SECURITIES & EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K

(X)  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934
     For the fiscal year ended December 31, 2001
     Commission File Number: 0-7831

                          JOURNAL COMMUNICATIONS, INC.
             (Exact name of Registrant as specified in its charter)

Wisconsin                                                             39-0382060
------------------------                                  ----------------------
(State of incorporation)                                        (I.R.S. Employer
                                                          identification number)

333 West State Street, Milwaukee, Wisconsin                                53203
-------------------------------------------                                -----
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code: (414) 224-2374
Securities registered pursuant to Section 12(b) of the Act:
                                      NONE
                                      ----
Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, Par Value $0.125 Per Share
                    ----------------------------------------
                                (title of class)


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 (Section 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. [ ]

State the aggregate market value of the voting stock held by non-affiliates of
the Registrant: Not applicable.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 6, 2002:

     Class                                       Outstanding at March 6, 2002
     -----                                       ----------------------------
     Common Stock, par value $0.125                       28,800,000
     Units of Beneficial Interest                         26,475,039

                       Documents Incorporated by Reference

Portions of the annual shareholders report for the year ended December 31, 2001
are incorporated by reference into Parts I and II. Portions of the proxy
statement for the annual shareholders meeting to be held June 4, 2002 are
incorporated by reference into Part III.


<PAGE>


FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (including information the we incorporates in it
by reference) contains statements that we believe are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact, including
statements regarding our future financial position, business strategy, budgets,
projected costs and plans and objectives of management for future operations,
are forward-looking statements. When used in this Annual Report, the words such
as "may," "will," "intend," "anticipate," "believe," or "should" and similar
expressions are generally intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond Journal
Communications, Inc.'s (the Company's) control. These risks, uncertainties and
other factors could cause actual results to differ materially from those
expressed or implied by those forward-looking statements. Among such risks,
uncertainties and other factors are changes in advertising demand, newsprint
prices, interest rates, regulatory rulings, the outcome of pending or future
litigation, the availability of quality broadcast programming at competitive
prices, changes in network affiliation agreements, changes in regulations
governing the number of broadcast licenses that a person may control, quality
and rating of network over-the-air broadcast programs available to the Company's
customers, energy costs, effects of the rapidly changing nature of the
telecommunications, newspaper, and broadcast industries, other economic
conditions and the availability and effect of acquisitions, investments, and
dispositions on the Company's results of operations or financial condition.
Readers are cautioned not to place undue reliance on such forward-looking
statements, which are as of the date of this report.

                                     PART I
                                ITEM 1. BUSINESS

The Company was incorporated on February 7, 1883 under the name of The Journal
Company in the state of Wisconsin. The Company changed its name to Journal
Communications, Inc. on January 13, 1987 to reflect the broad range of services
it provides. The Company began as a newspaper in 1882 in Milwaukee, Wisconsin,
and has grown into a leading independent media and communications company. The
industries within which the Company operates include newspaper and shopper
publishing, television and radio broadcasting, telecommunications, commercial
printing, and direct mail.

The revenue generated by each operating segment, as a percentage of the
Company's consolidated revenue, for the last three years is shown below.

     Segment                            2001        2000        1999
     -------                            ----        ----        ----
     Journal Sentinel                   26.5%       28.2%       30.6%
     Journal Broadcast Group            16.3        17.9        16.9
     Norlight Telecommunications        18.4        15.1        13.1
     IPC Communication Services         15.3        14.7        14.4
     Add, Inc.                          12.9        13.4        14.5
     NorthStar Print Group               6.7         7.1         7.6
     PrimeNet Marketing Services         4.4         4.1         3.6
     Corporate and eliminations         (0.5)       (0.5)       (0.7)
                                       -----       -----       -----
                                       100.0%      100.0%      100.0%
                                       =====       =====       =====

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<PAGE>

Additional information about the Company's segments is presented in Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and financial information about the segments is presented in Note 9
in the Company's Notes to Consolidated Financial Statements appearing on pages
28 through 30 of the Company's Annual Report (included in Exhibit 13), and is
incorporated herein by reference.

JOURNAL SENTINEL

The Milwaukee Journal (The Journal) began publishing an evening newspaper in
1882. In 1911, the Sunday edition of The Journal was born. The Journal Company,
as the Company was formerly known, purchased the Milwaukee Sentinel from the
Hearst Corporation in 1962 after a lengthy strike had caused the paper to stop
publishing. The paper was back in business and printing just four days after the
purchase. Founded in 1837, the Milwaukee Sentinel (The Sentinel) is Wisconsin's
oldest continuing business. Despite being part of the same newspaper company,
The Journal and The Sentinel maintained their editorial independence. The papers
maintained separate, competing news departments until they were merged on April
2, 1995 and a new daily newspaper, the Milwaukee Journal Sentinel, was launched.

SEASONAL TRENDS. Seasonal revenue fluctuations are common in the newspaper
industry and are primarily due to fluctuations in advertising expenditures by
retailers. Journal Sentinel Inc.'s (Journal Sentinel's) strongest periods of the
year are a result of increased advertising activity during May for Mother's Day
and summer clothes shopping, late summer, just prior to students returning to
school, and during the Thanksgiving and Christmas periods. The overall level of
advertising is dependent upon the general health of the economy.

CIRCULATION. Circulation revenue accounted for twenty-two percent of Journal
Sentinel's total revenue in 2001. Average net paid circulation for the twelve
months ended March 31 for the last five years, as audited by the Audit Bureau of
Circulation, was:

                       2001        2000        1999        1998        1997
-----------------    -------     -------     -------     -------     -------
Daily                266,590     279,156     286,608     289,350     292,035
Sunday               443,411     455,925     458,332     459,374     458,480

The Company believes the declines in the number of daily and Sunday newspaper
copies sold from March 2000 to March 2001 were caused by (1) declines in both
home delivery and single copy sales, mostly in Milwaukee County and (2) a
decision to change the amount of discounts offered to new subscribers. In order
to concentrate its circulation efforts, in January 2002, Journal Sentinel
eliminated home delivery of its newspapers in all but twelve counties in
southeastern Wisconsin. As a result, average net paid circulation is expected to
decrease by five to ten percent in 2002 for both the daily Milwaukee Journal
Sentinel and the Sunday Milwaukee Journal Sentinel.

The Company believes competition for circulation is primarily dependent upon
creating a product with relevant news and advertising content for the readers
because we are competing for their time and money. A newspaper has a better
chance to gain advertising dollars by having a large reader base. According to
the latest report from Scarborough Research, the daily Milwaukee Journal
Sentinel ranks fifth in readership and the Sunday Milwaukee Journal Sentinel

                                       3
<PAGE>

ranks number one in readership in the top fifty markets in the country in its
Metropolitan Strategic Area (MSA) (Milwaukee, Waukesha, Washington and Ozaukee
counties). Readership is measured by the percentage of households that subscribe
to a newspaper. The newspaper is distributed primarily by independent contract
carriers throughout southeastern Wisconsin and a small portion of Northern
Illinois.

ADVERTISING. Revenue from advertising generated seventy-six percent of Journal
Sentinel's total revenue in 2001. Annual advertising volume in column inches and
the number of preprints (reported in thousands) for Journal Sentinel's daily and
Sunday newspapers for the last five calendar years was:

Column Inches          2001        2000        1999        1998        1997
-----------------    -------     -------     -------     -------     -------
Full Run             1,840.5     2,017.6     2,125.6     2,188.0     2,319.4
Part Run                95.4        94.4       134.1       182.8       292.7

                       2001        2000        1999        1998        1997
-----------------    -------     -------     -------     -------     -------
Preprints                3.2         3.0         3.6         2.9         2.6

Whereas the number of preprints and part run volume remained virtually flat with
2000, the Company believes the advertising volume decline during 2001 in Full
Run was a result of several large retailers decreasing their advertising
expenditures and the downturn in employment advertising. Both are believed to be
due to the weakened economy during 2001.

The Company expects the decline in revenue from employment advertising to
continue during the first half of 2002. However, compared to 2001, the Company
expects the annual decline in employment advertising to occur at a much lower
rate. Full Run refers to advertisements that are published in all editions of
the newspaper, whereas Part Run refers to advertisements not published in all
editions of the newspaper. Preprints are the number of individual customer's
advertisements that are provided by the customer and then inserted into the
newspaper.

COMPETITION. Journal Sentinel has many competitors for advertising dollars.
These competitors include direct mail, television and radio stations, cable
television, satellite television and radio, other daily and weekly newspapers,
billboards, yellow pages and the Internet. Because newspaper companies rely upon
advertising revenues, they are subject to the cyclical changes in the economy.
The size of advertisers' budgets, which are affected by broad economic trends,
affects the newspaper industry in general and the revenue of individual
newspapers.

NEWSPRINT. The basic raw material of newspapers is newsprint. Journal Sentinel
has purchase contracts, which run through 2006, with two suppliers that provide
for approximately ninety-five percent of its estimated newsprint requirements.
According to the contract, Journal Sentinel will pay market price for quantities
it determines will meet its requirements. The remaining five percent of its
newsprint could come from these suppliers or from other suppliers in the spot
market. The Company believes it will continue to receive an adequate supply of
newsprint for its needs.

Newsprint prices fluctuate based upon market factors which include newsprint
production capacity, inventory levels, demand and consumption. Price
fluctuations for newsprint can have a significant effect on Journal Sentinel's
results of operations. The average net price per ton equaled $573 in 2001
compared to an average net price per ton of $528 in 2000. The total price

                                       4
<PAGE>

for newsprint increased $2.6 million during 2001. However, because the reduction
in consumption equaled $4.8 million, the overall cost of newsprint decreased
$2.2 million versus 2000. Consumption of newsprint declined to 56,898 metric
tons from 65,656 metric tons in 2000. The drop in consumption from 2000 is a
result of fewer advertising pages and a decrease in average net paid
circulation. The Company expects both the average net price per ton and
consumption to decline between five and fifteen percent in 2002.

PRODUCTION PROCESSES. Journal Sentinel currently utilizes a di-litho print
process which uses converted letterpresses to transfer the image directly to the
surface of the newsprint. This unique production process coupled with utilizing
presses that are approximately forty years old, results in high production costs
and a wide range of reproduction variability throughout the press runs. Journal
Sentinel is constructing a new production facility to house all printing,
packaging, inserting and transportation processes. This facility is expected to
be fully operational early in 2003. With the newly purchased printing presses,
the printing process will change to what is referred to as offset lithography,
which is common in the newspaper industry. This will offer manufacturing
flexibility, lower costs of production and high quality color reproduction and
product lines for our customers.

NEWS BUREAUS. To provide quality news and editorial content, Journal Sentinel
maintains Wisconsin news bureaus in Milwaukee, Cedarburg, Racine, Waukesha, and
Madison (the state capital). It also has a news bureau in Washington D.C.

JOURNAL BROADCAST GROUP

Journal Broadcast Group consists of Journal Broadcast Corporation and its
subsidiaries which operate five television stations, one low power television
station and thirty-six radio stations across the United States. In 1924, the
Company began experimenting with radio. At that time, there were less than
fifteen thousand receiving sets in the Milwaukee area. In 1927, the Company
purchased WKAF radio, which today is WTMJ-AM. It was Milwaukee's first fully
equipped radio station. A month after going on the air, WTMJ-AM affiliated with
the NBC network, bringing nationwide radio broadcasting to Wisconsin. In 1940,
the Company began experimental FM radio broadcasting from station W9XAO. Today,
the station's call letters are WKTI-FM. The Company began construction of a
broadcasting headquarters building in Milwaukee in 1941. The plan included space
for a television station. The Company had begun experimenting with television in
the 1930's and had operated an experimental closed circuit television station
for seven years. WTMJ-AM and WKTI-FM moved into the new headquarters in 1942.
After World War II, the Company resumed its work in FM radio and television.
When WTMJ-TV began broadcasting on December 3, 1947, it was the eleventh
television station in the country.

TELEVISION. In 2001, revenue from television operations accounted for forty-five
percent of Journal Broadcast Group's total revenue. The television stations of
Journal Broadcast Group are:

------------  ----------------  --------  -------  -------------  --------------
                                  Year                Station     Total Stations
Station            Market       Acquired  Network  Audience Rank    in Market
------------  ----------------  --------  -------  -------------  --------------
WTMJ-TV       Milwaukee, WI       1947      NBC          1t             10
------------  ----------------  --------  -------  -------------  --------------
KTNV-TV       Las Vegas, NV       1979      ABC          4              10
------------  ----------------  --------  -------  -------------  --------------

                                       5
<PAGE>

------------  ----------------  --------  -------  -------------  --------------
WSYM-TV       Lansing, MI         1984      FOX          3              6
------------  ----------------  --------  -------  -------------  --------------
KMIR-TV       Palm Springs, CA    1999      NBC          1t             7
------------  ----------------  --------  -------  -------------  --------------
KIVI-TV       Boise, ID           2001      ABC          3              6
------------  ----------------  --------  -------  -------------  --------------
KSAW-LPTV     Twin Falls, ID      2001      ABC          3              5
------------  ----------------  --------  -------  -------------  --------------
The Station Audience Rank in the above table equals the Designated Market Area
Household Rating, Sunday-Saturday, 5:00am to 5:00am from the November 2001
Nielsen ratings book. A "t" indicates a tie with another station in the market.

NETWORK COMPENSATION. The affiliation by a station with one of the four major
networks has a significant impact on the composition of the station's
programming, revenues, expenses and operations. A typical affiliate of a major
network receives the majority of each day's programming from the network. This
programming, along with cash payments (network compensation), is provided to the
affiliate by the network in exchange for a substantial majority of the
advertising time sold during the airing of network programs. The network then
sells this advertising time for its own account. The affiliate retains the
revenues from time sold during the breaks in and between network programs and
during programs produced by the affiliate or purchased from non-network sources.
In acquiring programming to supplement the programming supplied by the
affiliated network, network affiliates compete primarily with other affiliates
and independent stations in their markets. Cable systems generally do not
compete with local stations for programming. The Company believes all of Journal
Broadcast Group's television stations are strong affiliates with good
relationships with the networks. The recent trend in network compensation has
been for networks to negotiate for lower compensation payments to the affiliates
as they cover the rising costs of programming, including the increased cost of
network sports rights. Journal Broadcast Group's television stations have
varying affiliate agreements with the networks. The agreements can include
network compensation to be paid to the affiliate in the form of cash, or in lieu
of cash, additional advertising time, the affiliate paying the network for the
additional programming or any combination of these. The revenue received in the
form of network compensation is currently immaterial to Journal Broadcast Group.
Journal Broadcast Group currently has long-term affiliate agreements in place,
which include network commitments to provide programming. The television
stations of Journal Broadcast Group have attempted to combat the decline in
network compensation by producing top-rated newscasts to gain an increased
number of viewers that advertisers wish to attract.

DIGITAL BROADCASTING. In April 1997, the Federal Communications Commission (FCC)
provided existing television broadcasters with a second channel on which to
broadcast a digital signal concurrently with an analog signal. Under the current
digital transition schedule, stations were required to commence digital
transmission by May 1, 2002 and will broadcast in both digital and analog modes
until 2006, when they will be required to relinquish extra broadcast spectrum
and broadcast in only digital. The 2006 deadline for cessation of analog
broadcasting may be delayed if there is not substantial penetration of consumer
reception equipment. The opportunities provided by digital broadcasting may
include broadcasting in multiple streams with various programs on one channel. A
portion of the signal may also be used for datacasting. These opportunities are
all in the formation stages and the effect digital broadcasting will have on
Journal Broadcast Group remains to be seen. Journal Broadcast Group, like other
television broadcasters, has made substantial capital investments for digital
equipment in order to meet the FCC's mandate. In November 2000, WTMJ-TV became
the first commercial television station in Milwaukee to broadcast digitally on
WTMJ-DT. Other than WSYM-TV, which received an

                                       6
<PAGE>

extension until November 2002, the Company believes the other Journal Broadcast
Group television stations will be prepared to commence digital broadcast by the
May 1, 2002 deadline.

