audio
programming by cable television systems, direct broadcast satellite systems, personal
communications systems, Internet content providers and other digital audio broadcast
formats;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | satellite
digital audio radio service, with sound quality comparable to that of compact discs and
that provide numerous niche formats;
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| |  | in-band
 on-channel  digital  radio,  which could  improve  the  quality of  existing  AM and FM
 stations,            including stations owned by us;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

43

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| |  | expanded
approval of low-power FM radio, which could result in additional FM radio broadcast
outlets designed to serve small, localized areas; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

| |  | enhanced
capabilities of cell phones, MP3 players, and other mobile devices.
| | - | ----------------------------------------------------------------------------

These new technologies have the
potential to introduce new market competitors or change the means by which radio
advertisers can most efficiently and effectively reach their target audiences. We may not
have the resources to acquire new technologies or to introduce new services that could
compete with these new technologies.

# If we are unable to
respond to changes in technology and evolving industry standards, our television stations
may not be able to effectively compete.

New technologies could also adversely
affect our television stations. Programming alternatives such as cable, direct
satellite-to-home services, pay-per-view, on-demand programming, the Internet and home
video and entertainment systems have fractionalized television viewing audiences. Over the
past decade, cable television programming services have captured an increasing market
share, while the aggregate viewership of the major television networks has declined. In
addition, the expansion of cable television and other technological changes, including the
recent entry by certain of the regional Bell operating companies into the video services
delivery market, has increased, and may continue to increase, competitive demand for
programming. Such increased demand, together with rising production costs may, in the
future, increase our programming costs or impair our ability to acquire programming. The
enhanced video and audio capabilities of cell phones, MP3 players and other mobile devices
also has the potential to affect television viewership.

In addition, video compression
techniques now in use with direct broadcast satellites and, increasingly, by cable and
wireless cable, are expected to permit greater numbers of channels to be carried within
existing bandwidth. These compression techniques, as well as other technological
developments, which are applicable to all video delivery systems and enable television
broadcasters operating digital signals to offer multiple channels, have the potential to
provide vastly expanded programming to highly targeted audiences. Reduction in the cost of
creating additional channel capacity could lower entry barriers for new channels and
encourage the development of increasingly specialized niche programming. This ability to
reach very narrowly defined audiences may alter the competitive dynamics for advertising
expenditures. We are unable to predict the effect that these technological changes will
have on the television industry or the future results of our television broadcast
business.

As part of the conversion from analog
to digital broadcasting, our television stations will be required to cease analog
broadcasts at the end of the transition, which is currently scheduled to occur in February
2009. We are unable to predict the effect of the cessation of analog broadcasting on
viewership.

# If the network
programming we broadcast pursuant to network affiliation agreements does not maintain
satisfactory viewership levels or if the networks we are affiliated with terminate or do
not renew our agreements, our advertising revenues, financial condition and results of
operations may be adversely affected.

The television viewership levels, and
ultimately advertising revenue, for each of our stations are materially dependent upon
network programming, which is provided pursuant to network affiliation agreements. We
cannot assure you that network programming will achieve or maintain satisfactory
viewership levels. In particular, because four of our stations (including one of our
low-power stations) are parties to affiliation agreements with ABC, three with NBC, two
with FOX and one with CBS, failures of ABC, NBC, FOX or CBS network programming to attract
viewers or generate satisfactory ratings may have an adverse effect on our financial
condition and results of operations. In addition, we cannot assure you that we will be
able to renew our network affiliation agreements on as favorable terms or at all. The
termination or non-renewal, or renewal on less favorable terms, of the affiliation
agreements could have an adverse effect on us.

Changes in the relationship of
television networks with their affiliates and other content providers and distribution
channels also could affect our success. For example, networks and other content providers
recently have begun to sell programming content through new distribution channels and
offer viewers the ability to watch programs on-demand, rather than on an established
live television broadcast schedule.

The costs of
television programming may increase, which could adversely affect our results of
operations.

