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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the Fiscal Year Ended December 31, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number 001-33091

GateHouse Media, Inc.

(Exact Name of Registrant as Specified in Its Charter)



|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|Delaware                                                      |  | 36-4197635                         
|(State or Other Jurisdiction ofIncorporation or Organization) |  | (I.R.S. EmployerIdentification No.)

350 WillowBrook Office Park,

Fairport, New York 14450

(Address of Principal Executive Offices)

Telephone: (585) 598-0030

(Registrants Telephone Number, Including Area Code)

Securities Registered Pursuant to
Section 12(b) of the Act:None



Securities Registered
Pursuant to Section 12(g) of the Act:Common stock, $0.01 par value per share

Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    NO  x

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 if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 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. (Check One):



|                           |  |                      |  |                          |  |                             
|-------------------------- |  | -------------------- |  | ------------------------ |  | ----------------------------
|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

The aggregate market value of the voting common equity held by non-affiliates of the registrant on June 30, 2008, the last business day of the registrants most recently completed second fiscal quarter, was
approximately $61.6 million. The market value calculation was determined using a per share price of $2.46, the price at which the registrants common stock was last sold on the New York Stock Exchange on such date. For purposes of this
calculation, shares held by non-affiliates excludes only those shares beneficially owned by the registrants executive officers, directors, and stockholders owning 10% or more of the outstanding common stock (and, in each case, their immediate
family members and affiliates).

As of March 9, 2009, 58,087,420 shares of the registrants common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants definitive proxy statement, to be delivered to stockholders in connection with the registrants 2009 annual meeting of stockholders, are incorporated by reference into Part III
of this Annual Report on Form 10-K to the extent described therein.









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GATEHOUSE MEDIA, INC.

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2008

TABLE OF CONTENTS



|        |  |                                                                                                              |  |     
|------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|        |  |                                                                                                              |  | Page
|        |  | PART I                                                                                                       |  |     
|Item 1  |  | Business                                                                                                     |  | 1   
|Item 1A |  | Risk Factors                                                                                                 |  | 35  
|Item 1B |  | Unresolved Staff Comments                                                                                    |  | 42  
|Item 2  |  | Properties                                                                                                   |  | 42  
|Item 3  |  | Legal Proceedings                                                                                            |  | 42  
|Item 4  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 43  
|        |  |                                                                                                             
|        |  | PART II                                                                                                      |  |     
|        |  |                                                                                                             
|Item 5  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 44  
|Item 6  |  | Selected Financial Data                                                                                      |  | 46  
|Item 7  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 50  
|Item 7A |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 86  
|Item 8  |  | Financial Statements and Supplementary Data                                                                  |  | 88  
|Item 9  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 142 
|Item 9A |  | Controls and Procedures                                                                                      |  | 142 
|Item 9B |  | Other Information                                                                                            |  | 144 
|        |  |                                                                                                             
|        |  | PART III                                                                                                     |  |     
|        |  |                                                                                                             
|Item 10 |  | Directors, Executive Officers and Corporate Governance                                                       |  | 145 
|Item 11 |  | Executive Compensation                                                                                       |  | 145 
|Item 12 |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 145 
|Item 13 |  | Certain Relationships and Related Transactions, and Director Independence                                    |  | 146 
|Item 14 |  | Principal Accountant Fees and Services                                                                       |  | 146 
|        |  |                                                                                                             
|        |  | PART IV                                                                                                      |  |     
|        |  |                                                                                                             
|Item 15 |  | Exhibits and Financial Statement Schedules                                                                   |  | 147 



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Unless the context otherwise requires, in this report on Form 10-K:



| |  |  | 2005 Credit Facility refers to the term loan and revolving credit facilities that were entered into on February 28, 2005;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | 2006 Credit Facility refers to the first and second lien term loan credit facilities that were entered into on June 6, 2006, as amended;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 2006 Financing refers to the financing transactions contemplated by the 2006 Credit Facility;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | 2006 First Lien Facility refers to the first lien term loan facility, comprising part of the 2006 Credit Facility, remaining after the repayment and
termination of the second lien term loan credit facility;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 2007 Credit Facility refers to the amendment and restatement of the 2006 First Lien Facility that was entered into on February 27, 2007;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 2007 Financings refers to the financing transactions contemplated by the 2007 Credit Facility, the First Amendment and the Bridge Facility;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 2008 Bridge Facility refers to the Bridge Credit Agreement entered into with Barclays Capital on February 15, 2008;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | Barclays refers to Barclays Capital;
| | - |  | --------------------------------------



| |  |  | Bridge Facility refers to the bridge term loan credit facility that was entered into on April 11, 2007;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | Bridge Loan refers to the proceeds of the Bridge Facility;
| | - |  | ------------------------------------------------------------



| |  |  | Copley refers to The Copley Press, Inc.;
| | - |  | ------------------------------------------



| |  |  | Copley Acquisition refers to the acquisition by us of all the stock of certain wholly-owned subsidiaries of Copley and the acquisition by us of certain
assets, and the assumption of certain liabilities, of Copley which, taken together, comprised Copleys midwest (Ohio and Illinois) operations and business;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | CP Media and CNC refer to CP Media, Inc. and its predecessor entities;
| | - |  | --------------------------------------------------------------------------



| |  |  | CP Media Acquisition and CNC Acquisition refer to the acquisition by us of substantially all of the assets, and assumption of certain
liabilities, of CP Media;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Dover refers to The Dover Post Co.;
| | - |  | -------------------------------------



| |  |  | Dover Acquisition refers to the acquisition by us of substantially all of the assets, and assumption of certain liabilities of the newspapers and
related publications and websites owned by The Dover Post Co.;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Enterprise refers to Enterprise NewsMedia, LLC and its subsidiaries and predecessor entities;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Enterprise Acquisition refers to the acquisition by us of all of the equity interests of Enterprise;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | First Amendment refers to the amendment to the 2007 Credit Facility that was entered into on May 7, 2007;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | First Waiver refers to the waiver of compliance with the leverage ratio covenant granted by Barclays Capital on October 17, 2008 with respect to the
2008 Bridge Facility;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fortress refers to Fortress Investment Group LLC and certain of its affiliates, including certain funds managed by it or its affiliates;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | GAAP refers to U.S. generally accepted accounting principles;
| | - |  | ---------------------------------------------------------------



| |  |  | Gannett refers to Gannett Co., Inc.;
| | - |  | --------------------------------------



| |  |  | Gannett Acquisition refers to the acquisition by us of substantially all of the assets, and assumption of certain liabilities, of four daily newspapers
and related publications and websites owned by Gannett in Rockford, Illinois; Utica, New York; Norwich, Connecticut; and Huntington, West Virginia;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | GateHouse Media, GateHouse, the Company, we, our and us refer to GateHouse Media, Inc. and
its subsidiaries and predecessor entities;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | IPO refers to our initial public offering of 13,800,000 shares of common stock completed on October 30, 2006 (unless the context otherwise
indicates, this does not include the 2,070,000 shares of common stock sold pursuant to the exercise of the underwriters option to purchase additional shares on November 3, 2006);
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Massachusetts Acquisitions refers to the CNC Acquisition and the Enterprise Acquisition;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Merger refers to the June 6, 2005 merger pursuant to which FIF III Liberty Holdings LLC, a wholly-owned subsidiary of Fortress, merged with and
into the Company, with the Company surviving the merger and Fortress becoming our principal and controlling stockholder;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Morris refers to Morris Publishing Group;
| | - |  | -------------------------------------------



| |  |  | Morris Acquisition refers to the acquisition by us of substantially all of the assets, and assumption of certain liabilities of 15 daily newspapers and
related publications and websites owned by Morris Publishing Group in South Dakota, Florida, Kansas, Michigan, Missouri, Nebraska, Oklahoma and Tennessee;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Predecessor refers to GateHouse prior to the consummation of the Merger;
| | - |  | --------------------------------------------------------------------------



| |  |  | Predecessor Period refers to the period prior to the consummation of the Merger;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Pro forma refers to GateHouse after giving effect to (i) for the year ended December 31, 2007, the Copley Acquisition, the Gannett Acquisition
and the 2007 Financings; (ii) for the year ended December 31, 2006, the Massachusetts Acquisitions, the Copley Acquisition, the Gannett Acquisition and the 2007 Financings;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Second Amendment refers to the amendment to the 2007 Credit Facility that was entered into on February 3, 2009;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Second Waiver and Amendment refers to the waiver of compliance with the leverage ratio covenant and amendment of 2008 Bridge Facility entered into on
February 12, 2009;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Successor refers to GateHouse after the consummation of the Merger;
| | - |  | ---------------------------------------------------------------------



| |  |  | Successor Period refers to the period after the consummation of the Merger;
| | - |  | -----------------------------------------------------------------------------



| |  |  | SureWest refers to SureWest Directories; and
| | - |  | ----------------------------------------------



| |  |  | SureWest Acquisition refers to the acquisition by us of all the equity interests of SureWest.
| | - |  | -----------------------------------------------------------------------------------------------

Any data set forth anywhere in this report on Form 10-K regarding the number of our products, circulation, facilities, markets or employees is as of December 31,
2008, unless otherwise indicated.



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CAUTIONARY NOTE REGARDING FORWARD LOOKING INFORMATION

The following discussion of our financial condition and results of operations should be read in conjunction with our historical consolidated financial
statements and notes to those statements appearing in this report. The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors described in this report, including under the
heading Risk Factors in Item 1A of this report, that could cause actual future growth, results of operations, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, such
forward looking information.

Certain statements in this report on Form 10-K may constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that reflect our current views regarding, among other things, our future growth, results of operations, performance and business prospects and opportunities, as well as other statements that
are other than historical fact. Words such as anticipate(s), expect(s), intend(s), plan(s), target(s), project(s), believe(s), will, would,
seek(s), estimate(s) and similar expressions are intended to identify such forward-looking statements.

Forward-looking statements are based on managements current expectations and beliefs and are subject to a number of known and unknown risks, uncertainties and other factors that could lead to actual results materially different from
those described in the forward-looking statements. We can give no assurance that our expectations will be attained. Factors that could cause actual results to differ materially from our expectations include, but are not limited to the risks
identified by us under the heading Risk Factors in Item 1A of this report. Such forward-looking statements speak only as of the date on which they are made. Except to the extent required by law, we expressly disclaim any obligation
to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.



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PART I



|Item 1. | Business
|------- | --------

General Overview

We are one of the largest publishers of locally based print and online media in the United States as measured by number of daily publications. We were
incorporated in Delaware in 1997 for purposes of acquiring a portion of the daily and weekly newspapers owned by American Publishing Company. Our business model is to be the preeminent provider of local content and advertising in the small and
midsize markets we serve. Our portfolio of products, which includes 506 community publications and more than 250 related websites and seven yellow page directories, serves over 239,000 business advertising accounts and reaches approximately
10 million people on a weekly basis. All data contained in this report regarding the number of our products, circulation, facilities or employees is as of December 31, 2008, unless otherwise indicated.

Our core products include:



| |  |  | 91 daily newspapers with total paid circulation of approximately 789,000;
| | - |  | -------------------------------------------------------------------------



| |  |  | 294 weekly newspapers (published up to three times per week) with total paid circulation of approximately 686,000 and total free circulation of approximately 1
million;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 121 shoppers (generally advertising-only publications) with total circulation of approximately 1.9 million;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | over 250 locally focused websites, which extend our franchises onto the internet; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | seven yellow page directories, with a distribution of approximately 813,000, that covers a population of approximately 2.0 million people.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

In addition to our core products, we also opportunistically produce niche publications that address specific local
market interests such as recreation, sports, healthcare and real estate. During the last twelve months, we created approximately 81 niche publications.

Our print and online products focus on the local community from both a content and advertising standpoint. As a result of our focus on small and midsize markets, we are usually the primary, and sometimes, the sole,
provider of comprehensive and in-depth local market news and information in the communities we serve. Our content is primarily devoted to topics that we believe are highly relevant and of interest to our audience such as local news and politics,
community and regional events, youth sports, opinion and editorial pages, and local schools.

More than 74% of our daily newspapers have
been published for more than 100 years and 97% have been published for more than 50 years. We believe that the longevity of our publications demonstrates the value and relevance of the local information that we provide and has created a strong
foundation of reader loyalty and a highly recognized media brand name in each community we serve. As a result of these factors, we believe that our publications have high local audience penetration rates in our markets, thereby providing advertisers
with strong local market reach.

We have a history of growth through acquisitions and new product launches. Since our inception, we have
acquired 420 daily and weekly newspapers, shoppers and directories. This strategy has been a critical component of our growth. We believe we have demonstrated an ability to successfully integrate acquired publications and improve their performance
through sound management, including revenue generating and direct cost saving initiatives. The current economic environment, however, will limit our ability to grow through acquisition in the near-term future. As a result we are more focused on cost
reductions and de-levering opportunities. Longer-term, given our scale, we see significant opportunities to continue our acquisition and integration strategy within the highly fragmented local media industry.



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We operate in 385 markets across 21 states. A key element of our business strategy is geographic
clustering of publications to realize operating efficiencies and provide consistent management. We share best practices across our organization, giving each publication the benefit of proven and executable revenue producing and cost saving
initiatives. We regionally cluster functions such as ad composition, bookkeeping and production and give each publication in a cluster access to top quality production equipment, which we believe enables us to cost-efficiently provide superior
products and service to our customers. In addition, we believe that our size allows us to achieve economies of scale in the purchase of insurance, newsprint and other supplies. We believe that these advantages, together with the generally lower
overhead costs associated with operating in small and midsize markets, allow us to generate industry leading profit margins.

Compared with
the industry as a whole, our advertising revenue tends to be less volatile, especially during economic downturns, such as the one we are currently experiencing. We believe that our relatively low advertising revenue volatility is a result of our
geographic diversity, with our revenues coming from markets across 21 states, the large number of products we publish and our fragmented, diversified local advertising customer base. We believe that local advertising tends to be less sensitive to
economic cycles than national advertising because local businesses generally have fewer advertising channels in which to reach the local audience. We believe we are also less reliant than large metropolitan newspapers upon classified advertising,
particularly the recruiting and real estate categories, which are generally more sensitive to economic conditions.

Industry Overview

We operate in what is sometimes referred to as the hyper-local or community market within the media industry. Media companies that serve this
segment provide highly focused local content and advertising that is generally unique to each market they serve and is not readily obtainable from other sources. Local publications include community newspapers, shoppers, traders, real estate guides,
special interest magazines and directories. Due to the unique nature of their content, community publications compete to a limited extent for advertising customers with other forms of media, including: direct mail, directories, radio, television,
outdoor advertising and the internet. We believe that local print publications are the most effective medium for local retail advertising, which emphasizes the price of goods in an effort to move inventory on a regular basis, in contrast to radio,
broadcast and cable television, which are generally used for image or branding advertising. In addition, local print publications generally have the highest local audience penetration rates, which allows local advertisers to get their message in
front of a large portion of the local audience.

Locally focused media in small and midsize communities is distinct from national and urban
media delivered through outlets such as television, radio, metropolitan and national newspapers and the internet. Larger media outlets tend to offer broad based information to a geographically scattered audience, which tends to be more of a
commodity. In contrast, locally oriented media outlets deliver a highly focused product that is often the only source of local news and information in the market it serves. Our segment of the media industry is also characterized by high barriers to
entry, both economic and social. Small and midsize communities can generally only sustain one newspaper. Moreover, the brand value associated with long-term reader and advertiser loyalty, and the high start-up costs associated with developing and
distributing content and selling advertisements, help to limit competition.

Advertising Market

The primary sources of advertising revenue for local publications are small businesses, corporations, government agencies and individuals who reside in
the market that a publication serves. By combining paid circulation publications with total market coverage publications such as shoppers and other specialty publications (tailored to the specific attributes of a local community), local publications
are able to reach nearly 100% of the households in a distribution area. As macroeconomic conditions in advertising change due to the internet and the wide array of available information sources, we have seen mass advertisers shift their focus toward
targeted local advertising. Moreover, in addition to printed products, the majority of local publications have an online presence



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that further leverages the local brand and ensures higher penetration into a given market, as well as better ability to service the needs of local
advertisers.

The Internet

The
time spent online each day by media consumers continues to grow rapidly and newspaper web sites offer a wide variety of content providing comprehensive, in-depth and up to the minute coverage of news and current events. The ability to generate,
publish and archive more news and information than most other sources has allowed newspapers to produce some of the most visited sites on the internet.

We believe local publications are well positioned to capitalize on their existing market franchise and grow their total audience base by publishing proprietary local content online. Local online media sites now
include classifieds, directories of business information, local advertising, databases and most recently, audience-contributed content. This additional community-specific content will further extend and expand both the reach and the brand of the
publications with readers and advertisers. We believe that building a strong local online business extends the core audience of a local publication.

The opportunity created by the extension of the core audience makes local online advertising an attractive complement for existing print advertisers while opening up new opportunities to attract local advertisers that
have never advertised with local publications. In addition, we believe that national advertisers have an interest in reaching buyers on a hyper-local level and, although they typically are not significant advertisers in community publications, we
believe the internet offers them a powerful medium to reach targeted local audiences.

Circulation

Overall daily newspaper circulation, including national and urban newspapers has been declining steadily over the past several years. Small and mid-size
local market newspapers have tended to have smaller declines and more stability in their paid circulation volumes due to the relevant and unique hyper-local news they produce. In addition, this unique and valuable hyper-local content allows smaller
market newspapers to continue to be able to raise prices, leading to stable circulation revenues.

Our Strategy

We plan to maximize our revenue and cash flow per share potential in the existing economic and industry climate through a combination of (i) organic
growth in our existing portfolio, (ii) taking advantage of cost reductions and de-leveraging opportunities, and (iii) the realization of economies of scale and operating efficiencies. Longer term, given our scale, we see significant
opportunities to continue our previous acquisition and integration strategy. The key elements of our strategy are:

Maintain Our
Dominance in the Delivery of Proprietary Content in Our Communities.We seek to maintain our position as a leading provider of local content in the markets we serve and to leverage this position to strengthen our relationships with both
readers and advertisers, thereby increasing penetration rates and market share. A critical aspect of this approach is to continue to provide local content that is not readily obtainable elsewhere.

Strengthening our Balance Sheet and Managing our Operations. In the near future, our focus will be on strengthening our balance sheet and
managing our operations. From an operations standpoint, we intend to continue to invest in our online business, which is our fastest growing segment. With our revolving credit facility balance at zero and no amortization on our long term credit
facility that matures in 2014, we have increased flexibility to allow us to use available cash generated from operations to strengthen the balance sheet, build liquidity, and put ourselves in a position to potentially take advantage of the
dislocation in the markets, particularly with regard to valuations.



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We will also invest in our sales staffs in order to capture new or additional revenues and market share.
We will also continue to aggressively pursue cost reductions on our controllable expenses and look for ways to manage inflationary pressures and to become more efficient.

Leverage Benefits of Scale and Clustering to Increase Cash Flows and Operating Profit Margins.We intend to continue to take advantage of geographic clustering to realize operating and economic
efficiencies in areas such as labor, production, overhead, raw materials and distribution costs. We believe we will be able to increase our cash flows and expand our operating profit margins as we streamline and further centralize purchasing and
administrative functions and integrate acquired properties.

Introduce New Products or Modify Our Products to Enhance the Value
Proposition for Our Advertisers.We believe that our established positions in local markets, combined with our publishing and distribution capabilities, allow us to develop and customize new products to address the evolving interests and
needs of our readers and advertisers. These products are often specialty publications that address specific interests such as employment, healthcare, hobbies and real estate. In addition, we intend to capitalize upon our unique position in local
markets to introduce other marketing oriented products such as directories, magazines, shoppers and other niche publications in both online and printed format in order to further enhance our value to advertisers.

Pursue a Content-Driven Internet Strategy. We believe that we are well-positioned to increase our online penetration and generate
additional online audience and revenues due to both our ability to deliver unique local content and our relationships with readers and advertisers. We believe this presents an opportunity to increase our overall audience penetration rates and
advertising market share in each of the communities we serve. We expect that centralizing our technology and building a network of websites will allow us to aggregate classified advertisements and build online classified products in areas such as
real estate, automotive and recruitment. We will also have the ability to sell online display advertising and online video advertising locally and nationally. Finally, we intend to share content across our organization within this network in order
to give each of our publications access to technology, online management expertise, content and advertisers that they may not have been able to obtain or afford if they were operating independently.

Increase Sales Force Productivity.We aim to continue to increase the productivity of our sales force and, in turn, help maximize
advertising revenues. Our approach includes ongoing company-wide training of sales representatives and sales managers with training programs that focus on strengthening their ability to gather relevant demographic information, present to customers,
understanding multi-media and product portfolio sales, effectively utilize time and close on sales calls. Our training includes sharing best practices of our most successful account representatives. Finally, for managers, we have created
a train the trainer program to enable our clusters to effectively propagate our training programs. We regularly evaluate the performance of our sales representatives and sales management and implement contests and other incentive
compensation programs. We also regularly evaluate our advertising rates to ensure that we are maximizing revenue opportunities. We believe that better accountability and measurement of our sales force when combined with training and access to better
demographic and marketing information will lead to greater productivity and revenue from our sales force.



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Products

Our product mix consists of four publication types: (i) daily newspapers, (ii) weekly newspapers, (iii) shoppers and (iv) niche publications. Key characteristics of each of these types of publications are summarized in
the table below. In addition, through our SureWest Acquisition, completed in the first quarter of 2007, we have also increased the number of on-line and print telephone directories in our product mix.



|                       |  |                                                                                                                          |  |                                                                                                                                                                                     |  |                                                              |  |                                                                                                                                                                                        
|---------------------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  | Daily Newspapers                                                                                                         |  | Weekly Newspapers                                                                                                                                                                   |  | Shoppers                                                     |  | Niche Publications                                                                                                                                                                     
|Cost:                  |  | Paid                                                                                                                     |  | Paid and free                                                                                                                                                                       |  | Paid and free                                                |  | Paid and free                                                                                                                                                                          
|                       |  |                                                                                                                          |  |                                                                                                                                                                                    
|Distribution:          |  | Distributed four to seven days per week                                                                                  |  | Distributed one to three days per week                                                                                                                                              |  | Distributed weekly                                           |  | Distributed weekly, monthly or on annual basis                                                                                                                                         
|                       |  |                                                                                                                          |  |                                                                                                                                                                                    
|Format:                |  | Printed on newsprint, folded                                                                                             |  | Printed on newsprint, folded                                                                                                                                                        |  | Printed on newsprint, folded or booklet                      |  | Printed on newsprint or glossy, folded, booklet, magazine or book                                                                                                                      
|Content:               |  | 50% editorial (local news and coverage of community events, some national headlines) and 50% ads (including classifieds) |  | 50% editorial (local news and coverage of community events, some national headlines for smaller markets which cannot support a daily newspaper) and 50% ads (including classifieds) |  | Almost 100% ads, primarily classifieds, display and inserts  |  | Niche content and targeted ads (e.g., Chamber of Commerce city guides, tourism guides and special interest publications such as, seniors, golf, real estate, calendars and
directories)
|                       |  |                                                                                                                          |  |                                                                                                                                                                                    
|Income:                |  | Revenue from advertisers, subscribers, rack/box sales                                                                    |  | Paid: Revenue from advertising, subscribers, rack/box sales                                                                                                                         |  | Paid: Revenue from advertising, rack/box sales               |  | Paid: Revenue from advertising, rack/box sales                                                                                                                                         
|                       |  |                                                                                                                          |  |                                                                                                                                                                                    
|                       |  |                                                                                                                          |  | Free: Advertising revenue only, provide 100% market coverage.                                                                                                                       |  | Free: Advertising revenue only, provide 100% market coverage |  | Free: Advertising revenue only                                                                                                                                                         
|                       |  |                                                                                                                          |  |                                                                                                                                                                                    
|Internet Availability: |  | Available online                                                                                                         |  | Major publications available online                                                                                                                                                 |  | Major publications available online                          |  | Selectively available online                                                                                                                                                           

Overview of Operations

We operate in five geographic regions: Northeast, Western, Northern Midwest, Southern Midwest and Atlantic. A list of our dailies, weeklies and shoppers in each of our geographic regions is included under List
of Our Dailies, Weeklies and Shoppers in this report. We also operate over 250 related websites. A list of such websites is included under List of Websites in this report.



5



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##### Table of Contents

The following table sets forth information regarding our publications.



|                 |  |                        |  |                 |  |          |  |           |  |           |  |                 
|---------------- |  | ---------------------- |  | --------------- |  | -------- |  | --------- |  | --------- |  | ----------------
|                 |  | Number of Publications |  | Circulation (1)
|Operating Region |  | Dailies                |  | Weeklies        |  | Shoppers |  | Paid      |  | Free      |  | TotalCirculation
|Northeast        |  | 9                      |  | 117             |  | 9        |  | 375,618   |  | 528,913   |  | 904,531         
|Western          |  | 23                     |  | 77              |  | 37       |  | 538,820   |  | 628,005   |  | 1,166,825       
|Northern Midwest |  | 21                     |  | 17              |  | 31       |  | 129,768   |  | 574,640   |  | 704,408         
|Southern Midwest |  | 28                     |  | 46              |  | 23       |  | 270,720   |  | 660,365   |  | 931,085         
|Atlantic         |  | 10                     |  | 37              |  | 21       |  | 160,166   |  | 517,972   |  | 678,138         
|                 |  |                        |  |                 |  |          |  |           |  |           |  |                 
|Total            |  | 91                     |  | 294             |  | 121      |  | 1,475,092 |  | 2,909,895 |  | 4,384,987       



|(1) | Circulation statistics are estimated by our management as of December 31, 2008, except that audited circulation statistics, to the extent available, are utilized as of the
audit date.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Northeast Region.We are one of the largest community newspaper publishers in New England by
number of daily publications, serving 118 communities in markets across eastern Massachusetts and Norwich, Connecticut. Our three largest daily newspapers are located in our Northeast region: The Patriot Ledger (founded in 1837 with
circulation of 47,796), the Enterprise (founded in 1880 with circulation of 28,795) and the MetroWest Daily News (founded in 1897 with circulation of 20,961).

Many of the towns within our Northeast region were founded in the 1600s and our daily and weekly newspapers in the region have long been institutions
within these communities. In fact, our Northeast region has 35 daily and weekly newspapers that are over 100 years old.

Our publications
serve some of the most demographically desirable communities in New England. The Boston DMA is the seventh largest market in the United States with 2.4 million households and 6.2 million people, and ranks first nationally in concentration
of colleges and universities.

Massachusetts boasts more than one million households in the region earning greater than $75,000, and a 62%
homeownership rate. This upscale demographic provides a desirable market for advertisers. We reach 1.7 million readers in the Eastern Massachusetts market.

Eastern Massachusetts is also widely recognized as an employment center for leading industries such as technology, biotechnology, healthcare and higher education. Many of the regions leading employers are
located in the communities served by our Northeast regions publications.

Our Norwich, Connecticut property brings some stability to
our Northeast region as the Eastern Connecticut economy differs from the nation and New England markedly. Primary economic drivers include casinos, military submarine manufacture and pharmaceutical research. Major industrial employers in the region
include General Dynamics, Pfizer, Dow Chemical, Dominion Resources and the United States Navy.

The following table sets forth information
regarding our publications and production facilities in the Northeast region:



|                    |  |                        |  |                                |  |          |  |  
|------------------- |  | ---------------------- |  | ------------------------------ |  | -------- |  | -
|                    |  | Number of Publications |  | Number of ProductionFacilities
|State of Operations |  | Dailies                |  | Weeklies                       |  | Shoppers |  |  
|Massachusetts       |  | 8                      |  | 116                            |  | 7        |  | 3
|Connecticut         |  | 1                      |  | 1                              |  | 2        |  | 1
|                    |  |                        |  |                                |  |          |  |  
|Total               |  | 9                      |  | 117                            |  | 9        |  | 4



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##### Table of Contents

Western Region.Our Western region encompasses Illinois, parts of Minnesota, California,
Colorado and a total of 23 daily, 77 weekly newspapers and 37 shoppers. In addition to a good geographic mix, we benefit from a diverse economic and employment base across the region.

From the western shore of Lake Michigan to the eastern shore of the Mississippi River and running over 400 miles north to south, Illinois is a picture of
manufacturing, agricultural and recreational diversity. Major daily

newspapers in Rockford, Peoria, and the state capitol of Springfield coupled with the
southern and western Chicago suburbs and community coverage across the state make us the largest publishing company in Illinois. 20 paid daily newspapers, 50 paid weekly newspapers, 12 free weekly papers, and 28 shoppers provide inclusive coverage
across our three main clusters which are further supported by 10 print production facilities.

The suburban Chicago cluster publishes 25
weekly newspapers and one shopper publication in the southern and western suburbs. Coupled with these publications is the door-to-door Independent Delivery System which offers targeted delivery to over 2 million households per week in the nine
county suburban Chicago cluster.

Approximately 85 miles to the west of the Chicago suburban cluster is the Rockford Register Star
supported by its over 51,076 daily paid circulation base and ancillary products such as BusinessRockford.com, Espejo and the Star Shopper.

The western cluster of Illinois is composed of 6 daily, 13 weekly, and 10 shopper publications. The Peoria Journal Star with its daily paid circulation of approximately 62,745 has also provided print efficiencies to neighboring
publications. This coupled with the print capacities of our Galesburg print facility located at the Galesburg Register Mail has enhanced print and distribution levels. The market we serve includes manufacturing facilities for Caterpillar and John
Deere, higher education including Bradley University, Monmouth College, Knox College, and Western Illinois University, various health care centers and providers, and agricultural concerns such as Pioneer and Monsanto.

The Springfield State Journal-Register with a daily paid circulation of over 49,042 covers the state capital of Illinois and begins coverage of the
southern cluster of Illinois. Further south, the SI Trader with its paid weekly circulation of 16,323 adds further support to the additional 8 daily newspapers, 15 paid weekly publications, and 9 weekly shoppers throughout this section of the state.

We are represented in Southwestern Minnesota through seven paid weekly newspapers and four shoppers. St. James, Redwood Falls, Sleepy Eye,
Granite Falls, Cottonwood, Wabasso, and Montevideo are all communities with populations of 10,000 and under. This Minnesota cluster is printed primarily through our printing facility in Montevideo and represents the primary local news and
information source for these communities.

La Junta in the Southeastern part of the state represents the Colorado properties. Along with La
Junta we also serve Bent County and Fowler and produce the weekly agricultural newspaper, The Ag Journal.

We are represented in California
by two daily newspapers in Ridgecrest and Yreka, five paid weekly papers in Dunsmuir, Mt. Shasta, Weed, Gridley, and Taft, and five shoppers in Gridley, Mt. Shasta, Taft, Ridgecrest and Yreka. There is also a specialty/niche publication group
located in Orange County. These publications reach from northern California through the southern desert and China Lake naval base in Ridgecrest.

The following table sets forth information regarding our publications and production facilities in the Western region:



|                    |  |                        |  |                                |  |          |  |   
|------------------- |  | ---------------------- |  | ------------------------------ |  | -------- |  | --
|                    |  | Number of Publications |  | Number of ProductionFacilities
|State of Operations |  | Dailies                |  | Weeklies                       |  | Shoppers |  |   
|Illinois            |  | 20                     |  | 62                             |  | 28       |  | 10
|Southern Minnesota  |  | 0                      |  | 7                              |  | 4        |  | 1 
|California          |  | 2                      |  | 5                              |  | 5        |  | 3 
|Colorado            |  | 1                      |  | 3                              |  | 0        |  | 0 
|                    |  |                        |  |                                |  |          |  |   
|Total               |  | 23                     |  | 77                             |  | 37       |  | 14



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##### Table of Contents

Northern Midwest Region.Our Northern Midwest region comprises 21 daily, 16 weekly
newspapers and 31 shoppers spanning seven states: Michigan, parts of Minnesota, North Dakota, Iowa, Nebraska, Kansas and parts of Missouri. Each of our daily newspapers and five of our weeklies in the Northern Midwest region serve communities
located in a county seat. Our daily and weekly news products in this region average more than 100 years in continuous operation and our shopper publications are among the first ever published, with histories dating to the early 1960s.

The communities we serve in our Northern Midwest region are largely rural but also support educational institutions, government agencies (including
prisons and military bases), tourism, veterinary medicine and ethanol and agricultural chemical manufacturing. The area also maintains automotive (including recreational vehicles), boat, home construction products and furniture manufacturing
sectors.

The greatest concentration of circulation and market presence in our Northern Midwest region is in northern Missouri where we
operate nine daily and one weekly newspaper and 11 shoppers. We cover the 22,000 square mile area from Hannibal, on the states eastern border, to the western border and from Columbia in the south to the Iowa border in the north. Local
employers include the University of Missouri and other colleges, local and federal governments, State Farm Insurance and 3M.

We also have
a strong presence in southern Michigan where five of our dailiesAdrian, Coldwater, Holland, Hillsdale and Sturgisalong with six weeklies and seven shoppers blanket the southern tier of the state and into Indiana. The 18,794-circulation
Holland Sentinel is the flagship publication of the group. This area has several large employers, including Delphi, ConAgra, Tecumseh Products, Kellogg, JCI, Herman Miller, Hayworth, Gentex, Jackson State Prison, and a number of colleges and
universities.

Our Kansas City cluster includes nine publications (two daily and two weekly newspapers and three shoppers) located in the
eastern Kansas cities of Leavenworth, Kansas City and Lansing and on the Missouri side, Independence and Blue Springs. The Leavenworth Times was one of our original daily newspapers and the balance of the cluster was acquired afterward. In
addition, we secured the military publication, The Fort Leavenworth Lamp, in Fort Leavenworth. The Kansas City cluster, with a population over 700,000, is home to several prominent companies, including Hallmark, H&R Block, Interstate
Bakeries, and the University of Kansas.

We also have clusters in and around Grand Forks, North Dakota (home to the Grand Forks Air Force
Base and the University of North Dakota) and near Mason City, Iowa, where Cargill, ConAgra, Kraft, Winnebago and Fort Dodge Animal Health, a division of Wyeth, each maintain significant operations.

The following table sets forth information regarding our publications and production facilities in the Northern Midwest region:



|                    |  |                        |  |                                |  |          |  |   
|------------------- |  | ---------------------- |  | ------------------------------ |  | -------- |  | --
|                    |  | Number of Publications |  | Number of ProductionFacilities
|State of Operations |  | Dailies                |  | Weeklies                       |  | Shoppers |  |   
|Michigan            |  | 8                      |  | 7                              |  | 10       |  | 5 
|Minnesota           |  | 1                      |  | 1                              |  | 2        |  | 1 
|North Dakota        |  | 1                      |  | 0                              |  | 1        |  | 1 
|Iowa                |  | 1                      |  | 3                              |  | 3        |  | 1 
|Nebraska            |  | 0                      |  | 2                              |  | 1        |  | 1 
|Kansas              |  | 1                      |  | 2                              |  | 3        |  | 0 
|Northern Missouri   |  | 9                      |  | 1                              |  | 11       |  | 6 
|                    |  |                        |  |                                |  |          |  |   
|Total               |  | 21                     |  | 16                             |  | 31       |  | 15

On December 31, 2008, we sold one weekly and one shopper publication in Cresco, Iowa.



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##### Table of Contents

Southern Midwest Region.Our Southern Midwest region comprises 28 daily, 46 weekly
newspapers and 23 shoppers in parts of Missouri, Kansas, Arkansas, Delaware, Ohio, Oklahoma, Tennessee and Louisiana.

Our southern
Missouri operations are clustered around Lake of the Ozarks and Joplin. Located midway between Kansas City and St. Louis and approximately 90 miles from Springfield, Missouri, our three daily and nine weekly newspapers and three shoppers that serve
the Lake of the Ozarks area reach approximately 165,000 people.

The Joplin cluster is located in southwest Missouri and Southeast Kansas
and produces three daily and four weekly newspapers and two shoppers that serve a population of approximately 170,000. There are several colleges and universities in the area, a National Guard Fort and several large medical centers in addition to a
diverse mix of retail businesses, including the 120-store Northpark Mall.

The Wichita cluster, with a population of approximately 600,000
people, consists of six dailies, three weeklies and five shoppers in the towns of Augusta, Derby, El Dorado, Pratt, Wellington, Newton and McPherson near Wichita, Kansas. The clustering of the small dailies in this area allows the group to sell
advertisers a package providing access to multiple communities. Major aircraft manufacturers Boeing, Bombardier, Cessna and Raytheon have facilities nearby and McConnell Air Force Base is a key component of the local economy.

In Louisiana, we have an operating cluster in the southwestern part of the state, located between Lake Charles and Alexandria. This cluster consists of
six publications located in the cities of Leesville, Sulpher, DeRidder and Vinton. A new press configuration has increased the quality of our products in the area and provides an opportunity for additional commercial print revenue. Local employers
include major manufacturers such as Alcoa, Firestone, International Paper and Proctor & Gamble. We also expect the return of military personnel to the recently reopened Fort Polk base to drive revenue at our Guardian publication.

Our Baton Rouge cluster is a relatively new cluster developed through a series of acquisitions. The group consists of three weeklies and
three shoppers in the southeastern Louisiana cities of Donaldsville, Gonzales, and Plaquemine. Numerous petrochemical companies such as BASF, Exxon Mobil and Dow Chemical, plus universities including Louisiana State, support the local economies.

Purchased as part of our acquisition from Copley in April 2007, the Ohio cluster is anchored in Canton, Ohio, the seventh largest city in
the state and home to the Pro Football Hall of Fame, and covers Stark and Tuscarawas Counties. It is comprised of three daily newspapers and one weekly publication. The Repository is a 59,474 daily newspaper that covers the entire area of
Stark County. The Dover New Philadelphia Times Reporter is a 20,756 daily publication located 40 miles south of Canton in Tuscarawas County. The Massillon Independenta 10,922 circulation daily that is located in western Stark County.
The Suburbanite is a 33,800 weekly publication that circulates in the affluent northern Stark County area. The Ohio cluster has very successful web sites with more than 1.25 million combined monthly unique visitors. Together the
newspapers and web sites dominate their local markets.

The following table sets forth information regarding our publications and
production facilities in the Southern Midwest region:



|                    |  |                        |  |                                |  |          |  |   
|------------------- |  | ---------------------- |  | ------------------------------ |  | -------- |  | --
|                    |  | Number of Publications |  | Number of ProductionFacilities
|State of Operations |  | Dailies                |  | Weeklies                       |  | Shoppers |  |   
|Southern Missouri   |  | 5                      |  | 14                             |  | 6        |  | 2 
|Kansas              |  | 9                      |  | 5                              |  | 8        |  | 4 
|Louisiana           |  | 4                      |  | 5                              |  | 5        |  | 3 
|Arkansas            |  | 4                      |  | 10                             |  | 0        |  | 2 
|Delaware            |  | 0                      |  | 11                             |  | 1        |  | 1 
|Ohio                |  | 3                      |  | 1                              |  | 2        |  | 2 
|Oklahoma            |  | 2                      |  | 0                              |  | 1        |  | 2 
|Tennessee           |  | 1                      |  | 0                              |  | 0        |  | 0 
|                    |  |                        |  |                                |  |          |  |   
|Total               |  | 28                     |  | 46                             |  | 23       |  | 16



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##### Table of Contents

Atlantic Region.Our Atlantic region comprises holdings in New York, Pennsylvania and West
Virginia, which are anchored by two clusters, one in the area around Honesdale in northeastern Pennsylvania and the other in the area around Corning and Hornell in southwestern New York. Virtually all of our 10 dailies in the Atlantic region date
back more than 100 years.

Our Honesdale cluster, approximately 30 miles from Scranton, Pennsylvania, consists of six publications in the
cities of Carbondale, Honesdale and Hawley, Pennsylvania, along with Liberty, New York, located just across the Delaware River to the east. The cluster was created from our daily and shopper operations in Honesdale and later supplemented by the
acquisition of weeklies and shoppers in Carbondale and Liberty. Local employers include General Dynamics, Blue Cross/Blue Shield, Commonwealth Telephone and various colleges and universities, medical centers and governmental agencies.

We enjoy a strong presence in Upstate New York, including the popular Finger Lakes Region and the greater Rochester area. Messenger Post Media, with a
combination of 20 publications that span four counties, has combined circulation of 207,300. This growing commercial market has a tourism industry and is known for scores of boutique wineries. The flagship of Messenger Post Media is the
12,000-circulation Daily Messenger in Canandaigua. In the first quarter of 2008, we acquired Ad Group WC, Inc. in Wayne county, consisting of one weekly and three shopper publications with an aggregate circulation of 25,500.

In southwestern New York, our operations are centered around six publications based in Steuben County. In Corning, The Leader, a 10,699
circulation daily newspaper, dominates the eastern half of the county and shares its hometown namesake with Corning Incorporated. The Hornell Evening Tribune circulates daily throughout the western half of the county. Situated directly
between these two dailies in the county seat of Bath is the 10,800 circulation Steuben Courier, a free-distribution weekly. The Hornell-Canisteo Penn-E-Saver, a standalone shopper, solidifies this flagship group.

We also have a strong presence in the print advertising markets in three other New York counties that surround Steuben. In Allegany County to the west,
the Wellsville Daily Reporter and its shopper, the Allegany County Pennysaver, cover most households. In Livingston County to the north, the Dansville-Wayland Pennysaver, the Geneseeway Shopper and the Genesee
Country Express complement one another with combined circulation of 23,083. In Yates County to the north and east, The Chronicle-Express and Chronicle Ad-Visor shopper distribute weekly to over 15,000 households centered around the
county seat of Penn Yan.

In nearby Chemung County, the 26,000 circulation Horseheads Shopper anchors our presence in this area. The
majority of the southwestern New York cluster parallels future Interstate 86 across the central Southern Tier of New York State, which is benefiting from continued improvement and expansion under an omnibus federal highway appropriations bill.
Moreover, the cluster has several colleges and universities nearby, including Cornell University, Ithaca College, Elmira College and Houghton College.

In addition to the clustered publications, we have several strong standalone newspapers in the Atlantic region with total circulation of approximately 292,000. In addition to our standalone daily publications in
Waynesboro, Pennsylvania, Jackson County, West Virginia, and in Herkimer and Little Falls, New York, the Utica operations include one daily, seven shoppers and a weekly newspaper in Hamilton. The Utica and Herkimer County operations take advantage
of numerous synergies in printing, circulation and advertising.

The following table sets forth information regarding our publications and
production facilities in the Atlantic region:



|                    |  |                        |  |                                |  |          |  |  
|------------------- |  | ---------------------- |  | ------------------------------ |  | -------- |  | -
|                    |  | Number of Publications |  | Number of ProductionFacilities
|State of Operations |  | Dailies                |  | Weeklies                       |  | Shoppers |  |  
|New York            |  | 7                      |  | 31                             |  | 18       |  | 5
|Pennsylvania        |  | 2                      |  | 4                              |  | 1        |  | 2
|West Virginia       |  | 1                      |  | 2                              |  | 2        |  | 2
|                    |  |                        |  |                                |  |          |  |  
|Total               |  | 10                     |  | 37                             |  | 21       |  | 9



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##### Table of Contents

Directories

The core of our directory portfolio is comprised of the four yellow page directories acquired in the SureWest Acquisition, which are located in and around the Sacramento, California area, primarily in Roseville,
California. The four directories have an aggregate circulation of approximately 730,000 and service Roseville, Greater Sacramento, Auburn/Grass Valley/Nevada City and Folsom/El Dorado/Placerville, reaching four counties within the Sacramento region.

Our SureWest portfolio is highlighted by the Roseville and Greater Sacramento directories. The Roseville directory is the incumbent (with
a circulation of approximately 300,000) and has served the local Roseville community for over 90 years and has achieved more than 50% market share. The Greater Sacramento directory (with a circulation of approximately 250,000) targets its delivery
to high income consumers in Sacramento covering approximately 800,000 people.

Over the past 10 years, the Sacramento region has increased
to almost 2.2 million people. The area boasts a diversified economy with both traditional economic activity (including significant government and government related business) and the presence of prominent companies such as Hewlett Packard,
Intel and Oracle. As a result, we believe the area is characterized by sophisticated consumers with attractive wealth profiles. In addition, the area maintains professional and business services and leisure and hospitality sectors, which
historically utilize directories advertising as a primary medium to market their products and services.

We also own three additional
directories including two Michigan and Indiana phone guides servicing St. Joseph County, Michigan and LaGrange County, Indiana, and Branch County, Michigan and Steuben County, Indiana, respectively, and a yellow page directory based in Mt.
Shasta, California.

Revenue

Our
operations generate three primary types of revenue: (i) advertising, (ii) circulation (including single copy sales and home delivery subscriptions) and (iii) other (primarily commercial printing). In 2008, advertising, circulation and
other revenue accounted for approximately 73%, 21% and 6%, respectively, of our total revenue. The contribution of advertising, circulation and other revenue to our total revenue in 2006, 2007 and 2008 and to pro forma total revenue in 2007 was as
follows:



|                              |  |                            |         |                            |   |                            |  |                            |         |  |   |        
|----------------------------- |  | -------------------------- | ------- | -------------------------- | - | -------------------------- |  | -------------------------- | ------- |  | - | -------
|                              |  | Year EndedDecember 31,2006 |         | Year EndedDecember 31,2007 |   | Year EndedDecember 31,2007 |  | Year EndedDecember 31,2008
|                              |  | (Actual)                   |         | (Actual)                   |   | (Pro Forma)                |  | (Actual)                  
|                              |  | (In Thousands)            
|Revenue:                      |  |                            |         |                            |   |                            |  |                            |         |  |   |        
|Advertising                   |  | $                          | 232,130 |                            | $ | 428,531                    |  | $                          | 478,749 |  | $ | 495,667
|Circulation                   |  |                            | 50,868  |                            |   | 117,782                    |  |                            | 136,583 |  |   | 146,340
|Commercial printing and other |  |                            | 23,193  |                            |   | 33,147                     |  |                            | 37,066  |  |   | 41,092 
|                              |  |                            |         |                            |   |                            |  |                            |         |  |   |        
|Total revenue                 |  | $                          | 306,191 |                            | $ | 579,460                    |  | $                          | 652,398 |  | $ | 683,099

Advertising

Advertising revenue is the largest component of our revenue, accounting for approximately 76%, 74% and 73% of our total revenue in 2006, 2007 and 2008, respectively, and 73% of our pro forma total revenue in 2007. We
categorize advertising as follows:



| |  |  | Local Displaylocal retailers, local accounts at national retailers, grocers, department and furniture stores, local financial institutions, niche shops,
restaurants and other consumer related businesses.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Local Classifiedlocal employment, automotive, real estate and other advertising.
| | - |  | ---------------------------------------------------------------------------------



| |  |  | Nationalnational and major accounts such as wireless communications companies, airlines and hotels.
| | - |  | ----------------------------------------------------------------------------------------------------



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##### Table of Contents

We believe that our advertising revenue tends to be less volatile than the advertising revenue of large
metropolitan and national print media because we rely primarily on local rather than national advertising and because we have less exposure to classified revenue than others within our industry. We generally derive 95% of our advertising revenue
from local advertising (both local display and local classified) and only 5% from national advertising. Local advertising tends to be less sensitive to economic cycles than national advertising as local businesses generally have fewer effective
advertising channels through which to reach their customers. We are also less reliant than large metropolitan newspapers upon classified advertising, particularly the recruiting and real estate categories, which are generally more sensitive to
economic conditions.

Our advertising rate structures vary among our publications and are a function of various factors, including local
market conditions, competition, circulation, readership and demographics. Our corporate management works with our local newspaper management to approve advertising rates and a portion of our publishers compensation is based upon increases in
advertising revenue. We share advertising concepts throughout our network of publishers and advertising managers, enabling them to utilize advertising products and sales strategies that are successful in other markets we serve.

Substantially all of our advertising revenue is derived from a diverse group of local retailers and local classified advertisers, resulting in very
limited customer concentration. No single advertiser accounted for more than 1% of our pro forma total revenue in 2007 or our total revenue in 2006, 2007 or 2008 and our 20 largest advertisers accounted for less than 5% of our pro forma total
revenue in 2007.

Our advertising revenue tends to follow a seasonal pattern, with higher advertising revenue in months containing
significant events or holidays. Accordingly, our first quarter, followed by our third quarter, historically are our weakest quarters of the year in terms of revenue. Correspondingly, our second fiscal quarter, and fourth fiscal quarter, historically
are our strongest quarters. We expect that this seasonality will continue to affect our advertising revenue in future periods.

Circulation

Our circulation revenue is derived from home delivery sales to subscribers and single copy sales at retail stores and vending racks and
boxes. We own 91 paid daily publications that range in circulation from approximately 1,000 to over 63,000 and 204 paid weekly publications that range in circulation from approximately 100 to 75,000. Circulation revenue accounted for approximately
17%, 20% and 21% of our total revenue in 2006, 2007 and 2008, respectively, and 21% of our pro forma total revenue in 2007.

Subscriptions
are typically sold for three to twelve-month terms and often include promotions to extend the average subscription period. We implement marketing programs to increase readership through subscription and single copy sales, including Company-wide and
local circulation contests, door-to-door sales and strategic alliances with local schools in the form of Newspapers in Education programs. In addition, since the adoption of the Telemarketing Sales Rule by the Federal Trade Commission in
2003, which created a national do not call registry, we have increased our use of EZ Pay programs, door to door sales, kiosks, sampling programs, in-paper promotions and online promotions to increase our circulation.

We encourage subscriber use of EZ Pay, a monthly credit card charge or direct bank debit payment program, which has led to higher
retention rates for subscribers. We also use an active stop-loss program for all expiring subscribers. Additionally, in order to improve our circulation revenue and circulation trends, we periodically review the need for quality enhancements, such
as:



| |  |  | Upgrading and expanding printing facilities and printing presses;
| | - |  | -----------------------------------------------------------------



| |  |  | Increasing the use of color and color photographs;
| | - |  | --------------------------------------------------



| |  |  | Improving graphic design, including complete redesigns;
| | - |  | -------------------------------------------------------



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##### Table of Contents

| |  |  | Developing creative and interactive promotional campaigns;
| | - |  | ----------------------------------------------------------



| |  |  | Converting selected newspapers from afternoon to morning publications; and
| | - |  | --------------------------------------------------------------------------



| |  |  | Increasing the amount of unique hyper-local content.
| | - |  | ----------------------------------------------------

We believe that our unique and valuable hyper-local content allows us to continue to produce products of great relevance to our local market audiences. This allows us to be able to periodically raise prices, both for
home delivery and on a single copy basis, which results in increased circulation revenues.

Other

We provide commercial printing services to third parties on a competitive bid basis as a means to generate incremental revenue and utilize excess printing
capacity. These customers consist primarily of other publishers that do not have their own printing presses and do not compete with our publications. We also print other commercial materials, including flyers, business cards and invitations. Other
sources of revenue, including commercial printing, accounted for approximately 7%, 6% and 8% of our total revenue in 2006, 2007 and 2008, respectively, and 6% of our pro forma total revenue in 2007.

Printing and Distribution

We operate 58 print
facilities. We own 57 of these facilities and lease the remaining one. Each of our print facilities produces eight publications on average and is generally located within 60 miles of the communities it serves. By clustering our production resources,
we are able to reduce the operating costs of our publications while increasing the quality of our small and midsize market publications that would typically not otherwise have access to high quality production facilities. We also reduce future
capital expenditure needs by having fewer overall pressrooms and buildings. We believe our superior production quality is critical to maintaining and enhancing our position as the leading provider of local news coverage in the markets we serve.

The distribution of our daily newspapers is typically outsourced to independent, locally based, third-party distributors that also
distribute a majority of our weekly newspapers and non-newspaper publications. In addition, certain of our shopper and weekly publications are delivered via the U.S. Postal Service.

Newsprint

We are a member of a newsprint-buying consortium which enables our local publishers to
obtain favorable pricing by purchasing newsprint from local mills at reduced rates negotiated by the consortium. As a result, we have generally been able to purchase newsprint at a price of $10 to $12 per metric ton below the market price. We
generally maintain a 45  55-day inventory of newsprint.

Historically, the market price of newsprint has been volatile,
reaching a high of approximately $823 per metric ton in 2008 and a low of $410 per metric ton in 2002. The average market price of newsprint during 2008 was approximately $719 per metric ton.

In 2008 we purchased approximately 80,000 metric tons of newsprint (including for commercial printing) and the cost of our newsprint consumption totaled
approximately $54.0 million. Our newsprint expense generally averages less than 10% of total revenue, which generally compares favorably to larger, metropolitan newspapers.

Competition

Each of our publications competes for advertising revenue to varying degrees with direct
mail, yellow pages, radio, outdoor advertising, broadcast and cable television, magazines, local, regional and national newspapers, shoppers and other print and online media sources. However, we believe that barriers to entry are



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high in many of the markets we serve due to our position as the preeminent source for local news and information therein, because our markets are generally
not large enough to support a second newspaper and because our local news gathering infrastructures, sales networks and relationships would be time consuming and costly to replicate. We also have highly recognized local brand names and long
histories in the towns we serve.

We also provide our readers with community-specific content, which is generally not available from other
media sources. Our direct and focused coverage of the market and our cost effective advertising rates relative to more broadly circulated metropolitan newspapers allow us to tailor an approach for our advertisers. As a result, our publications
generally capture a large share of local advertising in the markets they serve.

The level of competition and primary competitors we face
vary from market to market. Competition tends to be based on penetration, demographic and quality factors, as opposed to price factors. The competitive environment in each of our operating regions is discussed in greater detail below.

Northeast Region.In the Northeast region, the Boston Globe and boston.com, a metropolitan daily and website, respectively,
owned by the New York Times Company, compete with us throughout eastern Massachusetts. In addition, we compete in Massachusetts with more than 30 other weekly or daily newspaper companies (that publish a combined total of approximately 16 dailies
and 50 weeklies), three major radio station operators, five local network television broadcasters, one cable company and numerous niche publications for advertising revenues. We believe that our publications generally deliver the highest household
coverage in their respective markets.

Western Region.The Western region consists of 88 markets and we believe our
publications are the dominant print advertising media in the vast majority of these markets. There are radio stations in or within 20 miles of every market we are in, but we do not believe that any of these radio station operators pose a significant
competitive threat to our publications. Yellow page advertising is prevalent in all of our markets with either a local phone book or a regional phone book. We believe that, in most cases, yellow page advertising is geared more towards the
professional services such as attorneys and doctors and not the local retail advertisers, as is the focus with our non-directory publications. In the Western region, we face regional competition with three of our daily newspapers in Illinois. Lee
Enterprises has the Southern Illinoisan that is located in Carbondale. This is a regional newspaper that competes with our dailies in Marion, Benton, West Frankfort and DuQuoin. In all four of these cases, we believe our publications are the
dominant local daily, but do compete on a regional basis with the larger dailies. We also compete with shoppers or weekly newspapers. This competition comes from small independent operators, which we believe is not significant. We have very little
television competition in the Western region because of our geographic location in relation to major markets. There are no local television affiliates in our markets.

Northern Midwest Region.In our Northern Midwest markets we believe our publications are generally the dominant media in those markets. Our only significant competition comes from regional television
stations in Adrian, Michigan and Leavenworth, Kansas. We also face competition from dozens of other competitors such as other local daily and weekly papers and niche publications, as well as radio, other television stations, directories, direct mail
and non-local internet websites, but none of these have proven to be significant.

Southern Midwest Region.In our Southern
Midwest markets we believe our publications are generally the dominant media in those markets. Our major competition comes from regional daily newspapers, specifically: The Advocate in Baton Rouge, Louisiana; The American Press in Lake
Charles, Louisiana; The Joplin Globe; and the Wichita Eagle. We also face competition from numerous other daily and weekly papers, local radio stations, shopping guides, directories and niche publications.

Atlantic Region.In our Atlantic markets we believe our publications are generally the dominant media in those markets. Daily newspapers
owned by Gannett Company, Inc. (The Star-Gazette in Elmira, NY and the Chambersburg (PA) Public-Opinion) compete with us in several markets in the Atlantic region. We also face



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competition from other major newspaper companies in several other Atlantic region markets: Schurz Communications Hagerstown (MD) Herald-Mail;
Times-Shamrock Companys Scranton (PA) The Times-Tribune and Towanda Daily/Sunday Review; Community Newspaper Holdings, Inc.s (CNHI) Sunbury Daily Item; Ogden-Nuttings Williamsport
Sun-Gazette; Newshouse Newspapers Syracuse Post-Standard; and CNHIs Cumberland (MD) Times News. Our competitors in the Atlantic region also include numerous other daily and weekly newspapers, local radio
stations, shopping guides, directories and niche publications. We believe our publications, many of which have an extensive history in the market, tend to be the dominant local publication.

Management and Employees

The 11 members of our
executive management team have an average of over 19 years of industry experience and a long history of identifying, acquiring and improving the operations of acquired publications. Our executive management team has managed community newspapers in
various economic cycles. We also have a seasoned team of managers at the local level, where our 115 publishers have an average of approximately 24 years of industry experience.

As of December 31, 2008, we had approximately 6,538 full time equivalent employees, consisting of hourly and salaried employees. We employ union
personnel at a number of our core publications representing approximately 830 full-time equivalent employees. As of December 31, 2008 there were 27 collective bargaining agreements covering union personnel. Six of these agreements, representing
employees in Massachusetts, Ohio and Illinois, expire in 2009. We believe that relations with our employees are generally good and we have had no work stoppages at any of our publications.

Environmental Matters

We believe that we are
substantially in compliance with all applicable laws and regulations for the protection of the environment and the health and safety of our employees based upon existing facts presently known to us. Compliance with federal, state, and local
environmental laws and regulations relating to the discharge of substances into the environment, the disposal of hazardous wastes and other related activities has had, and will continue to have, an impact on our operations, but has, since our
incorporation in 1997, been accomplished without having a material adverse effect on our operations. While it is difficult to estimate the timing and ultimate costs to be incurred due to uncertainties about the status of laws, regulations and
technology, based on information currently known to us and insurance procured with respect to certain environmental matters, we do not expect environmental costs or contingencies to be material or to have a material adverse effect on us. Our
operations involve risks in these areas, however, and we cannot assure you that we will not incur material costs or liabilities in the future which could adversely affect us.

Corporate Governance and Public Information

The address of our website is
www.gatehousemedia.com. Stockholders can access a wide variety of information on our website, including news releases, Securities and Exchange Commission (SEC) filings, information we are required to post online pursuant to
applicable SEC rules, newspaper profiles and online links. We make available via our website, all filings we make under the Securities Exchange Act of 1934, including Forms 10-K, 10-Q and 8-K, and related amendments, as soon as reasonably
practicable after they are filed with, or furnished to, the SEC. All such filings are available free of charge. Neither the content of our corporate website nor any other website referred to in this report are incorporated by reference into this
report unless expressly noted.