Radio. In 2001, revenue from radio operations accounted for fifty-five percent
of Journal Broadcast Group's total revenue. The radio stations of Journal
Broadcast Group are:


                                       7
<PAGE>
------- ----------------- -------- ------------------ -------- --------- -------
 Market                                               Station    Total     FCC
  and         City           Year                     Audience Stations  License
Station    of License     Acquired       Format         Rank   in Market  Class
------- ----------------- -------- ------------------ -------- --------- -------

Milwaukee, WI
------- ----------------- -------- ------------------ -------- --------- -------
WTMJ-AM Milwaukee, WI       1927    News/Talk/Sports      1        29       B
------- ----------------- -------- ------------------ -------- --------- -------
WKTI-FM Milwaukee, WI       1940        Hot Adult         9t       29       B
                                      Contemporary
------- ----------------- -------- ------------------ -------- --------- -------

Omaha, NE
------- ----------------- -------- ------------------ -------- --------- -------
KOSR-AM Omaha, NE           1995         Sports          17        20       C
------- ----------------- -------- ------------------ -------- --------- -------
KBBX-AM Omaha, NE           1998        Hispanic         18        20       B
------- ----------------- -------- ------------------ -------- --------- -------
KEZO-FM Omaha, NE           1995          Rock            5        20       C
------- ----------------- -------- ------------------ -------- --------- -------
KKCD-FM Omaha, NE           1995      Classic Hits       10        20       C2
------- ----------------- -------- ------------------ -------- --------- -------
KSRZ-FM Omaha, NE           1998        Hot Adult         8        20       C
                                      Contemporary
------- ----------------- -------- ------------------ -------- --------- -------
KOMJ-AM Omaha, NE           1999     Adult Standards      9        20       B
------- ----------------- -------- ------------------ -------- --------- -------
KMXM-FM Omaha, NE           1999      Hot Country        13        20       C
------- ----------------- -------- ------------------ -------- --------- -------
KQCH-FM Nebraska City, NE   1997   Contemporary Hits      4        20       C1
------- ----------------- -------- ------------------ -------- --------- -------

Tucson, AZ
------- ----------------- -------- ------------------ -------- --------- -------
KFFN-FM Tucson, AZ          1996      Sports Radio       18t       29       C
------- ----------------- -------- ------------------ -------- --------- -------
KMXZ-FM Tucson, AZ          1996   Adult Contemporary     3        29       C
------- ----------------- -------- ------------------ -------- --------- -------
KZPT-FM Tucson, AZ          1996      Modern Adult        9        29       A
                                      Contemporary
------- ----------------- -------- ------------------ -------- --------- -------
KGMG-FM Oracle, AZ          1998    Rhythmic Oldies      11        29       C2
------- ----------------- -------- ------------------ -------- --------- -------

Knoxville, TN
------- ----------------- -------- ------------------ -------- --------- -------
WQBB-AM Powell, TN          1998         Sports          18t       27       D
------- ----------------- -------- ------------------ -------- --------- -------
WMYU-FM Sevierville, TN     1997         Oldies           4        27       C1
------- ----------------- -------- ------------------ -------- --------- -------
WWST-FM Karns, TN           1997   Contemporary Hits      2        27       A
------- ----------------- -------- ------------------ -------- --------- -------
WBON-FM Knoxville, TN       1998      Classic Rock       11        27       A
------- ----------------- -------- ------------------ -------- --------- -------

Boise, ID
------- ----------------- -------- ------------------ -------- --------- -------
KGEM-AM Boise, ID           1998    Adult Standards      15        25       B
------- ----------------- -------- ------------------ -------- --------- -------
KJOT-FM Boise, ID           1998          Rock            9        25       C
------- ----------------- -------- ------------------ -------- --------- -------
KQXR-FM Boise, ID           1998    Alternative Rock      2t       25       C1
------- ----------------- -------- ------------------ -------- --------- -------
KCID-FM Caldwell, ID        1998   Adult Contemporary    16        25       C
------- ----------------- -------- ------------------ -------- --------- -------
KCID-AM Caldwell, ID        1998   Adult Contemporary    16        25       C
------- ----------------- -------- ------------------ -------- --------- -------
KRVB-FM Nampa, ID           2000   Adult Alternative     13        25       C
------- ----------------- -------- ------------------ -------- --------- -------
                                       8
<PAGE>

------- ----------------- -------- ------------------ -------- --------- -------
 Market                                               Station    Total     FCC
  and         City           Year                     Audience Stations  License
Station    of License     Acquired       Format         Rank   in Market  Class
------- ----------------- -------- ------------------ -------- --------- -------

Wichita, KS
------- ----------------- -------- ------------------ -------- --------- -------
KFTI-AM Wichita, KS         1999    Classic Country       5t       24       B
------- ----------------- -------- ------------------ -------- --------- -------
KFDI-FM Wichita, KS         1999        Country           1        24       C
------- ----------------- -------- ------------------ -------- --------- -------
KICT-FM Wichita, KS         1999          Rock            4        24       C1
------- ----------------- -------- ------------------ -------- --------- -------
KFXJ-FM Augusta, KS         1999      Classic Hits        9        24       C2
------- ----------------- -------- ------------------ -------- --------- -------
KYQQ-FM Arkansas City, KS   1999      Hot Country        17t       24       C
------- ----------------- -------- ------------------ -------- --------- -------
KMXW-FM Newton, KS          2000       Hot Adult         17t       24       C1
                                     Contemporary
------- ----------------- -------- ------------------ -------- --------- -------

Springfield, MO
------- ----------------- -------- ------------------ -------- --------- -------
KTTF-AM Springfield, MO     1999       News/Talk         14        18       B
------- ----------------- -------- ------------------ -------- --------- -------
KTTS-FM Springfield, MO     1999        Country           1        18       C
------- ----------------- -------- ------------------ -------- --------- -------
KMXH-FM Sparta, MO          1999       Rhythmic           3        18       C2
                                   Contemporary Hits
------- ----------------- -------- ------------------ -------- --------- -------

Tulsa, OK
------- ----------------- -------- ------------------ -------- --------- -------
KVOO-AM Tulsa, OK           1999    Classic Country       5t       23       A
------- ----------------- -------- ------------------ -------- --------- -------
KVOO-FM Tulsa, OK           1999        Country           7        23       C
------- ----------------- -------- ------------------ -------- --------- -------
KXBL-FM Henryetta, OK       1999      Hot Country         16       23       C1
------- ----------------- -------- ------------------ -------- --------- -------

The Station Audience Rank in the table above equals the ranking of each station,
in its market, according to the Fall 2001 Arbitron ratings book, average persons
12+, Monday-Friday, 6:00am to 12:00pm. A "t" indicates a tie with another
station in the market.

The FCC license class in the table above is a designation for the type of
license based upon the radio broadcast service area according to radio broadcast
rules compiled in the Code of Federal Regulation (Title 47, part 73).

SEASONAL/CYCLICAL TRENDS. Seasonal revenue fluctuations are common in the
broadcasting industry and are primarily due to fluctuations in advertising
expenditures by retailers and automobile manufacturers. Broadcast advertising is
strongest in the second and fourth quarters of the year. This coincides with
increased advertising around certain holidays, specifically Mother's Day and
Christmas. The second quarter tends to show an increase in automotive
advertising as well as increases in tourism and travel advertising before the
summer months. Because television and radio broadcasters rely upon advertising
revenues, they are subject to cyclical changes in the economy. The size of
advertisers' budgets, which are affected by broad economic trends, affects the
broadcast industry in general and the revenue of individual television and radio
stations. Additionally, advertising revenues in even-numbered years benefit from
advertising placed by candidates for political offices and demand for
advertising time in Olympic television broadcasts. NBC has purchased the right
to broadcast the Olympics through

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<PAGE>


2008 and the Company expects higher revenues in these years because its two NBC
affiliates sell a portion of the available advertising.

COMPETITION. In each market in which Journal Broadcast Group operates, it
competes with other television and radio stations, newspapers, cable television,
satellite television and radio, direct mail services, billboards and the
Internet for advertising dollars. The Company believes some of the factors an
advertiser considers when choosing an advertising medium include its overall
marketing strategy and reaching its targeted audience in the most cost-effective
manner. Revenues are derived primarily from local, regional and national
advertising, and to a much lesser extent, from network compensation and
production activities. Ratings highly influence competition in broadcasting.
Ratings represent the number of viewers or listeners tuning in to our stations
which then affects the advertising rates the broadcaster can charge. Advertising
rates for the broadcast industry are set based upon a variety of factors,
including a program's popularity among the advertiser's target audience, the
number of advertisers competing for the available time, the size and demographic
make up of the market served and the availability of alternative advertising in
the market. By having a "cluster" of several radio stations within one market,
Journal Broadcast Group can offer advertisers the opportunity to purchase air
time on more than one of its stations in order to reach a broader audience.
Technology can play an important role in competition as the ratings each station
receives also depend upon the strength of the station's signal in each market
and, therefore, the number of viewers or listeners who have access to the
signal. Journal Broadcast Group continues to invest in the technology needed to
maintain, and if possible, strengthen these signals.

FCC LICENSES. The FCC is empowered to regulate the broadcast industry. Broadcast
licenses are required for television and radio operation and are granted by the
FCC. The license renewal process has been simplified to presume the licensees
have met their statutory and regulatory obligations. Absent a clear
demonstration of substantive, deliberate and willful violations, licenses are
renewed for eight year terms. Journal Broadcast Group has never had a violation
of the FCC's regulations that jeopardized the renewal of its licenses.

NORLIGHT TELECOMMUNICATIONS
In 1972, the Company and American Microwave and Communications, Inc. formed
Midwestern Relay Company (MRC) to build a microwave transmission system across
Wisconsin. An independent television transmission company, MRC provided
microwave transmission service to Wisconsin cable television systems. In 1975,
the Company acquired sole ownership of MRC. In 1991, the Company acquired the
assets of NorLight, a fiber optics based private carrier formed by a consortium
of Wisconsin-based energy utilities. Today these companies are known as Norlight
Telecommunications, Inc. (Norlight). Norlight's carrier services (wholesale)
provide network transmission solutions, for voice, data or internet
transmissions and custom designed networks for other telecommunications
carriers, including interexchange carriers, wireless carriers, cable providers,
incumbent local exchange carriers and competitive local exchange carriers by
offering bulk transmission capacity. Norlight's business-to-business service
provides advanced data communications products, specifically dedicated circuits,
frame relay (packet technology that provides throughput and delay performance),
ATM, Internet access and switched voice services (pay-by-the-minute long
distance including domestic, international and calling card services) to small
and medium sized businesses in the Upper Midwest. Norlight offers these products
wherever Norlight either operates its own network or has service agreements with
resellers. Norlight's satellite and video services provide terrestrial and
satellite transmission of

                                       10
<PAGE>

broadcast quality video signals for various customers, such as television
stations and networks, video studios, and entities which use video conferencing.

Norlight owns and operates one of the Midwest's largest fiber optic networks.
The digital switching platforms provide fast connections and throughput, and the
SONET (Synchronous Optical NETwork) based network is constructed in a ring
formation with the intelligence to route traffic multiple ways to avoid points
of service interruption. The network covers approximately 4,366 route miles -
connecting Wisconsin, Minnesota, Illinois, Iowa, Indiana, and Michigan.
Norlight's customer contracts, which are negotiated by in-house salespersons,
normally are written for service terms of between twelve and sixty months.
Pricing is generally fixed over the term of the contract with the exception of
local access costs, which can be increased if Norlight experiences an underlying
cost increase. Contracts can be terminated early but are subject to a
cancellation charge that varies by customer. Norlight's top ten customers
accounted for approximately forty-two percent of Norlight's revenue in 2001. The
loss of one of its top two customers, WorldCom or Global Crossing, (Global
Crossing filed for Chapter 11 bankruptcy protection in January 2002) would
adversely affect the Company's results of operations. Because Norlight closely
and effectively managed its customer's accounts, the Company believes it had a
better receivables collection experience compared to other companies in its
industry in 2001. Norlight diligently continues to closely monitor its
customers' accounts.

The telecommunications industry has experienced a sharp slowdown over the past
eighteen months. While Norlight has seen continuing demand for quality
telecommunication services within the markets it serves, its revenue growth is
mirroring industry patterns. Norlight had registered an annual compounded
revenue growth rate of greater than twenty-seven percent between 1997 and 2000.
Revenue growth slowed to twenty percent for 2001 over 2000. This growth has
occurred primarily within the wholesale business segment and has been
accomplished by expanding its SONET network across the Midwest from 1999 through
2002 in Michigan, Minnesota, and Indiana. During 2001, dense wave division
multiplexing technology was deployed within the Wisconsin and Illinois segments
of the network to overcome impending network capacity constraint and enable
additional service capabilities.

COMPETITION. The telecommunications market, while in the throes of a general
economic contraction and industry-specific shakeout, remains extremely
competitive. The market consists of multiple large competitors, including both
interexchange carriers, such as WorldCom, Global Crossing, and Sprint, and
incumbent local exchange carriers, such as SBC Communications, Verizon, and
Qwest Communications. Various competitors have recently engaged in constructing
fiber network facilities within the geography served by Norlight. The existence
of alternative sources for capacity and/or services increases competitive
pressure on Norlight. However, in today's environment many of these competitors
face significant financial challenges in further pursuing their business plans.
Possible outcomes for these competitors vary from reduced profitability and
difficulty funding their ongoing business plan to seeking bankruptcy protection
while undergoing reorganization. In the past year, many new market entrants,
including competitive local exchange carriers McLeodUSA, Winstar and Teligent
filed for Chapter 11 bankruptcy protection. McLeodUSA, Winstar and Teligent
remain both customers and competitors of Norlight during their reorganization.
Various competitors within both the interexchange carriers and competitive local
exchange carriers market spaces had pursued, or continue to pursue a "compete on
price" selling model in their attempt to grow market share. The result has been
price pressure in most product categories. Technology has enabled this to

                                       11
<PAGE>

occur because new generation network equipment allows for greater data
transmission at lower operating costs. Though selling prices have declined,
operating costs have exhibited a similar downward trend. Thus, many companies
have been able to limit the impact of falling prices on profit margins. The
Company believes the immediate and long-term future price pressure is likely to
be mitigated by customers' overriding concern for the financial stability of the
respective service providers. The Company believes Norlight's perceived value by
its customers will play very effectively in this environment as its tenure of
over thirty years in the business and its focus on customer service garners
recognition. In spite of the recent slowing economic conditions, growth in the
demand for telecommunications services is expected to be at least equal to the
growth of other segments of the economy for the foreseeable future according to
The Yankee Group, a well-known industry consultant.

The Company believes the industry consolidation of the recent past will continue
with the ongoing decline in the availability of capital exacerbating the current
situation. The still-surviving startup companies, and those in need of
additional outside financing, will likely be purchased, secure funding through
private sources at the cost of significant equity stakes, or fail. Norlight has
had the benefit of adequate and timely access to financial resources from the
Company, which has enabled it to expand its network to meet service needs or
pursue opportunities. The Company believes Norlight's ability to react quickly
by executing custom-designed integrated solutions to customer requests is a
significant point of positive differentiation in the current market. The Company
further believes an additional element of Norlight's competitive advantage is
its well-developed, fault tolerant, regional fiber optic network. Managed and
supervised 24-hours-a-day, 7-days-a-week, the network is acknowledged by its
customers, according to their survey responses, for having an outstanding
reputation for reliability. With fewer viable providers to meet the need and an
established customer service track record, the Company believes it stands to
benefit from increasing share in the markets in which it competes.

Like most industry participants, Norlight has entered into various swap and
indefeasible right of use (IRU) arrangements to augment and extend its network
where strategically desirable. The use of these arrangements allows carriers to
gain access to segments of each other's networks to reach new geographic markets
or provide protection to existing network in a cost-effective way. Norlight
treats these arrangements as long-term service contracts, accounting for the
cost of service ratably over the term of the agreement. Likewise, where Norlight
has granted access to its network to others, revenue, whether payment is
received ratably or in lump sum, is recognized over the term of the agreement.

REGULATION. In connection with the Telecommunications Act of 1996, the FCC
regulates Norlight as an interexchange carrier. Additionally, Norlight holds a
variety of classifications at the state level and is regulated accordingly by
the various state Public Utility Commissions. Norlight is currently pursuing a
strategy intended to provide additional local service alternatives to its
customers. Using means such as interconnection agreements or collocation
arrangements, Norlight intends to secure improved service levels at a reduced
cost for the "last mile" of service connection. To facilitate obtaining this
path from Norlight's point-of-presence to the local exchange authority central
office (the last mile), Norlight is in the process of securing local exchange
authority in a number of states in which it conducts business.

                                       12
<PAGE>

IPC COMMUNICATION SERVICES

IPC Communication Services, Inc. (IPC), founded in 1949 as Imperial Printing
Company, was acquired by the Company in 1992. As a full-scale printing company
and a vertically integrated supply chain management company, IPC performs a wide
variety of services to the markets it serves. The foundation of IPC's printing
business includes printing scientific, medical and technical journals. This is
accomplished utilizing conventional and electronic pre-press processes, web and
sheet-fed printing and complete bindery and finishing. IPC is also a Microsoft
authorized replicator and a Microsoft authorized mastering business that
provides compact disc mastering, CD-ROM and CD-Audio replication; e-business
services and solutions; fulfillment (end user, channel and returns); packaging
and assembly and warehousing. These manufacturing and distribution services are
provided to the original equipment manufacturers and the software industry. All
of these markets are served through its direct salesforce.

