# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, 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: March 30, 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 May 1, 2008 (excluding 8,676,705 shares
of class B common stock held by our subsidiary, The Journal Company):

|Class                | Outstanding at May 1, 2008
|-------------------- | --------------------------
|Class A Common Stock | 41,991,061                
|Class B Common Stock | 10,876,499                
|Class C Common Stock | 3,264,000                 

---

# JOURNAL
COMMUNICATIONS, INC.

# INDEX

|         |                       |                                                                
|-------- | --------------------- | ---------------------------------------------------------------
|         |                       |                                                                
|Part I.  | Financial Information |                                                                
|         | Item 1.               | Financial Statements                                           
|         |                       | Unaudited Consolidated Condensed Balance Sheets as of          
|         |                       | March 30, 2008 and December 30, 2007                           
|         |                       | Unaudited Consolidated Condensed Statements of Earnings        
|         |                       | for the First Quarter Ended March 30, 2008 and April 1, 2007   
|         |                       | Unaudited Consolidated Condensed Statement of                  
|         |                       | Shareholders Equity for the First Quarter Ended March 30, 2008
|         |                       | Unaudited Consolidated Condensed Statements of                 
|         |                       | Cash Flows for the First Quarter Ended March 30, 2008          
|         |                       | and April 1, 2007                                              
|         |                       | Notes to Unaudited Consolidated Condensed                      
|         |                       | Financial Statements as of March 30, 2008                      
|         | Item 2.               | Managements Discussion and Analysis of Financial Condition    
|         |                       | and Results of Operations                                      
|         | Item 3.               | Quantitative and Qualitative Disclosure of Market Risk         
|         | Item 4.               | Controls and Procedures                                        
|Part II. | Other Information    
|         | Item 1.               | Legal Proceedings                                              
|         | Item 1A.              | Risk Factors                                                   
|         | Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds    
|         | Item 3.               | Defaults Upon Senior Securities                                
|         | Item 4.               | Submission of Matters to a Vote of Security Holders            
|         | Item 5.               | Other Information                                              
|         | Item 6.               | Exhibits                                                       

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)

|                                                                     | March 30, 2008 | December 30, 2007
|-------------------------------------------------------------------- | -------------- | -----------------
|ASSETS                                                               |                |                  
|Current assets:                                                      |                |                  
|Cash and cash equivalents                                            |                |                  
|Receivables, less allowance for doubtful accounts                    |                |                  
|of $4,046 and $4,031                                                 |                |                  
|Inventories, net                                                     |                |                  
|Prepaid expenses                                                     |                |                  
|Deferred income taxes                                                |                |                  
|                                                                     |                |                  
|TOTAL CURRENT ASSETS                                                 |                |                  
|Property and equipment, at cost, less accumulated depreciation       |                |                  
|of $221,222 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                                                     |                |                  
|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 March 30, 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 March 30, 2008 and December 30, 2007             |                |                  
|Class B - authorized 120,000,000 shares; issued and outstanding:     |                |                  
|10,945,292 shares at March 30, 2008 and 11,528,044                   |                |                  
|shares at December 30, 2007                                          |                |                  
|Class A - authorized 170,000,000 shares; issued and outstanding:     |                |                  
|41,875,995 shares at March 30, 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)

|                                                                | First Quarter 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                             |                    
|                                                                |                    
|Total operating costs and expenses and selling                  |                    
|and administrative expenses                                     |                    
|                                                                |                    
|Operating earnings                                              |                    
|Other income and expense:                                       |                    
|Interest income                                                 |                    
|Interest expense                                                |                    
|                                                                |                    
|Total other income and (expense)                                |                    
|                                                                |                    
|Earnings from continuing operations before income taxes         |                    
|Provision for income taxes                                      |                    
|                                                                |                    
|Earnings from continuing operations                             |                    
|Gain from discontinued operations, net of applicable income tax |                    
|expense of $0 and $41,791, respectively                         |                    
|                                                                |                    
|Net earnings                                                    |                    
|                                                                |                    
|Earnings per share:                                             |                    
|Basic - Class A and B common stock:                             |                    
|Continuing operations                                           |                    
|Discontinued operations                                         |                    
|                                                                |                    
|Net earnings                                                    |                    
|                                                                |                    
|Diluted - Class A and B Common Stock:                           |                    
|Continuing operations                                           |                    
|Discontinued operations                                         |                    
|                                                                |                    
|Net earnings                                                    |                    
|                                                                |                    
|Basic and diluted - Class C common stock:                       |                    
|Continuing operations                                           |                    
|Discontinued operations                                         |                    
|                                                                |                    
|Net earnings                                                    |                    
|                                                                |                    

See accompanying notes
to unaudited consolidated condensed financial statements.

3

---

Journal Communications,
Inc.                                 Unaudited Consolidated Condensed Statement of
Shareholders Equity             For the First Quarter Ended March 30, 2008
         (dollars in thousands, except per-share amounts)

|                                                          | Preferred | Common Stock | Additional | Accumulated
Other
Comprehensive | Retained | Treasury
Stock, |    | Comprehensive
|--------------------------------------------------------- | --------- | ------------ | ---------- | ------------------------------- | -------- | --------------- | -- | -------------
|
|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 |              
|                                                          |           |              |            |                                 |          |                 |    |              

See accompanying notes
to unaudited consolidated condensed financial statements.

4

---

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

|                                                                  | First Quarter Ended
|----------------------------------------------------------------- | -------------------
|
|Cash flow from operating activities:                              |                    
|Net earnings                                                      |                    
|Less gain from discontinued operations                            |                    
|                                                                  |                    
|Earnings from continuing operations                               |                    
|Adjustments for non-cash items:                                   |                    
|Depreciation                                                      |                    
|Amortization                                                      |                    
|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                                              |                    
|DISCONTINUED OPERATIONS                                           |                    
|                                                                  |                    
|NET DECREASE IN CASH AND CASH EQUIVALENTS                         |                    
|Cash and cash equivalents:                                        |                    
|Beginning of year                                                 |                    
|                                                                  |                    
|At March 30, 2008 and April 1, 2007                               |                    
|                                                                  |                    

See accompanying notes
to unaudited consolidated condensed financial statements.