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List of Our Dailies, Weeklies, Shoppers and Directories

Our dailies, weeklies, shoppers and directories are listed below:

Northeast Region



|                                      |  |                       |  |            
|------------------------------------- |  | --------------------- |  | -----------
|Publication                           |  | Principal City, State |  | Type       
|The Enterprise                        |  | Brockton, MA          |  | Daily      
|The MetroWest Daily News              |  | Framingham, MA        |  | Daily      
|The Milford Daily News                |  | Milford, MA           |  | Daily      
|The Daily News Transcript             |  | Norwood, MA           |  | Daily      
|Patriot Ledger                        |  | Quincy, MA            |  | Daily      
|The Daily News Tribune                |  | Waltham, MA           |  | Daily      
|The Herald News                       |  | Fall River, MA        |  | Daily      
|Taunton Daily Gazette                 |  | Taunton, MA           |  | Daily      
|Norwich Bulletin                      |  | Norwich, CT           |  | Daily      
|Abington Mariner/Rockland Standard    |  | Abington, MA          |  | Paid Weekly
|The Beacon                            |  | Acton/Boxboro, MA     |  | Paid Weekly
|Allston/Brighton TAB                  |  | Allston, MA           |  | Paid Weekly
|Amesbury News                         |  | Amesbury, MA          |  | Paid Weekly
|The Arlington Advocate                |  | Arlington, MA         |  | Paid Weekly
|Ashland TAB                           |  | Ashland, MA           |  | Paid Weekly
|Bedford Minuteman                     |  | Bedford, MA           |  | Paid Weekly
|Belmont Citizen-Herald                |  | Belmont, MA           |  | Paid Weekly
|Beverly Citizen                       |  | Beverly, MA           |  | Paid Weekly
|Billerica Minuteman                   |  | Billerica, MA         |  | Paid Weekly
|The Bolton Common                     |  | Bolton, MA            |  | Paid Weekly
|Tri-Town Transcript                   |  | Boxford, MA           |  | Paid Weekly
|Braintree Forum                       |  | Braintree, MA         |  | Paid Weekly
|The Cape Codder                       |  | Brewster, MA          |  | Paid Weekly
|Burlington Union                      |  | Burlington, MA        |  | Paid Weekly
|Cambridge Chronicle                   |  | Cambridge, MA         |  | Paid Weekly
|Canton Journal                        |  | Canton, MA            |  | Paid Weekly
|Carver Reporter                       |  | Carver, MA            |  | Paid Weekly
|Chelmsford Independent                |  | Chelmsford, MA        |  | Paid Weekly
|The Lancaster Times & Clinton Courier |  | Clinton, MA           |  | Paid Weekly
|Cohasset Mariner                      |  | Cohasset, MA          |  | Paid Weekly
|The Concord Journal                   |  | Concord, MA           |  | Paid Weekly
|Danvers Herald                        |  | Danvers, MA           |  | Paid Weekly
|Dover/Sherborn Press                  |  | Dover, MA             |  | Paid Weekly
|Halifax/Plympton Reporter             |  | Halifax, MA           |  | Paid Weekly
|Hamilton-Wenham Chronicle             |  | Hamilton, MA          |  | Paid Weekly
|Hanover Mariner                       |  | Hanover, MA           |  | Paid Weekly
|The Harvard Post                      |  | Harvard, MA           |  | Paid Weekly
|Harwich Oracle                        |  | Harwich, MA           |  | Paid Weekly
|The Hingham Journal                   |  | Hingham, MA           |  | Paid Weekly
|Holbrook Sun                          |  | Holbrook, MA          |  | Paid Weekly
|Holliston TAB                         |  | Holliston, MA         |  | Paid Weekly
|Hopkinton Crier                       |  | Hopkinton, MA         |  | Paid Weekly
|Hudson Sun                            |  | Hudson, MA            |  | Paid Weekly
|The Register                          |  | Hyannis, MA           |  | Paid Weekly
|Ipswich Chronicle                     |  | Ipswich, MA           |  | Paid Weekly



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|                                       |  |                               |  |            
|-------------------------------------- |  | ----------------------------- |  | -----------
|Publication                            |  | Principal City, State         |  | Type       
|Kingston Reporter                      |  | Kingston, MA                  |  | Paid Weekly
|Lexington Minuteman                    |  | Lexington, MA                 |  | Paid Weekly
|Lincoln Journal                        |  | Lincoln, MA                   |  | Paid Weekly
|Littleton Independent                  |  | Littleton, MA                 |  | Paid Weekly
|Malden Observer                        |  | Malden, MA                    |  | Paid Weekly
|Mansfield News                         |  | Mansfield, MA                 |  | Paid Weekly
|Marblehead Reporter                    |  | Marblehead, MA                |  | Paid Weekly
|The Sentinel                           |  | Marion, MA                    |  | Paid Weekly
|Marlborough Enterprise                 |  | Marlborough, MA               |  | Paid Weekly
|Marshfield Mariner                     |  | Marshfield, MA                |  | Paid Weekly
|The Beacon-Villager                    |  | Maynard/Stow, MA              |  | Paid Weekly
|Medfield Press                         |  | Medfield, MA                  |  | Paid Weekly
|Medford Transcript                     |  | Medford, MA                   |  | Paid Weekly
|Melrose Free Press                     |  | Melrose, MA                   |  | Paid Weekly
|Natick Bulletin & Tab                  |  | Natick, MA                    |  | Paid Weekly
|North Andover Citizen                  |  | North Andover, MA             |  | Paid Weekly
|The Northborough/Southborough Villager |  | Northborough/Southborough, MA |  | Paid Weekly
|Norton Mirror                          |  | Norton, MA                    |  | Paid Weekly
|Norwell Mariner                        |  | Norwell, MA                   |  | Paid Weekly
|Easton Journal                         |  | Easton, MA                    |  | Paid Weekly
|Westwood Press                         |  | Westwood, MA                  |  | Paid Weekly
|Georgetown Record                      |  | Georgetown, MA                |  | Paid Weekly
|Old Colony Memorial                    |  | Plymouth, MA                  |  | Paid Weekly
|The Reading Advocate                   |  | Reading, MA                   |  | Paid Weekly
|Roslindale Transcript                  |  | Roslindale, MA                |  | Paid Weekly
|Saugus Advertiser                      |  | Saugus, MA                    |  | Paid Weekly
|Scituate Mariner                       |  | Scituate, MA                  |  | Paid Weekly
|Sharon Advocate                        |  | Sharon, MA                    |  | Paid Weekly
|Shrewsbury Chronicle                   |  | Shrewsbury, MA                |  | Paid Weekly
|Somerville Journal                     |  | Somerville, MA                |  | Paid Weekly
|Stoughton Journal                      |  | Stoughton, MA                 |  | Paid Weekly
|The Sudbury Town Crier                 |  | Sudbury, MA                   |  | Paid Weekly
|Swampscott Reporter                    |  | Swampscott, MA                |  | Paid Weekly
|Tewksbury Reporter                     |  | Tewksbury, MA                 |  | Paid Weekly
|Wakefield Observer                     |  | Wakefield, MA                 |  | Paid Weekly
|Wareham Courier                        |  | Wareham, MA                   |  | Paid Weekly
|Watertown TAB & Press                  |  | Watertown, MA                 |  | Paid Weekly
|The Wayland Town Crier                 |  | Wayland, MA                   |  | Paid Weekly
|The Wellesley Townsman                 |  | Wellesley, MA                 |  | Paid Weekly
|West Roxbury Transcript                |  | West Roxbury, MA              |  | Paid Weekly
|Westborough News                       |  | Westborough, MA               |  | Paid Weekly
|Westford Eagle                         |  | Westford, MA                  |  | Paid Weekly
|The Weston Town Crier                  |  | Weston, MA                    |  | Paid Weekly
|Weymouth News                          |  | Weymouth, MA                  |  | Paid Weekly
|The Winchester Star                    |  | Winchester, MA                |  | Paid Weekly
|Norwood Bulletin                       |  | Norwood, MA                   |  | Paid Weekly
|Pembroke Mariner & Reporter            |  | Pembroke, MA                  |  | Paid Weekly
|The WalpoleTimes                       |  | Walpole, MA                   |  | Paid Weekly
|The Provincetown Banner                |  | Provincetown, MA              |  | Paid Weekly
|The North Attleborough Free Press      |  | North Attleborough, MA        |  | Free Weekly
|Country Gazette                        |  | Bellingham, MA                |  | Free Weekly



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|                               |  |                       |  |            
|------------------------------ |  | --------------------- |  | -----------
|Publication                    |  | Principal City, State |  | Type       
|North Shore Sunday             |  | Danvers, MA           |  | Free Weekly
|Bridgewater Independent        |  | Bridgewater, MA       |  | Free Weekly
|Brookline TAB                  |  | Brookline, MA         |  | Free Weekly
|Cambridge TAB                  |  | Cambridge, MA         |  | Free Weekly
|Duxbury Reporter               |  | Duxbury, MA           |  | Free Weekly
|East Bridgewater Star          |  | E. Bridgewater, MA    |  | Free Weekly
|Framingham TAB                 |  | Framingham, MA        |  | Free Weekly
|Hanson Town Crier              |  | Hanson, MA            |  | Free Weekly
|Lakeville Call                 |  | Lakeville, MA         |  | Free Weekly
|Needham Times                  |  | Needham, MA           |  | Free Weekly
|Newton TAB                     |  | Newton, MA            |  | Free Weekly
|The Newburyport Current        |  | Newburyport, MA       |  | Free Weekly
|Plymouth Bulletin              |  | Plymouth, MA          |  | Free Weekly
|Randolph Herald                |  | Randolph, MA          |  | Free Weekly
|Raynham Call                   |  | Raynham, MA           |  | Free Weekly
|Salem Gazette                  |  | Salem, MA             |  | Free Weekly
|Stoneham Sun                   |  | Stoneham, MA          |  | Free Weekly
|West Bridgewater Times         |  | West Bridgewater, MA  |  | Free Weekly
|Whitman Times                  |  | Whitman, MA           |  | Free Weekly
|Wilmington Advocate            |  | Wilmington, MA        |  | Free Weekly
|Woburn Advocate                |  | Woburn, MA            |  | Free Weekly
|OJornal                        |  | Fall River, MA        |  | Free Weekly
|El Latino Expreso              |  | Fall River, MA        |  | Free Weekly
|Falmouth Bulletin              |  | Falmouth, MA          |  | Free Weekly
|Sandwich Broadsider            |  | Sandwich, MA          |  | Free Weekly
|Bourne Courier                 |  | Bourne, MA            |  | Free Weekly
|Cape Ann Beacon                |  | Cape Ann, MA          |  | Free Weekly
|O Journal Brasieiro            |  | Fall River, MA        |  | Free Weekly
|The Nantucket Independent      |  | Nantucket, MA         |  | Free Weekly
|Colchester Bulletin            |  | Colchester, CT        |  | Free Weekly
|Brockton Pennysaver            |  | Brockton, MA          |  | Shopper    
|Mashpee/Cotuit Pennysaver      |  | Cotuit, MA            |  | Shopper    
|Dennis Pennysaver              |  | Dennis, MA            |  | Shopper    
|Hyannis/Centerville Pennysaver |  | Hyannis, MA           |  | Shopper    
|Yarmouth Pennysaver            |  | South Yarmouth, MA    |  | Shopper    
|Better Living                  |  | Taunton, MA           |  | Shopper    
|South Coast Life               |  | Fall River, MA        |  | Shopper    
|Shop Local Town and Country    |  | Norwich, CT           |  | Shopper    
|Shop Local Shoreline           |  | Norwich, CT           |  | Shopper    



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Western Region



|                               |  |                                                                |  |            
|------------------------------ |  | -------------------------------------------------------------- |  | -----------
|Publication                    |  | Principal City, State                                          |  | Type       
|Benton Evening News            |  | Benton, IL                                                     |  | Daily      
|Daily Ledger                   |  | Canton, IL                                                     |  | Daily      
|The Carmi Times                |  | Carmi, IL                                                      |  | Daily      
|Du Quoin Evening Call          |  | Du Quoin, IL                                                   |  | Daily      
|The Journal Standard           |  | Freeport, IL                                                   |  | Daily      
|Eldorado Daily Journal         |  | Eldorado, IL                                                   |  | Daily      
|Harrisburg Daily Register      |  | Harrisburg, IL                                                 |  | Daily      
|La Junta Tribune Democrat      |  | La Junta, CO                                                   |  | Daily      
|Macomb Journal                 |  | Macomb, IL                                                     |  | Daily      
|Marion Daily Republican        |  | Marion, IL                                                     |  | Daily      
|Daily Review Atlas             |  | Monmouth, IL                                                   |  | Daily      
|The Olney Daily Mail           |  | Olney, IL                                                      |  | Daily      
|Pekin Daily Times              |  | Pekin, IL                                                      |  | Daily      
|Daily Leader                   |  | Pontiac, IL                                                    |  | Daily      
|The Daily Independent          |  | Ridgecrest, CA                                                 |  | Daily      
|Star-Courier                   |  | Kewanee, IL                                                    |  | Daily      
|Daily American                 |  | West Frankfort, IL                                             |  | Daily      
|Siskiyou Daily News            |  | Yreka, CA                                                      |  | Daily      
|Journal Star                   |  | Peoria, IL                                                     |  | Daily      
|The Register-Mail              |  | Galesburg, IL                                                  |  | Daily      
|The State Journal-Register     |  | Springfield, IL                                                |  | Daily      
|The Courier                    |  | Lincoln, IL                                                    |  | Daily      
|Rockford Register Star         |  | Rockford, IL                                                   |  | Daily      
|Advocate Press                 |  | Flora, IL                                                      |  | Paid Weekly
|Press                          |  | Addison/Bensenville/Wood Dale, IL                              |  | Paid Weekly
|The Times Record               |  | Aledo, IL                                                      |  | Paid Weekly
|Life                           |  | Berwyn/Cicero, IL                                              |  | Paid Weekly
|Suburban Life                  |  | Brookfield, IL                                                 |  | Paid Weekly
|The Weekly Times               |  | Carmi, IL                                                      |  | Paid Weekly
|Press                          |  | Bloomingdale/Glendale Heights/ Carol Stream/Roselle/Itasca, IL |  | Paid Weekly
|Randolph County Herald Tribune |  | Chester, IL                                                    |  | Paid Weekly
|Steeleville Ledger             |  | Steeleville, IL                                                |  | Paid Weekly
|The Progress                   |  | Christopher, IL                                                |  | Paid Weekly
|Ridgway News                   |  | Shawneetown, IL                                                |  | Paid Weekly
|Tri-County News                |  | Cottonwood, MN                                                 |  | Paid Weekly
|Suburban Life                  |  | Countryside, IL                                                |  | Paid Weekly
|Suburban Life                  |  | Darien, IL                                                     |  | Paid Weekly
|Reporter                       |  | Downers Grove, IL                                              |  | Paid Weekly
|Ashley News                    |  | Ashley, IL                                                     |  | Paid Weekly
|Du Quoin News                  |  | Du Quoin, IL                                                   |  | Paid Weekly
|Press                          |  | Elmhurst, IL                                                   |  | Paid Weekly
|The Blade                      |  | Fairbury, IL                                                   |  | Paid Weekly
|The Geneseo Republic           |  | Geneseo, IL                                                    |  | Paid Weekly
|Cambridge Chronicle            |  | Cambridge, IL                                                  |  | Paid Weekly
|Chillicothe Times Bulletin     |  | Chillicothe, IL                                                |  | Paid Weekly
|East Peoria Times-Courier      |  | East Peoria, IL                                                |  | Paid Weekly
|Morton Times News              |  | Morton, IL                                                     |  | Paid Weekly



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|                               |  |                                       |  |            
|------------------------------ |  | ------------------------------------- |  | -----------
|Publication                    |  | Principal City, State                 |  | Type       
|Orion Gazette                  |  | Orion, IL                             |  | Paid Weekly
|Granite Falls Advocate-Tribute |  | Granite Falls, MN                     |  | Paid Weekly
|The Gridley Herald             |  | Gridley, CA                           |  | Paid Weekly
|The Spokesman                  |  | Herrin, IL                            |  | Paid Weekly
|Suburban Life                  |  | Hinsdale, IL                          |  | Paid Weekly
|Farmside                       |  | Huntley, IL                           |  | Paid Weekly
|Suburban Life                  |  | La Grange, IL                         |  | Paid Weekly
|Ag Journal                     |  | La Junta, CO                          |  | Paid Weekly
|Bent County Democrat           |  | Las Pimas, CO                         |  | Paid Weekly
|Fowler Tribune                 |  | Fowler, CO                            |  | Paid Weekly
|Reporter                       |  | Lemont, IL                            |  | Paid Weekly
|Spectator                      |  | Lombard, IL                           |  | Paid Weekly
|Oquawka Current                |  | Oquawka, IL                           |  | Paid Weekly
|Montevideo American News       |  | Montevideo, MN                        |  | Paid Weekly
|Dunsmuir News                  |  | Dunsmuir, CA                          |  | Paid Weekly
|Mount Shasta Herald            |  | Mount Shasta, CA                      |  | Paid Weekly
|Weed Press                     |  | Weed, CA                              |  | Paid Weekly
|Murphysboro American           |  | Murphysboro, IL                       |  | Paid Weekly
|Newton Press Mentor            |  | Newton, IL                            |  | Paid Weekly
|Norris City Banner             |  | Norris City, IL                       |  | Paid Weekly
|The Weekly Mail                |  | Olney, IL                             |  | Paid Weekly
|Redwood Gazette                |  | Redwood Falls, MN                     |  | Paid Weekly
|Suburban Life                  |  | Riverside, IL                         |  | Paid Weekly
|Gallatin Democrat              |  | Shawneetown, IL                       |  | Paid Weekly
|Sleepy Eye Herald Dispatch     |  | Sleepy Eye, MN                        |  | Paid Weekly
|St. James Plaindealer          |  | St. James, MN                         |  | Paid Weekly
|Midway Driller                 |  | Taft, CA                              |  | Paid Weekly
|Teutopolis Press               |  | Teutopolis, IL                        |  | Paid Weekly
|SI Trader                      |  | West Frankfort, IL                    |  | Paid Weekly
|Argus                          |  | Villa Park, IL                        |  | Paid Weekly
|The Wabasso Standard           |  | Wabasso, MN                           |  | Paid Weekly
|Press                          |  | Winfield/Warrenville/West Chicago, IL |  | Paid Weekly
|Suburban Life                  |  | Westchester, IL                       |  | Paid Weekly
|Progress                       |  | Westmont, IL                          |  | Paid Weekly
|Reporter                       |  | Bolingbrook/Lisle/Naperville, IL      |  | Paid Weekly
|Galva News                     |  | Galva, IL                             |  | Paid Weekly
|Abingdon Argus-Sentinel        |  | Abingdon, IL                          |  | Paid Weekly
|Augusta Eagle-Scribe           |  | Augusta, IL                           |  | Paid Weekly
|Macomb Eagle                   |  | Macomb, IL                            |  | Paid Weekly
|Roseville Independent          |  | Roseville, IL                         |  | Paid Weekly
|Pro-Football Weekly            |  | Downers Grove, IL                     |  | Paid Weekly
|Republican                     |  | Batavia, IL                           |  | Free Weekly
|Republican                     |  | Geneva, IL                            |  | Free Weekly
|News                           |  | Glen Ellyn, IL                        |  | Free Weekly
|Republican                     |  | St. Charles, IL                       |  | Free Weekly
|Leader                         |  | Wheaton, IL                           |  | Free Weekly
|Espejo                         |  | Rockford, IL                          |  | Free Weekly
|The Paper                      |  | Galesburg, IL                         |  | Free Weekly
|BusinessRockford.com           |  | Rockford, IL                          |  | Free Weekly
|Press                          |  | Bartlett, IL                          |  | Free Weekly



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|                                 |  |                       |  |            
|-------------------------------- |  | --------------------- |  | -----------
|Publication                      |  | Principal City, State |  | Type       
|Peoria Times-Observer            |  | Peoria, IL            |  | Free Weekly
|Washington Times Reporter        |  | Washington, IL        |  | Free Weekly
|Daily Brief                      |  | Macomb, IL            |  | Free Weekly
|White County Shopper News        |  | Carmi, IL             |  | Shopper    
|CCAP Special                     |  | Flora, IL             |  | Shopper    
|The Scene                        |  | Freeport, IL          |  | Shopper    
|Fulton County Shopper            |  | Canton, IL            |  | Shopper    
|The Gridley Shopping News        |  | Gridley, CA           |  | Shopper    
|Henry County Advertizer/Shopper  |  | Geneseo, IL           |  | Shopper    
|Herrin Free Time                 |  | Herrin, IL            |  | Shopper    
|Marion Free Time                 |  | Marion, IL            |  | Shopper    
|McDonough County Shopper         |  | Macomb, IL            |  | Shopper    
|Money Stretcher                  |  | Galatia, IL           |  | Shopper    
|Pennysaver                       |  | Monmouth, IL          |  | Shopper    
|The Star Advisor                 |  | Montevideo, MN        |  | Shopper    
|Super Saver Advertiser           |  | Mount Shasta, CA      |  | Shopper    
|American Monday                  |  | Murphysboro, IL       |  | Shopper    
|Jasper County News Eagle         |  | Olney, IL             |  | Shopper    
|Livingston Shopping News         |  | Pontiac, IL           |  | Shopper    
|Redwood Falls Livewire           |  | Redwood Falls, MN     |  | Shopper    
|Ridgecrest Ad Delivery           |  | Ridgecrest, CA        |  | Shopper    
|Brown County Reminder            |  | Sleepy Eye, MN        |  | Shopper    
|Town and Country Shopper         |  | St. James, MN         |  | Shopper    
|Star Power                       |  | Kewanee, IL           |  | Shopper    
|Springfield Shopper              |  | Springfield, IL       |  | Shopper    
|Bargain Hunter                   |  | Taft, CA              |  | Shopper    
|Town Crier                       |  | Aledo, IL             |  | Shopper    
|Select Homes                     |  | Downers Grove, IL     |  | Shopper    
|Franklin Press                   |  | West Frankfort, IL    |  | Shopper    
|The Link                         |  | Yreka, CA             |  | Shopper    
|Star Shopper                     |  | Rockford, IL          |  | Shopper    
|US Express                       |  | Peoria, IL            |  | Shopper    
|Pekin Express                    |  | Peoria, IL            |  | Shopper    
|Logan County Shopper             |  | Lincoln, IL           |  | Shopper    
|Springfield Advertiser           |  | Springfield, IL       |  | Shopper    
|Chillicothe Choo Choo Advertiser |  | Chillicothe, IL       |  | Shopper    
|Eastside Advertiser              |  | East Peoria, IL       |  | Shopper    
|Morton Pumpkin Advertiser        |  | Morton, IL            |  | Shopper    
|McDonough County This Week       |  | Macomb, IL            |  | Shopper    
|Richland County Shopper          |  | Olney, IL             |  | Shopper    



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##### Table of Contents

Northern Midwest Region



|                                |  |                       |  |            
|------------------------------- |  | --------------------- |  | -----------
|Publication                     |  | Principal City, State |  | Type       
|The Daily Telegram              |  | Adrian, MI            |  | Daily      
|Boonville Daily News            |  | Boonville, MO         |  | Daily      
|Charles City Press              |  | Charles City, IA      |  | Daily      
|Cheboygan Daily Tribune         |  | Cheboygan, MI         |  | Daily      
|Constitution Tribune            |  | Chillicothe, MO       |  | Daily      
|The Daily Reporter              |  | Coldwater, MI         |  | Daily      
|Crookston Daily Times           |  | Crookston, MN         |  | Daily      
|Devils Lake Daily Journal       |  | Devils Lake, ND       |  | Daily      
|Sentinel-Standard               |  | Ionia, MI             |  | Daily      
|Kirksville Daily Express & News |  | Kirksville, MO        |  | Daily      
|The Leavenworth Times           |  | Leavenworth, KS       |  | Daily      
|Chronicle Herald                |  | Macon, MO             |  | Daily      
|Maryville Daily Forum           |  | Maryville, MO         |  | Daily      
|The Mexico Ledger               |  | Mexico, MO            |  | Daily      
|Moberly Monitor Index           |  | Moberly, MO           |  | Daily      
|The Evening News                |  | Sault Ste. Marie, MI  |  | Daily      
|Sturgis Journal                 |  | Sturgis, MI           |  | Daily      
|Hannibal Courier Post           |  | Hannibal, MO          |  | Daily      
|Hillside Daily News             |  | Hillside, MI          |  | Daily      
|The Holland Sentinel            |  | Holland, MI           |  | Daily      
|The Examiner                    |  | Independence, MO      |  | Daily      
|Kansas City Kansan              |  | Kansas City, KS       |  | Paid Weekly
|Nebraska City News Press        |  | Nebraska City, NE     |  | Paid Weekly
|Linn County Leader              |  | Brookfield, MO        |  | Paid Weekly
|Mackinaw Journal                |  | Cheboygan, MI         |  | Paid Weekly
|Bronson Journal                 |  | Bronson, MI           |  | Paid Weekly
|Jonesville Independent          |  | Jonesville, MI        |  | Paid Weekly
|Times-Plain Dealer              |  | Cresco, IA            |  | Paid Weekly
|The Valley Journal              |  | Halstad, MN           |  | Paid Weekly
|Hamburg Reporter                |  | Hamburg, IA           |  | Paid Weekly
|New Hampton Tribune             |  | New Hampton, IA       |  | Paid Weekly
|Syracuse Journal Democrat       |  | Syracuse, NE          |  | Paid Weekly
|Lansing This Week               |  | Leavenworth, KS       |  | Free Weekly
|The Fort Leavenworth Lamp       |  | Leavenworth, KS       |  | Free Weekly
|Hamilton Herald                 |  | Holland, MI           |  | Free Weekly
|My Zeeland                      |  | Holland, MI           |  | Free Weekly
|West Michigan Senior Times      |  | Kalamazoo, MI         |  | Free Weekly
|The Sampler                     |  | Hillsdale, MI         |  | Free Weekly
|Adrian Access Shopper           |  | Adrian, MI            |  | Shopper    
|Adrian Medley                   |  | Adrian, MI            |  | Shopper    
|The Record                      |  | Boonville, MO         |  | Shopper    
|Sho-Me Shopper                  |  | Brookfield, MO        |  | Shopper    
|The Extra                       |  | Charles City, IA      |  | Shopper    
|Northeast Iowa Shopper          |  | Charles City, IA      |  | Shopper    
|Shopper Fair                    |  | Cheboygan, MI         |  | Shopper    
|C.T. Extra                      |  | Chillicothe, MO       |  | Shopper    
|Chronicle Shopper               |  | Leavenworth, KS       |  | Shopper    
|The Reporter Extra              |  | Coldwater, MI         |  | Shopper    
|Coldwater Shoppers Guide        |  | Coldwater, MI         |  | Shopper    



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##### Table of Contents

|                          |  |                       |  |        
|------------------------- |  | --------------------- |  | -------
|Publication               |  | Principal City, State |  | Type   
|The Extra                 |  | Cresco, IA            |  | Shopper
|Crookston Valley Shopper  |  | Crookston, MN         |  | Shopper
|The Country Peddler       |  | Devils Lake, ND       |  | Shopper
|The Gentry County Shopper |  | Albany, MO            |  | Shopper
|The Shopper               |  | Halstad, MN           |  | Shopper
|Penny Press 4             |  | Hiawatha, KS          |  | Shopper
|Sentinel-Standard TMC     |  | Ionia, MI             |  | Shopper
|Wyandotte County Shopper  |  | Kansas City, KS       |  | Shopper
|Kirksville Crier          |  | Kirksville, MO        |  | Shopper
|NEMO Trader               |  | La Plata, MO          |  | Shopper
|Macon Journal             |  | Macon, MO             |  | Shopper
|Penny Press 2             |  | Maryville, MO         |  | Shopper
|The Shopper               |  | Moberly, MO           |  | Shopper
|Penny Press 1             |  | Nebraska City, NE     |  | Shopper
|Tri County Buyers Guide   |  | Sault Ste. Marie, MI  |  | Shopper
|Sturgis Gateway Shopper   |  | Sturgis, MI           |  | Shopper
|Flashes Shopping Guide    |  | Allegan, MI           |  | Shopper
|Salt River Journal        |  | Hannibal, MO          |  | Shopper
|The Extra                 |  | Independence, MO      |  | Shopper
|Tip Off                   |  | Jonesville, MI        |  | Shopper



23



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##### Table of Contents

Southern Midwest Region



|                               |  |                            |  |            
|------------------------------ |  | -------------------------- |  | -----------
|Publication                    |  | Principal City, State      |  | Type       
|Daily Siftings Herald          |  | Arkadelphia, AR            |  | Daily      
|Augusta Daily Gazette          |  | Augusta, KS                |  | Daily      
|The Bastrop Daily Enterprise   |  | Bastrop, LA                |  | Daily      
|Lake Sun Leader                |  | Camdenton, MO              |  | Daily      
|The Carthage Press             |  | Carthage, MO               |  | Daily      
|Derby Reporter                 |  | Derby, KS                  |  | Daily      
|The El Dorado Times            |  | El Dorado, KS              |  | Daily      
|The Daily World                |  | Helena, AR                 |  | Daily      
|Hope Star                      |  | Hope, AR                   |  | Daily      
|Beauregard Daily News          |  | DeRidder, LA               |  | Daily      
|Leesville Daily Leader         |  | Leesville, LA              |  | Daily      
|Southwest Daily News           |  | Sulphur, LA                |  | Daily      
|McPherson Sentinel             |  | McPherson, KS              |  | Daily      
|Neosho Daily News              |  | Neosho, MO                 |  | Daily      
|The Pratt Tribune              |  | Pratt, KS                  |  | Daily      
|Rolla Daily News               |  | Rolla, MO                  |  | Daily      
|Stuttgart Daily Leader         |  | Stuttgart, AR              |  | Daily      
|The Daily Guide                |  | Waynesville, MO            |  | Daily      
|Wellington Daily News          |  | Wellington, KS             |  | Daily      
|The Repository                 |  | Canton, OH                 |  | Daily      
|The Independent                |  | Massilon, OH               |  | Daily      
|The Times-Reporter             |  | Dover/New Philadelphia, OH |  | Daily      
|The Daily Ardmoreite           |  | Ardmore, OK                |  | Daily      
|Dodge City Daily Globe         |  | Dodge City, KS             |  | Daily      
|The Newton Kansan              |  | Newton, KS                 |  | Daily      
|The Oak Ridger                 |  | Oak Ridge, TN              |  | Daily      
|The Morning Sun                |  | Pittsburg, KS              |  | Daily      
|The Shawnee News-Star          |  | Shawnee, OK                |  | Daily      
|Gurdon Times                   |  | Arkadelphia, AR            |  | Paid Weekly
|The Donaldsonville Chief       |  | Donaldsonville, LA         |  | Paid Weekly
|Gonzales Weekly Citizen        |  | Gonzales, LA               |  | Paid Weekly
|The Vedette                    |  | Greenfield/Miller, MO      |  | Paid Weekly
|The Sun Times                  |  | Heber Springs, AR          |  | Paid Weekly
|Nevada County Picayune         |  | Hope, AR                   |  | Paid Weekly
|Vinton News                    |  | Sulphur, LA                |  | Paid Weekly
|The PostFocus on Rural Living |  | Neosho, MO                 |  | Paid Weekly
|Newport Independent            |  | Newport, AR                |  | Paid Weekly
|Post South                     |  | Plaquemine, LA             |  | Paid Weekly
|Barber County Index            |  | Medicine Lodge, KS         |  | Paid Weekly
|St. Johns News                 |  | St. Johns, KS              |  | Paid Weekly
|Kiowa County Signal            |  | Greensburg, KS             |  | Paid Weekly
|St. James Leader Journal       |  | St. James, MO              |  | Paid Weekly
|The White Hall Journal         |  | White Hall, AR             |  | Paid Weekly
|Aurora Advertiser              |  | Aurora, MO                 |  | Paid Weekly
|Girard Press                   |  | Girard, KS                 |  | Paid Weekly
|Dover Post                     |  | Dover, DE                  |  | Paid Weekly
|Milford Beacon                 |  | Milford, DE                |  | Paid Weekly
|Smyrna/Clayton Sun-Times       |  | Smyrna, DE                 |  | Paid Weekly
|The Airlifter                  |  | Dover, DE                  |  | Paid Weekly



24



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##### Table of Contents

|                                    |  |                            |  |            
|----------------------------------- |  | -------------------------- |  | -----------
|Publication                         |  | Principal City, State      |  | Type       
|The Middletown Transcript           |  | Middletown, DE             |  | Paid Weekly
|The Sussex Countian                 |  | Sussex, DE                 |  | Paid Weekly
|West Side Star                      |  | Laurie, MO                 |  | Free Weekly
|Lake Lifestyles Magazine            |  | Osage Beach, MO            |  | Free Weekly
|Lake Area News Focus                |  | Osage Beach, MO            |  | Free Weekly
|Vacation News                       |  | Osage Beach, MO            |  | Free Weekly
|Homes                               |  | Camdenton, MO              |  | Free Weekly
|The Suburbanite                     |  | Green, OH                  |  | Free Weekly
|Tube Tab                            |  | Osage Beach, MO            |  | Free Weekly
|Lake of Ozarks Real Estate          |  | Osage Beach, MO            |  | Free Weekly
|La Estrella                         |  | Dodge City, KS             |  | Free Weekly
|The Arsenal Sentinel                |  | White Hall, AR             |  | Free Weekly
|Arkadelphia Extra                   |  | Arkadelphia, AR            |  | Free Weekly
|The Carthage Press Scope            |  | Carthage, MO               |  | Free Weekly
|Daily World TMC                     |  | Helena, AR                 |  | Free Weekly
|Star Extra                          |  | Hope, AR                   |  | Free Weekly
|Neighborhood Showcase               |  | Neosho, MO                 |  | Free Weekly
|Rolla Daily News Plus             |  | Rolla, MO                  |  | Free Weekly
|The Xtra                            |  | Stuttgart, AR              |  | Free Weekly
|Guardian                            |  | Sulphur, LA                |  | Free Weekly
|Brandywine East Community News      |  | Dover, DE                  |  | Free Weekly
|Brandywine West Community News      |  | Dover, DE                  |  | Free Weekly
|Greenville Community News           |  | Greenville, DE             |  | Free Weekly
|Hockessin Community News            |  | Hockessin, DE              |  | Free Weekly
|Mill Creek Community News           |  | Mill Creek, DE             |  | Free Weekly
|The Pennysaver                      |  | Bastrop, LA                |  | Shopper    
|Pennysaver                          |  | Camdenton, MO              |  | Shopper    
|Shoppers Guide                      |  | El Dorado, KS              |  | Shopper    
|Nickel Ads                          |  | Gonzales, LA               |  | Shopper    
|The Marketeer                       |  | Gonzales, LA               |  | Shopper    
|Lake Stockton Shopper               |  | Greenfield/Miller, MO      |  | Shopper    
|Big Nickel                          |  | Joplin, MO                 |  | Shopper    
|Calcasieu Shopper                   |  | Sulphur, LA                |  | Shopper    
|South Central Kansas Shoppers Guide |  | McPherson, KS              |  | Shopper    
|Lake of the Ozarks Boats            |  | Osage Beach, MO            |  | Shopper    
|West Bank Shopper                   |  | Plaquemine, LA             |  | Shopper    
|Sunflower Shopper                   |  | Pratt, KS                  |  | Shopper    
|Pulaski County Weekly               |  | Waynesville, MO            |  | Shopper    
|The Weekender                       |  | Wellington, KS             |  | Shopper    
|Stark Values                        |  | Canton, OH                 |  | Shopper    
|TMC-EXTRA                           |  | Dover/New Philadelphia, OH |  | Shopper    
|Entertainment Spotlight             |  | Ardmore, OK                |  | Shopper    
|Big AA Shopper                      |  | Aurora, MO                 |  | Shopper    
|Shoppers Weekly                     |  | Dodge City, KS             |  | Shopper    
|Prairie Shopper                     |  | Newton, KS                 |  | Shopper    
|The Sunland Shopper                 |  | Pittsburg, KS              |  | Shopper    
|Augusta Advertiser                  |  | Augusta, KS                |  | Shopper    
|The Express                         |  | Dover, DE                  |  | Shopper    



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##### Table of Contents

Atlantic Region



|                                  |  |                        |  |            
|--------------------------------- |  | ---------------------- |  | -----------
|Publication                       |  | Principal City, State  |  | Type       
|The Leader                        |  | Corning, NY            |  | Daily      
|The Evening Telegram              |  | Herkimer, NY           |  | Daily      
|The Wayne Independent             |  | Honesdale, PA          |  | Daily      
|Evening Tribune                   |  | Hornell, NY            |  | Daily      
|Mineral Daily News Tribune        |  | Keyser, WV             |  | Daily      
|The Evening Times                 |  | Little Falls, NY       |  | Daily      
|The Record Herald                 |  | Waynesboro, PA         |  | Daily      
|Wellsville Daily Reporter         |  | Wellsville, NY         |  | Daily      
|Daily Messenger                   |  | Canandaigua, NY        |  | Daily      
|Utica Observer-Dispatch           |  | Utica, NY              |  | Daily      
|Mid-York Weekly                   |  | Hamilton, NY           |  | Paid Weekly
|The Villager                      |  | Moscow, PA             |  | Paid Weekly
|Carbondale News                   |  | Carbondale, PA         |  | Paid Weekly
|Genesee Country Express           |  | Dansville, NY          |  | Paid Weekly
|The Echo Pilot                    |  | Greencastle, PA        |  | Paid Weekly
|News Eagle                        |  | Hawley, PA             |  | Paid Weekly
|The Chronicle-Express             |  | Penn Yan, NY           |  | Paid Weekly
|The Jackson Star News             |  | Ravenswood, WV         |  | Paid Weekly
|The Jackson Herald                |  | Ripley, WV             |  | Paid Weekly
|Brighton-Pittsford Post           |  | Brighton/Pittsford, NY |  | Paid Weekly
|Greece Post                       |  | Greece, NY             |  | Paid Weekly
|Irondequoit Post                  |  | Irondequoit, NY        |  | Paid Weekly
|Webster Post                      |  | Webster, NY            |  | Paid Weekly
|Gates-Chili Post                  |  | Gates/Chili, NY        |  | Paid Weekly
|Rush-Henrietta Post               |  | Rush/Henrietta, NY     |  | Paid Weekly
|Penfield Post                     |  | Penfield, NY           |  | Paid Weekly
|Saugerties Post Star              |  | Saugerties, NY         |  | Paid Weekly
|Fairport-ER Post                  |  | Fairport, NY           |  | Paid Weekly
|Palmyra Courier-Journal           |  | Palmyra, NY            |  | Paid Weekly
|Newark Courier Gazette            |  | Newark, NY             |  | Paid Weekly
|Steuben Courier Advocate          |  | Bath, NY               |  | Free Weekly
|Brighton-Pittsford Community Post |  | Brighton/Pittsford, NY |  | Free Weekly
|Canandaigua-Victor Community Post |  | Canandaigua/Naples, NY |  | Free Weekly
|Fairport-ER Community Post        |  | Fairport, NY           |  | Free Weekly
|Gates-Chili Community Post        |  | Gates/Chili, NY        |  | Free Weekly
|Greece Community Post             |  | Greece, NY             |  | Free Weekly
|Irondequoit Community Post        |  | Irondequoit, NY        |  | Free Weekly
|Penfield Community Post           |  | Penfield, NY           |  | Free Weekly
|Rush-Henrietta Community Post     |  | Rush/Henrietta, NY     |  | Free Weekly
|Webster Community Post            |  | Webster, NY            |  | Free Weekly
|Fusion                            |  | Utica, NY              |  | Free Weekly
|Utica Pennysaver                  |  | Utica, NY              |  | Free Weekly
|New Hartford Pennysaver           |  | Utica, NY              |  | Free Weekly
|North County Pennysaver           |  | Utica, NY              |  | Free Weekly
|Herkimer Pennysaver               |  | Utica, NY              |  | Free Weekly
|Whitesboro Pennysaver             |  | Utica, NY              |  | Free Weekly
|Clinton Pennysaver                |  | Utica, NY              |  | Free Weekly
|Rome Pennysaver                   |  | Utica, NY              |  | Shopper    
|Hornell Canisteo Penn-E-Saver     |  | Canisteo, NY           |  | Shopper    



26



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##### Table of Contents

|                             |  |                       |  |        
|---------------------------- |  | --------------------- |  | -------
|Publication                  |  | Principal City, State |  | Type   
|Corning Pennysaver           |  | Corning, NY           |  | Shopper
|Geneseeway Shopper           |  | Dansville, NY         |  | Shopper
|Dansville-Wayland Pennysaver |  | Dansville/Wayland, NY |  | Shopper
|Images                       |  | Herkimer, NY          |  | Shopper
|The Independent Extra        |  | Honesdale, PA         |  | Shopper
|The Tribune Extra            |  | Hornell, NY           |  | Shopper
|The Shopper                  |  | Horseheads, NY        |  | Shopper
|Todays Shopper              |  | Keyser, WV            |  | Shopper
|Catskill Shopper             |  | Liberty, NY           |  | Shopper
|Mohawk Valley Pennysaver     |  | Ft. Plain, NY         |  | Shopper
|Star Herald Weekender        |  | Ripley, WV            |  | Shopper
|Mountain Pennysaver          |  | Saugerties, NY        |  | Shopper
|Saugerties Pennysaver        |  | Saugerties, NY        |  | Shopper
|Allegany County Pennysaver   |  | Wellsville, NY        |  | Shopper
|Chronicle Ad-Viser           |  | Penn Yan, NY          |  | Shopper
|Timesaver                    |  | Wayne Co., NY         |  | Shopper
|Lyons Shopping Guide         |  | Lyons, NY             |  | Shopper
|Newark Pennysaver            |  | Newark, NY            |  | Shopper
|Sodus Pennysaver             |  | Sodus, NY             |  | Shopper



27



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##### Table of Contents

Yellow Page Directories



|                                          |  |                                               |  |                      
|----------------------------------------- |  | --------------------------------------------- |  | ---------------------
|Publication                               |  | Principal City, State                         |  | Type                 
|Roseville Directory                       |  | Roseville, CA                                 |  | Yellow Page Directory
|Greater Sacramento Directory              |  | Sacramento, CA                                |  | Yellow Page Directory
|Auburn/Grass Valley/Nevada City Directory |  | Auburn/Grass Valley/Nevada City, CA           |  | Yellow Page Directory
|Folsom/EI Dorado/Placerville Directory    |  | Folsom/EI Dorado/Placerville, CA              |  | Yellow Page Directory
|Michigan & Indiana Phone Guide            |  | St. Joseph County, MI and LaGrange County, IN |  | Yellow Page Directory
|Michigan & Indiana Phone Guide            |  | Branch County, MI and Steuben County, IN      |  | Yellow Page Directory
|The Siskiyou County Connection            |  | Mt. Shasta, CA                                |  | Yellow Page Directory



28



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##### Table of Contents

List of Websites

Our websites are listed below.



|                                  |  |                           
|--------------------------------- |  | --------------------------
|Arkadelphia Daily Siftings Herald |  | siftingsherald.com        
|Arkadelphia Extra                 |  | siftingsherald.com        
|The Sun Times                     |  | thesuntimes.com           
|Daily World TMC                   |  | helena-arkansas.com       
|The Daily World                   |  | helena-arkansas.com       
|Hope Star                         |  | hopestar.com              
|Star Extra                        |  | hopestar.com              
|Newport Independant               |  | newportindependent.com    
|Nevada County Picayune            |  | picayune-times.com        
|Stuttgart Daily Leader            |  | stuttgartdailyleader.com  
|The Extra                         |  | stuttgartdailyleader.com  
|The Gridley Herald                |  | gridleyherald.com         
|The Gridley Shopping News         |  | gridleyherald.com         
|Dunsmuir News                     |  | mtshastanews.com          
|Mount Shasta Herald               |  | mtshastanews.com          
|Weed Press                        |  | mtshastanews.com          
|The Daily Independent             |  | ridgecrestca.com          
|Daily Midway Driller              |  | taftmidwaydriller.com     
|Siskiyou Daily News               |  | siskiyoudaily.com         
|Siskiyou Daily News Extra         |  | siskiyoudaily.com         
|SureWest Directories              |  | surewestdirectories.com   
|Ag Journal                        |  | agjournalonline.com       
|La Junta Tribune Democrat         |  | lajuntatribunedemocrat.com
|Norwich Bulletin                  |  | norwichbulletin.com       
|Charles City Press                |  | charlescitypress.com      
|Times-Plain Dealer                |  | crescotimes.com           
|Hamburg Reporter                  |  | hamburgreporter.com       
|New Hampton Tribune               |  | northeastiowafocus.com    
|Addison Press                     |  | chicagosuburbannews.com   
|Times Record                      |  | aledotimesrecord.com      
|Benton Evening News               |  | bentoneveningnews.com     
|Berwyn Life                       |  | chicagosuburbannews.com   
|Cambridge Chronicle               |  | cambridgechronicle.com    
|Canton Daily Ledger               |  | cantondailyledger.com     
|Carmi Times                       |  | carmitimes.com            
|Darien Suburban Life              |  | chicagosuburbannews.com   
|Downers Grove Reporter            |  | chicagosuburbannews.com   
|Hinsdale Suburban Life            |  | chicagosuburbannews.com   
|Lemont Reporter                   |  | chicagosuburbannews.com   
|Westmont Progress                 |  | chicagosuburbannews.com   
|Du Quoin Evening Call             |  | duquoin.com               
|Advocate Press                    |  | advocatepress.com         
|The Journal Standard              |  | journalstandard.com       
|Money Stretcher                   |  | galatiamoneystretcher.com 
|The Paper                         |  | thepaper.net              
|The Geneseo Republic              |  | geneseorepublic.com       
|Geneva Republican                 |  | chicagosuburbannews.com   
|Bloomingdale Press                |  | chicagosuburbannews.com   



29



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##### Table of Contents

|                             |  |                          
|---------------------------- |  | -------------------------
|Carol Stream Press           |  | chicagosuburbannews.com  
|Countryside Suburban Life    |  | chicagosuburbannews.com  
|Elmhurst Press               |  | chicagosuburbannews.com  
|Glen Ellyn News              |  | chicagosuburbannews.com  
|Itasca Press Roselle Press   |  | chicagosuburbannews.com  
|Lombard Spectator            |  | chicagosuburbannews.com  
|Villa Park Argus             |  | chicagosuburbannews.com  
|Harrisburg Daily Register    |  | dailyregister.com        
|Star Courier                 |  | starcourier.com          
|La Grange Park Suburban Life |  | chicagosuburbannews.com  
|Lisle Reporter               |  | chicagosuburbannews.com  
|Macomb Journal               |  | macombjournal.com        
|Marion Daily Republican      |  | mariondaily.com          
|Daily Review Atlas           |  | reviewatlas.com          
|Brookfield Suburban Life     |  | chicagosuburbannews.com  
|Suburban Life                |  | chicagosuburbannews.com  
|Westchester Suburban Life    |  | chicagosuburbannews.com  
|Advantage                    |  | olneydailymail.com       
|The Olney Daily Mail         |  | olneydailymail.com       
|Orion Gazette                |  | oriongazette.com         
|Pekin Daily Times            |  | pekintimes.com           
|Daily Leader                 |  | pontiacdailyleader.com   
|Batavia Republican           |  | chicagosuburbannews.com  
|Springfield Shopper          |  | springfield-shopper.net  
|Huntley Farmside             |  | chicagosuburbannews.com  
|Press                        |  | chicagosuburbannews.com  
|St. Charles Republican       |  | chicagosuburbannews.com  
|Daily American               |  | dailyamericannews.com    
|SI Trader                    |  | sitraders.com            
|The Courier                  |  | lincolncourier.com       
|Peoria Journal Star          |  | pjstar.com               
|Register-Mail                |  | registermail.com         
|Rockford Register Star       |  | rrstar.com               
|The State-Journal Register   |  | sj-r.com                 
|Peoria Times Observer        |  | peoriatimesobserver.com  
|Wheaton Leader               |  | chicagosuburbannews.com  
|Augusta Daily Gazette        |  | augustagazette.com       
|Derby Reporter               |  | derbydailyrep.com        
|The El Dorado Times          |  | eldoradotimes.com        
|Kiowa County Signal          |  | kiowacountysignal.com    
|Kansas City Kansan           |  | kansascitykansan.com     
|Lansing This Week            |  | lansingthisweek.com      
|The Lansing Chronicle Times  |  | lansingchronicletimes.com
|Chronicle Shopper            |  | leavenworthshopper.com   
|Leavenworth Times            |  | leavenworthtimes.com     
|McPherson Sentinel           |  | mcphersonsentinel.com    
|The Pratt Tribune            |  | pratttribune.com         
|Wellington Daily News        |  | wgtndailynews.com        
|The Morning Sun              |  | morningsun.net           
|The Daily Globe              |  | dodgeglobe.com           
|The Newton Kansan            |  | dodgeglobe.com           
|The Bastrop Daily Enterprise |  | bastropenterprise.com    



30



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##### Table of Contents

|                                      |  |                            
|------------------------------------- |  | ---------------------------
|Beauregard Daily News                 |  | deridderdailynews.com      
|Ascension Citizen                     |  | ascensioncitizen.com       
|Nickel Ads                            |  | ascensioncitizen.com       
|The Marketeer                         |  | ascensioncitizen.com       
|Leesville Daily Leader                |  | leesvilledailyleader.com   
|Post South                            |  | postsouth.com              
|West Bank Shopper                     |  | postsouth.com              
|Southwest Daily News                  |  | sulphurdailynews.com       
|The Register                          |  | barnstableregister.com     
|Country Gazette                       |  | thecountrygazette.com      
|Amesbury News                         |  | amesburynews.com           
|Beverly Citizen                       |  | beverlycitizen.com         
|Danvers Herald                        |  | danversherald.com          
|Georgetown Record                     |  | georgetownrecord.com       
|Hamilton-Wenham Chronicle             |  | hamiltonwenhamchronicle.com
|Medford Transcript                    |  | medfordtranscript.com      
|Melrose Free Press                    |  | melrosefreepress.com       
|The Newburyport Current               |  | newburyportcurrent.com     
|North Andover Citizen                 |  | northandovercitizen.com    
|North Shore Sunday                    |  | northshoresunday.com       
|Stoneham Sun                          |  | stonehamsun.com            
|Tri-Town Transcript                   |  | tritowntranscript.com      
|Wakefield Observer                    |  | wakefieldobserver.com      
|Billerica Minuteman                   |  | thebillericaminuteman.com  
|Bourne Courier                        |  | uppercapecodder.com        
|The Enterprise                        |  | enterprisenews.com         
|The Cape Codder                       |  | capecodder.com             
|The Lancaster Times & Clinton Courier |  | timesandcourier.com        
|The Beacon                            |  | actonbeacon.com            
|Bedford Minuteman                     |  | bedfordminuteman.com       
|Burlington Union                      |  | burlingtonunion.com        
|Chelmsford Independent                |  | chelmsfordindependent.com  
|The Concord Journal                   |  | concordjournal.com         
|Littleton Independent                 |  | littletonindependent.com   
|The Reading Advocate                  |  | readingadvocate.com        
|Tewksbury Advocate                    |  | tewksburyadvocate.com      
|Lincoln Journal                       |  | thelincolnjournal.com      
|Wilmington Advocate                   |  | wilmingtonadvocate.com     
|Woburn Advocate                       |  | woburnadvocate.com         
|The Herald News                       |  | heraldnews.com             
|Ashland TAB                           |  | ashlandweekly.com          
|Canton Journal                        |  | cantonjournal.com          
|The Daily News Transcript             |  | dailynewstranscript.com    
|The Framingham Tab                    |  | framinghamtab.com          
|Holliston TAB                         |  | hollistontab.com           
|Hopkinton Crier                       |  | hopkintoncrier.com         
|Medfield Press                        |  | medfieldpress.com          
|The MetroWest Daily News              |  | metrowestdailynews.com     
|Natick Bulletin and Tab               |  | natickbulletinandtab.com   
|Norton Mirror                         |  | nortonmirror.com           
|Stoughton Journal                     |  | stoughtonjournal.com       
|The Sudbury Town Crier                |  | sudburytowncrier.com       



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|                                  |  |                           
|--------------------------------- |  | --------------------------
|The Wayland Town Crier            |  | waylandtowncrier.com      
|The Weston Town Crier             |  | westontowncrier.com       
|The Bolton Common                 |  | boltoncommon.com          
|The Harvard Post                  |  | harvardpost.com           
|Cohasset Mariner                  |  | cohassetmariner.com       
|The Hingham Journal               |  | hinghamjournal.com        
|Ipswich Chronicle                 |  | ipswichchronicle.com      
|The Arlington Advocate            |  | arlingtonadvocate.com     
|Belmont Citizen-Herald            |  | belmontcitizenherald.com  
|Lexington Minuteman               |  | lexingtonminuteman.com    
|The Winchester Star               |  | thewinchesterstar.com     
|Marblehead Reporter               |  | marbleheadreporter.com    
|Swampscott Reporter               |  | swampscottreporter.com    
|Hudson Sun                        |  | hudsonsun.com             
|Marlborough Enterprise            |  | marlboroughenterprise.com 
|Abington Rockland Mariner         |  | abingtonmariner.com       
|Carver Reporter                   |  | carverreporter.com        
|Duxbury Reporter                  |  | duxbury.wickedlocal.com   
|East Bridgewater Star             |  | eastbridgewaterstar.com   
|Hanover Mariner                   |  | hanovermariner.com        
|Marshfield Mariner                |  | marshfieldmariner.com     
|Norwell Mariner                   |  | norwellmariner.com        
|Pembroke Mariner & Reporter       |  | pembrokemariner.com       
|Plymouth Bulletin                 |  | townonline.com\plymouth   
|The Beacon-Villager               |  | beaconvillager.com        
|Malden Observer                   |  | maldenobserver.com        
|Easton Journal                    |  | theeastonjournal.com      
|The Milford Daily News            |  | milforddailynews.com      
|Country Gazette                   |  | thecountrygazette.com     
|Mansfield News                    |  | themansfieldnews.com      
|Mothertown                        |  | mothertown.com            
|The North Attleborough Free Press |  | nafreepress.com           
|Allston Brighton TAB              |  | allstonbrightontab.com    
|Brookline TAB                     |  | brooklinetab.com          
|Cambridge TAB                     |  | cambridgetab.com          
|Dover-Sherborn Press              |  | doversherbornpress.com    
|Needham Times                     |  | needhamtimes.com          
|Newton TAB                        |  | newtontab.com             
|Watertown TAB & Press             |  | watertowntab.com          
|West Roxbury Transcript           |  | westroxburytranscript.com 
|The Villager                      |  | northboroughvillager.com  
|Norwood Bulletin                  |  | norwoodbulletin.com       
|Harwich Oracle                    |  | harwichoracle.com         
|Halifax Plympton Reporter         |  | halifaxreporter.com       
|Kingston Reporter                 |  | kingstonreporter.com      
|Old Colony Memorial               |  | plymouth.wickedlocal.com  
|The Sentinel                      |  | thesentinelnewspaper.com  
|Wareham Courier                   |  | wareham.wickedlocal.com   
|The Patriot Ledger                |  | ledger.com                
|Avon Messenger                    |  | avonmessenger.com         
|Bridgewater Independent           |  | bridgewaterindependent.com
|Easton Bulletin                   |  | eastonbulletin.com        



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|                                   |  |                           
|---------------------------------- |  | --------------------------
|Hanson Town Crier                  |  | hansontowncrier.com       
|Lakeville Call                     |  | lakevillecall.com         
|Randolph Herald                    |  | randolphherald.com        
|Raynham Call                       |  | raynhamcall.com           
|Taunton Call                       |  | tauntoncall.com           
|The Taunton Daily Gazette          |  | tauntongazette.com        
|Rockland Standard                  |  | therocklandstandard.com   
|West Bridgewater Times             |  | westbridgewatertimes.com  
|RoslindaleWest Roxbury Transcript |  | parkwaytranscript.com     
|Somerville Journal                 |  | somervillejournal.com     
|The Daily News Tribune             |  | dailynewstribune.com      
|The Wellesley Townsman             |  | wellesleytownsman.com     
|Westborough News                   |  | westboronews.com          
|Braintree Forum                    |  | braintreeforum.com        
|Holbrook Sun                       |  | holbrooksun.com           
|The Register                       |  | barnstableregister.com    
|Salem Gazette                      |  | thesalemgazette.com       
|Westford Eagle                     |  | westfordeagle.com         
|Sharon Advocate                    |  | sharonadvocate.com        
|Westwood Press                     |  | thewestwoodpress.com      
|Shrewsbury Chronicle               |  | theshrewsburychronicle.com
|Scituate Mariner                   |  | scituatemariner.com       
|Saugus Advertiser                  |  | saugusadvertiser.com      
|Roslindale Transcript              |  | roslindaletranscript.com  
|Whitman Times                      |  | whitmantimes.com          
|Weymouth News                      |  | theweymouthnews.com       
|El Latino Expreso                  |  | neexpreso.com             
|O Jornal                           |  | ojornal.com               
|The Daily Telegram                 |  | lenconnect.com            
|Cheboygan Daily Tribune            |  | cheboygannews.com         
|Mackinaw Journal                   |  | cheboygannews.com         
|Bronson Journal                    |  | thebronsonjournal.com     
|The Daily Reporter                 |  | thedailyreporter.com      
|Union City Register Tribune        |  | thedailyreporter.com      
|The Evening News                   |  | sooeveningnews.com        
|Sturgis Journal                    |  | sturgisjournal.com        
|Sentinel-Standard                  |  | sentinel-standard.com     
|The Hillside Daily News            |  | hilsdale.net              
|The Holland Sentinel               |  | hollandsentinel.com       
|Crookston Daily Times              |  | crookstontimes.com        
|Granite Falls Advocate Tribune     |  | granitefallsnews.com      
|Montevideo American News           |  | montenews.com             
|Redwood Gazette                    |  | redwoodfallsgazette.com   
|Sleepy Eye Herald Dispatch         |  | sleepyeyenews.com         
|St. James Plain Dealer             |  | stjamesnews.com           
|Boonville Daily News               |  | boonvilledailynews.com    
|Linn County Leader                 |  | linncountyleader.com      
|Lake Sun Leader                    |  | lakesunleader.com         
|The Westside Star                  |  | westsidestar.net          
|The Carthage Press                 |  | carthagepress.com         
|Constitution Tribune               |  | chillicothenews.com       
|Kirksville Daily Express           |  | kirksvilledailyexpress.com



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|                           |  |                          
|-------------------------- |  | -------------------------
|Chronicle Herald           |  | maconch.com              
|Macon Journal              |  | maconch.com              
|Maryville Daily Forum      |  | maryvilledailyforum.com  
|The Mexico Ledger          |  | mexicoledger.com         
|Moberly Monitor Index      |  | moberlymonitor.com       
|Neosho Daily News          |  | neoshodailynews.com      
|Rolla Daily News           |  | therolladailynews.com    
|The Daily Guide            |  | waynesvilledailyguide.com
|The Examiner               |  | examiner.net             
|The Hannibal Courier-Post  |  | hannibal.net             
|Aurora Advertiser          |  | auroraadvertiser.net     
|Devils Lake Daily Journal  |  | devilslakejournal.com    
|Nebraska City News         |  | ncnewspress.com          
|Syracuse Journal Democrat  |  | journaldemocrat.com      
|The Leader                 |  | the-leader.com           
|GateHouse Media            |  | gatehousemedia.com       
|The Evening Telegram       |  | herkimertelegram.com     
|Evening Tribune            |  | eveningtribune.com       
|The Evening Times          |  | littlefallstimes.com     
|Wellsville Daily Reporter  |  | wellsvilledaily.com      
|Daily Messenger            |  | mpnewspapers.com         
|Ad Net Direct              |  | adnetdirect.net          
|The Observer-Dispatch      |  | uticaod.com              
|The Repository             |  | cantonrepository.com     
|The Independent            |  | indeonline.com           
|The Repository             |  | jacksonrep.com           
|The Suburbanite            |  | thesuburbanite.com       
|The Times-Reporter         |  | timesreporter.com        
|The Daily Ardmoreite       |  | ardmoreite.com           
|Shawnee News-Star          |  | news-star.com            
|The News Eagle             |  | neagle.com               
|The Wayne Independent      |  | wayneindependent.com     
|The Record Herald          |  | therecordherald.com      
|The Oak Ridger             |  | oakridger.com            
|Mineral Daily News Tribune |  | newstribune.info         
|Courier-Gazette            |  | cgazette.com             
|The State Journal-Register |  | cityguidespringfield.com 
|The Community News         |  | communitypub.com         
|The Dover Post             |  | doverpost.com            
|Macomb Eagle               |  | eaglepublications.com    
|Middletown Transcript      |  | middletowntranscript.com 
|Milford Beacon             |  | milfordbeacon.com        
|Provincetown Banner        |  | provincetownbanner.com   
|Smyrna Clayton Sun-Times   |  | scsuntimes.com           
|Sussex Countian            |  | sussexcountian.com       
|Delmarva Express           |  | delmarvaexpress.com      



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|Item 1A. | Risk Factors
|-------- | ------------

Our business and operations are
subject to numerous risks, many of which are described below and elsewhere in this report. The risks described below may not be the only risks we face. Additional risks that we do not presently know or that we currently believe to be immaterial may
also adversely affect our business and the trading price of our securities.

Risks Related to Our Business

We depend to a great extent on the economies and the demographics of the local communities that we serve and we are also susceptible to general economic downturns,
like the one currently being experienced, which could have a material and adverse impact on our advertising and circulation revenues and on our profitability.

Our advertising revenues and, to a lesser extent, circulation revenues, depend upon a variety of factors specific to the communities that our publications serve. These factors include, among others, the size and
demographic characteristics of the local population, local economic conditions in general and the economic condition of the retail segments of the communities that our publications serve. If the local economy, population or prevailing retail
environment of a community we serve experiences a downturn, our publications, revenues and profitability in that market could be adversely affected. Our advertising revenues are also susceptible to negative trends in the general economy, like the
one currently being experienced, that affect consumer spending. The advertisers in our newspapers and other publications and related websites are primarily retail businesses, which can be significantly affected by regional or national economic
downturns, like the one currently being experienced, and other developments. Continuing or deepening softness in the U.S. economy could significantly affect key advertising revenue categories, such as help wanted, real estate and automotive.

Uncertainty and adverse changes in the general economic conditions of markets in which we participate may negatively affect our business.

Current and future conditions in the economy have an inherent degree of uncertainty. As a result, it is difficult to estimate the level of
growth or contraction for the economy as a whole. It is even more difficult to estimate growth or contraction in various parts, sectors and regions of the economy, including the markets in which we participate. Adverse changes may occur as a result
of soft global economic conditions, rising oil prices, wavering consumer confidence, unemployment, declines in stock markets, contraction of credit availability, declines in real estate values, or other factors affecting economic conditions in
general. These changes may negatively affect the sales of our products, increase exposure to losses from bad debts, increase the cost and decrease the availability of financing, or increase costs associated with manufacturing and distributing
products.