IPC is based in St. Joseph, Michigan, and has additional operations in Foothill
Ranch, California, Austin, Texas, Lebanon, Tennessee and Roncq, France. In the
beginning of 2001, IPC began operations in Ireland, but due to the deteriorating
economic and marketing conditions closed this facility in February 2002. Also in
2001, based upon significant downward pricing pressure in the compact disc
replication business, IPC reduced its cost base by transitioning the majority of
the Foothill Ranch, California operations to St. Joseph, Michigan.

SEASONAL TRENDS. IPC does not experience seasonal trends with its publishing
customers. IPC's printing business is a predominantly stable business. However,
IPC is dependent, somewhat, upon the seasonality of the technology industries.
Of the revenue it receives from its technology customers, one half is received
during the third and fourth quarters of the year because we believe many PC
software and hardware manufacturers aim their product launches for October and
November to take advantage of the Christmas buying season.

COMPETITION. There are many large and small competitors offering the same
products and services as IPC, in all of its markets. With the investment in a
new 10-unit web press in 2000, IPC has increased its offering of four-color
printing while operating more efficiently. In the original equipment
manufacturers and software market, the competition is more concentrated and much
of the business is being impacted by the trend to reduce the amount of printed
documentation that ships with the products and to deliver the software
electronically, rather than using discs. IPC has introduced, and will continue
to develop, other revenue streams with the objective of compensating for this
trend.

While the loss of a single customer would not have a material adverse effect on
the Company, IPC derives forty-two percent of its revenues from three major
customers and the loss of one or more of these customers would have a material
adverse effect on IPC's results of operations.

RAW MATERIALS. IPC uses paper, ink, and polycarbonate plastic in its production
processes, all of which are readily available.

ADD, INC.

Add, Inc. began publishing and printing in Waupaca, Wisconsin in 1972, and in
1981 the Company purchased a majority interest in Add, Inc. The Company obtained
complete ownership of Add, Inc. in 1986. Add, Inc. owns and operates more than
one hundred publications and

                                       13
<PAGE>


seven printing plants. Add, Inc. derives its revenues from advertising,
circulation, and commercial printing.

Add, Inc. publishes forty-four shoppers with a combined circulation of more than
870,000 households each week. Shoppers are free publications, primarily
carrier-delivered to each household in a geographic area, featuring
advertisements from local and national businesses. A few of Add, Inc.'s shoppers
also include local interest stories and weekly columns, such as fishing/hunting
reports, obituaries and television listings. These shoppers are delivered to
various communities in Massachusetts, New York, Ohio, Vermont, and Wisconsin.

Add, Inc. also publishes forty-seven community newspapers, with a combined
circulation of more than 300,000 weekly. Add, Inc.'s community newspapers focus
on local news and events that are of interest to the local residents. In some
markets, Add, Inc.'s community newspapers are the only source of local news.
These local newspapers serve communities in Connecticut, Florida, Vermont, and
Wisconsin. Over the last few years, Add, Inc. has acquired or started several
niche publications. Niche publications are different from shoppers and community
newspapers in that they are product or industry specific; therefore, they appeal
to a very specific advertiser and reader. A few examples of the niche products
are automotive and boating focused publications. Add, Inc. provides niche
publications in Florida, Louisiana, and Wisconsin.

Add, Inc.'s business model involves "clustering" or grouping like publications
around a central printing facility in order to achieve efficiencies and enable
combination selling within these publications. Publications that cannot meet
Add, Inc.'s strategic goals will be divested. During 2001, Add, Inc.
discontinued operating three publications in Florida and in early 2002, seven
weekly newspapers were discontinued in the Fox Valley region of Wisconsin.

In 2002, Add, Inc. will install a new press at its printing plant in Louisiana.
Add, Inc. expects the new press to bring greater printing efficiencies and
better print quality to its publications as well as new advertising
opportunities for its customers.

SEASONAL TRENDS. Seasonal revenue fluctuations are common in the newspaper
industry and are primarily due to fluctuations in advertising expenditures by
retailers. Add, Inc.'s strongest periods of the year are a result of increased
advertising activity during the spring for Easter and Mother's Day; late summer,
just prior to students returning to school; and during the Thanksgiving and
Christmas periods. The overall level of advertising is dependent upon the
general health of the economy.

COMPETITION. The factors affecting advertising and circulation competition in
the markets Add, Inc. serves include the quality of the products offered,
customer service, competitive pricing versus other publications, editorial and
local news content, and proven readership of the publication's classifieds. Add,
Inc.'s competitors include other newspapers, television and radio stations,
direct mail and the Internet.

RAW MATERIALS. Newsprint is the main material used in Add, Inc.'s production
processes and it has purchase contracts, which run through 2006, with two
suppliers that provide for approximately one half of its estimated newsprint
requirements. According to the contract, Add, Inc. will pay market price for
quantities it determines will meet its requirements. The other half could come
from these suppliers or from other suppliers in the spot market. Price
fluctuations for

                                       14
<PAGE>

newsprint can have a significant effect on Add, Inc.'s results of operations.
The average net price per ton equaled $615 in 2001 compared to an average net
price per ton of $570 in 2000. The total price for newsprint increased $0.5
million during 2001; however, the overall cost of newsprint decreased $1.3
million versus 2000 due to a reduction of $1.8 million in consumption costs.
Add, Inc.'s newsprint consumption decreased to 21,316 metric tons in 2001 from
23,614 metric tons in 2000. The decline is a result of a decrease in volume in
Connecticut and Ohio and the outsourcing of publication printing in Florida.
Add, Inc. attempts to leverage its purchasing power from all of its plants to
obtain the best price possible for non-newsprint supplies, such as camera room
and pressroom materials. The Company anticipates that the supply of newsprint
and other raw materials will adequately meet Add, Inc.'s needs in 2002.

NORTHSTAR PRINT GROUP

In 1966, the Company acquired the Gugler Lithographic Co. which was founded in
Milwaukee in 1878. Gugler has evolved into what is known today as NorthStar
Print Group, Inc. (NorthStar). NorthStar produces premium rotogravure and
pressure sensitive labels on various substrates for consumer goods and
industrial manufacturers (including in-mold labels).

Due to industry consolidations of printers and converters, 2001 was the first
full year that NorthStar began operating its two label operations as a single
consolidated unit. This restructuring has given NorthStar a competitive
advantage as many of its large consumer product customers have also consolidated
through acquisition and have moved towards single-supply source programs.

In March 2001, the Company completed the sale of certain of the assets of the
Milwaukee operations of NorthStar. This business was engaged in the printing of
point-of-purchase materials and out-of-home media.

NorthStar provides Miller Brewing Company with all of its labels for beer
bottles under an agreement that expires in December 2005. This accounts for
about fifty percent of NorthStar's revenue. The loss of this customer would not
negatively affect the results of operations of the Company, but would materially
affect NorthStar's results of operations.

PRIMENET MARKETING SERVICES

The Company acquired PrimeNet DataSystems in St. Paul, Minnesota in 1994 and
MegaDirect in Clearwater, Florida in 1995. Today, these businesses are
collectively known as PrimeNet Marketing Services, Inc. (PrimeNet). In 2001,
PrimeNet assumed operational support responsibilities for a direct mail facility
in Milwaukee, Wisconsin. The St. Paul division is engaged in the business of
providing marketing database services, consultative marketing solutions, data
production services, customized laser printing, direct mail production and
fulfillment services. The Clearwater division is a direct mail operation
offering customers design services, offset and laser printing, direct mail
production, processing and fulfillment. The Milwaukee facility is a direct mail
operation providing direct mail and fulfillment services mainly to the
advertising customers of Journal Sentinel.

SEASONAL/CYCLICAL TRENDS. PrimeNet's Clearwater division can be impacted by
trends in the automobile industry and all of PrimeNet's operations experience
slow downs during the summer

                                       15
<PAGE>

months as these are traditionally slower periods for direct mail. Like other
companies that derive revenue from advertising, the overall health of the
economy effects PrimeNet's operations. In 2001, PrimeNet's results of operations
were negatively impacted from market and competitive pressures due to postal
rate increases and bioterrorism fears which followed the September 11 terrorist
attacks.

COMPETITION. PrimeNet competes for advertising dollars with other direct mail
firms, newspapers, television and radio broadcasting, and the Internet. PrimeNet
also competes with telemarketers. PrimeNet services all types of markets whereby
direct mail is a desirable communication tool for advertisers to solicit new
customers or to communicate with existing customers.

COMPLIANCE WITH ENVIRONMENTAL LAWS

As the owner, lessee or operator of various real properties and facilities, the
Company is subject to various federal, state, and local environmental laws and
regulations. Historically, compliance with these laws and regulations has not
had a material adverse effect on our business. However, there can be no
assurance that compliance with existing or new environmental laws and
regulations will not require us to make future expenditures.

EMPLOYEES

As of December 31, 2001, the Company and its subsidiaries had approximately
4,600 full-time and 2,000 part-time employees compared to approximately 5,100
full-time and 2,200 part-time employees at December 31, 2000. The decrease in
the number of employees is a result of voluntary and involuntary workforce
reduction programs, business divestitures, and attrition. Currently, there are
fourteen bargaining units representing approximately 900 full and part-time
employees, or fourteen percent of the total number of employees.

                               ITEM 2. PROPERTIES

The Company, whose headquarters are located in Milwaukee, Wisconsin, believes
all of its properties are well maintained, are in good condition, and suitable
for its present operations. There are no material encumbrances on any of the
Company's properties or equipment. Principal properties operated by the Company
and its subsidiaries as of December 31, 2001 are:

-------------------------   -------------------   ------------   --------------
         Segment                 Location           How Held     Square Footage
-------------------------   -------------------   ------------   --------------

Journal Sentinel
-------------------------   -------------------   ------------   --------------
Headquarters Office/Plant   Milwaukee, WI         Owned              484,500
-------------------------   -------------------   ------------   --------------
Garage                      Milwaukee, WI         Owned               67,500
-------------------------   -------------------   ------------   --------------
Distribution Centers        Throughout WI         Owned/Leased       295,900
-------------------------   -------------------   ------------   --------------
Inserting Plant             Milwaukee, WI         Leased              85,200
-------------------------   -------------------   ------------   --------------
Production Facility         West Milwaukee, WI    Owned/Leased       448,750
-------------------------   -------------------   ------------   --------------

                                       16
<PAGE>
-------------------------   -------------------   ------------   --------------
         Segment                 Location           How Held     Square Footage
-------------------------   -------------------   ------------   --------------

Journal Broadcast Group
-------------------------   -------------------   ------------   --------------
Headquarters Office         Milwaukee, WI         Owned              101,500
 and Studios
-------------------------   -------------------   ------------   --------------
Office and Studios          Las Vegas, NV         Owned               20,300
-------------------------   -------------------   ------------   --------------
Office and Studios          Lansing, MI           Leased              13,200
-------------------------   -------------------   ------------   --------------
Office and Studios          Palm Springs, CA      Owned               19,100
-------------------------   -------------------   ------------   --------------
Office and Studios          Omaha, NE             Leased              24,700
-------------------------   -------------------   ------------   --------------
Office/Studios/             Tucson, AZ            Owned/Leased         9,800
Transmitter sites
-------------------------   -------------------   ------------   --------------
Office and Studios          Boise, ID             Owned/Leased        39,700
-------------------------   -------------------   ------------   --------------
Office and Studios          Knoxville, TN         Owned               31,400
-------------------------   -------------------   ------------   --------------
Offices and Studios         Wichita, KS           Owned/Leased        26,000
                                                                  (4,700 sq ft.
                                                                   not in use)
-------------------------   -------------------   ------------   --------------
Office and Studios          Springfield, MO       Leased               9,000
-------------------------   -------------------   ------------   --------------
Office and Studios          Tulsa, OK             Leased              20,000
-------------------------   -------------------   ------------   --------------

Norlight Telecommunications
-------------------------   -------------------   ------------   --------------
Headquarters and            Brookfield, WI        Leased             50,700
 Sales Office
-------------------------   -------------------   ------------   --------------
Office/Satellite antennae   Skokie, IL            Leased              6,100
-------------------------   -------------------   ------------   --------------
Office                      Buffalo Grove, IL     Leased              2,700
-------------------------   -------------------   ------------   --------------
Offices                     Green Bay, Madison,   Owned/Leased        9,300
                            and Afton, WI
-------------------------   -------------------   ------------   --------------
Offices                     St. Paul, Duluth,     Owned/Leased        5,300
                            and Arden Hills, MN
-------------------------   -------------------   ------------   --------------
Offices                     Grand Rapids and      Leased              3,800
                            Lansing, MI
-------------------------   -------------------   ------------   --------------
Office                      Indianapolis, IN      Leased              2,500
-------------------------   -------------------   ------------   --------------

IPC Communication Services
-------------------------   -------------------   ------------   --------------
Headquarters Office/        St. Joseph, MI        Leased             321,000
 Plant/Warehouse
-------------------------   -------------------   ------------   --------------
Office/Plant/Warehouse      Foothill Ranch, CA    Leased             201,000
                                                                    (148,700
                                                                 sq. ft. unused)
-------------------------   -------------------   ------------   --------------
Offices/Plants/Warehouses   Fremont and           Leased             621,100
                            San Jose, CA                          (entire space
                                                                    is sublet)
-------------------------   -------------------   ------------   --------------
Office/Warehouse            Austin, TX            Leased              10,600
-------------------------   -------------------   ------------   --------------
Office/Warehouse            Lebanon, TN           Leased              11,200
-------------------------   -------------------   ------------   --------------
                                       17
<PAGE>

-------------------------   -------------------   ------------   --------------
         Segment                 Location           How Held     Square Footage
-------------------------   -------------------   ------------   --------------
Office                      Balentine, CA         Leased                 300
-------------------------   -------------------   ------------   --------------
Offices/Plant               Lille and             Leased              71,600
                            Grenoble, France
-------------------------   -------------------   ------------   --------------
Office/Plant/Warehouse      Dublin, Ireland       Leased              26,400
-------------------------   -------------------   ------------   --------------

Add, Inc.
-------------------------   -------------------   ------------   --------------
Headquarters Office/        Waupaca, WI           Owned               58,000
 and Plant
-------------------------   -------------------   ------------   --------------


                                       18
<PAGE>


-------------------------   -------------------   ------------   --------------
         Segment                 Location           How Held     Square Footage
-------------------------   -------------------   ------------   --------------

Add, Inc. - continued
-------------------------   -------------------   ------------   --------------
Offices/Plants              WI, OH, FL, LA, VT,   Owned/Leased       371,100
                            CT, NY, MA
-------------------------   -------------------   ------------   --------------

NorthStar Print Group
-------------------------   -------------------   ------------   --------------
Headquarters                Watertown, WI         Owned/Leased        74,500
Office/Plant/Warehouse
-------------------------   -------------------   ------------   --------------
Office/Plant                Norway, MI            Owned              108,000
-------------------------   -------------------   ------------   --------------
Offices/Plants              Green Bay and         Owned              168,000
                            Brown Deer, WI                          (128,400
                                                                 sq. ft. unused)
-------------------------   -------------------   ------------   --------------

PrimeNet Marketing Services
-------------------------   -------------------   ------------   --------------
Headquarters Office/Plant   St. Paul, MN          Leased              87,200
-------------------------   -------------------   ------------   --------------
Office/Plant                Clearwater, FL        Leased              32,000
-------------------------   -------------------   ------------   --------------
Office/Plant/Warehouse      Milwaukee, WI         Leased              22,900
-------------------------   -------------------   ------------   --------------



                            ITEM 3. LEGAL PROCEEDINGS

See Note 7 in the Company's "Notes to Consolidated Financial Statements " in the
Company's Annual Report on page 28, which is incorporated herein by reference.

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

No matters were submitted to a vote of security holders during the fourth
quarter of 2001.

                    ITEM 4A. EXECUTIVE OFFICERS OF REGISTRANT

Information with respect to the executive officers of the Company, as of March
6, 2002, is set forth below. The descriptions of the business experience of
these individuals include the principal positions held by them since 1997. Each
officer listed below will hold office until the next annual meeting of the Board
of Directors, which will be held immediately following the annual meeting of
shareholders on June 4, 2002. For information on the directors of the Company,
see Item 10. "Directors and Executive Officers of the Registrant."

STEVEN J. SMITH (51)
Chairman of the Board of Directors of the Company since December 1998 and Chief
Executive Officer since March 1998; President of the Company from September 1992
to December 1998; Director of the Company since 1987.

                                       19
<PAGE>


DOUGLAS G. KIEL (53)
President of the Company since December 1998; Chief Executive Officer of Journal
Broadcast Group* since December 2001; Executive Vice President of the Company
between June 1997 and December 1998; President of Journal Broadcast Group* from
June 1992 to December 1998; Director of the Company since 1991.

PAUL M. BONAIUTO (51)
Executive Vice President of the Company since June 1997 and Chief Financial
Officer since January 1996; Senior Vice President between March 1996 and June
1997; Director of the Company since June 1993.