Television programming is a
significant operating cost component in our broadcasting operations. We cannot assure you
that we will not be exposed in the future to increased programming costs. Should such an
increase occur, it could have an adverse effect on our results of operations. Television
networks have been seeking arrangements from their affiliates to share the networks programming
costs. We cannot predict the nature or scope of any such potential compensation
arrangements or the effect, if any, on our operations. In addition, acquisitions of
program rights for syndicated programming are usually made two or three years in advance
and may require multi-year commitments, making it difficult to predict accurately how a
program will perform. In some instances, programs must be replaced before their costs
have been fully amortized, resulting in write-offs that increase station operating costs
and decrease station earnings.

44

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# If our key on-air
talent does not remain with us or loses popularity, our advertising revenue and results
of operations may be adversely affected.

We employ or independently contract
with a number of on-air personalities and hosts of television and radio programs whose
ratings success depends in part on audience loyalty in their respective markets. Although
we have entered into long-term agreements with some of our key on-air talent and program
hosts to protect our interests in those relationships, we cannot assure you that all or
any of these key employees will remain with us over the long term. Furthermore, the
popularity and audience loyalty to our key on-air talent and program hosts is highly
sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty
could reduce ratings and may impact our ability to generate advertising revenue.

In addition, our key local management
employees are extremely important to our business since we believe that our growth and
future success depends on retaining local management with knowledge of the community, its
audience and its advertisers. Our inability to attract or retain these skilled personnel
could have a material adverse impact on our financial condition and results of operations.

# Changes in the
professional sports industry or changes in our contractual relationships with local
professional sports teams could result in decreased ratings for our Milwaukee radio
station and adversely affect our results of operations and financial condition.

Our Milwaukee radio station, WTMJ-AM,
currently maintains exclusive radio broadcast rights for the Green Bay Packers, Milwaukee
Bucks and Milwaukee Brewers, and arranges a statewide radio network for the broadcast of
their games. Our advertising revenue could be adversely affected by changes in the
professional sports industry, such as a relocation of one of the local professional sports
teams from the Wisconsin market or the potential loss of exclusivity due to league or team
initiatives such as pay-per-listen, satellite radio or Internet broadcast of games. In
addition, we could lose our exclusive broadcast rights during periodic competitive
bidding, or suffer damage to the marketplace value of sports advertising due to factors
such as a players strike, negative publicity or downturn in on-field performance of
a team.

# If cable systems and
other video distribution systems do not carry our new digital channels or we do not enter
into acceptable agreements with such systems, our revenue and results of operations may be
adversely affected.

Since our television stations are
highly dependent on carriage by cable systems in many of the areas they service, any
modifications to rules regarding the obligations of cable systems to carry digital
television signals in their local markets could result in some of our television stations
or channels not being carried on cable systems, which could adversely affect our revenue
and results of operations. Our television stations have the option to elect to negotiate
retransmission agreements with cable systems. If certain stations make this election and
we are unable to negotiate these agreements in a timely manner or on favorable economic
terms, some of our stations may not be carried on certain cables systems for a period of
time and our revenue and results of operations could be adversely affected. We may also be
unable to negotiate or renegotiate acceptable agreements with other types of video
distribution systems, which could also cause our revenue and results of operations to be
adversely affected.

If we cannot renew
our FCC broadcast licenses, our business will be impaired.

Our business depends upon maintaining
our broadcast licenses, which are issued by the FCC for a term of eight years and are
renewable. Pursuant to FCC rules, certain of our broadcast licenses that expired in 2006
and 2005 remain in effect pending processing by the FCC of their timely filed renewal
applications. Interested parties may challenge a renewal application. The FCC has the
authority to revoke licenses, not renew them, or renew them with conditions, including
renewals for less than a full term. We cannot assure you that our future renewal
applications will be approved, or that the renewals, even if granted, will not include
conditions or qualifications that could adversely affect our operations. If we fail to
renew any of our licenses, or renew them with substantial conditions or modifications
(including renewing one or more of our licenses for a term of fewer than eight years), it
could prevent us from operating the affected station and generating revenue from it.