5

---

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 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 generally accepted accounting principles in the
United States 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 first quarter of 2008. The
operating results for the first quarter ended March 30, 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
2008, the FASB issued EITF Issue No. 06-11, Accounting for Income Tax Benefits of
Dividends on Share-Based Payment Awards. EITF Issue No. 06-11 clarifies the
accounting for income tax benefits related to the payment of dividends on
equity-classified employee share-based payment awards that are charged to retained
earnings under FASB Statement No. 123 (Revised 2004), Share-Based Payment. We
adopted EITF Issue No. 06-11 in the first quarter of 2008. The effect of adopting EITF
Issue No. 06-11 did not have a material impact on our consolidated financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 2007, the FASB issued Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities  Including an Amendment of FASB
Statement No. 115.This standard permits an entity the option to measure many
financial assets and liabilities and certain other assets and liabilities at fair value
on an instrument-by-instrument basis beginning after November 15, 2007.  We adopted
Statement No. 159 in the first quarter of 2008. There was no impact on the first quarter
2008 consolidated condensed financial statements as a result of the adoption because the
fair value option was not elected for any of our existing financial assets and
liabilities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

---

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

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

| | In
September 2006, the FASB issued Statement No. 157, Fair Value Measurements, which
provides guidance for using fair value to measure assets and liabilities. Statement No.
157 applies whenever other standards require (or permit) assets or liabilities to be
measured at fair value but does not expand the use of fair value in any new
circumstances. Under Statement No. 157, fair value refers to the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants in the market in which the reporting entity transacts. In
this standard, the FASB clarifies the principle that fair value should be based on the
assumptions market participants would use when pricing the asset or liability. In support
of this principle, Statement No. 157 establishes a fair value hierarchy that prioritizes
the information used to develop those assumptions. The fair value hierarchy gives the
highest priority to quoted prices in active markets and the lowest priority to
unobservable data, for example, the reporting entitys own data. Under the standard,
fair value measurements would be separately disclosed by level within the fair value
hierarchy. 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. In accordance with the new
rule, we adopted Statement No. 157 for all financial assets and liabilities. There was no
impact in the first quarter 2008 consolidated condensed financial statements as a result
of the adoption because we do not currently record any financial assets or liabilities at
fair value. We will adopt Statement No. 157 for nonfinancial assets and liabilities in
the first quarter of 2009. We expect the standard to have the most significant impact on
our determination of fair value in acquisition accounting and impairment analysis of
long-lived assets, goodwill, broadcast licenses and other intangible assets.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | 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
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 class A, class B
and                class C 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
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.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | 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 the class A, class B and class C common
stock due to the lack of any contractual participation rights of any class to those
undistributed earnings. The weighted average number of class A and B and class C shares
outstanding for basic earnings per share exclude non-vested restricted stock.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

---

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. The first quarter of 2007 has been restated to conform to the first quarter of 2008 presentation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                 | First Quarter Ended
|---------------------------------------------------------------- | -------------------
|
|Numerator for basic earnings from continuing operations per      |                    
|class A and B and class C common stock:                          |                    
|Earnings from continuing operations                              |                    
|Less dividends:                                                  |                    
|Class A and B                                                    |                    
|Class C                                                          |                    
|                                                                 |                    
|Total undistributed earnings from continuing operations          |                    
|                                                                 |                    
|Class A and B undistributed earnings from continuing operations  |                    
|Class C undistributed earnings from continuing operations        |                    
|                                                                 |                    
|Total undistributed earnings from continuing operations          |                    
|                                                                 |                    
|Numerator for basic earnings from continuing operations          |                    
|per class A and B common stock:                                  |                    
|Dividends on class A and B                                       |                    
|Class A and B undistributed earnings                             |                    
|                                                                 |                    
|Numerator for basic earnings 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 from continuing operations        |                    
|for class A and B and class C common stock:                      |                    
|Weighted average shares outstanding -class A and B               |                    
|Weigthed average shares outstanding - class C                    |                    
|Basic earnings per share from continuing operations              |                    
|Class A and B                                                    |                    
|                                                                 |                    
|Class C                                                          |                    
|                                                                 |                    
|Numerator for basic earnings from discontinued operations per    |                    
|class A and B and class C common stock:                          |                    
|Total undistributed earnings from discontinued operations        |                    
|                                                                 |                    
|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 class A and B and class C common stock:                      |                    
|Weighted average shares outstanding - class A and B              |                    
|Weighted average shares outstanding - class C                    |                    
|Basic earnings per share from discontinued operations            |                    
|Class A and B                                                    |                    
|                                                                 |                    
|Class C                                                          |                    
|                                                                 |                    

8

---

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

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

|                                                                 | First Quarter Ended
|---------------------------------------------------------------- | -------------------
|
|Numerator for basic net earnings per class A and B and           |                    
|class C common stock:                                            |                    
|Net earnings                                                     |                    
|Less dividends:                                                  |                    
|Class A and B                                                    |                    
|Class C                                                          |                    
|                                                                 |                    
|Total undistributed net earnings                                 |                    
|                                                                 |                    
|Class A and B undistributed net earnings                         |                    
|Class C undistributed net earnings                               |                    
|                                                                 |                    
|Total undistributed net earnings                                 |                    
|                                                                 |                    
|Numerator for basic net earnings per class A and B common stock: |                    
|Dividends on class A and B                                       |                    
|Class A and B undistributed net earnings                         |                    
|                                                                 |                    
|Numerator for basic net earnings 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        |                    
|                                                                 |                    
|Denominator for basic net earnings for class A and B and         |                    
|Class C common stock:                                            |                    
|Weighted average shares outstanding - class A and B              |                    
|Weighted average shares outstanding - class C                    |                    
|Basic net earnings per share                                     |                    
|Class A and B                                                    |                    
|                                                                 |                    
|Class C                                                          |                    
|                                                                 |                    

| | The
following table sets forth restated basic earnings per share calculations using the
two-class method for the second, third and fourth quarters of 2007 and for the years
2007, 2006 and 2005 to conform to the 2008 presentation:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                    | Second Quarter | Third Quarter | Fourth Quarter
|----------------------------------- | -------------- | ------------- | --------------
|Earnings per share:                 |                |               |               
|Basic - Class A and B common stock: |                |              
|Continuing operations               |                |               | $             
|Discontinued operations             |                |               |               
|                                    |                |               |               
|Net earnings                        |                |               | $             
|                                    |                |               |               
|Basic - Class C common stock:       |                |              
|Continuing operations               |                |               | $             
|Discontinued operations             |                |               |               
|                                    |                |               |               
|Net earnings                        |                |               | $             
|                                    |                |               |               
|                                   
|
|Earnings per share:                 |                |              
|Basic - Class A and B common stock: |                |              
|Continuing operations               |                |               | $             
|Discontinued operations             |                |               |               
|                                    |                |               |               
|Net earnings                        |                |               | $             
|                                    |                |               |               
|Basic - Class C common stock:       |                |              
|Continuing operations               |                |               | $             
|Discontinued operations             |                |               |               
|                                    |                |               |               
|Net earnings                        |                |               | $             
|                                    |                |               |               