TODD K. ADAMS (43)
Director and Vice President of the Company since June 1996; Senior Vice
President and Chief Financial Officer of Journal Sentinel* since June 1993.

ANNE M. BAUER (37)
Vice President and Corporate Controller of the Company since June 2000;
Corporate Controller from January 1999 to June 2000; Assistant Corporate
Controller from January 1995 to January 1999.

JAMES J. DITTER (40)
Director and Vice President of the Company since September 1995 and President of
Norlight Telecommunications* since September 1995.

ROBERT M. DYE (54)
Director of the Company since March 6, 1990; Vice President of Corporate Affairs
for the Company since June 2000; Vice President of Corporate Communications for
the Company from March 1990 to June 2000.

CARL D. GARDNER (45)
Director of the Company since June 1999; Vice President of the Company since
March 1999; President-Radio, Journal Broadcast Group* since December 1998;
Executive Vice President - Radio, Journal Broadcast Group* from July 1997 to
December 1998; Executive Vice President - Radio and General Manager, WTMJ-AM and
WKTI-FM, Journal Broadcast Group* from January 1995 to July 1997; Vice President
and General Manager, WTMJ-AM and WKTI-FM, Journal Broadcast Group* from August
1991 to January 1995.

RICHARD J. GASPER (58)
Director and Vice President of the Company since June 1996 and President of
NorthStar Print Group* since January 1996.

DANIEL L. HARMSEN (46)
Vice President of Human Resources for the Company since March 1996.

STEPHEN O. HUHTA (46)
Director and Vice President of the Company since June 1993; President of Add,
Inc.* since August 1996.

                                       20
<PAGE>

MARK J. KEEFE (42)
Director and Vice President of the Company since March 1996 and President of
PrimeNet Marketing Services* since October 1995.

KENNETH J. KOZMINSKI (36)
Director and Vice President of the Company since December 1999; President of IPC
Communication Services* since July 1999; Vice President and General Manager of
Eastern Region-IPC Communication Services* from July 1998 to July 1999; Vice
President of Operations of IPC Communication Services* from May 1998 to July
1998; General Manager of IPC Communication Services Europe, a subsidiary of IPC
Communication Services* from February 1997 to May 1998; Director of Print
Operations of IPC Communication Services* from February 1995 to February 1997.

PAUL E. KRITZER (59)
Vice President and General Counsel-Media for the Company since July 2001; Vice
President-Legal from June 1990 to July 2001; Secretary of the Company since
September 1992 and Director of the Company since June 1990.

MARY HILL LEAHY (47)
Vice President and General Counsel-Business Services for the Company since July
2001; General Counsel Americas, GE Medical Systems from January 1999 to July
2001; Counsel for Products and Distribution, GE Medical Systems from June 1997
to January 1999; Consulting Attorney for Miller Brewing Company from 1995 to
1997.

JAMES P. PRATHER (44)
Director of Journal Communications, Inc. since June 1999; Vice President of the
Company since March 1999; President-Television, Journal Broadcast Group* since
December 1998; Executive Vice President-Television, Journal Broadcast Group*
from December 1997 to December 1998; General Manager of WTMJ-TV from 1995 to the
present.

KEITH K. SPORE (59)
Director and Senior Vice President of the Company and President of Journal
Sentinel* since September 1995; Publisher of The Milwaukee Journal Sentinel
since June 1996.

MARY ALICE TIERNEY (51)
Vice President of Corporate Communications for the Company since June 2000;
Communications and Corporate Affairs Manager from August 1999 to June 2000;
Corporate Affairs Manager from March 1999 to August 1999; Vice President of
Communications and Community Affairs for Journal Broadcast Group Inc* from June
1994 to August 1999.

KAREN O. TRICKLE (45)
Director of the Company since June 1999; Vice President of the Company since
March 1999; Treasurer of the Company since December 1996 after joining the
Company in September 1996.

-----------------------------------------
*A subsidiary of the Company

There are no family relationships between any of the executive officers. All of
the officers are elected annually at the first meeting of the Board of Directors
held after each annual meeting of the shareholders. There is no arrangement or
understanding between any executive officer and any other person pursuant to
which he was elected as an officer.

                                       21
<PAGE>


                                     PART II
                    ITEM 5. MARKET FOR COMPANY'S COMMON STOCK
                         AND RELATED STOCKHOLDER MATTERS

The majority of the Company's common stock is owned by a trust (Stock Trust)
created under the Journal Employees' Stock Trust Agreement, dated May 15, 1937,
as amended (the Trust Agreement). Its creation was due to the determination of
Harry J. Grant, Chairman of the Company from 1935 to his death in 1963, to offer
employees the opportunity to become partners in ownership of the Company. The
purpose of the Stock Trust and the Trust Agreement is to enable eligible
employees to enjoy a beneficial interest in the shares of the Company's common
stock, to vote those shares in certain instances, to take part in the benefits
of ownership, such as capital accumulation and discretionary dividends, and to
control the transfer of units of beneficial interest outside the Company's
active employee group. Employees own units of beneficial interest (units)
representing beneficial interests in the Stock Trust. The intent is to promote
stability and continuity of management and control of the Company in the
interest of the Company, the descendants of Harry J. Grant (Grant family
stockholders) and its employee owners (unitholders). Among other consequences of
that stability and continuity, the Company remains an independent company, and
its media businesses can express independent editorial voices.

A unit is different than a share of common stock offered by publicly traded
companies. Units cannot be traded on the open market. In general, a unit only
can be sold to another employee or to the Company. A unit does not provide a
unitholder with all of the rights typically associated with stock ownership. The
Trust Agreement governs all aspects of unitholders' rights and obligations.

In 1937, the stockholders deposited 25% of the Company's outstanding common
stock in the Stock Trust for units reflecting beneficial ownership in the 25% of
the Company's common stock held by the Stock Trust. The units were then sold to
employees. Similar deposits of the Company's common stock and sales of units in
subsequent years have increased the number of shares of the Company's common
stock deposited in the Stock Trust to 90% of the outstanding common stock, or
25,920,000 shares, and an equal number of units have been issued. There is one
share of the Company's common stock in the Stock Trust for every unit issued.
Employees take part in the employee ownership program by buying units in the
Stock Trust. The Grant family stockholders beneficially own the remaining 10% of
the Company's common stock.

The Stock Trust is administered by five trustees who currently are each an
officer and a director of the Company. They have no financial interest in the
Company's stock owned by the Stock Trust other than through the units that they
own individually.

PURCHASES AND SALES OF UNITS

All purchases and sales of units are transacted at the option price set forth in
the Trust Agreement, typically the option price in effect at the time of the
transaction. The option price is based upon a formula prescribed within the
Trust Agreement. The formula uses the Company's


                                       22
<PAGE>


book value and the past five year's net income as factors in calculating the
option price. An option price is calculated approximately every four weeks.

After a 90-day waiting period, full-time employees of the Company and its
subsidiaries are eligible to take part in the employee-ownership program.
Part-time employees are eligible to buy units if they have 1,000 or more hours
of service during each of the two then most recent calendar years. As the
Company adds new operations and companies, their employees become eligible for
employee-ownership under these rules. The Company and the Grant family
stockholders are also eligible to purchase and hold units. In addition, employee
benefit trusts established by the Company or its subsidiaries or established by
employees to provide retirement benefits and certain other trusts for the
benefit of individual beneficiaries or charities are eligible to own units.

The Company has offered units to eligible employees on a rotation basis. A
rotation schedule determines the time the Company will make the offering to the
group to which each employee has been assigned for purposes of the
employee-ownership rotation. Most often, the Company assigns all the employees
of a given business unit to the same group, which only includes employees from
that business unit. However, in some cases, the Company may divide the employees
of a business unit into two or more groups for rotation purposes. The frequency
of the rotation and the number of units offered to employees depends on the
number of units that the Company has, or anticipates having, available to sell
and the number of units that the Company desires to sell because the Company may
choose to retain rather than sell units. In addition to offering units to
employees on a rotation basis, the Company may allow participants in some
incentive plans to use all or a portion of a cash incentive award to purchase
units. For this purpose, units have been valued at the formula option price then
in effect. Units that participants acquire in this manner are subject to all
terms, conditions, restrictions and rights of units and unitholders.

All units are subject to mandatory offers to sell upon termination of employment
and to restrictions on their resale. In general, the Trust Agreement requires
that an employee must offer to sell his or her units when he or she retires or
otherwise terminates employment and that employees sell units only to certain
classes of eligible purchasers. For this purpose, termination occurs when one
ceases to be an employee of the Company or its subsidiaries. Employees that
retire, as defined by the Journal Communications, Inc. Employees' Pension Plan,
may hold a pro rata share of their units for up to ten years after their
retirement from the Company. In such circumstances, the cumulative number of
units that a retired employee must offer to sell increases in equal increments
of ten percent each year for ten years beginning on the first anniversary of the
employee's retirement. Employees that are terminated because of downsizing,
restructuring, reorganization, job elimination, divestiture, outsourcing or
similar event in each case that results in the termination of a sufficient
number of employees (as determined by the trustees at their sole discretion) may
hold a pro rata portion of units for a period of up to five years after such
termination, depending on the number of years the employee has owned units.
Employees that terminate their employment for reasons other than retirement or
for downsizing, restructuring, etc. are required to offer to sell all of their
units immediately.

The Trust Agreement provides that, when a unitholder offers to sell units,
certain persons may have the option to purchase the units at the formula option
price in accordance with procedures and time periods that the Trust Agreement
prescribes. Persons who may have the option to

                                       23
<PAGE>


purchase units include employees designated by the President of the Company or
the Board of Directors, the Grant family stockholders and the Company. Where the
Trust Agreement requires a unitholder to offer to sell units, the Company's
option to purchase the units extends for five years. While it is not obligated
to do so, recent practice has been that the Company elects to immediately
purchase units offered for sale, and the Company then resells the units to other
employees as described above.

On March 6, 2002, the holders of beneficially owned shares included the
following:

-----------------------------------    ------------------    -----------------
                                             Shares          Percent of Common
             Holders                   Beneficially Owned    Stock Outstanding
-----------------------------------    ------------------    -----------------
Active employees                           16,301,986              56.6%
-----------------------------------    ------------------    -----------------
Former employees                            7,293,053              25.3
-----------------------------------    ------------------    -----------------
Treasury (the Company)                      2,324,961               8.1
-----------------------------------    ------------------    -----------------
Matex, Inc.*                                2,640,000               9.2
-----------------------------------    ------------------    -----------------
Abert Family Journal Stock Trust *            240,000               0.8
-----------------------------------    ------------------    -----------------
* The Grant family stockholders

Former employees include retirees and separated employees with extended
sell-back terms. Of the number of units held by active and former employees,
1,462,324 units were held, as of March 6, 2002, by personal trusts and
foundations.

Though it is not obligated to do so, the Company currently anticipates that it
will continue to pay comparable cash dividends at levels similar to the recent
past. The Company's option price and dividend history (adjusted for stock
splits) for the past decade are presented in the following table:

                                             Amended
               Beginning  Ending  Original   Formula   Total              Total
                Option    Option  Formula      Inc/    Price      Cash    Annual
Year  Quarter    Price    Price   Inc/(Dec)   (Dec)   Increase  Dividend  Return
----  -------  ---------  ------  ---------  -------  --------  --------  ------

2001    4th     $37.68    $38.14   $(0.08)   $ 0.54    $ 0.46    $ 0.30    13.7%
        3rd      36.56     37.68     0.23      0.89      1.12      0.35
        2nd      35.03     36.56     0.66      0.87      1.53      0.35
        1st      34.74     35.03    (0.19)     0.48      0.29      0.35

2000    4th      33.22     34.74     0.68      0.84      1.52      0.35    20.5
        3rd      32.08     33.22     0.30      0.84      1.14      0.35
        2nd      30.84     32.08     0.52      0.72      1.24      0.35
        1st      29.94     30.84     0.28      0.62      0.90      0.30

1999             25.48     29.94     1.80      2.66      4.46      1.14    22.0
1998             21.69     25.48     1.51      2.28      3.79      1.10    22.5
1997             18.58     21.69     1.15      1.96      3.11      1.10    22.7
1996             18.12     18.58        -         -      0.46      1.10     8.6
1995             17.70     18.12        -         -      0.42      1.05     8.3
1994             17.32     17.70        -         -      0.38      0.95     7.7
1993             16.80     17.32        -         -      0.52      0.90     8.5
1992             16.30     16.80        -         -      0.50      0.90     8.6

                                       24
<PAGE>

In 1996, the trustees, stockholders and active-unitholders of the Company
adopted an amendment to the Trust Agreement to change the option price formula
(the amendment) used to calculate the price of units. A multiplier is applied to
the Company's original option price formula. The multiplier was progressively
phased in over five years, beginning with the first accounting period in 1997
and ending with the last accounting period in 2001. A multiplier of 1.5 has
become a permanent component of the option price formula.

STOCK TRUST AMENDMENTS AND TERMINATION

From time to time the Stock Trust holds meetings of its unitholders to vote with
respect to proposed amendments to the Trust Agreement. In addition, there must
be a meeting of unitholders prior to terminating the Trust Agreement. Each
active employee unitholder and certain employee benefit trusts may vote the
number of units the unitholder owns. Unitholders may vote by proxy at these
meetings. The Trust Agreement may only be amended or terminated if all of the
following vote to amend or terminate it: two-thirds of the outstanding units
that active employees and certain employee benefit trusts established by
employees hold; all of the trustees; and 80% of the shares of the Company's
common stock that the Grant family stockholders hold. The Company does not vote
at meetings of unitholders, and its approval is not required to amend or
terminate the Trust Agreement. Under the Trust Agreement, it would be very
difficult, if not impossible, for the trustees to sell or otherwise permanently
dispose of any shares of the Company's common stock that the Stock Trust holds.
If active employee unitholders and employee benefit trust owners of at least
two-thirds of the units then outstanding owned by such holders authorize a sale
of their units, then their units will be offered, successively, to any employee
unitholder and employee benefit trust owner of units who did not consent to the
proposed sale or other permanent disposition (nonconsenting eligibles) and the
Grant family stockholders. If any units remain unsold, first the nonconsenting
eligibles and then the Grant family stockholders have a second opportunity to
purchase. Finally, if any units still remain, then the Company may purchase
them. All of these purchases would be made at the formula option price as set
forth in the Trust Agreement.

If the Company liquidates or dissolves, then the Stock Trust, as holder of the
Company's common stock, is entitled to a pro rata share of the assets available
for distribution on the Company's common stock. In addition, if the Company
liquidates or dissolves or if the Stock Trust terminates as a result of a sale
or other disposition of all or any part of the Company's common stock that the
Stock Trust holds, then the unitholders will receive a pro rata distribution of
the assets of the Stock Trust (or of the proceeds of any partial disposition),
less any amounts withheld for taxes, expenses and other charges.

                         ITEM 6. SELECTED FINANCIAL DATA

Selected financial data of the Company is presented in the Company's Annual
Report on pages 12 and 13 (included in Exhibit 13), and is incorporated herein
by reference.

                                       25
<PAGE>

            ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            ---------------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS
                       -----------------------------------

COMPARE 2001 WITH 2000

CONSOLIDATED
Revenue was $824.8 million in 2001 compared with $839.4 million in 2000, a 1.7%
decrease. Earnings before income taxes decreased $26.8 million to $83.1 million
in 2001 compared with $109.9 million in 2000. The Company believes that the
recession, which began in March 2001, has had a significant adverse impact on
its advertising related businesses. This extremely difficult economic climate
was further exacerbated by the difficulties relating to the September 11
terrorist attacks and has resulted in a disappointing year for many of our
businesses.

JOURNAL SENTINEL
Total revenue of $218.8 million declined $18.2 million or 7.7% from $237.0
million in 2000. The majority of the reduction in revenue is attributed to a
decline in employment advertising. Earnings before taxes in 2001 of $23.3
million declined $15.0 million, or 39.2% from 2000. Cost reductions in virtually
all areas of the newspaper operations did not offset the loss in employment
advertising revenue. A total of $3.3 million in voluntary and involuntary
workforce reduction programs were recorded in 2001. This charge consisted of
termination benefits to be paid to approximately 130 employees.

Advertising revenue totaling $166.3 million was a $17.5 million decrease from
2000. Classified advertising of $67.9 million and $85.4 million in 2001 and
2000, respectively, accounted for the entire decrease. Employment classified
advertising decreased by $18.6 million or 36.0% from 2000. The Company believes
the downward trend of classified advertising revenue will continue in 2002, but
is not expected to be as dramatic as in 2001. Increases in other revenue
categories such as retail preprints, event marketing, solo mail and JS Online,
the online version of the Milwaukee Journal Sentinel, were virtually offset by
decreases in retail and general ROP (run-of-press) and general preprints. Run-of
press refers to advertisements that are published in all editions of a
particular day's newspaper.