Our indebtedness could adversely affect our financial health and reduce the funds available to us for corporate purposes.

We have a significant amount of indebtedness. At December 31, 2008, we had total indebtedness of approximately $1.2 billion under
our 2007 Credit Facility. Our interest expense for the year ended December 31, 2008 was $88.2 million. Additionally, we had $17 million in short term debt outstanding as of December 31, 2008 under the 2008 Bridge Facility with Barclays
Capital that we incurred in connection with our acquisition of newspapers from the Dover Post and $11.5 million of short term debt outstanding as of December 31, 2008 pursuant to a seller note.

Our substantial indebtedness could adversely affect our financial health in the following ways:



| |  |  | a substantial portion of our cash flow from operations must be dedicated to the payment of interest on our outstanding indebtedness, thereby reducing the funds
available to us for other purposes;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our flexibility to react to further deterioration in our industry and economic conditions generally may be limited;
| | - |  | -------------------------------------------------------------------------------------------------------------------



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| |  |  | our substantial degree of leverage could make us more vulnerable in the event of additional deterioration in general economic conditions or other adverse events in
our business or the geographic markets that we serve;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired, limiting our
ability to maintain the value of our assets and operations; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | there would be a material and adverse effect on our business and financial condition if we are unable to service our indebtedness or obtain additional financing, as
needed.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, our 2007 Credit Facility contains, and our other indebtedness contains, financial and other
restrictive covenants, ratios and tests that limit our ability to incur additional debt and engage in other activities that may be in our long-term best interests. Our ability to comply with the covenants, ratios or tests contained in our 2007
Credit Facility or in the agreements governing our other indebtedness may be affected by events beyond our control, including prevailing economic, financial and industry conditions. In addition, events of default, if not waived or cured, could
result in the acceleration of the maturity of our indebtedness under our 2007 Credit Facility or our other indebtedness. If we were unable to repay those amounts, the lenders under our 2007 Credit Facility could proceed against the security granted
to them to secure that indebtedness. If the lenders accelerate the payment of our indebtedness under our 2007 Credit Facility or our other indebtedness, our assets may not be sufficient to repay in full such indebtedness.

In addition, a portion of our 2007 Credit Facility is unhedged, which means we are subject to the risk of interest rate fluctuations on such portion of
our long-term debt. If the interest rate on such portion of the 2007 Credit Facility increases, it may have a material adverse effect on our business and financial condition.

The collectability of accounts receivable under current adverse economic conditions could deteriorate to a greater extent than provided for in our financial statements and in our projections of future results.

Recessionary conditions in the United States have increased our exposure to losses resulting from the potential bankruptcy of our
advertising customers. Our accounts receivable are stated at net estimated realizable value and our allowance for doubtful accounts has been determined based on several factors, including receivable agings, significant individual credit risk
accounts and historical experience. If such collectability estimates prove inaccurate, adjustments to future operating results could occur.

Further
declines in our credit ratings and continued volatility in the U.S. credit markets could significantly impact our ability to obtain new financing to fund our operations and strategic initiatives or to refinance our existing debt at reasonable rates
as it matures.

Our long-term debt is rated by Standard & Poors and Moodys Investors Service. We are currently rated
below-investment grade by both rating agencies, and any future long-term borrowing or the extension or replacement of our short-term borrowing will reflect the negative impact of these ratings, increasing our borrowing costs, limiting our financing
options and subjecting us to more restrictive covenants than our existing debt arrangements. Additional reductions in our credit ratings could further increase our borrowing costs, subject us to more onerous terms and reduce or eliminate our
borrowing flexibility in the future. Such limitations on our financing options may affect our ability to refinance existing debt when it becomes due.

We may not generate a sufficient amount of cash or generate sufficient funds from operations to fund our operations or repay our indebtedness at maturity or otherwise.

Our ability to make payments on our indebtedness as required will depend on our ability to generate cash flow from operations in the future. This ability,
to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.



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There can be no assurance that our business will generate cash flow from operations or that future
borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Currently we do not have the ability to draw upon our revolving credit facility which will further limit our
immediate and short-term access to funds.

If there is a significant increase in the price of newsprint or a reduction in the availability of
newsprint, our results of operations and financial condition may suffer.

The basic raw material for our publications is newsprint.
We generally maintain only a 45  55-day inventory of newsprint, although our participation in a newsprint-buying consortium helps ensure adequate supply. An inability to obtain an adequate supply of newsprint at a favorable price or
at all in the future could have a material adverse effect on our ability to produce our publications. Historically, the price of newsprint has been volatile, reaching a high of approximately $823 per metric ton in 2008 and dropping to a low of
almost $410 per metric ton in 2002. The average price of newsprint for 2008 was approximately $719 per metric ton. Recent and future consolidation of major newsprint suppliers may adversely affect price competition among suppliers. Significant
increases in newsprint costs could have a material adverse effect on our financial condition and results of operations.

We compete with a large
number of companies in the local media industry; if we are unable to compete effectively, our advertising and circulation revenues may decline.

Our business is concentrated in newspapers and other print publications located primarily in small and midsize markets in the United States. Our revenues primarily consist of advertising and paid circulation.
Competition for advertising revenues and paid circulation comes from direct mail, directories, radio, television, outdoor advertising, other newspaper publications, the internet and other media. For example, as the use of the internet has increased,
we have lost some classified advertising and subscribers to online advertising businesses and our free internet sites that contain abbreviated versions of our publications. Competition for advertising revenues is based largely upon advertiser
results, advertising rates, readership, demographics and circulation levels. Competition for circulation is based largely upon the content of the publication and its price and editorial quality. Our local and regional competitors vary from market to
market and many of our competitors for advertising revenues are larger and have greater financial and distribution resources than us. We may incur increasing costs competing for advertising expenditures and paid circulation. We may also experience a
decline of circulation or print advertising revenue due to alternative media, such as the internet. If we are not able to compete effectively for advertising expenditures and paid circulation, our revenues may decline.

Our business is subject to seasonal and other fluctuations, which affects our revenues and operating results.

Our business is subject to seasonal fluctuations that we expect to continue to be reflected in our operating results in future periods. Our first fiscal
quarter of the year tends to be our weakest quarter because advertising volume is at its lowest levels following the holiday season. Correspondingly, our second and fourth fiscal quarters tend to be our strongest because they include heavy holiday
and seasonal advertising. Other factors that affect our quarterly revenues and operating results may be beyond our control, including changes in the pricing policies of our competitors, the hiring and retention of key personnel, wage and cost
pressures, distribution costs, changes in newsprint prices and general economic factors.

We could be adversely affected by declining circulation.

Overall daily newspaper circulation, including national and urban newspapers, has declined. There can be no assurance that our
circulation will not continue to decline in the future. We have been able to maintain our annual circulation revenue from existing operations in recent years through, among other things, increases in our per copy prices. However, there can be no
assurance that we will be able to continue to increase prices to offset any declines in circulation. Further declines in circulation could impair our ability to maintain or increase our advertising prices, cause purchasers of advertising in our
publications to reduce or discontinue those purchases and discourage potential new advertising customers which could have a material adverse effect on our business, financial condition, results of operations or cash flows.



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We have a history of losses and may not be able to achieve or maintain profitable operations in the future.

We experienced operating losses from continuing operations of approximately $661.9 million, $234.1 million and $2.5 million in
2008, 2007 and 2006, respectively. Our results of operations in the future will depend on many factors, including our ability to execute our business strategy and realize efficiencies through our clustering strategy. Our failure to achieve
profitability in the future could adversely affect the trading price of our common stock and our ability to raise additional capital and, accordingly, our ability to grow or maintain our business.

The value of our intangible assets may become impaired, depending upon future operating results.

As of December 31, 2008, goodwill and other intangible assets were approximately $826.4 million, or 71.9% of our total assets. To determine whether
all or a portion of the carrying values of our goodwill and other intangible assets are no longer recoverable, which may require a charge to our earnings, we periodically evaluate such assets. During the year ended December 31, 2008, we
performed impairment analyses for goodwill and our other indefinite lived intangible assets. Based on our assessment of future cash flows and recent industry transaction multiples, we determined an impairment charge of $615.5 million should be
recognized. Any future evaluations requiring an asset impairment charge for goodwill or other intangible assets could affect future reported results of operations and shareholders equity, although such charges would not affect operations or
cash flow.

We are subject to environmental and employee safety and health laws and regulations that could cause us to incur significant compliance
expenditures and liabilities.

Our operations are subject to federal, state and local laws and regulations pertaining to the
environment, storage tanks and the management and disposal of wastes at our facilities. Under various environmental laws, a current or previous owner or operator of real property may be liable for contamination resulting from the release or
threatened release of hazardous or toxic substances or petroleum at that property. Such laws often impose liability on the owner or operator without regard to fault and the costs of any required investigation or cleanup can be substantial. Although
in connection with certain of our acquisitions, we have rights to indemnification for certain environmental liabilities, these rights may not be sufficient to reimburse us for all losses that we might incur if a property acquired by us has
environmental contamination.

Our operations are also subject to various employee safety and health laws and regulations, including those
pertaining to occupational injury and illness, employee exposure to hazardous materials and employee complaints. Environmental and employee safety and health laws tend to be complex, comprehensive and frequently changing. As a result, we may be
involved from time to time in administrative and judicial proceedings and investigations related to environmental and employee safety and health issues. These proceedings and investigations could result in substantial costs to us, divert our
managements attention and adversely affect our ability to sell, lease or develop our real property. Furthermore, if it is determined we are not in compliance with applicable laws and regulations, or if our properties are contaminated, it could
result in significant liabilities, fines or the suspension or interruption of the operations of specific printing facilities. Future events, such as changes in existing laws and regulations, new laws or regulations or the discovery of conditions not
currently known to us, may give rise to additional compliance or remedial costs that could be material.

We may not be able to protect intellectual
property rights upon which our business relies, and if we lose intellectual property protection, our assets may lose value.

Our
business depends on our intellectual property, including, but not limited to, our content and services, which we attempt to protect through patents, copyrights, trade laws and contractual restrictions, such as confidentiality agreements. We believe
our proprietary and other intellectual property rights are important to our continued success and our competitive position.



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Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or
otherwise obtain and use our content, services and other intellectual property, and we cannot be certain that the steps we have taken will prevent any misappropriation or confusion among consumers and merchants, or unauthorized use of these rights.
If we are unable to procure, protect and enforce our intellectual property rights, we may not realize the full value of these assets, and our business may suffer. If we must litigate to enforce our intellectual property rights or determine the
validity and scope of the proprietary rights of others, such litigation may be costly and divert the attention of our management.

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

The success of our business is heavily dependent on our ability to retain our current management and other key personnel and to attract and retain
qualified personnel in the future. Competition for senior management personnel is intense and we may not be able to retain our personnel. Although we have entered into employment agreements with certain of our key personnel, these agreements do not
ensure that our key personnel will continue in their present capacity with us for any particular period of time. We do not have key man insurance for any of our current management or other key personnel. The loss of any key personnel would require
our remaining key personnel to divert immediate and substantial attention to seeking a replacement. An inability to find a suitable replacement for any departing executive officer on a timely basis could adversely affect our ability to operate and
grow our business.

A shortage of skilled or experienced employees in the media industry, or our inability to retain such employees, could pose a
risk to achieving improved productivity and reducing costs, which could adversely affect our profitability.

Production and
distribution of our various publications requires skilled and experienced employees. A shortage of such employees, or our inability to retain such employees, could have an adverse impact on our productivity and costs, our ability to expand, develop
and distribute new products and our entry into new markets. The cost of retaining or hiring such employees could exceed our expectations.

Our
potential inability to successfully execute cost control measures could result in greater than expected total operating costs.

We
have implemented general cost control measures, and expect to continue such cost control efforts. If we do not achieve expected savings as a result of such measures or if our operating costs increase as a result of our growth strategy, our total
operating costs may be greater than expected. In addition, reductions in staff and employee benefits could affect our ability to attract and retain key employees.

Our common stock was delisted from the New York Stock Exchange and now is trading in the over-the-counter market.

Effective October 24, 2008, the New York Stock Exchange delisted our common stock. Our common stock is currently quoted on the Pink Sheets Electronic Quotation Service, or pink sheets, in the over-the-counter market under the
trading symbol GHSE. No assurance can be given that our common stock will continue to be traded on any stock market, that any broker will make a market in our common stock, or that any active trading market in our common stock will
exist. Broker-dealers often decline to trade in pink sheet stocks given that (i) the market for such securities is often limited, (ii) such securities are generally more volatile, and (iii) the risk to investors is generally greater.
Moreover, additional requirements with which broker-dealers must comply generally makes it more difficult for such broker-dealers to recommend that their customers buy securities traded on the pink sheets. Consequently, selling our
common stock can be difficult because smaller quantities of shares can be bought and sold, transactions can be delayed and securities analyst and media coverage of our Company is reduced. These factors could result in lower prices and larger spreads
in the bid and ask prices for shares of our common stock as well as lower trading volume. We cannot provide any assurance that, even if our



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common stock continues to be listed or quoted on the pink sheets or another market or system, the market for our common stock will be as liquid as it was
prior to the delisting of our common stock from the NYSE. This relative lack of liquidity also could make it even more difficult for us to raise capital in the future. In addition, our delisting from the NYSE may have other negative results,
including the potential loss of confidence by employees and the loss of institutional investor interest.

Companies which are quoted on the pink
sheets are not subject to corporate governance requirements in order for their shares to be quoted. As a result, our stockholders have less protection from conflicts of interest, related party transactions and similar matters.

Our common stock currently trades as an over-the-counter security on the pink sheets. Corporate governance requirements are not imposed on
companies quoted on the pink sheets. As a result of our delisting from the NYSE, we are not required to comply with any, and our stockholders no longer have the protection of, various NYSE corporate governance requirements, including among others:



| |  |  | the requirement that a majority of our board of directors consist of independent directors;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the requirement that a minimum of three members of our board of directors consist of independent directors;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | the requirement that we have an audit committee, a nominating committee and a compensation committee, in each case that is composed entirely of independent
directors with a written charter addressing the committees purpose and responsibilities;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the requirement for an annual performance evaluation of the audit, nominating and compensation committees; and
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the requirement that our stockholders must be given the opportunity to vote on equity-compensation plans and material revisions thereto.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

We do not anticipate paying additional dividends for the foreseeable future.

We suspended the payment of quarterly cash dividends commencing with the second quarter of 2008 and do not anticipate paying any cash dividends on, or
making repurchases of, our common stock in the foreseeable future. We intend to retain future earnings, if any, to reduce leverage and increase liquidity, finance the expansion of our operations and for general corporate purposes. In addition,
covenants in our 2007 Credit Facility and other Credit Facilities restrict our ability to pay dividends and make certain other payments.

Risks Related to Our Organization and Structure

If the ownership of our common stock continues to be highly concentrated, it may
prevent stockholders from influencing significant corporate decisions and the interests of our principal stockholder may conflict with interests of our other stockholders.

As of December 31, 2008, Fortress beneficially owned approximately 41.9% of our outstanding common stock. As a result, Fortress will continue to have
effective control over fundamental and significant corporate matters and transactions, including: the election of directors; mergers, consolidations or acquisitions; the sale of all or substantially all of our assets and other decisions affecting
our capital structure; the amendment of our amended and restated certificate of incorporation and our amended and restated by-laws; and our dissolution. The interests of Fortress may not always coincide with our interests or the interest of our
other stockholders. For example, Fortress could delay, deter or prevent acts that may be favored by our other stockholders such as hostile takeovers, changes in control and changes in management. As a result of such actions, the market price of our
common stock could decline or stockholders might not receive a premium for their shares in connection with a change of control transaction.



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Fortress has the right to, and has no duty to abstain from exercising such right to, engage or invest in the same
or similar business as us.

Fortress, together with its affiliates, has other business activities in addition to their ownership of
us. Under our amended and restated certificate of incorporation, Fortress has the right to, and has no duty to abstain from exercising such right to, engage or invest in the same or similar business as us, do business with any of our clients,
customers or vendors or employ or otherwise engage any of our officers, directors or employees. If Fortress or any of its affiliates or any of their respective officers, directors or employees acquire knowledge of a potential transaction that could
be a corporate opportunity, they have no duty to offer such corporate opportunity to us, our stockholders or our affiliates.

In the event
that any of our directors and officers who is also a director, officer or employee of Fortress acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such
persons capacity as our director or officer and such person acted in good faith, then such person is deemed to have fully satisfied such persons fiduciary duty and is not liable to us if Fortress pursues or acquires such corporate
opportunity or if such person did not present the corporate opportunity to us.

Anti-takeover provisions in our amended and restated certificate of
incorporation and our amended and restated by-laws may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable or prevent the removal of our current board of directors and management.

Certain provisions of our amended and restated certificate of incorporation and our amended and restated by-laws may discourage, delay or prevent a merger
or acquisition that stockholders may consider favorable or prevent the removal of our current board of directors and management. We have a number of anti-takeover devices in place that can hinder takeover attempts, including:



| |  |  | a staggered board of directors consisting of three classes of directors, each of whom serves a three-year term;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | blank-check preferred stock;
| | - |  | ----------------------------



| |  |  | provisions in our amended and restated certificate of incorporation and amended and restated by-laws preventing stockholders from calling special meetings or acting
by written consent in lieu of a meeting (with the exception of Fortress, so long as Fortress beneficially owns at least 50% of our issued and outstanding common stock);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | advance notice requirements for stockholders with respect to director nominations and actions to be taken at annual meetings; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | no provision in our amended and restated certificate of incorporation for cumulative voting in the election of directors, which means that the holders of a majority
of the outstanding shares of our common stock can elect all the directors standing for election.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our 2007 Credit
Facility currently limits our ability to enter into certain change of control transactions, the occurrence of which would constitute an event of default under our 2007 Credit Facility. However, our amended and restated certificate of incorporation
provides that Section 203 of the Delaware General Corporation Law, which restricts certain business combinations with interested stockholders in certain situations, will not apply to us. This may make it easier for a third party to acquire an
interest in some or all of us with Fortress approval, even though our other stockholders may not deem such an acquisition beneficial to their interests.



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We are a holding company and our access to the cash flow of our subsidiaries is subject to restrictions imposed by
our indebtedness.

We are a holding company with no material direct operations. Our principal assets are the equity interests we own
in our direct subsidiary, GateHouse Media Holdco, Inc. (Holdco), through which we indirectly own equity interests in our operating subsidiaries. As a result, we are dependent on loans, dividends and other payments from our subsidiaries
to generate the funds necessary to meet our financial obligations. Our subsidiaries are legally distinct from us and have no obligation to make funds available to us. Holdco and certain of its subsidiaries are parties to our 2007 Credit Facility,
which imposes restrictions on their ability to make loans, dividend payments or other payments to us. Any payment of dividends to us are subject to the satisfaction of certain financial conditions set forth in our 2007 Credit Facility. Our ability
to comply with these conditions may be affected by events that are beyond our control. We expect future borrowings by our subsidiaries to contain restrictions or prohibitions on the payment of dividends to us.

The requirements of being a public company may strain our resources, including personnel, and cause us to incur additional expenses.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, (the Exchange Act) and the
Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act). These requirements may place a strain on our people, systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business
and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and
procedures and internal controls over financial reporting, significant resources and management oversight will be required. This may divert managements attention from other business concerns. Since the IPO, our costs have and will increase as
a result of having to comply with the Exchange Act and the Sarbanes-Oxley Act, which required us, among other things, to establish an internal audit function.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

Not applicable.



|Item 2. | Properties
|------- | ----------

We operate 58 print facilities across
the United States. We owned 57 of these facilities and lease the remaining one for a term ranging from one to five years. Our facilities range in size from approximately 500 to 55,000 square feet. Our executive offices are located in Fairport, New
York, where we lease approximately 15,000 square feet under a lease terminating in June 2014.

We maintain our properties in good condition
and believe that our current facilities are adequate to meet the present needs of our business. We do not believe any individual property is material to our financial condition or results of operations.



|Item 3. | Legal Proceedings
|------- | -----------------

We become involved from time to
time in claims and lawsuits incidental to the ordinary course of our business, including such matters as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, and complaints alleging discrimination. In
addition, we are involved from time to time in governmental and administrative proceedings concerning employment, labor, environmental and other claims. Insurance coverage mitigates potential loss for certain of these matters. Historically, such
claims and proceedings have not had a material adverse effect upon our consolidated results of operations or financial condition. While we are unable to predict the ultimate outcome of any currently outstanding legal actions, we believe that it is
not



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a likely possibility that the disposition of these matters would have a material adverse effect upon our consolidated results of operations, financial
condition or cash flow.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

Not applicable.



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##### Table of Contents

PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

Market Information

Our common stock was traded on the
New York Stock Exchange, or NYSE, under the symbol GHS from our initial public offering on October 25, 2006 through October 24, 2008. Effective October 24, 2008, the New York Stock Exchange delisted our common stock. Our common
stock is currently quoted on the Pink Sheets Electronic Quotation Service, or pink sheets, and on the Over-the-Counter Bulletin Board System under the trading symbol GHSE. Prior to October 25, 2006, there was no public
market for our common stock. The following table shows the high and low sale prices of our common stock as reported on the NYSE and Over-The-Counter Bulletin Board System for the periods indicated. Reported prices from the Over-the-Counter Bulletin
Board System reflect intermediate prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.



|                             |  |      |       |     |   |      
|---------------------------- |  | ---- | ----- | --- | - | -----
|                             |  | High |       | Low
|Year Ended December 31, 2008 |  |      |       |     |   |      
|Fourth Quarter               |  | $    | 0.60  |     | $ | 0.03 
|Third Quarter                |  | $    | 2.50  |     | $ | 0.30 
|Second Quarter               |  | $    | 6.27  |     | $ | 2.39 
|First Quarter                |  | $    | 9.85  |     | $ | 4.80 
|Year Ended December 31, 2007 |  |      |       |     |   |      
|Fourth Quarter               |  | $    | 13.12 |     | $ | 7.43 
|Third Quarter                |  | $    | 19.10 |     | $ | 11.80
|Second Quarter               |  | $    | 22.18 |     | $ | 17.92
|First Quarter                |  | $    | 20.75 |     | $ | 17.98

The closing sale price for our common stock as reported on the over-the-counter market on
March 9, 2009 was $0.07 per share. As of that date, there were approximately 175 holders of record and approximately 4,743 beneficial owners registered in nominee and street name.

Dividends

On March 9, 2007, our board of directors declared a first quarter 2007 cash dividend
of $0.37 per share on our common stock, or an aggregate of $14.5 million, for the period from January 1, 2007 to March 31, 2007, which was paid on April 16, 2007 to stockholders of record as of March 30, 2007.

On June 18, 2007, our board of directors declared a second quarter 2007 cash dividend of $0.40 per share on our common stock, or an aggregate of
$15.7 million, for the period from April 1, 2007 to June 30, 2007, which was paid on July 16, 2007 to stockholders of record as of June 29, 2007.

On September 13, 2007, our board of directors declared a third quarter 2007 cash dividend of $0.40 per share on our common stock, or an aggregate of $23.1 million for the period from July 1, 2007 to
September 30, 2007, which was paid on October 15, 2007 to stockholders of record as of September 28, 2007.

On
November 13, 2007, our board of directors declared a fourth quarter 2007 cash dividend of $0.40 per share on our common stock, or an aggregate of $23.1 million for the period from October 1, 2007 to December 31, 2007, which was paid
on January 15, 2008 to stockholders of record as of December 31, 2007.

On March 14, 2008, our board of directors declared a
first quarter 2008 cash dividend of $0.20 per share on our common stock, or an aggregate of $11.6 million for the period from January 1, 2008 to March 31, 2008, which was paid on April 15, 2008 to stockholders of record as of March 31, 2008.



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We suspended the payment of quarterly dividends commencing with the second quarter of 2008 and we do not
anticipate paying any cash dividends on our common stock in the foreseeable future. In addition, covenants in our 2007 Credit Facility and other credit facilities restrict our ability to pay dividends or make certain other payments.



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##### Table of Contents

|Item 6. | Selected Financial Data
|------- | -----------------------

The following table
presents our selected historical financial data as of and for each of the years in the five year period ended December 31, 2008. The information in this table should be read in conjunction with the information under Managements
Discussion and Analysis of Financial Condition and Results of Operations, Business and our historical consolidated financial statements and the related notes thereto included elsewhere in this report.



|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | -------- | - | ------------------------------ | - | -------- | ------------------------------ |  | - | ---------------------------------------------- | - | ---------------------------------------- | - | ------- | ------------------------------ | - | ------- | - |  | - | ------- | -
|                                                                                                                                                     |  | Year EndedDecember 31,2008            |          |   | Year EndedDecember 31,2007 (4) |   |          | Year EndedDecember 31,2006 (5) |  |   | Period fromJune 6, 2005 toDecember 31,2005 (6) |   | Period fromJanuary 1,2005 toJune 5, 2005 |   |         | Year EndedDecember 31,2004
(7) |  
|                                                                                                                                                     |  |                                       |          |   |                                |  
|                                                                                                                                                     |  | (Successor)                           |          |   | (Successor)                    |   |          | (Successor)                    |  |   | (Successor)                                    |   | (Predecessor)                            |   |         | (Predecessor)                  |  
|                                                                                                                                                     |  | (In Thousands, Except Per Share Data) |         
|Statement of Operations Data:                                                                                                                        |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Revenues:                                                                                                                                            |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Advertising                                                                                                                                          |  | $                                     | 495,667  |   |                                | $ | 428,531  |                                |  |   | 232,130                                        |   |                                          |   | 88,798  |                                | $ | 63,172  |   |  | $ | 148,291 |  
|Circulation                                                                                                                                          |  |                                       | 146,340  |   |                                |   | 117,782  |                                |  |   | 50,868                                         |   |                                          |   | 19,298  |                                |   | 14,184  |   |  |   | 34,017  |  
|Commercial printing and other                                                                                                                        |  |                                       | 41,092   |   |                                |   | 33,147   |                                |  |   | 23,193                                         |   |                                          |   | 11,415  |                                |   | 8,134   |   |  |   | 17,776  |  
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Total revenues                                                                                                                                       |  |                                       | 683,099  |   |                                |   | 579,460  |                                |  |   | 306,191                                        |   |                                          |   | 119,511 |                                |   | 85,490  |   |  |   | 200,084 |  
|Operating costs and expenses:                                                                                                                        |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Operating costs                                                                                                                                      |  |                                       | 384,594  |   |                                |   | 311,999  |                                |  |   | 156,697                                        |   |                                          |   | 61,001  |                                |   | 40,007  |   |  |   | 97,198  |  
|Selling, general and administrative                                                                                                                  |  |                                       | 187,781  |   |                                |   | 156,016  |                                |  |   | 88,578                                         |   |                                          |   | 29,033  |                                |   | 26,210  |   |  |   | 52,223  |  
|Depreciation and amortization (1)                                                                                                                    |  |                                       | 70,121   |   |                                |   | 57,292   |                                |  |   | 23,610                                         |   |                                          |   | 8,030   |                                |   | 5,776   |   |  |   | 13,374  |  
|Transaction costs related to Merger and Massachusetts Acquisitions                                                                                   |  |                                       |         |   |                                |   |         |                                |  |   |                                               |   |                                          |   | 2,850   |                                |   | 7,703   |   |  |   |        |  
|Integration and reorganization costs and management fees paid to prior owner                                                                         |  |                                       | 7,627    |   |                                |   | 7,490    |                                |  |   | 4,486                                          |   |                                          |   | 1,002   |                                |   | 768     |   |  |   | 1,480   |  
|Impairment of long-lived assets                                                                                                                      |  |                                       | 123,717  |   |                                |   | 1,553    |                                |  |   | 917                                            |   |                                          |   |        |                                |   |        |   |  |   | 1,500   |  
|Gain (loss) on sale of assets                                                                                                                        |  |                                       | (337     | ) |                                |   | (1,495   | )                              |  |   | (700                                           | ) |                                          |   | 40      |                                |   |        |   |  |   | (30     | )
|Goodwill and mastheads impairment                                                                                                                    |  |                                       | 491,830  |   |                                |   | 225,993  |                                |  |   |                                               |   |                                          |   |        |                                |   |        |   |  |   |        |  
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Operating income (loss)                                                                                                                              |  |                                       | (582,908 | ) |                                |   | (182,378 | )                              |  |   | 31,203                                         |   |                                          |   | 17,635  |                                |   | 5,026   |   |  |   | 34,279  |  
|Interest expense, amortization of deferred financing costs, loss on early extinguishment of debt, unrealized gain on derivative instrument and
other |  |                                       | 100,111  |   |                                |   | 83,461   |                                |  |   | 37,458                                         |   |                                          |   | 1,020   |                                |   | 32,884  |   |  |   | 63,762  |  
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Income (loss) from continuing operations before income taxes                                                                                         |  |                                       | (683,019 | ) |                                |   | (265,839 | )                              |  |   | (6,255                                         | ) |                                          |   | 16,615  |                                |   | (27,858 | ) |  |   | (29,483 | )
|Income tax expense (benefit)                                                                                                                         |  |                                       | (21,139  | ) |                                |   | (31,789  | )                              |  |   | (3,769                                         | ) |                                          |   | 7,050   |                                |   | (3,027  | ) |  |   | 1,228   |  
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Income (loss) from continuing operations                                                                                                             |  |                                       | (661,880 | ) |                                |   | (234,050 | )                              |  |   | (2,486                                         | ) |                                          |   | 9,565   |                                |   | (24,831 | ) |  |   | (30,711 | )
|Income from discontinued operations, net of income taxes                                                                                             |  |                                       | (11,426  | ) |                                |   | 2,626    |                                |  |   | 912                                            |   |                                          |   |        |                                |   |        |   |  |   | 4,626   |  
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Net income (loss)                                                                                                                                    |  |                                       | (673,306 | ) |                                | $ | (231,424 | )                              |  | $ | (1,574                                         | ) |                                          | $ | 9,565   |                                | $ | (24,831 | ) |  | $ | (26,085 | )
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Net income (loss) available to common stockholders                                                                                                   |  |                                       | (673,306 | ) |                                | $ | (231,424 | )                              |  | $ | (1,574                                         | ) |                                          | $ | 9,565   |                                | $ | (24,831 | ) |  | $ | (26,085 | )
|                                                                                                                                                     |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Basic net income (loss) from continuing operations per share (2)                                                                                     |  | $                                     | (11.60   | ) |                                | $ | (5.04    | )                              |  |   | (0.10                                          | ) |                                          |   | 0.43    |                                | $ | (0.12   | ) |  | $ | (0.14   | )
|Diluted net income (loss) from continuing operations per share (2)                                                                                   |  | $                                     | (11.60   | ) |                                | $ | (5.04    | )                              |  |   | (0.10                                          | ) |                                          |   | 0.43    |                                | $ | (0.12   | ) |  | $ | (0.14   | )
|Basic net income (loss) available to common stockholders per share (2)                                                                               |  | $                                     | (11.80   | ) |                                | $ | (4.99    | )                              |  |   | (0.06                                          | ) |                                          |   | 0.43    |                                | $ | (0.12   | ) |  | $ | (0.12   | )
|Diluted net income (loss) available to common stockholders per share (2)                                                                             |  | $                                     | (11.80   | ) |                                | $ | (4.99    | )                              |  |   | (0.06                                          | ) |                                          |   | 0.43    |                                | $ | (0.12   | ) |  | $ | (0.12   | )
|Other Data:                                                                                                                                          |  |                                       |          |   |                                |   |          |                                |  |   |                                                |   |                                          |   |         |                                |   |         |   |  |   |         |  
|Adjusted EBITDA (3)                                                                                                                                  |  | $                                     | 102,819  |   |                                | $ | 102,444  |                                |  | $ | 55,746                                         |   |                                          | $ | 28,515  |                                | $ | 18,505  |   |  | $ | 49,153  |  
|Cash interest paid                                                                                                                                   |  | $                                     | 89,677   |   |                                | $ | 74,910   |                                |  | $ | 38,459                                         |   |                                          | $ | 31,720  |                                | $ | 16,879  |   |  | $ | 24,210  |  



|(1) | As a result of the Merger, we performed a valuation of intangible assets based on current economic conditions at such time. The remaining useful lives of advertiser and subscriber
relationships were revised to 18 and 19 years, respectively, effective June 6, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | All share and per share data has been computed as if our 2006 100-for-1 stock split had occurred as of the beginning of each of the applicable periods presented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | We define Adjusted EBITDA as net income (loss) from continuing operations before income tax expense (benefit), interest/financing expense, depreciation and amortization and non-cash
impairments. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations, net income (loss), cash flow from continuing operating activities or any
other measure of performance or liquidity derived in accordance with GAAP. We believe this non-GAAP measure, as we have defined it, is helpful in identifying trends in our day-to-day performance because the items excluded have little or no
significance in our day-to-day operations. This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal
financial performance. Adjusted EBITDA provides an indicator for management to determine if adjustments to current spending decisions are needed.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted EBITDA provides us with a measure of financial performance, independent of items that are beyond the control of management in the short-term, such as depreciation and amortization, taxation and interest
expense associated with our capital structure. This metric measures our financial performance based on operational factors that management can impact in the short-term, namely our cost structure or expenses of the organization. Adjusted EBITDA is
one of the metrics used by senior management and the board of directors to review the financial performance of our business on a monthly basis.

Not all companies calculate Adjusted EBITDA using the same methods; therefore, the Adjusted EBITDA figures set forth herein may not be comparable to Adjusted EBITDA reported by other companies. A substantial portion of our Adjusted EBITDA
must be dedicated to the payment of interest on our outstanding indebtedness and to service other commitments, thereby reducing the funds available to us for other purposes. Accordingly, Adjusted EBITDA does not represent an amount of funds that is
available for managements discretionary use. See Managements Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report.

|(4) | Includes the results of the newspapers acquired from the Journal Register Company, the acquisition of SureWest Directories, the newspapers acquired from The Copley Press, Inc., the
newspapers acquired from Gannett Co. Inc. and the newspapers acquired from Morris Publishing Group since their acquisitions on February 9, 2007, February 28, 2007, April 11, 2007, May 7, 2007 and November 30,
2007, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes the results of CP Media and Enterprise NewsMedia, LLC since their acquisitions on June 6, 2006.
|--- | --------------------------------------------------------------------------------------------------------

|(6) | Includes an unrealized gain on the derivative instrument of $10,807 as well as a decrease in interest expense due to debt extinguishment in connection with the Merger.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Includes the results of the newspapers acquired from Lee Enterprises since their acquisitions on February 3, 2004.
|--- | ------------------------------------------------------------------------------------------------------------------



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The table below shows the reconciliation of income (loss) from continuing operations to Adjusted EBITDA
for the periods presented:



|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    
|-------------------------------------------------------------------- |  | -------------------------- | -------- | --- | -------------------------- | - | -------- | -------------------------- |  | - | ------------------------------------------ | --- |  | ---------------------------------------- | ------- | --- | -------------------------- | - | ------- | --- |  | - | ------- | ---
|                                                                     |  | Year EndedDecember 31,2008 |          |     | Year EndedDecember 31,2007 |   |          | Year EndedDecember 31,2006 |  |   | Period fromJune 6, 2005 toDecember 31,2005 |     |  | Period fromJanuary 1,2005 toJune 5, 2005 |         |     | Year EndedDecember 31,2004 |  
|                                                                     |  |                            |          |     |                            |  
|                                                                     |  | (Successor)                |          |     | (Successor)                |   |          | (Successor)                |  |   | (Successor)                                |     |  | (Predecessor)                            |         |     | (Predecessor)              |  
|                                                                     |  | (In Thousands)             |         
|Income (loss) from continuing operations                             |  | $                          | (661,880 | )   |                            | $ | (234,050 | )                          |  | $ | (2,486                                     | )   |  | $                                        | 9,565   |     |                            | $ | (24,831 | )   |  | $ | (30,711 | )  
|Income tax expense (benefit)                                         |  |                            | (21,139  | )   |                            |   | (31,789  | )                          |  |   | (3,769                                     | )   |  |                                          | 7,050   |     |                            |   | (3,027  | )   |  |   | 1,228   |    
|Unrealized (gain) loss on derivative instrument(1)                   |  |                            | 10,119   |     |                            |   | 2,378    |                            |  |   | (1,150                                     | )   |  |                                          | (10,807 | )   |                            |   |        |     |  |   |        |    
|Loss on early extinguishment of debt(2)                              |  |                            |         |     |                            |   | 2,240    |                            |  |   | 2,086                                      |     |  |                                          |        |     |                            |   | 5,525   |     |  |   |        |    
|Amortization of deferred financing costs                             |  |                            | 1,845    |     |                            |   | 2,101    |                            |  |   | 544                                        |     |  |                                          | 67      |     |                            |   | 643     |     |  |   | 1,826   |    
|Interest expensedividends on mandatorily redeemable preferred stock |  |                            |         |     |                            |   |         |                            |  |   |                                           |     |  |                                          |        |     |                            |   | 13,484  |     |  |   | 29,019  |    
|Interest expensedebt                                                |  |                            | 88,206   |     |                            |   | 76,726   |                            |  |   | 35,994                                     |     |  |                                          | 11,760  |     |                            |   | 13,232  |     |  |   | 32,917  |    
|Impairment of long-lived assets                                      |  |                            | 123,717  |     |                            |   | 1,553    |                            |  |   | 917                                        |     |  |                                          |        |     |                            |   |        |     |  |   | 1,500   |    
|Transaction costs related to Merger and Massachusetts Acquisitions   |  |                            |         |     |                            |   |         |                            |  |   |                                           |     |  |                                          | 2,850   |     |                            |   | 7,703   |     |  |   |        |    
|Depreciation and amortization                                        |  |                            | 70,121   |     |                            |   | 57,292   |                            |  |   | 23,610                                     |     |  |                                          | 8,030   |     |                            |   | 5,776   |     |  |   | 13,374  |    
|Goodwill and mastheads impairment                                    |  |                            | 491,830  |     |                            |   | 225,993  |                            |  |   |                                           |     |  |                                          |        |     |                            |   |        |     |  |   |        |    
|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    
|Adjusted EBITDA from continuing operations                           |  | $                          | 102,819  | (a) |                            | $ | 102,444  | (b)                        |  | $ | 55,746                                     | (c) |  | $                                        | 28,515  | (d) |                            | $ | 18,505  | (e) |  | $ | 49,153  | (f)
|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    



|(a) | Adjusted EBITDA for the year ended December 31, 2008 included net expenses of $24,664 which are one time in nature or non-cash compensation. Included in these net expenses of
$24,664 is non-cash compensation and other expenses of $18,198, non-cash portion of post retirement benefits expense of $(1,499), integration and reorganization costs of $7,627 and $338 loss on the sale of assets. Adjusted EBITDA also does not
include $3,894 of EBITDA generated from our discontinued operations.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Adjusted EBITDA for the year ended December 31, 2007 included net expenses of $23,791 which are one-time in nature or non-cash compensation. Included in these net expenses of
$23,791 is non-cash compensation and other expense of $14,007, non-cash portion of postretirement benefits expense of $799, integration and reorganization costs of $7,490 and a $1,495 loss on the sale of assets.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted EBITDA also does not include $10,189 from SureWest Directories due to the impact of purchase accounting and $4,398 of EBITDA generated from our
discontinued operations, including Huntington, West Virginia, Yankton, South Dakota and Winter Haven, Florida.



|(c) | Adjusted EBITDA for the year ended December 31, 2006 included net expenses of $11,109 which are one-time in nature or non-cash compensation. Included in these net expenses of
$11,109 is non-cash compensation and other expense of $5,175, non-cash portion of postretirement benefit expense of $748, integration and reorganization costs of $4,486 and a $700 loss on the sale of assets.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted EBITDA also does not include $1,860 of EBITDA generated from our discontinued operations, including Globe, Arizona, Oswego, New York, and Milton
and Sayre, Pennsylvania.



|(d) | Adjusted EBITDA for the period from June 6, 2005 to December 31, 2005 included net expenses of $1,643 which are one-time in nature or non-cash
compensation. Included in these net expenses of $1,643 is
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | non-cash compensation and other expense of $681 and integration and reorganization costs of $1,002, which are partially offset by a $40 gain on the sale of
assets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Adjusted EBITDA for the period from January 1, 2005 to June 5, 2005 included net expenses of $1,564 which are one-time in nature or non-cash compensation. Included in
these net expenses of 1,564 is non-cash compensation and other expense of $796 and management fees paid to prior owners of $768.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Adjusted EBITDA for the year ended December 31, 2004 included net expenses of $1,076 which are one-time in nature or non-cash compensation. Included in these net expenses of
$1,076 is management fees paid to prior owners of $1,480 and a loss of $30 on the sale of assets, partially offset by $434 of other income.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | Non-cash (gain) loss on derivative instruments is related to interest rate swap agreements which are financing related and are excluded from Adjusted EBITDA.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Non-cash write-off of deferred financing costs are similar to interest expense and amorization of financing fees and are excluded from Adjusted EBITDA.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                          |  |                    |           |   |             |   |             |  |             |           |               |   |         |  |   |          |  
|--------------------------------------------------------- |  | ------------------ | --------- | - | ----------- | - | ----------- |  | ----------- | --------- | ------------- | - | ------- |  | - | -------- | -
|                                                          |  | As of December 31, |          
|                                                          |  | 2008               |           |   | 2007        |   | 2006        |  | 2005        |           | 2004          |  
|                                                          |  | (Successor)        |           |   | (Successor) |   | (Successor) |  | (Successor) |           | (Predecessor) |  
|                                                          |  | (In Thousands)     |          
|Balance Sheet Data:                                       |  |                    |           |   |             |   |             |  |             |           |               |   |         |  |   |          |  
|Total assets                                              |  | $                  | 1,149,621 |   |             | $ | 1,874,995   |  | $           | 1,131,497 |               | $ | 638,726 |  | $ | 488,176  |  
|Total long-term obligations, including current maturities |  |                    | 1,241,975 |   |             |   | 1,220,856   |  |             | 559,811   |               |   | 313,655 |  |   | 602,003  |  
|Stockholders equity (deficit)                            |  |                    | (229,078  | ) |             |   | 453,988     |  |             | 473,084   |               |   | 232,056 |  |   | (165,577 | )



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|Item 7. | 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 in conjunction with our historical consolidated financial
statements and notes to those statements and pro forma results of operations appearing in this report. The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors under the
heading Risk Factors and elsewhere in this report that could cause our actual future growth, results of operations, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, such
forward-looking statements. See Cautionary Note Regarding Forward-Looking Information at the beginning of this report.

Overview

We are one of the largest publishers of locally based print and online media in the United States as measured by number of daily
publications. Our business model is to be the preeminent provider of local content and advertising in the small and midsize markets we serve. Our portfolio of products, which includes 506 community publications and more than 250 related websites,
and seven yellow page directories, serves over 233,000 business advertising accounts and reaches approximately 10.0 million people on a weekly basis.

Our core products include:



| |  |  | 91 daily newspapers with total paid circulation of approximately 789,000;
| | - |  | -------------------------------------------------------------------------



| |  |  | 294 weekly newspapers (published up to three times per week) with total paid circulation of approximately 686,000 and total free circulation of approximately 1
million;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 121 shoppers (generally advertising-only publications) with total circulation of approximately 1.9 million;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | over 250 locally focused websites, which extend our franchises onto the internet; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | seven yellow page directories, with a distribution of approximately 813,000, that covers a population of approximately 2.0 million people.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

In addition to our core products, we also opportunistically produce niche publications that address specific local
market interests such as recreation, sports, healthcare and real estate. Over the last twelve months, we created approximately 81 niche publications.

We were incorporated in Delaware in 1997 for purposes of acquiring a portion of the daily and weekly newspapers owned by American Publishing Company. We accounted for the initial acquisition using the purchase method
of accounting.

On May 9, 2005, FIF III Liberty Holdings LLC, an affiliate of Fortress Investment Group LLC, entered into an Agreement
and Plan of Merger with the Company pursuant to which a wholly-owned subsidiary of FIF III Liberty Holdings LLC merged with and into the Company (the Merger). The Merger was effective on June 6, 2005, thus making FIF III Liberty
Holdings LLC our principal and controlling stockholder. Prior to the effectiveness of the Merger, we were controlled by affiliates of Leonard Green & Partners, L.P.

As of December 31, 2008, Fortress beneficially owned approximately 41.9% of our outstanding common stock.

Since 1998, we have acquired 416 daily and weekly newspapers and shoppers, including 17 dailies, 120 weeklies and 22 shoppers acquired in the
acquisitions of CP Media and Enterprise NewsMedia, LLC (the Massachusetts Acquisitions), the Copley Press, Inc. newspapers and the Gannett Co., Inc. newspapers and launched numerous new products.



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We generate revenues from advertising, circulation and commercial printing. Advertising revenue is
recognized upon publication of the advertisements. Circulation revenue from subscribers, which is billed to customers at the beginning of the subscription period, is recognized on a straight-line basis over the term of the related subscription. The
revenue for commercial printing is recognized upon delivery of the printed product to our customers. Directory revenue is recognized on a straight-line basis over the 12-month period in which the corresponding directory is distributed and in use in
the market.

Our advertising revenue tends to follow a seasonal pattern, with higher advertising revenue in months containing significant
events or holidays. Accordingly, our first quarter, followed by our third quarter, historically are our weakest quarters of the year in terms of revenue. Correspondingly, our second and fourth fiscal quarters, historically, are our strongest
quarters. We expect that this seasonality will continue to affect our advertising revenue in future periods.

Our operating costs consist
primarily of labor, newsprint, and delivery costs. Our selling, general and administrative expenses consist primarily of labor costs.

According to the Newspaper Association of America, overall annual volume for the industry, including national and urban newspapers, decreased 6.7% during 2007. We have experienced recent declines in certain advertising revenue streams and
increased volatility of operating performance, despite our geographic diversity, well-balanced portfolio of products, strong local franchises, broad customer base and reliance on smaller markets. These levels of recent declines in advertising
revenue we have experienced are typical in the current slow economy. We believe our local advertising tends to be less sensitive to economic cycles than national advertising because local businesses generally have fewer advertising channels through
which to reach their target audience.

Operating cost categories of newsprint, labor and delivery costs have experienced increased upward
price pressure in the industry over the three year period from 2003 to 2006. Newsprint prices then declined in late 2006 and 2007. Newsprint prices rose again throughout 2008. While we expect newsprint costs to decline per metric ton in 2009, we
have taken steps to mitigate some of these prior increases with consumption declines. In addition, we are a member of a newsprint-buying consortium which enables our local publishers to obtain favorable pricing versus the general market.
Additionally, we have taken steps to cluster our operations thereby increasing the usage of facilities and equipment while increasing the productivity of our labor force. We expect to continue to employ these steps as part of our business and
clustering strategy. Labor represents just over 50% of our operating expenses. Beginning in 2008 we initiated an effort to drive efficiencies and centralization of work throughout the organization.

Recent Developments

The newspaper industry
and the Company have experienced declining same store revenue over the past two years. This has led to increased losses, reduced cash flow from operations and the need to record impairment charges for certain long term assets. It has also made it
more difficult to meet certain debt covenants and has eliminated the availability of additional borrowings under our revolving debt agreement. As a result of these trends in the industry and the Company, management is implementing plans to reduce
costs and preserve cash flow. This includes suspending the payment of our cash dividend, the issuance of preferred stock, repayment of borrowings under the revolving debt agreement, and the planned continued implementation of cost reduction
programs, and the potential sale of non-core assets. We believe these initiatives will provide the financial resources necessary to invest in the business and ensure our future success and provide sufficient cash flow to enable us to meet our
committments for the next year.

General economic conditions, including declines in consumer confidence, increases in unemployment levels,
stock market declines, contraction of credit availability, declines in real estate values, and other trends, have impacted the markets we operated in. These changes may negatively impact advertising and other revenue



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sources as well as increase operating costs in the future. Management believes that we have adequate capital resources and liquidity to meet our working
capital needs, borrowing obligations and all required capital expenditures for at least the next twelve months.

We performed testing for
impairment of goodwill and newspaper mastheads as of December 31 and June 30, 2008 and December 31, 2007. The fair value of our reporting units for goodwill impairment testing and individual newspaper mastheads were estimated using the expected
present value of future cash flows and recent industry transaction multiples, using estimates, judgments and assumptions, that we believe were appropriate in the circumstances. Should general economic, market or business conditions continue to
decline, and continue to have a negative impact on estimates of future cash flow and market transaction multiples, we may be required to record additional impairment charges in the future.

During 2008, our credit rating was downgraded to be rated below-investment grade by both Standard & Poors and Moodys Investors Service
and any future long-term borrowing or the extension or replacement of our short-term borrowing will reflect the negative impact of these ratings, increasing our borrowing costs, limiting our financing options and subjecting us to more restrictive
covenants than our existing debt arrangements. Additional reductions in our credit ratings could further increase our borrowing cost, subject us to more onerous borrowing terms and reduce or eliminate our borrowing flexibility in the future.

We have a history of growth through acquisitions. The current economic environment will limit our ability to grow through acquisition in
the near-term future. As a result, we are focused on cost reductions and de-levering opportunities.

Pro Forma

We believe that the separate presentation of historical financial results for the Predecessor and Successor periods may impede the ability of users of our
financial information to understand our operating and cash flow performance. Consequently, in order to enhance an analysis of our operating results, we have presented our operating results on a pro forma basis for the years ended December 31,
2007 and 2006. As no material acquisitions were completed during 2008 pro forma results are not presented for this period. This pro forma presentation for the year ended December 31, 2007 assumes that the Copley Acquisition, the Gannett
Acquisition and the 2007 Financings occurred at the beginning of 2006. This pro forma presentation for the year ended December 31, 2006 assumes that the Massachusetts Acquisitions, the Copley Acquisition, the Gannett Acquisition and the 2007
Financings occurred at the beginning of 2006. These pro forma presentations are not necessarily indicative of what our operating results would have actually been had the Merger, the Massachusetts Acquisitions, the Copley Acquisition, the Gannett
Acquisition and the 2007 and 2006 Financings occurred at the beginning of each pro forma period.

Critical Accounting Policy Disclosure

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. We base our estimates and judgments on historical experience
and other assumptions that we find reasonable under the circumstances. Actual results may differ from such estimates under different conditions. The following accounting policies require significant estimates and judgments.

Goodwill and Long-Lived Assets

We assess the
potential impairment of goodwill and intangible assets with indefinite lives on an annual basis in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets (SFAS No. 142). We perform our impairment analysis on each of our reporting



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units, represented by our nine geographic regions. The geographic regions have discrete financial information and are regularly reviewed by management. The
fair value of the applicable reporting unit is compared to its carrying value. Calculating the fair value of a reporting unit requires us to make significant estimates and assumptions. We estimate fair value by applying third-party market value
indicators to projected cash flows and/or projected earnings before interest, taxes, depreciation, and amortization. In applying this methodology, we rely on a number of factors, including current operating results and cash flows, expected future
operating results and cash flows, future business plans, and market data. If the carrying value of the reporting unit exceeds the estimate of fair value, we calculate the impairment as the excess of the carrying value of goodwill over its implied
fair value.

We account for long-lived assets in accordance with the provisions of SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. (SFAS No. 144). We assess the recoverability of our long-lived assets, including property, plant and equipment and definite lived intangible assets, whenever events or changes in business
circumstances indicate the carrying amount of the assets, or related group of assets, may not be fully recoverable. Factors leading to impairment include significant under-performance relative to historical or projected results, significant changes
in the manner of use of the acquired assets or the strategy for our overall business and significant negative industry or economic trends. The assessment of recoverability is based on managements estimates. If undiscounted projected future
operating cash flows do not exceed the net book value of the long-lived assets, then a permanent impairment has occurred. We would record the difference between the net book value of the long-lived asset and the fair value of such asset as a charge
against income in our consolidated statements of operations if such a difference arose.

The fair values of our reporting units for
goodwill impairment testing and individual newspaper mastheads are estimated using the expected present value of future cash flows, recent industry transaction multiples and using estimates, judgments and assumptions that management believes are
appropriate in the circumstances.

The sum of the fair values of the reporting units are reconciled to our current market capitalization
(based upon the stock market price) plus an estimated control premium.

Significant judgment is required in determining the fair value of
our goodwill and long-lived assets to measure impairment, including the determination of multiples of revenue and Adjusted EBITDA and future earnings projections. The estimates and judgments that most significantly affect the future cash flow
estimates are assumptions related to revenue, and in particular, potential changes in future advertising (including the impact of economic trends and the speed of conversion of advertising and readership to online products from traditional print
products); trends in newsprint prices; and other operating expense items.

We determined that we should perform impairment testing of
goodwill and indefinite lived intangible assets during the second and fourth quarters of 2008 and the fourth quarter of 2007, due to declines in our stock price, reduced estimates in of our future cash flows, increased volatility in operating
results and declines in market transactions. As a result, impairment charges related to goodwill and mastheads were recorded in fiscal 2008 and 2007 and related to goodwill, mastheads and amortizable intangibles in fiscal 2008. See additional
information in Note 5 to the Consolidated Financial Statements.

Newspaper mastheads (newspaper titles and website domain names) are not
subject to amortization and are tested for impairment annually (at year-end), or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each
newspaper masthead with its carrying amount. We used a relief from royalty approach which utilizes a discounted cash flow model to determine the fair value of each newspaper masthead. Our judgments and estimates of future operating results in
determining the reporting unit fair values are consistently applied to each newspaper in determining the fair value of each newspaper masthead. We performed impairment tests on newspaper mastheads as of June 30 and December 31, 2008 and December 31,
2007. See Note 5 to the Consolidated Financial Statements for a discussion of the impairment charges taken.



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Intangible assets subject to amortization (primarily advertiser and subscriber lists) are tested for
recoverability whenever events or change in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result
from the use of such asset group. We performed impairment tests on long lived assets (including intangible assets subject to amortization) as of June 30 and December 31, 2008 and December 31, 2007. See Note 5 to the Consolidated Financial
Statements for a discussion of the impairment charges taken.

Derivative Instruments

We record all of our derivative instruments on our balance sheet at fair value pursuant to SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities (SFAS No. 133), as amended and SFAS No. 157, Fair Value Measurements (SFAS No. 157). Fair value is based on counterparty quotations adjusted for our credit related risk. To the
extent a derivative qualifies as a cash flow hedge under SFAS No. 133, unrealized changes in the fair value of the derivative are recognized in accumulated other comprehensive income. However, any ineffective portion of a derivatives
change in fair value is recognized immediately in earnings. Fair values of derivatives are subject to significant variability based on market conditions, such as future levels of interest rates. This variability could result in a significant
increase or decrease in our accumulated other comprehensive income and/or earnings but will generally have no effect on cash flows, provided the derivative is carried through to full term. We also assess the capabilities of our counterparties to
perform under the terms of the contracts. A change in the assessment could have an impact on the accounting and economics of our derivatives.

Income
Taxes

We account for income taxes under the provisions of SFAS No. 109, Accounting for Income Taxes (SFAS
No. 109). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in which the
differences are expected to affect taxable income. The assessment of the realizability of deferred tax assets involves a high degree of judgment and complexity. Valuation allowances are established when necessary to reduce deferred tax assets to the
amounts that are expected to be realized. When we determine that it is more likely than not that we will be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax asset would be
made and reflected either in income or as an adjustment to goodwill. This determination will be made by considering various factors, including our expected future results, that in our judgment will make it more likely than not that these deferred
tax assets will be realized.

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, (FIN 48) which is an interpretation of SFAS No. 109. FIN 48 prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial
statements uncertain tax positions that a company has taken or expects to take on a tax return. Under FIN 48, the financial statements will reflect expected future tax consequences of such positions presuming the taxing authorities full
knowledge of the position and all relevant facts, but without considering time values. FIN 48 substantially changes the applicable accounting model and is likely to cause greater volatility in income statements as more items are recognized
discretely within income tax expense. FIN 48 also revises disclosure requirements and introduces a prescriptive, annual, tabular roll-forward of the unrecognized tax benefits.

Companies need to assess all material open positions in all tax jurisdictions as of the adoption date and determine the appropriate amount of tax
benefits that are recognizable under FIN 48. Any difference between the amounts previously recognized and the benefit determined under the new guidance, including changes in accrued interest and penalties, has to be recorded on the date of adoption.
For certain types of income tax uncertainties, existing generally accepted accounting principles provide specific guidance on the accounting for modifications of the recognized benefit. Any differences in recognized tax benefits on the date of
adoption that are not subject



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to specific guidance would be an adjustment to retained earnings as of the beginning of the adoption period. The FASB has issued a FASB Staff Position
(FSP) related to FIN 48. The proposed FSP, Definition of Settlement in FASB Interpretation No. 48, would amend FIN 48 to address concerns regarding the meaning of ultimately settled in paragraph 10b. The
implementation of FIN 48 did not have a material impact on our consolidated financial statements.

We record tax assets and liabilities at
the date of a purchase business combination, based on our best estimate of the ultimate tax basis that will be accepted by the tax authority, and liabilities for prior tax returns of the acquired entity should be based on our best estimate of the
ultimate settlement in accordance with Emerging Issues Task Force (EITF) Issue No. 93-7, Uncertainties Related to Income Taxes in a Purchase Business Combination. At the date of a change in our best estimate of the ultimate
tax basis of acquired assets, liabilities, and carryforwards, and at the date that the tax basis is settled with the tax authority, tax assets and liabilities will be adjusted to reflect the revised tax basis and the amount of any settlement with
the tax authority for prior-year income taxes. Similarly, at the date of a change in our best estimate of items relating to the acquired entitys prior tax returns, and at the date that the items are settled with the tax authority, any
liability previously recognized will be adjusted. The effect of those adjustments is applied to increase or decrease the remaining balance of goodwill attributable to that acquisition. If goodwill is reduced to zero, the remaining amount of those
adjustments will be applied initially to reduce to zero other noncurrent intangible assets related to that acquisition, and any remaining amount should be recognized in earnings.

We also adjust income tax accounts related to purchase business combinations during the purchase accounting allocation period, based on information on
which we are waiting that becomes available within one year of the acquisition date. These adjustments can significantly affect our scheduling of deferred tax assets and liabilities and our determination of the need for a valuation allowance on
deferred tax assets, and therefore on reported results.

Self-Insurance Liability Accruals

We maintain self-insured medical and workers compensation programs. We purchase stop loss coverage from third parties which limits our exposure to
large claims. We record a liability for healthcare and workers compensation costs during the period in which they occur as well as an estimate of incurred but not reported claims.