9

---

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

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

| | Diluted
earnings per share for the first quarter of 2007 is computed based upon the assumption
that the class C shares outstanding were converted into class A and B shares, 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.  Diluted earnings per share for the first quarter of 2008 is computed based upon
the assumption that the class C shares were not converted as they are anti-dilutive.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|                                                            | First Quarter Ended
|----------------------------------------------------------- | -------------------
|
|Numerator for diluted net earnings per share:               |                    
|Dividends on class A and B common stock                     |                    
|Dividends on class C common stock                           |                    
|Total undistributed earnings from continuing operations     |                    
|Total undistributed earnings from discontinued operations   |                    
|                                                            |                    
|Net earnings                                                |                    
|                                                            |                    
|Denominator for diluted net earnings per share:             |                    
|Weighted average shares outstanding - class A and B         |                    
|Assumed exercise of stock appreciation rights net of common |                    
|Shares assumed repurchased with the proceeds                |                    
|Impact of non-vested restricted stock                       |                    
|Conversion of class C shares                                |                    
|                                                            |                    
|Adjusted weighted average shares outstanding                |                    
|                                                            |                    
|Diluted earnings per share:                                 |                    
|Continuing operations                                       |                    
|Discontinued operations                                     |                    
|                                                            |                    
|Net earnings                                                |                    
|                                                            |                    

| | Diluted
earnings per share for the class C common stock is the same as basic earnings 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).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5 | 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 (SARs), 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 March 30,
2008, there are 4,744,031 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

---

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

|5 | STOCK-BASED
COMPENSATION continued
|- | ----------------------------------

| | During
the first quarter ended March 30, 2008 and April 1, 2007, we recognized $356 and $348,
respectively, in stock-based compensation expense, including $0 and $96, respectively,
recorded in gain from discontinued operations. Total income tax benefit recognized
related to stock-based compensation for the first quarter ended March 30, 2008 and April
1, 2007 was $139 and $138, 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. There was no impact on cash flows from operating or financing activities
associated with stock-based compensation during the first quarter of 2008 because there
were no options exercised. As of March 30, 2008, total unrecognized compensation cost
related to stock-based compensation awards was $2,832, net of estimated forfeitures,
which we expect to recognize over a weighted average period of 1.5 years. Stock-based
compensation expense is reported in selling and administrative expenses and gain on
discontinued operations 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There
has been no stock option activity during the first quarter of 2008.
| | -------------------------------------------------------------------------

|                                             
|---------------------------------------------
|Outstanding at December 30, 2007             
|Outstanding and exercisable at March 30, 2008

| | The
aggregate intrinsic value of stock options outstanding and exercisable at the end of the
first quarter of 2008 is zero because the fair market value of our class B common stock
on March 30, 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 first quarter 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 |  

11

---

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

|5 | STOCK-BASED
COMPENSATION continued
|- | ----------------------------------

| | 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
summary of SAR activity during the first quarter of 2008 is:
| | --------------------------------------------------------------

|                                
|--------------------------------
|Outstanding at December 30, 2007
|Granted                         
|                                
|Outstanding at March 30, 2008   
|                                
|Exercisable at March 30, 2008   
|                                

| | The
aggregate intrinsic value of the SARs outstanding and exercisable at the end of the first
quarter of 2008 is zero because the fair market value of our class B common stock on
March 30, 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 first quarter of 2008 is:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               
|-------------------------------
|Non-vested at December 30, 2007
|Granted                        
|Vested                         
|Forfeited                      
|                               
|Non-vested at March 30, 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 1.9 years. The total fair value of shares vesting during the
first quarter of 2008 was $663. There were 54,928 vested unrestricted and non-vested
restricted stock grants issued to our directors and employees in the first quarter of
2007 at a weighted average fair value of $13.31, 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 35,789 class B common shares sold to employees under this
plan in the first quarter of 2008 at a weighted average fair value of $8.05. As of March
30, 2008, there are 2,698,338shares available for sale under the plan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

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

|6 | 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 2004 through 2006 tax returns are open for federal
purposes, and our 2003 through 2006 tax returns remain open for state tax purposes,
unless the statute of limitations has been previously extended. Currently, we are under
audit in Wisconsin, Illinois, and Kansas.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of March 30, 2008, our liability for unrecognized tax benefits was $4,598, which, if
recognized, $4,485 would have an impact on our effective tax rate. Our liability includes
$2,381 accrued for tax positions and $2,217 accrued for interest and penalties. During
the first quarter of 2008, we recognized $237 in interest expense. We recognize penalties
and interest related to unrecognized tax benefits in our provision for income taxes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is possible for $220 of unrecognized tax benefits and related interest to be recognized
within the next 12 months due to settlements with taxing authorities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|7 | INVENTORIES
|- | -----------

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

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

|8 | NOTES
PAYABLE TO BANKS
|- | ----------------------

| | We
have a $475.0 million 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 March 30, 2008, we had borrowings of $210.1 million under the
facility at a weighted average rate of 3.39%. Fees in connection with the facility of
$1,717 are being amortized over the term of the facility using the straight-line method
which approximates the effective-interest method.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9 | 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 $1,495 as of March 30, 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

---

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

|10 | 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 (credit) included in total operating costs |                 
|and expenses and selling and administrative expenses                 |                 
|                                                                     |                 

| | 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 reflects 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 is based upon a 5.75%
discount rate.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                | 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                |                              
|                                                                |                              

|11 | GOODWILL
AND OTHER INTANGIBLE ASSETS
|-- | ------------------------------------

| | 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 $492 and $476 for the first quarter of 2008 and 2007, respectively. Estimated
amortization expense for our next five fiscal years is $1,904 for 2008, $1,658 for 2009,
$1,608 for 2010, $1,250 for 2011 and $1,168 for 2012.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---