The FCC may impose
sanctions or penalties for violations of rules or regulations.

If we or any of our officers,
directors or significant shareholders materially violate the FCCs rules and
regulations or are convicted of a felony or are found to have engaged in unlawful
anticompetitive conduct or fraud upon another government agency, the FCC may, in response
to a petition by a third party or on its own initiative, in its discretion, commence a
proceeding to impose sanctions upon us that could involve the imposition of monetary
penalties, the denial of a license renewal application, revocation of a broadcast license
or other sanctions. If the FCC were to issue an order denying a license renewal
application or revoking a license, we would be required to cease operating the broadcast
station only after we had exhausted all administrative and judicial review without
success. In addition, the FCC has recently emphasized more vigorous enforcement of
indecency standards and the prohibition on payola, which could result in
increased costs associated with the adoption and implementation of stricter compliance
procedures at our broadcast facilities or FCC fines.

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We could experience
delays in expanding our business due to antitrust laws.

The Federal Trade Commission, the
United States Department of Justice and the FCC carefully review our proposed business
acquisitions and dispositions under their respective regulatory authority, focusing on the
effects on competition, the number and types of stations owned in a market and the effects
on concentration of market revenue share. The Department of Justice has challenged
proposed acquisitions of radio stations, particularly in instances where an existing
licensee seeks to acquire additional radio stations in the same market. Some of these
challenges ultimately resulted in consent decrees requiring, among other things,
divestitures of certain stations. In general, the Department of Justice has more closely
scrutinized radio station acquisitions that result in local market shares in excess of 40%
of radio advertising revenue. Any delay, prohibition or modification required by
regulatory authorities could adversely affect the terms of a proposed transaction or could
require us to modify or abandon an otherwise attractive acquisition opportunity. The
filing of petitions or complaints against us or any FCC licensee from which we acquire a
station could result in the FCC delaying the grant of, refusing to grant or imposing
conditions on its consent to the assignment or transfer of control of licenses.

Regulatory changes
may result in increased competition in our radio and television broadcasting business.

The radio and television
broadcasting industry is subject to extensive and changing federal regulation. Among
other things, the Communications Act of 1934, as amended, and FCC rules and policies
require FCC approval for transfers of control and assignments of licenses, and limit the
number and types of broadcast properties in a market in which any person or entity may
have an attributable interest. Media ownership restrictions include a variety of limits
on local ownership, such as a limit of one television station in medium and smaller
markets and two stations in larger markets as long as one station is not a top-four rated
station (known as the duopoly rule), a prohibition on ownership of a daily
English-language newspaper and a television or radio station in the same market, and
limits both on the ownership of radio stations, and on common ownership of radio stations
and television stations, in the same local market. In response to a court order and to
satisfy its statutory obligation to conduct a quadrennial review of its media ownership
rules, the FCC undertook further review of changes to its ownership rules adopted in 2003
(the effectiveness of which had been stayed pending judicial review). In December, 2007,
the FCC adopted an order relaxing only the newspaper broadcast cross-ownership rule and
declining to make changes in its other broadcast ownership rules. The FCCs decision
to relax the newspaper broadcast cross-ownership rule in the top twenty markets is likely
to be subject to further consideration by the FCC and judicial review. It is impossible
to predict the outcome of this further review.

In addition, the 2004 Consolidated
Appropriations Act prohibits any person or entity from having an attributable interest in
broadcast television stations with an aggregate audience reach exceeding 39% of television
households nationally. The increase in the national television viewership cap gave the
largest television operators the ability to continue to hold or to acquire additional
stations, which may give them a competitive advantage over us, since they have much
greater financial and other resources than we have. In addition, the networks
ability to acquire additional stations could give them leverage over their
affiliates on issues such as compensation and program clearance, in part because of the
risk that a network facing an uncooperative affiliate could acquire a station in the
market and terminate its agreement with that affiliate.