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Results of Operations

The following table summarizes our historical results of operations for the years ended December 31, 2008 2007 and 2006 and our pro forma results of operations for the years ended December 31, 2007 and 2006.



|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|------------------------------------------------------------------ |  | -------------------------- | -------- | - | -------------------------- | - | -------- | -------------------------- |  | - | -------------------------- | - |  | -------------------------- | ------- | - |  | - | ------- | -
|                                                                   |  | Year EndedDecember 31,2008 |          |   | Year EndedDecember 31,2007 |   |          | Year EndedDecember 31,2007 |  |   | Year EndedDecember 31,2006 |   |  | Year EndedDecember 31,2006 |        
|                                                                   |  | (Actual)                   |          |   | (Pro Forma)                |   |          | (Actual)                   |  |   | (Pro Forma)                |   |  | (Actual)                   |        
|                                                                   |  | (In Thousands)             |         
|Revenues:                                                          |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Advertising                                                        |  | $                          | 495,667  |   |                            | $ | 478,749  |                            |  | $ | 428,531                    |   |  | $                          | 469,883 |   |  | $ | 232,130 |  
|Circulation                                                        |  |                            | 146,340  |   |                            |   | 136,583  |                            |  |   | 117,782                    |   |  |                            | 128,132 |   |  |   | 50,868  |  
|Commercial printing and other                                      |  |                            | 41,092   |   |                            |   | 37,066   |                            |  |   | 33,147                     |   |  |                            | 37,100  |   |  |   | 23,193  |  
|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Total revenues                                                     |  |                            | 683,099  |   |                            |   | 652,398  |                            |  |   | 579,460                    |   |  |                            | 635,115 |   |  |   | 306,191 |  
|Operating costs and expenses:                                      |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Operating costs                                                    |  |                            | 384,594  |   |                            |   | 354,409  |                            |  |   | 311,999                    |   |  |                            | 348,787 |   |  |   | 156,697 |  
|Selling, general and administrative                                |  |                            | 187,781  |   |                            |   | 172,266  |                            |  |   | 156,016                    |   |  |                            | 155,074 |   |  |   | 88,578  |  
|Depreciation and amortization                                      |  |                            | 70,121   |   |                            |   | 64,783   |                            |  |   | 57,292                     |   |  |                            | 55,876  |   |  |   | 23,610  |  
|Transaction costs related to Merger and Massachusetts Acquisitions |  |                            |         |   |                            |   |         |                            |  |   |                           |   |  |                            | 4,420   |   |  |   |        |  
|Integration and reorganization costs                               |  |                            | 7,627    |   |                            |   | 7,490    |                            |  |   | 7,490                      |   |  |                            | 4,486   |   |  |   | 4,486   |  
|Impairment of long-lived assets                                    |  |                            | 123,717  |   |                            |   | 1,553    |                            |  |   | 1,553                      |   |  |                            | 917     |   |  |   | 917     |  
|Loss on sale of assets                                             |  |                            | (337     | ) |                            |   | (1,495   | )                          |  |   | (1,495                     | ) |  |                            | (745    | ) |  |   | (700    | )
|Goodwill and mastheads impairment                                  |  |                            | 491,830  |   |                            |   | 225,993  |                            |  |   | 225,993                    |   |  |                            |        |   |  |   |        |  
|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Operating income (loss)                                            |  |                            | (582,908 | ) |                            |   | (175,591 | )                          |  |   | (182,378                   | ) |  |                            | 64,810  |   |  |   | 31,203  |  
|Interest expense                                                   |  |                            | 88,206   |   |                            |   | 96,096   |                            |  |   | 76,726                     |   |  |                            | 103,933 |   |  |   | 35,994  |  
|Amortization of deferred financing costs                           |  |                            | 1,845    |   |                            |   | 1,532    |                            |  |   | 2,101                      |   |  |                            | 4,397   |   |  |   | 544     |  
|Loss on early extinguishment of debt                               |  |                            |         |   |                            |   | 2,240    |                            |  |   | 2,240                      |   |  |                            | 3,449   |   |  |   | 2,086   |  
|Unrealized (gain) loss on derivative instrument                    |  |                            | 10,119   |   |                            |   | 2,378    |                            |  |   | 2,378                      |   |  |                            | (1,150  | ) |  |   | (1,150  | )
|Other (income) loss                                                |  |                            | (59      | ) |                            |   | (4       | )                          |  |   | 16                         |   |  |                            | 1       |   |  |   | (16     | )
|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Loss from continuing operations before income taxes                |  |                            | (683,019 | ) |                            |   | (277,833 | )                          |  |   | (265,839                   | ) |  |                            | (45,820 | ) |  |   | (6,255  | )
|Income tax benefit                                                 |  |                            | (21,139  | ) |                            |   | (36,725  | )                          |  |   | (31,789                    | ) |  |                            | (15,045 | ) |  |   | (3,769  | )
|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  
|Loss from continuing operations                                    |  | $                          | (661,880 | ) |                            | $ | (241,108 | )                          |  | $ | (234,050                   | ) |  | $                          | (30,775 | ) |  | $ | (2,486  | )
|                                                                   |  |                            |          |   |                            |   |          |                            |  |   |                            |   |  |                            |         |   |  |   |         |  



56



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Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2007

(In thousands)



|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|---------------------------------------- |  | ----------------- | -------- | - | --------- | - | ------ | ---------- |  | -------------- | ------ |  | --------- | ------- | ------ |  | - | -------- | -
|                                         |  | GateHouseMedia(A) |          |   | Copley(B) |   |        | Gannett(C) |  | Adjustments(D) |        |  | Pro forma |        
|Revenues:                                |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Advertising                              |  | $                 | 428,531  |   |           | $ | 26,272 |            |  | $              | 28,511 |  | $         | (4,565  | )(1)   |  | $ | 478,749  |  
|Circulation                              |  |                   | 117,782  |   |           |   | 12,369 |            |  |                | 7,862  |  |           | (1,430  | )(1)   |  |   | 136,583  |  
|Commercial printing and other            |  |                   | 33,147   |   |           |   | 2,934  |            |  |                | 2,013  |  |           | (1,028  | )(1)   |  |   | 37,066   |  
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Total revenues                           |  |                   | 579,460  |   |           |   | 41,575 |            |  |                | 38,386 |  |           | (7,023  | )      |  |   | 652,398  |  
|Operating costs and expenses:            |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Operating costs                          |  |                   | 311,999  |   |           |   | 25,476 |            |  |                | 21,699 |  |           | (4,765  | )(1,2) |  |   | 354,409  |  
|Selling, general and administrative      |  |                   | 156,016  |   |           |   | 11,459 |            |  |                | 6,860  |  |           | (2,069  | )(1,3) |  |   | 172,266  |  
|Depreciation and amortization            |  |                   | 57,292   |   |           |   | 2,882  |            |  |                | 1,372  |  |           | 3,237   | (1,4)  |  |   | 64,783   |  
|Integration and reorganization           |  |                   | 7,490    |   |           |   |       |            |  |                |       |  |           |        |        |  |   | 7,490    |  
|Impairment of long-lived assets          |  |                   | 1,553    |   |           |   |       |            |  |                |       |  |           |        |        |  |   | 1,553    |  
|Loss on sale of assets                   |  |                   | (1,495   | ) |           |   |       |            |  |                |       |  |           |        |        |  |   | (1,495   | )
|Goodwill and mastheads impairment        |  |                   | 225,993  |   |           |   |       |            |  |                |       |  |           |        |        |  |   | 225,993  |  
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Total operating expenses                 |  |                   | 761,838  |   |           |   | 39,817 |            |  |                | 29,931 |  |           | (3,597  | )      |  |   | 827,989  |  
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Operating income (loss)                  |  |                   | (182,378 | ) |           |   | 1,758  |            |  |                | 8,455  |  |           | (3,426  | )      |  |   | (175,591 | )
|Interest expense                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Debt                                     |  |                   | 76,726   |   |           |   |       |            |  |                |       |  |           | 19,370  | (5)    |  |   | 96,096   |  
|Other interest expense                   |  |                   |         |   |           |   | 3,817  |            |  |                |       |  |           | (3,817  | )(5)   |  |   |         |  
|Amortization of deferred financing costs |  |                   | 2,101    |   |           |   |       |            |  |                |       |  |           | (569    | )(6)   |  |   | 1,532    |  
|Loss on early extinguishment of debt     |  |                   | 2,240    |   |           |   |       |            |  |                |       |  |           |        |        |  |   | 2,240    |  
|Unrealized loss on derivative instrument |  |                   | 2,378    |   |           |   |       |            |  |                |       |  |           |        |        |  |   | 2,378    |  
|Other (income) loss                      |  |                   | 16       |   |           |   | (20    | )          |  |                |       |  |           |        |        |  |   | (4       | )
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Income (loss) from operations before tax |  |                   | (265,839 | ) |           |   | (2,039 | )          |  |                | 8,455  |  |           | (18,410 | )      |  |   | (277,833 | )
|Income tax expense (benefit)             |  |                   | (31,789  | ) |           |   | (1,120 | )          |  |                | 3,391  |  |           | (7,207  | )(1,7) |  |   | (36,725  | )
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  
|Income (loss) from continuing operations |  | $                 | (234,050 | ) |           | $ | (919   | )          |  | $              | 5,064  |  | $         | (11,203 | )      |  | $ | (241,108 | )
|                                         |  |                   |          |   |           |   |        |            |  |                |        |  |           |         |        |  |   |          |  

Adjustments to Unaudited Pro Forma Condensed Consolidated Statement of Operations

(A) GateHouse Media, Inc.

Reflects historical
consolidated statement of operations for the Company for the year ended December 31, 2007.

(B) Copley

Reflects historical consolidated statement of operations for the newspapers acquired from the Copley Press Inc. for the period from January 1,
2007 to April 11, 2007.

(C) Gannett

Reflects historical consolidated statement of operations for the newspapers acquired from Gannett Co. Inc. for the period from January 1, 2007 to May 7, 2007.



57



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(D) Adjustments



|(1) | Reflects the adjustment to eliminate the revenue and expenses related to the group of assets and liabilities from the Gannett Acquisition held for sale:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|                                    |  |                             |      
|----------------------------------- |  | --------------------------- | -----
|                                    |  | Year endedDecember 31, 2007
|Revenues:                           |  |                             |      
|Advertising                         |  | $                           | 4,565
|Circulation                         |  |                             | 1,430
|Commercial printing and other       |  |                             | 1,028
|Operating costs and expenses:       |  |                             |      
|Operating costs                     |  |                             | 4,221
|Selling, general and administrative |  |                             | 1,159
|Depreciation and amortization       |  |                             | 202  
|Income tax expense                  |  |                             | 578  
|                                    |  |                             |      
|Income from operations              |  | $                           | 863  
|                                    |  |                             |      



|(2) | Reflects the elimination of expenses related to the pension and postretirement plans not continued by the Company.
|--- | ------------------------------------------------------------------------------------------------------------------



|                                              |  |                             |    
|--------------------------------------------- |  | --------------------------- | ---
|                                              |  | Year endedDecember 31, 2007
|GannettPension and postretirement adjustment |  | $                           | 544
|                                              |  |                             |    



|(3) | Reflects the elimination of certain expenses related to liabilities included in the historical statement of operations of Copley and Gannett but not assumed by us.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                   |  |                             |    
|-------------------------------------------------- |  | --------------------------- | ---
|                                                   |  | Year endedDecember 31, 2007
|Copley:                                            |  |                             |    
|Pension, postretirement and other retirement plans |  | $                           | 729
|Gannett:                                           |  |                             |    
|Pension, postretirement and other retirement plans |  |                             | 181
|                                                   |  |                             |    
|                                                   |  | $                           | 910
|                                                   |  |                             |    



|(4) | Copley:
|--- | -------



|                                                      |  |            |        |                                       |      |                                              |   |      
|----------------------------------------------------- |  | ---------- | ------ | ------------------------------------- | ---- | -------------------------------------------- | - | -----
|Asset Category                                        |  | Fair value |        | Remainingestimateduseful lifein years |      | Pro forma expenseYear endedDecember 31, 2007
|Buildings                                             |  | $          | 25,691 |                                       | 25   |                                              | $ | 256  
|Machinery & Equipment                                 |  |            | 35,845 |                                       | 3-10 |                                              |   | 1,043
|Furniture & Fixtures                                  |  |            | 805    |                                       | 10   |                                              |   | 15   
|Auto & Trucks                                         |  |            | 2,255  |                                       | 5    |                                              |   | 107  
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma depreciation expense                  |  |            |        |                                       |      |                                              |   | 1,421
|                                                      |  |            |        |                                       |      |                                              |   |      
|Subscriber Relationships                              |  |            | 40,083 |                                       | 14   |                                              |   | 716  
|Advertiser Relationships                              |  |            | 95,466 |                                       | 14   |                                              |   | 1,705
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma amortization expense                  |  |            |        |                                       |      |                                              |   | 2,421
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma depreciation and amortization expense |  |            |        |                                       |      |                                              | $ | 3,842
|                                                      |  |            |        |                                       |      |                                              |   |      



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Gannett:



|                                                      |  |            |                             |                                       |      |                   |   |      
|----------------------------------------------------- |  | ---------- | --------------------------- | ------------------------------------- | ---- | ----------------- | - | -----
|Asset Category                                        |  | Fair value |                             | Remainingestimateduseful lifein years |      | Pro forma expense
|                                                      |  |            | Year endedDecember 31, 2007
|Buildings                                             |  | $          | 10,570                      |                                       | 25   |                   | $ | 141  
|Machinery & Equipment                                 |  |            | 26,333                      |                                       | 3-10 |                   |   | 884  
|Furniture & Fixtures                                  |  |            | 483                         |                                       | 10   |                   |   | 16   
|Auto and Trucks                                       |  |            | 546                         |                                       | 5    |                   |   | 36   
|                                                      |  |            |                             |                                       |      |                   |   |      
|Total pro forma depreciation expense                  |  |            |                             |                                       |      |                   |   | 1,077
|                                                      |  |            |                             |                                       |      |                   |   |      
|Subscriber Relationships                              |  |            | 26,964                      |                                       | 16   |                   |   | 562  
|Advertiser Relationships                              |  |            | 96,503                      |                                       | 16   |                   |   | 2,010
|                                                      |  |            |                             |                                       |      |                   |   |      
|Total pro forma amortization expense                  |  |            |                             |                                       |      |                   |   | 2,572
|                                                      |  |            |                             |                                       |      |                   |   |      
|Total pro forma depreciation and amortization expense |  |            |                             |                                       |      |                   | $ | 3,649
|                                                      |  |            |                             |                                       |      |                   |   |      

The following tables summarize the pro forma adjustments:



|                                      |  |        |        |   |         |   |        |                             |  |   |        |  
|------------------------------------- |  | ------ | ------ | - | ------- | - | ------ | --------------------------- |  | - | ------ | -
|                                      |  | Copley |        |   | Gannett |   |        | Year endedDecember 31, 2007 | 
|Pro forma depreciation expense        |  | $      | 1,421  |   |         | $ | 1,077  |                             |  | $ | 2,498  |  
|Pro forma amortization expense        |  |        | 2,421  |   |         |   | 2,572  |                             |  |   | 4,993  |  
|Less: historical depreciation expense |  |        | (2,738 | ) |         |   | (1,147 | )                           |  |   | (3,885 | )
|Less: historical amortization expense |  |        | (144   | ) |         |   | (23    | )                           |  |   | (167   | )
|                                      |  |        |        |   |         |   |        |                             |  |   |        |  
|                                      |  | $      | 960    |   |         | $ | 2,479  |                             |  | $ | 3,439  |  
|                                      |  |        |        |   |         |   |        |                             |  |   |        |  



|(5) | Represents adjustment to reflect the interest expense of the 2007 Financings for the periods presented. The following table illustrates the assumed interest rates and amounts of
borrowings the pro forma interest expense calculation is based on. The term loan, delayed draw term loan, bridge facility and the revolving loan facility average rate is LIBOR based. The term loan and delayed draw term loan variable interest rate is
effectively converted to a fixed rate loan under five interest rate swap agreements for notional amounts at acquisition of $300,000, $270,000, $100,000, $250,000 and $200,000, except for a $75,000 unhedged portion of the term loan. Unused commitment
fees are based on the remaining balance of the $40,000 of the total revolving credit facility. Letter of credit fees are a quarterly fee equal to the applicable margin for the LIBOR based loans on the aggregate amount of outstanding letters of
credit.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|---------------------------------------- |  | ---------------------------- | - |  | ------ | - |  | ---------- | - |  | ------------------ | ------- | ------------------------ | - | --------- | ------------------------------ |  | ------------------------------- | ------ |  | - | ------
|                                         |  | Year ended December 31, 2007
|                                         |  | Average Rate                 |   |  | Margin |   |  | Total Rate |   |  | Amount ofborrowing |         | Pro formainterestexpense |   |           | Less:Historicalinterestexpense |  | Netadjustmentto interestexpense
|Term Loan FacilityB                     |  | 4.778                        | % |  | 2.00   | % |  | 6.778      | % |  | $                  | 670,000 |                          | $ | 22,708    |                                |  |                                 |        |  |   |       
|Delayed Draw Term Loan Facility          |  | 4.971                        | % |  | 2.00   | % |  | 6.971      | % |  |                    | 250,000 |                          |   | 8,714     |                                |  |                                 |        |  |   |       
|Term Loan FacilityC                     |  | 5.156                        | % |  | 2.25   | % |  | 7.406      | % |  |                    | 275,000 |                          |   | 10,182    |                                |  |                                 |        |  |   |       
|Bridge Facility                          |  | 5.320                        | % |  | 1.50   | % |  | 6.820      | % |  |                    | 300,000 |                          |   | 10,230    |                                |  |                                 |        |  |   |       
|Unused commitment fees                   |  | 0.50                         | % |  |       |   |  | 0.500      | % |  |                    | 40,000  |                          |   | 100       |                                |  |                                 |        |  |   |       
|Letter of credit fees                    |  | 2.00                         | % |  |       |   |  | 2.000      | % |  |                    | 3,269   |                          |   | 32        |                                |  |                                 |        |  |   |       
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          | $ | 51,966    |                                |  | $                               | 32,596 |  | $ | 19,370
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|Historical weighted average debt balance |  |                              |   |  |        |   |  |            |   |  |                    |         |                          | $ | 1,084,582 |                                |  |                                 |        |  |   |       
|Weighted average interest rate           |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   | 6.65      | %                              |  |                                 |        |  |   |       



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For year ended December 31, 2007, the elimination of other interest expense also included interest
expense on an intercompany demand note held by the newspapers acquired from the Copley Press, Inc. of $3,817.



|(6) | Deferred financing costs consist of costs incurred in connection with debt financings. Such costs are amortized to interest expense on a straight-line basis over the remaining terms
of the related debt. Reflects the net adjustment to a total deferred financing cost amount of $12,575 amortized over a weighted average life of 2.9 years as follows:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                   |  |                             |        |  
|---------------------------------- |  | --------------------------- | ------ | -
|                                   |  | Year endedDecember 31, 2007 |       
|Pro forma deferred financing costs |  | $                           | 634    |  
|Less: historical costs             |  |                             | (1,203 | )
|                                   |  |                             |        |  
|Net adjustment                     |  | $                           | (569   | )
|                                   |  |                             |        |  



|(7) | The pro forma adjustment reflects the income tax effect of pro forma adjustments. The tax effect is calculated based on a 39.15% effective tax rate.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------



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Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2006

(In thousands)



|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|------------------------------------------------------- |  | ----------------- | ------- | - | --------- | - | ------- | ---------- |  | ------------- | ------- |  | ------ | ------ | - | -------------- | - | ------ | --------- |  | - | ------- | ------ |  | - | ------- | -
|                                                        |  | GateHouseMedia(A) |         |   | Copley(B) |   |         | Gannett(C) |  | Enterprise(D) |         |  | CNC(E) |        |   | Adjustments(F) |   |        | Pro forma | 
|Revenues:                                               |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Advertising                                             |  | $                 | 232,130 |   |           | $ | 104,000 |            |  | $             | 89,679  |  |        | 24,175 |   |                |   | 35,550 |           |  | $ | (15,651 | )(1)   |  | $ | 469,883 |  
|Circulation                                             |  |                   | 50,868  |   |           |   | 44,238  |            |  |               | 23,914  |  |        | 8,226  |   |                |   | 5,222  |           |  |   | (4,336  | )(1)   |  |   | 128,132 |  
|Commercial printing and other                           |  |                   | 23,193  |   |           |   | 10,591  |            |  |               | 5,008   |  |        | 235    |   |                |   | 1,633  |           |  |   | (3,560  | )(1)   |  |   | 37,100  |  
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Total revenues                                          |  |                   | 306,191 |   |           |   | 158,829 |            |  |               | 118,601 |  |        | 32,636 |   |                |   | 42,405 |           |  |   | (23,547 | )      |  |   | 635,115 |  
|Operating costs and expenses:                           |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Operating costs                                         |  |                   | 156,697 |   |           |   | 93,170  |            |  |               | 64,916  |  |        | 23,789 |   |                |   | 25,611 |           |  |   | (15,396 | )(1,2) |  |   | 348,787 |  
|Selling, general and administrative                     |  |                   | 88,578  |   |           |   | 43,706  |            |  |               | 19,697  |  |        | 5,000  |   |                |   | 8,772  |           |  |   | (10,679 | )(1,3) |  |   | 155,074 |  
|Depreciation and amortization                           |  |                   | 23,610  |   |           |   | 11,083  |            |  |               | 3,748   |  |        | 2,953  |   |                |   | 1,716  |           |  |   | 12,766  | (1,4)  |  |   | 55,876  |  
|Transaction costs related to Massachusetts Acquisitions |  |                   |        |   |           |   |        |            |  |               |        |  |        | 4,420  |   |                |   |       |           |  |   |        |        |  |   | 4,420   |  
|Integration and reorganization                          |  |                   | 4,486   |   |           |   |        |            |  |               |        |  |        |       |   |                |   |       |           |  |   |        |        |  |   | 4,486   |  
|Impairment of long-lived assets                         |  |                   | 917     |   |           |   |        |            |  |               |        |  |        |       |   |                |   |       |           |  |   |        |        |  |   | 917     |  
|Other expense                                           |  |                   | (700    | ) |           |   | (45     | )          |  |               |        |  |        |       |   |                |   |       |           |  |   |        |        |  |   | (745    | )
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Total operating expenses                                |  |                   | 274,988 |   |           |   | 148,004 |            |  |               | 88,361  |  |        | 36,162 |   |                |   | 36,099 |           |  |   | (13,309 | )      |  |   | 570,305 |  
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Operating income (loss)                                 |  |                   | 31,203  |   |           |   | 10,825  |            |  |               | 30,240  |  |        | (3,526 | ) |                |   | 6,306  |           |  |   | (10,238 | )      |  |   | 64,810  |  
|Interest expense                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Debt                                                    |  |                   | 35,994  |   |           |   |        |            |  |               |        |  |        | 2,161  |   |                |   | 4,248  |           |  |   | 61,530  | (5)    |  |   | 103,933 |  
|Other interest expense                                  |  |                   |        |   |           |   | 13,061  |            |  |               |        |  |        |       |   |                |   | 2,488  |           |  |   | (15,549 | )(5)   |  |   |        |  
|Amortization of deferred financing costs                |  |                   | 544     |   |           |   |        |            |  |               |        |  |        | 72     |   |                |   | 137    |           |  |   | 3,644   | (6)    |  |   | 4,397   |  
|Loss on early extinguishment of debt                    |  |                   | 2,086   |   |           |   |        |            |  |               |        |  |        | 1,363  |   |                |   |       |           |  |   |        |        |  |   | 3,449   |  
|Unrealized gain on derivative instrument                |  |                   | (1,150  | ) |           |   |        |            |  |               |        |  |        |       |   |                |   |       |           |  |   |        |        |  |   | (1,150  | )
|Other (income) loss                                     |  |                   | (16     | ) |           |   | 49      |            |  |               |        |  |        | (104   | ) |                |   | (12    | )         |  |   | 84      | (7)    |  |   | 1       |  
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Income (loss) from operations before tax                |  |                   | (6,255  | ) |           |   | (2,285  | )          |  |               | 30,240  |  |        | (7,018 | ) |                |   | (555   | )         |  |   | (59,947 | )      |  |   | (45,820 | )
|Income tax expense (benefit)                            |  |                   | (3,769  | ) |           |   | (1,042  | )          |  |               | 12,126  |  |        |       |   |                |   | 1,161  |           |  |   | (23,521 | )(1,8) |  |   | (15,045 | )
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  
|Income (loss) from continuing operations                |  | $                 | (2,486  | ) |           | $ | (1,243  | )          |  | $             | 18,114  |  | $      | (7,018 | ) |                | $ | (1,716 | )         |  | $ | (36,426 | )      |  | $ | (30,775 | )
|                                                        |  |                   |         |   |           |   |         |            |  |               |         |  |        |        |   |                |   |        |           |  |   |         |        |  |   |         |  

Adjustments to Unaudited Pro Forma Condensed Consolidated Statement of Operations

(A) GateHouse Media, Inc.

Reflects our historical
consolidated statement of operations for year ended December 31, 2006.



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(B) Copley

Reflects historical consolidated statement of operations for the newspapers acquired from the Copley Press Inc. for the period from January 1, 2006 to December 31, 2006.

(C) Gannett

Reflects historical consolidated
statement of operations for the newspapers acquired from Gannett Co. Inc. for the period from January 1, 2006 to December 31, 2006.

(D)
Enterprise

Reflects historical consolidated statement of operations for the newspapers acquired from Enterprise NewsMedia, LLC. for the
period from January 1, 2006 to June 5, 2006.

(E) CNC

Reflects historical consolidated statement of operations for the newspapers acquired from CP Media for the period from January 1, 2006 to June 5, 2006.

(F) Adjustments



|(1) | Reflects the adjustment to eliminate the revenue and expenses related to the group of assets and liabilities from the Gannett Acquisition held for sale:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|                                    |  |                             |       
|----------------------------------- |  | --------------------------- | ------
|                                    |  | Year endedDecember 31, 2006
|Revenues:                           |  |                             |       
|Advertising                         |  | $                           | 15,651
|Circulation                         |  |                             | 4,336 
|Commercial printing and other       |  |                             | 3,560 
|Operating costs and expenses:       |  |                             |       
|Operating costs                     |  |                             | 13,702
|Selling, general and administrative |  |                             | 3,798 
|Depreciation and amortization       |  |                             | 567   
|Income tax expense                  |  |                             | 2,197 
|                                    |  |                             |       
|Income from operations              |  | $                           | 3,283 
|                                    |  |                             |       



|(2) | Reflects the elimination of expenses related to the pension and postretirement plans not continued by us.
|--- | ---------------------------------------------------------------------------------------------------------



|                                              |  |                             |      
|--------------------------------------------- |  | --------------------------- | -----
|                                              |  | Year endedDecember 31, 2006
|GannettPension and postretirement adjustment |  | $                           | 1,694
|                                              |  |                             |      



|(3) | Reflects the elimination of certain expenses related to liabilities included in the historical statement of operations of Copley and Gannett but not assumed by us.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                   |  |                             |      
|-------------------------------------------------- |  | --------------------------- | -----
|                                                   |  | Year endedDecember 31, 2006
|Copley:                                            |  |                             |      
|Pension, postretirement and other retirement plans |  | $                           | 6,332
|Gannett:                                           |  |                             |      
|Pension, postretirement and other retirement plans |  |                             | 549  
|                                                   |  |                             |      
|                                                   |  | $                           | 6,881
|                                                   |  |                             |      



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(4)Copley:



|                                                      |  |            |        |                                       |      |                                              |   |       
|----------------------------------------------------- |  | ---------- | ------ | ------------------------------------- | ---- | -------------------------------------------- | - | ------
|Asset Category                                        |  | Fair value |        | Remainingestimateduseful lifein years |      | Pro forma expenseYear endedDecember 31, 2006
|Buildings                                             |  | $          | 25,691 |                                       | 25   |                                              | $ | 1,028 
|Machinery & Equipment                                 |  |            | 35,845 |                                       | 3-10 |                                              |   | 4,020 
|Furniture & Fixtures                                  |  |            | 805    |                                       | 10   |                                              |   | 81    
|Auto & Trucks                                         |  |            | 2,255  |                                       | 5    |                                              |   | 451   
|                                                      |  |            |        |                                       |      |                                              |   |       
|Total pro forma depreciation expense                  |  |            |        |                                       |      |                                              |   | 5,580 
|                                                      |  |            |        |                                       |      |                                              |   |       
|Subscriber Relationships                              |  |            | 40,083 |                                       | 14   |                                              |   | 2,863 
|Advertiser Relationships                              |  |            | 95,466 |                                       | 14   |                                              |   | 6,819 
|                                                      |  |            |        |                                       |      |                                              |   |       
|Total pro forma amortization expense                  |  |            |        |                                       |      |                                              |   | 9,682 
|                                                      |  |            |        |                                       |      |                                              |   |       
|Total pro forma depreciation and amortization expense |  |            |        |                                       |      |                                              | $ | 15,262
|                                                      |  |            |        |                                       |      |                                              |   |       

Gannett:



|                                                      |  |            |                             |                                       |      |                   |   |       
|----------------------------------------------------- |  | ---------- | --------------------------- | ------------------------------------- | ---- | ----------------- | - | ------
|Asset Category                                        |  | Fair value |                             | Remainingestimateduseful lifein years |      | Pro forma expense
|                                                      |  |            | Year endedDecember 31, 2006
|Buildings                                             |  | $          | 10,570                      |                                       | 25   |                   | $ | 424   
|Machinery & Equipment                                 |  |            | 26,333                      |                                       | 3-10 |                   |   | 2,653 
|Furniture & Fixtures                                  |  |            | 483                         |                                       | 10   |                   |   | 48    
|Auto and Trucks                                       |  |            | 546                         |                                       | 5    |                   |   | 109   
|                                                      |  |            |                             |                                       |      |                   |   |       
|Total pro forma depreciation expense                  |  |            |                             |                                       |      |                   |   | 3,234 
|                                                      |  |            |                             |                                       |      |                   |   |       
|Subscriber Relationships                              |  |            | 26,964                      |                                       | 16   |                   |   | 1,685 
|Advertiser Relationships                              |  |            | 96,503                      |                                       | 16   |                   |   | 6,032 
|                                                      |  |            |                             |                                       |      |                   |   |       
|Total pro forma amortization expense                  |  |            |                             |                                       |      |                   |   | 7,717 
|                                                      |  |            |                             |                                       |      |                   |   |       
|Total pro forma depreciation and amortization expense |  |            |                             |                                       |      |                   | $ | 10,951
|                                                      |  |            |                             |                                       |      |                   |   |       

Enterprise:



|                                                      |  |            |        |                                       |       |                                              |   |      
|----------------------------------------------------- |  | ---------- | ------ | ------------------------------------- | ----- | -------------------------------------------- | - | -----
|Asset Category                                        |  | Fair value |        | Remainingestimateduseful lifein years |       | Pro forma expenseYear endedDecember 31, 2006
|Buildings & Improvements                              |  | $          | 2,978  |                                       | 6-25  |                                              | $ | 75   
|Machinery & Equipment                                 |  |            | 7,384  |                                       | 3-10  |                                              |   | 632  
|Furniture & Fixtures                                  |  |            | 602    |                                       | 10    |                                              |   | 25   
|Auto and Trucks                                       |  |            | 1,296  |                                       | 5     |                                              |   | 108  
|                                                      |  |            |        |                                       |       |                                              |   |      
|Total pro forma depreciation expense                  |  |            |        |                                       |       |                                              |   | 840  
|                                                      |  |            |        |                                       |       |                                              |   |      
|Subscriber Relationships                              |  |            | 22,339 |                                       | 14-16 |                                              |   | 658  
|Advertiser Relationships                              |  |            | 52,846 |                                       | 18    |                                              |   | 1,223
|Noncompete                                            |  |            | 986    |                                       | 2     |                                              |   | 205  
|                                                      |  |            |        |                                       |       |                                              |   |      
|Total pro forma amortization expense                  |  |            |        |                                       |       |                                              |   | 2,086
|                                                      |  |            |        |                                       |       |                                              |   |      
|Total pro forma depreciation and amortization expense |  |            |        |                                       |       |                                              | $ | 2,926



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CNC:



|                                                      |  |            |        |                                       |      |                                              |   |      
|----------------------------------------------------- |  | ---------- | ------ | ------------------------------------- | ---- | -------------------------------------------- | - | -----
|Asset Category                                        |  | Fair value |        | Remainingestimateduseful lifein years |      | Pro forma expenseYear endedDecember 31, 2006
|Buildings                                             |  | $          | 8,858  |                                       | 6-25 |                                              | $ | 230  
|Machinery & Equipment                                 |  |            | 8,147  |                                       | 3-10 |                                              |   | 487  
|Furniture & Fixtures                                  |  |            | 450    |                                       | 10   |                                              |   | 19   
|Auto and Trucks                                       |  |            | 301    |                                       | 5    |                                              |   | 25   
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma depreciation expense                  |  |            |        |                                       |      |                                              |   | 761  
|                                                      |  |            |        |                                       |      |                                              |   |      
|Subscriber Relationships                              |  |            | 10,781 |                                       | 18   |                                              |   | 250  
|Advertiser Relationships                              |  |            | 76,194 |                                       | 15   |                                              |   | 2,117
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma amortization expense                  |  |            |        |                                       |      |                                              |   | 2,367
|                                                      |  |            |        |                                       |      |                                              |   |      
|Total pro forma depreciation and amortization expense |  |            |        |                                       |      |                                              | $ | 3,128

The following tables summarize the pro forma adjustments:



|                                      |  |        |         |   |         |   |        |            |  |   |        |   |  |                             |        |   |  |   |         |  
|------------------------------------- |  | ------ | ------- | - | ------- | - | ------ | ---------- |  | - | ------ | - |  | --------------------------- | ------ | - |  | - | ------- | -
|                                      |  | Copley |         |   | Gannett |   |        | Enterprise |  |   | CNC    |   |  | Year endedDecember 31, 2006 |       
|Pro forma depreciation expense        |  | $      | 5,580   |   |         | $ | 3,234  |            |  | $ | 840    |   |  | $                           | 761    |   |  | $ | 10,415  |  
|Pro forma amortization expense        |  |        | 9,682   |   |         |   | 7,717  |            |  |   | 2,086  |   |  |                             | 2,367  |   |  |   | 21,852  |  
|Less: historical depreciation expense |  |        | (10,467 | ) |         |   | (3,100 | )          |  |   | (723   | ) |  |                             | (1,105 | ) |  |   | (15,395 | )
|Less: historical amortization expense |  |        | (616    | ) |         |   | (82    | )          |  |   | (2,230 | ) |  |                             | (611   | ) |  |   | (3,539  | )
|                                      |  |        |         |   |         |   |        |            |  |   |        |   |  |                             |        |   |  |   |         |  
|                                      |  | $      | 4,179   |   |         |   | 7,769  |            |  |   | (27    | ) |  |                             | 1,412  |   |  |   | 13,333  |  
|                                      |  |        |         |   |         |   |        |            |  |   |        |   |  |                             |        |   |  |   |         |  



|(5) | Represents adjustment to reflect the interest expense of the 2007 Financings for the periods presented. The following table illustrates the assumed interest rates and amounts of
borrowings the pro forma interest expense calculation is based on. The term loan, delayed draw term loan, bridge facility and the revolving loan facility average rate is LIBOR based. The term loan and delayed draw term loan variable interest rate is
effectively converted to a fixed rate loan under five interest rate swap agreements for notional amounts of $300,000, $270,000, $100,000, $250,000 and $200,000, except for a $75,000 unhedged portion of the term loan. Unused commitment fees are based
on the remaining balance of the $40,000 of the total revolving credit facility. Letter of credit fees are a quarterly fee equal to the applicable margin for the LIBOR based loans on the aggregate amount of outstanding letters of credit.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|---------------------------------------- |  | ---------------------------- | - |  | ------ | - |  | ---------- | - |  | ------------------ | ------- | ------------------------ | - | --------- | ------------------------------ |  | ------------------------------- | ------ |  | - | ------
|                                         |  | Year ended December 31, 2006 |   |  |        |   | 
|                                         |  | Average Rate                 |   |  | Margin |   |  | Total Rate |   |  | Amount ofborrowing |         | Pro formainterestexpense |   |           | Less:Historicalinterestexpense |  | Netadjustmentto interestexpense
|Term Loan FacilityB                     |  | 4.778                        | % |  | 2.00   | % |  | 6.778      | % |  | $                  | 670,000 |                          | $ | 45,414    |                                |  |                                 |        |  |   |       
|Delayed Draw Term Loan Facility          |  | 4.971                        | % |  | 2.00   | % |  | 6.971      | % |  |                    | 250,000 |                          |   | 17,428    |                                |  |                                 |        |  |   |       
|Term Loan FacilityC                     |  | 5.156                        | % |  | 2.25   | % |  | 7.406      | % |  |                    | 275,000 |                          |   | 20,366    |                                |  |                                 |        |  |   |       
|Bridge Facility                          |  | 5.320                        | % |  | 1.50   | % |  | 6.820      | % |  |                    | 300,000 |                          |   | 20,460    |                                |  |                                 |        |  |   |       
|Unused commitment fees                   |  | 0.50                         | % |  |       |   |  | 0.500      | % |  |                    | 40,000  |                          |   | 200       |                                |  |                                 |        |  |   |       
|Letter of credit fees                    |  | 2.00                         | % |  |       |   |  | 2.000      | % |  |                    | 3,269   |                          |   | 65        |                                |  |                                 |        |  |   |       
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          | $ | 103,933   |                                |  | $                               | 42,403 |  | $ | 61,530
|                                         |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   |           |                                |  |                                 |        |  |   |       
|Historical weighted average debt balance |  |                              |   |  |        |   |  |            |   |  |                    |         |                          | $ | 1,084,582 |                                |  |                                 |        |  |   |       
|Weighted average interest rate           |  |                              |   |  |        |   |  |            |   |  |                    |         |                          |   | 6.65      | %                              |  |                                 |        |  |   |       



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For the year ended December 31, 2006, the elimination of other interest expense also included
interest expense on an intercompany demand note held by the newspapers acquired from the Copley Press, Inc. of $13,061, and interest on preferred stock held by the newspapers acquired from CNC of $2,488.



|(6) | Deferred financing costs consist of costs incurred in connection with debt financings. Such costs are amortized to interest expense on a straight-line basis over the remaining terms
of the related debt. The table below reflects the net adjustment to a total deferred financing cost amount of $12,575 amortized over a weighted average life of 2.9 years as follows:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                   |  |                             |       |  
|---------------------------------- |  | --------------------------- | ----- | -
|                                   |  | Year endedDecember 31, 2007 |      
|Pro forma deferred financing costs |  | $                           | 4,397 |  
|Less: historical costs             |  |                             | (753  | )
|                                   |  |                             |       |  
|Net adjustment                     |  | $                           | 3,644 |  
|                                   |  |                             |       |  



|(7) | Reflects the elimination of certain expenses related to liabilities included in the historical statement of operations of Enterprise but not assumed by us. The amount represents net
interest income related to the triple net lease agreement which was not assumed as a result of the Enterprise Acquisition. The amount is reflective of the rental income to a third party partially offset by interest expense related to the mortgage of
that property.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(8) | The pro forma adjustment reflects the income tax effect of pro forma adjustments. The tax effect is calculated based on a 39.15% effective tax rate.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

Year Ended December 31, 2008 Compared To Pro Forma Year Ended December 31, 2007

The discussion of our results of operations that follows is based upon our historical results of operations for the year ended December 31, 2008 and
our pro forma results of operations for the year ended December 31, 2007.

Revenue. Total GAAP revenue for the year
ended December 31, 2008 increased by $30.7 million or 4.7% to $683.1 million from the pro forma year ended December 31, 2007 revenue of $652.4 million. $16.9 million of the increase came from advertising revenue and $9.8 million of the
increase came from circulation revenue. The increase in total revenues of $30.7 million was driven primarily by revenues from the acquisitions that did not meet the significance test for pro forma treatment (the 2007 and 2008
acquisitions) of $74.7 million. Excluding the revenue increases of $74.7 million from the 2007 and 2008 acquisitions, same store revenues were down $41.7 million or 5.6%. The same store revenue declines were primarily driven by declines in
classified advertising. The weakened economy, particularly in the sectors of employment, automotive and real estate has led to declining classified revenues across the country.

On February 28, 2007, we acquired SureWest Directories which publishes annual yellow page and white page directories. Purchase accounting rules did
not allow us to record deferred revenue and the related costs for these directories until we published the directories. This resulted in revenue and expenses being less than what the predecessor owner would have recognized for the year ended
December 31, 2007. Excluding these purchase accounting adjustments, revenue for the year ended December 31, 2007 would have been $19.1 million, an increase of $0.6 million over $18.5 million for 2008.

Revenue from publications disposed of during the year (included in discontinued operations) was $15.4 million during the year ended December 31, 2008.

Operating Costs. Operating costs for the year ended December 31, 2008 increased by $30.2 million, or 8.5%, to
$384.6 million from $354.4 million for the year ended December 31, 2007. The increase in operating



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costs was primarily due to operating costs of the acquisitions completed in 2007 and 2008 of $41.3 million. These acquisition related expense increases were
partially offset by decreased newsprint volumes, and compensation expenses of $3.6 million and $8.1 million, respectively.

Selling,
General and Administrative. Selling, general and administrative expenses for the year ended December 31, 2008 increased by $15.5 million, or 9.0%, to $187.8 million from $172.3 million for the year ended December 31, 2007. The
increase in selling, general and administrative expenses was primarily due to selling, general and administrative expenses of the 2007 and 2008 acquisitions of $21.8 million. These expense increases were partially offset by a decreased in
compensation, health insurance and pension expenses of $1.6 million, $2.2 million and $2.6 million, respectively.

Depreciation and
Amortization. Depreciation and amortization expense for the year ended December 31, 2008 increased by $5.3 million to $70.1 million from $64.8 million for the year ended December 31, 2007. The increase was primarily due to
depreciation and amortization of the 2007 and 2008 acquisitions of $1.9 million. Additionally, during the years ended December 31, 2008 and 2007, we incurred capital expenditures of $9.7 and $8.6 million, respectively, which contributed to the
increase in depreciation expense in 2008.

Impairment of Long-Lived Assets. During the year ended December 31, 2008
we incurred a charge of $123.2 million due to reductions in our operating projections within our Northeast Reporting Unit. During the year ended December 31, 2007 we incurred a charge of $1.6 million related to the impairment of property, plant and
equipment which were classified as held for sale at, or disposed of during the year ended December 31, 2008 and December 31, 2007, respectively.

Goodwill and Mastheads Impairment. During the years ended December 31, 2008 and December 31, 2007, we recorded an impairment charge of $491.8 million and $226.0 million, respectively, on
our goodwill and mastheads due to declines in our cash flow projections, reductions of transaction multiples, and the related impact on the fair value of our reporting units.

Interest Expense. Total interest expense for the year ended December 31, 2008 decreased by $7.9 million, or 8.2%, to $88.2
million from $96.1 million for the year ended December 31, 2007. The decrease was primarily due to a decline in interest rates during 2008 and the related impact on our unhedged debt position.

Loss on Early Extinguishment of Debt. During the year ended December 31, 2007, we incurred a $2.2 million loss due to the write
off of deferred financing costs associated with the extinguishment of our Bridge Facility.

Unrealized (Gain) Loss on Derivative
Instrument. During the years ended December 31, 2008 and 2007 we recorded a loss of $10.1 million and $2.4 million, respectively, due to ineffectiveness related to several of our interest rate swaps which were entered into, in an
effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.

Income Tax Benefit. Income tax
benefit for the year ended December 31, 2008 was $21.1 million compared to $36.7 million for the year ended December 31, 2007. The change of $15.6 million was primarily due to the change in the income tax valuation allowance during the
year ended December 31, 2008, the impairment of nondeductible goodwill and an increase in book pretax loss during the year ended December 31, 2008.

Net Loss from Continuing Operations. Net loss from continuing operations for the year ended December 31, 2008 was $661.9 million. Net loss from continuing operations for the year ended
December 31, 2007 was $241.1 million. Our net loss from continuing operations increased due to the factors noted above.



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Year Ended December 31, 2008 Compared To Year Ended December 31, 2007

The discussion of our results of operations that follows is based upon our historical results of operations for the years ended December 31, 2008 and
2007.

Revenue. Total revenue for the year ended December 31, 2008 increased by $103.7 million or 17.9% to $683.1
million from the year ended December 31, 2007 revenue of $579.4 million. $67.1 million of the increase came from advertising revenue and $28.6 million of the increase came from circulation revenue. The increase in total revenues of $103.7
million was driven primarily by revenues from the acquisitions that did not meet the significance test for pro forma treatment (the 2007 and 2008 acquisitions) of $74.7 million and the increase in revenue for the Copley and Gannett
acquisitions completed in 2007 of $50.5 million. Excluding the revenue increases of $74.7 million from the 2007 and 2008 acquisitions, same store revenues were down $41.7 million or 5.6%. The same store revenue declines were primarily driven by
declines in classified advertising. The weakened economy, particularly in the sectors of employment, automotive and real estate has led to declining classified revenues across the country.

On February 28, 2007, we acquired SureWest Directories which publishes annual yellow page and white page directories. Purchase accounting rules did
not allow us to record deferred revenue and the related costs for these directories until we published the directories. This resulted in revenue and expenses being less than what the predecessor owner would have recognized for the year ended
December 31, 2007. Excluding these purchase accounting adjustments, revenue for the year ended December 31, 2007 would have been $19.1 million, an increase of $0.6 million over $18.5 million for 2008.

Revenue from publications disposed of during the year (included in discontinued operations) was $15.4 million during the year ended December 31,
2008.

Operating Costs. Operating costs for the year ended December 31, 2008 increased by $72.6 million, or 23.2%,
to $384.6 million from $312.0 million for the year ended December 31, 2007. The increase in operating costs was primarily due to operating costs of the acquisitions completed in 2007 and 2008 of $41.3 million as well as an increase in operating
costs recognized for the Copley and Gannett acquisitions completed in 2007 of $35.1 million.

Selling, General and
Administrative. Selling, general and administrative expenses for the year ended December 31, 2008 increased by $31.8 million, or 20.4%, to $187.8 million from $156.0 million for the year ended December 31, 2007. The increase
in selling, general and administrative expenses was primarily due to selling, general and administrative expenses of the 2007 and 2008 acquisitions of $21.8 million and an increase in expenses recorded by the Copley and Gannett acquisitions
completed in 2007 of $10.1 million.

Depreciation and Amortization. Depreciation and amortization expense for the year
ended December 31, 2008 increased by $12.8 million to $70.1 million from $57.3 million for the year ended December 31, 2007. The increase was primarily due to depreciation and amortization of the 2007 and 2008 acquisitions of $1.9 million
and an increase in depreciation expense for the Copley and Gannett acquisitions completed in 2007 of $8.5 million. Additionally, during the years ended December 31, 2008 and 2007, we incurred capital expenditures of $9.7 and $8.6 million,
respectively, which contributed to the increase in depreciation expense in 2008.

Impairment of Long-Lived
Assets. During the year ended December 31, 2008 we incurred a charge of $123.2 million due to reductions in our operating projections within our Northeast and Surewest reporting units. During the year ended December 31, 2007 we
incurred a charge of $1.6 million related to the impairment of property, plant and equipment which were classified as held for sale at, or disposed of during the year ended December 31, 2008 and December 31, 2007, respectively.



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Goodwill and Mastheads Impairment. During the years ended December 31, 2008 and
December 31, 2007, we recorded an impairment charge of $491.8 million and $226.0 million, respectively, on our goodwill and mastheads due to declines in our cash flow projections, reductions of transaction multiples, declines in our stock price
and the related impact on the fair value of our reporting units.

Interest Expense. Total interest expense for the year
ended December 31, 2008 increased by $11.5 million, or 15.0%, to $88.2 million from $76.7 million for the year ended December 31, 2007. The increase was primarily due to increases in our total outstanding debt position.

Loss on Early Extinguishment of Debt. During the year ended December 31, 2007, we incurred a $2.2 million loss due to the write
off of deferred financing costs associated with the extinguishment of our Bridge Facility.

Unrealized (Gain) Loss on Derivative
Instrument. During the years ended December 31, 2008 and 2007 we recorded a loss of $10.1 million and $2.4 million, respectively, due to ineffectiveness related to several of our interest rate swaps which were entered into, in an
effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.

Income Tax Benefit. Income tax
benefit for the year ended December 31, 2008 was $21.1 million compared to $31.8 million for the year ended December 31, 2007. The change of $10.7 million was primarily due to the change in income tax valuation allowance during the year
ended December 31, 2008, the impairment of nondeductible goodwill and an increase in book pretax loss during the year ended December 31, 2008.

Net Loss from Continuing Operations. Net loss from continuing operations for the year ended December 31, 2008 was $661.9 million. Net loss from continuing operations for the year ended
December 31, 2007 was $234.1 million. Our net loss from continuing operations increased due to the factors noted above.

Pro Forma Year Ended
December 31, 2007 Compared to Pro Forma Year Ended December 31, 2006

The discussion of our results of operations that
follows is based upon our pro forma results of operations for years ended December 31, 2007 and 2006.

Revenue. Total pro forma revenue for the year ended December 31, 2007 increased by $17.3 million or 2.7% to $652.4 million from the pro forma year ended December 31, 2006 revenue of $635.1 million. $8.9 million
of the increase came from advertising revenue and $8.5 million of the increase came from circulation revenue. The increase in total revenues of $17.3 million was driven primarily by revenues from the acquisitions that did not meet the significance
test for pro forma treatment (the 2007 acquisitions) of $42.7 million. This 2007 acquisition related revenue increase was partially offset by the loss of a third party printing contract not assumed in the acquisition of The Copley Press,
Inc. as well as the sale of a stand alone commercial printing business in October 2006. These two items caused revenues to decline by $6.2 million. Excluding the revenue increases of $42.7 million from the 2007 acquisitions and the other revenue
declines of $6.2 million from the asset sales and printing contract not assumed, same store revenues were down $15.9 million or 2.5%. The same store revenue declines were primarily driven by decreases in classified advertising and by a weaker
localized Massachusetts economy. Our revenues generated in our Massachusetts region have been negatively impacted by lower classified real estate, help wanted and automotive advertising and additionally by the intentional and careful elimination of
seven publications to maximize cash flow in the region.

On February 28, 2007, we acquired SureWest Directories which publishes annual
yellow page and white page directories. Purchase accounting rules did not allow us to record deferred revenue and the related costs for these directories until we published the directories. This resulted in revenue and expenses being less than what
the predecessor owner would have recognized for the year ended December 31, 2007. Excluding these purchase



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accounting adjustments, revenue for the year ended December 31, 2007 would have been $19.1 million, an increase of $0.7 million over $18.4 million for
the same period in 2006. For the period of February 28, 2007 to December 31, 2007 revenue would have been $16.0 million, up $0.7 million or 4.4% over the same period in 2006.

Revenue from publications subsequently disposed of (included in discontinued operations) was $18.1 million during the year ended December 31, 2007.

Operating Costs. Operating costs for the year ended December 31, 2007 increased by $5.6 million, or 1.6%, to
$354.4 million from $348.8 million for the year ended December 31, 2006. The increase in operating costs was primarily due to operating costs of the acquisitions completed in 2007 of $24.9 million. These acquisition related expense increases
were partially offset by decreased newsprint, and compensation expenses of $9.8 million and $5.5 million, respectively.

Selling,
General and Administrative. Selling, general and administrative expenses for the year ended December 31, 2007 increased by $17.2 million, or 11.1%, to $172.3 million from $155.1 million for the year ended December 31, 2006.
The increase in selling, general and administrative expenses was primarily due to selling, general and administrative expenses of the 2007 acquisitions of $11.5 million as well as an increase in non-cash compensation expense related to our RSGs of
$3.0 million. Additionally, during the year ended December 31, 2007 we incurred an increase in audit, Sarbanes-Oxley and legal fees of $2.5 million. During the year ended December 31, 2007, we also incurred an increase in pension and
postretirement expenses of $0.3 million.

Depreciation and Amortization. Depreciation and amortization expense for the
year ended December 31, 2007 increased by $8.9 million to $64.8 million from $55.9 million for the year ended December 31, 2006. The increase was primarily due to depreciation and amortization of the 2007 acquisitions of $6.4 million.
Additionally, during the year ended December 31, 2007, we incurred capital expenditures of $8.6 million.

Transaction Costs
Related to Merger and Acquisitions. During the year ended December 31, 2006, we incurred approximately $4.4 million in transaction costs primarily related to bonuses at Enterprise NewsMedia, LLC paid by the prior owner.

Impairment of Long-Lived Assets. During the years ended December 31, 2007 and December 31, 2006 we incurred a charge of
$1.6 million and $0.9 million related to the impairment of property, plant and equipment which were classified as held for sale at, or disposed of during the year ended December 31, 2007 and December 31, 2006, respectively.

Goodwill and Mastheads Impairment. During the year ended December 31, 2007, we recorded a $226.0 million impairment on our
goodwill and mastheads due to our stock price as of the end of the fourth quarter and the related impact on the fair value of our reporting units.

Interest Expense. Total interest expense for the year ended December 31, 2007 decreased by $7.8 million, or 7.5%, to $96.1 million from $103.9 million for the year ended December 31, 2006. The decrease was
primarily due to decreases in our total outstanding debt due to the application of equity proceeds.

Loss on Early Extinguishment of
Debt. During the year ended December 31, 2007, we incurred a $2.2 million loss due to the write off of deferred financing costs associated with the extinguishment of our Bridge Facility.

During the year ended December 31, 2006, we incurred a $2.1 million loss due to the write-off of deferred financing costs associated with the
extinguishment of our Term Loan B and second lien credit facility. Additionally, we incurred a $1.4 million loss related to the extinguishment of our debt at Enterprise NewsMedia, LLC.



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Unrealized (Gain) Loss on Derivative Instrument. During the year ended
December 31, 2007 we recorded a loss of $2.4 million due to ineffectiveness related to several of our interest rate swaps which were entered into, in an effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.

During the year ended December 31, 2006, we recorded a net unrealized gain of $1.2 million related to our $300 million notional
amount interest rate swap, which we entered into in June 2005 in an effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.

Income Tax Benefit. Income tax benefit for the year ended December 31, 2007 was $36.7 million compared to $15.0 million for the year ended December 31, 2006. The change of $21.7 million
was primarily due to the recognition of an income tax valuation allowance during the year ended December 31, 2007, the impairment of nondeductible goodwill and an increase in book pretax loss during the year ended December 31, 2007.

Net Loss from Continuing Operations. Net loss from continuing operations for the year ended December 31, 2007 was
$241.1 million. Net loss from continuing operations for the year ended December 31, 2006 was $30.8 million. Our net loss from continuing operations increased due to the factors noted above.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

The discussion of our results of operations that follows is based upon our historical results of operations for years ended December 31, 2007 and
2006.

Revenue. Total revenue for the year ended December 31, 2007 increased by $273.3 million or 89.3% to $579.5
million from the year ended December 31, 2006 revenue of $306.2 million. $196.4 million of the increase came from advertising revenue and $66.9 million of the increase came from circulation revenue. The increase in total revenues of $273.3
million was driven primarily by revenues from the acquisitions of Copley, Gannett completed in 2007 of $178.4 million and full year 2007 revenues of $180.9 million for the Boston publications acquired in 2006, an increase of $82.0 million over
partial year revenues of $98.9 million for 2006. Revenues from the acquisitions that did not meet the significance test for pro forma treatment (the 2007 acquisitions) of $42.7 million also contributed to the increase in revenue. These
revenue increases were partially offset by a decline in same store revenues of $15.9 million or 2.5%. The same store revenue declines were primarily driven by decreases in classified advertising and by a weaker localized Massachusetts economy. Our
revenues generated in our Massachusetts region have been impacted by lower classified real estate, help wanted and automotive advertising and additionally by the intentional and careful elimination of seven publications to maximize cash flow in the
region.

On February 28, 2007, we acquired SureWest Directories which publishes annual yellow page and white page directories.
Purchase accounting rules did not allow us to record deferred revenue and the related costs for these directories until we published the directories. This resulted in revenue and expenses being less than what the predecessor owner would have
recognized for the year ended December 31, 2007. Excluding these purchase accounting adjustments, revenue for the year ended December 31, 2007 would have been $19.1 million, an increase of $0.7 million over $18.4 million for the same
period in 2006. For the period of February 28, 2007 to December 31, 2007 revenue would have been $16.0 million, up $0.7 million or 4.4% over the same period in 2006.

Revenue from publications subsequently disposed of (included in discontinued operations) was $18.1 million during the year ended December 31, 2007.

Operating Costs. Operating costs for the year ended December 31, 2007 increased by $155.3 million, or 99.1%, to
$312.0 million from $156.7 million for the year ended December 31, 2006. The increase in operating costs was primarily due to operating costs of the Copley and Gannett acquisitions completed in 2007 of $95.5 million and full year 2007 operating
costs of $100.6 million for the Boston publications acquired in 2006, an increase of $48.0 million over partial year costs of $52.6 million for 2006. Operating costs from the 2007



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acquisitions of $24.9 million also contributed to the increase. These acquisition related expense increases were partially offset by decreased newsprint, and
compensation expenses of $9.8 million and $5.5 million, respectively.

Selling, General and Administrative. Selling,
general and administrative expenses for the year ended December 31, 2007 increased by $67.4 million, or 76.1%, to $156.0 million from $88.6 million for the year ended December 31, 2006. The increase was primarily due to selling, general
and administrative costs of the Copley and Gannett acquisitions completed in 2007 of $31.8 million and full year 2007 costs of $45.5 million for the Boston publications acquired in 2006, an increase of $17.1 million over partial year costs of $28.4
million for 2006. Selling, general and administrative costs from the 2007 acquisitions of $11.5 million contributed to the increase as did an increase in non-cash compensation expense related to our RSGs of $3.0 million further contributed to the
increase. Additionally, during the year ended December 31, 2007 we incurred an increase in audit, Sarbanes-Oxley and legal fees of $2.5 million. During the year ended December 31, 2007, we also incurred an increase in pension and
postretirement expenses of $0.3 million.

Depreciation and Amortization. Depreciation and amortization expense for the
year ended December 31, 2007 increased by $33.7 million to $57.3 million from $23.6 million for the year ended December 31, 2006. The increase in depreciation and amortization expense was primarily due to expenses of the Copley and Gannett
acquisitions completed in 2007 of $18.9 million and full year 2007 expense of $17.5 million for the Boston publications acquired in 2006, an increase of $8.5 million over partial year expenses of $9.0 million for 2006. Depreciation and amortization
from the 2007 acquisitions of $6.4 million also contributed to the increase. Additionally, during the year ended December 31, 2007, we incurred capital expenditures of $8.6 million.

Transaction Costs Related to Merger and Acquisitions. During the year ended December 31, 2006, we incurred approximately $4.4
million in transaction costs primarily related to bonuses at Enterprise NewsMedia, LLC paid by the prior owner.

Impairment of
Long-Lived Assets. During the years ended December 31, 2007 and December 31, 2006 we incurred a charge of $1.6 million and $0.9 million related to the impairment of property, plant and equipment which were classified as held
for sale at, or disposed of during the year ended December 31, 2007 and December 31, 2006, respectively.

Goodwill and
Mastheads Impairment. During the year ended December 31, 2007, we recorded a $226.0 million impairment on our goodwill and mastheads due to our stock price as of the end of the fourth quarter and the related impact on the fair
value of our reporting units.

Interest Expense. Total interest expense for the year ended December 31, 2007
increased by $40.7 million, or 113.2%, to $76.7 million from $36.0 million for the year ended December 31, 2006. The increase was primarily due to execution of the 2007 credit facility.

Loss on Early Extinguishment of Debt. During the year ended December 31, 2007, we incurred a $2.2 million loss due to the write
off of deferred financing costs associated with the extinguishment of our Bridge Facility.

During the year ended December 31, 2006,
we incurred a $2.1 million loss due to the write-off of deferred financing costs associated with the extinguishment of our Term Loan B and second lien credit facility. Additionally, we incurred a $1.4 million loss related to the extinguishment of
our debt at Enterprise NewsMedia, LLC.

Unrealized (Gain) Loss on Derivative Instrument. During the year ended
December 31, 2007 we recorded a loss of $2.4 million due to ineffectiveness related to several of our interest rate swaps which were entered into, in an effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.



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During the year ended December 31, 2006, we recorded a net unrealized gain of $1.2 million related
to our $300 million notional amount interest rate swap, which we entered into in June 2005 in an effort to eliminate a significant portion of our exposure to fluctuations in LIBOR.

Income Tax Benefit. Income tax benefit for the year ended December 31, 2007 was $31.8 million compared to $3.8 million for the
year ended December 31, 2006. The change of $28.0 million was primarily due to the recognition of an income tax valuation allowance during the year ended December 31, 2007, the impairment of nondeductible goodwill and an increase in book
pretax loss during the year ended December 31, 2007.

Net Loss from Continuing Operations. Net loss from continuing
operations for the year ended December 31, 2007 was $234.1 million. Net loss from continuing operations for the year ended December 31, 2006 was $2.5 million. Our net loss from continuing operations increased due to the factors noted
above.

Liquidity and Capital Resources

Our primary cash requirements are for working capital, debt obligations and capital expenditures. We have no material outstanding commitments for capital expenditures. Our principal sources of funds have historically been, and will be, cash
provided by operating activities and term loan borrowings for significant acquisitions.

On February 27, 2007, we entered into the
2007 Credit Facility with a syndicate of financial institutions with Wachovia Bank, National Association as administrative agent. The 2007 Credit Facility provides for a $670.0 million term loan facility which matures in August, 2014, a delayed draw
term loan of up to $250.0 million available until August 2007 which matures in August 2014 and a revolving credit agreement with a $40.0 million aggregate loan commitment available, including a $15.0 million sub-facility for letters of credit and a
$10.0 million swingline facility, which matures in February 2014.

On April 11, 2007, we entered into the Bridge Agreement with a
syndicate of financial institutions with Wachovia Investment Holdings LLC as administrative agent. The Bridge Agreement provided a $300.0 million term loan facility which matures on April 11, 2015.

On May 7, 2007, we amended our 2007 Credit Facility and increased our borrowing by $275.0 million. This incremental borrowing has an interest rate
of LIBOR + 2.25% or the Alternate Base Rate + 1.25%, depending upon the designation of the borrowing.

The rate on the previously existing
borrowings of $920.0 million was changed to bear interest at LIBOR + 2.00% or the Alternate Base Rate + 1.00% depending upon the designation of the borrowing. The terms of the previously outstanding borrowings were also modified to include
a 1% premium if the debt is called within one year and an interest feature that grants the previously outstanding debt an interest rate of .25% below the highest rate of any borrowing under the 2007 Credit Facility.