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

|11 | GOODWILL
AND OTHER INTANGIBLE ASSETS continued
|-- | ----------------------------------------------

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

|                               | Gross
Carrying
Amount | Accumulated
Amortization | Net
Carrying
Amount
|------------------------------ | --------------------- | ------------------------ | -------------------
|March 30, 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
$225,507 and $223,529 as of March 30, 2008 and December 30, 2007, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Goodwill
The adjustments in the carrying amount of goodwill for the first quarter ended March 30,
2008 is as follows:
| | ---------------------------------------------------------------------------------------------------------------------

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

| | The
adjustments in the carrying amount of goodwill in the first quarter ended March 30, 2008
represent the acquisition of KPSE-LP, Channel 50, in Palm Springs, California.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

---

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

|12 | 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 preliminary settlement
with the Environmental Protection Agency for a 2007 initial assessment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Community
newspapers and shoppers In 2007, Journal Community Publishing Group, Inc., our community
newspapers and shopper business, 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 first quarter of 2007:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | First Quarter Ended
|---------------------------- | -------------------
|
|Revenue                      |                    
|Earnings before income taxes |                    

| | Norlight
Telecommunications, Inc. On February 26, 2007, Q-Comm acquired 100% of the stock of
Norlight, our former telecommunications subsidiary. 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 first quarter of 2007:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | First Quarter Ended
|---------------------------- | -------------------
|
|Revenue                      |                    
|Earnings before income taxes |                    

|13 | WORKFORCE
REDUCTION AND BUSINESS IMPROVEMENT INITIATIVES
|-- | --------------------------------------------------------

| | In
2007, we recorded a pre-tax charge of $3,106 for separation benefits at our daily
newspaper for 57 employees. We paid $2,849 in separation benefits in 2007 and recorded a
liability of $257 for expected payments in the first quarter of 2008. We paid $251 in
separation benefits in the first quarter of 2008 and adjusted the remaining liability of
$6.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

---

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

|14 | 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.
Our publishing segment consists of the Milwaukee Journal Sentinel, which serves as
the only major daily newspaper for the Milwaukee metropolitan area, and 51 community
newspapers and shoppers in two states. Our broadcasting segment consists of 35 radio
stations and 11 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, depreciation and amortization and
capital expenditures from continuing operations for the first quarter ended March 30,
2008 and April 1, 2007 and identifiable total assets at March 30, 2008 and December 30,
2007.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              | First Quarter Ended
|----------------------------- | -------------------
|
|Revenue                       |                    
|Publishing                    |                    
|Broadcasting                  |                    
|Printing service              |                    
|Other                         |                    
|                              |                    
|                              |                    
|                              |                    
|Operating earnings            |                    
|Publishing                    |                    
|Broadcasting                  |                    
|Printing services             |                    
|Other                         |                    
|                              |                    
|                              |                    
|                              |                    
|Depreciation and amortization |                    
|Publishing                    |                    
|Broadcasting                  |                    
|Printing services             |                    
|Other                         |                    
|                              |                    
|                              |                    
|                              |                    
|Capital expenditures          |                    
|Publishing                    |                    
|Broadcasting                  |                    
|Printing services             |                    
|Other                         |                    
|                              |                    
|                              |                    
|                              |                    

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

17

---

# 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 first quarter ended March 30, 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 the Private
Securities Litigation Reform Act of 1995. 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;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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.

18

---

# 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 52 community newspapers and
shoppers in two states. Our broadcasting segment consists of 35 radio stations and 11
television stations in 12 states and the operation of a television station under a local
marketing agreement. Our interactive media assets include more than 121 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 two 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 recent 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 first quarter of 2008
and we expect them to continue in future periods.

Our publishing business was
challenged in the first quarter of 2008. Classified advertising revenue decreased $3.5
million in the first quarter of 2008 compared to the first quarter of 2007 primarily in
the employment and real estate categories. Retail advertising also decreased in the first
quarter of 2008 compared to the first quarter of 2007 with weakness in a number of
categories, including home improvement, automotive, communications, airline and travel,
department stores and real estate. Our pursuit of new media initiatives resulted in
Interactive revenue increasing 17.3% to $3.6 million at our publishing businesses in the
first quarter of 2008 compared to the first quarter of 2007. In an effort to offset the
negative effect of advertising revenue decreases, our publishing businesses focused on
expense controls which caused expenses to decrease by 8.1% in the first quarter of 2008
compared to the first quarter of 2007.

During the first quarter of 2008, the
daily newspaper joined the consortium among Yahoo! and a group of leading U.S. newspaper
companies to combine the newspapers local news and advertising with the technologies
and audience of Yahoo!, an important global Internet brand and one of the most trafficked
Internet destinations worldwide. We believe this strategic partnership will enhance our
daily newspapers Interactive advertising revenue.

During the first quarter of 2008, our
community newspapers and shoppers business completed the acquisitions of two weekly paid
newspapers and two free shoppers in Wisconsin, reflecting our plan to deepen our local
media offerings in the state.

Our broadcasting business was also
challenged in the first quarter of 2008 due to a decrease in local and national
advertising revenue led by decreases in the automotive category. These revenue decreases
were partially offset by an increase in political and issue advertising revenue,
developmental revenue and Interactive advertising revenue. Expenses at our broadcasting
business were up 1.2% in the first quarter of 2008 compared to the first quarter of 2007
reflecting our investments in programming and enhanced technologies to serve the viewers
and advertisers in our television markets.

In the first quarter of 2008, we
signed an asset purchase agreement to purchase KWBA-TV in Sierra Vista, Arizona. KWBA-TV
is affiliated with the CW Network and serves the Tucson, Arizona television market where
we currently own KGUN-TV, the ABC affiliate, and four radio stations. We believe owning
multi-media businesses in this growth market will help us increase our local news focus
and better serve our viewers and listeners.

Revenue at our printing services
business decreased 2.1% in the first quarter of 2008 compared to the first quarter of 2007
primarily due to a decrease in the printing of publications and manuals. Operating
earnings at our printing services business decreased due to the decrease in revenue, an
increase in health care costs and prior year non-recurring lease income. Revenue at our
direct marketing services business decreased 4.9% in the first quarter of 2008 compared to
the first quarter of 2007 primarily due to a decrease in mailing services revenue.