Circulation revenue of $48.1 million in 2001 was essentially flat when compared
to $48.3 million in 2000. Average year-to-date net paid circulation in 2001 for
both the daily and Sunday newspaper decreased 7.4% and 1.6%, respectively, from
2000. Late in 2001, the Company decided to eliminate the out-state home delivery
circulation. This decision is expected to reduce daily and Sunday net-paid
circulation by 3.7% and 2.5%; however, there should be positive pretax earnings
implications.

The total cost of newsprint declined in 2001 compared to 2000. A reduction in
consumption more than offset the higher price per tonnage in 2001. The Company
expects the price per tonnage of newsprint to decline in 2002.

Progress on the new production facility is on time and virtually on budget. The
building that will house the KBA Commander presses and the GMA inserting
equipment was completed in December 2001. Press installation, which is nearly a
yearlong process, will begin in early 2002


                                       26
<PAGE>

as the presses begin to arrive from Germany. The Company expects the facility to
be fully operational by early 2003.

JOURNAL BROADCAST GROUP
Journal Broadcast Group consists of five television stations, thirty-six radio
stations and one low-power television station. Revenue was $134.8 million in
2001 compared with $149.9 million in 2000, a decrease of 10.1% or $15.1 million.
Earnings before taxes of $15.5 million in 2001 decreased by $15.0 million from
2000 results. On December 31, 2001, the Company acquired the business and
certain of the assets of a television station, KIVI-TV in Boise, Idaho, and a
low-power television station, KSAW-LP in Twin Falls, Idaho, for approximately
$22.1 million. The Company began operating the new stations on January 1, 2002.

Revenue from the television stations was $60.9 million, a 20.3% decrease from
2000 revenue of $76.4 million. Pretax earnings of $9.6 million in 2001 compared
to $25.4 million in 2000. The economic downturn and the uninterrupted news
coverage following the tragic events of September 11 directly impacted both
advertising revenue and pretax earnings for the television stations. In
addition, 2001 did not have the benefit of political and issue advertising of
$6.4 million and Olympics advertising revenue of $2.9 million that occurred in
2000. Revenue and earnings at the television station in Las Vegas, KTNV-TV, an
ABC affiliate, was also negatively impacted by a decline in ratings. Nationally,
ABC primetime household ratings were down 26% from the prior year and KTNV-TV
had ratings declines in each of its local newscasts.

In Milwaukee, WTMJ-TV, ratings finished the year No. 1 in its target
demographics for the 5 p.m., 6 p.m. and 10 p.m. newscasts. Strong ratings
performance was also achieved at KMIR-TV in Palm Springs. KMIR-TV moved into No.
1 ranking in its target demographics in every newscast and finished first in all
key syndicated programming.

Revenue from the radio operations was $73.9 million in 2001, a slight increase
over 2000 revenue of $73.5 million. The stations in Milwaukee, Tucson, Boise and
Knoxville all contributed to the revenue growth. Although the radio operations
experienced only a modest increase in revenues, they successfully grew pretax
earnings by 18%, or $5.9 million, compared to $5.0 million in 2000. The increase
in earnings was primarily a result of improved operating efficiencies and tight
cost control initiatives at each location. These initiatives resulted in a
decrease in payroll costs and other selling expenses of over $1.0 million.

NORLIGHT TELECOMMUNICATIONS
Norlight recorded revenue and pretax earnings of $152.0 million and $48.0
million in 2001. This represents a 20.1% increase from 2000 revenue and a 19.7%
increase from 2000 pretax earnings. While Norlight recorded significant growth
in 2001, these results were impacted by the general economic slowdown and, more
specifically, the telecommunications industry contraction. Both a reduction in
new sales opportunities and significant price reductions for existing and
renewal customer contracts occurred in 2001. Bad debt expense increased nearly
$1.0 million in 2001 over 2000. This is a direct result of customer business
failures and contractions within Norlight's existing and targeted customer base.
The Company believes that the poor economic health of the telecommunications
industry could result in a slower pace of revenue growth and decreased earnings
growth trends in 2002.

Operationally, Norlight successfully opened a business office in Indianapolis to
support the growth opportunities that network expansion into the state of
Indiana provides. In addition,

                                       27
<PAGE>


several capital investment initiatives were completed in 2001. These included
the purchase and implementation of the Cisco ATM platform and dense wave
division multiplexing transport technology within segments of the legacy
network. These efforts provided the expansion in network capacity that was
necessary to support the growth in Norlight's revenues.

IPC COMMUNICATION SERVICES
IPC Communication Services had revenue of $126.2 million in 2001 compared with
$123.2 million in 2000, an increase of $3.0 million. In 2001, IPC reported a
pretax loss of $1.7 million, compared to pretax earnings of $4.8 million in
2000. Included in the pretax loss for 2001 are $2.3 million of consolidation and
asset impairment costs associated with transitioning the Eastern and Western
Regions into one operational unit called U.S. Operations. IPC's foreign
operations recorded a pretax loss of $3.4 million in 2001, compared to pretax
earnings of $1.0 million in 2000. During 2001, IPC attempted to capitalize on a
promising customer opportunity and started a small operation in Ireland. This
opportunity did not prove to be successful and management responded quickly by
closing its operations in Ireland, and recorded $0.7 million in shutdown costs.

ADD, INC.
Add, Inc. had revenue of $106.3 million in 2001 compared to $112.7 million in
2000, a $6.4 million decrease. Revenue decreases are attributed to the slowdown
in employment and automotive related advertising, the shutdown of unprofitable
publications in 2001 and declines in printing revenue. Add, Inc. did experience
revenue growth in the Vermont and Florida regions, as well as in the Ohio and
Waupaca, Wisconsin, printing plants. Pretax earnings increased $1.1 million to
$0.4 million in 2001, compared to a pretax loss of $0.7 million in 2000. Pretax
earnings increases are a result of corporate-wide efforts to significantly
reduce expenses and gain operational efficiencies. Add, Inc. recorded $0.2
million in termination costs paid to approximately 60 employees.

In January 2002, Add, Inc. announced the closing of the Fox Cities Newspapers
(Newspapers) in Wisconsin. The costs of shutdown are unknown at this time;
however, they are not expected to be material. In 2001, the Newspapers recorded
$3.7 million in revenue and a pretax loss of $1.2 million. The Company did not
expect this group of Newspapers to become profitable in the foreseeable future.

NORTHSTAR PRINT GROUP
Revenue at NorthStar Print Group was $55.6 million compared to $59.6 million in
2000, a decrease of $4.0 million. A pretax loss of $0.5 million in 2001 compared
to a pretax loss of $0.9 million in 2000. On March 2, 2001, certain assets of
the display division in Milwaukee, Wisconsin, were sold. The Company's earnings
were negatively impacted by the recording of $1.1 million in costs related to
the sale. Revenue from the remaining label division of $51.6 million increased
$10.3 million compared to 2000. Pretax earnings from the remaining label
division were $1.5 million in 2001 compared to a pretax loss of $0.7 million in
2000.

PRIMENET MARKETING SERVICES
Revenue at PrimeNet Marketing Services grew to $35.9 million in 2001 compared
with $34.4 million in 2000. PrimeNet mailed about 215 million pieces of mail in
2001, which was another record year. A pretax loss of $1.2 million was recorded
in 2001 compared to pretax earnings of $0.1 million in 2000. The decline in
earnings is largely attributed to the impact of market and

                                       28
<PAGE>


competitive pressures from the slowing economy, the postal rate increases and
the anthrax scares following the September 11 terrorist attacks. The postal rate
increases and the anthrax scare both resulted in advertisers deciding to use
other media to reach their targeted audiences. The Company believes these events
will not significantly impact long-term prospects for revenue and earnings
growth.

OTHER INCOME AND EXPENSE
Dividend and interest income in 2001 was $1.7 million, an increase from $1.4
million in 2000. The Company invests excess cash in cash equivalents such as
commercial paper and money market investments. Interest expense of $0.4 million
in 2001 was virtually even with 2000. During 2001, the Company carried a modest
amount of debt through the first quarter of the year and did not have borrowings
on its line of credit until the last day of the year, at which time it borrowed
$4.4 million. On December 31, 2001, the Company completed the acquisition of a
television station and a low-power television station in Idaho for approximately
$22.1 million. In 2000, the Company carried a modest amount of debt throughout
the entire year.

Net Earnings
Net earnings for 2001 were $47.8 million or $1.70 per share compared with net
earnings of $66.4 million or $2.45 per share in 2000.


COMPARE 2000 WITH 1999

CONSOLIDATED
Revenue was $839.4 million in 2000 compared with $775.2 million in 1999, an 8.3%
increase. Earnings before income taxes decreased $5.1 million to $109.9 million
in 2000 compared with $115.0 million in 1999. Overall, the slowdown in the
national economy affected many of our businesses. In addition, pretax earnings
were impacted by an increase in the cost of the Company's pension plans,
recording of reserves for litigation and the payment of voluntary termination
benefits. The combined impact of these three items was $10.2 million. Without
these expenses, earnings before taxes would have increased $5.1 million, or
4.4%.

JOURNAL SENTINEL
Total revenue of $237.0 million declined $0.2 million or 0.1% from $237.2
million in 1999. The reduction in revenue from the closing of two major
retailers in the Milwaukee area and advertising reductions by some key retail
accounts was partially offset by approximately $2.0 million of additional
revenue due to an extra Sunday newspaper in 2000.

Advertising revenue was $183.8 million in 2000 compared to $183.6 million in
1999. Increases in retail preprints, general advertising, direct and solo mail
and JSOnline were offset by declines in classified and retail ROP
(run-of-press). Run-of press refers to advertisements that are published in all
editions of a particular day's newspaper. Classified advertising, the largest
advertising category, was $85.4 million in 2000 compared with $86.6 million in
1999.

Revenue from circulation was $48.3 million in 2000 compared with $48.8 million
in 1999. Average year-to-date net paid circulation for both the daily and the
Sunday newspaper has decreased 3.2% and 1.4% in 2000 from 1999, respectively.

                                       29
<PAGE>

Earnings before taxes in 2000 were $38.4 million, a decrease of $4.7 million
from 1999. The increase in total newsprint costs, payroll and employee benefits
combined with the recording of $2.1 million in voluntary termination benefits
have more than offset the earnings from the additional Sunday newspaper. Most of
the workforce cutbacks are in production areas to give improved efficiencies,
particularly in the preparation for the moving of production of the newspaper
into a new facility.

JOURNAL BROADCAST GROUP
Journal Broadcast Group revenue was $149.9 million in 2000 compared with $130.9
million in 1999, an increase of 14.5% or $19.0 million. Full year results from
the Company's 1999 acquisitions of one television station and 13 radio stations
account for $11.1 million in revenue growth in 2000. Earnings before taxes of
$30.4 million in 2000 increased by $2.6 million over 1999 results. Same station
pretax earnings grew by $3.1 million in 2000 over 1999.

Revenue from the television stations was $76.4 million, a 10.1% increase from
1999 revenue of $69.4 million. In 2000, the television stations recorded $6.4
million in political and issue advertising and $2.9 million in Olympic
advertising. Advertising market growth in Las Vegas (KTNV) and Palm Springs
(KMIR) was strong in 2000. In addition, KTNV recorded a slight increase in
market share. KMIR focused resources on their news products and recorded strong
growth in news ratings. Political advertising was particularly strong in
Lansing, Michigan (WSYM), where political advertising spending per capita ranked
second in the nation. In addition, WSYM was No. 1 in late news ratings growth
for all Fox affiliates in the country. In 2000, the Milwaukee (WTMJ) advertising
market reported no growth despite political advertising in an election year.
Revenue decreased at WTMJ by 2.4% in 2000 from 1999. However, WTMJ recaptured
the No. 1 ratings position for the 10 p.m. news.

The four television stations reported earnings before taxes of $25.4 million in
2000 compared with $23.4 million in 1999. All stations except WTMJ had pretax
earnings growth in 2000. Overall, all stations have focused on cost containment
programs.

Revenue from the radio operations was $73.5 million in 2000, a $12.0 million
increase over 1999 revenue of $61.5 million. Excluding revenue from the 13 radio
stations acquired in June 1999, same station revenue was $52.7 million in 2000
compared with $47.9 million in 1999, a $4.8 million increase. The stations in
Milwaukee, Tucson, Boise and Knoxville all contributed to the same station
revenue growth. Pretax earnings were $5.0 million compared with $4.4 million in
1999. Same station earnings were $7.2 million in 2000 compared with $5.6 million
in 1999. The year 2000 has been a turnaround year for the radio operations in
Boise and Knoxville.

NORLIGHT TELECOMMUNICATIONS
Norlight continued to record strong revenue and pretax earnings growth in 2000.
Revenue of $126.6 million in 2000 grew 24.8% or $25.2 million over 1999 revenue
of $101.4 million. Pretax earnings were $40.1 million in 2000 compared with
$32.5 million in 1999. This is the first year that Norlight surpassed the
Journal Sentinel as the Company's top earnings producer. In 2000, capital
spending exceeded $28.0 million. Demand for capacity remained strong as the
network continued to expand with the completion of the Indiana addition by the
second quarter of 2001. In addition to network expansion, Norlight continued to
focus on new product development to complement their existing service offerings,
improving service delivery and installation and providing outstanding customer
service. Outstanding customer service was validated by improved results in
customer satisfaction surveys.

                                       30
<PAGE>

IPC COMMUNICATION SERVICES
IPC Communication Services had revenue of $123.2 million in 2000 compared with
$111.3 million in 1999, an increase of $11.9 million. In 2000, IPC reported
earnings before taxes of $4.8 million, a $0.5 million or 10.3% increase over
1999. A combination of an increase in the cost of materials used in production
of $5.3 million and approximately $1.0 million of start-up costs in the Eastern
Region on the new M-1000 press offset the earnings growth from revenue increases
in 2000. The investment in the M-1000 press was expected to bring in additional
revenue and improved production efficiencies in 2001 and beyond.

ADD, INC.
Add, Inc. had revenue of $112.7 million in 2000 compared to $112.2 million in
1999, a $0.5 million increase. Revenue increases were attributed to the full
year impact from the 1999 start-up of the Fox Cities Newspapers and the Vermont
and Connecticut publishing operations, the printing plants in Trumbull,
Connecticut, and Waupaca, Wisconsin, and the 1999 acquisition of the Ponte Vedra
Recorder in Florida. These increases were offset by declines at the publishing
groups in Wisconsin, Ohio and Louisiana. In addition, Add, Inc. reported revenue
of $2.4 million in 1999 from operations that were either sold or shut down
during 1999. A pretax loss of $0.7 million was recorded in 2000 compared to
pretax earnings of $4.1 million in 1999. Significant causes of the earnings
decline were the $1.0 million loss on disposal from the shutdown of the Auto
Mart operations in Ohio, start-up costs of $1.0 million from the new press in
Waupaca, newsprint cost increases and printing inefficiencies at the Dixie Web
print plant.

NORTHSTAR PRINT GROUP
Revenue at NorthStar Print Group was $59.6 million compared to $58.8 million in
1999, an increase of $0.8 million. Revenue from the label division increased
$1.8 million while revenue decreased at the display division in Milwaukee. In
January 2001, the Company announced its agreement to sell certain of the assets
of the display division. The sale was completed on March 2, 2001. A pretax loss
of $0.9 million was recorded in 2000 compared with pretax earnings of $0.7
million in 1999.

PRIMENET MARKETING SERVICES
Revenue at PrimeNet Marketing Services grew by 24.3% to $34.4 million in 2000
compared with $27.6 million in 1999. Earnings before taxes were $0.1 million in
2000 compared with a pretax loss of $2.6 million in 1999. PrimeNet mailed about
185 million mailings in 2000, which was a record year. The significant increase
in revenue coupled with continued tight cost controls resulted in this
turnaround.

OTHER INCOME AND EXPENSE
Dividend and interest income in 2000 was $1.4 million, a decrease from $4.7
million in 1999. The Company invested excess cash in cash equivalents such as
commercial paper and money market investments. The decrease in interest income
is attributed to the high levels of capital spending in 2000 following a year of
$132.6 million in acquisitions. Interest expense of $0.4 million in 2000 was
slightly less than the $0.5 million recorded in 1999. During 2000, the Company
carried a modest amount of debt throughout the year due to the high levels of
capital investment. In 1999, the Company did not have debt borrowings under its
line of credit until late in the year after the Company completed two
significant acquisitions mid-year.

                                       31
<PAGE>

NET EARNINGS
Net earnings for 2000 were $66.4 million or $2.45 per share, compared with net
earnings of $69.4 million or $2.54 per share in 1999.

INCOME TAXES
Income taxes were 42.6% of pretax earnings in 2001 and 39.6% in 2000 and 1999.
Changes in the effective tax rate are a result of changes in state income taxes,
state net operating losses, foreign income taxes and foreign net operating
losses and permanent tax differences. Permanent tax differences exist for
goodwill amortization for acquisitions before 1991. The effective tax rate
increased primarily due to the reduction of deferred tax assets for state net
operating losses and foreign net operating losses.

LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations, which is a significant source of the Company's
liquidity totaled $119.8 million, $132.2 million and $119.2 million in 2001,
2000 and 1999, respectively.

Principal uses of cash for investing purposes during this period were for
property and equipment expenditures. Capital expenditures for property and
equipment totaled $90.4 million in 2001, $97.9 million in 2000 and $69.3 million
in 1999. Cash used for acquisitions was $22.1 million, $8.0 million and $132.6
million in 2001, 2000 and 1999, respectively. In 2000, cash provided by the
redemption of the preferred stock received from the 1995 sale of Perry Printing
was $7.1 million.

Cash used in financing activities totaled $13.4 million, $35.2 million and $39.0
million in 2001, 2000 and 1999, respectively. Net short-term borrowings provided
$4.4 million of cash in 2001 while $12.1 million was used in 2000 to repay
amounts borrowed in 1999. Dividends paid during 2001 were $37.9 million or $1.35
per share, compared with $36.8 million ($1.35 per share) in 2000 and $31.3
million ($1.14 per share) in 1999. In 2001 and 2000, net sales of units of
beneficial interest provided cash of $17.5 million and $13.4 million,
respectively. In 1999, the net purchases of units of beneficial interest used
$19.6 million of cash.

Net working capital at the end of 2001 decreased to a negative $1.2 million from
a positive $26.7 million at the end of 2000. Total indebtedness, as of December
31, 2001, made up of the line of credit, the current portion of long-term
liabilities and long-term liabilities increased $3.0 million in 2001.

The Company has various unsecured short-term lines of credit with banks to
support its cash requirements. At December 31, 2001, the Company had $4.4
million outstanding on a $39.0 million unsecured short-term line of credit. The
interest rate at December 31, 2001 on the outstanding balance was 2.28%. The
maturity on this line of credit has been extended to May 31, 2002. On January
24, 2002, the Company executed a revolving demand note in an aggregate amount
not to exceed $25.0 million. In addition, on February 7, 2002 the Company
increased an existing unsecured short-term line of credit from $2.0 million to
$15.0 million. The Company is currently negotiating a single-syndicated
short-term credit facility.

Since December 31, 2001, the Company has substantially increased its borrowing
under the line of credit and has used its additional demand note primarily to
purchase units of beneficial interest (units) from employees and retirees of the
Company. As of January 25, 2002, the Company


                                       32
<PAGE>

purchased approximately 1,460,000 units worth $55.5 million since December 31,
2001. Near the end of December 2001, the Company sent a communication to all
active employees and retiree and former employee unitholders explaining two
issues that were expected to impact the Company's option price. The Company
believes the issues raised in this letter caused many retiree and former
employee unitholders to sell their scheduled installment of units for 2002
earlier in the year than required. Also, several active employees decided to
sell units.

The Company believes that current cash balances, cash flows from operations and
borrowings under bank loan agreements will be adequate to provide for the
Company's capital expenditures, cash dividends, purchases of units and working
capital requirements for the foreseeable future.

The Company's contractual obligations and commitments are summarized in the
table below.

-----------------------------     ----------------------------------------------

                                              Payments Due by Period
                                                ($'s in thousands)
                                  ----------------------------------------------
   Contractual Obligations                   Less than                    After
                                   Total       1 year     1 - 4 years    4 years
-----------------------------     -------    ---------    -----------    -------
Other long-term liabilities       $ 4,830     $ 1,921       $ 2,199      $   710
-----------------------------     -------    ---------    -----------    -------
Operating leases                   60,181      14,622        32,477       13,082
-----------------------------     -------    ---------    -----------    -------
Total contractual obligations     $65,011     $16,543       $34,676      $13,792
-----------------------------     -------    ---------    -----------    -------

Other long-term liabilities consist primarily of obligations for non-compete
agreements resulting from acquisitions and deposits received from subleases of
building operating leases. The Company leases office space, certain broadcasting
facilities, distribution centers, printing plants and equipment under both
short-term and long-term leases accounted for as operating leases. Some of the
lease agreements contain renewal options and rental escalation clauses, as well
as provisions for the payment of utilities, maintenance and taxes by the
Company.

-----------------------------     ----------------------------------------------

                                    Amount of Commitment Expiration per Period
                                                ($'s in thousands)
                                  ----------------------------------------------
      Other Commitments                      Less than                    After
                                   Total       1 year     1 - 4 years    4 years
-----------------------------     -------    ---------    -----------    -------
Other contractual commitments     $29,737     $19,107       $10,445       $ 185
-----------------------------     -------    ---------    -----------    -------
Standby letters of credit           1,822       1,822            --          --
-----------------------------     -------    ---------    -----------    -------
Total other commitments           $31,559     $20,929       $10,445       $ 185
-----------------------------     -------    ---------    -----------    -------

Commitments for television programs not yet available for broadcast as of
December 31, 2001, were $12.9 million. In addition, purchase commitments related
to capital expenditures for Journal Sentinel's new production facility are
approximately $16.8 million. The Company expects to spend up to $110.9 million
on this project to be completed by early 2003, of which $83.3 million has been
spent on the project as of December 31, 2001. Standby letters of credit are
required for business insurance purposes.

                                       33
<PAGE>

CONCENTRATION OF CREDIT RISK
Credit is extended based upon an evaluation of the customer's financial
position, and generally advance payment is not required. Credit losses are
provided for in the financial statements and consistently have been within the
Company's expectations. The allowance for doubtful accounts at December 31, 2001
and 2000 was $4.1 million and $3.6 million, respectively. The Company performed
a detailed analysis of the collectibility of all of its accounts receivable and
determined it was necessary to increase its allowance for doubtful accounts in
2001.

LITIGATION AND CONTINGENCIES
The Company is subject to various legal actions, administrative proceedings and
claims arising out of the ordinary course of business. Management believes that
such unresolved legal actions and claims will not materially affect the
consolidated results of operations, financial position or cash flows of the
Company. Although it is not possible to predict the outcome of litigation with
certainty, through December 31, 2001 the Company has accrued $10.0 million for
potential adverse outcomes in such actions, of which a majority relates to the
Newspaper Merger Class Action Suit. The Company periodically reevaluates its
exposure on such claims and, based on the changing circumstances in the
Newspaper Merger Class Action Suit, increased its litigation reserve by $5.7
million during 2001.

Newspaper Merger Class Action Suit -- On May 4, 1999, five former employees
filed a lawsuit in the Milwaukee County Circuit Court. This suit was in
connection with the 1995 merger of the Milwaukee Journal and Milwaukee Sentinel.
The plaintiffs allege that an internal memorandum created a contract permitting
members of the plaintiff class to sell back units at any time over a period of
up to ten years, depending on their years of unit ownership. The Company asserts
that it was widely communicated and known that units were required to be sold
back to the Company ratably over a specified time period. This lawsuit has been
granted class action status to include all other unitholders who separated from
the Company as part of the merger. In 2000 the judge ruled in favor of the
plaintiff's summary judgment motion that the separation agreement permits the
sell back of units at any time during the sell-back period. A trial on the
remaining issues of breach, causation and amount of damages is not expected to
begin any earlier than June 2002. While the Company disagrees with the judge's
ruling on the contract interpretation, there is a risk that the outcome of such
a trial may not be in the Company's favor. However, based upon the information
available as of the date of the filing of this Annual Report on Form 10-K, the
Company believes its litigation reserve is adequate to cover any likely outcome
in the Newspaper Merger Class Action Suit.

ASSUMPTIONS USED IN THE ACCOUNTING FOR PENSION BENEFITS AND OTHER POSTRETIREMENT
BENEFITS The Company has made certain assumptions as it relates to the
accounting for pension benefits and other postretirement benefits. Moody's Aa
Corporate bonds, as of the measurement date, is the benchmark the Company
consistently uses to determine the assumed discount rate, which was 7.25% for
2001. Management makes other assumptions that affect the accounting for pension
benefits, such as the expected rate of return on plan assets (9.5% in 2001) and
the rate of compensation increase (4.5% in 2001). These assumptions are reviewed
by the Company on an annual basis.

IMPAIRMENT OF LONG LIVED ASSETS
Goodwill, broadcast licenses and other intangible assets account for 35.8% and
36.9% of total assets at December 31, 2001 and 2000, respectively. These assets,
resulting primarily from


                                       34
<PAGE>

acquisitions, are recorded at fair market value at the time of acquisition and
were amortized on a straight-line basis over the expected benefit period up to
40 years. All long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. In the fourth quarter of 2001, the Company recorded a $1.0 million
loss on impairment of certain property at Journal Broadcast Group and certain
equipment at IPC. Independent professional appraisers determined fair market
value.

NEW ACCOUNTING STANDARDS
In June 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 addresses
financial accounting and reporting for business combinations and requires that
the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. The Company applied the new standards to its
acquisition of two television stations on December 31, 2001.

Under SFAS No. 142, goodwill and certain other intangible assets, including
broadcast licenses, will no longer be systematically amortized but, instead,
will be reviewed for impairment on an annual basis and written down and charged
to results of operations when their carrying amount exceeds their estimated fair
value. SFAS No. 142 is effective for the Company on January 1, 2002. Management
expects that ceasing amortization of goodwill and broadcast licenses will reduce
operating expense by approximately $9.0 million for 2002. In addition, the
Company expects to record a write-down in the first quarter of 2002 for goodwill
and other intangible asset impairment of $8.2 million at PrimeNet and a
write-down for impairment of broadcast licenses of $1.0 million at Journal
Broadcast Group. The impairment charge will be non-operational in nature and
reflected as a cumulative effect of an accounting change in 2002. In the case of
the PrimeNet assets, an impairment loss was not recognized under SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," since the recoverability test of the sum of undiscounted cash
flows exceeded the carrying value of the assets. In the case of the broadcast
licenses, the indicators of impairment under SFAS No. 121 were not present.

EFFECT OF INFLATION
The Company's results of operations and financial condition have not been
significantly affected by general inflation. The Company has reduced the effects
of rising costs through improvements in productivity, cost containment programs
and, where the competitive environment exists, increased selling prices.
However, changes in newsprint prices could have an impact on costs, which the
Company may not be able to offset fully in its pricing or cost containment
programs.


       ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to interest rate risk on its short-term line of credit
and foreign currency exchange rates in the normal course of its business.
However, a 10% change in the interest rate is not expected to have a material
impact on the Company's earnings before income taxes. In addition, the Company
has minimal operations outside the United States and has not entered into any
foreign currency derivative instruments.

                                       35
<PAGE>

                    ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
                             AND SUPPLEMENTARY DATA

The Company's Consolidated Financial Statements with Report of Independent
Auditors are presented in Exhibit 13, as provided on pages 14 through 32 of the
Company's Annual Report, and are incorporated herein by reference.

            ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                       ACCOUNTING AND FINANCIAL DISCLOSURE
                                      None.

                                    PART III
           ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information in response to this item is incorporated herein by reference to the
Company's proxy statement, which shall be filed with the Securities and Exchange
Commission no later than April 30, 2002. Information about executive officers of
the Company is included in Item 4A. of this Form 10-K.

                         ITEM 11. EXECUTIVE COMPENSATION

Information in response to this item is incorporated herein by reference to the
Company's proxy statement, which shall be filed with the Securities and Exchange
Commission no later than April 30, 2002.

                ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

Information in response to this item is incorporated herein by reference to the
Company's proxy statement, which shall be filed with the Securities and Exchange
Commission no later than April 30, 2002.

             ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information in response to this item is incorporated herein by reference to the
Company's proxy statement, which shall be filed with the Securities and Exchange
Commission no later than April 30, 2002.

                                       36
<PAGE>

                                     PART IV
                ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                             AND REPORTS ON FORM 8-K

(a)  1 and 2.
     Financial Statements and Financial Statement Schedules
     The following consolidated financial statements of the Registrant are
     included in Item 8:

                                                             Company's
                                                           Annual Report
                                                            Page Number
          Consolidated Balance Sheets at
           December 31, 2001 and 2000                           14

          Consolidated Statements of Earnings
           for each of the three years in
           the period ended December 31, 2001                   15

          Consolidated Statements of Stockholders'
           Equity for each of the three years
           in the period ended December 31, 2001                16

          Consolidated Statements of Cash Flows
           for each of the three years in the
           period ended December 31, 2001                       17

          Notes to Consolidated Financial Statements
           December 31, 2001                                   18-31

                                                           Company's 10-K
          Financial Statement Schedules:                    Page Number

          Consolidated schedules for each of
          the three years in the period ended
          December 31, 2001:
          II - Valuation and qualifying accounts                36

          All other schedules are omitted since the required information is not
          present, or is not present in amounts sufficient to require submission
          of the schedule, or because the information required is included in
          the consolidated financial statements and notes thereto.

          3.   Exhibits

               The exhibits listed on page 40 are filed as part of this annual
               report.

(b)  Reports on Form 8-K.
     No report on Form 8-K was required to be filed by the Company during the
     quarter ended December 31, 2001.

                                       37
<PAGE>

                          JOURNAL COMMUNICATIONS, INC.

          SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

                  Years ended December 31, 2001, 2000, and 1999
                                 (in thousands)


                Balance at    Additions     Acquisitions/                Balance
                Beginning      Charged     (Divestitures)   Deductions   at End
Description      of Year     to Earnings        (1)            (2)       of Year
-------------   ----------   -----------   --------------   ----------   -------
Allowance for
doubtful
accounts:

2001             $ 3,617       $ 4,274         $  (59)       $ 3,755     $ 4,076

2000             $ 4,302       $ 3,244             --        $ 3,929     $ 3,617

1999             $ 4,345       $ 3,727         $  199        $ 3,969     $ 4,302

Reserve for
litigation:

2001             $ 4,350       $ 5,650         $   --        $    --     $10,000

2000             $ 2,834       $ 4,445         $   --        $ 2,929     $ 4,350

1999             $ 2,469       $   365         $   --        $    --     $ 2,834


Notes:
-----
(1)  During 2001, $59,000 was deducted from the allowance for doubtful accounts
     due to the sale of the Milwaukee operation of NorthStar Print Group. During
     1999, $199,000 was added to the allowance for doubtful accounts due to the
     purchase of Great Empire Broadcasting, Inc.
(2)  Deductions from the allowance for doubtful accounts equal accounts
     receivable written off, less recoveries, against the allowance. The
     deduction from the reserve for litigation in 2000 represents a settlement
     payment.

                                       38
<PAGE>


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                    JOURNAL COMMUNICATIONS, INC.



                                    By: /s/ Steven J. Smith
                                        ----------------------------------------
                                        Steven J. Smith
                                        Chairman and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:



/s/ Steven J. Smith                                     March 28, 2002
---------------------------------------------
Steven J. Smith, Director &
Chief Executive Officer
(Principal Executive Officer)

/s/ Douglas G. Kiel                                     March 28, 2002
---------------------------------------------
Douglas G. Kiel, Director & President

/s/ Paul M. Bonaiuto                                    March 28, 2002
---------------------------------------------
Paul M. Bonaiuto, Director & Chief Financial
Officer (Principal Financial Officer)

/s/ Anne M. Bauer                                       March 28, 2002
---------------------------------------------
Anne M. Bauer, Vice President & Controller
(Principal Accounting Officer)

/s/ Todd K. Adams                                       March 28, 2002
---------------------------------------------
Todd K. Adams, Director

/s/ David A. Anderson                                   March 28, 2002
---------------------------------------------
David A. Anderson, Director

                                                        March   , 2002
---------------------------------------------                ---
Bernadette L. Carpenter, Director

/s/ James J. Ditter                                     March 28, 2002
---------------------------------------------
James J. Ditter, Director

/s/ Robert M. Dye                                       March 28, 2002
---------------------------------------------
Robert M. Dye, Director

                                       39
<PAGE>

/s/ James L. Forbes                                     March 28, 2002
---------------------------------------------
James L. Forbes, Director

/s/ Carl D. Gardner                                     March 28, 2002
---------------------------------------------
Carl D. Gardner, Director

/s/ Richard J. Gasper                                   March 28, 2002
---------------------------------------------
Richard J. Gasper, Director

/s/ Cynthia L. Gault                                    March 28, 2002
---------------------------------------------
Cynthia L. Gault, Director

/s/ Douglas T. Golner                                   March 28, 2002
---------------------------------------------
Douglas T. Golner, Director

                                                        March   , 2002
---------------------------------------------                ---
Troy A. Hartfiel, Director

                                                        March   , 2002
---------------------------------------------                ---
Stephen O. Huhta, Director

                                                        March   , 2002
---------------------------------------------                ---
Margaret M. Jones, Director

/s/ Mark J. Keefe                                       March 28, 2002
---------------------------------------------
Mark J. Keefe, Director

                                                        March   , 2002
---------------------------------------------                ---
Kenneth J. Kozminski, Director

                                                        March   , 2002
---------------------------------------------                ---
Paul E. Kritzer, Director

/s/ Sandra J. Lloyd                                     March 28, 2002
---------------------------------------------
Sandra J. Lloyd, Director

/s/  David G. Meissner                                  March 28, 2002
---------------------------------------------
David G. Meissner, Director

/s/ Ulice Payne, Jr.                                    March 28, 2002
---------------------------------------------
Ulice Payne, Jr., Director

/s/ Roger D. Peirce                                     March 28, 2002
---------------------------------------------
Roger D. Peirce, Director

/s/ James P. Prather                                    March 28, 2002
---------------------------------------------
James P. Prather, Director

                                                        March   , 2002
---------------------------------------------                ---
Keith K. Spore, Director

/s/ Karen O. Trickle                                    March 28, 2002
---------------------------------------------
Karen O. Trickle, Director

                                       40
<PAGE>




                          JOURNAL COMMUNICATIONS, INC.