On February 15, 2008, we entered into our 2008 Bridge Facility with Barclays, as syndication agent, sole arranger and book runner. The 2008 Bridge
Facility provides for a $20.6 term loan facility that is subject to extensions through August 15, 2009.

On October 17, 2008 Barclays
granted us a waiver from compliance with the total leverage ratio covenant with respect to the quarter ended September 30, 2008.

On August
21, 2008, FIF III Liberty Holdings LLC (FIF III) purchased an aggregate of $11.5 million in 10% cumulative preferred stock of GateHouse Media Macomb Holdings, Inc. (Macomb), an operating subsidiary of ours. The preferred
stock was issued on August 21, 2008. Macomb, an Unrestricted Subsidiary under the terms of our 2007 Credit Facility, used the proceeds from such sale of preferred stock to make an $11.5 million cash investment in Holdco non-voting 10%
cumulative preferred stock. FIF III may require us to purchase its Macomb preferred stock during the five-year period following our full repayment of the 2008 Bridge Facility for an amount



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equal to the original purchase price, plus accrued but unpaid dividends. FIF III is an affiliate of Fortress Investment Group, LLC, the owner of
approximately 41.9% of our outstanding Common Stock.

On February 3, 2009, we amended our 2007 Credit Facility and reduced the amounts
available under the credit agreement, as follows: (i) for revolving loans, from $40,000,000 to $20,000,000; (ii) for the letter of credit subfacility, from $15,000,000 to $5,000,000; and (iii) for the swingline loan subfacility, from $10,000,000 to
$5,000,000.

On February 12, 2009, we amended the 2008 Bridge Facility and Barclays granted us a waiver from compliance with the total
leverage ratio covenant for the quarter ended December 31, 2008. The amendment set the applicable margin for the Bridge Facility at 12.00% and eliminated the covenant requiring compliance with the Total Leverage Ratio. The amendment also established
an amortization schedule for the outstanding balance due which runs through December 31, 2009.

As a holding company, we have no operations
of our own and accordingly have no independent means of generating revenue, and our internal sources of funds to meet our cash needs, including payment of expenses, are dividends and other permitted payments from our subsidiaries. Our 2007 Credit
Facility imposes upon us certain financial and operating covenants, including, among others, requirements that we satisfy certain financial tests, including a total leverage ratio, a minimum fixed charge ratio, and restrictions on our ability to
incur debt, pay dividends or take certain other corporate actions. We are in compliance with these covenants. Management believes that we have adequate capital resources and liquidity to meet our working capital needs, borrowing obligations and all
required capital expenditures for at least the next twelve months.

We are currently in compliance with all of our covenants and
obligations under the 2007 Credit Facility and the 2008 Bridge Facility. However, due to restrictive covenants and conditions within each of the facilities, we currently do not have the ability to draw upon the revolving credit facility portion of
the 2007 Credit Facility for any immediate short-term funding needs or to incur additional long-term debt.

Future compliance with our
financial and operating covenants will depend on the future performance of the business and our ability to curtail the negative revenue trends experience, in the prior periods as well as our ability to address other risks set forth herein and in our
Annual Report on Form 10-K for the year ended December 31, 2007 as supplemented and amended by the risk factors that were included in our Quarterly Report for the quarterly period ended June 30, 2008 and in Item IA of this report. We believe that we
have adequate capital resources and liquidity to meet our working capital needs, borrowing obligations and all required capital expenditures for at least the next twelve months.

Our leverage may adversely affect our business and financial performance and may restrict our operating flexibility. The level of our indebtedness and
our on-going cash flow requirements may expose us to a risk that a substantial decrease in operating cash flows due to economic developments or adverse developments in our business, including declines in advertising revenues, could make it difficult
to meet the total leverage ratio test and other financial and operating covenants which may or may not be applicable from time to time. In addition, our leverage may limit cash flow available for general corporate purposes such as capital
expenditures and our flexibility to react to competitive technological and other changes in our industry and economic conditions generally.

On October 25, 2006, we completed our IPO of 13,800,000 shares of common stock at a price of $18.0 per share, raising approximately $231.0 million, which is net of the underwriters discount of $17.4 million. We used a portion of
the net proceeds to repay in full and terminate our $152.0 million second lien term loan credit facility. In addition, we used a portion of the net proceeds to pay down $12.0 million of the $570.0 million first lien term loan credit facility,
reducing the balance and limit to $558.0 million, and to repay in full the outstanding balance of $21.3 million under our $40.0 million revolving credit facility. In connection with the termination of our $152.0 million second lien term loan credit
facility and the $12.0 million reduction in borrowing capacity on the first lien term loan credit facility, we wrote off $1.4 million of deferred financing costs in the fourth quarter of 2006.



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On November 3, 2006, the underwriters of our initial public offering exercised their option to
purchase an additional 2,070,000 shares of common stock as allowed in the underwriting agreement. The net proceeds before offering expenses of these additional shares were $34.7 million, after deducting the underwriting discount. The total proceeds
from the initial public offering of 13,800,000 shares and this additional allotment of 2,070,000 shares before offering expenses was $265.7 million, after deducting the underwriting discount.

On July 23, 2007, we completed our follow-on public offering of 18,700,000 shares of our common stock, including 1,700,000 shares sold pursuant to
the exercise by the underwriters of their option, as allowed in the underwriting agreement at a public offering price of $18.45 per share. The total net proceeds from our follow-on public offering were approximately $331.6 million. We used a portion
of the proceeds to repay and terminate our $300.0 million Bridge Facility.

Cash Flows

The following table summarizes our historical cash flows.



|                                                |  |                            |         |   |                            |   |            |                            |  |   |          |  
|----------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | - | ---------- | -------------------------- |  | - | -------- | -
|                                                |  | Year EndedDecember 31,2008 |         |   | Year EndedDecember 31,2007 |   |            | Year EndedDecember 31,2006 | 
|                                                |  | (in thousands)             |        
|Cash provided by (used in) operating activities |  | $                          | 25,506  |   |                            | $ | 63,733     |                            |  | $ | 25,217   |  
|Cash provided by (used in) investing activities |  |                            | 11,675  |   |                            |   | (1,051,168 | )                          |  |   | (428,838 | )
|Cash provided by (used in) financing activities |  |                            | (37,533 | ) |                            |   | 909,229    |                            |  |   | 490,860  |  

Cash Flows from Operating Activities.Net cash provided by operating activities for
the year ended December 31, 2008 was $25.5 million. The net cash provided by operating activities resulted from depreciation and amortization of $71.6 million, non-cash compensation of $3.6 million, an impairment of long-lived assets of
$132.9 million, a goodwill and mastheads impairment charge of $496.3 million which includes $4.5 million from discontinued operations, a net increase in cash provided by working capital of $4.4 million, a loss of $0.3 million on the sale of assets,
amortization of deferred financing costs of $1.8 million, non-cash interest expense of $0.6 million, an unrealized loss of $10.1 million on derivative instruments, partially offset by a net loss of $673.3 million, a decrease of $21.3 million related
to deferred income taxes, and an increase funding of pension and other post-retirement obligations of $1.5 million. The increase in cash provided by working capital primarily resulted from a decrease in accounts receivable and an increase in
accounts payable, which were partially offset by a decrease in accrued interest and an increase in inventory from December 31, 2007 to December 31, 2008.

Net cash provided by operating activities for the year ended December 31, 2007 was $63.7 million. The net cash provided by operating activities resulted from a goodwill and mastheads impairment charge of $226.0
million, depreciation and amortization of $57.8 million, a loss of $2.2 million on the early extinguishment of debt, non-cash compensation of $4.7 million, an impairment of long-lived assets of $1.6 million, a net increase of $28.3 million in
working capital, a loss of $1.5 million on the sale of assets, an unrecognized loss of $0.8 million from pension and other postretirement benefit obligations, amortization of deferred financing costs of $2.1 million, an unrealized loss of $2.4
million on derivative instruments, partially offset by a net loss of $231.4 million and a decrease of $32.2 million related to deferred income taxes. The decrease in working capital primarily resulted from an increase in accrued expenses, including
interest and accounts payable, a decrease in accounts receivable and inventory that were partially offset by an increase in other assets from December 31, 2006 to December 31, 2007.

Net cash provided by operating activities for the year ended December 31, 2006 was $25.2 million. The net cash provided by operating activities
resulted from depreciation and amortization of $24.1 million, a loss of $2.1 million on the early extinguishment of debt, non-cash compensation of $1.8 million, an impairment of long-lived assets of $0.9 million, a net increase of $0.5 million in
working capital, a loss of $0.7 million on the sale of



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assets, an unrecognized loss of $0.7 million from pension and other postretirement obligations, amortization of deferred financing costs of $0.5 million,
partially offset by a decrease of $3.4 million related to deferred income taxes, a net loss of $1.6 million, and an unrealized gain of $1.2 million on derivative instruments. The increase in working capital primarily resulted from an increase in
accounts payable and accrued interest and a decrease in prepaid expenses and other assets, partially offset by an increase in accounts receivable from December 31, 2005 to December 31, 2006.

Cash Flows from Investing Activities. Net cash provided by investing activities for the year ended December 31, 2008 was $11.7
million. During the year ended December 31, 2008, we received $48.9 million from the sale of publications and other assets, which was partially offset by $27.5 million, net of cash acquired, used for acquisitions and $9.7 million used for
capital expenditures.

Net cash used in investing activities for the year ended December 31, 2007 was $1.05 billion. During the year
ended December 31, 2007, we used $1.12 billion, net of cash acquired, for acquisitions and $8.6 million for capital expenditures, which uses were partially offset by proceeds of $79.7 million from the sale of publications and other assets.

Net cash used in investing activities for the year ended December 31, 2006 was $428.8 million. During the year ended
December 31, 2006, we used $424.9 million, net of cash acquired, for acquisitions, and $8.4 million for capital expenditures, which uses were partially offset by proceeds of $4.5 million from the sale of publications and other assets.

Cash Flows from Financing Activities. Net cash used in financing activities for the year ended December 31, 2008 was
$37.5 million. The net cash used in financing activities resulted from the payment of dividends of $34.7 million, repayment of $22.5 million of short term debt and notes payable, and a net repayment of $11.0 million of borrowing under the Revolver,
partially offset by borrowings under short term debt of $19.5 million and the issuance of subsidiary preferred stock of $11.3 million, net of issuance costs.

Net cash provided by financing activities for the year ended December 31, 2007 was $909.2 million. The net cash provided by financing activities resulted from net borrowings of $1.53 billion under the 2007 Credit
Facility, the issuance of common stock of $331.6 from the secondary offering, net of underwriters discount and offering costs, and $11.0 million under the revolving credit facility, partially offset by the repayment of $558.0 million of
borrowings under the 2006 Credit Facility and $339.8 million under the 2007 Credit Facility, payment of dividends of $62.7 million, and payment of $7.5 million of debt issuance costs in connection with the 2007 Credit Facility.

Net cash provided by financing activities for the year ended December 31, 2006 was $490.9 million. The net cash provided by financing activities
primarily resulted from net borrowings of $549.5 million under the 2006 Credit Facility and the issuance of common stock of $265.9 million, primarily from the IPO, net of underwriters discount, partially offset by the repayment of $304.4
million of borrowings under the 2005 Credit Facility and payment of $9.2 million of dividends, payment of $7.2 million of debt issuance costs in connection with the 2006 Credit Facility and payment of $3.7 million of offering costs.

Changes in Financial Position

The discussion
that follows highlights significant changes in our financial position and working capital from December 31, 2007 to December 31, 2008.

Accounts Receivable. Accounts receivable decreased $10.2 million from December 31, 2007 to December 31, 2008, of which $11.2 million relates to the timing of cash collection and lower revenue recognized in 2008
compared to 2007 and $1.5 million from assets sold and held for sale. This decrease was partially offset by $2.5 million acquired from acquisitions consummated during the year ended December 31, 2008.



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Property, Plant, and Equipment. Property, plant, and equipment decreased $15.8 million
during the period from December 31, 2007 to December 31, 2008, of which $1.1 million relates to an impairment charge, $7.4 million relates to assets sold and held for sale, and depreciation of $27.9 million. These decreases in property,
plant, and equipment were partially offset by $5.7 million in purchase accounting adjustments from acquisitions in 2007, $5.5 million was acquired from acquisitions consummated during the current year, and $9.7 million was used for capital
expenditures.

Goodwill.Goodwill decreased $440.5 million from December 31, 2007 to December 31, 2008, of which
$429.8 million relates to an impairment charge, $11.1 million from assets sold and held for sale, and $4.7 million is related to purchase accounting adjustments from acquisitions in 2007. These decreases in goodwill were partially offset by $5.1
million acquired from acquisitions consummated during the year ended December 31, 2008.

Intangible Assets.Intangible assets
decreased $243.7 million from December 31, 2007 to December 31, 2008, of which $198.4 million relates to an impairment charge, amortization of $43.7 million, and assets held for sale of $18.7 million. These decreases in intangible assets
were partially offset by $17.1 million of acquisitions consummated during the current year.

Long-term Assets Held for Sale.
Long-term assets held for sale decreased $10.1 million from December 31, 2007 to December 31, 2008 of which $46.7 million came from assets sold during the current year, partially offset by $36.6 million from assets classified as held for
sale during the current year. Assets held for sale as of December 31, 2008 consist primarily of real estate for which we have typically have sale agreements in place.

Short-term Debt . Short-term debt increased $17.0 million from December 31, 2007 to December 31, 2008, of which $20.6 million
relates to borrowings which were partially offset by $3.6 million of repayments under the Barclays Credit Agreement.

Accounts
Payable. Accounts payable increased $7.2 million from December 31, 2007 to December 31, 2008, of which $0.5 million was acquired from acquisitions. The remaining $6.8 million increase in accounts payable working capital primarily
resulted from the timing of vendor payments.

Accrued Expenses. Accrued expenses decreased $9.2 million from
December 31, 2007 to December 31, 2008, of which $1.8 million relates to purchase accounting adjustments from acquisitions in 2007, a $8.7 million decrease in accrued payroll and decreases in various other accrual balances, including 401K
contributions, miscellaneous tax balances and vacation. These decreases in accrued expenses were partially offset by $1.5 million acquired from acquisitions consummated during the current year.

Dividend Payable.Dividend payable decreased $23.1 million from December 31, 2007 to December 31, 2008 from the payment of
dividends of $34.7 million, primarily offset by dividends declared of $11.6 million. In 2008, the Board of Directors elected to suspend the payment of all quarterly dividends.

Long-Term Debt. Long-term debt decreased $11.0 million from December 31, 2007 to December 31, 2008 from the repayment of $11.0
million under the Revolver.

Long-Term Liabilities, Less Current Portion. Long-term liabilities, less current
portion, increased $12.9 million from December 31, 2007 to December 31, 2008, which resulted primarily from the issuance of preferred stock in a subsidiary in the amount of $11.5 million.

Deferred Income Taxes. Deferred income taxes decreased $25.3 million from December 31, 2007 to December 31, 2008, of which $26.1
million was primarily attributable to the 2008 impairment charges recognized on intangible assets.



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Derivative Instruments. Derivative instruments decreased $9.1 million from
December 31, 2007 to December 31, 2008, due to changes in the fair value measurement of our interest rate swaps and the termination of $570 million notional amount of interest rate swaps.

Additional Paid-in Capital.Additional paid-in capital increased $3.6 million from December 31, 2007 to December 31, 2008, which
resulted from non-cash compensation of $3.6 million.

Accumulated Deficit. Accumulated deficit increased $684.9 million from
December 31, 2007 to December 31, 2008 from declaration of dividends of $11.6 million and a net loss of $673.3 million.

Indebtedness

2007 Credit Facility

GateHouse Media
Operating, Inc. (Operating), an indirect wholly owned subsidiary of ours, GateHouse Media Holdco, Inc. (Holdco), a direct wholly owned subsidiary of ours, and certain of their subsidiaries are parties to an Amended and
Restated Credit Agreement, dated as of February 27, 2007 with a syndicate of financial institutions with Wachovia Bank, National Association as administrative agent. The 2007 Credit Facility amended and restated our 2006 Credit Facility.

The 2007 Credit Facility provides for a (i) $670.0 million term loan facility that matures on August 28, 2014, (ii) a
delayed draw term loan facility of up to $250.0 million that matures on August 28, 2014, and (iii) a revolving loan facility with a $40.0 million aggregate loan commitment amount available, including a $15.0 million sub-facility for
letters of credit and a $10.0 million swingline facility, that matures on February 28, 2014. The borrowers used the proceeds of the 2007 Credit Facility to finance the acquisition of SureWest, to refinance existing indebtedness and for working
capital and other general corporate purposes, including, without limitation, financing acquisitions permitted under the 2007 Credit Facility. The 2007 Credit Facility is secured by a first priority security interest in (i) all present and
future capital stock or other membership, equity, ownership or profits interest of Operating and all of its direct and indirect domestic restricted subsidiaries, (ii) 65% of the voting stock (and 100% of the nonvoting stock) of all present and
future first-tier foreign subsidiaries and (iii) substantially all of the tangible and intangible assets of Holdco, Operating and their present and future direct and indirect domestic restricted subsidiaries. In addition, the loans and other
obligations of the borrowers under the 2007 Credit Facility are guaranteed, subject to specified limitations, by Holdco, Operating and their present and future direct and indirect domestic restricted subsidiaries.

As of December 31, 2008, (i) $670.0 million was outstanding under the term loan facility, (ii) $250.0 million was outstanding under the
delayed draw term loan facility and (iii) $0 was outstanding under the revolving credit facility. Borrowings under the 2007 Credit Facility bear interest, at the borrowers option, equal to the LIBOR Rate for a LIBOR Rate Loan (as defined
in the 2007 Credit Facility), or the Alternate Base Rate for an Alternate Base Rate Loan (as defined in the 2007 Credit Facility), plus an applicable margin. The applicable margin for LIBOR Rate term loans and Alternate Base Rate term loans as
amended by the First Amendment is 2.00% and 1.00%, respectively. The applicable margin for revolving loans is adjusted quarterly based upon Holdcos Total Leverage Ratio (as defined in the 2007 Credit Facility) ( i.e ., the ratio of
Holdcos Consolidated Indebtedness (as defined in the 2007 Credit Facility) on the last day of the preceding quarter to Consolidated EBITDA (as defined in the 2007 Credit Facility) for the four fiscal quarters ending on the date of
determination). The applicable margin ranges from 1.50% to 2.00%, in the case of LIBOR Rate Loans and, 0.50% to 1.00%, in the case of Alternate Base Rate Loans. Under the revolving loan facility we also pay a quarterly commitment fee on the unused
portion of the revolving loan facility ranging from 0.25% to 0.5% based on the same ratio of Consolidated Indebtedness to Consolidated EBITDA and a quarterly fee equal to the applicable margin for LIBOR Rate Loans on the aggregate amount of
outstanding letters of credit. In addition, we are required to pay a ticking fee at the rate of 0.50% of the aggregate unfunded amount available to be borrowed under the delayed draw term facility.



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No principal payments are due on the term loan facilities or the revolving credit facility until the
applicable maturity date. The borrowers are required to prepay borrowings under the term loan facilities in an amount equal to 50.0% of Holdcos Excess Cash Flow (as defined in the Credit Agreement) earned during the previous fiscal year,
except that no prepayments are required if the Total Leverage Ratio is less than or equal to 6.0 to 1.0 at the end of such fiscal year. In addition, the borrowers are required to prepay borrowings under the term loan facilities with asset
disposition proceeds in excess of specified amounts to the extent necessary to cause Holdcos Total Leverage Ratio to be less than or equal to 6.25 to 1.00, and with cash insurance proceeds and condemnation or expropriation awards, in excess of
specified amounts, subject, in each case, to reinvestment rights. The borrowers are required to prepay borrowings under the term loan facilities with the net proceeds of equity issuances by us in an amount equal to the lesser of (i) the amount
by which 50.0% of the net cash proceeds exceeds the amount (if any) required to repay any credit facilities of ours or (ii) the amount of proceeds required to reduce Holdcos Total Leverage Ratio to 6.0 to 1.0. The borrowers are also
required to prepay borrowings under the term loan facilities with 100% of the proceeds of debt issuances (with specified exceptions) except that no prepayment is required if Holdcos Total Leverage Ratio is less than 6.0 to 1.0. If the term
loan facilities have been paid in full, mandatory prepayments are applied to the repayment of borrowings under the swingline facility and revolving credit facilities and the cash collateralization of letters of credit.

The 2007 Credit Facility contains a financial covenant that requires Holdco to maintain a Total Leverage Ratio of less than or equal to 6.5 to 1.0 at any
time an extension of credit is outstanding under the revolving credit facility. The 2007 Credit Facility contains affirmative and negative covenants applicable to Holdco, Operating and their restricted subsidiaries customarily found in loan
agreements for similar transactions, including restrictions on their ability to incur indebtedness (which we are generally permitted to incur so long as we satisfy an incurrence test that requires us to maintain a pro forma Total Leverage ratio of
less than 6.5 to 1.0), create liens on assets, engage in certain lines of business; engage in mergers or consolidations, dispose of assets, make investments or acquisitions; engage in transactions with affiliates, enter into sale leaseback
transactions, enter into negative pledges or pay dividends or make other restricted payments (except that Holdco is permitted to (i) make restricted payments (including quarterly dividends) so long as, after giving effect to any such restricted
payment, Holdco and its subsidiaries have a Fixed Charge Coverage Ratio equal to or greater than 1.0 to 1.0 and would be able to incur an additional $1.00 of debt under the incurrence test referred to above and (ii) make restricted payments of
proceeds of asset dispositions to us to the extent such proceeds are not required to prepay loans under the 2007 Credit Facility and/or cash collateralize letter of credit obligations and such proceeds are used to prepay borrowings under acquisition
credit facilities of ours). The 2007 Credit Facility also permits the borrowers, in certain limited circumstances, to designate subsidiaries as unrestricted subsidiaries which are not subject to the covenant restrictions in the 2007
Credit Facility. The 2007 Credit Facility contains customary events of default, including defaults based on a failure to pay principal, reimbursement obligations, interest, fees or other obligations, subject to specified grace periods; a material
inaccuracy of representations and warranties; breach of covenants; failure to pay other indebtedness and cross-accelerations; a Change of Control (as defined in the 2007 Credit Facility); events of bankruptcy and insolvency; material judgments;
failure to meet certain requirements with respect to ERISA; and impairment of collateral. There were no extensions of credit outstanding under the revolving credit portion of the facility at December 31, 2008 and, therefore, we are not required to
be in compliance with the total leverage ratio covenant. Currently we do not have the ability to draw upon our revolving credit facility which will further limit our immediate and short term access to funds.

Subject to the satisfaction of certain conditions and the willingness of lenders to extend additional credit, the 2007 Credit Facility provides that the
borrowers may increase the amounts available under the revolving facility and/or the term loan facilities.

First Amendment to 2007
Credit Facility.

On May 7, 2007, we entered into the First Amendment to amend the 2007 Credit Facility. The First Amendment
provided an incremental term loan facility under the 2007 Credit Facility in the amount of $275.0 million the proceeds of which were used to finance a portion of the Gannett Acquisition. As amended by the First



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Amendment, the 2007 Credit Facility includes $1.195 billion of term loan facilities and a $40.0 million revolving credit facility. The incremental term loan
facility amortizes at the same rate and matures on the same date as the existing term loan facilities under the 2007 Credit Facility. Interest on the incremental term loan facility accrues at a rate per annum equal to, at the option of the borrower,
(a) adjusted LIBOR plus a margin equal to (i) 2.00%, if the corporate family ratings and corporate credit ratings of Operating by Moodys Investor Service Inc. (Moodys) and Standard & Poors Rating
Services (S&P), are at least B1 and B+, respectively, in each case with stable outlook or (ii) 2.25%, otherwise, as was the case as of December 31, 2008, or (b) the greater of the prime rate set by Wachovia Bank, National
Association, or the federal funds effective rate plus 0.50%, plus a margin 1.00% lower than that applicable to adjusted LIBOR-based loans. Any voluntary or mandatory repayment of the First Amendment term loans made with the proceeds of a new term
loan entered into for the primary purpose of benefiting from a margin that is less than the margin applicable as a result of the First Amendment will be subject to a 1.00% prepayment premium. The First Amendment term loans are subject to a
most favored nation interest provision that grants the First Amendment term loans an interest rate margin that is 0.25% less than the highest margin of any future term loan borrowings under the 2007 Credit Facility.

As previously noted, the First Amendment also modified the interest rates applicable to the term loans under the 2007 Credit Facility. Term loans
thereunder accrue interest at a rate per annum equal to, at the option of the Borrower, (a) adjusted LIBOR plus a margin equal to 2.00% or (b) the greater of the prime rate set by Wachovia Bank, National Association, or the federal funds
effective rate plus 0.50%, plus a margin equal to 1.00%. The terms of the previously outstanding borrowings were also modified to include a 1.00% prepayment premium corresponding to the prepayment premium applicable to the First Amendment term loans
and a corresponding most favored nation interest provision.

Second Amendment to 2007 Credit Facility

On February 3, 2009 we entered into a Second Amendment to Credit Agreement (the Second Amendment). The Second Amendment amends our Amended and
Restated Credit Agreement, dated as of February 27, 2007, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of May 7, 2007 (together, the Credit Agreement), by and among Holdco, GateHouse Media
Operating, Inc. (the Subsidiary), GateHouse Media Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc., ENHE Acquisition, LLC, each of those domestic subsidiaries of Holdco identified as a Guarantor on the signature
pages of the Credit Agreement, and Wachovia Bank, National Association, as administrative agent for the lenders. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

The Second Amendment, among other things, permits the Subsidiary to repurchase term loans outstanding under the Credit Agreement at prices below par
through one or more Modified Dutch Auctions through December 31, 2011, provided that: (i) no Default or Event of Default under the Credit Agreement has occurred and is continuing or would result from such repurchases, (ii) the sum of Unrestricted
Cash and Accessible Borrowing Availability under the Credit Agreement is greater than or equal to $20,000,000; and (iii) no Extension of Credit is outstanding under the Revolving Facility before or after giving effect to such repurchases. The Second
Amendment further provides that such repurchases may result in the prepayment of term loans on a non-pro rata basis. No debt repurchases are required to be made pursuant to the Amendment and we cannot provide any assurances that any such debt
repurchases will be made or, if made, the prices at which such repurchases will be made.

The Second Amendment also reduces the aggregate
principal amounts available under the Credit Agreement, as follows: (i) for revolving loans, from $40,000,000 to $20,000,000; (ii) for the letter of credit subfacility, from $15,000,000 to $5,000,000; and (iii) for the swingline loan subfacility,
from $10,000,000 to $5,000,000.



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In addition, the Second Amendment provides that Holdco may not incur additional term debt under the
Credit Agreement unless the Senior Secured Incurrence Test is less then 4.00 to 1 and the current Incurrence Test is satisfied as such terms are defined in the Second Amendment.

We are currently in compliance with all of our covenants and obligations under the 2007 Credit Facility and the 2008 Bridge Facility. However, due to
restrictive covenants and conditions within each of the facilities, we currently do not have the ability to draw upon the revolving credit facility portion of the 2007 Credit Facility for any immediate short-term funding needs or to incur additional
long-term debt.

2008 Bridge Facility

On February 15, 2008, GateHouse Media Intermediate Holdco, Inc., a subsidiary of GateHouse Media Holdco II, Inc. (Holdco II) and GateHouse Media (collectively, the Bridge Borrower) entered into
the 2008 Bridge Facility with Barclays Capital, as syndication agent, sole arranger and book runner (Barclays).

The 2008
Bridge Facility provided a $20,600 term loan facility subject to extensions through August 15, 2009. The 2008 Bridge Facility is secured by a first priority security interest in all present and future capital stock of Holdco owned by Holdco II and
all proceeds thereof.

Borrowings under the 2008 Bridge Facility bear interest at a floating rate equal to the LIBOR Rate (as defined in
the 2008 Bridge Facility), plus an applicable margin. During the first three months of the facility, until May 15, 2008 (the First Pricing Step-Up Date), the applicable margin was 8.00%. After the First Pricing Step-Up Date and until the
nine month anniversary of the First Pricing Step-Up Date (February 15, 2009, the Second Pricing Step-Up Date), the applicable margin is 10.00%. After the Second Pricing Step-Up Date and until the maturity date, the applicable margin is
12.00%.

No principal payments are due on the 2008 Bridge Facility until the maturity date. The Bridge Borrower is required to prepay
borrowings under the 2008 Bridge Facility with (a) 100% of the net cash proceeds from the issuance or incurrence of debt by Holdco II and its restricted subsidiaries, (b) 100% of the net cash proceeds from any issuances of equity by Holdco II or any
of its restricted subsidiaries and (c) 100% of the net cash proceeds of asset sales and dispositions by Holdco II and its subsidiaries, except, in the case of each of clause (a), (b) and (c), to the extent such required prepayment would contravene
any provision of, or cause a violation of or default under, the 2007 Credit Facility, in which case such mandatory prepayment shall not be required. The Bridge Borrower may voluntarily prepay the 2008 Bridge Facility at any time.

The 2008 Bridge Facility contains affirmative and negative covenants applicable to Holdco II and, in limited circumstances, the Bridge Borrower and
Holdco IIs restricted subsidiaries, customarily found in loan agreements for similar transactions, including restrictions on their ability to incur indebtedness, create liens on assets, engage in certain lines of business; engage in mergers or
consolidations, dispose of assets, make investments or acquisitions; engage in transactions with affiliates, enter into sale leaseback transactions, enter into negative pledges or pay dividends or make other restricted payments. The 2008 Bridge
Facility contains customary events of default, including defaults based on a failure to pay principal, reimbursement obligations, interest, fees or other obligations, subject to specified grace periods; a material inaccuracy of representations and
warranties; breach of covenants; failure to pay other indebtedness and cross-accelerations; a Change of Control (as defined in the 2008 Bridge Facility); events of bankruptcy or insolvency; material judgments; failure to meet certain requirements
with respect to ERISA; and impairment of collateral. Certain of the foregoing covenants are only applicable to the extent they do not contravene any provision of or cause a violation of or default under the 2007 Credit Facility.

In connection with the 2008 Bridge Facility, Holdco II entered into a Pledge Agreement in favor of Barclays, pursuant to which Holdco II pledged certain
assets for the benefit of the secured parties as collateral security for the payment and performance of its obligations under the Bridge Agreement. The pledged assets



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include, among other things (i) all present and future capital stock or other membership, equity, ownership or profits interest of the Bridge Borrower in all
of its direct domestic restricted subsidiaries and (ii) 65% of the voting stock (and 100% of the nonvoting stock) of all of its present and future first-tier foreign subsidiaries.

As of December 31, 2008, a total of $17,000 was outstanding under the 2008 Bridge Facility.

On October 17, 2008, Holdco II entered into the First Waiver to the Bridge Facility. The First Waiver waived compliance by borrower with the Total
Leverage Ratio (as defined in the Bridge Agreement) covenant of the Bridge Facility which is required to be greater than 7.25 to 1.00.

On
February 12, 2009, Holdco II entered into the Second Waiver and Amendment to the Bridge Facility. The Second Waiver and Amendment waived compliance by Holdco II with the Total Leverage Ratio for the quarter ended December 31, 2008. The Second Waiver
and Amendment also set the applicable margin for the Bridge Facility at 12.00% and established an amortization schedule for the outstanding balance due under the Bridge Facility as follows:



|                        |  |                               |  |                 
|----------------------- |  | ----------------------------- |  | ----------------
|Installment             |  |                               |  | Principal Amount
|May 31, 2009            |  |                               |  | $1,500          
|June 30, 2009           |  |                               |  | $1,500          
|July 31, 2009           |  |                               |  | $1,500          
|August 31, 2009         |  |                               |  | $1,500          
|September 30, 2009      |  |                               |  | $5,000          
|October 31, 2009        |  |                               |  | $2,000          
|November 30, 2009       |  |                               |  | $2,000          
|Term Loan Maturity Date |  | Remaining outstanding amounts

Furthermore, under the Second Waiver and Amendment to the Bridge Facility the covenant requiring
compliance with the Total Leverage Ratio was eliminated. The Bridge Borrower also agreed to prepay the Bridge Loan in any month, and only to the extent that, the month end cash balance exceeds the Projected Cash Balance by $2,000, starting in May of
2009, and agreed to make certain prepayments in the event of any voluntary repurchase or prepayment of term loans under the 2007 Credit Facility.

In connection with the acquisition of Morris Publishing Group, the Company committed to pay a portion of the purchase price under a $10,000 promissory note. During 2008, this note was amended to include the working capital settlement
related to the acquisition. As of December 31, 2008, $11,538 was outstanding under this note, which includes a portion of the working capital settlement. In accordance with an additional amendment executed during January 2009, principal payments on
the remaining balance will be made evenly from April-November of 2009.

Summary Disclosure About Contractual Obligations and Commercial Commitments

The following table reflects a summary of our contractual cash obligations, including estimated interest payments where applicable, as of
December 31, 2008:



|                                                 |  |                |         |      |   |        |  |      |        |      |   |            |  |       |        |  |   |           |  |   |          
|------------------------------------------------ |  | -------------- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ---------- |  | ----- | ------ |  | - | --------- |  | - | ---------
|                                                 |  | 2009           |         | 2010 |   | 2011   |  | 2012 |        | 2013 |   | Thereafter |  | Total
|                                                 |  | (In Thousands)
|2007 Credit Facility and short-term note payable |  | $              | 101,895 |      | $ | 71,366 |  | $    | 71,366 |      | $ | 71,366     |  | $     | 71,366 |  | $ | 1,242,578 |  | $ | 1,629,937
|Noncompete payments                              |  |                | 831     |      |   | 739    |  |      | 721    |      |   | 631        |  |       | 311    |  |   | 1,110     |  |   | 4,343    
|Operating lease obligations                      |  |                | 5,266   |      |   | 4,532  |  |      | 2,442  |      |   | 2,109      |  |       | 2,060  |  |   | 3,360     |  |   | 19,769   
|Letters of credit                                |  |                | 5,197   |      |   |       |  |      |       |      |   |           |  |       |       |  |   |          |  |   | 5,197    
|                                                 |  |                |         |      |   |        |  |      |        |      |   |            |  |       |        |  |   |           |  |   |          
|Total                                            |  | $              | 113,189 |      | $ | 76,637 |  | $    | 74,529 |      | $ | 74,106     |  | $     | 73,737 |  | $ | 1,247,048 |  | $ | 1,659,246
|                                                 |  |                |         |      |   |        |  |      |        |      |   |            |  |       |        |  |   |           |  |   |          



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On February 27, 2007, we entered into the 2007 Credit Facility with a syndicate of financial
institutions with Wachovia Bank, National Association as administrative agent. The 2007 Credit Facility provides for a $670.0 million term loan facility which matures in August 2014, a delayed draw term loan of up to $250.0 million available until
August 2007 which matures in August, 2014 and a revolving credit agreement with a $40.0 million aggregate loan commitment available, including a $15.0 million sub-facility for letters of credit and a $10.0 million swingline facility, which matures
in February 2014.

On May 7, 2007, we amended our 2007 Credit Facility and increased our borrowings by $275.0 million.

On February 3, 2009, we again amended our 2007 Credit Facility and reduced the amounts available under the credit agreement, as follows: (i) for
revolving loans, from $40,000,000 to $20,000,000; (ii) for the letter of credit subfacility, from $15,000,000 to $5,000,000; and (iii) for the swingline loan subfacility, from $10,000,000 to $5,000,000.

We do not have any off-balance sheet arrangements reasonably likely to have a current or future effect on our financial statements.

The 2009 payment amount shown above, includes $17 million and $11.5 million related to the 2008 Bridge Facility and a promissory note executed in
connection with the Morris Acquisition, respectively.

Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS
No. 157). SFAS No. 157 defines fair value, provides a market-based framework for measuring fair value, and expands disclosure requirements. SFAS No. 157 applies to other accounting pronouncements that require or permit fair
value measurements. SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is initially effective for financial statements issued for fiscal years beginning after November 15, 2007, however the FASB provided a one
year deferral for implementation of the standard for non-financial assets and liabilities. Accordingly, our adoption of SFAS No. 157 in 2008 was primarily related to the valuation of our derivative instruments. The adoption of SFAS No. 157 decreased
the value of the derivative instruments by $3,300 upon adoption and by $64,518 as of December 31, 2008. We do not expect the adoption of SFAS No. 157 to have a material impact on nonfinancial assets and liabilities.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS
No. 159). SFAS No. 159 permits companies to measure financial instruments and certain other items at fair value. The objective of this statement is to improve financial reporting by providing companies with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is expected to expand the use of fair value measurement for
accounting for financial instruments. SFAS No. 159 is effective for financial statements issued as of the beginning of the first fiscal year that begins after November 15, 2007. The adoption of SFAS No. 159 did not have a material
impact on our consolidated financial statements.

In May 2007, the FASB issued Staff Position No. 48-1, Definition of Settlement in
FASB Interpretation No. 48, (FIN 48-1) which is an amendment to FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes. FIN 48-1 provides guidance on how an enterprise should determine whether a tax
position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. FIN 48-1 became effective during the first quarter of 2007 and did not have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141(R)), and
SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS No. 160).

SFAS No. 141(R) significantly changes the accounting for business combinations. Under SFAS No. 141(R), an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a
transaction at



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the acquisition-date at fair value with limited exceptions. FAS No. 141(R) further changes the accounting treatment for certain specific items,
including:



| |  |  | Acquisition costs will be generally expensed as incurred;
| | - |  | ---------------------------------------------------------



| |  |  | Acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount
determined under existing guidance for non-acquired contingencies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

SFAS No. 141(R) includes a substantial number of new disclosure requirements. SFAS No. 141(R) applies
prospectively to our business combinations for which the acquisition date is on or after January 1, 2009. The adoption of SFAS No. 141(R) could have a material impact on the consolidated financial statements if significant acquisitions are
consummated in the future.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statementsan Amendment of Accounting Research Bulletin No. 51 (SFAS No. 160). SFAS No. 160 requires reporting entities to present noncontrolling (minority) interests as equity (as opposed to as a liability) and provides
guidance on the accounting for transactions between an entity and noncontrolling interests. SFAS No. 160 applies prospectively as of January 1, 2009, except for the presentation on disclosure requirements which will be applied retrospectively for
all periods presented. We do not anticipate that SFAS No. 160 will have a material impact on our financial statements.

In March 2008, the
FASB issued SFAS No. 161 Disclosuresabout Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133 (SFAS No. 161). The new standard requires additional disclosures regarding a
companys derivative instruments and hedging activities by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also requires disclosure of derivative features that are credit
risk-related as well as cross-referencing within the notes to the financial statements to enable financial statement users to locate important information about derivative instruments, financial performance, and cash flows. SFAS No. 161 is effective
for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The principal impact from this standard will be to require us to expand our disclosures regarding derivative
instruments.

Non-GAAP Financial Measures

A non-GAAP financial measure is generally defined as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most
comparable GAAP measure. In this report, we define and use Adjusted EBITDA, a non-GAAP financial measure, as set forth below.

Adjusted EBITDA

We define Adjusted EBITDA as follows:

Income (loss) from continuing operations before:



| |  |  | Income tax expense (benefit);
| | - |  | -----------------------------



| |  |  | interest/financing expense;
| | - |  | ---------------------------



| |  |  | depreciation and amortization; and
| | - |  | ----------------------------------



| |  |  | non-cash impairments.
| | - |  | ---------------------



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Managements Use of Adjusted EBITDA

Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to income from
operations, net income (loss), cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. We believe this non-GAAP measure, as we have defined it, is helpful in identifying trends
in our day-to-day performance because the items excluded have little or no significance on our day-to-day operations. This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are
expected to facilitate meeting current financial goals as well as achieve optimal financial performance. It provides an indicator for management to determine if adjustments to current spending decisions are needed.

Adjusted EBITDA provides us with a measure of financial performance, independent of items that are beyond the control of management in the short-term,
such as depreciation and amortization, taxation and interest expense associated with our capital structure. This metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost
structure or expenses of the organization. Adjusted EBITDA is one of the metrics used by senior management and the board of directors to review the financial performance of the business on a monthly basis.

Limitations of Adjusted EBITDA

Adjusted
EBITDA has limitations as an analytical tool. It should not be viewed in isolation or as a substitute for GAAP measures of earnings or cash flows. Material limitations in making the adjustments to our earnings to calculate Adjusted EBITDA and using
this non-GAAP financial measure as compared to GAAP net income (loss), include: the cash portion of interest/financing expense, income tax (benefit) provision and charges related to gain (loss) on sale of facilities represent charges (gains), which
may significantly affect our financial results.

An investor or potential investor may find this item important in evaluating our
performance, results of operations and financial position. We use non-GAAP financial measures to supplement our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.

Adjusted EBITDA is not an alternative to net income, income from operations or cash flows provided by or used in operations as calculated and presented
in accordance with GAAP. Readers of our financial statements should not rely on Adjusted EBITDA as a substitute for any such GAAP financial measure. We strongly urge readers of our financial statements to review the reconciliation of income (loss)
from continuing operations to Adjusted EBITDA, along with our consolidated financial statements included elsewhere in this report. We also strongly urge readers of our financial statements to not rely on any single financial measure to evaluate our
business. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure, as presented in this report, may differ from and may not be comparable to
similarly titled measures used by other companies.

We use Adjusted EBITDA as a measure of our core operating performance, which is
evidenced by the publishing and delivery of news and other media and excludes certain expenses that may not be indicative of our core business operating results. We consider the unrealized (gain) loss on derivative instruments and the loss on early
extinguishment of debt to be financing related costs associated with interest expense or amortization of financing fees. Accordingly, we exclude financing related costs such as the early extinguishment of debt because they represent the write-off of
deferred financing costs and we believe these non-cash write-offs are similar to interest expense and amortization of financing fees, which by definition are excluded from Adjusted EBITDA. Additionally, the non-cash gains (losses) on derivative
contracts, which are related to interest rate swap agreements to manage interest rate risk, are financing costs associated with interest expense. Such charges are incidental to, but not reflective of, our core operating performance and it is
appropriate to exclude charges related to financing activities such as the early extinguishment of debt and the unrealized (gain) loss on derivative instruments which, depending on the nature of the financing arrangement, would have otherwise been
amortized over the period of the related agreement and does not require a current cash settlement.



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The table below shows the reconciliation of income (loss) from continuing operations to Adjusted EBITDA
for the periods presented:



|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    
|-------------------------------------------------------------------- |  | -------------------------- | -------- | --- | -------------------------- | - | -------- | -------------------------- |  | - | ------------------------------------------ | --- |  | ---------------------------------------- | ------- | --- | -------------------------- | - | ------- | --- |  | - | ------- | ---
|                                                                     |  | Year EndedDecember 31,2008 |          |     | Year EndedDecember 31,2007 |   |          | Year EndedDecember 31,2006 |  |   | Period fromJune 6, 2005 toDecember 31,2005 |     |  | Period fromJanuary 1, 2005 toJune 5,2005 |         |     | Year EndedDecember 31,2004 |  
|                                                                     |  |                            |          |     |                            |  
|                                                                     |  | (Successor)                |          |     | (Successor)                |   |          | (Successor)                |  |   | (Successor)                                |     |  | (Predecessor)                            |         |     | (Predecessor)              |  
|Income (loss) from continuing operations                             |  | $                          | (661,880 | )   |                            | $ | (234,050 | )                          |  | $ | (2,486                                     | )   |  | $                                        | 9,565   |     |                            | $ | (24,831 | )   |  | $ | (30,711 | )  
|Income tax expense (benefit)                                         |  |                            | (21,139  | )   |                            |   | (31,789  | )                          |  |   | (3,769                                     | )   |  |                                          | 7,050   |     |                            |   | (3,027  | )   |  |   | 1,228   |    
|Unrealized (gain) loss on derivative instrument(1)                   |  |                            | 10,119   |     |                            |   | 2,378    |                            |  |   | (1,150                                     | )   |  |                                          | (10,807 | )   |                            |   |        |     |  |   |        |    
|Loss on early extinguishment of debt(2)                              |  |                            |         |     |                            |   | 2,240    |                            |  |   | 2,086                                      |     |  |                                          |        |     |                            |   | 5,525   |     |  |   |        |    
|Amortization of deferred financing costs                             |  |                            | 1,845    |     |                            |   | 2,101    |                            |  |   | 544                                        |     |  |                                          | 67      |     |                            |   | 643     |     |  |   | 1,826   |    
|Interest expensedividends on mandatorily redeemable preferred stock |  |                            |         |     |                            |   |         |                            |  |   |                                           |     |  |                                          |        |     |                            |   | 13,484  |     |  |   | 29,019  |    
|Interest expensedebt                                                |  |                            | 88,206   |     |                            |   | 76,726   |                            |  |   | 35,994                                     |     |  |                                          | 11,760  |     |                            |   | 13,232  |     |  |   | 32,917  |    
|Impairment of long-lived assets                                      |  |                            | 123,717  |     |                            |   | 1,553    |                            |  |   | 917                                        |     |  |                                          |        |     |                            |   |        |     |  |   | 1,500   |    
|Transaction costs related to Merger and Massachusetts Acquisitions   |  |                            |         |     |                            |   |         |                            |  |   |                                           |     |  |                                          | 2,850   |     |                            |   | 7,703   |     |  |   |        |    
|Depreciation and amortization                                        |  |                            | 70,121   |     |                            |   | 57,292   |                            |  |   | 23,610                                     |     |  |                                          | 8,030   |     |                            |   | 5,776   |     |  |   | 13,374  |    
|Goodwill and mastheads impairment                                    |  |                            | 491,830  |     |                            |   | 225,993  |                            |  |   |                                           |     |  |                                          |        |     |                            |   |        |     |  |   |        |    
|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    
|Adjusted EBITDA from continuing operations                           |  | $                          | 102,819  | (a) |                            | $ | 102,444  | (b)                        |  | $ | 55,746                                     | (c) |  | $                                        | 28,515  | (d) |                            | $ | 18,505  | (e) |  | $ | 49,153  | (f)
|                                                                     |  |                            |          |     |                            |   |          |                            |  |   |                                            |     |  |                                          |         |     |                            |   |         |     |  |   |         |    



|(a) | Adjusted EBITDA for the year ended December 31, 2008 included net expenses of $24,664 which are one time in nature or non-cash compensation. Included in these net expenses of
$24,664 is non-cash compensation and other expenses of $18,198, non-cash portion of post retirement benefits expense of $(1,499) and integration and reorganization costs of $7,627 and $338 loss on the sale of assets. Adjusted EBITDA also does not
include $3,894 from our discontinued operations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Adjusted EBITDA for the year ended December 31, 2007 included net expenses of $23,791 which are one-time in nature or non-cash compensation. Included in these net expenses of
$23,791 is non-cash compensation and other expense of $14,007, non-cash portion of postretirement benefits expense of $799, integration and reorganization costs of $7,490 and a $1,495 loss on the sale of assets.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted EBITDA also does not include $10,189 from SureWest Directories due to the impact of purchase accounting and $4,398 from our discontinued
operations, including Huntington, West Virginia, Yankton, South Dakota and Winter Haven, Florida.



|(c) | Adjusted EBITDA for the year ended December 31, 2006 included net expenses of $11,109, which are one-time in nature or non-cash compensation. Included in these net expenses of
$11,109 is non-cash compensation and other expense of $5,175, non-cash portion of postretirement benefit expense of $748, integration and reorganization costs of $4,486 and a $700 loss on the sale of assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adjusted EBITDA also does not include $1,850 from our discontinued operations, including Globe, Arizona, Oswego, New York and Milton and Sayre,
Pennsylvania.



|(d) | Adjusted EBITDA for the period from June 6, 2005 to December 31, 2005 included net expenses of $1,643 which are one-time in nature or non-cash
compensation. Included in these net expenses of $1,643 is
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | non-cash compensation and other expense of $681 and integration and reorganization costs of $1,002, which are partially offset by a $40 gain on the sale of
assets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Adjusted EBITDA for the period from January 1, 2005 to June 5, 2005 included net expenses of $1,564, which are one-time in nature or non-cash compensation. Included in
these net expenses of $1,564 is non-cash compensation and other expense of $796 and management fees paid to prior owners of $768.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Adjusted EBITDA for the year ended December 31, 2004 included net expenses of $1,076, which are one-time in nature or non-cash compensation. Included in these net expenses of
$1,076 is management fees paid to prior owners of $1,480 and a loss of $30 on the sale of assets, partially offset by $434 of other income.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | Non-cash (gain) loss on derivative instruments is related to interest rate swap agreements which are financing related and are excluded from Adjusted EBITDA.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Non-cash write-off of deferred financing costs are similar to interest expense and amortization of financing fees and are excluded from Adjusted EBITDA.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

We are exposed to market risk from changes in interest rates and commodity prices. Changes in these factors could cause fluctuations in earnings and cash flow. In the normal course of business, exposure to certain of these market risks is
managed as described below.

Interest Rates

On August 18, 2008, we terminated interest rate swaps with a total notional amount of $570.0 million. At December 31, 2008, after consideration of the interest rate swaps described below, $570.0 million of the
remaining principal amount of our term loans are subject to floating interest rates.

Our debt structure and interest rate risks are
managed through the use of floating rate debt and interest rate swaps. Our primary exposure is to LIBOR. A 100 basis point change in LIBOR would change our income from continuing operations before income taxes on an annualized basis by approximately
$1.7 million, based on average pro forma floating rate debt outstanding during 2008, after consideration of the interest rate swaps of $625.0 million described below, and average amounts outstanding under the 2008 Bridge Facility and revolving
credit facility during 2008.

On February 27, 2007, we executed an interest rate swap in the notional amount of $100.0 million with a
forward starting date of February 28, 2007. The interest rate swap has a term of seven years. Under this swap, we pay an amount to the swap counterparty representing interest on a notional amount at a rate of 5.14% and receive an amount from
the swap counterparty representing, interest on the notional amount at a rate equal to the one month LIBOR.

On April 4, 2007, we
executed an additional interest rate swap in the notional amount of $250.0 million with a forward starting date of April 13, 2007. The interest rate swap has a term of seven years. Under this swap, we pay an amount to the swap counterparty
representing interest on a notional amount at a rate of 4.971% and receive an amount from the swap counterparty representing interest on the notional amount at a rate equal to one month LIBOR.

On April 13, 2007, we executed an additional interest rate swap in the notional amount of $200.0 million with a forward starting date of
April 30, 2007. The interest rate swap has a term of seven years. Under this swap, we pay an amount to the swap counterparty representing interest on a notional amount at a rate of 5.079% and receive an amount from the swap counterparty
representing interest on the notional amount at a rate equal to one month LIBOR.

On September 18, 2007, we executed an additional
interest rate swap based on a notional amount of $75.0 million with a forward starting date of September 18, 2007. The interest rate swap has a term of seven years.



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Under the swap, we pay an amount to the swap counterparty representing interest on a notional amount at a rate of 4.941% and receive an amount from the swap
counterparty representing interest on the notional amount at a rate equal to one month LIBOR.

Commodities

Certain materials we use are subject to commodity price changes. We manage this risk through instruments such as purchase orders, membership in a buying
consortium and continuing programs to mitigate the impact of cost increases through identification of sourcing and operating efficiencies. Primary commodity price exposures are newsprint, energy costs and, to a lesser extent, ink.

A $10 per metric ton newsprint price change would result in a corresponding annualized change in our income from continuing operations before income
taxes of $0.8 million based on newsprint usage for the year ended December 31, 2008 of approximately 83,000 metric tons.



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|Item 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

GATEHOUSE MEDIA, INC.

INDEX TO FINANCIAL STATEMENTS



|                                                                                                                                          |  |     
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                          |  | Page
|Consolidated Financial Statements:                                                                                                        |  |     
|Reports of Independent Registered Public Accounting Firms                                                                                 |  | 89  
|Consolidated Balance Sheets as of December 31, 2008 and 2007                                                                              |  | 91  
|Consolidated Statements of Operations for the years ended December 31, 2008, December 
31, 2007 and December 31, 2006                     |  | 92  
|Consolidated Statements of Stockholders Equity (Deficit) for the years ended December 31, 2008, December 
31, 2007 and December 31, 2006 |  | 93  
|Consolidated Statements of Cash Flows for the years ended December 31, 2008, December 
31, 2007 and December 31, 2006                     |  | 95  
|Notes to Consolidated Financial Statements                                                                                                |  | 96  



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

GateHouse Media, Inc.

We have audited the accompanying consolidated balance sheets of GateHouse Media, Inc. and subsidiaries as of December 31, 2008 and
2007, and the related consolidated statements of operations, stockholders equity (deficit), and cash flows for the years then ended. Our audits also included the financial statement schedule listed in the Index at Item 15(a) for the years
ended December 31, 2008 and 2007. These financial statements and schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of GateHouse Media, Inc. and subsidiaries at December 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted
accounting principles. Also, in our opinion, the related financial statement schedule for the years ended December 31, 2008 and 2007, when considered in relation to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), GateHouse Media, Inc.s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission and our report dated March 13, 2009 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Buffalo, New York

March 13, 2009



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

GateHouse Media, Inc.:

We have audited the accompanying consolidated statements of operations, stockholders equity (deficit) and cash flows of GateHouse Media, Inc. and
subsidiaries (the Company) for the year ended December 31, 2006. In connection with our audit of the consolidated financial statements, we have also audited the financial statement schedule as listed in the index at Item 15(a). These consolidated
financial statements and financial statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our
audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in
all material respects, the results of operations and the cash flows of GateHouse Media, Inc. and subsidiaries for the year ended December 31, 2006 in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1(s) to the consolidated financial statements, during 2006, the Company adopted Statement of Financial Accounting Standards
No. 123 (revised 2004), Share-Based Payment.