# Results of Operations

| | First
Quarter Ended March 30, 2008 compared to the First Quarter Ended April 1, 2007
| | ------------------------------------------------------------------------------------

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

Our consolidated revenue in the first
quarter of 2008 was $134.3 million, a decrease of $8.9 million, or 6.2%, compared to
$143.2 million in the first quarter of 2007. Our consolidated operating costs and expenses
in the first quarter of 2008 were $77.3 million, a decrease of $3.1 million, or 3.8%,
compared to $80.4 million in the first quarter of 2007. Our consolidated selling and
administrative expenses in the first quarter of 2008 were $44.4 million, a decrease of
$1.8 million, or 3.9%, compared to $46.2 million in the first quarter of 2007.

19

---

The following table presents our
total revenue by segment, total operating costs and expenses, selling and administrative
expenses and total operating earnings as a percent of total revenue for the first quarter
of 2008 and the first quarter of 2007:

|                                               | 2008 | Percent of
Total
Revenue | 2007 | Percent of
Total
Revenue
|---------------------------------------------- | ---- | ------------------------ | ---- | ------------------------
|
|Revenue:                                       |      |                          |      |                         
|Publishing                                     |      |                          | $    | 60.7                    
|Broadcasting                                   |      |                          |      | 49.4                    
|Printing services                              |      |                          |      | 16.5                    
|Other                                          |      |                          |      | 7.7                     
|                                               |      |                          |      |                         
|Total revenue                                  |      |                          |      | 134.3                   
|Total operating costs and expenses             |      |                          |      | 77.3                    
|Selling and administrative expenses            |      |                          |      | 44.4                    
|                                               |      |                          |      |                         
|Total operating costs and expenses and selling |      |                         
|and administrative expenses                    |      |                          |      | 121.7                   
|                                               |      |                          |      |                         
|Total operating earnings                       |      |                          | $    | 12.6                    
|                                               |      |                          |      |                         

The decrease in total revenue was due
to a decrease in classified ROP advertising, primarily for employment and real estate at
our publishing businesses, a decrease in local advertising revenue at our television
stations, a decrease in retail ROP advertising at our publishing businesses, a decrease in
local advertising revenue at our radio stations, a decrease in national advertising
revenue at our television stations, a decrease in mailing services revenue at our direct
marketing services business, a decrease in circulation revenue and national advertising
revenue at our daily newspaper and a decrease in revenue from the printing of publications
and manuals at our printing services business. These revenue decreases were partially
offset by an increase in political and issue advertising revenue at our television
stations, an increase in Interactive advertising revenue at our publishing and
broadcasting businesses and an increase in developmental revenue at our broadcasting
business.

The decrease in total operating costs
and expenses was due to a decrease in newsprint and paper costs at our daily newspaper, a
decrease in broadcasting rights fees for Milwaukee Bucks basketball games, a
decrease in operating costs associated with the decrease in direct marketing and brokered
printing revenue at our daily newspaper, a decrease in material costs at our daily
newspaper and printing services business due to the decrease in revenue and a decrease in
payroll and retirement benefit costs at our daily newspaper and direct marketing services
business due to workforce reductions in 2007 and other labor savings. These cost decreases
were partially offset by an increase in news and programming expenses at our television
stations and an increase in health care costs at all of our businesses.

The decrease in selling and
administrative expenses is primarily due to a decrease in payroll and retirement benefit
costs at our publishing and broadcasting businesses, costs associated with a lease
termination in the first quarter of 2007 at our community newspapers and shoppers business
and decreases in advertising and legal expenses at our publishing and broadcasting
businesses. These decreases were partially offset by an increase in health care costs at
all of our businesses.

Our consolidated operating earnings
in the first quarter of 2008 were $12.6 million, a decrease of $4.0 million, or 24.3%,
compared to $16.6 million in the first quarter of 2007. The following table presents our
operating earnings by segment for the first quarter of 2008 and the first quarter of 2007:

|                         | 2008 | Percent of
Total
Operating
Earnings | 2007 | Percent of
Total
Operating
Earnings
|------------------------ | ---- | ----------------------------------- | ---- | -----------------------------------
|
|Publishing               |      |                                     | $    | 4.3                                
|Broadcasting             |      |                                     |      | 7.1                                
|Printing services        |      |                                     |      | 0.8                                
|Other                    |      |                                     |      | 0.4                                
|                         |      |                                     |      |                                    
|Total operating earnings |      |                                     | $    | 12.6                               
|                         |      |                                     |      |                                    

The decrease in total operating
earnings was primarily due to the operating earnings impact from the decrease in revenue
across all of our businesses.

20

---

Our consolidated EBITDA in the first
quarter of 2008 was $19.9 million, a decrease of $4.2 million, or 17.4%, compared to $24.1
million in the first quarter of 2007. We define EBITDA as net earnings excluding gain from
discontinued operations, net, provision for income taxes, total other expense, net (which
is entirely comprised of interest income and expense), depreciation and amortization. Our
management uses EBITDA, among other things, to evaluate our operating performance and to
value prospective acquisitions. EBITDA is not a measure of performance calculated in
accordance with accounting principles generally accepted in the United States. 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. 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 EBITDA for the first
quarter of 2008 and the first quarter of 2007:

|                                       | 2008 | 2007
|-------------------------------------- | ---- | ----
|
|Net earnings                           |      |     
|Gain from discontinued operations, net |      |     
|Provision for income taxes             |      |     
|Total other expense, net               |      |     
|Depreciation                           |      |     
|Amortization                           |      |     
|                                       |      |     
|EBITDA                                 |      |     
|                                       |      |     

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

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

Revenue from publishing in the first
quarter of 2008 was $60.7 million, a decrease of $5.7 million, or 8.6%, compared to $66.4
million in the first quarter of 2007. Operating earnings from publishing were $4.3
million, a decrease of $0.7 million, or 15.8%, compared to $5.0 million in the first
quarter of 2007.

The following table presents our
publishing revenue by category and operating earnings for the first quarter of 2008 and
the first 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 first
quarter of 2008 accounted for 70.8% of total publishing revenue compared to 73.2% in the
first quarter of 2007.