                                INDEX TO EXHIBITS
                                  (Item 14(a))

                                                                      Form 10-K
Exhibits                                                             Page Number
--------                                                             -----------

(3.1)    Articles of Association of Journal Communications,
         Inc., as amended (incorporated by reference to
         Exhibit 3.1 to Journal Communications, Inc.'s
         Annual Report on Form 10-K for the year ended
         December 31, 1995 [Commission File No. 0-7831]).

(3.2)    By-Laws of Journal Communications, Inc.
         (incorporated by reference to Exhibit 3.1 to
         Journal Communications, Inc.'s Current Report
         For Form 8-K dated March 5, 1996 [Commission
         File No. 0-7831]).

(4.1)    The Journal Employees' Stock Trust Agreement,
         dated May 15, 1937, as amended (incorporated by
         reference to Exhibit 4.1 of the Quarterly
         Report on Form 10-Q of Journal Employees' Stock
         Trust for the quarter ended June 30, 2001
         [Commission File No. 0-7832]).

(13)     Portions of Registrant's Annual Report, filed herewith          42-62

(21)     Subsidiaries of the Registrant, filed herewith                     63

(23)     Consent of Independent Auditors, filed herewith                    64



                                       41
<PAGE>


<TABLE>
                                                             Exhibit 13

                                                                                                                            Average
<CAPTION>
Ten Years in Review                                                                                                          annual
(in thousands, except option price and per share amounts)                                                                   Compound
                                                                                                                                %
                       2001       2000    1999(10)  1998 (9)  1997 (8)  1996 (7)  1995 (6)  1994 (3)  1993 (2)  1992 (1)    increase
                     ---------------------------------------------------------------------------------------------------------------
<S>                  <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>           <C>
Revenue (11)         $824,844   $839,411  $775,167  $749,723  $688,089  $634,420  $604,769  $527,580  $455,929  $392,904      8.6%

Operating Expense
 (12)                 743,032    730,444   664,426   653,366   598,396   567,095   563,344   460,527   390,042   332,801      9.3%

Operating earnings
 (12)                  81,812    108,967   110,741    96,357    89,693    67,325    41,425    67,053    65,887    60,103      3.5%

Non-operating
 income (expense),
 net (12)               1,328        968     4,273     6,305     6,246     3,366     4,806       778     1,611     2,567     -7.1%
                     ---------------------------------------------------------------------------------------------------------------

Earnings from
 continuing
 operations before
 income taxes (5)      83,140    109,935   115,014   102,662    95,939    70,691    46,231    67,831    67,498    62,670      3.2%
                                                                                       (4)

Income taxes           35,383     43,551    45,565    41,954    39,728    29,648    18,330    27,230    26,460    17,879      7.9%

                     ---------------------------------------------------------------------------------------------------------------
Earnings from
 continuing
 operations            47,757     66,384    69,449    60,708    56,211    41,043    27,901    40,601    41,038    44,791      0.7%

Discontinued
 operations, net            -          -         -         -         -         -    16,312     3,266     3,166     3,16    -100.0%

                     ---------------------------------------------------------------------------------------------------------------
Net Income           $ 47,757   $ 66,384  $ 69,449  $ 60,708  $ 56,211  $ 41,043  $ 44,213  $ 43,867  $44,204   $ 47,951      0.0%
                     ===============================================================================================================


Financial Position
  Net working
   capital           $ (1,235)  $ 26,689  $ 22,320  $153,385  $129,418  $104,935  $124,129  $114,369  $106,368  $ 99,229
  Property and
   equipment(5)       317,316    273,258   216,698   178,338   173,312   163,693   160,433   149,687   135,716   124,107    11.0%
  Total assets        732,316    687,627   639,070   584,148   550,133   473,564   474,738   461,416   437,429   409,863     6.7%
  Long-term
   obligations          4,563      3,994     4,991     1,643     1,808     1,524     2,762     2,947     3,609     2,251      N/A
  Stockholders'
   equity             532,880    508,519   465,697   447,884   412,739   361,030   366,330   367,429   347,447   328,230     5.5%
  Percent return
   on stockholders'
   equity                9.4%      14.3%     15.5%     14.7%     15.6%     11.2%     12.0%      12.6%     13.5%     13.4%
  Other Financial
   Data
    Earnings for
     option price    $ 51,052   $ 69,011  $ 69,449  $ 65,432  $ 51,464  $ 41,043  $ 43,149  $ 43,867  $ 44,204  $ 41,631      2.3%
    Dividends          37,866     36,765    31,286    31,057    30,243    28,563    29,156    26,699    25,156    25,244      4.6%
    Earnings
     retained           9,891     29,619    38,163    29,651    25,968    12,480    15,057    17,168    19,048    16,387     -5.5%

  Per Share Amounts
    Net earnings       $ 1.71     $ 2.45    $ 2.54    $ 2.16    $ 2.05    $ 1.57    $ 1.59    $ 1.57    $ 1.58    $ 1.49      1.6%
    Earnings for
     option price        1.81       2.55      2.54      2.33      1.88      1.57      1.55      1.57      1.58      1.49      2.2%
    Dividends            1.35       1.35      1.14      1.10      1.10      1.10      1.05      0.95      0.90      0.90      4.6%
    Book value          18.90      18.38     17.08     15.98     14.88     13.70     13.43     13.02     12.38     11.70      5.5%
    Unit option price   38.14      34.74     29.94     25.48     21.69     18.58     18.12     17.70     17.32     16.80      9.5%












Notes
 1)  Includes full year of Norlight and IPC since Oct. 6.
 2)  Includes full year of IPC and IPC-Europe since Feb 28.
 3)  Includes full year of PrimeNet Marketing Services.
 4)  Does not include gain on sale of Perry Printing Corp. of $14,941 or $0.535 per share in 1995.
 5)  Figures prior to 1996 have been restated to exclude the discontinued operations of Perry Printing Corp.
 6)  Includes Omaha, Neb., radio stations KEZO-AM (renamed KOSR-AM), KEZO-FM and KKCD-FM since Jan. 24 and PrimeNet-Clearwater since
     June 22.
 7)  Includes Tucson, Ariz., radio stations KMXZ-FM, KKHG-FM (renamed KZPT-FM) and KKND-AM (renamed KFFN-AM) since Jan. 29.
 8)  Includes Knoxville, Tenn., radio stations WWST-FM and WMYU-FM since June 30, CNI since Oct. 1 and Kansas City, Mo., radio
     station KQRC-FM until June 30.
 9)  Includes Omaha, Neb., radio stations KESY-FM (renamed KSRZ-FM) and KBBX-AM from January 1; Knoxville, Tenn., radio stations
     WQBB-FM (renamed WQIX-FM) and WQBB-AM from April 20; Oracle, Ariz., radio station KLQB-FM (renamed KIXD-FM, KGMG) from June 9;
     and Caldwell, Idaho (KCID-AM and KCID-FM), Payette, Idaho (KQXR-FM), Boise, Idaho (KGEM-AM and KJOT-FM) and Ontario, Ore.
     (KSRV-AM and KSRV-FM) radio stations from July 1.
10)  Includes Wichita, Kan., radio stations KFDI-AM, KFDI-FM and KICT-FM; Arkansas City, Kan., radio station KYQQ-FM; Augusta, Kan.,
     radio station KLLS-FM (renamed KFXJ-FM); Springfield, Missouri radio stations KTTS-FM and and KTTS-AM; Sparta Missouri radio
     station KLTQ-FM (renamed KMXH-FM); Tulsa, Okla., radio stations KVOO-FM and KVOO-AM; Henryetta, Okla., radio station KCKI-FM;
     and Omaha, Neb., radio stations WOW-FM (renamed KMXM-FM) and WOW-AM (renamed KOMJ-AM) since June 14, 1999; and Palm Springs,
     Calif., TV station KMIR-TV from August 1, 1999.
11)  Figures prior to 2001 have been restated to properly record postage and freight sales and expense per EITF 00-10.
12)  Figures have been restated to properly record the gain/(loss) on sale of fixed assets.
</TABLE>

                                                                 42
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
         December 31 (in thousands, except share and per share amounts)

                                                         2001            2000
ASSETS
Current assets:
  Cash and cash equivalents                           $  10,087      $  12,031
  Receivables, net                                       95,804        107,708
  Inventories, net                                       20,807         20,100
  Prepaid expenses                                       10,096          8,860
  Deferred income taxes                                   5,696          5,339
                                                      ---------      ---------
     TOTAL CURRENT ASSETS                               142,490        154,038

Property and equipment:
  Land and land improvements                             23,644         18,371
  Buildings                                              79,357         73,925
  Equipment                                             457,447        440,517
  Construction in progress                               85,494         56,197
                                                      ---------      ---------
                                                        645,942        589,010
  Less accumulated depreciation                         324,141        315,752
                                                      ---------      ---------
  Net property and equipment                            321,801        273,258

Goodwill, net                                           112,687        113,783
Broadcast licenses, net                                 128,842        123,219
Other intangible assets, net                             20,360         16,829
Other assets                                              6,136          6,500
                                                      ---------      ---------
     TOTAL ASSETS                                     $ 732,316      $ 687,627
                                                      =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Line of credit                                      $   4,420      $      --
  Accounts payable                                       45,421         55,685
  Accrued compensation                                   24,159         25,971
  Deferred revenue                                       21,180         19,234
  Accrued employee benefits                              23,882         11,513
  Other current liabilities                              22,742         12,670
  Current portion of long-term liabilities                1,921          2,277
                                                      ---------      ---------
     TOTAL CURRENT LIABILITIES                          143,725        127,350

Accrued employee benefits                                19,508         22,838
Other liabilities                                        10,695          6,397
Deferred income taxes                                    25,508         22,523

Stockholders' equity:
  Common stock, $0.125 par value; authorized
       and issued 28,800,000 shares                       3,600          3,600
  Retained earnings                                     556,139        542,800
  Units of beneficial interest in treasury, at cost     (23,046)       (37,074)
  Accumulated other comprehensive loss                   (3,813)          (807)
                                                      ---------      ---------
     TOTAL STOCKHOLDERS' EQUITY                         532,880        508,519
                                                      ---------      ---------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 732,316      $ 687,627
                                                      =========      =========

See accompanying notes.

                                       43
<PAGE>
                       CONSOLIDATED STATEMENTS OF EARNINGS
        Years ended December 31 (in thousands, except per share amounts)

                                             2001          2000          1999

REVENUE

  Publishing                              $ 295,814     $ 318,371     $ 318,592
  Broadcasting                              134,801       149,886       130,857
  Telecommunications                        151,992       126,586       101,428
  Printing                                  211,117       214,031       200,847
  Other                                      31,120        30,537        23,443
                                          ---------     ----------    ---------
TOTAL REVENUE                               824,844       839,411       775,167

COSTS OF SALES AND EXPENSES

  Publishing                                136,944       141,446       136,356
  Broadcasting                               54,804        54,672        48,317
  Telecommunications                         77,079        62,060        49,817
  Printing                                  180,396       178,156       161,768
  Other                                      26,259        25,308        20,916
                                          ---------     ----------    ---------
  Total cost of sales                       475,482       461,642       417,174
  Selling and administrative expenses       267,550       268,802       247,252
                                          ---------     ----------    ---------
TOTAL COSTS OF SALES AND EXPENSES           743,032       730,444       664,426
                                          ---------     ----------    ---------

OPERATING EARNINGS                           81,812       108,967       110,741

INTEREST AND DIVIDENDS

  Interest income and dividends               1,714         1,403         4,747
  Interest expense                             (386)         (435)         (474)
                                          ---------     ----------    ---------
TOTAL NET INTEREST AND DIVIDENDS              1,328           968         4,273
                                          ---------     ----------    ---------

EARNINGS BEFORE INCOME TAXES                 83,140       109,935       115,014

Provision for income taxes                   35,383        43,551        45,565
                                          ---------     ----------    ---------

NET EARNINGS                              $  47,757     $  66,384     $  69,449
                                          =========     =========     =========

BASIC AND DILUTED EARNINGS PER SHARE      $    1.70     $    2.45     $    2.54
                                          =========     =========     =========

See accompanying notes.

                                       44
<PAGE>
<TABLE>
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       Years ended December 31 (in thousands, except per share amounts)
<CAPTION>
                                                      Units of
                                                      Beneficial    Accumulated
                                                       Interest        Other
                                Common    Retained        in       Comprehensive                Comprehensive
                                 Stock    Earnings     Treasury    Income (Loss)      Total     Income (Loss)
                                ------    --------    ----------   -------------      -----     -------------

<S>                             <C>       <C>         <C>             <C>           <C>           <C>
Balance at December 31, 1998    $ 3,600   $462,919    $(18,826)       $   191       $447,884
  Net earnings                              69,449                                    69,449      $  69,449
  Other comprehensive loss
    Foreign currency
     translation adjustments                                             (759)          (759)          (759)
                                                                                                  ---------
  Other comprehensive loss                                                                             (759)

Comprehensive income                                                                              $  68,690
                                                                                                  =========

Cash dividends ($1.14 per
 share)                                    (31,286)                                  (31,286)
Units of beneficial interest
 purchased                                             (69,017)                      (69,017)
Units of beneficial interest
 sold                                        3,601      45,825                        49,426
                                -------   --------    --------        -------       --------
Balance at December 31, 1999      3,600    504,683     (42,018)          (568)       465,697
  Net earnings                              66,384                                    66,384      $  66,384
  Other comprehensive loss
    Foreign currency
     translation adjustments                                             (239)          (239)          (239)
                                                                                                  ---------
  Other comprehensive loss                                                                             (239)
                                                                                                  =========

Comprehensive income                                                                              $  66,145
                                                                                                  =========

Cash dividends ($1.35 per
 share)                                    (36,765)                                  (36,765)
Units of beneficial interest
 purchased                                             (77,145)                      (77,145)
Units of beneficial interest
 sold                                        8,498      82,089                        90,587
                                -------   --------    --------        -------       --------
Balance at December 31, 2000      3,600    542,800     (37,074)          (807)       508,519
  Net earnings                              47,757                                    47,757      $  47,757
  Other comprehensive loss
    Minimum pension
     liability adjustment
     (net of tax of $1,906)                                            (2,856)        (2,856)        (2,856)
    Foreign currency
     translation adjustments                                             (150)          (150)          (150)
                                                                                                  ---------
  Other comprehensive loss                                                                           (3,006)

Comprehensive income                                                                              $  44,751
                                                                                                  =========

Cash dividends ($1.35 per
 share)                                    (37,866)                                  (37,866)
Units of beneficial interest
 purchased                                             (84,351)                      (84,351)
Units of beneficial interest
 sold                                        3,448      98,379                       101,827
                                -------   --------    --------        -------       --------
Balance at December 31, 2001    $ 3,600   $556,139    $(23,046)       $(3,813)      $ 532,880
                                =======   ========    ========        =======       ========
</TABLE>
See accompanying notes.
                                                      45
<PAGE>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31 (in thousands)

                                             2001         2000        1999
                                             ----         ----        ----
Cash flow from operating activities:
  Net earnings                            $   47,757   $   66,384   $   69,449
  Adjustments to reconcile net
   earnings to net cash provided
   by operating activities
    Depreciation                              41,576       39,530       37,689
Amortization of intangible assets             10,863       11,463        8,964
Provision for doubtful accounts                3,830        2,908        4,305
Deferred income taxes                          4,533        2,562          307
  Net loss from disposal of assets             2,486        1,565        1,049
  Net changes in assets and
   liabilities, excluding effect
   of sales and acquisitions
    Receivables                                4,905       (6,185)      (9,586)
    Inventories                               (1,310)        (334)        (240)
    Accounts payable                         (10,264)       5,163        3,956
    Other assets and liabilities              15,374        9,171        3,293
                                          ----------   ----------   ----------
       NET CASH PROVIDED BY OPERATING
        ACTIVITIES                           119,750      132,227      119,186
                                          ----------   ----------   ----------

Cash flow from investing activities:
  Proceeds from sales of assets                5,255        3,212          895
  Property and equipment expenditures        (90,363)     (97,871)     (69,316)
  Acquisition of businesses                  (22,148)      (8,018)    (132,571)
  Redemption of preferred stock                   --        7,106           --
  Other                                       (1,069)         466         (166)
                                          ----------   ----------   ----------
       NET CASH USED FOR INVESTING
        ACTIVITIES                          (108,325)     (95,105)    (201,158)
                                          ----------   ----------   ----------

Cash flow from financing activities:
  Net increase (decrease) in line
   of credit                                   4,420      (12,115)      12,115
  Proceeds from other long-term
   liabilities                                   301          258        1,189
  Payments of other long-term
   liabilities                                (1,752)      (2,422)      (1,398)
  Purchases of units of beneficial
   interest                                  (84,351)     (77,145)     (69,017)
  Sales of units of beneficial
   interest                                  101,827       90,587       49,426
  Cash dividends                             (37,866)     (36,765)     (31,286)
  Deferred revenue                             4,052        2,403           --
                                          ----------   ----------   ----------
       NET CASH USED FOR FINANCING
        ACTIVITIES                           (13,369)     (35,199)     (38,971)
                                          ----------   ----------   ----------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                             (1,944)       1,923     (120,943)
Cash and cash equivalents
  Beginning of year                           12,031       10,108      131,051
                                          ----------   ----------   ----------
  End of year                             $   10,087   $   12,031   $   10,108
                                          ==========   ==========   ==========

Cash paid for income taxes                $   25,788   $   40,859   $   52,841
                                          ==========   ==========   ==========

See accompanying notes.
                                       46
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           December 31, 2001 (in thousands, except per share amounts)

1    PRINCIPAL ACCOUNTING POLICIES

BASIS OF CONSOLIDATION - The consolidated financial statements include the
accounts of Journal Communications Inc. and its wholly owned subsidiaries
(collectively, the Company). All significant intercompany balances and
transactions have been eliminated.