/s/ KPMG LLP

Chicago, Illinois

March 12, 2007



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In
thousands, except share data)



|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ---------- | - | ---------------- | - | --------- | -
|                                                                                                                                                                                                                               |  | December 31,2008 |            |   | December 31,2007 |  
|ASSETS                                                                                                                                                                                                                         |  |                  |            |   |                  |   |           |  
|Current assets:                                                                                                                                                                                                                |  |                  |            |   |                  |   |           |  
|Cash and cash equivalents                                                                                                                                                                                                      |  | $                | 11,744     |   |                  | $ | 12,096    |  
|Accounts receivable, net of allowance for doubtful accounts of $6,024 and $3,874 at December 31, 2008 and 2007,
respectively                                                                                                   |  |                  | 75,274     |   |                  |   | 85,474    |  
|Inventory                                                                                                                                                                                                                      |  |                  | 10,790     |   |                  |   | 9,046     |  
|Prepaid expenses                                                                                                                                                                                                               |  |                  | 4,576      |   |                  |   | 4,514     |  
|Deferred income taxes                                                                                                                                                                                                          |  |                  |           |   |                  |   | 3,890     |  
|Other current assets                                                                                                                                                                                                           |  |                  | 3,808      |   |                  |   | 4,208     |  
|Assets held for sale                                                                                                                                                                                                           |  |                  |           |   |                  |   | 1,540     |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total current assets                                                                                                                                                                                                           |  |                  | 106,192    |   |                  |   | 120,768   |  
|Property, plant, and equipment, net of accumulated depreciation of $57,400 and $30,597 at December 31, 2008 and 2007, respectively                                                                                             |  |                  | 194,401    |   |                  |   | 210,209   |  
|Goodwill                                                                                                                                                                                                                       |  |                  | 261,332    |   |                  |   | 701,852   |  
|Intangible assets, net of accumulated amortization of $100,132 and $58,111 at December 31, 2008 and 2007, respectively                                                                                                         |  |                  | 565,033    |   |                  |   | 808,794   |  
|Deferred financing costs, net                                                                                                                                                                                                  |  |                  | 7,055      |   |                  |   | 8,416     |  
|Other assets                                                                                                                                                                                                                   |  |                  | 2,489      |   |                  |   | 1,692     |  
|Long-term assets held for sale                                                                                                                                                                                                 |  |                  | 13,119     |   |                  |   | 23,264    |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total assets                                                                                                                                                                                                                   |  | $                | 1,149,621  |   |                  | $ | 1,874,995 |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                                                                                 |  |                  |            |   |                  |   |           |  
|Current liabilities:                                                                                                                                                                                                           |  |                  |            |   |                  |   |           |  
|Current portion of long-term liabilities                                                                                                                                                                                       |  | $                | 1,454      |   |                  | $ | 1,047     |  
|Short-term notes payable                                                                                                                                                                                                       |  |                  | 11,863     |   |                  |   | 10,000    |  
|Short-term debt                                                                                                                                                                                                                |  |                  | 17,000     |   |                  |   |          |  
|Accounts payable                                                                                                                                                                                                               |  |                  | 20,378     |   |                  |   | 13,190    |  
|Accrued expenses                                                                                                                                                                                                               |  |                  | 31,495     |   |                  |   | 40,672    |  
|Accrued interest                                                                                                                                                                                                               |  |                  | 7,895      |   |                  |   | 9,947     |  
|Deferred revenue                                                                                                                                                                                                               |  |                  | 28,444     |   |                  |   | 29,840    |  
|Dividend payable                                                                                                                                                                                                               |  |                  |           |   |                  |   | 23,126    |  
|Liabilities held for sale                                                                                                                                                                                                      |  |                  |           |   |                  |   | 623       |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total current liabilities                                                                                                                                                                                                      |  |                  | 118,529    |   |                  |   | 128,445   |  
|Long-term liabilities:                                                                                                                                                                                                         |  |                  |            |   |                  |   |           |  
|Long-term debt                                                                                                                                                                                                                 |  |                  | 1,195,000  |   |                  |   | 1,206,000 |  
|Long-term liabilities, less current portion                                                                                                                                                                                    |  |                  | 16,658     |   |                  |   | 3,809     |  
|Deferred income taxes                                                                                                                                                                                                          |  |                  |           |   |                  |   | 25,327    |  
|Derivative instruments                                                                                                                                                                                                         |  |                  | 34,957     |   |                  |   | 44,101    |  
|Pension and other postretirement benefit obligations                                                                                                                                                                           |  |                  | 13,555     |   |                  |   | 13,325    |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total liabilities                                                                                                                                                                                                              |  |                  | 1,378,699  |   |                  |   | 1,421,007 |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Stockholders equity (deficit):                                                                                                                                                                                                |  |                  |            |   |                  |   |           |  
|Preferred stock, $0.01 par value, 50,000,000 shares authorized at December 31, 2008; none issued and outstanding at December 31,
2008 and December 31, 2007                                                                    |  |                  |           |   |                  |   |          |  
|Common stock, $0.01 par value, 150,000,000 shares authorized at December 31, 2008; 58,213,868 and 57,947,073 shares issued, and
58,020,693 and 57,891,295 outstanding at December 31, 2008 and December 31, 2007, respectively |  |                  | 568        |   |                  |   | 568       |  
|Additional paid-in capital                                                                                                                                                                                                     |  |                  | 825,580    |   |                  |   | 822,025   |  
|Accumulated other comprehensive loss                                                                                                                                                                                           |  |                  | (51,604    | ) |                  |   | (49,962   | )
|Accumulated deficit                                                                                                                                                                                                            |  |                  | (1,003,319 | ) |                  |   | (318,407  | )
|Treasury stock, at cost, 193,175 and 55,778 shares at December 31, 2008, and December 31, 2007, respectively                                                                                                                   |  |                  | (303       | ) |                  |   | (236      | )
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total stockholders equity (deficit)                                                                                                                                                                                           |  |                  | (229,078   | ) |                  |   | 453,988   |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  
|Total liabilities and stockholders equity (deficit)                                                                                                                                                                           |  | $                | 1,149,621  |   |                  | $ | 1,874,995 |  
|                                                                                                                                                                                                                               |  |                  |            |   |                  |   |           |  

See accompanying notes to consolidated financial statements.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|--------------------------------------------------------------- |  | -------------------------- | -------- | - | -------------------------- | - | -------- | -------------------------- |  | - | ------- | -
|                                                                |  | Year EndedDecember 31,2008 |          |   | Year EndedDecember 31,2007 |   |          | Year EndedDecember 31,2006 | 
|                                                                |  |                            |          |   |                            |   |          |                            | 
|Revenues:                                                       |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Advertising                                                     |  | $                          | 495,667  |   |                            | $ | 428,531  |                            |  | $ | 232,130 |  
|Circulation                                                     |  |                            | 146,340  |   |                            |   | 117,782  |                            |  |   | 50,868  |  
|Commercial printing and other                                   |  |                            | 41,092   |   |                            |   | 33,147   |                            |  |   | 23,193  |  
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Total revenues                                                  |  |                            | 683,099  |   |                            |   | 579,460  |                            |  |   | 306,191 |  
|Operating costs and expenses:                                   |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Operating costs                                                 |  |                            | 384,594  |   |                            |   | 311,999  |                            |  |   | 156,697 |  
|Selling, general, and administrative                            |  |                            | 187,781  |   |                            |   | 156,016  |                            |  |   | 88,578  |  
|Depreciation and amortization                                   |  |                            | 70,121   |   |                            |   | 57,292   |                            |  |   | 23,610  |  
|Integration and reorganization costs                            |  |                            | 7,627    |   |                            |   | 7,490    |                            |  |   | 4,486   |  
|Impairment of long-lived assets                                 |  |                            | 123,717  |   |                            |   | 1,553    |                            |  |   | 917     |  
|Loss on sale of assets                                          |  |                            | 337      |   |                            |   | 1,495    |                            |  |   | 700     |  
|Goodwill and mastheads impairment                               |  |                            | 491,830  |   |                            |   | 225,993  |                            |  |   |        |  
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Operating income (loss)                                         |  |                            | (582,908 | ) |                            |   | (182,378 | )                          |  |   | 31,203  |  
|Interest expense                                                |  |                            | 88,206   |   |                            |   | 76,726   |                            |  |   | 35,994  |  
|Amortization of deferred financing costs                        |  |                            | 1,845    |   |                            |   | 2,101    |                            |  |   | 544     |  
|Loss on early extinguishment of debt                            |  |                            |         |   |                            |   | 2,240    |                            |  |   | 2,086   |  
|Unrealized loss (gain) on derivative instrument                 |  |                            | 10,119   |   |                            |   | 2,378    |                            |  |   | (1,150  | )
|Other (income) expense                                          |  |                            | (59      | ) |                            |   | 16       |                            |  |   | (16     | )
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Loss from continuing operations before income taxes             |  |                            | (683,019 | ) |                            |   | (265,839 | )                          |  |   | (6,255  | )
|Income tax benefit                                              |  |                            | (21,139  | ) |                            |   | (31,789  | )                          |  |   | (3,769  | )
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Loss from continuing operations                                 |  |                            | (661,880 | ) |                            |   | (234,050 | )                          |  |   | (2,486  | )
|Income (loss) from discontinued operations, net of income taxes |  |                            | (11,426  | ) |                            |   | 2,626    |                            |  |   | 912     |  
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Net loss                                                        |  | $                          | (673,306 | ) |                            | $ | (231,424 | )                          |  | $ | (1,574  | )
|                                                                |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Loss per share:                                                 |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Basic and diluted:                                              |  |                            |          |   |                            |   |          |                            |  |   |         |  
|Loss from continuing operations                                 |  | $                          | (11.60   | ) |                            | $ | (5.04    | )                          |  | $ | (0.10   | )
|Net loss                                                        |  | $                          | (11.80   | ) |                            | $ | (4.99    | )                          |  | $ | (0.06   | )
|Dividends declared per share                                    |  | $                          | 0.20     |   |                            | $ | 1.57     |                            |  | $ | 0.64    |  

See accompanying notes to consolidated financial statements.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

(In thousands, except share data)



|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|------------------------------------------------------------------------------ |  | ------------ | - | ------------------------ | ------ | --- | -------------------- | - | ------- | --------------------------------- | ------ | - | ------------------------------------ | - |  | -------------- | ------- | - | ----- | - | -------- | - |  | ------ |  | - | ---- | - |  | - | -------- | -
|                                                                               |  | Common Stock |   | AdditionalPaid-InCapital |        |     | DeferredCompensation |   |         | AccumulatedOtherComprehensiveLoss |        |   | RetainedEarnings(AccumulatedDeficit) |   |  | Treasury Stock |         |   | Total |  
|                                                                               |  | Shares       |   |                          | Amount |     |                      |   |         |                                   | Shares |   | Amount                               |   | 
|Balance at December 31, 2005                                                   |  | 22,640,000   |   |                          | $      | 222 |                      | $ | 226,178 |                                   |        | $ | (3,909                               | ) |  | $              |        |   |       | $ | 9,565    |   |  |       |  | $ |     |   |  | $ | 232,056  |  
|Comprehensive loss:                                                            |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Net loss                                                                       |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   | (1,574   | ) |  |       |  |   |     |   |  |   | (1,574   | )
|Unrealized loss on derivative instrument, net of income taxes of $1,560        |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                | (2,351  | ) |       |   |         |   |  |       |  |   |     |   |  |   | (2,351   | )
|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Comprehensive loss                                                             |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   | (3,925   | )
|Adjustment to initially apply FASB Statement 158, net of income taxes of $197  |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                | (293    | ) |       |   |         |   |  |       |  |   |     |   |  |   | (293     | )
|Reclassification of deferred compensation                                      |  |             |   |                          |        |    |                      |   | (3,909  | )                                 |        |   | 3,909                                |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   |         |  
|Restricted share grants                                                        |  | 618,680      |   |                          |        |    |                      |   | 1,936   |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | 1,936    |  
|Restricted share forfeitures                                                   |  | (6,417       | ) |                          |        |    |                      |   | (15     | )                                 |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | (15      | )
|Issuance of common stock                                                       |  | 25,000       |   |                          |        |    |                      |   | 375     |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | 375      |  
|Issuance of common stock from initial public offering, net of issuance costs   |  | 15,870,000   |   |                          |        | 159 |                      |   | 261,446 |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | 261,605  |  
|Purchase of treasury stock                                                     |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  | 6,000  |  |   | (60  | ) |  |   | (60      | )
|Common stock cash dividends                                                    |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   | (18,595  | ) |  |       |  |   |     |   |  |   | (18,595  | )
|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Balance at December 31, 2006                                                   |  | 39,147,263   |   |                          | $      | 381 |                      | $ | 486,011 |                                   |        | $ |                                     |   |  | $              | (2,644  | ) |       | $ | (10,604  | ) |  | 6,000  |  | $ | (60  | ) |  | $ | 473,084  |  
|Comprehensive loss:                                                            |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Net loss                                                                       |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   | (231,424 | ) |  |       |  |   |     |   |  |   | (231,424 | )
|Unrealized loss on derivative instrument, net of income taxes of $930          |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                | (48,764 | ) |       |   |         |   |  |       |  |   |     |   |  |   | (48,764  | )
|Net actuarial loss and prior service cost, net of income taxes of $930         |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                | 1,446   |   |       |   |         |   |  |       |  |   |     |   |  |   | 1,446    |  
|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Comprehensive loss                                                             |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   | (278,742 | )
|Restricted share grants                                                        |  | 198,846      |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   |         |  
|Non-cash compensation expense                                                  |  |             |   |                          |        |    |                      |   | 4,617   |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | 4,617    |  
|Restricted share forfeitures                                                   |  | (99,036      | ) |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  | 35,469 |  |   |     |   |  |   |         |  
|Restricted stock canceled for withholding tax                                  |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  | 14,309 |  |   | (176 | ) |  |   | (176     | )
|Deferred offering costs from initial public offering                           |  |             |   |                          |        |    |                      |   | (38     | )                                 |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | (38      | )
|Issuance of common stock from follow on public offering, net of issuance costs |  | 18,700,000   |   |                          |        | 187 |                      |   | 331,435 |                                   |        |   |                                     |   |  |                |        |   |       |   |         |   |  |       |  |   |     |   |  |   | 331,622  |  
|Common stock cash dividends                                                    |  |             |   |                          |        |    |                      |   |        |                                   |        |   |                                     |   |  |                |        |   |       |   | (76,379  | ) |  |       |  |   |     |   |  |   | (76,379  | )
|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  
|Balance at December 31, 2007                                                   |  | 57,947,073   |   |                          | $      | 568 |                      | $ | 822,025 |                                   |        | $ |                                     |   |  | $              | (49,962 | ) |       | $ | (318,407 | ) |  | 55,778 |  | $ | (236 | ) |  | $ | 453,988  |  
|                                                                               |  |              |   |                          |        |     |                      |   |         |                                   |        |   |                                      |   |  |                |         |   |       |   |          |   |  |        |  |   |      |   |  |   |          |  



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)(Continued)

(In thousands, except share data)



|                                                                    |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   |          |  
|------------------------------------------------------------------- |  | ------------ |  | ------------------------ | --- | -------------------- | - | --------------------------------- |  | ------ | ------------------------------------ | ------ | - | -------------- | - |  | ----- | ---------- | - |  | ------- |  | - | ---- | - |  | - | -------- | -
|                                                                    |  | Common Stock |  | AdditionalPaid-InCapital |     | DeferredCompensation |   | AccumulatedOtherComprehensiveLoss |  |        | RetainedEarnings(AccumulatedDeficit) |        |   | Treasury Stock |   |  | Total |           
|                                                                    |  | Shares       |  | Amount                   |     |                      |   |                                   |  | Shares |                                      | Amount |   |               
|Balance at December 31, 2007                                        |  | 57,947,073   |  | $                        | 568 |                      | $ | 822,025                           |  | $      |                                     |        | $ | (49,962        | ) |  | $     | (318,407   | ) |  | 55,778  |  | $ | (236 | ) |  | $ | 453,988  |  
|Comprehensive loss:                                                 |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   |          |  
|Net loss                                                            |  |             |  |                          |    |                      |   |                                  |  |        |                                     |        |   |               |   |  |       | (673,306   | ) |  |        |  |   |     |   |  |   | (673,306 | )
|Unrealized loss on derivative instrument, net of income taxes of $0 |  |             |  |                          |    |                      |   |                                  |  |        |                                     |        |   | (373           | ) |  |       |           |   |  |        |  |   |     |   |  |   | (373     | )
|Net actuarial loss and prior service cost, net of income tax of $0  |  |             |  |                          |    |                      |   |                                  |  |        |                                     |        |   | (1,269         | ) |  |       |           |   |  |        |  |   |     |   |  |   | (1,269   | )
|                                                                    |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   |          |  
|Comprehensive loss                                                  |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   | (674,948 | )
|Restricted share grants                                             |  | 266,795      |  |                          |    |                      |   |                                  |  |        |                                     |        |   |               |   |  |       |           |   |  |        |  |   |     |   |  |   |         |  
|Non-cash compensation expense                                       |  |             |  |                          |    |                      |   | 3,555                             |  |        |                                     |        |   |               |   |  |       |           |   |  |        |  |   |     |   |  |   | 3,555    |  
|Purchase of treasury stock                                          |  |             |  |                          |    |                      |   |                                  |  |        |                                     |        |   |               |   |  |       |           |   |  | 137,397 |  |   | (67  | ) |  |   | (67      | )
|Common stock cash dividends                                         |  |             |  |                          |    |                      |   |                                  |  |        |                                     |        |   |               |   |  |       | (11,606    | ) |  |        |  |   |     |   |  |   | (11,606  | )
|                                                                    |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   |          |  
|Balance at December 31, 2008                                        |  | 58,213,868   |  | $                        | 568 |                      | $ | 825,580                           |  | $      |                                     |        | $ | (51,604        | ) |  | $     | (1,003,319 | ) |  | 193,175 |  | $ | (303 | ) |  | $ | (229,078 | )
|                                                                    |  |              |  |                          |     |                      |   |                                   |  |        |                                      |        |   |                |   |  |       |            |   |  |         |  |   |      |   |  |   |          |  



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)



|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|------------------------------------------------------------------------------- |  | -------------------------- | -------- | - | -------------------------- | - | ---------- | -------------------------- |  | - | -------- | -
|                                                                                |  | Year endedDecember 31,2008 |          |   | Year endedDecember 31,2007 |   |            | Year endedDecember 31,2006 | 
|Cash flows from operating activities:                                           |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Net loss                                                                        |  | $                          | (673,306 | ) |                            | $ | (231,424   | )                          |  | $ | (1,574   | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Depreciation and amortization                                                   |  |                            | 71,573   |   |                            |   | 57,750     |                            |  |   | 24,051   |  
|Amortization of deferred financing costs                                        |  |                            | 1,845    |   |                            |   | 2,101      |                            |  |   | 544      |  
|Unrealized loss (gain) on derivative instrument                                 |  |                            | 10,119   |   |                            |   | 2,378      |                            |  |   | (1,150   | )
|Non-cash compensation expense                                                   |  |                            | 3,555    |   |                            |   | 4,687      |                            |  |   | 1,846    |  
|Deferred income taxes                                                           |  |                            | (21,348  | ) |                            |   | (32,154    | )                          |  |   | (3,448   | )
|Loss on sale of assets                                                          |  |                            | 337      |   |                            |   | 1,495      |                            |  |   | 700      |  
|Loss on early extinguishment of debt                                            |  |                            |         |   |                            |   | 2,240      |                            |  |   | 2,086    |  
|Pension and other postretirement benefit obligations                            |  |                            | (1,499   | ) |                            |   | 800        |                            |  |   | 748      |  
|Non-cash interest expense                                                       |  |                            | 618      |   |                            |   |           |                            |  |   |         |  
|Impairment of long-lived assets                                                 |  |                            | 132,856  |   |                            |   | 1,553      |                            |  |   | 917      |  
|Goodwill and mastheads impairment                                               |  |                            | 496,309  |   |                            |   | 225,993    |                            |  |   |         |  
|Changes in assets and liabilities, net of acquisitions:                         |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Accounts receivable, net                                                        |  |                            | 11,197   |   |                            |   | 5,153      |                            |  |   | (1,701   | )
|Inventory                                                                       |  |                            | (1,697   | ) |                            |   | 2,138      |                            |  |   | (23      | )
|Prepaid expenses                                                                |  |                            | 274      |   |                            |   | 1,143      |                            |  |   | 610      |  
|Other assets                                                                    |  |                            | (790     | ) |                            |   | (2,685     | )                          |  |   | 161      |  
|Accounts payable                                                                |  |                            | 6,663    |   |                            |   | 5,021      |                            |  |   | 1,614    |  
|Accrued expenses and other current liabilities                                  |  |                            | (7,033   | ) |                            |   | 10,548     |                            |  |   | (829     | )
|Accrued interest                                                                |  |                            | (2,052   | ) |                            |   | 7,589      |                            |  |   | 1,025    |  
|Deferred revenue                                                                |  |                            | (1,349   | ) |                            |   | (398       | )                          |  |   | (668     | )
|Long-term liabilities                                                           |  |                            | (766     | ) |                            |   | (195       | )                          |  |   | 308      |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Net cash provided by operating activities                                       |  |                            | 25,506   |   |                            |   | 63,733     |                            |  |   | 25,217   |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Cash flows from investing activities:                                           |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Purchases of property, plant, and equipment                                     |  |                            | (9,704   | ) |                            |   | (8,602     | )                          |  |   | (8,396   | )
|Proceeds from sale of publications and other assets                             |  |                            | 48,938   |   |                            |   | 79,658     |                            |  |   | 4,494    |  
|Acquisition of CP Media, net of cash acquired                                   |  |                            |         |   |                            |   |           |                            |  |   | (231,735 | )
|Acquisition of Enterprise NewsMedia, LLC, net of cash acquired                  |  |                            |         |   |                            |   | (154       | )                          |  |   | (181,393 | )
|Acquisition of The Copley Press, Inc. Newspapers, net of cash acquired          |  |                            | (11      | ) |                            |   | (385,756   | )                          |  |   |         |  
|Acquisition of Gannett Co., Inc. Newspapers, net of cash acquired               |  |                            |         |   |                            |   | (418,576   | )                          |  |   |         |  
|Other acquisitions, net of cash acquired                                        |  |                            | (27,548  | ) |                            |   | (317,738   | )                          |  |   | (11,808  | )
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Net cash provided by (used) in investing activities                             |  |                            | 11,675   |   |                            |   | (1,051,168 | )                          |  |   | (428,838 | )
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Cash flows from financing activities:                                           |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Payment of debt issuance costs                                                  |  |                            | (7       | ) |                            |   | (7,460     | )                          |  |   | (7,166   | )
|Borrowings under term loans                                                     |  |                            | 19,505   |   |                            |   | 1,534,757  |                            |  |   | 570,000  |  
|Repayments under short term debt and notes payable                              |  |                            | (22,547  | ) |                            |   | (897,757   | )                          |  |   | (12,000  | )
|Net borrowings (repayments) under revolving credit facility                     |  |                            | (11,000  | ) |                            |   | 11,000     |                            |  |   | (8,500   | )
|Extinguishment of credit facility, net of fees                                  |  |                            |         |   |                            |   |           |                            |  |   | (304,426 | )
|Payment of offering costs                                                       |  |                            |         |   |                            |   | (1,374     | )                          |  |   | (3,701   | )
|Issuance of common stock, net of underwriter's discount                         |  |                            |          |   |                            |   | 332,939    |                            |  |   | 265,914  |  
|Purchase of treasury stock                                                      |  |                            | (67      | ) |                            |   | (176       | )                          |  |   | (60      | )
|Payment of dividends                                                            |  |                            | (34,731  | ) |                            |   | (62,700    | )                          |  |   | (9,201   | )
|Issuance of subsidiary preferred stock                                          |  |                            | 11,500   |   |                            |   |           |                            |  |   |         |  
|Payment of subsidiary preferred stock issuance costs                            |  |                            | (186     | ) |                            |   |           |                            |  |   |         |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Net cash provided by (used in) financing activities                             |  |                            | (37,533  | ) |                            |   | 909,229    |                            |  |   | 490,860  |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Net increase (decrease) in cash and cash equivalents                            |  |                            | (352     | ) |                            |   | (78,206    | )                          |  |   | 87,239   |  
|Cash and cash equivalents at beginning of period                                |  |                            | 12,096   |   |                            |   | 90,302     |                            |  |   | 3,063    |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Cash and cash equivalents at end of period                                      |  | $                          | 11,744   |   |                            | $ | 12,096     |                            |  | $ | 90,302   |  
|                                                                                |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Supplemental disclosures on cash flow information:                              |  |                            |          |   |                            |   |            |                            |  |   |          |  
|Cash interest paid                                                              |  | $                          | 89,677   |   |                            | $ | 74,910     |                            |  | $ | 38,459   |  
|Cash income taxes paid                                                          |  |                            | 115      |   |                            |   | 131        |                            |  |   |         |  
|Note payable issued related to the acquisition of Morris Publishing Group       |  |                            |         |   |                            |   | 10,000     |                            |  |   |         |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data)

(1) Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

(a) Description of Business

GateHouse Media, Inc. (GateHouse), formerly Liberty Group Publishing, Inc. (LGP), and subsidiaries is a leading U.S. publisher of local newspapers and related publications that are generally the dominant source of
local news and print advertising in their markets. As of December 31, 2008, the Company (as defined below) owned and operated 506 publications located in 21 states. The majority of the Companys paid daily newspapers have been published
for more than 100 years and are typically the only paid daily newspapers of general circulation in their respective nonmetropolitan markets. The Companys publications generally face limited competition as a result of operating in small and
midsized markets that can typically support only one newspaper. The Company has strategically clustered its publications in geographically diverse, nonmetropolitan markets in the Midwest and Northeast United States, which limits its exposure to
economic conditions in any single market or region.

Unlike large metropolitan newspapers, the Company derives a majority of its revenues
from local advertising, rather than national advertising, which is generally more sensitive to economic conditions. The Company currently operates in a single reportable segment as its publications have similar economic characteristics, products,
customers and distribution.

(b) Basis of Presentation

GateHouse was formed in 1997 for purposes of acquiring 166 daily and weekly newspapers. GateHouse is a holding company for its wholly owned subsidiary, GateHouse Media Operating, Inc. (Operating Company).
The consolidated financial statements include the accounts of GateHouse and Operating Company and its consolidated subsidiaries (the Company). All significant intercompany accounts and transactions have been eliminated.

(c) Initial Public Offering

On
October 25, 2006, the Company completed its initial public offering (IPO) of 13,800,000 shares of common stock at $18.00 per share. The Companys registered common stock is traded on the Over-the-Counter Bulletin Board System
under the symbol GHSE.

On November 3, 2006, the underwriters of the Companys IPO exercised their option to purchase
an additional 2,070,000 shares of common stock pursuant to the terms of the underwriting agreement. The total net proceeds from the IPO of 13,800,000 shares and this additional allotment of 2,070,000 shares after deducting offering expenses and the
underwriting discount was $261,605.

(d) Follow-on Public Offering

On July 23, 2007, the Company completed a follow-on public offering of 18,700,000 shares of its common stock, including 1,700,000 shares sold
pursuant to the exercise by the underwriters of their option, pursuant to the terms of the underwriting agreement, at a public offering price of $18.45 per share. The total net proceeds from the follow-on public offering were approximately $331,622.

(e) Recent Developments

The
newspaper industry and the Company have experienced declining same store revenue over the past two years. This has led to increased losses, reduced cash flow from operations and the need to record impairment



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(In thousands, except share data)



charges for certain long term assets. It has also made it more difficult to meet certain debt covenants and has eliminated the availability of additional
borrowings under the Companys revolving debt agreement. As a result of these trends in the industry and the Company, management has implemented plans to reduce costs and preserve cash flow and will continue to implement plans. This includes
suspending the payment of the Companys cash dividend, the issuance of preferred stock, the repayment of borrowings under the revolving debt agreement, the planned continued implementation of cost reduction programs, and the potential sale of
non-core assets. Management believes these initiatives will provide the financial resources necessary to invest in the business, ensure the Companys future success, and will provide the cash flow to enable the Company to meet its financial
commitments in 2009.

Effective October 24, 2008, the New York Stock Exchange delisted the Companys common stock. The Companys
common stock is currently quoted in the Over-the-Counter Bulletin Board System under the trading symbol GHSE.

(f) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

(g) Fiscal Year

The Companys fiscal year end is December 31, 2008. CP Media, the newspapers acquired from the Copley Press, Inc. and Gannett Co., Inc.,
subsidiaries of the Company, have a fiscal year which ends on the Sunday closest to December 31 which was December 28 in 2008.

(h) Accounts
Receivable

Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. The
Companys allowance for doubtful accounts is based upon several factors including the length of time the receivables are past due, historical payment trends and current economic factors. The Company generally does not require collateral.

(i) Inventory

Inventory
consists principally of newsprint, which is valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method.

(j) Property, Plant, and Equipment

Property, plant, and equipment is recorded at cost.
Routine maintenance and repairs are expensed as incurred.

Depreciation is calculated under the straight-line method over the estimated
useful lives, principally 25 years for buildings and improvements, 3 to 10 years for machinery and equipment, and 3 to 10 years for furniture, fixtures, and computer software. Leasehold improvements are amortized under the straight-line method over
the shorter of the lease term or estimated useful life of the asset.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



(k) Goodwill and Intangible Assets

Intangible assets consist of advertiser, subscriber, customer relationships, mastheads, non-compete agreements with former owners of acquired newspapers,
trade names and publication rights. The excess of acquisition costs over the estimated fair value of tangible and identifiable intangible net assets acquired is recorded as goodwill.

For tax purposes, the amount of goodwill that is expected to be deductible is 608,722 as of December 31, 2008.

Goodwill and mastheads are not amortized pursuant to SFAS No. 142, Goodwill and Other Intangible Assets (SFAS No. 142).
Mastheads are not amortized because it has been determined that the useful lives of such mastheads are indefinite.

In accordance with SFAS
No. 142, goodwill and intangible assets with indefinite lives are tested for impairment annually or when events indicate that an impairment could exist which may include an economic downturn in a market, a change in the assessment of future
operations or a decline in the Companys stock price. The Company performs an annual impairment assessment on June 30 of each year. As required by SFAS No. 142, the Company performs its impairment analysis on each of its reporting
units, represented by its geographic regions. The geographic regions have discrete financial information and are regularly reviewed by management. The fair value of the applicable reporting unit is compared to its carrying value. Calculating the
fair value of a reporting unit requires significant estimates and assumptions by the Company. The Company estimates fair value by applying third-party market value indicators to projected cash flows and/or projected earnings before interest, taxes,
depreciation, and amortization. In applying this methodology, the Company relies on a number of factors, including current operating results and cash flows, expected future operating results and cash flows, future business plans, and market data. If
the carrying value of the reporting unit exceeds the estimate of fair value, the Company calculates the impairment as the excess of the carrying value of goodwill over its implied fair value.

The Company determined that it should perform impairment testing of goodwill and indefinite lived intangible assets during the fourth quarter of 2008,
due to a change in the assessment of future operations and declines in market transactions.

The fair values of the Companys
reporting units for goodwill impairment testing and newspaper mastheads were estimated using the expected present value of future cash flows, recent industry transaction multiples and using estimates, judgments and assumptions that management
believes were appropriate in the circumstances and that hypothetical marketplace participants would use.

As a result of the fair values of
the reporting units, the Company recorded an impairment charge related to goodwill of $125,894 and a newspaper masthead impairment charge of $29,840 in the fourth quarter of 2008.

As part of the Companys annual impairment assessment as of June 30, 2008 the Company recorded an impairment charge related to goodwill of $299,153
and a newspaper masthead impairment charge of $41,422.

The Company determined that it should perform impairment testing of goodwill and
indefinite lived intangibles during the fourth quarter of 2007, due to the decline of the Companys stock price. As a result, the Company recorded an impairment charge of $201,479 related to goodwill and $24,514 related to mastheads.

No goodwill or masthead impairment charges were recorded during the year ended December 31, 2006.

Refer to Note 5 for additional information on the impairment testing of goodwill and indefinite lived intangible assets.



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(In thousands, except share data)



The Company accounts for long-lived assets in accordance with the provisions of SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144). The Company assesses the recoverability of its long-lived assets, including property, plant, and equipment and definite lived intangible assets,
whenever events or changes in business circumstances indicate the carrying amount of the assets, or related group of assets, may not be fully recoverable. Impairment indicators include significant under performance relative to historical or
projected future operating losses, significant changes in the manner of use of the acquired assets or the strategy for the Companys overall business, and significant negative industry or economic trends. The assessment of recoverability is
based on managements estimates. If the carrying value of the assets exceeds the undiscounted cash flows, the asset would be deemed to be impaired. Impairment would be measured as the difference between the fair value and its carrying value.

(l) Revenue Recognition

Circulation revenue from subscribers is billed to customers at the beginning of the subscription period and is recognized on a straight-line basis over the term of the related subscription. Circulation revenue from single copy sales is
recognized at the time of sale. Advertising revenue is recognized upon publication of the advertisement. Revenue for commercial printing is recognized upon delivery. Directory revenue is recognized on a straight-line basis over the period in which
the corresponding directory is distributed.

(m) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company records tax assets and liabilities at the date of a purchase business combination, based on managements best estimate of the ultimate
tax basis that will be accepted by the tax authority, and liabilities for prior tax returns of the acquired entity should be based on the Companys best estimate of the ultimate settlement in accordance with Emerging Issues Task Force
(EITF) Issue No. 93-7, Uncertainties Related to Income Taxes in a Purchase Business Combination. At the date of a change in the Companys best estimate of the ultimate tax basis of acquired assets, liabilities, and
carryforwards, and at the date that the tax basis is settled with the tax authority, tax assets and liabilities should be adjusted to reflect the revised tax basis and the amount of any settlement with the tax authority for prior-year income taxes.
Similarly, at the date of a change in the Companys best estimate of items relating to the acquired entitys prior tax returns, and at the date that the items are settled with the tax authority, any liability previously recognized should
be adjusted. The effect of those adjustments should be applied to increase or decrease the remaining balance of goodwill attributable to that acquisition. If goodwill is reduced to zero, the remaining amount of those adjustments should be applied
initially to reduce to zero other noncurrent intangible assets related to that acquisition, and any remaining amount should be recognized in earnings.

The realization of the remaining deferred tax assets is primarily dependent on the scheduled reversals of deferred taxes. Any changes in the scheduled reversals of deferred taxes may require an additional valuation
allowance against the remaining deferred tax assets. Any increase or decrease in the valuation allowance could result in an increase or decrease in income tax expense in the period of adjustment.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes, an interpretation of SFAS No. 109 (FIN 48), effective January 1, 2007. There was no impact as a result of the implementation of FIN 48. The Company does not anticipate significant increases or decreases in
our uncertain tax positions within the next twelve months. The Company recognizes penalties and interest relating to uncertain tax positions in the provision for income taxes. The Company recognizes interest and penalties related to unrealized tax
benefits in income tax expense. As of December 31, 2008 and 2007, the Company had unrecognized tax benefits of approximately $4,726 and $4,518, respectively. The Company did not record significant amounts of interest and penalties related to
unrecognized tax benefits.

(n) Fair Value of Financial Instruments

The Company has reviewed its cash equivalents, accounts receivable, accounts payable, and accrued expenses and has determined that their carrying values
approximate fair value due to the short maturity of these instruments.

The Company accounts for derivative instruments in accordance with
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133), as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activitiesan
amendment of FASB Statement No. 133, SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities and SFAS No. 157 Fair Value Measurements (SFAS No. 157). These standards require
an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Additionally, the fair value adjustments will affect either stockholders equity or net
earnings depending on whether the derivative instrument qualifies as an effective hedge for accounting purposes and, if so, the nature of the hedging activity.

(o) Cash Equivalents

Cash equivalents represent highly liquid certificates of deposit which have original maturities
of three months or less.

(p) Deferred Financing Costs

Deferred financing costs consist of costs incurred in connection with debt financings. Such costs are amortized on a straight-line basis over the estimated remaining term of the related debt.

(q) Advertising

Advertising costs are
expensed in the period incurred. The Company incurred total advertising expenses of $4,951, $4,444 and $1,787 during the years ended December 31, 2008, 2007, and 2006, respectively.

(r) Earnings (loss) per share

Basic earnings (loss) per share is computed as net income
(loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur from common shares issued through common stock
equivalents.

(s) Stock-based Employee Compensation

On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R). SFAS No. 123R supersedes SFAS No. 123 and APB No. 25 and
requires that all share-based



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(In thousands, except share data)



payments to employees, including grants of employee stock options, be recognized in the consolidated financial statements on a straight line basis over the
service period (generally the vesting period) based on fair values measured on grant dates. The Company adopted SFAS No. 123R using the modified prospective transition method, therefore, prior results were not restated. Under the modified
prospective method, share-based compensation is recognized for new awards, the modification, repurchase or cancellation of awards and the remaining portion of service under previously granted, unvested awards outstanding as of the date of adoption.
Accordingly, the expense required under SFAS No. 123R has been recorded beginning January 1, 2006. In addition, the Company eliminated the December 31, 2005 balance of deferred compensation of $3,909 by reducing additional paid-in
capital.

(t) Pension and Postretirement Liabilities

SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158), became effective for the Company during the year ended December 31,
2006, and requires recognition of an asset or liability in the consolidated balance sheet reflecting the funded status of pension and other postretirement benefit plans such as retiree health and life, with current-year changes in the funded status
recognized in the statement of stockholders equity. SFAS No. 158 did not change the existing criteria for measurement of periodic benefit costs, plan assets or benefit obligations. During the years ended December 31, 2008, 2007 and
2006 a total of $(1,218), $1,446 and $(293) net of taxes of $0, $930 and $197 respectively, was recognized in other comprehensive income (see Note 13).

(u) Self-Insurance Liability Accruals

We maintain self-insured medical and workers compensation programs. We
purchase stop loss coverage from third parties which limits our exposure to large claims. We record a liability for healthcare and workers compensation costs during the period in which they occur as well as an estimate of incurred but not
reported claims.

(v) Correction of Immaterial Error

The Company revised its consolidated financial statements for the year ended December 31, 2006 due to corrections of immaterial prior years errors identified in 2007 (Purchase accounting tax
adjustment). The Company overstated both its deferred tax liability and goodwill balances as of December 31, 2006 primarily related to deferred taxes being calculated on tax deductible goodwill as part of the Merger. The result was a
decrease of previously reported deferred tax liabilities and goodwill of approximately $36,226 as of December 31, 2006. This adjustment relates entirely to acquisition deferred taxes and, as such, there is no impact on previously reported
income tax expense or net income.

Upon adoption of SFAS No. 158 Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans (SFAS No. 158) in 2006, the Company recognized a comprehensive loss of $293 (net of income taxes) to record the unfunded portion of its defined benefit and other postretirement benefit plan liabilities. This
adjustment was disclosed in the notes to the December 31, 2006 consolidated financial statements. However, SFAS No. 158 requires that this adjustment not affect comprehensive income, but rather be reflected as an adjustment directly to
stockholders equity. The reported net loss, the loss from continuing operations, the cumulative pension adjustment and total stockholders equity were not affected by this misstatement, however, as a result of this error, which has now
been corrected, the reported comprehensive loss had been overstated by $293.



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(In thousands, except share data)



(w) Reclassifications

Certain amounts in the prior periods consolidated financial statements have been reclassified to conform to the 2008 presentation.

(x) Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board
(FASB) issued SFAS No. 157. SFAS No. 157 defines fair value, provides a market-based framework for measuring fair value, and expands disclosure requirements. SFAS No. 157 applies to other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is initially effective for financial statements issued for fiscal years beginning after November 15, 2007, however
the FASB provided a one year deferral for implementation of the standard for non-financial assets and liabilities. Accordingly, the Companys adoption of SFAS No. 157 in 2008 was primarily related to the valuation of its derivative instruments.
The adoption of SFAS No. 157 decreased the value of the derivative instruments by $3,300 upon adoption and by $64,698 as of December 31, 2008. The adoption of SFAS No. 157 is not expected to have a material impact on nonfinancial assets and
liabilities.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities (SFAS No. 159). SFAS No. 159 permits companies to measure financial instruments and certain other items at fair value. The objective of this statement is to improve financial reporting by providing companies
with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is expected to expand the use of fair
value measurement for accounting for financial instruments. SFAS No. 159 is effective for financial statements issued as of the beginning of the first fiscal year that begins after November 15, 2007. The adoption of SFAS No. 159 did
not have a material impact on the Companys consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141
(revised 2007), Business Combinations (SFAS No. 141(R)), and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51
(SFAS 160).

SFAS No. 141(R) significantly changes the accounting for business combinations. Under SFAS No. 141(R),
an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date at fair value with limited exceptions. SFAS No. 141(R) further changes the accounting treatment for
certain specific items, including:



| |  |  | Acquisition costs will be generally expensed as incurred;
| | - |  | ---------------------------------------------------------



| |  |  | Acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount
determined under existing guidance for non-acquired contingencies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

SFAS No. 141(R) includes a substantial number of new disclosure requirements. SFAS No. 141(R) applies
prospectively to the Companys business combinations for which the acquisition date is on or after January 1,



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(In thousands, except share data)



2009. The adoption of SFAS No. 141(R) could have a material impact on the consolidated financial statements if significant acquisitions are consummated
in the future.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statementsan Amendment of Accounting Research Bulletin No. 51 (SFAS No. 160). SFAS No. 160 requires reporting entities to present noncontrolling (minority) interests as equity (as opposed to as a liability) and provides
guidance on the accounting for transactions between an entity and noncontrolling interests. SFAS No. 160 applies prospectively as of January 1, 2009, except for the presentation on disclosure requirements which will be applied retrospectively for
all periods presented. The Company does not anticipate that SFAS No. 160 will have a material impact on its financial statements.

In March
2008, the FASB issued SFAS No. 161 Disclosuresabout Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133 (SFAS No. 161). The new standard requires additional disclosures regarding a
companys derivative instruments and hedging activities by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also requires disclosure of derivative features that are credit
risk-related as well as cross-referencing within the notes to the financial statements to enable financial statement users to locate important information about derivative instruments, financial performance, and cash flows. SFAS No. 161 is effective
for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The principal impact from this standard will be to require the Company to expand its disclosures regarding
derivative instruments.

(2) Share-Based Compensation

The Company recognized compensation cost for share-based payments of $3,555, $4,687 and $1,846, during the years ended December 31, 2008, 2007 and 2006, respectively. The total compensation cost not yet
recognized related to non-vested awards as of December 31, 2008 was $5,327, which is expected to be recognized over a weighted-average period of 2 years through April 2013.

Total share-based compensation expense during the year ended December 31, 2006 of $1,846 is comprised of $125 related to the purchase of common
stock at a discount, as discussed below, and $1,721 related to share-based compensation expense for Restricted Share Grants (RSGs), which is net of estimated forfeitures.

(a) Restricted Share Grants

Prior to the IPO, the Company had issued 792,500 RSGs to certain
management investors pursuant to each investors management stockholder agreement (the Management Stockholder Agreements). Under the Management Stockholder Agreements, RSGs vest by one-third on each of the third, fourth and fifth
anniversaries from the grant date. Following the adoption of the GateHouse Media, Inc. Omnibus Stock Incentive Plan (the Plan) in October 2006, an additional 268,680 RSGs were granted during the year ended December 31, 2006. During
the year ended December 31, 2007 an additional 198,846 RSGs were granted to Company directors, management and employees, 105,453 of which were both granted and forfeited. During the year ended December 31, 2008 an additional 266,795 RSGs
were granted to Company directors, management and employees, 42,535 of which were both granted and forfeited. The majority of the RSGs issued under the Plan vest in increments of one-third on each of the first, second and third anniversaries of the
grant date. In the event a grantee of an RSG is terminated by the Company without cause, a number of unvested RSGs immediately vest that would have vested under the normal vesting period on the next succeeding anniversary date following such



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(In thousands, except share data)



termination. In the event an RSG grantees employment with the Company is terminated without cause within twelve months after a change in control as
defined in the applicable award agreement, all unvested RSGs become immediately vested at the termination date. During the period prior to the lapse and removal of the vesting restrictions, a grantee of an RSG will have all of the rights of a
stockholder, including without limitation, the right to vote and the right to receive all dividends or other distributions. As a result, the RSGs are reflected as outstanding common stock; however, the unvested RSGs have been excluded from the
calculation of basic earnings per share. With respect to Company employees, the value of the RSGs on the date of issuance is recognized as employee compensation expense over the vesting period or through the grantees eligible retirement date,
if shorter, with an increase to additional paid-in-capital. During the years ended December 31, 2008, 2007 and 2006 the Company recognized $3,555, $4,687 and $1,721 respectively in share-based compensation expense related to RSGs.

As of December 31, 2008 and 2007, there were 868,492 and 1,035,480 RSGs, respectively, issued and outstanding with a weighted average grant date
fair value of $12.54 and $13.87, respectively. As of December 31, 2008, the aggregate intrinsic value of unvested RSGs was $43. As of December 31, 2008, the aggregate fair value of vested RSGs was $11.

RSG activity was as follows:



|                              |  |                              |   |                              |                                      |                              |               |           |   |                                      |   |               |  |           |                                      |  |   |      
|----------------------------- |  | ---------------------------- | - | ---------------------------- | ------------------------------------ | ---------------------------- | ------------- | --------- | - | ------------------------------------ | - | ------------- |  | --------- | ------------------------------------ |  | - | -----
|                              |  | Year Ended December 31, 2008 |   | Year Ended December 31, 2007 |                                      | Year Ended December 31, 2006
|                              |  | Numberof RSGs                |   |                              | Weighted-AverageGrant DateFair Value |                              | Numberof RSGs |           |   | Weighted-AverageGrant DateFair Value |   | Numberof RSGs |  |           | Weighted-AverageGrant DateFair Value
|Unvested at beginning of year |  | 1,035,480                    |   |                              | $                                    | 13.87                        |               | 1,051,763 |   |                                      | $ | 14.33         |  | 442,500   |                                      |  | $ | 10.00
|Granted                       |  | 266,795                      |   |                              |                                      | 7.45                         |               | 198,846   |   |                                      |   | 11.69         |  | 618,680   |                                      |  |   | 17.36
|Vested                        |  | (317,767                     | ) |                              |                                      | 13.27                        |               | (80,624   | ) |                                      |   | 19.78         |  | (3,000    | )                                    |  |   | 10.00
|Forfeited                     |  | (116,016                     | ) |                              |                                      | 14.60                        |               | (134,505  | ) |                                      |   | 10.72         |  | (6,417    | )                                    |  |   | 10.73
|                              |  |                              |   |                              |                                      |                              |               |           |   |                                      |   |               |  |           |                                      |  |   |      
|Unvested at end of year       |  | 868,492                      |   |                              | $                                    | 12.54                        |               | 1,035,480 |   |                                      | $ | 13.87         |  | 1,051,763 |                                      |  | $ | 14.33
|                              |  |                              |   |                              |                                      |                              |               |           |   |                                      |   |               |  |           |                                      |  |   |      

SFAS No. 123R requires the recognition of share-based compensation for the number of awards
that are ultimately expected to vest. The Companys estimated forfeitures are based on forfeiture rates of comparable plans. Estimated forfeitures will be reassessed in subsequent periods and the estimate may change based on new facts and
circumstances.

(b) Other Awards

In January 2006, a management investor purchased 25,000 shares of common stock at a discount of $5.01 per share, or $125, pursuant to the investors Management Stockholder Agreement. The purchase was determined to be compensatory in
accordance with SFAS No. 123R. The Company recognized $125 in employee compensation expense related to this purchase during the year ended December 31, 2006. The fair value of the common stock was determined to be $15.01 per share as of
January 2006.

(c) Valuation of Equity Securities Issued as Compensation

In determining the fair value of the Companys common stock at the dates of grant prior to the IPO on October 25, 2006, GateHouses stock
was not traded and, therefore, the Company was unable to rely on a public trading market for its stock prior to October 25, 2006.

As
the Company began the process of preparing for its IPO, it developed a preliminary valuation using a discounted cash flow approach as of July 2006. The Company prepared this valuation using an estimated revenue



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(In thousands, except share data)



growth rate based upon advertising rate increases considering the consumer price index (CPI), implementation of additional on-line content and
products and introduction of additional niche products. Additionally, the Company used an estimated annual EBITDA, (adjusted to exclude certain non-cash and non-recurring items), growth rate based upon increases in revenues, cost reductions from the
integration of acquisitions and improvements in cost from clustering and centralized services.

The Company estimated that the fair value
of its common stock was $15.01 per share based on a valuation using a discounted cash flow approach as of July 2006.

In preparing a
discounted cash flow analysis, certain significant assumptions were made including:



| |  |  | the rate of revenue growth, which is a function of, among other things, anticipated increases in advertising rates (CPI based), impacts of on-line strategy and the
introduction of niche products;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the rate of the Companys Adjusted EBITDA growth, which is a function of, among other things, anticipated revenues, cost reductions and synergies from the
integration of CP Media and Enterprise NewsMedia, LLC (see note 3(g)) and ongoing cost savings resulting from a clustering strategy;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | estimated capital expenditures;
| | - |  | -------------------------------



| |  |  | the discount rate of 7.8%, based on the Companys capital structure as of July 2006, the cost of equity, based on a risk free rate of 5.0% and a market risk of
premium of 7.0% and the Companys cost of debt; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a terminal multiple of between 9 and 10 times unlevered cash flow, based upon the Companys anticipated growth prospects and private and public market
valuations of comparable companies. The Company defines unlevered cash flow as Adjusted EBITDA less interest expense, cash taxes and capital expenditures.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company also considered the cash flow based trading multiples of comparable companies, including competitors and other similar publicly traded
companies and sales transactions for comparable companies in its industry. Additionally, it considered the results of operations, market conditions, competitive position and the stock performance of these companies, as well as its financial
forecasts, as updated, to develop its valuation. The Company determined the valuation performed by management to be the best available tool for projections of the final price range for purposes of valuing its stock-based compensation. The Company
did not obtain contemporaneous valuations by unrelated valuation specialists at times other than the Merger valuation because: (i) the Companys efforts were focused on, among other things, potential acquisitions and refinancing the
Company and (ii) the Company did not consider it to be economic to incur costs for such valuations given the number of shares issued. The Company considered that it met its internal financial performance objectives as reflected in its
valuation.

The Company retrospectively applied the valuation to share-based compensation relating to RSGs and common stock sales which
occurred from January 2006 to May 2006. Therefore, the consolidated financial statements reflect this valuation for grants made prior to the Companys IPO.



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(In thousands, except share data)



(3) Acquisitions

(a) Acquisitions2008

During the twelve months ended December 31, 2008, the Company acquired 25 publications
for an aggregate purchase price of approximately $25,470. These were all attractive tuck-in acquisitions, in which the acquired businesses fit in extremely well with the Companys existing clusters. The results of operations for the
acquisitions have been included in the Companys condensed consolidated financial statements since the date of the acquisitions. The purchase price allocations for these acquisitions are as follows:



|                              |  |   |       
|----------------------------- |  | - | ------
|Current assets                |  | $ | 3,351 
|Property, plant and equipment |  |   | 5,524 
|Noncompete agreements         |  |   | 1,809 
|Advertising relationships     |  |   | 7,809 
|Subscriber relationships      |  |   | 781   
|Mastheads                     |  |   | 3,435 
|Customer relationships        |  |   | 3,218 
|Goodwill                      |  |   | 5,123 
|                              |  |   |       
|Total assets                  |  |   | 31,050
|                              |  |   |       
|Current liabilities           |  |   | 3,279 
|Long-term liabilities         |  |   | 2,301 
|                              |  |   |       
|Total liabilities             |  |   | 5,580 
|                              |  |   |       
|Net assets acquired           |  | $ | 25,470
|                              |  |   |       

The Company continues to refine the fair value estimates in accordance with SFAS No. 141. As
additional information becomes available and as actual values vary from these estimates, the underlying assets and liabilities may need to be adjusted, thereby impacting asset estimates, as well as goodwill.

For tax purposes, the amount of goodwill that is expected to be deductible is $5,123 for the newspapers acquired during the twelve months ended December
31, 2008.

(b) Morris Publishing Group Newspaper Acquisitions2007

On November 30, 2007, the Company completed its acquisition of thirty seven publications from the Morris Publishing Group for an aggregate purchase
price, including working capital of approximately $122,768. The acquisition included fifteen daily and seven weekly newspapers, as well as fifteen shopper publications serving South Dakota, Florida, Kansas, Michigan, Missouri, Nebraska, Oklahoma and
Tennessee. The rationale for the acquisition was primarily due to the attractive nature of the community newspaper assets with stable revenues and cash flows combined with cost saving opportunities available by clustering with the Companys
nearby newspapers. The Company accounted for these acquisitions under the purchase method of accounting. Accordingly, the cost of the acquisition was allocated to the assets and liabilities assumed based upon their respective fair values. The
results of operations for the Morris Publishing Group newspaper acquisitions have been included in the Companys consolidated financial statements since the date of the acquisition.



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(In thousands, except share data)



The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date adjusted through December 31,
2008:



|                              |  |   |        
|----------------------------- |  | - | -------
|Current assets                |  | $ | 9,435  
|Other assets                  |  |   | 10,685 
|Property, plant and equipment |  |   | 21,924 
|Advertising relationships     |  |   | 38,011 
|Subscriber relationships      |  |   | 8,341  
|Mastheads                     |  |   | 12,244 
|Customer relationships        |  |   | 3,659  
|Goodwill                      |  |   | 22,654 
|                              |  |   |        
|Total assets                  |  |   | 126,953
|Current liabilities           |  |   | 4,126  
|Long-term liabilities         |  |   | 59     
|                              |  |   |        
|Total liabilities             |  |   | 4,185  
|                              |  |   |        
|Net assets acquired           |  | $ | 122,768
|                              |  |   |        

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the subscriber relationships, advertiser relationships and customer relationships acquired in connection with the Morris Publishing Group newspaper acquisition. The appraisals used an excess earnings approach, a form of the income
approach, which values assets based upon associated estimated discounted cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 7.5% for advertiser relationships, subscriber relationships and
customer relationships for the Morris Publishing Group newspaper acquisition. The growth rate was estimated to be 0.5% and the discount rate was estimated to be 10.0% for subscriber relationships. The growth rate was estimated to be 2.3% and the
discount rate was estimated to be 10.0% for advertiser relationships. The growth rate was estimated to be 2.0% and the discount rate was estimated to be 10% for customer relationships.

Estimated cash flows extend up to periods of approximately 30 years which considers that a majority of the acquired newspapers have been in existence
over 50 years with many having histories over 100 years. The Company is amortizing the fair values of the subscriber and advertiser relationships over the periods at which 90% of the cumulative net cash flows are estimated to be realized. Therefore,
the subscriber relationships, advertiser relationships and customer relationships are being amortized over 14, 15 and 15 years respectively, on a straight-line basis as no other discernable pattern of usage was more readily determinable.

For tax purposes, goodwill is deductible for the newspapers acquired from Morris Publishing Group as of December 31, 2008.

(c) Gannett Co., Inc. Newspaper Acquisitions2007

On May 7, 2007, the Company completed its acquisition of thirteen publications from Gannett Co., Inc. for an aggregate purchase price, including working capital, of approximately $418,961. The acquisition included four daily and three
weekly newspapers, as well as six shopper publications serving Rockford, Illinois, Utica, New York, Norwich, Connecticut and Huntington, West Virginia. The rationale for the acquisition was primarily due to the attractive nature of the community
newspaper assets with stable revenues and cash flows combined with cost saving opportunities available by clustering with the Companys nearby newspapers. The Company has



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(In thousands, except share data)



accounted for these acquisitions under the purchase method of accounting. Accordingly, the cost of the acquisition has been allocated to the assets and
liabilities assumed based upon their respective fair values. The results of operations for the Gannett Co., Inc. newspaper acquisitions have been included in the Companys consolidated financial statements since the date of the acquisition.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date adjusted through
December 31, 2008:



|                              |  |   |        
|----------------------------- |  | - | -------
|Current assets                |  | $ | 14,153 
|Other assets                  |  |   | 75,632 
|Property, plant and equipment |  |   | 39,092 
|Advertising relationships     |  |   | 96,503 
|Subscriber relationships      |  |   | 26,964 
|Mastheads                     |  |   | 24,450 
|Goodwill                      |  |   | 147,232
|                              |  |   |        
|Total assets                  |  |   | 424,026
|Total liabilities             |  |   | 5,065  
|                              |  |   |        
|Net assets acquired           |  | $ | 418,961
|                              |  |   |        

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the subscriber and advertiser relationships acquired in connection with the Gannett Co., Inc. newspaper acquisition. The appraisals used an excess earnings approach, a form of the income approach, which values assets based upon associated
estimated discounted cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 7.0% for advertiser relationships and subscriber relationships for the Gannett Co., Inc. newspaper acquisition. Growth
rates were estimated to be 2.5% and discount rates were estimated to be 8.5% for advertiser and subscriber relationships.

Estimated cash
flows extend up to periods of approximately 30 years which considers that a majority of the acquired newspapers have been in existence over 50 years with many having histories over 100 years. The Company is amortizing the fair values of the
subscriber and advertiser relationships over the periods at which 90% of the cumulative net cash flows are estimated to be realized. Therefore, the subscriber and advertiser relationships are being amortized over 16 years, on a straight-line basis
as no other discernable pattern of usage was more readily determinable.

For tax purposes, goodwill is deductible for the newspapers
acquired from Gannett Co., Inc. as of December 31, 2008.

(d) The Copley Press, Inc. Newspaper Acquisitions2007

On April 11, 2007, the Company completed its acquisition of fifteen publications from The Copley Press, Inc. for an aggregate purchase price,
including working capital, of approximately $388,245. The acquisition included seven daily and two weekly newspapers as well as six shopper publications, serving areas of Ohio and Illinois. The rationale for the acquisition was primarily due to the
attractive nature of the community newspaper assets with stable revenues and cash flows. In addition, there were cost saving opportunities from margin improvement as well as clustering with the Companys nearby newspapers. The Company has
accounted for



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(In thousands, except share data)



these acquisitions under the purchase method of accounting. Accordingly, the cost of the acquisition has been allocated to the assets and liabilities based
upon their respective fair values. The results of operations for The Copley Press, Inc. newspaper acquisitions have been included in the Companys consolidated financial statements since the date of the acquisition.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date adjusted through
December 31, 2008:



|                              |  |   |        
|----------------------------- |  | - | -------
|Current assets                |  | $ | 21,204 
|Other assets                  |  |   | 18     
|Property, plant and equipment |  |   | 71,076 
|Advertising relationships     |  |   | 95,466 
|Subscriber relationships      |  |   | 40,083 
|Mastheads                     |  |   | 34,719 
|Goodwill                      |  |   | 164,648
|                              |  |   |        
|Total assets                  |  |   | 427,214
|Current liabilities           |  |   | 15,451 
|Long-term liabilities         |  |   | 23,518 
|                              |  |   |        
|Total liabilities             |  |   | 38,969 
|                              |  |   |        
|Net assets acquired           |  | $ | 388,245
|                              |  |   |        

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the subscriber and advertiser relationships acquired in connection with the Copley Press, Inc. newspaper acquisition. The appraisals used an excess earnings approach, a form of the income approach, which values assets based upon associated
estimated discounted cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 7.0% for advertiser relationships and subscriber relationships for the Copley Press, Inc. newspaper acquisition. Growth
rates were estimated to be 2.5% and discount rates were estimated to be 10.0% for advertiser relationships and subscriber relationships.

Estimated cash flows extend up to periods of approximately 30 years which considers that a majority of the acquired newspapers have been in existence over 50 years with many having histories over 100 years. The Company is amortizing the
fair values of the subscriber and advertiser relationships over the periods at which 90% of the cumulative net cash flows are estimated to be realized. Therefore, the subscriber and advertiser relationships are being amortized over 15 years on a
straight-line basis as no other discernable pattern of usage was more readily determinable.

For tax purposes, the amount of goodwill that
is expected to be deductible is $104,433 for the newspapers acquired from the Copley Press, Inc. as of December 31, 2008.

(e) SureWest
Directories Acquisition2007

On February 28, 2007, the Company completed its acquisition of all the issued and
outstanding capital stock of SureWest Directories from SureWest Communications for an aggregate purchase price, including working capital, of approximately $110,156. SureWest Directories is engaged in the business of publishing yellow page and white
page directories, as well as internet yellow pages through the www.sacramento.com website. The Company has become the publisher of the official directory of SureWest Telephone. The acquisition of SureWest



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(In thousands, except share data)



Directories is the Companys platform acquisition into the local directories business. This was an attractive acquisition due to the stability and
visibility of the businesses revenues and cash flows, minimal capital expenditure requirements and growth prospects for the Sacramento, California marketplace. The Company has accounted for this acquisition under the purchase method of accounting.
Accordingly, the cost of the acquisition has been allocated to the assets and liabilities assumed based upon their respective fair values. The results of operations for SureWest Directories have been included in the Companys consolidated
financial statements since the date of the acquisition.

The following table summarizes the fair values of the assets acquired and
liabilities assumed as of the acquisition date adjusted through December 31, 2008:



|                              |  |   |        
|----------------------------- |  | - | -------
|Current assets                |  | $ | 15,041 
|Property, plant and equipment |  |   | 51     
|Advertising relationships     |  |   | 40,955 
|Trade name                    |  |   | 5,493  
|Publication rights            |  |   | 345    
|Goodwill                      |  |   | 48,454 
|                              |  |   |        
|Total assets                  |  |   | 110,339
|Total liabilities             |  |   | 183    
|                              |  |   |        
|Net assets acquired           |  | $ | 110,156
|                              |  |   |        

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the advertiser relationships acquired in connection with the SureWest Directories acquisition. The appraisals used an excess earnings approach, a form of the income approach, which values assets based upon associated estimated discounted
cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 12.0% for advertiser relationships for SureWest Directories. Growth rates were estimated to be 2.5% and the discount rate was estimated to be
11.0% for advertiser relationships.

Estimated cash flows extend up to periods of approximately 18 years which considers an attrition study
which concluded that half of the existing advertiser base would be advertising in the Companys directories after six years. Survival curves were calculated based on this and other relevant information which resulted in the 12% attrition rate.
The Company is amortizing the fair values of the advertiser relationships over the periods at which 90% of the cumulative net cash flows are estimated to be realized. Therefore, the advertiser relationships are being amortized over 12 years, on a
straight-line basis as no other discernable pattern of usage was more readily determinable.

For tax purposes, the amount of goodwill that
is expected to be deductible is $48,454 for SureWest Directories as of December 31, 2008.

(f) Journal Register Company Newspaper
Acquisitions2007

On February 9, 2007, the Company completed its acquisition of eight publications from the Journal
Register Company for an aggregate purchase price, including working capital, of approximately $72,371. The acquisition included two daily and four weekly newspapers as well as two shopper publications serving southeastern Massachusetts. The
rationale for the acquisition was primarily due to the attractive nature of the community newspaper assets with stable revenues and cash flows combined with the cost savings opportunities from



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(In thousands, except share data)



clustering with the Companys other newspapers serving Massachusetts. The Company has accounted for these acquisitions under the purchase method of
accounting. Accordingly, the cost of the acquisition has been allocated to the assets and liabilities assumed based upon their respective fair values. The results of operations for the Journal Register Company newspaper acquisitions have been
included in the Companys consolidated financial statements since the date of the acquisition.

The following table summarizes the
fair values of the assets acquired and liabilities assumed as of the acquisition date adjusted through December 31, 2008:



|                              |  |   |       
|----------------------------- |  | - | ------
|Current assets                |  | $ | 2,614 
|Property, plant and equipment |  |   | 7,159 
|Advertising relationships     |  |   | 27,268
|Subscriber relationships      |  |   | 6,397 
|Mastheads                     |  |   | 4,393 
|Goodwill                      |  |   | 25,357
|                              |  |   |       
|Total assets                  |  |   | 73,188
|Total liabilities             |  |   | 817   
|                              |  |   |       
|Net assets acquired           |  | $ | 72,371
|                              |  |   |       

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the subscriber and advertiser relationships acquired in connection with the Journal Register Company newspaper acquisition. The appraisals used an excess earnings approach, a form of the income approach, which values assets based upon
associated estimated discounted cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 7.0% for advertiser relationships and subscriber relationships for the Journal Register Company newspaper
acquisitions. The growth rate was estimated to be 1.8% and the discount rate was estimated to be 10.0% for subscriber relationships. The growth rate was estimated to be 1.7% and the discount rate was estimated to be 10.0% for advertiser
relationships.

Estimated cash flows extend up to periods of approximately 30 years, which considers that a majority of the acquired
newspapers have been in existence over 50 years with many having histories over 100 years. The Company is amortizing the fair values of the subscriber and advertiser relationships over the periods at which 90% of the cumulative net cash flows are
estimated to be realized. Therefore, the subscriber and advertiser relationships are being amortized over 16 years on a straight-line basis as no other discernable pattern of usage was more readily determinable.

For tax purposes, the amount of goodwill that is expected to be deductible is $25,357 for the newspapers acquired from the Journal Register Company as of
December 31, 2008.



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(In thousands, except share data)



(g) Other Acquisitions2007

During the year ended December 31, 2007, the Company acquired an additional 40 publications (excluding the acquisitions discussed above) for an
aggregate purchase price of $27,595. These were all attractive tuck-in acquisitions, in which the acquired businesses fit in extremely well with existing GateHouse clusters. The purchase price allocation for these acquisitions are as follows:



|                              |  |   |       
|----------------------------- |  | - | ------
|Current assets                |  | $ | 2,630 
|Other assets                  |  |   | 225   
|Property, plant and equipment |  |   | 5,683 
|Noncompete agreements         |  |   | 1,577 
|Advertising relationships     |  |   | 7,432 
|Subscriber relationships      |  |   | 1,716 
|Mastheads                     |  |   | 3,375 
|Customer relationships        |  |   | 967   
|Goodwill                      |  |   | 8,288 
|                              |  |   |       
|Total assets                  |  |   | 31,893
|Current liabilities           |  |   | 2,520 
|Long-term liabilities         |  |   | 1,778 
|                              |  |   |       
|Total liabilities             |  |   | 4,298 
|                              |  |   |       
|Net assets acquired           |  | $ | 27,595
|                              |  |   |       

(h) CP Media and Enterprise NewsMedia, LLC Acquisitions2006

On June 6, 2006, the Company acquired substantially all of the assets, and assumed certain liabilities of CP Media for $232,024 and acquired all of
the equity interests of Enterprise NewsMedia, LLC for $194,083 (the Massachusetts Acquisitions). CP Media and Enterprise NewsMedia, LLC are two leading publishers of daily and weekly newspapers in eastern Massachusetts. The rationale for
the Massachusetts Acquisitions was primarily due to the attractive community newspaper assets with stable cash flows, the combination of the two companies that creates operational upside and cost savings and economies of scale for advertising,
sales, operating costs and existing infrastructure leverage. The Company has accounted for these acquisitions under the purchase method of accounting. Accordingly, the cost of each acquisition has been allocated to the assets and liabilities assumed
based upon their respective fair values. The results of operations for CP Media and Enterprise NewsMedia, LLC have been included in the Companys consolidated financial statements since the date they were acquired.