Retail advertising revenue in the
first quarter of 2008 was $26.6 million, a decrease of $1.3 million, or 4.6%, compared to
$27.9 million in the first quarter of 2007. The $0.9 million decrease at our daily
newspaper was primarily due to a decrease in ROP advertising, primarily in the automotive,
home improvement, food/furnishings, airline and travel, communications and real estate
categories, partially offset by increases in ROP advertising in the small to mid-sized
retailers and finance/insurance categories. Retail preprint advertising decreased in the
home improvement, communications and department stores categories. These decreases were
partially offset by an increase in Interactive and specialty magazine advertising in the
first quarter of 2008. The $0.4 million decrease at our community newspapers and shoppers
was primarily due to decreases in automotive, real estate and health care advertising.

21

---

Classified advertising revenue in the
first quarter of 2008 was $13.5 million, a decrease of $3.5 million, or 20.6%, compared to
$17.0 million in the first quarter of 2007. Decreases in ROP and Market Place, our TMC
(total market coverage) product, classified advertising at our daily newspaper were
partially offset by an increase in Interactive classified advertising. The $3.2 million
decrease in ROP 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 $1.2 million and automotive advertising of $0.1
million. Employment advertising accounted for 43.3% of classified advertising revenue at
the daily newspaper in the first quarter of 2008. The $0.3 million decrease in classified
advertising revenue at our community newspapers and shoppers is primarily due to a
decrease in automotive advertising.

Interactive advertising revenue is
reported in the various advertising revenue categories. Total retail and classified
Interactive advertising revenue at our publishing businesses was $3.6 million in the first
quarter of 2008, an increase of $0.5 million, or 17.3%, compared to $3.1 million in the
first quarter of 2007 primarily due to an increase in sponsorships and classified packages
sold.

National advertising revenue in the
first quarter of 2008 was $2.0 million, a decrease of $0.4 million, or 17.4%, compared to
$2.4 million in the first quarter of 2007. The decrease was due to a decrease in national
ROP advertising in the airline and travel and communications categories and a decrease in
national preprint advertising in the business services category.

Direct marketing revenue, consisting
of revenue from direct mail products of our daily newspaper, was $0.8 million in the first
quarter of 2008, a decrease of $0.3 million, or 28.8%, compared to $1.1 million in the
first quarter of 2007 primarily due to a decrease in postage amounts billed to customers
and a decrease in direct mail products sold.

Other advertising revenue, consisting
of revenue from company-sponsored event advertising at our community newspapers and
shoppers, was $0.1 million in the first quarter of 2008, a decrease of $0.1 million, or
40.1%, compared to $0.2 million in the first quarter of 2007.

Circulation revenue in the first
quarter of 2008 accounted for 20.8% of total publishing revenue compared to 19.6% in the
first quarter of 2007. Circulation revenue of $12.6 million in the first quarter of 2008
decreased $0.4 million, or 3.6%, compared to $13.0 million in the first quarter of 2007
primarily due to decreases in Sunday and daily average net paid circulation, partially
offset by an increase in the daily average rate per copy at our daily newspaper.

Other revenue, which consists of
revenue from commercial printing at the printing plants for our community newspapers and
shoppers and promotional, distribution and commercial printing revenue at our daily
newspaper, accounted for 8.4% of total publishing revenue in the first quarter of 2008
compared to 7.2% in the first quarter of 2007. Other revenue in the first quarter of 2008
was $5.1 million, an increase of $0.3 million, or 6.0%, compared to $4.8 million in the
first quarter of 2007. The $0.4 million increase at our daily newspaper was primarily due
to an increase in commercial printing revenue from printing the USA Today for
northern Illinois and eastern Wisconsin and the Chicago Reader and an increase in
commercial delivery revenue. Commercial printing revenue decreased $0.1 million at our
community newspapers and shoppers.

Publishing operating earnings in the
first quarter of 2008 were $4.3 million, a decrease of $0.7 million, or 15.8%, compared to
$5.0 million in the first quarter of 2007. Operating earnings decreased $1.2 million in
the first quarter of 2008 at the daily newspaper primarily due to the impact of the
decrease in retail and classified ROP advertising, partially offset by a $1.5 million
decrease in payroll and benefit costs due to the workforce reductions in 2007 and other
labor savings, a $1.0 million decrease in paper costs and web-width reduction costs of
$0.5 million in the first quarter of 2007. The operating loss decreased $0.5 million in
the first quarter of 2008 at our community newspapers and shoppers primarily due a
decrease in payroll and benefit costs, a decrease in lease expenses and costs associated
with a lease termination in the first quarter of 2007. Total newsprint and paper costs for
our publishing businesses in the first quarter of 2008 were $5.8 million, a decrease of
$1.1 million, or 15.5%, compared to $6.9 million in the first quarter of 2007 primarily
due to a 10.4% decrease in newsprint consumption and a 4.4% decrease in average newsprint
pricing per metric ton. Consumption of metric tonnes of newsprint in the first quarter of
2008 decreased primarily due to decreases in ROP advertising, average net paid circulation
and reduction in waste at our daily newspaper. We believe our consumption of newsprint
will continue to decrease during the remainder of 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
first quarter of 2008 was $49.4 million, a decrease of $2.3 million, or 4.6%, compared to
$51.7 million in the first quarter of 2007. Operating earnings from broadcasting in the
first quarter of 2008 were $7.1 million, a decrease of $2.9 million, or 28.6%, compared to
$10.0 million in the first quarter of 2007.

22

---

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

|                   | 2008 | 2007 | Percent
|------------------ | ---- | ---- | -------
|
|
|Revenue            |      |      | $      
|                   |      |      |        
|Operating earnings |      |      | $      
|                   |      |      |        

Revenue from our television stations
in the first quarter of 2008 was $32.4 million, a decrease of $1.1 million, or 3.4%,
compared to $33.5 million in the first quarter of 2007. The revenue decrease was primarily
from our Las Vegas, Fort Myers/Naples and Tucson television markets. The decrease was due
to a $1.5 million decrease in local advertising revenue and a $0.8 million decrease in
national advertising revenue, partially offset by a $1.2 million increase in political and
issue advertising revenue. Developmental and Interactive revenue, primarily reported in
local advertising revenue, increased $0.4 million and $0.3 million, respectively, in the
first quarter of 2008 compared to the first quarter of 2007. Developmental revenue refers
to non-transactional revenue that targets non-traditional advertisers.