Congress, the FCC or other federal
agencies may in the future consider and adopt new laws, regulations and policies regarding
a wide variety of matters that could, directly or indirectly, affect the operation,
ownership and profitability of our television and radio stations and result in the loss of
audience share and advertising revenue for our stations. Examples of such changes include:

| |  | proposals
to increase regulatory fees or to impose spectrum use or other fees on FCC licenses;
| | - | ----------------------------------------------------------------------------------------------

| |  | proposals
to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;
| | - | ----------------------------------------------------------------------------------------------

| |  | proposals
to limit the tax deductibility of advertising expenses by advertisers;
| | - | --------------------------------------------------------------------------------

| |  | proposals
to impose sales tax on advertising expense;
| | - | -----------------------------------------------------

| |  | proposals
to revise the rules relating to political broadcasting;
| | - | -----------------------------------------------------------------

| |  | proposals
to require broadcast stations to operate studios in the communities to which they are
licensed, requiring construction of new studios, and to provide staffing on a 24 hour per
day basis; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | proposals
to require radio broadcasters to pay royalties to musicians and record labels for the
performance of music played on the stations.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

# Risks Relating to
Our Printing Services Business and Other Segment

# Postal rate increases
and disruptions in postal services could lead to reduced volumes of business.

Our printing services business, as
well as our direct marketing business, has been negatively impacted from time to time
during the past years by postal rate increases. Rate increases may result in customers
mailing fewer pieces with reduced page counts. The USPS most recently increased postal
rates in May 2008. Additionally, the amount of mailings could be reduced in response to
disruptions in and concerns over the security of the United States mail system. Such
responses by customers could negatively impact us by decreasing the amount of printing and
direct marketing services or other services that our customers purchase from us, which
could result in decreased revenue.

# Revenue from our
direct marketing business may decline if our data and laser print personalization
products do notmaintain technological competitiveness.

Our direct marketing service business
is affected by the complexity and uncertainty of new technologies. If we are not able to
maintain technological competitiveness in our data and print personalization products,
processing functionality or software systems and services, we may not be able to provide
effective or efficient service to our customers, and our revenue may decline.

Changes in economic
conditions in the markets we serve may produce volatility in demand for our products and
services

Customers of our printing services
business and our direct marketing services business may reduce their spending during
economic downturns; a recession or economic downturn could have an adverse effect on our
financial condition and results of operations.

# Other Business Risks

# Our business has been
and may be in the future negatively affected by an impairment charge of goodwill,
broadcast licenses or other intangible assets.

Due to deteriorating macro-economic
factors, a prolonged adverse change in the business climate, deteriorating market
conditions and results and a further decline in our stock price, we performed interim
impairment testing of goodwill and intangible assets as of September 28, 2008. As a result
of the testing, we recorded a pre-tax, non-cash impairment charge related to four
television and 13 radio broadcast licenses of $38.8 million. After such charge, as of
September 28, 2008, we had a total of $459.6 million of goodwill, broadcast licenses and
other intangible assets on our balance sheet, representing 55.0% of our total assets. The
September 28, 2008 impairment charge had, and any future non-cash impairment charge of
goodwill, broadcast licenses or other intangible assets would have, an adverse effect on
our financial condition and results of operations.

# The current economic
crisis and volatility in US credit markets could affect our financing arrangements.

Given the current economic crisis,
including the current instability of financial institutions, one or more of the lenders in
our revolving credit facility syndicate could fail, refuse to fund future draws thereunder
or take other positions adverse to us. In such an event, our liquidity could be severely
restrained. In addition, our ability to meet our credit agreements financial
covenants may also be affected by events beyond our control, including a further
deterioration of current economic and industry conditions, which could negatively affect
our earnings. Because of the current volatility in US credit markets, obtaining new
financing arrangements or amending our existing one may result in significantly higher
fees and ongoing interest costs as compared to those in our current arrangement.

# We depend on key
personnel, and we may not be able to operate and grow our business effectively if we lose
the services of any of our senior executive officers or are unable to attract qualified
personnel in the future.