Upon the acquisition of Enterprise NewsMedia, LLC, the Company recorded deferred taxes based upon its best estimate of the tax basis of assets and
liabilities acquired. During the year ended December 31, 2006, the Company updated its forecasted schedule of future reversals of taxable temporary differences, an adjustment was applied as an increase to the balance of goodwill attributable to
the acquisition.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The following table summarizes the fair values of the assets acquired and liabilities assumed as of
the acquisition date adjusted through December 31, 2008:



|                              |  |          |         |                          |   |        
|----------------------------- |  | -------- | ------- | ------------------------ | - | -------
|                              |  | CP Media |         | EnterpriseNewsMedia, LLC
|Current assets                |  | $        | 12,469  |                          | $ | 24,127 
|Other assets                  |  |          |        |                          |   | 107    
|Property, plant and equipment |  |          | 19,055  |                          |   | 22,435 
|Advertising relationships     |  |          | 76,194  |                          |   | 52,846 
|Noncompete agreements         |  |          |        |                          |   | 986    
|Subscriber relationships      |  |          | 10,781  |                          |   | 22,339 
|Mastheads                     |  |          | 13,214  |                          |   | 10,146 
|Goodwill                      |  |          | 111,243 |                          |   | 117,342
|                              |  |          |         |                          |   |        
|Total assets                  |  |          | 242,956 |                          |   | 250,328
|Current liabilities           |  |          | 10,421  |                          |   | 7,656  
|Other long-term liabilities   |  |          | 511     |                          |   | 13,671 
|Deferred income taxes         |  |          |        |                          |   | 34,918 
|                              |  |          |         |                          |   |        
|Total liabilities             |  |          | 10,932  |                          |   | 56,245 
|                              |  |          |         |                          |   |        
|Net assets acquired           |  | $        | 232,024 |                          | $ | 194,083
|                              |  |          |         |                          |   |        

The Company obtained third party independent appraisals to assist in the determination of the fair
values of the subscriber and advertiser relationships acquired in connection with the CP Media and Enterprise NewsMedia, LLC acquisitions. The appraisals used an excess earnings approach, a form of the income approach, which values assets based upon
associated estimated discounted cash flows. A static pool approach using historical attrition rates was used to estimate attrition rates of 10% and 6.0% for advertiser relationships and 4.0% and 6.0% to 8.0% for subscriber relationships for CP Media
and Enterprise NewsMedia, LLC, respectively. Growth rates were estimated to be 0% and 0.5% and the discount rate was estimated to be 8.5% and 9.0% for subscriber relationships for CP Media and Enterprise NewsMedia, LLC, respectively. Growth rates
were estimated to be 2.5% and 3.0% and the discount rate was estimated to be 8.5% and 9.0% for advertiser relationships for CP Media and Enterprise NewsMedia, LLC, respectively.

Estimated cash flows extend up to periods of approximately 32 years which considers that a majority of the acquired newspapers have been in existence
over 50 years with many having histories over 100 years for both CP Media and Enterprise NewsMedia, LLC. The Company is amortizing the fair values of the subscriber and advertiser relationships over the periods at which 90% of the cumulative net
cash flows are estimated to be realized. Therefore, the subscriber and advertiser relationships are being amortized over 18 and 15 years and 14 to 16 and 18 years for CP Media and Enterprise NewsMedia, LLC, respectively, on a straight-line basis as
no other discernable pattern of usage was more readily determinable.

The fair value of non-compete agreements was determined using the
damages method under the income approach method of valuation. Non-compete agreements in the Enterprise NewsMedia, LLC acquisition were valued at $986 and are being amortized over two years on a straight-line basis. There were no
non-compete agreements in the CP Media acquisition.

For tax purposes, the amount of goodwill that is expected to be deductible is $111,243
for CP Media as of December 31, 2008.



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(In thousands, except share data)



(i) Other Acquisitions2006

During the year ended December 31, 2006, the Company acquired nine publications (excluding the Acquisitions discussed above) for an aggregate
purchase price of $11,752. The purchase price allocation for these acquisitions is as follows:



|                              |  |   |       
|----------------------------- |  | - | ------
|Net tangible assets acquired  |  | $ | 734   
|Property, plant and equipment |  |   | 2,856 
|Noncompete agreements         |  |   | 368   
|Advertising relationships     |  |   | 1,857 
|Subscriber relationships      |  |   | 232   
|Mastheads                     |  |   | 549   
|Customer lists                |  |   | 2,064 
|Goodwill                      |  |   | 3,092 
|                              |  |   |       
|Purchase price                |  | $ | 11,752
|                              |  |   |       

(j) Restructuring

As of December 31, 2008, the accrued restructuring balance was $53, which relates to on-going obligations for employee termination agreements in connection with the acquisition of the Morris Publishing Group
newspapers. During the year ended December 31, 2008, the Company made payments of $826 in connection with obligations for employee termination agreements from the acquisitions of the Morris Publishing Group newspapers, The Copley Press,
Inc. newspapers, as well as the acquisitions of Messenger Post and Enterprise NewsMedia, LLC.

During the year ended December 31,
2008, restructuring related expense, which is included in integration and reorganization costs on the accompanying statement of operations was $2,706. This amount relates to severance expense incurred in connection with the closing printing
facilities and general labor reductions. During the year ended December 31, 2008, the Company made payments of $2,824 connection with these obligations.

(k) Pro-Forma Results

The unaudited pro forma condensed consolidated statement of operations information for 2007,
set forth below, presents the results of operations as if the acquisitions of the newspapers from The Copley Press, Inc., and the newspapers from Gannett Co., Inc. had occurred on January 1, 2007. These amounts are not necessarily indicative of
future results or actual results that would have been achieved had the acquisitions occurred as of the beginning of such period. The unaudited pro forma condensed consolidated statements of operations data, set forth below, does not give pro forma
effect to the following acquisitions which are not considered significant:



| |  |  | the acquisition of all the issued and outstanding capital stock of SureWest Directories from SureWest Communications for an aggregate purchase price of
approximately $110,156 in February of 2007;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the acquisition of eight publications from the Journal Register Company for an aggregate purchase price of approximately $72,371 in February of 2007; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



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(In thousands, except share data)



| |  |  | the acquisition of thirty seven publications from Morris Publishing Group for an aggregate purchase price of approximately $122,768 in November, 2007.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|                                    |  |                            |          |  
|----------------------------------- |  | -------------------------- | -------- | -
|                                    |  | Year EndedDecember 31,2007 |         
|                                   
|Revenues                            |  | $                          | 652,398  |  
|Net loss from continuing operations |  | $                          | (241,108 | )
|Net loss                            |  | $                          | (231,424 | )
|Net loss per common share           |  |                            |          |  
|Basic                               |  | $                          | (4.99    | )
|Diluted                             |  | $                          | (4.99    | )

(4) Property, Plant, and Equipment

Property, plant, and equipment consisted of the following:



|                                                |  |              |         |   |      |   |         |  
|----------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                |  | December 31, |        
|                                                |  | 2008         |         |   | 2007 |  
|Land                                            |  | $            | 20,203  |   |      | $ | 20,917  |  
|Buildings and improvements                      |  |              | 89,128  |   |      |   | 89,887  |  
|Machinery and equipment                         |  |              | 123,704 |   |      |   | 114,529 |  
|Furniture, fixtures, and computer software      |  |              | 16,654  |   |      |   | 13,738  |  
|Construction in progress                        |  |              | 2,112   |   |      |   | 1,735   |  
|                                                |  |              |         |   |      |   |         |  
|                                                |  |              | 251,801 |   |      |   | 240,806 |  
|Less: accumulated depreciation and amortization |  |              | (57,400 | ) |      |   | (30,597 | )
|                                                |  |              |         |   |      |   |         |  
|Total                                           |  | $            | 194,401 |   |      | $ | 210,209 |  
|                                                |  |              |         |   |      |   |         |  

Depreciation expense during the years ended December 31, 2008, 2007, and 2006 was $27,241,
$19,686 and $8,566, respectively.

(5) Goodwill and Other Intangible Assets

Goodwill and intangible assets consisted of the following:



|                                |  |                     |         |                         |   |                   |  |   |        
|------------------------------- |  | ------------------- | ------- | ----------------------- | - | ----------------- |  | - | -------
|                                |  | December 31, 2008  
|                                |  | GrossCarryingAmount |         | AccumulatedAmortization |   | NetCarryingAmount
|Amortized intangible assets:    |  |                     |         |                         |   |                   |  |   |        
|Noncompete agreements           |  | $                   | 4,970   |                         | $ | 2,262             |  | $ | 2,708  
|Advertiser relationships        |  |                     | 455,568 |                         |   | 76,787            |  |   | 378,781
|Customer relationships          |  |                     | 8,941   |                         |   | 995               |  |   | 7,946  
|Subscriber relationships        |  |                     | 123,452 |                         |   | 19,039            |  |   | 104,413
|Trade name                      |  |                     | 5,493   |                         |   | 1,007             |  |   | 4,486  
|Publication rights              |  |                     | 345     |                         |   | 42                |  |   | 303    
|                                |  |                     |         |                         |   |                   |  |   |        
|Total                           |  | $                   | 598,769 |                         | $ | 100,132           |  | $ | 498,637
|                                |  |                     |         |                         |   |                   |  |   |        
|Nonamortized intangible assets: |  |                     |         |                         |   |                   |  |   |        
|Goodwill                        |  | $                   | 261,332 |                         |   |                   |  |   |        
|Mastheads                       |  |                     | 66,396  |                         |   |                   |  |   |        
|                                |  |                     |         |                         |   |                   |  |   |        
|Total                           |  | $                   | 327,728 |                         |   |                   |  |   |        
|                                |  |                     |         |                         |   |                   |  |   |        



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(In thousands, except share data)



|                                |  |                     |         |                         |   |                   |  |   |        
|------------------------------- |  | ------------------- | ------- | ----------------------- | - | ----------------- |  | - | -------
|                                |  | December 31, 2007  
|                                |  | GrossCarryingAmount |         | AccumulatedAmortization |   | NetCarryingAmount
|Amortized intangible assets:    |  |                     |         |                         |   |                   |  |   |        
|Noncompete agreements           |  | $                   | 3,172   |                         | $ | 1,295             |  | $ | 1,877  
|Advertiser relationships        |  |                     | 565,663 |                         |   | 45,097            |  |   | 520,566
|Customer relationships          |  |                     | 6,689   |                         |   | 383               |  |   | 6,306  
|Subscriber relationships        |  |                     | 146,751 |                         |   | 10,859            |  |   | 135,892
|Trade name                      |  |                     | 5,493   |                         |   | 458               |  |   | 5,035  
|Publication rights              |  |                     | 345     |                         |   | 19                |  |   | 326    
|                                |  |                     |         |                         |   |                   |  |   |        
|Total                           |  | $                   | 728,113 |                         | $ | 58,111            |  | $ | 670,002
|                                |  |                     |         |                         |   |                   |  |   |        
|Nonamortized intangible assets: |  |                     |         |                         |   |                   |  |   |        
|Goodwill                        |  | $                   | 701,852 |                         |   |                   |  |   |        
|Mastheads                       |  |                     | 138,792 |                         |   |                   |  |   |        
|                                |  |                     |         |                         |   |                   |  |   |        
|Total                           |  | $                   | 840,644 |                         |   |                   |  |   |        
|                                |  |                     |         |                         |   |                   |  |   |        

The weighted average amortization periods for amortizable intangible assets are 4.4 years for
noncompete agreements, 15.9 years for advertiser relationships, 13.8 years for customer relationships, 16.3 years for subscriber relationships, 10 years for trade names and 15 years for publication rights.

Amortization expense for the years ended December 31, 2008, 2007, and 2006 was $42,880, $37,606 and $15,044, respectively. Estimated future
amortization expense as of December 31, 2008, is as follows:



|                                 |  |   |        
|-------------------------------- |  | - | -------
|For the year ending December 31: |  |   |        
|2009                             |  | $ | 37,066 
|2010                             |  |   | 37,031 
|2011                             |  |   | 36,910 
|2012                             |  |   | 36,597 
|2013                             |  |   | 36,315 
|Thereafter                       |  |   | 314,718
|                                 |  |   |        
|Total                            |  | $ | 498,637
|                                 |  |   |        

The changes in the carrying amount of goodwill for the years ended December 31, 2008 and 2007
are as follows:



|                                |  |   |          |  
|------------------------------- |  | - | -------- | -
|Balance at January 1, 2007      |  | $ | 480,430  |  
|Goodwill from acquisitions      |  |   | 422,901  |  
|Goodwill impairment             |  |   | (201,479 | )
|                                |  |   |          |  
|Balance at December 31, 2007    |  |   | 701,852  |  
|Goodwill from acquisitions, net |  |   | 571      |  
|Goodwill from divestitures      |  |   | (16,044  | )
|Goodwill impairment             |  |   | (425,047 | )
|                                |  |   |          |  
|Balance at December 31, 2008    |  | $ | 261,332  |  
|                                |  |   |          |  



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(In thousands, except share data)



Goodwill from divestitures during the year ended December 31, 2008 relates primarily from the sale of
certain newspapers originally acquired from the Morris Publishing Group.

Goodwill from acquisitions during the year ended
December 31, 2007 relates primarily to the newspapers acquired from Morris Publishing Group, the Copley Press, Inc. and Gannett Co. Inc., the acquisition of SureWest Directories and the newspapers acquired from the Journal Register Company.

As of December 31, 2008 and 2007, goodwill in the amount of $608,722 and $622,913, respectively was deductible for income tax
purposes.

The Company revised its consolidated financial statements for the year ended December 31, 2006 due to a purchase accounting
tax adjustment identified in the prior year. The Company overstated both its deferred tax liability and goodwill balances as of December 31, 2006 primarily related to deferred taxes being calculated on tax deductible goodwill as part of the
Merger. The result was a decrease of previously reported deferred tax liabilities and goodwill of approximately $36,226 as of December 31, 2006. This adjustment relates entirely to acquisition deferred taxes and, as such, there is no impact on
previously reported income tax expense or net income.

The Companys date on which its annual impairment assessment is made is June
30. No impairment charge resulted from the assessments completed as of June 30, 2007 and June 30, 2006, respectively. As of September 30, 2007 a review of impairment indicators was performed with the Company noting that its market
capitalization continued to exceed its consolidated carrying value, and it was determined that an impairment analysis was not required.

The Company determined that it should perform impairment testing of goodwill and indefinite lived intangible assets as of December 31, 2007, due to the declines in its stock price, market capitalization, revenue trends and other economic
factors, which were most significant in the fourth quarter of 2007. During the second half of 2007, the Company and the newspaper industry experienced declines in classified advertising, primarily caused by economic trends. Also during this period,
the Companys stock price declined, with its consolidated carrying value exceeding its market capitalization in the fourth quarter of 2007.

As of December 31, 2007, the fair values of the Companys reporting units for goodwill impairment testing and individual newspaper mastheads were estimated using the expected present value of future cash flows, recent industry
transaction multiples and using estimates, judgments and assumptions that management believes were appropriate in the circumstances. While this method was consistent with the June 30, 2007, impairment analysis, revenue declines, increased volatility
of operating performance and decreased market capitalization, primarily occurring during the fourth quarter, resulted in a reduction of the Companys estimated fair value between the June 30, 2007, and December 31, 2007, impairment analysis.
The sum of the fair values of the reporting units was reconciled to the Companys then market capitalization (based upon the stock market price) plus an estimated control premium. The Company recorded an impairment charge related to goodwill of
$201,479 and a newspaper masthead impairment charge of $24,514 in the fourth quarter of 2007 based on this comparison of reporting unit carrying value to fair value.

The 2007 impairment charge included amounts related to the Copley and Gannett operations which were purchased during 2007. While these operations were purchased during the year, the industry downturn, as well as the
Companys revenue, stock price and enterprise value declines, predominately occurred in the second half of 2007 and the impact was considered for these reporting units.



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(In thousands, except share data)



As of March 31, 2008, a review of impairment indicators was performed with the Company noting that
its market capitalization exceeded its consolidated carrying value and it was determined that an impairment analysis was not required.

As
part of the annual impairment assessment, as of June 30, 2008, the fair values of the Companys reporting units for goodwill impairment testing and individual newspaper mastheads were estimated using the expected present value of future cash
flows, recent industry transaction multiples and using estimates, judgments and assumptions that management believes were appropriate in the circumstances. While this method was consistent with the June 30, 2007 and December 31, 2007, impairment
analysis, revenue declines, increased volatility of operating performance and decreased market capitalization, resulted in a reduction of the Companys estimated fair value between the June 30, 2007, December 31, 2007 and June 30, 2008,
impairment analysis. The sum of the fair values of the reporting units was reconciled to the Companys then market capitalization (based upon the stock market price) plus an estimated control premium. The Company recorded an impairment charge
related to goodwill of $299,153 and a newspaper masthead impairment charge of $41,422 in the second quarter of 2008 based on this comparison of reporting unit carrying value to fair value. During the third quarter of 2008, the Company sold certain
publications, and as a result a total of $4,479 of goodwill and masthead impairment has been reclassified to discontinued operations.

The
Company considered the goodwill and masthead impairment to be an impairment indicator under SFAS No. 144, and performed an analysis of its undiscounted cash flows for amortizable intangibles. Due to reductions in operating projections within
the Companys Northeast reporting unit, an impairment charge of $102,517 was recorded related to the Companys advertiser and subscriber relationships.

As of September 30, 2008, a review of impairment indicators was performed with the Company noting that its market capitalization exceeded its consolidated carrying value and it was determined that an impairment
analysis was not required.

As of December 31, 2008, the Company reviewed the impairment indicators within SFAS No. 142 and determined that
an impairment analysis should be performed for all reporting units due to the reduction of estimated future cash flows and decline in market transaction multiples, primarily experienced during the fourth quarter of 2008.

As of December 31, 2008, the fair values of the Companys reporting units for goodwill impairment testing and individual newspaper mastheads were
estimated using the expected present value of future cash flows, recent industry transaction multiples and using estimates, judgments and assumptions that management believes were appropriate in the circumstances. While this method was consistent
with the June 30, 2008 and December 31, 2007 impairment analysis, revenue declines, increased volatility of operating performance, decreased transactions multiples and declines in general economic conditions during the second half of the year
resulted in a reduction of the Companys estimated fair value between June 30, 2008, and December 31, 2008. The Company recorded an impairment charge related to goodwill of $125,894 and a newspaper masthead impairment charge of $29,840 in the
fourth quarter of 2008 based on this comparison of reporting unit carrying value to fair value.

The Company considered the goodwill and
masthead impairment to be an impairment indicator under SFAS No. 144 and performed an analysis of its undiscounted cash flows for amortizable intangibles. Due to reductions in operating projections within certain of the Companys reporting
units, an impairment charge of $20,608 was recorded related to the Companys advertiser relationships in the fourth quarter of 2008.



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(In thousands, except share data)



It is reasonably possible that impairment charges could be incurred in the future based on industry
and market factors present at that time. The Company is unable to estimate any possible future impairment charges at this time.

(6) Accrued Expenses

Accrued expenses consisted of the following:



|                  |  |              |        |      |   |       
|----------------- |  | ------------ | ------ | ---- | - | ------
|                  |  | December 31,
|                  |  | 2008         |        | 2007
|Accrued payroll   |  | $            | 4,906  |      | $ | 8,638 
|Accrued bonus     |  |              | 2,281  |      |   | 2,697 
|Accrued vacation  |  |              | 4,146  |      |   | 4,373 
|Accrued insurance |  |              | 4,687  |      |   | 3,411 
|Accrued newsprint |  |              | 945    |      |   | 1,497 
|Accrued other     |  |              | 14,530 |      |   | 20,056
|                  |  |              |        |      |   |       
|                  |  | $            | 31,495 |      | $ | 40,672
|                  |  |              |        |      |   |       

(7) Lease Commitments

The future minimum lease payments related to the Companys non-cancelable operating lease commitments as of December 31, 2008 are as follows:



|                                 |  |   |       
|-------------------------------- |  | - | ------
|For the year ending December 31: |  |   |       
|2009                             |  | $ | 5,266 
|2010                             |  |   | 4,532 
|2011                             |  |   | 2,442 
|2012                             |  |   | 2,109 
|2013                             |  |   | 2,060 
|Thereafter                       |  |   | 3,360 
|                                 |  |   |       
|Total minimum lease payments     |  | $ | 19,769
|                                 |  |   |       

Future minimum operating lease payments have not been reduced by future minimum sublease income of
$1,167.

Rental expense under operating leases for the years ended December 31, 2008, 2007 and 2006 was $5,434, $4,888 and $2,855,
respectively.

(8) Long-Term Debt and Short-Term Note Payable

On February 28, 2005, the Company entered into a Credit Agreement with a syndicate of financial institutions led by Wells Fargo Bank, National Association (the 2005 Credit Facility). The 2005 Credit
Facility provided for a $280,000 principal amount term loan facility that matured in February 2012 and a $50,000 revolving credit facility with a $10,000 sub-facility for letters of credit that matured in February 2011. The 2005 Credit Facility was
secured by a first-priority security interest in substantially all of the tangible and intangible assets of the Company and its subsidiaries.

All amounts outstanding under the 2005 Credit Facility were repaid with borrowings under the 2006 Credit Facility, as described below. In connection with the termination of the 2005 Credit Facility, the Company wrote off $702 of deferred
financing costs.



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(In thousands, except share data)



In connection with the Companys acquisitions of CP Media and Enterprise NewsMedia, LLC, on
June 6, 2006 GateHouse Media Holdco, Inc., a subsidiary of the Company (Holdco), GateHouse Media Operating, Inc., a subsidiary of Holdco (Operating) and certain of the Companys other direct and indirect
subsidiaries (together, the Borrower) entered into a financial arrangement with Wachovia Bank, National Association (the 2006 Credit Facility). The 2006 Credit Facility consisted of a First Lien Credit Agreement (the
First Lien Facility) and a Secured Bridge Credit Agreement (the Second Lien Facility). The First Lien Facility, which was amended on each of June 21, 2006 and October 11, 2006, provided for a $570,000 term loan
facility which matured on December 6, 2013 and a $40,000 revolving credit facility including a $15,000 sub-facility for letters of credit, that matured on June 6, 2013. The Second Lien Facility provided for a $152,000 term loan facility
that matured on June 6, 2014. The 2006 Credit Facility was secured by a first priority security interest in (i) all of the equity ownership or profits interest of Operating and its direct and indirect subsidiaries and
(ii) substantially all of the tangible and intangible assets of Holdco, Operating and their respective direct and indirect subsidiaries. The obligations of the Borrower under the 2006 Credit Facility were guaranteed by Holdco, Operating and
their respective direct and indirect subsidiaries.

Borrowings under the First Lien Facility bore interest, at the Borrowers option,
at a rate equal either to the LIBOR Rate or the Alternate Base Rate (each as defined in the First Lien Facility), in each case plus an applicable margin. The applicable margin for LIBOR Rate term loans and Alternate Base Rate term loans was fixed at
2.25% and 1.25%, respectively. The applicable margin for revolving loans was adjusted quarterly based upon Holdcos Total Leverage Ratio (as defined in the First Lien Facility) and ranged from 1.5% to 2.0% in the case of LIBOR Rate loans and
0.5% to 1.0% in the case of Alternate Base Rate loans. A quarterly commitment fee ranging from 0.25% to 0.5% on unused revolving credit availability based on the ratio of Consolidated Indebtedness to Consolidated EBITDA (each as defined in the First
Lien Facility), and a quarterly fee equal to the applicable margin for LIBOR Rate loans on the aggregate amount of outstanding letters of credit were also payable under the First Lien Facility.

Borrowings under the Second Lien Facility bore interest, at the Borrowers option, at a rate equal to the LIBOR Rate or the Alternate Base Rate, in
each case plus an applicable margin. The applicable margin for LIBOR Rate term loans and Alternate Base Rate term loans under the Second Lien Facility was fixed at 1.5% and 0.5%, respectively.

No principal payments were due on the term loan or the revolving credit portions of the 2006 Credit Facility until the applicable maturity date. However,
the Borrower was required to prepay borrowings under the term loan facility in an amount equal to 50% of Holdcos Excess Cash Flow (as defined in the First Lien Facility), except that no prepayments were required if Holdcos Total Leverage
Ratio (as defined in the First Lien Facility) was less than or equal to 6.0 to 1.0 at the end of any fiscal year. In addition, the Borrower was required to prepay borrowings under the term loan portion of the 2006 Credit Facility with certain asset
disposition proceeds, cash insurance proceeds and condemnation or expropriation awards. The Borrower was also required to prepay borrowings with 50% of the net proceeds of certain equity issuances or 100% of the proceeds of certain debt issuances,
except that no prepayment was required if Holdcos Total Leverage Ratio was less than 6.0 to 1.0. The 2006 Credit Facility also contained financial covenants that required Holdco to satisfy specified quarterly financial tests and which also
contained customary covenants and events of default.

In October 2006, using a portion of the proceeds from the Companys IPO, the
Borrower repaid in full and terminated the $152,000 Second Lien Facility. In addition, a portion of the net proceeds of the Companys IPO was used to pay down $12,000 of the $570,000 then outstanding under the First Lien Facility, and to repay
in full the outstanding balance of $21,300 under the $40,000 revolving credit portion of the First Lien Facility.



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(In thousands, except share data)



In connection with the termination of the $152,000 Second Lien Facility and the $12,000 reduction in
borrowing capacity on the First Lien Facility, the Company wrote off $1,384 of deferred financing costs.

On February 27, 2007, the
Borrower amended and restated the 2006 Credit Agreement (as amended, the 2007 Credit Facility). The 2007 Credit Facility provides for a $670,000 term loan facility which matures in August 2014 and a $40,000 revolving credit facility
including a $15,000 sub-facility for letters of credit and a $10,000 swingline facility which matures in February 2014. Under the 2007 Credit Facility, up to an additional $250,000 was available until August 2007 for borrowing under a delayed draw
term loan.

The 2007 Credit Facility is secured by a first priority security interest in (i) all of the present and future equity
ownership or profits interest of Operating and its direct and indirect subsidiaries, (ii) 66% of the voting stock (and 100% of the nonvoting stock) of certain present and future foreign subsidiaries and (iii) substantially all of the
tangible and intangible assets of Holdco, Operating and their respective present and future subsidiaries. In addition, the loans and other obligations of the Borrower under the 2007 Credit Facility are guaranteed by Holdco, Operating and their
present and future direct and indirect subsidiaries.

No principal payments are due on the term or the revolving credit portions of the
2007 Credit Facility until the applicable maturity date. However, the Borrower is required to make prepayments under the term loan facility, and/or to collateralize letter of credit obligations, under specified conditions, from excess cash flow and
from the proceeds of asset dispositions, issuances of debt and equity and insurance and condemnation awards.

Borrowings under the 2007
Credit Facility bear interest, at the Borrowers option, at a rate equal to the LIBOR Rate or the Alternate Base Rate (each as defined in the 2007 Credit Facility), plus an applicable margin. The applicable margin for revolving loans under the
2007 Credit Facility is adjusted quarterly based upon Holdcos Total Leverage Ratio (as defined in the 2007 Credit Facility). The applicable margin for revolving loans ranges from 1.50% to 2.00% in the case of LIBOR Rate loans and 0.50% to
1.00% in the case of Alternate Base Rate loans. Prior to the consummation of the First Amendment, as discussed below, the applicable margin for LIBOR Rate term loans and Alternate Base Rate term loans was 1.75% and 0.75%, respectively, if credit
ratings for the 2007 Credit Facility from Moodys Investors Service Inc. and Standard & Poors Ratings Services were at least B1 and B+, respectively, and otherwise was 2.00% and 1.00%, respectively. A quarterly commitment fee
ranging from 0.25% and 0.5% of the unused portion of the revolving loan facility based on the ratio of Consolidated Indebtedness to Consolidated EBITDA (each as defined in the 2007 Credit Facility), and a quarterly fee equal to the applicable margin
for LIBOR Rate loans on the aggregate amount of outstanding letters of credit are also payable under the 2007 Credit Facility.

The 2007
Credit Facility contains a financial covenant which requires Holdco to maintain a Total Leverage Ratio of less than or equal to 6.5 to 1.0 at any time an extension of credit is outstanding under the revolving credit portion of the facility. The 2007
Credit Facility also contains covenants customarily found in loan agreements for similar transactions, including restrictions on the Borrowers ability to incur indebtedness (which is generally permitted so long as Holdco maintains a pro forma
Total Leverage Ratio of less than 6.5 to 1.0), create liens on assets, engage in certain lines of business, engage in mergers or consolidations, dispose of assets, make investments or acquisitions, engage in transactions with affiliates, enter into
sale leaseback transactions, enter into negative pledges or pay dividends or make other restricted payments (except that Holdco is permitted to (i) make restricted payments (including quarterly dividends) so long as, after giving effect to any
such restricted payment, Holdcos Fixed Charge Coverage Ratio (as defined in the 2007 Credit Facility) is equal to or greater than 1.0 to 1.0 and it would be permitted under the 2007 Credit Facility to incur an additional $1.00 of debt) and
(ii) make restricted payments of proceeds of asset dispositions to the Company to the extent such



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(In thousands, except share data)



proceeds are not required to prepay borrowings under the 2007 Credit Facility and/or cash collateralize letter of credit obligations, provided that such
proceeds are used to prepay borrowings under the Companys credit facilities used to finance acquisitions). The Borrower, in certain limited circumstances, may also designate subsidiaries as unrestricted subsidiaries which are not
subject to the covenant restrictions in the 2007 Credit Facility. The 2007 Credit Facility contains customary events of default. There were no extensions of credit outstanding under the revolving credit portion of the facility at December 31, 2008,
and, therefore, we were not required to be in compliance with the Total Leverage Ratio covenant of the 2007 Credit Facility.

On
April 11, 2007, the Company entered into a Bridge Facility with Wachovia Investment Holdings, LLC acting as administrative agent (the Bridge Facility). The Bridge Facility, which was repaid by the Company in full in July 2007,
provided for a $300,000 term loan facility that matured on April 11, 2015. Borrowings under the Bridge Facility bore interest, at the Companys option, at a floating rate equal to the LIBOR Rate or the Base Rate (each as defined in the
Bridge Facility), plus an applicable margin. The applicable margin for LIBOR Rate term loans and Base Rate term loans was 1.50% and 0.50%, respectively. The Bridge Facility was secured by a first priority interest in all of the capital stock of
Holdco owned by the Company and contained customary covenants and events or default. In connection with its repayment of the Bridge Facility, the Company wrote off $2,240 of deferred financing costs.

On May 7, 2007, the Borrower amended the 2007 Credit Facility pursuant to a First Amendment (the First Amendment). The First Amendment
provided for a $275,000 incremental increase in the term loan available under the 2007 Credit Facility pursuant to an Incemental Term Facility. The $275,000 incremental term loan facility matures in August 2014. Pursuant to the First Amendment, the
applicable margin for the initial $670,000 term loan facility under the 2007 Credit Facility was increased to 2.00% for LIBOR Rate term loans and 1.00% for Alternate Base Rate term loans, which margin is not adjustable based upon Borrowers
credit rating. Interest on the incremental term loan portion of the 2007 Credit Facility accrues, at the option of the Borrower, at a rate equal to the LIBOR Rate or the Alternate Base Rate, plus an applicable margin. The applicable margin for LIBOR
Rate incremental term loans and Alternate Base Rate incremental term loans is (i) 2.00% and 1.00%, respectively, if the corporate family ratings and corporate credit ratings of Operating by Moodys Investor Service Inc. and
Standard & Poors Rating Services, are at least B1 and B+, respectively, in each case with stable outlook, or (ii) 2.25% and 1.75% otherwise as was the case as of December 31, 2008. The First Amendment also provides that term
loans under the 2007 Credit Facility are also subject to a most favored nation interest provision that (i) increases the interest rate margin to a rate that is 0.25% less than the highest margin of any future incremental term loan
borrowings under the 2007 Credit Facility and (ii) provides that after any such increase, no reductions in the margin based on credit ratings will be permitted. Any voluntary or mandatory repayment of the First Amendment term loans made with
the proceeds of a new term loan entered into for the primary purpose of benefiting from a margin that is less than the margin applicable as a result of the First Amendment are subject to a 1.00% prepayment premium.

As of December 31, 2008, a total of $670,000, $250,000, $275,000 and $0 was outstanding under the term loan facility, the delayed draw term loan,
the incremental term loan facility and the revolving credit facility portions of the 2007 Credit Facility, respectively.

In connection
with the acquisition of Morris Publishing Group, the Company commited to pay a portion of the purchase price under a $10,000 promissory note. During 2008, this note was amended to include the working capital settlement related to the acquisition. As
of December 31, 2008, $11,538 was outstanding under this note, which includes a portion of the working capital settlement. In accordance with an additional amendment executed during January 2009, principal payments on the remaining balance will be
made evenly from April-November of 2009.



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(In thousands, except share data)



On February 15, 2008, GateHouse Media Intermediate Holdco, Inc., a subsidiary of GateHouse Media
Holdco II, Inc. (Holdco II) and GateHouse Media (collectively, the Bridge Borrower) entered into a Bridge Credit Agreement (the 2008 Bridge Facility) with Barclays Capital, as syndication agent, sole arranger and
book runner (Barclays).

The 2008 Bridge Facility provided a $20,600 term loan facility subject to extensions through August
15, 2009. The 2008 Bridge Facility is secured by a first priority security interest in all present and future capital stock of Holdco owned by Holdco II and all proceeds thereof.

Borrowings under the 2008 Bridge Facility bear interest at a floating rate equal to the LIBOR Rate (as defined in the 2008 Bridge Facility), plus an
applicable margin. During the first three months of the facility, until May 15, 2008 (the First Pricing Step-Up Date), the applicable margin was 8.00%. After the First Pricing Step-Up Date and until the nine month anniversary of the
First Pricing Step-Up Date (February 15, 2009, the Second Pricing Step-Up Date), the applicable margin is 10.00%. After the Second Pricing Step-Up Date and until the maturity date, the applicable margin is 12.00%.

No principal payments are due on the 2008 Bridge Facility until the maturity date. The Bridge Borrower is required to prepay borrowings under the 2008
Bridge Facility with (a) 100% of the net cash proceeds from the issuance or incurrence of debt by Holdco II and its restricted subsidiaries, (b) 100% of the net cash proceeds from any issuances of equity by Holdco II or any of its restricted
subsidiaries and (c) 100% of the net cash proceeds of asset sales and dispositions by Holdco II and its subsidiaries, except, in the case of each of clause (a), (b) and (c), to the extent such required prepayment would contravene any provision of,
or cause a violation of or default under, the 2007 Credit Facility, in which case such mandatory prepayment shall not be required. The Bridge Borrower may voluntarily prepay the 2008 Bridge Facility at any time.

The 2008 Bridge Facility contains affirmative and negative covenants applicable to Holdco II and, in limited circumstances, Bridge Borrower and Holdco
IIs restricted subsidiaries, customarily found in loan agreements for similar transactions, including restrictions on their ability to incur indebtedness, create liens on assets, engage in certain lines of business; engage in mergers or
consolidations, dispose of assets, make investments or acquisitions; engage in transactions with affiliates, enter into sale leaseback transactions, enter into negative pledges or pay dividends or make other restricted payments. The 2008 Bridge
Facility contains customary events of default, including defaults based on a failure to pay principal, reimbursement obligations, interest, fees or other obligations, subject to specified grace periods; a material inaccuracy of representations and
warranties; breach of covenants; failure to pay other indebtedness and cross-accelerations; a Change of Control (as defined in the 2008 Bridge Facility); events of bankruptcy or insolvency; material judgments; failure to meet certain requirements
with respect to ERISA; and impairment of collateral. Certain of the foregoing covenants are only applicable to the extent they do not contravene any provision of or cause a violation of or default under the 2007 Credit Facility.

In connection with the 2008 Bridge Facility, Holdco II entered into a Pledge Agreement in favor of Barclays, pursuant to which Holdco II pledged certain
assets for the benefit of the secured parties as collateral security for the payment and performance of its obligations under the Bridge Agreement. The pledged assets include, among other things (i) all present and future capital stock or other
membership, equity, ownership or profits interest of Bridge Borrower in all of its direct domestic restricted subsidiaries and (ii) 65% of the voting stock (and 100% of the nonvoting stock) of all of its present and future first-tier foreign
subsidiaries.

As of December 31, 2008, a total of $17,000 was outstanding under the 2008 Bridge Facility.



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(In thousands, except share data)



On October 17, 2008, Holdco II entered into the First Waiver to the Bridge Facility. The First Waiver
waived compliance by Holdco II with the Total Leverage Ratio (as defined in the Bridge Agreement) covenant of the Bridge Facility which is required to be greater than 7.25 to 1.00.

On February 12, 2009, Holdco II entered into the Second Waiver and Amendment to the Bridge Facility. The Second Waiver and Amendment waived compliance by
Holdco II with the Total Leverage Ratio for the quarter ended December 31, 2008. The Second Waiver and Amendment also set the applicable margin for the Bridge Facility at 12.00% and established an amortization schedule for the outstanding balance
due under the Bridge Facility as follows:



|                        |  |                               |  |                 
|----------------------- |  | ----------------------------- |  | ----------------
|Installment             |  |                               |  | Principal Amount
|May 31, 2009            |  |                               |  | $1,500          
|June 30, 2009           |  |                               |  | $1,500          
|July 31, 2009           |  |                               |  | $1,500          
|August 31, 2009         |  |                               |  | $1,500          
|September 30, 2009      |  |                               |  | $5,000          
|October 31, 2009        |  |                               |  | $2,000          
|November 30, 2009       |  |                               |  | $2,000          
|Term Loan Maturity Date |  | Remaining outstanding amounts

Furthermore, under the Second Waiver and Amendment to the Bridge Facility, the covenant requiring
compliance with the Total Leverage Ratio was eliminated. Holdco II also agreed to prepay the Bridge Loan in any month, and only to the extent that, the month end cash balance exceeds the Projected Cash Balance by $2,000, starting in May of 2009, and
agreed to make certain prepayments in the event of any voluntary repurchase or prepayment of term loans under the 2007 Credit Facility.

On
August 21, 2008, FIF III Liberty Holdings LLC (FIF III) purchased an aggregate of $11,500 in 10% cumulative preferred stock of GateHouse Media Macomb Holdings, Inc. (Macomb), an operating subsidiary of the Company. Macomb, an
Unrestricted Subsidiary under the terms of the 2007 Credit Facility, used the proceeds from such sale of preferred stock to make an $11,500 cash investment in Holdco non-voting 10% cumulative preferred stock. FIF III may require the Company to
purchase its Macomb preferred stock during the five-year period following the full repayment by the Company of the 2008 Bridge Facility for an amount equal to the original purchase price plus accrued but unpaid dividends. The entire preferred stock
balance of $11,500 is included in long-term liabilities, net of current portion, and dividends of $425 are accrued as of December 31, 2008. FIF III is an affiliate of Fortress Investment Group, LLC, the owner of approximately 41.9% of the
Companys outstanding Common Stock.

On February 3, 2009 the Company entered into a Second Amendment to the 2007 Credit Agreement (the
Second Amendment).

The Second Amendment, among other things, permits the Subsidiary to repurchase term loans outstanding under
the 2007 Credit Agreement at prices below par through one or more Modified Dutch Auctions (as described in the Second Amendment) through December 31, 2011, provided that: (i) no Default or Event of Default under the 2007 Credit Agreement has
occurred and is continuing or would result from such repurchases, (ii) the sum of Unrestricted Cash and Accessible Borrowing Availability each as defined in the 2007 the Credit Agreement is greater than or equal to $20,000,000; and (iii) no
Extension of Credit is outstanding under the Revolving Facility before or after giving effect to such repurchases. The Second Amendment further provides that such repurchases may result in the prepayment of term loans on a non-pro rata basis.



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(In thousands, except share data)



The Second Amendment also reduces the aggregate principal amounts available under the Credit
Agreement, as follows: (i) for revolving loans, from $40,000,000 to $20,000,000; (ii) for the letter of credit subfacility, from $15,000,000 to $5,000,000; and (iii) for the swingline loan subfacility, from $10,000,000 to $5,000,000.

In addition, the Second Amendment provides that Holdco may not incur additional term debt under the 2007 Credit Agreement unless the Senior Secured
Incurrence Test is less then 4.00 to 1 and the current Incurrence Test is satisfied, as such terms are defined in the Second Amendment.

We
are currently in compliance with all of our covenants and obligations under the 2007 Credit Facility and the 2008 Bridge Facility. However, due to restrictive covenants and conditions within each of the facilities, we currently do not have the
ability to draw upon the revolving credit facility portion of the 2007 Credit Facility for any immediate short-term funding needs or to incur additional long-term debt.

The fair value of the Companys total long-term debt, determined based on estimated market prices for similar issues of debt with consistent remaining maturities and terms, totaled approximately $361,000 at
December 31, 2008.

(9) Derivative Instruments

The Company uses certain derivative financial instruments to hedge the aggregate risk of interest rate fluctuations with respect to its long-term debt, which requires payments based on a variable interest rate index. These risks include:
increases in debt rates above the earnings of the encumbered assets, increases in debt rates resulting in the failure of certain debt ratio covenants, increases in debt rates such that assets can no longer be refinanced, and earnings volatility.

In order to reduce such risks, the Company primarily uses interest rate swap agreements to change floating-rate long term debt to
fixed-rate long-term debt. This type of hedge is intended to qualify as a cash-flow hedge under SFAS No. 133. For these instruments, the effective portion of the change in the fair value of the derivative is recorded in accumulated
other comprehensive income in the Statement of Stockholders Equity (Deficit) and recognized in the Statement of Operations in the same period in which the hedged transaction impacts earnings. The ineffective portion of the change in the fair
value of the derivative is immediately recognized in earnings.

On June 23, 2005, the Company entered into and designated an interest rate
swap based on a notional amount of $300,000 maturing June 2012 as a cash flow hedge. Under the swap agreement, the Company receives interest equivalent to one month LIBOR and pays a fixed rate of 4.135%, with settlements occurring monthly. For the
period from January 1, 2006 through February 19, 2006, the hedge was deemed ineffective and, as a result, the change in the fair value of the derivative of $2,605 was recognized through earnings. On February 20, 2006, the Company redesignated the
same interest rate swap as a cash flow hedge for accounting purposes. The fair value of the swap decreased by $1,082, net, of which $(1,472) was recognized through earnings and a $234 increase in fair value net of income taxes of $156 was recognized
through accumulated other comprehensive income. At December 31, 2006, the swap no longer qualified as an effective hedge. Therefore, the balance in accumulated other comprehensive income will be reclassified into earnings over the life of the hedged
item. On January 1, 2007, the Company redesignated the same interest rate swap as a cash flow hedge for accounting purposes. On August 18, 2008, the Company terminated the swap and entered into a settlement agreement with Goldman Sachs in the
aggregate amount of $18,947 which also includes the termination of the swap having a notional value of $270,000. The balance in accumulated other comprehensive income will be reclassified into



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(In thousands, except share data)



earnings over the remaining life of the item previously hedged. During the period from January 1, 2008 to August 18,
2008, the fair value of the swap decreased by $2,748, net, of which $2,383 was recognized through earnings and a $222 decrease in fair value, net of income taxes of $143 was recognized through accumulated other comprehensive income. During the year
ended December 31, 2008, $2,422 net of taxes of $1,558 was amortized and recognized through earnings relating to the balances in accumulated other comprehensive income as of December 31, 2006 and August 18, 2008. The estimated net amount to be
reclassified into earnings during the next twelve months is $8,256.

In connection with the 2006 Financing, the Company entered into and
designated an interest rate swap based on a notional amount of $270,000 maturing July 2011 as a cash flow hedge. Under the swap agreement, the Company receives interest equivalent to one month LIBOR and pays a fixed rate of 5.359%, with settlements
occurring monthly. On January 1, 2007, the swap was redesignated. Therefore, the balance in accumulated other comprehensive income will be reclassified into earnings over the life of the hedged item. On August 18, 2008, the Company terminated the
swap and entered into a settlement agreement with Goldman Sachs in the aggregate amount of $18,947 which also includes the termination of the swap having a notional value of $300,000. The balance in accumulated other comprehensive income will be
reclassified into earnings over the remaining life of the item previously hedged. During the period from January 1, 2008 to August 18, 2008, the effective portion of the decrease in fair value of the swap of $326, net of income taxes of $210 was
recognized through accumulated other comprehensive income. During the year ended December 31, 2008, $1,854 net of taxes of $1,193 was amortized and recognized through earnings relating to the balance in accumulated other comprehensive income as of
December 31, 2006 and August 18, 2008. The estimated net amount to be reclassified into earnings during the next twelve months is $5,413.

In connection with the 2007 Credit Facility, the Company entered into and designated an interest rate swap based on a notional amount of $100,000 maturing September 2014, as a cash flow hedge. Under the swap agreement, the Company receives
interest equivalent to one-month LIBOR and pays a fixed rate of 5.14%, with settlements occurring monthly. During the year ended December 31, 2008, the fair value of the swap decreased by $596, net, of which $44 was recognized through earnings
and a $336 decrease in fair value net of income taxes of $216, was recognized through accumulated other comprehensive income.

In
connection with the 2007 Credit Facility, the Company entered into and designated an interest rate swap based on a notional amount of $250,000 maturing September 2014, as a cash flow hedge. Under the swap agreement, the Company receives interest
equivalent to one-month LIBOR and pays a fixed rate of 4.971%, with settlements occurring monthly. During the year ended December 31, 2008, the fair value of the swap decreased by $3,180, net, of which $369 was recognized through earnings and a
$1,710 decrease in fair value, net of income taxes of $1,101 was recognized through accumulated other comprehensive income.

In connection
with the First Amendment to the 2007 Credit Facility, the Company entered into and designated an interest rate swap based on a notional amount of $200,000 maturing September 2014, as a cash flow hedge. Under the swap agreement, the Company receives
interest equivalent to one-month LIBOR and pays a fixed rate of 5.079% with settlements occurring monthly. During the year ended December 31, 2008, the fair value of the swap decreased by $1,680, net, of which $278 was recognized through
earnings and a $853 decrease in fair value, net of income taxes of $549 was recognized through accumulated other comprehensive income.

During September, 2007, the Company entered into and designated an interest rate swap based on a notional amount of $75,000 maturing September 2014, as a cash flow hedge. Under the swap agreement, the Company receives interest equivalent to
one-month LIBOR and pays a fixed rate of 4.941% with settlements occurring



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(In thousands, except share data)



monthly. During the year ended December 31, 2008, the fair value of the swap decreased by $1,064, net, of which $18 was recognized through earnings and
a $636 decrease in fair value, net of income taxes of $410 was recognized through accumulated other comprehensive income.

A valuation
allowance was reversed during the year ended December 31, 2008 related to the decrease in deferred tax assets as a result of the change in fair value of the swap instruments in the amount of $557 for a net tax effect of $0.

The aggregate amount of unrealized loss related to derivative instruments recognized in other comprehensive income as of December 31, 2008 was $51,486.

(10) Income Taxes

Income tax expense
(benefit) for the periods shown below consisted of:



|                              |  |         |     |          |   |         |       |  |   |         |  
|----------------------------- |  | ------- | --- | -------- | - | ------- | ----- |  | - | ------- | -
|                              |  | Current |     | Deferred |   |         | Total | 
|Year ended December 31, 2008: |  |         |     |          |   |         |       |  |   |         |  
|U.S. Federal                  |  | $       |    |          | $ | (17,077 | )     |  | $ | (17,077 | )
|State and local               |  |         | 209 |          |   | (4,271  | )     |  |   | (4,062  | )
|                              |  |         |     |          |   |         |       |  |   |         |  
|                              |  | $       | 209 |          | $ | (21,348 | )     |  | $ | (21,139 | )
|                              |  |         |     |          |   |         |       |  |   |         |  
|Year ended December 31, 2007: |  |         |     |          |   |         |       |  |   |         |  
|U.S. Federal                  |  | $       |    |          | $ | (26,476 | )     |  | $ | (26,476 | )
|State and local               |  |         | 962 |          |   | (6,275  | )     |  |   | (5,313  | )
|                              |  |         |     |          |   |         |       |  |   |         |  
|                              |  | $       | 962 |          | $ | (32,751 | )     |  | $ | (31,789 | )
|                              |  |         |     |          |   |         |       |  |   |         |  
|Year ended December 31, 2006: |  |         |     |          |   |         |       |  |   |         |  
|U.S. Federal                  |  | $       |    |          | $ | (1,991  | )     |  | $ | (1,991  | )
|State and local               |  |         | 175 |          |   | (1,953  | )     |  |   | (1,778  | )
|                              |  |         |     |          |   |         |       |  |   |         |  
|                              |  | $       | 175 |          | $ | (3,944  | )     |  | $ | (3,769  | )
|                              |  |         |     |          |   |         |       |  |   |         |  

Income tax expense (benefit) differed from the amounts computed by applying the U.S. federal
income tax rate of 34% to income (loss) from continuing operations before income taxes as a result of the following:



|                                                     |  |                            |          |   |                            |   |         |                            |  |   |        |  
|---------------------------------------------------- |  | -------------------------- | -------- | - | -------------------------- | - | ------- | -------------------------- |  | - | ------ | -
|                                                     |  | Year EndedDecember 31,2008 |          |   | Year EndedDecember 31,2007 |   |         | Year EndedDecember 31,2006 | 
|Computed expected tax expense (benefit)            |  | $                          | (232,227 | ) |                            | $ | (90,411 | )                          |  | $ | (2,144 | )
|Increase (decrease) in income taxes resulting from:  |  |                            |          |   |                            |   |         |                            |  |   |        |  
|State and local income taxes, net of federal benefit |  |                            | (2,772   | ) |                            |   | (5,425  | )                          |  |   | (141   | )
|Change in effective state tax rate                   |  |                            |         |   |                            |   |        |                            |  |   | (1,556 | )
|Nondeductible meals and entertainment                |  |                            | 142      |   |                            |   | 92      |                            |  |   | 72     |  
|Return to provision adjustment                       |  |                            | 21       |   |                            |   | (1,399  | )                          |  |   |       |  
|Impairment of Non-Deductible Goodwill                |  |                            | 61,114   |   |                            |   | 24,676  |                            |  |   |       |  
|Change in valuation allowance                        |  |                            | 151,745  |   |                            |   | 39,775  |                            |  |   |       |  
|Increase to provision for unrecognized tax benefits  |  |                            | 209      |   |                            |   | 897     |                            |  |   |       |  
|Other                                                |  |                            | 629      |   |                            |   | 6       |                            |  |   |       |  
|                                                     |  |                            |          |   |                            |   |         |                            |  |   |        |  
|                                                     |  | $                          | (21,139  | ) |                            | $ | (31,789 | )                          |  | $ | (3,769 | )
|                                                     |  |                            |          |   |                            |   |         |                            |  |   |        |  

During the year ended December 31, 2008, income tax expense, net of income tax valuation
allowance related to discontinued operations, was $0.



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(In thousands, except share data)



The tax effects of temporary differences that give rise to significant portions of the deferred tax
assets and liabilities as of December 31, 2008 and 2007 are presented below:



|                                                                                                  |  |              |          |   |      |   |         |  
|------------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ---- | - | ------- | -
|                                                                                                  |  | December 31, |         
|                                                                                                  |  | 2008         |          |   | 2007 |  
|Deferred tax assets:                                                                              |  |              |          |   |      |   |         |  
|Accounts receivable, principally due to allowance for doubtful accounts                           |  | $            | 2,358    |   |      | $ | 1,517   |  
|Accrued expenses                                                                                  |  |              | 9,211    |   |      |   | 9,854   |  
|Derivative instrument                                                                             |  |              | 13,659   |   |      |   | 17,926  |  
|Pension and other postretirement benefit obligation                                               |  |              | 5,602    |   |      |   | 4,426   |  
|Long-lived and intangible assets, principally due to differences in depreciation and amortization |  |              | 92,751   |   |      |   |        |  
|Net operating losses                                                                              |  |              | 119,873  |   |      |   | 76,827  |  
|                                                                                                  |  |              |          |   |      |   |         |  
|Gross deferred tax assets                                                                         |  |              | 243,454  |   |      |   | 110,549 |  
|Less valuation allowance                                                                          |  |              | (243,454 | ) |      |   | (65,421 | )
|                                                                                                  |  |              |          |   |      |   |         |  
|Net deferred tax assets                                                                           |  |              |         |   |      |   | 45,128  |  
|                                                                                                  |  |              |          |   |      |   |         |  
|Deferred tax liabilities:                                                                         |  |              |          |   |      |   |         |  
|Long-lived and intangible assets, principally due to differences in depreciation and amortization |  |              |         |   |      |   | 66,565  |  
|                                                                                                  |  |              |          |   |      |   |         |  
|Gross deferred tax liabilities                                                                    |  |              |         |   |      |   | 66,565  |  
|                                                                                                  |  |              |          |   |      |   |         |  
|Net deferred tax liability                                                                        |  | $            |         |   |      | $ | 21,437  |  
|                                                                                                  |  |              |          |   |      |   |         |  

In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible. In assessing the realizability of the Companys deferred tax assets, which are principally net operating loss carryforwards, management considers the reversal of deferred tax liabilities which are scheduled to
reverse during the carryforward period and tax planning strategies.

During the period from June 6, 2005 to December 31, 2005,
the valuation allowance increased by $32,180, of which $280 was charged to earnings and $31,900 was recorded as an increase to goodwill, related to the Merger. During the year ended December 31, 2006, the valuation allowance of $32,430 was
reduced to $1,100 with a corresponding adjustment to goodwill, primarily as a result of the Enterprise NewsMedia, LLC acquisition. During the year ended December 31, 2007, the valuation allowance increased by $64,321, of which $45,800 was
charged to earnings, and $18,521 was recorded through accumulated other comprehensive income. During the year ended December 31, 2008, the valuation allowance increased by $178,032, of which $178,309 was charged to earnings, $915 reduction was
related to purchase accounting adjustments and $638 was recorded through accumulated other comprehensive income.

At December 31,
2008, the Company has net operating loss carryforwards for Federal and state income tax purposes of approximately $310,170, which are available to offset future taxable income, if any. These Federal and state net operating loss carryforwards begin
to expire on various dates from 2018 through 2028. A portion of these net operating losses are subject to the limitations of Internal Revenue Code Section 382. This section provides limitations on the availability of net operating losses to
offset current taxable income if significant ownership changes have occurred for Federal tax purposes.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The Company revised its consolidated financial statements for the year ended December 31, 2006
due to a purchase accounting tax adjustment identified in the current year. The Company overstated both its deferred tax liability and goodwill balances as of December 31, 2006 primarily related to deferred taxes being calculated on tax
deductible goodwill as part of the Merger. The result was a decrease of previously reported deferred tax liabilities and goodwill of approximately $36,226 as of December 31, 2006. This adjustment relates entirely to acquisition deferred taxes
and, as such, there is no impact on previously reported income tax expense or net income.

As discussed in Note 1, the Company adopted the
provisions of FIN 48 as of January 1, 2007. The cumulative effect of adopting FIN 48 had no effect on the Companys retained earnings. The total amount of unrecognized tax benefits as of the date of adoption was $3,621 million. At
December 31, 2008, the Company had unrecognized tax benefits of $4,726 of which $1,105, if recognized, would impact the effective tax rate. The remaining amount of $3,621 would impact goodwill from previous acquisitions. The Company did not
record significant amounts of interest and penalties related to unrecognized tax benefits in 2008.

A reconciliation of the beginning and
ending amount of unrecognized tax benefits is as follows (in thousands):



|                                                  |  |   |      
|------------------------------------------------- |  | - | -----
|Balance as of January 1, 2008                     |  | $ | 4,518
|Increases based on tax positions prior to 2008    |  |   | 92   
|Increases based on tax positions in 2008          |  |   | 116  
|                                                  |  |   |      
|Unrecognized tax benefits as of December 31, 2008 |  | $ | 4,726
|                                                  |  |   |      

The Company does not anticipate significant increases or decreases in our uncertain tax positions
within the next twelve months. The Company recognizes penalties and interest relating to uncertain tax positions in the provision for income taxes.

The Company files a U.S. federal consolidated income tax return for which the statute of limitations remains open for the 2005 tax year and beyond. U.S. state jurisdictions have statute of limitations generally ranging from 3 to 6 years.
Currently, we do not have any returns under examination.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



(11) Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share (EPS):



|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|--------------------------------------------------------------- |  | -------------------------- | ---------- | - | -------------------------- | - | ---------- | -------------------------- |  | - | ---------- | -
|                                                                |  | Year EndedDecember 31,2008 |            |   | Year EndedDecember 31,2007 |   |            | Year EndedDecember 31,2006 | 
|Numerator for earnings per share calculation:                   |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Loss from continuing operations                                 |  | $                          | (661,880   | ) |                            | $ | (234,050   | )                          |  | $ | (2,486     | )
|Income (loss) from discontinued operations, net of income taxes |  |                            | (11,426    | ) |                            |   | 2,626      |                            |  |   | 912        |  
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Net loss                                                        |  | $                          | (673,306   | ) |                            | $ | (231,424   | )                          |  | $ | (1,574     | )
|Denominator for earnings per share calculation:                 |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Basic weighted average shares outstanding                       |  |                            | 57,058,454 |   |                            |   | 46,403,965 |                            |  |   | 25,087,535 |  
|Dilutive securities, including restricted share grants          |  |                            |           |   |                            |   |           |                            |  |   |           |  
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Diluted weighted average shares outstanding                     |  |                            | 57,058,454 |   |                            |   | 46,403,965 |                            |  |   | 25,087,535 |  
|Loss per sharebasic:                                           |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Loss from continuing operations                                 |  | $                          | (11.60     | ) |                            | $ | (5.04      | )                          |  | $ | (0.10      | )
|Income (loss) from discontinued operations, net of taxes        |  |                            | (0.20      | ) |                            |   | 0.05       |                            |  |   | 0.04       |  
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Net loss                                                        |  | $                          | (11.80     | ) |                            | $ | (4.99      | )                          |  | $ | (0.06      | )
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Income (loss) per sharediluted:                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Loss from continuing operations                                 |  | $                          | (11.60     | ) |                            | $ | (5.04      | )                          |  | $ | (0.10      | )
|Income (loss) from discontinued operations, net of taxes        |  |                            | (0.20      | ) |                            |   | 0.05       |                            |  |   | 0.04       |  
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  
|Net loss                                                        |  | $                          | (11.80     | ) |                            | $ | (4.99      | )                          |  | $ | (0.06      | )
|                                                                |  |                            |            |   |                            |   |            |                            |  |   |            |  

During the years ended December 31, 2008 and 2007, 868,492 and 1,035,480 RSGs,
respectively, were excluded from the computation of diluted loss per share because their effect would have been antidilutive.

(12) Employee Benefit
Plans

The Company maintains a GateHouse Media, Inc. defined contribution plan (the Defined Plan) designed to conform to IRS
rules for 401(k) plans for all of its employees satisfying minimum service requirements as set forth under the Defined Plan. The Defined Plan allows for a matching contribution at the discretion of the Company. Employees can contribute amounts up to
100% of their eligible gross wages to the plan, subject to IRS limitations. The Company matched 50% of a specified portion of employee contributions, which specified portion ranges from 1% to 6% of eligible gross wages. During the years ended
December 31, 2008, 2007 and 2006, the Companys matching contributions to the plan were $3,060, $1,264 and $176, respectively.

The Company maintains three nonqualified deferred compensation plans, as described below, for certain of its employees.

The
Company maintains the GateHouse Media, Inc. Publishers Deferred Compensation Plan (Publishers Plan), a nonqualified deferred compensation plan for the benefit of certain designated publishers of the Companys newspapers. Under
the Publishers Plan, the Company credits an amount to a bookkeeping account established for each participating publisher pursuant to a pre-determined formula, which is based upon the gross operating profits of each such publishers newspaper.
The bookkeeping account is credited with earnings and losses based upon the investment choices selected by the participant. The amounts credited to the bookkeeping account on behalf of each participating publisher vest on an installment basis over a
period of 15 years. A participating publisher forfeits all amounts under the Publishers Plan in the event that the publishers



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



employment with the Company is terminated for cause, as defined in the Publishers Plan. Amounts credited to a participating publishers
bookkeeping account are distributable upon termination of the publishers employment with the Company and will be made in a lump sum or installments as elected by the publisher. The Publishers Plan was frozen effective as of
December 31, 2006, and all accrued benefits of participants under the terms of the Publishers Plan became 100% vested. The Company recorded $0, $0 and $0 of compensation expense related to the Publishers Plan for the years ended
December 31, 2008, 2007 and 2006, respectively.

The Company maintains the GateHouse Media, Inc. Executive Benefit Plan
(Executive Benefit Plan), a nonqualified deferred compensation plan for the benefit of certain key employees of the Company. Under the Executive Benefit Plan, the Company credits an amount, determined at the Companys sole
discretion, to a bookkeeping account established for each participating key employee. The bookkeeping account is credited with earnings and losses based upon the investment choices selected by the participant. The amounts credited to the bookkeeping
account on behalf of each participating key employee vest on an installment basis over a period of 5 years. A participating key employee forfeits all amounts under the Executive Benefit Plan in the event that the key employees employment with
the Company is terminated for cause, as defined in the Executive Benefit Plan. Amounts credited to a participating key employees bookkeeping account are distributable upon termination of the key employees employment with the
Company, and will be made in a lump sum or installments as elected by the key employee. The Executive Benefit Plan was frozen effective as of December 31, 2006, and all accrued benefits of participants under the terms of the Executive Benefit
Plan became 100% vested. The Company recorded $0, $0 and $0 of compensation expense related to the Executive Benefit Plan for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company maintains the GateHouse Media, Inc. Executive Deferral Plan (Executive Deferral Plan), a nonqualified deferred compensation plan
for the benefit of certain key employees of the Company. Under the Executive Deferral Plan, eligible key employees may elect to defer a portion of their compensation for payment at a later date. Currently, the Executive Deferral Plan allows a
participating key employee to defer up to 100% of his or her annual compensation until termination of employment or such earlier period as elected by the participating key employee. Amounts deferred are credited to a bookkeeping account established
by the Company for this purpose. The bookkeeping account is credited with earnings and losses based upon the investment choices selected by the participant. Amounts deferred under the Executive Deferral Plan are fully vested and non-forfeitable. The
amounts in the bookkeeping account are payable to the key employee at the time and in the manner elected by the key employee.