Operating earnings from our
television stations in the first quarter of 2008 were $3.6 million, a decrease of $2.6
million, or 40.9%, compared to $6.2 million in the first quarter of 2007. The decrease in
operating earnings was primarily due to the impact of the decrease in revenue, an increase
in payroll and benefit costs, an increase in news and programming and production costs, an
increase in depreciation expense due to our investment in high-definition equipment and
the new building constructed in Las Vegas, Nevada and an increase in bad debt expense.

Revenue from our radio stations in
the first quarter of 2008 was $17.0 million, a decrease of $1.2 million, or 6.7%, compared
to $18.2 million in the first quarter of 2007. The decrease was due to a $1.0 million
decrease in local advertising revenue and a $0.3 million decrease in national advertising
revenue partially offset by a $0.1 million increase in other advertising revenue. The
decrease in local advertising revenue was primarily due to a change in the Milwaukee
Bucks affiliation agreement that previously included local advertising revenue and
is now based on a fee-per-game. Absent the impact from the Milwaukee Bucks
affiliation agreement, revenue from our radio stations decreased $0.7 million, or 3.6%, in
the first quarter of 2008 compared to the first quarter of 2007. Developmental revenue,
which is primarily reported in local advertising revenue, increased $0.1 million in the
first quarter of 2008 compared to the first quarter of 2007.

Operating earnings from our radio
stations in the first quarter of 2008 were $3.5 million, a decrease of $0.3 million, or
9.0%, compared to $3.8 million in the first quarter of 2007. The decrease in operating
earnings is due to the impact of the decrease in revenue partially offset by a decrease in
broadcasting rights fees for Milwaukee Bucks basketball games, a decrease in
promotion expenses due to eliminating or deferring listener programs and contests and a
$0.1 million loss on the sale of KOMJ-AM in Omaha, Nebraska in the first quarter of 2007.

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
first quarter of 2008 was $16.5 million, a decrease of $0.4 million, or 2.1%, compared to
$16.9 million in the first quarter of 2007. Operating earnings from printing services in
the first quarter of 2008 were $0.8 million, a decrease of $0.2 million, or 21.9%,
compared to $1.0 million in the first quarter of 2007.

The decrease in printing services
revenue was primarily due to a decrease in the printing of publications and manuals
partially offset by a temporary increase in revenue from Dell Computer Corporation (Dell).
We do not expect the same level of business from Dell to continue in future periods and we
believe our revenue from Dell will decrease in 2008 compared to revenue from Dell in 2007.

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

| | Other
| | -----

Other revenue in the first quarter of
2008 was $7.7 million, a decrease of $0.5 million, or 5.8%, compared to $8.2 million in
the first quarter of 2007. Other operating earnings in the first quarter of 2008 were $0.4
million, a decrease of $0.2 million, or 27.4%, compared to $0.6 million in the first
quarter of 2007.

23

---

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

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

The decrease in other revenue in the
first quarter of 2008 compared to the first quarter of 2007 was primarily due to a
decrease in mailing services at our direct marketing services business. Included in
revenue and operating costs and expenses from our direct marketing services business is
$4.4 million and $4.5 million of postage amounts billed to customers in the first quarter
of 2008 and the first quarter of 2007, respectively.

The decrease in other operating
earnings was primarily due to an increase in corporate expenses related to the development
of new Interactive products for our publishing and broadcasting business.

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

Interest income was insignificant in
the first quarter of 2008 and the first quarter of 2007. Interest expense was $2.3 million
in the first quarter of 2008 compared to $3.0 million in the first quarter of 2007. The
decrease is primarily due to a decrease in our weighted average interest rate.
Amortization of deferred financing costs was $0.1 million in the first quarter of 2008 and
the first quarter of 2007.

The effective tax rate for continuing
operations was 39.1% in the first quarter of 2008 and 39.6% in the first quarter of 2007.

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

In the first quarter of 2008, we
recorded a gain on discontinued operations of $400 for a reduction in the reserve related
to a preliminary settlement with the Environmental Protection Agency for a 2007 initial
assessment against NorthStar Print Group, Inc.

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 $65.1 million in the first quarter of 2007. Income tax expense
related to discontinued operations was $41.8 million in the first quarter of 2007.

We recorded a $62.0 million net gain
on the sale of Norlight the first quarter of 2007. We recorded a $3.1 million net gain
from the operating results of all of our discontinued operations in the first quarter of
2007.

| | Net
Earnings
| | ------------

Our net earnings in the first quarter
of 2008 were $6.7 million, a decrease of $66.6 million, compared to $73.3 million in the
first quarter of 2007. The decrease was due to the gain from discontinued operations and
the decrease in operating earnings from continuing operations for the reasons described
above.

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

Diluted earnings per share from
continuing operations were $0.10 in the first quarter of 2008 compared to $0.12 in the
first quarter of 2007. Diluted earnings per share from discontinued operations were $0.01
in the first quarter of 2008 compared to $0.93 in the first quarter of 2007. Diluted
earnings per share from net earnings were $0.11 in the first quarter of 2008 compared to
$1.05 in the first quarter of 2007. Our diluted earnings per share were favorably impacted
in the first quarter of 2008 and the first quarter of 2007 by our share repurchases.

24

---

# Liquidity and Capital
Resources

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 March 30, 2008,
we had borrowings of $210.1 million under the facility at a weighted average rate of
3.39%. 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. The financial covenants of this agreement include the
following:

| | A
consolidated funded debt ratio as determined for the four fiscal quarter period preceding
the date of determination.
|- | ----------------------------------------------------------------------------------------------------------------------

| | An
interest coverage ratio as determined for the four fiscal quarter period preceding the
date of determination.
|- | ----------------------------------------------------------------------------------------------------------------

As of March 30, 2008, we were in
compliance with these financial covenants.

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.

| | 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 publications with a paid circulation of approximately 1,800. 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 $1.4 million.
The acquisitions deepen our media offerings and extend our reach in north central
Wisconsin.

On March 18, 2008, Journal Broadcast
Corporation and Journal Broadcast Group, Inc., our broadcasting businesses, entered into
an asset purchase agreement with Cascade Broadcasting Group, LLC and Tucson
Communications, L.L.C. to purchase the CW affiliate, KWBA-TV, Analog Channel 58, Digital
Channel 44, in Sierra Vista, Arizona, serving the Tucson, Arizona market. We currently 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.