We are dependent upon the efforts of
our senior executive officers. The success of our business is heavily dependent on our
ability to retain our current management and to attract and retain qualified personnel in
the future. Competition for senior management personnel is intense, and we may not be able
to retain our personnel. We have not entered into employment agreements with our key
personnel, other than with our Chairman and Chief Executive Officer, and these individuals
may not continue in their present capacity with us for any particular period of time. We
have, however, entered into change in control agreements with certain of our senior
executives which provide, within two years after a change in control, severance payments
and benefits to the executive if his or her employment is terminated without cause or the
executive resigns for good reason. We do not have key man insurance for any of our
executive officers or key personnel. The loss of any senior executive officer could
require the remaining executive officers to divert immediate and substantial attention to
seeking a replacement. Our inability to find a replacement for any departing executive
officer on a timely basis could adversely affect our ability to operate and grow our
business.

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Our business may be
negatively affected by work stoppages, slowdowns or strikes by our employees.

Currently, there are 11 bargaining
units representing approximately 700 (or approximately 18%) of our total number of
employees. We have entered into various collective bargaining agreements with these
bargaining units. Nine of these agreements will expire within the next two years and one
agreement covering 42 employees of our broadcasting business expired in February 2008.
These employees continue to work without a contract. We are currently renegotiating one
agreement, which expires at the end of 2008, covering 204 employees of our daily
newspaper. A majority of the employees covered by a collective bargaining agreement work
at the daily newspaper. We cannot assure you of the results of negotiations of future
collective bargaining agreements, whether future collective bargaining agreements will be
negotiated without interruptions in our businesses, or the possible impact of future
collective bargaining agreements on our financial condition and results of operations. We
also cannot assure you that strikes will not occur in the future in connection with labor
negotiations or otherwise. Any prolonged strike or work stoppage could have a material
adverse effect on our financial condition and results of operations.

# ITEM 2.    UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides
information about our repurchases of our class A common stock in the third quarter ended
September 28, 2008:

# Issuer Purchases of
Equity Securities

|                                     
|-------------------------------------
|Period                               
|June 30, 2008 to July 27, 2008       
|July 28, 2008 to August 24, 2008     
|August 25, 2008 to September 28, 2008

| | (1) | These
shares were purchased pursuant to a repurchase program publicly announced
               on May 1, 2008, and commenced on May 12, 2008, pursuant to which our board
of                directors authorized the repurchase of up to 5,000,000 class A shares
over the                following 18 months. These shares will remain authorized but
unissued.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 3.    DEFAULTS UPON
SENIOR SECURITIES

None.

# ITEM 4.    SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS

None.

# ITEM 5.    OTHER INFORMATION

None.

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# ITEM 6.    EXHIBITS

(a) Exhibits

|Exhibit No. | Description                                                                                                                              
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------
|(31.1)      | Certification by Steven J. Smith, Chairman and Chief Executive Officer of Journal Communications, Inc.,                                  
|            | pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                               
|(31.2))     | Certification by Paul M. Bonaiuto, Executive Vice President and Chief Financial Officer of Journal                                       
|            | Communications, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|(32)        | Certification of Steven J. Smith, Chairman and Chief Executive Officer and Paul M. Bonaiuto, Executive Vice President and Chief Financial
|            | Officer of Journal Communications, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                              
|            | 906 of the Sarbanes-Oxley Act of 2002.                                                                                                   

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SIGNATURES

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

|                       |                                                                       
|---------------------- | ----------------------------------------------------------------------
|                       | JOURNAL COMMUNICATIONS, INC.                                          
|                       | Registrant                                                            
|Date: November 7, 2008 | /s/ Steven J. Smith                                                   
|                       | Steven J. Smith, Chairman and Chief Executive Officer                 
|Date: November 7, 2008 | /s/ Paul M. Bonaiuto                                                  
|                       | Paul M. Bonaiuto, Executive Vice President and Chief Financial Officer

50