(13) Pension and
Postretirement Benefits

As a result of the Enterprise and Copley acquisitions, the Company maintains a pension plan and postretirement
medical and life insurance plans which cover certain employees. The Company uses the accrued benefit actuarial method and best estimate assumptions to determine pension costs, liabilities and other pension information for defined benefit plans.

The Company assumed a post retirement medical and life insurance plan as part of the acquisition of newspapers from Copley. An actuarial
valuation of the plan obligation had not been performed and the Company estimated a $460 obligation in accrued liabilities for this plan as of December 31, 2007. During the first quarter of 2008, a valuation was performed and a benefit obligation of
$2,217 was recorded, $2,037 of which was recognized through a purchase accounting adjustment.

The Enterprise pension plan was amended to
freeze all future benefit accruals as of December 31, 2008, except for a select group of union employees. Also, during 2008 the medical and life insurance benefits were frozen and the plan was amended to limit future benefits to a select group of
active employees under the Enterprise postretirement medical and life insurance plan. A curtailment gain in the amount of $2,434 was recognized related to the postretirement medical and life insurance plan during the year ended December 31, 2008.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The following provides information on the pension plan and postretirement medical and life insurance
plan as of December 31, 2008 and 2007, for the years ended December 31, 2008 and 2007.



|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|---------------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | - | ------ | -------------------------- |  | - | -------------------------- | - |  | - | ------ | -
|                                                     |  | Pension                    |         |   | Postretirement             |   |        | Pension                    |  |   | Postretirement             |  
|                                                     |  | Year EndedDecember 31,2008 |         |   | Year EndedDecember 31,2008 |   |        | Year EndedDecember 31,2007 |  |   | Year EndedDecember 31,2007 |  
|Change in projected benefit obligation:              |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Benefit obligation at beginning of period            |  | $                          | 20,754  |   |                            | $ | 11,304 |                            |  | $ | 21,102                     |   |  | $ | 9,697  |  
|Service cost                                         |  |                            | 431     |   |                            |   | 301    |                            |  |   | 548                        |   |  |   | 371    |  
|Interest cost                                        |  |                            | 1,291   |   |                            |   | 739    |                            |  |   | 1,286                      |   |  |   | 570    |  
|Actuarial (gain) loss                                |  |                            | 560     |   |                            |   | 864    |                            |  |   | (786                       | ) |  |   | (1,291 | )
|Benefits and expenses paid                           |  |                            | (1,568  | ) |                            |   | (385   | )                          |  |   | (1,396                     | ) |  |   | (260   | )
|Participant contributions                            |  |                            |        |   |                            |   | 25     |                            |  |   |                           |   |  |   |       |  
|Plan change                                          |  |                            |        |   |                            |   | (3,242 | )                          |  |   |                           |   |  |   |       |  
|Curtailments                                         |  |                            | (789    | ) |                            |   | (2,901 | )                          |  |   |                           |   |  |   |       |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Projected benefit obligation at end of period        |  | $                          | 20,679  |   |                            | $ | 6,705  |                            |  | $ | 20,754                     |   |  | $ | 9,087  |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Change in plan assets:                               |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Fair value of plan assets at beginning of period     |  | $                          | 17,429  |   |                            | $ |       |                            |  | $ | 16,723                     |   |  | $ |       |  
|Actual return on plan assets                         |  |                            | (3,556  | ) |                            |   |       |                            |  |   | 1,449                      |   |  |   |       |  
|Employer contributions                               |  |                            | 1,763   |   |                            |   | 360    |                            |  |   | 653                        |   |  |   | 260    |  
|Participant contributions                            |  |                            |        |   |                            |   | 25     |                            |  |   |                           |   |  |   |       |  
|Benefits paid                                        |  |                            | (1,372  | ) |                            |   | (385   | )                          |  |   | (1,202                     | ) |  |   | (260   | )
|Expenses paid                                        |  |                            | (198    | ) |                            |   |       |                            |  |   | (194                       | ) |  |   |       |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Fair value of plan assets at end of period           |  | $                          | 14,066  |   |                            | $ |       |                            |  | $ | 17,429                     |   |  | $ |       |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Reconciliation of funded status:                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Benefit obligation at end of period                  |  | $                          | (20,679 | ) |                            | $ | (6,705 | )                          |  | $ | (20,754                    | ) |  | $ | (9,087 | )
|Fair value of assets at end of period                |  |                            | 14,066  |   |                            |   |       |                            |  |   | 17,429                     |   |  |   |       |  
|Funded status                                        |  |                            | (6,613  | ) |                            |   | (6,705 | )                          |  |   | (3,325                     | ) |  |   | (9,087 | )
|Unrecognized prior service cost                      |  |                            |        |   |                            |   | (3,243 | )                          |  |   |                           |   |  |   |       |  
|Unrecognized actuarial (gain) loss                   |  |                            | 3,329   |   |                            |   | 32     |                            |  |   | (1,443                     | ) |  |   | (441   | )
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Net accrued benefit cost                             |  | $                          | (3,284  | ) |                            | $ | (9,916 | )                          |  | $ | (4,768                     | ) |  | $ | (9,528 | )
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Balance sheet presentation:                          |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Accrued liabilities                                  |  | $                          |        |   |                            | $ | 509    |                            |  | $ |                           |   |  | $ | 405    |  
|Pension and other postretirement benefit obligations |  |                            | 6,613   |   |                            |   | 6,196  |                            |  |   | 3,325                      |   |  |   | 8,682  |  
|Accumulated other comprehensive income               |  |                            | (3,329  | ) |                            |   | 3,211  |                            |  |   | 875                        |   |  |   | 276    |  
|Deferred taxes                                       |  |                            |        |   |                            |   |       |                            |  |   | 568                        |   |  |   | 165    |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Net accrued benefit cost                             |  | $                          | 3,284   |   |                            | $ | 9,916  |                            |  | $ | 4,768                      |   |  | $ | 9,528  |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Components of net periodic benefit cost:             |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Service cost                                         |  | $                          | 431     |   |                            | $ | 301    |                            |  | $ | 548                        |   |  | $ | 371    |  
|Interest cost                                        |  |                            | 1,291   |   |                            |   | 739    |                            |  |   | 1,286                      |   |  |   | 570    |  
|Expected return on plan assets                       |  |                            | (1,487  | ) |                            |   |       |                            |  |   | (1,438                     | ) |  |   |       |  
|Amortization of prior service cost                   |  |                            |        |   |                            |   |       |                            |  |   |                           |   |  |   |       |  
|Amortization of unrecognized loss                    |  |                            |        |   |                            |   |       |                            |  |   |                           |   |  |   |       |  
|Special termination benefits                         |  |                            | 42      |   |                            |   |       |                            |  |   | 288                        |   |  |   |       |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Net periodic benefit cost                            |  | $                          | 277     |   |                            | $ | 1,040  |                            |  | $ | 684                        |   |  | $ | 941    |  
|                                                     |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Comparison of obligations to plan assets:            |  |                            |         |   |                            |   |        |                            |  |   |                            |   |  |   |        |  
|Projected benefit obligation                         |  | $                          | 20,679  |   |                            | $ | 6,705  |                            |  | $ | 20,754                     |   |  | $ | 9,087  |  
|Accumulated benefit obligation                       |  |                            | 20,612  |   |                            |   | 6,705  |                            |  |   | 19,964                     |   |  |   | 9,087  |  
|Fair value of plan assets                            |  |                            | 14,066  |   |                            |   |       |                            |  |   | 17,429                     |   |  |   |       |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The following assumptions were used in connection with the Companys actuarial valuation of its
defined benefit pension and postretirement plans:



|                                               |  |                            |   |  |                            |   |  |                            |   |  |                            |  
|---------------------------------------------- |  | -------------------------- | - |  | -------------------------- | - |  | -------------------------- | - |  | -------------------------- | -
|                                               |  | Pension                    |   |  | Postretirement             |   |  | Pension                    |   |  | Postretirement             |  
|                                               |  | Year EndedDecember 31,2008 |   |  | Year EndedDecember 31,2008 |   |  | Year EndedDecember 31,2007 |   |  | Year EndedDecember 31,2007 |  
|Weighted average discount rate                 |  | 6.2                        | % |  | 6.2                        | % |  | 6.4                        | % |  | 6.5                        | %
|Rate of increase in future compensation levels |  | 3.0                        | % |  |                           |   |  | 3.0                        | % |  |                           |  
|Expected return on assets                      |  | 8.5                        | % |  |                           |   |  | 8.5                        | % |  |                           |  
|Current year trend                             |  |                           |   |  | 8.8                        | % |  |                           |   |  | 8.5                        | %
|Ultimate year trend                            |  |                           |   |  | 5.3                        | % |  |                           |   |  | 5.5                        | %
|Year of ultimate trend                         |  |                           |   |  | 2017                       |   |  |                           |   |  | 2012                       |  

The following assumptions were used to calculate the net periodic benefit cost for the
Companys defined benefit pension and post retirement plans:



|                                               |  |                            |  |                            |   |  |                            |   |  |                            |  
|---------------------------------------------- |  | -------------------------- |  | -------------------------- | - |  | -------------------------- | - |  | -------------------------- | -
|                                               |  | Pension                    |  | Postretirement             |   |  | Pension                    |   |  | Postretirement             |  
|                                               |  | Year EndedDecember 31,2008 |  | Year EndedDecember 31,2008 |   |  | Year EndedDecember 31,2007 |   |  | Year EndedDecember 31,2007 |  
|Weighted average discount rate                 |  | 6.4%                       |  | 6.5                        | % |  | 6.04                       | % |  | 6.0                        | %
|Rate of increase in future compensation levels |  | 3.0%                       |  |                           |   |  | 3.5                        | % |  |                           |  
|Expected return on assets                      |  | 8.5%                       |  |                           |   |  | 8.5                        | % |  |                           |  
|Current year trend                             |  |                           |  | 9.0                        | % |  |                           |   |  | 8.5                        | %
|Ultimate year trend                            |  |                           |  | 5.3                        | % |  |                           |   |  | 5.5                        | %
|Year of ultimate trend                         |  |                           |  | 2018                       |   |  |                           |   |  | 2011                       |  

To determine the expected long-term rate of return on pension plan assets, the Company considers
the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the actuaries and investment consultants, and long-term inflation assumptions. The expected allocation of pension
plan assets is based on a diversified portfolio consisting of domestic and international equity securities and fixed income securities. This expected return is then applied to the fair value of plan assets. The Company amortizes experience gains and
losses, including the effects of changes in actuarial assumptions and plan provisions over a period equal to the average future service of plan participants.

Amortization of prior service costs was calculated using the straight-line method over the average remaining service periods of the employees expected to receive benefits under the plan.



|                                                      |  |                            |       |   
|----------------------------------------------------- |  | -------------------------- | ----- | --
|                                                      |  | Postretirement             |      
|                                                      |  | Year EndedDecember 31,2008 |      
|Effect of 1% increase in health care cost trend rates |  |                            |       |   
|APBO                                                  |  | $                          | 7,241 |   
|Dollar change                                         |  | $                          | 535   |   
|Percent change                                        |  |                            | 7.4   | % 
|Effect of 1% decrease in health care cost trend rates |  |                            |       |   
|APBO                                                  |  | $                          | 6,267 |   
|Dollar change                                         |  | $                          | (439  | ) 
|Percent change                                        |  |                            | (7.0  | )%



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The pension plans assets by asset category are as follows:



|             |  |                  |   |  |                  |  
|------------ |  | ---------------- | - |  | ---------------- | -
|             |  | Pension          |   |  | Pension          |  
|             |  | December 31,2008 |   |  | December 31,2007 |  
|Equity funds |  | 60               | % |  | 66               | %
|Debt funds   |  | 20               | % |  | 30               | %
|Other        |  | 20               | % |  | 4                | %
|             |  |                  |   |  |                  |  
|Total        |  | 100              | % |  | 100              | %
|             |  |                  |   |  |                  |  

Plan fiduciaries of the George W. Prescott Publishing Company LLC Pension Plan set investment
policies and strategies for the pension trust. Objectives include preserving the funded status of the plan and balancing risk against return. The general target allocation is 70% in equity funds and 30% in fixed income funds for the plans
investments. To accomplish this goal, each plans assets are actively managed by outside investment managers with the objective of optimizing long-term return while maintaining a high standard of portfolio quality and proper diversification.
The Company monitors the maturities of fixed income securities so that there is sufficient liquidity to meet current benefit payment obligations.

The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid as follows:



|                                                                                   |  |         |       |                |   |      
|---------------------------------------------------------------------------------- |  | ------- | ----- | -------------- | - | -----
|                                                                                   |  | Pension |       | Postretirement
|2009                                                                               |  | $       | 1,328 |                | $ | 510  
|2010                                                                               |  |         | 1,315 |                |   | 484  
|2011                                                                               |  |         | 1,322 |                |   | 484  
|2012                                                                               |  |         | 1,381 |                |   | 457  
|2013                                                                               |  |         | 1,435 |                |   | 460  
|2014-2018                                                                          |  |         | 7,469 |                |   | 2,155
|Employer contribution expected to be paid during the year ending December 31, 2009 |  | $       | 812   |                | $ | 510  

The postretirement plans are not funded.

The aggregate amount of net actuarial loss and prior service cost related to the Companys pension and post retirement plans recognized in other
comprehensive income as of December 31, 2008 was $118.

(14) Stock Compensation Plans

Omnibus Stock Incentive Plan

On October 5, 2006, the Company adopted a new equity
incentive plan for its employees, the GateHouse Media, Inc. Omnibus Stock Incentive Plan (the Plan) and presented the Plan to the Companys stockholders for approval, which was received on October 6, 2006. The purposes of
the Plan are to strengthen the commitment of the Companys employees, motivate them to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons who are essential to the success of the
business and whose efforts will result in the Companys long-term growth and profitability. To accomplish such purposes, the Plan provides for the issuance of stock options, stock appreciation rights, restricted shares, deferred shares,
performance shares, unrestricted shares and other stock-based awards.

A total of 2,000,000 shares of the Companys common stock were
initially reserved for issuance under the Plan, provided however, that commencing on the first day of each fiscal year beginning in calendar year 2007,



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



the number of shares reserved and available for issuance is increased by an amount equal to 100,000. All such shares of the Companys common stock that
are available for the grant of awards under the Plan may be granted as incentive stock options. When Section 162(m) of the Internal Revenue Code (the Code) becomes applicable, the maximum aggregate number of shares that will be
subject to stock options or stock appreciation rights that may be granted to any individual during any fiscal year will be 400,000 and the maximum aggregate number of shares that will be subject to awards of restricted stock, deferred shares,
unrestricted shares or other stock-based awards that may be granted to any individual during any fiscal year will be 400,000.

The Plan was
initially administered by the Companys board of directors, although it may be administered by either the board of directors or any committee of the board of directors including a committee that complies with the applicable requirements of
Section 162(m) of the Code, Section 16 of the Exchange Act and any other applicable legal or stock exchange listing requirements. On October 5, 2006, the Companys board of directors authorized the Compensation Committee of the
board of directors to administer the Plan.

Except as otherwise provided by the Plan administrator, on the first business day after the
Companys annual meeting of stockholders and each such annual meeting thereafter during the term of the Plan, each of the Companys independent directors who is serving following such annual meeting will automatically be granted under the
Plan a number of unrestricted shares of common stock having a fair market value of $15 as of the date of grant; however, those of the Companys independent directors who were granted restricted common stock upon the consummation of the IPO will
not be eligible to receive these automatic annual grants.

The terms of the Plan provide that the board of directors may amend, alter or
discontinue the Plan, but no such action may impair the rights of any participant with respect to outstanding awards without the participants consent. The Plan administrator, however, reserves the right to amend, modify, or supplement an award
to either bring it into compliance with Section 409A of the Code, or to cause the award to not be subject to such section. Unless the board of directors determines otherwise, stockholder approval of any such action will be obtained if required
to comply with applicable law. The Plan will terminate on October 5, 2016.

As of December 31, 2008 and 2007, a total of 343,492
and 281,980 RSGs were outstanding under the Plan, respectively.

Stock Option Plan

In February 1999, the Company adopted the Option Plan under which certain employees may be granted the right to purchase shares of common stock. Pursuant
to the Option Plan, GateHouse granted incentive stock options and two types of nonqualified stock options, one type for publishers and the other type for corporate employees. Stock options may be exercised only to the extent they have vested in
accordance with the provisions described in the individual option award agreements. Generally, options vest under the incentive stock option awards on the first anniversary of the grant date. Generally, under the nonqualified stock option awards for
publishers, options vest with respect to 50% of the shares on the third anniversary of the grant date and with respect to the remaining 50% on the eighth anniversary of the grant date. However, the vesting period for the remaining 50% may be
accelerated if certain financial targets are met. Generally, options vest under the nonqualified stock option awards for corporate employees on the third anniversary of the grant date. In conjunction with the Merger, each outstanding option under
the Option Plan was cancelled for cash consideration per share equal to the difference between the conversion amount of $0.10 per share or an aggregate amount of $93. In June 2006, the Option Plan was terminated.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



(15) Assets Held for Sale

As of December 31, 2008 and 2007, the Company intended to dispose of various assets which are classified as held for sale on the consolidated balance sheet in accordance with SFAS No. 144. The following
table summarizes the major classes of assets and liabilities held for sale at December 31, 2008 and 2007:



|                                          |  |                  |        |                  |   |       
|----------------------------------------- |  | ---------------- | ------ | ---------------- | - | ------
|                                          |  | December 31,2008 |        | December 31,2007
|Assets held for sale:                     |  |                  |        |                  |   |       
|Accounts receivable, net                  |  | $                |       |                  | $ | 1,314 
|Inventory                                 |  |                  |       |                  |   | 152   
|Prepaid expenses and other current assets |  |                  |       |                  |   | 74    
|                                          |  |                  |        |                  |   |       
|Total assets held for sale                |  | $                |       |                  | $ | 1,540 
|                                          |  |                  |        |                  |   |       
|Long-term assets held for sale:           |  |                  |        |                  |   |       
|Property, plant and equipment, net        |  | $                | 13,119 |                  | $ | 15,842
|Intangible assets                         |  |                  |       |                  |   | 7,422 
|                                          |  |                  |        |                  |   |       
|Total long-term assets held for sale      |  | $                | 13,119 |                  | $ | 23,264
|                                          |  |                  |        |                  |   |       
|Liabilities held for sale                 |  | $                |       |                  | $ | 623   
|                                          |  |                  |        |                  |   |       

During the years ended December 31, 2008 and 2007, the Company recorded a charge to
operations of $9,706 and $1,553, respectively, related to the impairment of property, plant and equipment and certain intangible assets which were either classified as held for sale as of December 31, 2008 or 2007, or disposed of during the
years ended December 31, 2008 or 2007, respectively.

(16) Fair Value Measurement

The Company measures and records in the accompanying condensed consolidated financial statements certain assets and liabilities at fair value on a
recurring basis. SFAS No. 157 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Companys own assumptions (unobservable
inputs).

These inputs are prioritized as follows:



| |  |  | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or
liabilities or market corroborated inputs; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the
asset or liability.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The valuation techniques that may be used to measure fair value are as follows:



| |  |  | Market approachUses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Income approachUses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cost approachBased on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



The following table provides fair value measurement information for the Companys major
categories of financial assets and liabilities measured on a recurring basis:



|                |  |                                                             |  |                                             |  |                                        |        |                  |   |       
|--------------- |  | ----------------------------------------------------------- |  | ------------------------------------------- |  | -------------------------------------- | ------ | ---------------- | - | ------
|                |  | Fair Value Measurements at Reporting Date Using             |  |                                            
|                |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |  | Significant OtherObservable Inputs(Level 2) |  | SignificantUnobservableInputs(Level 3) |        | December 31,2008
|Liabilities     |  |                                                             |  |                                             |  |                                        |        |                  |   |       
|Derivatives (1) |  |                                                             |  |                                             |  | $                                      | 34,957 |                  | $ | 34,957





|(1) | Derivative assets and liabilities include interest rate swaps which are measured using the Companys assumptions about the assumptions market participant would use in pricing
the derivative. The calculation of fair value of the Companys derivatives in a liability position includes the Companys own credit risk.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the first two quarters of 2008, the Company used level two inputs to calculate the fair value of its derivative instruments. The credit value adjustment was calculated as the difference between the swap yield
curve and the yield curve corresponding to the Companys credit rating. When the Companys credit rating was downgraded, this methodology could no longer be applied as the yield curve corresponding to the new credit rating is not
available.

Beginning in the third quarter of 2008, the Company began calculating the credit value adjustment based on the credit default
swap spread of companies having a similar credit rating. The Company also considers it necessary to apply a floor to the credit adjustment based on the estimated recovery rate of the unadjusted value of the derivative instruments.

The following tables reflect the activity of our assets and liabilities measured at fair value using level 3 inputs for the year ended December 31, 2008:



|                                                |  |                       |         |  
|----------------------------------------------- |  | --------------------- | ------- | -
|Year Ended December 31, 2008                    |  | DerivativeLiabilities |        
|Balance as of June 30, 2008                     |  | $                     | 36,891  |  
|Settlements                                     |  |                       | (18,947 | )
|Total gains/(losses), net:                      |  |                       |         |  
|Included in earnings (or changes in net assets) |  |                       | 1,906   |  
|Included in other comprehensive income          |  |                       | 15,107  |  
|                                                |  |                       |         |  
|Balance as of December 31, 2008                 |  | $                     | 34,957  |  
|                                                |  |                       |         |  

Certain assets and liabilities are measured at fair value on a non-recurring basis and are not
currently required to be presented on an interim basis. The FASB deferred implementation of SFAS No. 157 for certain non-financial assets and liabilities until 2009.

(17) Commitments and Contingencies

The Company becomes involved from time to time in claims and
lawsuits incidental to the ordinary course of its business, including such matters as libel, invasion of privacy, intellectual property infringement, wrongful termination actions, and complaints alleging discrimination. In addition, the Company is
involved from time to time



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



in governmental and administrative proceedings concerning employment, labor, environmental and other claims. Insurance coverage mitigates potential loss for
certain of these matters. Historically, such claims and proceedings have not had a material effect upon the Companys consolidated results of operations or financial condition. While the Company is unable to predict the ultimate outcome of any
currently outstanding legal actions, it is the opinion of the Companys management that it is a remote possibility that the disposition of these matters would have a material adverse effect upon the Companys consolidated results of
operations, financial condition or cash flow.

Included in cash and cash equivalents at December 31, 2008 are certificates of deposits,
having maturities of less than three months, in the aggregate amount of $5,197. These amounts are currently used to collateralize standby letters of credit in the name of the Companys insurers in accordance with certain insurance policies.

(18) Related-Party Transactions

As of
December 31, 2008, Fortress Investment Group LLC and its affiliates (Fortress) beneficially owned approximately 41.9% of the Companys outstanding common stock.

In addition, the Companys Chairman, Wesley Edens, is also the Chief Executive Officer and Chairman of the board of directors of Fortress Investment
Group LLC. The Company does not pay Mr. Edens a salary or any other form of compensation.

Affiliates of Fortress Investment Group LLC
own $126,000 of the $1,195,000 2007 Credit Facility as of December 31, 2008. These amounts were purchased on arms length terms in secondary market transactions.

Affiliates of Fortress Investment Group LLC own $8,500 of the $17,000 2008 Bridge Facility as of December 31, 2008. These amounts were purchased directly
from Barclays.

On August 21, 2008, FIF III Liberty Holdings LLC (FIF III) purchased an aggregate of $11,500 in 10% cumulative
preferred stock of GateHouse Media Macomb Holdings, Inc. (Macomb), an operating subsidiary of the Company. The preferred stock was issued on August 21, 2008. Macomb, an Unrestricted Subsidiary under the terms of the 2007 Credit Facility,
used the proceeds from such sale of preferred stock to make an $11,500 cash investment in Holdco non-voting 10% cumulative preferred stock. FIF III may require the Company to purchase its Macomb preferred stock during the five-year period following
the full repayment by the Company of the 2008 Bridge Facility for an amount equal to the original purchase price plus accrued but unpaid dividends. FIF III is an affiliate of Parent.

On October 24, 2006, the Company entered into an Investor Rights Agreement with Parent, an affiliate of Fortress, our principal and controlling
stockholder. The Investor Rights Agreement provides Parent with certain rights with respect to the nomination of directors to the Companys board of directors as well as registration rights for securities of the Company owned by Fortress
Investment Group LLC.

The Investor Rights Agreement requires the Company to take all necessary or desirable action within its control to
elect to its board of directors so long as Fortress beneficially owns (i) more than 50% of the voting power of the Company, four directors nominated by FIG Advisors LLC, an affiliate of Fortress Investment Group LLC (FIG Advisors),
or such other party nominated by Fortress; (ii) between 25% and 50% of the voting power of the Company, three directors nominated by FIG Advisors; (iii) between 10% and 25% of the voting power of the Company, two directors nominated by FIG
Advisors; and (iv) between 5% and 10% of the



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



voting power of the Company, one director nominated by FIG Advisors. In the event that any designee of FIG Advisors shall for any reason cease to serve as a
member of the board of directors during his term of office, FIG Advisors will be entitled to nominate an individual to fill the resulting vacancy on the board of directors.

Pursuant to the Investor Rights Agreement, the Company has granted Parent, for so long as it or its permitted transferees beneficially own an amount of
the Companys common stock at least equal to 5% or more of the Companys common stock issued and outstanding immediately after the consummation of its IPO (a Registrable Amount), demand registration rights that
allow Parent at any time after six months following the consummation of its IPO to request that the Company register under the Securities Act of 1933, as amended, an amount equal to or greater than a Registrable Amount. Parent is entitled to an
aggregate of four demand registrations. The Company is not required to maintain the effectiveness of the registration statement for more than 60 days. The Company is also not required to effect any demand registration within six months of a
firm commitment underwritten offering to which the requestor held piggyback rights and which included at least 50% of the securities requested by the requestor to be included. The Company is not obligated to grant a request
for a demand registration within four months of any other demand registration and may refuse a request for demand registration if, in the Companys reasonable judgment, it is not feasible for the Company to proceed with the registration because
of the unavailability of audited financial statements.

For as long as Parent and its permitted transferees beneficially own an amount of
the Companys common stock at least equal to 1% of the Companys common stock issued and outstanding immediately after the consummation of its IPO, Parent also has piggyback registration rights that allow Parent to include the
shares of common stock that Parent and its permitted transferees own in any public offering of equity securities initiated by the Company (other than those public offerings pursuant to registration statements on Forms S-4 or S-8) or by any of the
Companys other stockholders that may have registration rights in the future. The piggyback registration rights of Parent are subject to proportional cutbacks based on the manner of the offering and the identity of the party
initiating such offering.

The Company has granted Parent and its permitted transferees for as long as Fortress beneficially owns a
Registrable Amount, the right to request shelf registrations on Form S-3, providing for an offering to be made on a continuous basis, subject to a time limit on the Companys efforts to keep the shelf registration statement continuously
effective and the Companys right to suspend the use of a shelf registration prospectus for a reasonable period of time (not exceeding 60 days in succession or 90 days in the aggregate in any 12-month period) if the Company determines that
certain disclosures required by the shelf registration statement would be detrimental to the Company or the Companys stockholders.

The Company has agreed to indemnify Parent and its permitted transferees against any losses or damages resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to which Parent and
its permitted transferees sells shares of the Companys common stock, unless such liability arose from Parents misstatement or omission, and Parent has agreed to indemnify the Company against all losses caused by its misstatements or
omissions. The Company will pay all expenses incident to registration and Fortress will pay its respective portions of all underwriting discounts, commissions and transfer taxes relating to the sale of its shares under such a registration statement.

(19) Discontinued Operations

On
September 14, 2007, the Company completed its sale of The Herald Dispatch and related publications (initially acquired in the Gannett Co., Inc. acquisition) which are located in Huntington, West Virginia for a purchase price of
approximately $77,000.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



During the year ended December 31, 2008, the Company completed its sale of twelve publications
(initially acquired in the Morris Publishing Group newspaper acquisition) for an aggregate purchase price of approximately $35,380. Additionally, during the year ended December 31, 2008, the Company completed its sale of fifteen publications
acquired through various acquisitions for an aggregate purchase price of approximately $9,277.

The net revenue during the years ended
December 31, 2008 and 2007 for the aforementioned discontinued operations was $15,376 and $18,142, respectively. Income (loss) before income taxes during the years ended December 30, 2008 and 2007 for the aforementioned discontinued operations was
$(11,426) and $4,073, respectively. During the year ended December 31, 2008, the Company recorded a charge to operations of $9,114 related to certain publications which were sold during the period.

(20) Quarterly Results (unaudited)



|                             |  |                          |         |   |                             |   |          |                              |  |   |                                 |   |  |   |          |  
|---------------------------- |  | ------------------------ | ------- | - | --------------------------- | - | -------- | ---------------------------- |  | - | ------------------------------- | - |  | - | -------- | -
|                             |  | Quarter EndedMarch 31(a) |         |   | Quarter EndedJune 30(a),(b) |   |          | Quarter EndedSeptember 30(a) |  |   | Quarter EndedDecember 31(b)     |  
|Year Ended December 31, 2008 |  |                          |         |   |                             |   |          |                              |  |   |                                 |   |  |   |          |  
|Revenues                     |  | $                        | 163,950 |   |                             | $ | 179,139  |                              |  | $ | 171,516                         |   |  | $ | 168,494  |  
|Impairment loss              |  |                          |        |   |                             |   | (439,205 | )                            |  |   |                                |   |  |   | (176,342 | )
|Operating income (loss)      |  |                          | 179     |   |                             |   | (426,413 | )                            |  |   | 9,787                           |   |  |   | (166,461 | )
|Loss before income taxes     |  |                          | (25,553 | ) |                             |   | (451,270 | )                            |  |   | (15,738                         | ) |  |   | (190,458 | )
|Net loss                     |  |                          | (28,790 | ) |                             |   | (443,251 | )                            |  |   | (18,507                         | ) |  |   | (182,758 | )
|Basic loss per share         |  | $                        | (0.51   | ) |                             | $ | (7.77    | )                            |  | $ | (0.32                           | ) |  | $ | (3.20    | )
|Diluted loss per share       |  | $                        | (0.51   | ) |                             | $ | (7.77    | )                            |  | $ | (0.32                           | ) |  | $ | (3.20    | )
|                             |  |                          |         |  
|                             |  | Quarter EndedMarch 31(a) |         |   | Quarter EndedJune 30(a)     |   |          | Quarter EndedSeptember 30(a) |  |   | Quarter EndedDecember 31(a),(b) |  
|Year Ended December 31, 2007 |  |                          |         |   |                             |   |          |                              |  |   |                                 |   |  |   |          |  
|Revenues                     |  | $                        | 92,895  |   |                             | $ | 156,388  |                              |  | $ | 161,186                         |   |  | $ | 168,991  |  
|Impairment loss              |  |                          |        |   |                             |   |         |                              |  |   |                                |   |  |   | (227,546 | )
|Operating income             |  |                          | 1,829   |   |                             |   | 18,075   |                              |  |   | 12,116                          |   |  |   | (214,398 | )
|Loss before income taxes     |  |                          | (8,789  | ) |                             |   | (4,523   | )                            |  |   | (15,281                         | ) |  |   | (237,246 | )
|Net loss                     |  |                          | (6,079  | ) |                             |   | (1,964   | )                            |  |   | (8,754                          | ) |  |   | (214,627 | )
|Basic loss per share         |  | $                        | (0.16   | ) |                             | $ | (0.05    | )                            |  | $ | (0.17                           | ) |  | $ | (3.78    | )
|Diluted loss per share       |  | $                        | (0.16   | ) |                             | $ | (0.05    | )                            |  | $ | (0.17                           | ) |  | $ | (3.78    | )



|(a) | Certain amounts differ from those previously reported on Forms 10-Q and 10-K due to the reclassification of discontinued operations as described in Note 19 to the consolidated
Financial Statements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Impairment charges recorded in the second and fourth quarters of 2008 and the fourth quarter of 2007 are included above due to their size and unusual nature.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

(21) Subsequent Events

On February 3, 2009, the Company and certain its subsidiaries and affiliates entered into a Second Amendment to the 2007 Credit Agreement. The Amendment permits the subsidiary to repurchase term loans outstanding under the 2007 Credit
Agreement at prices below par through one or more Modified Dutch Auctions through December 31, 2011, subject to certain provisions. The Amendment also reduces the aggregate principal amounts available under the 2007 Credit Agreement. Refer to Note 8
for additional discussion of the Amendment.



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GATEHOUSE MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands, except share data)



On February 12, 2009, Holdco II entered into the Second Waiver and Amendment to the Bridge Facility.
The Second Waiver and Amendment waived compliance by Holdco II with the Total Leverage Ratio for the quarter ended December 31, 2008. The Second Waiver and Amendment also set the applicable margin for the Bridge Facility at 12.00% and established an
amortization schedule for the outstanding balance due under the Bridge Facility as follows:



|                        |  |                               |  |                 
|----------------------- |  | ----------------------------- |  | ----------------
|Installment             |  |                               |  | Principal Amount
|May 31, 2009            |  |                               |  | $1,500          
|June 30, 2009           |  |                               |  | $1,500          
|July 31, 2009           |  |                               |  | $1,500          
|August 31, 2009         |  |                               |  | $1,500          
|September 30, 2009      |  |                               |  | $5,000          
|October 31, 2009        |  |                               |  | $2,000          
|November 30, 2009       |  |                               |  | $2,000          
|Term Loan Maturity Date |  | Remaining outstanding amounts

Furthermore, under the Second Waiver and Amendment to the Bridge Facility, the covenant requiring
compliance with the Total Leverage Ratio was eliminated. Holdco II also agreed to prepay the Bridge Loan in any month, and only to the extent that, the month end cash balance exceeds the Projected Cash Balance by $2,000, starting in May of 2009, and
agreed to make certain prepayments in the event of any voluntary repurchase or prepayment of term loans under the 2007 Credit Facility.



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|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

Not applicable.



|Item 9A. | Controls and Procedures
|-------- | -----------------------

Conclusion Regarding the Effectiveness
of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2008, our disclosure controls and procedures were effective.

Changes in Internal Controls Over Financial Reporting

There have not been any changes in our internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Managements Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Our internal control system was designed under the supervision of our Chief Executive Officer and our Chief Financial Officer and with the participation of management in order to provide reasonable assurance regarding the
reliability of our financial reporting and our preparation of financial statements for external purposes in accordance with GAAP.

All
internal control systems, no matter how well designed and tested, have inherent limitations, including, among other things, the possibility of human error, circumvention or disregard. Therefore, even those systems of internal control that have been
determined to be effective can provide only reasonable assurance that the objectives of the control system are met and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of our Chief Executive Officer and our Chief Financial Officer and with the participation of management, we conducted an assessment of the effectiveness of our internal control over financial
reporting based on the criteria set forth in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on an assessment of such criteria, management concluded that,
as of December 31, 2008, we maintained effective internal control over financial reporting.



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The effectiveness of our internal control over financial reporting as of December 31, 2008, has been
audited by Ernst & Young LLP, an independent registered public accounting firm. Ernst & Young LLPs attestation report is included below.

Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public
Accounting Firm

The Board of Directors and Shareholders of GateHouse Media, Inc.

We have audited GateHouse Media Inc.s internal control over financial reporting as of December 31, 2008, based on criteria established in
Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). GateHouse Media Inc.s management is responsible for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Managements Annual Report on Internal Control over Financial Reporting. Our responsibility is to express
an opinion on the companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, GateHouse Media, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31,
2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated balance sheets of GateHouse Media, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders equity (deficit), and cash flows for
the years then ended and our report dated March 13, 2009 expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP

Buffalo,
New York

March 13, 2009



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|Item 9B. | Other Information
|-------- | -----------------

On March 12, 2009, awards of
annual cash bonuses to certain GateHouse Media, Inc. executive officers were declared, as set forth below. It is anticipated that such bonuses will be paid out late in the first quarter or early in the second quarter of 2009.



|                                                                                         |  |            |       
|---------------------------------------------------------------------------------------- |  | ---------- | ------
|Executive Officer                                                                        |  | Cash Bonus
|Michael R. Reed Chief Executive Officer                                                  |  | $          | 50,000
|                                                                                         | 
|Gene A. Hall Executive Vice President                                                    |  | $          | 50,000
|                                                                                         | 
|Scott T. Champion Regional Manager                                                       |  | $          | 50,000
|                                                                                         | 
|Polly Grunfeld Sack Senior Vice President, Secretary and General Counsel                 |  | $          | 75,000
|                                                                                         | 
|Kirk A. Davis President and Chief Operating Officer                                      |  | $          | 50,000
|                                                                                         | 
|Mark Maring Treasurer and Vice President of Investor Relations and Strategic Development |  | $          | 70,000



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PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------

Except as set forth below, the information required by this Item 10 is incorporated into this report by reference to our proxy statement to be issued in connection with our 2009 Annual Meeting of Stockholders under the headings
Election of Directors, Executive Officers, Corporate Governance and Section 16(a) Beneficial Ownership Reporting Compliance, which proxy statement will be filed within 120 days after the year ended
December 31, 2008.

We have adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller or persons performing similar functions. Our Code of Business Conduct and Ethics also applies to all of our other employees and, as set forth therein, to our directors. Our Code of
Business Conduct and Ethics is posted on our website at www.gatehousemedia.com under Investors/Governance. We intend to satisfy any disclosure requirements pursuant to Item 5.05 of Form 8-K regarding any amendment to, or a waiver from, certain
provisions of our Code of Business Conduct and Ethics by posting such information on our website under Investors/Governance.



|Item 11. | Executive Compensation
|-------- | ----------------------

The information required by
this Item 11 is incorporated into this report by reference to our proxy statement to be issued in connection with our 2009 Annual Meeting of Stockholders, under the headings Compensation Discussion and Analysis, Compensation
Committee Report and Compensation of Executive Officers, which proxy statement will be filed within 120 days after the year ended December 31, 2008.



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

Except as set forth below, the information required by this Item 12 is incorporated into this report by reference to our proxy statement to be issued
in connection with our 2009 Annual Meeting of Stockholders, under the heading Common Stock Ownership of Certain Beneficial Owners and Management, which proxy statement will be filed within 120 days after the year ended December 31,
2008.

Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2008

Equity Compensation Plan Information



|                                                           |  |                                                                                        |  |                                                                          |  |                                                                                                                                      
|---------------------------------------------------------- |  | -------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------
|Plan Category                                              |  | Number of Securitiesto be Issued UponExercise ofOutstandingOptions, Warrantsand Rights |  | Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights |  | Number of SecuritiesRemaining Available forFuture Issuance UnderEquity CompensationPlans
(ExcludingSecurities Reflected inColumn (a))
|                                                           |  | (a)                                                                                    |  | (b)                                                                      |  | (c)                                                                                                                                  
|Equity compensation plans approved by security holders     |  |                                                                                       |  |                                                                         |  | 1,856,508                                                                                                                            
|Equity compensation plans not approved by security holders |  |                                                                                       |  |                                                                         |  |                                                                                                                                     
|                                                           |  |                                                                                        |  |                                                                          |  |                                                                                                                                      
|Totals                                                     |  |                                                                                       |  |                                                                          |  | 1,856,508                                                                                                                            
|                                                           |  |                                                                                        |  |                                                                          |  |                                                                                                                                      



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|Item 13. | Certain Relationships and Related Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------

The information required by this Item 13 is incorporated into this report by reference to our proxy statement to be issued in connection with our 2009 Annual Meeting of Stockholders, under the headings
Related Person Transactions and Corporate Governance Principles and Board Matters, which proxy statement will be filed within 120 days after the year ended December 31, 2008.



|Item 14. | Principal Accounting Fees and Services
|-------- | --------------------------------------

The
information required by this Item 14 is incorporated into this report by reference to our proxy statement to be issued in connection with our 2009 Annual Meeting of Stockholders, under the heading Matters Relating to the Independent
Registered Public Accounting Firm, which proxy statement will be filed within 120 days after the year ended December 31, 2008.



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PART IV



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------

(a)
Documents filed as part of this report:



| | (1) | Financial Statements
| | --- | --------------------

The financial statements required by
this Item 15 are set forth in Part II, Item 8 of this report.



| | (2) | Financial Statement Schedules
| | --- | -----------------------------

Schedule IIValuation
and Qualifying Accounts.

GateHouse Media, Inc.

Valuation and Qualifying Accounts

(In Thousands)



|                                 |  |                              |        |                    |   |                         |  |   |            |     |  |                        |         |      |  |   |        
|-------------------------------- |  | ---------------------------- | ------ | ------------------ | - | ----------------------- |  | - | ---------- | --- |  | ---------------------- | ------- | ---- |  | - | -------
|Description                      |  | Balance atBeginningof Period |        | Charges toEarnings |   | Chargesto OtherAccounts |  |   | Deductions |     |  | Balance atEnd ofPeriod
|Allowance for doubtful accounts  |  |                              |        |                    |   |                         |  |   |            |     |  |                        |         |      |  |   |        
|Year ended December 31, 2008     |  | $                            | 3,874  |                    | $ | 5,462                   |  | $ | 2,302      | (1) |  | $                      | (5,614  | )(4) |  | $ | 6,024  
|Year ended December 31, 2007     |  | $                            | 2,332  |                    | $ | 2,996                   |  | $ | 1,675      | (2) |  | $                      | (3,129  | )(4) |  | $ | 3,874  
|Year ended December 31, 2006     |  | $                            | 1,509  |                    | $ | 2,249                   |  | $ | 2,188      | (3) |  | $                      | (3,614  | )(4) |  | $ | 2,332  
|                                 |  |                              |        |                    |  
|Deferred tax valuation allowance |  |                              |        |                    |   |                         |  |   |            |     |  |                        |         |      |  |   |        
|Year ended December 31, 2008     |  |                              | 65,421 |                    |   | 177,732                 |  |   | 638        | (5) |  |                        |        |      |  |   | 243,791
|Year ended December 31, 2007     |  | $                            | 1,100  |                    | $ | 45,800                  |  | $ | 18,521     | (5) |  |                        |        |      |  | $ | 65,421 
|Year ended December 31, 2006     |  | $                            | 32,430 |                    |   |                        |  |   |           |     |  | $                      | (31,330 | )(6) |  | $ | 1,100  



|(1) | Amount is primarily related to fully reserved accounts receivable balances recorded during the year.
|--- | ----------------------------------------------------------------------------------------------------

|(2) | Amount is primarily related to the acquisitions of the newspapers from the Copley Press, Inc., the newspapers from Gannett Co. Inc., and the newspapers from Morris Publishing Group.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Amount is primarily related to the acquisitions of CP Media and Enterprise NewsMedia, LLC.
|--- | ------------------------------------------------------------------------------------------

|(4) | Amounts are primarily related to the write off of fully reserved accounts receivable.
|--- | -------------------------------------------------------------------------------------

|(5) | Amount is primarily related to the change in derivative value and is recorded in accumulated other comprehensive income.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(6) | Amount of decrease is primarily related to the Enterprise NewsMedia, LLC acquisition with a corresponding reduction to goodwill.
|--- | --------------------------------------------------------------------------------------------------------------------------------

All other schedules are omitted because the conditions requiring their filing do not exist, or because the required information is provided in the
consolidated financial statements, including the notes thereto.



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(b) Exhibits. The following Exhibits are filed as a part of this report:



|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |         |                                  |             |     |  |                  
|---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ---------------- | ------- | -------------------------------- | ----------- | --- |  | -----------------
|ExhibitNo. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                            |      | IncludedHerewith |         | Incorporated by Reference Herein
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   | Form |                  | Exhibit |                                  | Filing Date
|2.1        |  | Asset Purchase Agreement, dated as of November 30, 2006, among Northeast Publishing Company, Inc., Journal Company, Inc., and Taunton Acquisition, LLC, as Sellers, and Enterprise Publishing
Company, LLC, as Purchaser                                                                                                                                                                                                          |      |                  |         | 8-K/A                            |             | 2.1 |  | May 4, 2007      
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.2        |  | Share Purchase Agreement, dated as of January 28, 2007, by and among SureWest Communications, as Seller, SureWest Directories and GateHouse Media, Inc., as Purchaser                                                                                                                                                                                                                                                             |      |                  |         | 8-K                              |             | 2.1 |  | March 1, 2007    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.3        |  | Stock and Asset Purchase Agreement, dated as of March 13, 2007, by and between GateHouse Media Illinois Holdings, Inc., as Buyer, and The Copley Press, Inc., as Seller                                                                                                                                                                                                                                                           |      |                  |         | 8-K                              |             | 2.1 |  | April 11, 2007   
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.4        |  | Amended and Restated Asset Purchase Agreement, dated April 12, 2007, by and among Gannett Satellite Information Network, Inc., Gannett River States Publishing Corporation, Pacific and Southern
Company, Inc., Federated Publications, Inc., Media WestGSI, Inc., Media WestGRS, Inc., as Sellers, and GateHouse Media Illinois Holdings, Inc., as Buyer, and GateHouse Media, Inc., as Buyer guarantor                        |      |                  |         | 8-K                              |             | 2.1 |  | May 8, 2007      
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.5        |  | Asset Purchase Agreement, dated April 12, 2007, by and among Gannett Satellite Information Network, Inc., Media WestGSI, Inc., as Sellers, GateHouse Media Illinois Holdings, Inc., as
Buyer, and GateHouse Media, Inc., as Buyer guarantor                                                                                                                                                                                      |      |                  |         | 8-K                              |             | 2.2 |  | May 8, 2007      
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.6        |  | Asset Purchase Agreement, dated June 28, 2007, by and among GateHouse Media, Inc., GateHouse Media West Virginia Holdings, Inc., GateHouse Media Illinois Holdings, Inc., Champion Publishing,
Inc. and Champion Industries, Inc.                                                                                                                                                                                                 |      |                  |         | S-1/A                            |             | 2.9 |  | July 13, 2007    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|2.7        |  | Asset Purchase Agreement, dated October 23, 2007, by and among GateHouse Media Operating, Inc., as Buyer, GateHouse Media, Inc., as Buyer guarantor, Morris Communications Company LLC, Morris
Publishing Group, LLC, MPG Allegan Property, LLC, Broadcaster Press, Inc., MPG Holland Property, LLC, The Oak Ridger, LLC, and Yankton Printing Company, as Sellers, and Morris Communications Company, LLC, as Sellers guarantor |      |                  |         | 8-K                              |             | 2.1 |  | December 3, 2007 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|3.1        |  | Second Amended and Restated Certificate of Incorporation of GateHouse Media, Inc.                                                                                                                                                                                                                                                                                                                                                 |      |                  |         | S-1/A                            |             | 3.1 |  | October 11, 2006 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |        
|3.2        |  | Amended and Restated By-laws of GateHouse Media, Inc.                                                                                                                                                                                                                                                                                                                                                                             |      |                  |         | 8-K                              |             | 3.2 |  | November 13, 2007



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|           |  |                                                                                                                                                                 |      |                  |         |                                  |             |       |  |                 
|---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ---------------- | ------- | -------------------------------- | ----------- | ----- |  | ----------------
|ExhibitNo. |  | Description of Exhibit                                                                                                                                          |      | IncludedHerewith |         | Incorporated by Reference Herein
|           |  |                                                                                                                                                                 | Form |                  | Exhibit |                                  | Filing Date
|4.1        |  | Form of common stock certificate                                                                                                                                |      |                  |         | S-1/A                            |             | 4.1   |  | October 11, 2006
|           |  |                                                                                                                                                                 |      |                  |        
|4.2        |  | Form of Investor Rights Agreement by and among GateHouse Media, Inc. and FIF III Liberty Holdings LLC                                                           |      |                  |         | S-1/A                            |             | 4.2   |  | October 11, 2006
|           |  |                                                                                                                                                                 |      |                  |        
|*10.1      |  | GateHouse Media, Inc. Omnibus Stock Incentive Plan                                                                                                              |      |                  |         | S-1/A                            |             | 10.1  |  | October 11, 2006
|           |  |                                                                                                                                                                 |      |                  |        
|*10.2      |  | Form of Restricted Share Award Agreement under the GateHouse Media, Inc. Omnibus Stock Incentive Plan (three-year vesting)                                      |      |                  |         | 10-K                             |             | 10.2  |  | March 17, 2008  
|           |  |                                                                                                                                                                 |      |                  |        
|*10.3      |  | Form of Restricted Share Award Agreement under the GateHouse Media, Inc. Omnibus Stock Incentive Plan (April 15, 2008 vesting)                                  |      |                  |         | 10-K                             |             | 10.3  |  | March 17, 2008  
|           |  |                                                                                                                                                                 |      |                  |        
|*10.4      |  | Liberty Group Publishing, Inc. Publishers Deferred Compensation Plan                                                                                           |      |                  |         | S-1                              |             | 10.2  |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.5      |  | Liberty Group Publishing, Inc. Executive Benefit Plan                                                                                                           |      |                  |         | S-1                              |             | 10.3  |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.6      |  | Liberty Group Publishing, Inc. Executive Deferral Plan                                                                                                          |      |                  |         | S-1                              |             | 10.4  |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.7      |  | Employment Agreement, dated as of January 3, 2006, by and among Liberty Group Publishing, Inc., Liberty Group Operating, Inc. and Michael E. Reed               |      |                  |         | S-1                              |             | 10.8  |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.8      |  | Employment Agreement, dated as of May 9, 2005, by and among Liberty Group Publishing, Inc., Liberty Group Operating, Inc. and Scott Tracy Champion              |      |                  |         | S-1                              |             | 10.9  |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.9      |  | Employment Agreement, dated as of April 19, 2006, by and among GateHouse Media, Inc., GateHouse Media Operating, Inc. and Mark R. Thompson                      |      |                  |         | S-1                              |             | 10.11 |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.10     |  | Employment Agreement, dated as of May 1, 2006, by and among GateHouse Media, Inc., GateHouse Media Operating, Inc. and Polly G. Sack                            |      |                  |         | S-1                              |             | 10.12 |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.11     |  | Management Stockholder Agreement, dated as of January 29, 2006, by and between Liberty Group Publishing, Inc., FIF III Liberty Holdings LLC and Michael E. Reed |      |                  |         | S-1                              |             | 10.13 |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.12     |  | Management Stockholder Agreement, dated as of May 17, 2006, by and between GateHouse Media, Inc., FIF III Liberty Holdings LLC and Polly G. Sack                |      |                  |         | S-1                              |             | 10.19 |  | July 21, 2006   
|           |  |                                                                                                                                                                 |      |                  |        
|*10.13     |  | Management Stockholder Agreement, dated as of May 17, 2006, by and between GateHouse Media, Inc., FIF III Liberty Holdings LLC and Mark R. Thompson             |      |                  |         | S-1                              |             | 10.21 |  | July 21, 2006   



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|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |         |                                  |             |      |  |                 
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ---------------- | ------- | -------------------------------- | ----------- | ---- |  | ----------------
|ExhibitNo. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |      | IncludedHerewith |         | Incorporated by Reference Herein
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Form |                  | Exhibit |                                  | Filing Date
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |        
|*10.14     |  | Memo of Understanding dated as of December 20, 2006, by and among GateHouse Media, Inc., f/k/a Liberty Group Publishing, Inc., a Delaware corporation, GateHouse Media Operating, Inc., f/k/a
Liberty Group Operating, Inc., a Delaware corporation, and Mark Thompson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |      |                  |         | 10-Q                             |             | 10.1 |  | May 16, 2007    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |        
|10.15      |  | Form of Indemnification Agreement to be entered into by GateHouse Media, Inc. with each of its executive officers and directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |         | S-1/A                            |             | 10.6 |  | October 11, 2006
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |        
|10.16      |  | License Agreement, dated as of February 28, 2007, by and between SureWest Communications and GateHouse Media, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |      |                  |         | 8-K                              |             | 10.1 |  | March 1, 2007   
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |        
|10.17      |  | Amended and Restated Credit Agreement, dated as of February 27, 2007, among GateHouse Media Holdco, Inc., as Holdco, GateHouse Media Operating, Inc., as the Company, GateHouse Media
Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc., and ENHE Acquisition, LLC, as Subsidiary Borrowers, the Domestic Subsidiaries of Holdco from time to time Parties thereto, as Guarantors, the Lenders Parties thereto, Goldman Sachs
Credit Partners L.P., as Syndication Agent, Morgan Stanley Senior Funding, Inc., and BMO Capital Markets Financing, Inc., as co-documentation Agents and Wachovia Bank, National Association, as Administrative Agent, Wachovia Capital Markets, LLC, as
Goldman Sachs Credit Partners, L.P., General Electric Capital Corporation and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Book Runners |      |                  |         | 8-K                              |             | 10.1 |  | March 1, 2007   
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |        
|10.18      |  | Amended and Restated Security Agreement, dated as of February 28, 2007, among GateHouse Media Holdco, Inc., as Holdco, GateHouse Media Operating, Inc., as the Company, GateHouse Media
Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc., and ENHE Acquisition, LLC, as Subsidiary Borrowers, the Domestic Subsidiaries of Holdco from time to time Parties thereto, as Guarantors, and Wachovia Bank, National Association, as
Administrative Agent, Wachovia Capital Markets, LLC, as Goldman Sachs Credit Partners, L.P., General Electric Capital Corporation and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Book Runners                                                                                                                                                                                               |      |                  |         | 8-K                              |             | 10.2 |  | March 1, 2007   



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|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |         |                                  |             |      |  |                 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ---------------- | ------- | -------------------------------- | ----------- | ---- |  | ----------------
|ExhibitNo. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |      | IncludedHerewith |         | Incorporated by Reference Herein
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Form |                  | Exhibit |                                  | Filing Date
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.19      |  | Amended and Restated Pledge Agreement, dated as of February 28, 2007, among GateHouse Media Holdco, Inc., as Holdco, GateHouse Media Operating, Inc., as the Company, GateHouse Media
Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc., and ENHE Acquisition, LLC, as Subsidiary Borrowers, the Domestic Subsidiaries of Holdco from time to time Parties thereto, as Guarantors, and Wachovia Bank, National Association, as
Administrative Agent, for the several banks and other financial institutions as may from time to time becomes parties to such Credit Agreement |      |                  |         | 8-K                              |             | 10.3 |  | March 1, 2007   
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.20      |  | First Amendment to Amended and Restated Credit Agreement, dated as of May 7, 2007, by and among GateHouse Media Holdco, Inc., as Holdco, GateHouse Media Operating, Inc., as the Company,
GateHouse Media Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc. and ENHE Acquisition, LLC, as Subsidiary Borrowers, the Domestic Subsidiaries of Holdco from time to time Parties thereto, as Guarantors, the Lenders Parties thereto, and
Wachovia Bank, National Association, as Administrative Agent                                                                           |      |                  |         | 8-K                              |             | 99.1 |  | May 11, 2007    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.21      |  | Underwriting Agreement, dated July 17, 2007, among GateHouse Media, Inc. and Goldman, Sachs & Co., Wachovia Capital Markets, LLC and Morgan Stanley & Co. Incorporated                                                                                                                                                                                                                                                                                                                                                                                                                    |      |                  |         | 8-K                              |             | 1.1  |  | July 18, 2007   
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.22      |  | Second Amendment to Amended and Restated Credit Agreement, dated as of February 3, 2009, by and among GateHouse Media Holdco, Inc., as Holdco, GateHouse Media Operating, Inc., as the Company,
GateHouse Media Massachusetts I, Inc., GateHouse Media Massachusetts II, Inc. and ENHE Acquisition, LLC, as Subsidiary Borrowers, the Domestic Subsidiaries of Holdco from time to time Parties thereto, as Guarantors, the Lenders Parties thereto, and
Wachovia Bank, National Association, as Administrative Agent                                                                     |      |                  |         | 8-K                              |             | 99.1 |  | February 5, 2009
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.23      |  | Offer letter dated December 23, 2008, between GateHouse Media, Inc., and Melinda A. Janik                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |      | X                |         |                                  |             |      |  |                 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.24      |  | Employment Agreement dated as of January 9, 2009, by and among GateHouse Media, Inc., GateHouse Media Operating Inc., and Kirk Davis.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |      |                  |         | 8-K                              |             | 10.1 |  | January 9, 2009 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      |                  |        
|10.25      |  | Offer letter dated February 4, 2008, between GateHouse Media, Inc., and Mark Maring.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |                  |         | 10-Q                             |             | 10.1 |  | November 7, 2008



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|           |  |                                                                                                                 |      |                  |         |                                  |             |      |  |               
|---------- |  | --------------------------------------------------------------------------------------------------------------- | ---- | ---------------- | ------- | -------------------------------- | ----------- | ---- |  | --------------
|ExhibitNo. |  | Description of Exhibit                                                                                          |      | IncludedHerewith |         | Incorporated by Reference Herein
|           |  |                                                                                                                 | Form |                  | Exhibit |                                  | Filing Date
|           |  |                                                                                                                 |      |                  |        
|16.1       |  | Letter from KPMG LLP to the Securities and Exchange Commission dated April 13, 2007                             |      |                  |         | 8-K/A                            |             | 16.1 |  | April 13, 2007
|           |  |                                                                                                                 |      |                  |        
|21         |  | Subsidiaries of GateHouse Media, Inc.                                                                           |      | X                |         |                                  |             |      |  |               
|23.1       |  | Consent of Ernst & Young LLP                                                                                    |      | X                |         |                                  |             |      |  |               
|           |  |                                                                                                                 |      |                  |        
|23.2       |  | Consent of KPMG LLP                                                                                             |      | X                |         |                                  |             |      |  |               
|           |  |                                                                                                                 |      |                  |        
|31.1       |  | Rule 13a-14(a)/15d-14(d) Certification of Principal Executive Officer under the Securities Exchange Act of 1934 |      | X                |         |                                  |             |      |  |               
|           |  |                                                                                                                 |      |                  |        
|31.2       |  | Rule 13a-14(a)/15d-14(d) Certification of Principal Financial Officer under the Securities Exchange Act of 1934 |      | X                |         |                                  |             |      |  |               
|           |  |                                                                                                                 |      |                  |        
|32.1       |  | Section 1350 Certification                                                                                      |      | X                |         |                                  |             |      |  |               
|           |  |                                                                                                                 |      |                  |        
|32.2       |  | Section 1350 Certification                                                                                      |      | X                |         |                                  |             |      |  |               

For purposes of the incorporation by reference of documents as Exhibits, all references to Forms
10-Q and 8-K of GateHouse Media, Inc. refer to Forms 10-Q and 8-K filed with the Commission under Commission file number 001-33091; and all references to Forms S-1 and S-1/A of GateHouse Media, Inc. refer to Forms S-1 and S-1/A filed with the
Commission under Registration Number 333-135944.



|* | Asterisks identify management contracts and compensatory plans or arrangements.
|- | -------------------------------------------------------------------------------



152



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.



GATEHOUSE MEDIA, INC.By:

/s/    MICHAEL E. REEDMichael E. Reed Chief Executive Officer


March 13, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



|                                         |  |                                                                    |  |               
|---------------------------------------- |  | ------------------------------------------------------------------ |  | --------------
|Signature                                |  | Title                                                              |  | Date          
|                                         |  |                                                                   
|/s/    WESLEY R.
EDENS Wesley R. Edens   |  | Chairman of the Board                                              |  | March 13, 2009
|                                         |  |                                                                   
|/s/    MICHAEL E.
REED Michael E. Reed   |  | Chief Executive Officer and Director (Principal
Executive Officer) |  | March 13, 2009
|                                         |  |                                                                   
|/s/    MELINDA A.
JANIK Melinda A. Janik |  | Chief Financial Officer (Principal Financial Officer)              |  | March 13, 2009
|                                         |  |                                                                   
|/s/    LINDA A.
HILL Linda A. Hill       |  | Corporate Controller (Principal Accounting
Officer)                |  | March 13, 2009
|                                         |  |                                                                   
|/s/    RICHARD
FRIEDMAN Richard Friedman |  | Director                                                           |  | March 13, 2009
|                                         |  |                                                                   
|/s/    BURL
OSBORNE Burl Osborne         |  | Director                                                           |  | March 13, 2009
|                                         |  |                                                                   
|/s/    KEVIN M.
SHEEHAN Kevin M. Sheehan |  | Director                                                           |  | March 13, 2009



153