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

In the first quarter of 2008, we
purchased 4.1 million shares of our class A common stock pursuant to our October 2007
board of directors authorization for $30.7 million or an average of $7.39 per share,
excluding commissions. We have now completed our repurchases under the October 2007
authorization.

In May 2008, our Board of Directors
authorized the repurchase of up to five million additional shares of our class A common
stock over the following 18 months.

# Cash Flow

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

Cash balances were $3.9 million at
March 30, 2008. We believe our expected cash flows from operations and borrowings
available under our credit facility will adequately meet our needs for the next twelve
months.

Cash provided by operating activities
was $10.4 million in the first quarter of 2008 compared to $1.0 million in the first
quarter of 2007. The increase was primarily due to a $10.4 million deposit in the first
quarter of 2007 with the Wisconsin Department of Revenue for an income tax assessment.

Cash used for investing activities
was $9.3 million in the first quarter of 2008 compared to cash provided by investing
activities of $157.2 million in the first quarter of 2007. Capital expenditures were $3.2
million in the first quarter of 2008 compared to $7.8 million in the first quarter of
2007. In an effort to reduce costs, we are reviewing all of our planned capital
expenditures for 2008 and may delay spending on noncritical 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. 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 and KOMJ-AM in Omaha, Nebraska were $176.4
million in the first quarter of 2007. During the first quarter of 2008, we acquired
KPSE-LP in Palm Springs, California for $4.7 million and two community newspapers and two
community shoppers for $1.4 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 $1.4 million in the first quarter of 2007.

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Cash used for financing activities
was $4.1 million in the first quarter of 2008 compared to $163.2 million in the first
quarter of 2007. Borrowings under our credit facility in the first quarter of 2008 were
$64.9 million and we made payments of $33.7 million compared to borrowings of $99.3
million and payments of $229.1 million in the first quarter of 2007 reflecting the
immediate use of proceeds received from the sale of Norlight. In the first quarter of 2008
and the first quarter of 2007, we paid $30.7 million and $28.1 million, respectively, to
purchase our class A common stock. We paid cash dividends of $4.9 million and $5.4 million
in the first quarter of 2008 and the first quarter of 2007, respectively.

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

Cash provided by discontinued
operations was $0.6 million in the first quarter of 2008 and $3.0 million in the first
quarter of 2007 primarily due to the sale of Norlight in February 2007. Capital
expenditures, which related primarily to Norlight, were $0.7 million in the first quarter
of 2007.

# New Accounting Standards

In 2008, the FASB issued EITF Issue
No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment
Awards. EITF Issue No. 06-11 clarifies the accounting for income tax benefits
related to the payment of dividends on equity-classified employee share-based payment
awards that are charged to retained earnings under FASB Statement No. 123 (Revised 2004),
Share-Based Payment. We adopted EITF Issue No. 06-11 in the first quarter of
2008. The effect of adopting EITF Issue No. 06-11 did not have a material impact on our
consolidated financial statements.

On December 4, 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.

On February 15, 2007, the FASB issued
Statement No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities  Including an Amendment of FASB Statement No. 115.This
standard permits an entity the option to measure many financial assets and liabilities and
certain other assets and liabilities at fair value on an instrument-by-instrument basis
beginning after November 15, 2007.  We adopted Statement No. 159 in the first quarter
of 2008. There was no impact on the first quarter consolidated condensed financial
statements as a result of the adoption because the fair value option was not elected for
any of our existing financial assets and liabilities.

In September 2006, the FASB issued
Statement No. 157, Fair Value Measurements, which provides guidance for
using fair value to measure assets and liabilities. Statement No. 157 applies whenever
other standards require (or permit) assets or liabilities to be measured at fair value but
does not expand the use of fair value in any new circumstances. Under Statement No. 157,
fair value refers to the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants in the market in which
the reporting entity transacts. In this standard, the FASB clarifies the principle that
fair value should be based on the assumptions market participants would use when pricing
the asset or liability. In support of this principle, Statement No. 157 establishes a fair
value hierarchy that prioritizes the information used to develop those assumptions. The
fair value hierarchy gives the highest priority to quoted prices in active markets and the
lowest priority to unobservable data, for example, the reporting entitys own data.
Under the standard, fair value measurements would be separately disclosed by level within
the fair value hierarchy. In December 2007, the FASB issued FASB Staff Position FAS 157-b,
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. In accordance with the
new rule, we adopted Statement No. 157 for all financial assets and liabilities. There was
no impact in the first quarter consolidated condensed financial statements as a result of
the adoption because we do not currently record any financial assets or liabilities at
fair value. We will adopt Statement No. 157 for nonfinancial assets and liabilities in the
first quarter of 2009. We expect the standard to have the most significant impact on our
determination of fair value in acquisition accounting and impairment analysis of
long-lived assets, goodwill, broadcast licenses and other intangible assets.

# 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.

26

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# 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 Exchange Act
Rules 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 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

There are no material changes to the
disclosures regarding risk factors made in Item 1A. of our Annual Report on Form 10-K for
the year ended December 30, 2007.

# 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 first quarter ended
March 30, 2008:

# Issuer Purchases of
Equity Securities

|                                     
|-------------------------------------
|Period                               
|December 31, 2007 to January 27, 2008
|January 28 to February 24, 2008      
|February 25 to March 30, 2008        

| | (1) | Also
includes 12,396 shares of class B common stock from January 28 to February
               24, 2008 transferred from employees to us to satisfy tax withholding
               requirements in connection with the vesting of restricted stock under the
2003                Equity Incentive Plan.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | These
shares were purchased pursuant to a repurchase program publicly announced
               on October 9, 2007, and commenced on December 5, 2007, pursuant to which
our                board of directors authorized the repurchase of up to 5,000,000
shares. These                shares will remain authorized but unissued. We completed our
repurchases under                this program in March 2008.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 3. DEFAULTS UPON
SENIOR SECURITIES

None.

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

None

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# ITEM 5. OTHER INFORMATION

None.

# 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.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

28

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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:  May 8, 2008 | /s/ Steven J. Smith                                                   
|                   | Steven J. Smith, Chairman and Chief Executive Officer                 
|Date:  May 8, 2008 | /s/ Paul M. Bonaiuto                                                  
|                   | Paul M. Bonaiuto, Executive Vice President and Chief Financial Officer

29