FOREIGN CURRENCY TRANSLATION - The Company's foreign subsidiaries use the local
currency as their functional currency. Accordingly, assets and liabilities of
the foreign subsidiaries are translated into U.S. dollars at year-end exchange
rates while revenue and expense items are translated at the weighted average
exchange rates for the year. The resulting translation adjustments are reflected
in accumulated other comprehensive income (loss).

REVENUE RECOGNITION - The Company recognizes revenue primarily from the
publishing, broadcasting, telecommunications and printing industries. Publishing
revenue is generated primarily from advertising and circulation revenue.
Broadcasting revenue is generated primarily from the sale of television and
radio advertising time. Advertising revenue is recognized in the publishing and
broadcasting industries when the advertisement is published or aired.
Circulation revenue is recognized ratably over the newspaper subscription
period. Telecommunication revenue is generated from toll (voice), data
transmission and satellite (video) services. Toll and video service revenue is
recognized at the time the service is performed and data transmission revenue is
recorded on a straight-line basis over the term of the contract. Revenue in the
printing industry is recorded at the time of shipment when title passes to the
customer.

EARNINGS PER SHARE - Basic and diluted earnings per share are the same because
there are no dilutive securities. The term "share" is representative of both
shares and units of beneficial interest outstanding.

                                               2001       2000       1999
                                               ----       ----       ----

     Net earnings                            $47,757    $66,384    $69,449
     Weighted average shares outstanding      28,084     27,101     27,393
     Earnings per share                        $1.70      $2.45      $2.54

FAIR VALUES - The carrying amount of cash and cash equivalents, receivables,
accounts payable and long-term obligations approximates fair value as of
December 31, 2001 and 2000.

CASH EQUIVALENTS - Cash equivalents are highly liquid investments with
maturities of three months or less when purchased. Cash equivalents are stated
at cost, which approximates market value.

RECEIVABLES - Allowance for doubtful accounts at December 31, 2001 and 2000 was
$4,076 and $3,617, respectively.

                                       47
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1    PRINCIPAL ACCOUNTING POLICIES continued

INVENTORIES - Inventories are stated at the lower of cost (first in, first out
method) or market. Inventories at December 31 consisted of the following:

                                                  2001            2000
                                                  ----            ----

     Paper and supplies                         $10,356         $11,994
     Work in process                              2,440           2,771
     Finished goods                               9,362           6,646
     Less obsolescence reserve                   (1,351)         (1,311)
                                                -------         -------
                                                $20,807         $20,100
                                                =======         =======

PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost.
Depreciation of property and equipment is provided over the estimated useful
lives (3-30 years) of the respective assets principally using the straight-line
method.

GOODWILL - Goodwill resulting from acquisitions subsequent to November 1, 1970,
is amortized on a straight-line basis over 40 years. Goodwill prior to November
1, 1970, is amortized when it is determined that such intangible assets have a
limited useful life. At December 31, 2001, $2,280 of goodwill was not being
amortized. Accumulated amortization at December 31, 2001 and 2000 was $19,164
and $15,535, respectively.

BROADCAST LICENSES - Broadcast licenses resulting from acquisitions are
amortized on a straight-line basis over 30 years. Accumulated amortization as of
December 31, 2001 and 2000 was $14,767 and $10,314, respectively.

OTHER INTANGIBLE ASSETS - Identifiable intangible assets resulting from
acquisitions are amortized on a straight-line basis for periods up to 40 years.
Accumulated amortization relating to other intangible assets at December 31,
2001 and 2000 was $42,160 and $39,551, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS - Property and equipment, goodwill, broadcast
licenses and other intangible assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be
recoverable. If the sum of the expected undiscounted cash flows is less than the
carrying value of the related asset or group of assets, a loss is recognized for
the difference between the fair value and carrying value of the asset or group
of assets. Such analyses necessarily involve significant judgment. In 2001, the
Company recorded a $1,003 loss on impairment of certain property at Journal
Broadcast Group and certain equipment at IPC Communication Services. Fair market
value was determined by independent professional appraisers. This loss is
recorded as an operating expense in the accompanying Consolidated Statement of
Earnings.

CONCENTRATION OF CREDIT RISK - Credit is extended based upon an evaluation of
the customer's financial position, and generally advance payment is not
required. Credit losses are provided for in the financial statements and
consistently have been within management's expectations.

                                       48
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1    PRINCIPAL ACCOUNTING POLICIES continued

USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

RECLASSIFICATIONS - Certain prior year amounts have been reclassified to conform
to the 2001 presentation.

RECENTLY ADOPTED ACCOUNTING STANDARDS - The Company adopted Emerging Issues Task
Force Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs" on
January 1, 2001. EITF No. 00-10 requires companies to classify shipping and
handling amounts billed to customers as revenue. Shipping and handling amounts
billed to customers were $29,120 in 2000 and $19,236 in 1999. The Company has
historically classified shipping and handling costs as a reduction to revenue.
However, shipping and handling costs have been reclassified to cost of sales in
the accompanying Consolidated Statements of Earnings for all years presented
herein.

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." In 2000,
the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an amendment of FASB Statement No. 133," which was
adopted concurrently with SFAS No. 133. Provisions of the Statements are
required to be adopted for years beginning after June 15, 2000 and require the
Company to recognize all derivatives in the balance sheet at fair value. The
Company adopted the Statements effective January 1, 2001. As the Company is not
party to any derivative transactions, the adoption has not had an effect on its
results of operations, financial position or cash flows.

NEW ACCOUNTING STANDARDS - In June 2001, the FASB issued SFAS No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 addresses financial accounting and reporting for business combinations
and requires that the purchase method of accounting be used for all business
combinations completed after June 30, 2001. Under SFAS No. 142, goodwill and
certain other intangible assets, including broadcast licenses, will no longer be
systematically amortized but, instead, will be reviewed for impairment and
written down and charged to results of operations when their carrying amount
exceeds their estimated fair value. SFAS No. 142 is effective for the Company
for its fiscal year beginning January 1, 2002. Management expects that the
effect of ceasing amortization of goodwill and broadcast licenses will reduce
operating expenses by approximately $9.0 million for 2002. The Company currently
expects to record a write-down for goodwill and other intangible asset
impairment of $8.2 million at PrimeNet Marketing Services (PrimeNet) and a
write-down for impairment of broadcast licenses of $1.0 million at Journal
Broadcast Group. The impairment charge will be non-operational in nature and
reflected as a cumulative effect of an accounting change in 2002. In the case of
the PrimeNet assets, an impairment loss was not recognized under SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," since the recoverability test of the sum of future, expected
undiscounted cash flows exceeded the carrying value of the assets. In the case
of the broadcast licenses, the indicators of impairment under SFAS No. 121 were
not present.

                                       49
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1    PRINCIPAL ACCOUNTING POLICIES continued

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which addresses financial accounting and
reporting for the impairment of long-lived assets and for long-lived assets to
be disposed of, as well as the accounting and reporting of discontinued
operations. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001, with early adoption permitted. The Company will adopt SFAS No. 144
effective January 1, 2002.

2    EMPLOYEE BENEFIT PLANS

The Company has a defined benefit pension plan (the Pension Plan) covering the
majority of its employees. The benefits are based on years of service and the
average compensation from the employee's last five years of employment. Plan
assets consist primarily of listed stocks and government and other bonds. In
addition, the Company provides health benefits to certain retirees and their
eligible spouses. The Company has elected to amortize the related unfunded
postretirement health care obligation of $25,324 at January 1, 1993, over a
period of 20 years.

The Company also sponsors an unfunded non-qualified pension plan (SERP Plan) for
employees whose benefits under the Pension Plan and the Investment Savings Plan
may be restricted to limitations imposed by the Internal Revenue Service. The
disclosure for the SERP Plan for all years presented is combined with the
Pension Plan. The accrued net benefit cost related to the SERP Plan was $4,403
and $4,143 at December 31, 2001 and 2000, respectively.

                                                          Other Postretirement
                                  Pension Benefits              Benefits
                                  ----------------        --------------------

Years ended December 31           2001        2000          2001        2000
                                  ----        ----          ----        ----

CHANGE IN BENEFIT
 OBLIGATIONS
Benefit obligation
 at beginning of year           $111,549    $102,129      $ 28,937    $ 25,311
Service cost                       3,361       3,751           549         523
Plan amendments                       31          --            --          --
Interest cost                      7,552       7,759         2,069       1,822
Actuarial (loss) gain             (4,039)      4,643         8,682       4,037
Benefits paid                     (7,060)     (6,733)       (2,972)     (2,756)
                                --------    --------      --------    --------
Benefit obligation at
 end of year                    $111,394    $111,549      $ 37,265    $ 28,937
                                ========    ========      ========    ========

CHANGE IN PLAN ASSETS
Fair value of plan assets
 at beginning of year           $ 79,861    $ 86,247      $     --    $     --
Actual loss return on
 plan assets                      (3,897)     (4,233)           --          --
Company contributions              3,852       4,580         2,972       2,756
Benefits paid                     (7,060)     (6,733)       (2,972)     (2,756)
                                --------    --------      --------    --------
Fair value of plan assets
 at end of year                 $ 72,756    $ 79,861      $     --    $     --
                                ========    ========      ========    ========

                                       50
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2    EMPLOYEE BENEFIT PLANS continued

Years ended December 31           2001        2000          2001        2000
                                  ----        ----          ----        ----

FUNDED STATUS OF THE PLAN
Underfunded status of the
 plan                           $(38,638)   $(31,688)     $(37,265)   $(28,937)
Unrecognized net actuarial
 loss                             21,740      13,662         9,856       1,174
Unrecognized prior service
 cost                              1,303       1,527            --          --
Unrecognized transition
 obligation                          313         417        12,211      13,321
                                --------    --------      --------    --------
Accrued net benefit cost        $(15,282)   $(16,082)     $(15,198)   $(14,442)
                                ========    ========      ========    ========

ACCRUED NET BENEFIT COST
Accrued benefit cost            $(21,612)   $(16,082)     $(15,198)   $(14,442)
Intangible asset                   1,568          --            --          --
Deferred tax asset                 1,906          --            --          --
Accumulated comprehensive loss     2,856          --            --          --
                                --------    --------      --------    --------
Accrued net benefit cost        $(15,282)   $(16,082)     $(15,198)   $(14,442)
                                ========    ========      ========    ========


                                                      Pension Benefits

Years ended December 31                       2001          2000        1999
                                              ----          ----        ----

COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                $  3,361      $  3,751    $  3,874
Interest cost                                  7,552         7,759       7,071
Expected return on plan assets                (8,189)       (7,721)     (7,097)
Amortization of:
  Unrecognized prior service cost                254           254         254
  Unrecognized net transition obligation
     (asset)                                     104          (127)       (133)
  Unrecognized net (gain) loss                   (30)           --         291
                                            --------      --------    --------

Net periodic benefit cost                   $  3,052      $  3,916    $  4,260
                                            ========      ========    ========

                                              Other Postretirement Benefits

Years ended December 31                       2001          2000        1999
                                              ----          ----        ----

COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                $    549      $    523    $    566
Interest cost                                  2,069         1,822       1,797
Amortization of:
  Unrecognized net transition obligation       1,110         1,110       1,110
  Unrecognized net gain                           --           (17)         --
                                            --------      -------     --------

Net periodic benefit cost                   $  3,728      $  3,438    $  3,473
                                            ========      ========    ========

                                       51
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2    EMPLOYEE BENEFIT PLANS continued

                                                            Other Postretirement
                                        Pension Benefits          Benefits
                                        ----------------    --------------------

Major assumptions as of December 31     2001        2000      2001        2000
                                        ----        ----      ----        ----

Discount rate                           7.25%       7.50%     7.25%       7.50%
Expected return on plan assets          9.50        9.50        --          --
Rate of compensation increase           4.50        4.50        --          --

The assumed health care cost trend rate used in measuring the postretirement
benefit obligation for retirees for 2002 is 10.0%, grading down to 5.0% in the
year 2007 and thereafter. The assumed health care cost trend rates have a
significant effect on the amounts reported for other postretirement benefits. A
one percentage point change in the assumed health care cost trend rate would
have the following effects:

                                                        One            One
                                                     Percentage     Percentage
                                                       Point          Point
                                                      Increase       Decrease
                                                     ----------     ----------
    Effect on total of service and interest
     cost components in 2001                          $   140        $  (119)
    Effect on postretirement benefit
     obligation as of December 31, 2001                 1,485         (1,313)


The Journal Communications Inc. Investment Savings Plan is a defined
contribution benefit plan covering substantially all employees. The plan allows
employees to defer up to 19% of their eligible wages, up to the IRS limit, on a
pre-tax basis. In addition, employees can contribute up to 10% of their eligible
wages after taxes. The maximum combined total contributed may not exceed 19%.
Each employee who elects to participate is eligible to receive company matching
contributions. The Company may contribute $0.50 for each dollar contributed by
the participant, up to 5% of eligible wages as defined by the plan. Company
matching contributions were $2,672, $2,799 and $2,273 in 2001, 2000 and 1999,
respectively. The Company made additional contributions into the Investment
Savings Plan on behalf of certain employees not covered by the Pension Plan of
$860, $759 and $596 in 2001, 2000 and 1999, respectively.

                                       52
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3   INCOME TAXES

The components of the provision for income taxes consist of the following:

Years ended December 31                      2001         2000         1999
                                             ----         ----         ----

Current:
  Federal                                  $ 24,807     $ 35,473     $ 37,241
  State                                       6,043        5,516        8,017
                                           --------     --------     --------
                                             30,850       40,989       45,258
Deferred                                      4,533        2,562          307
                                           --------     --------     --------
Total                                      $ 35,383     $ 43,551     $ 45,565
                                           ========     ========     ========


The significant differences between the statutory federal tax rates and the
effective tax rates are as follows:

Years ended December 31                      2001         2000         1999
                                             ----         ----         ----

Statutory federal income tax rate            35.0%        35.0%        35.0%
State income taxes, net of federal
 tax benefit                                  5.6          4.2          4.1
Foreign income taxes                          0.7         (0.3)         0.0
Other                                         1.3          0.7          0.5
                                             ----         ----         ----
Actual provision                             42.6%        39.6%        39.6%
                                             ====         ====         ====

                                       53
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3    INCOME TAXES continued

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities include:

December 31                                           2001             2000
                                                      ----             ----

CURRENT ASSETS
Receivables                                        $   1,415        $   1,288
Inventories                                              425              597
Other assets                                             306              290
Accrued compensation                                   3,559            3,288
Accrued employee benefits                              1,117            1,020
                                                   ---------        ---------
Total current deferred tax assets                      6,822            6,483
                                                   ---------        ---------

CURRENT LIABILITIES
Accrued state taxes                                   (1,126)          (1,121)
Other liabilities                                         --              (23)
                                                   ---------        ---------
   Total current deferred tax liabilities             (1,126)          (1,144)
                                                   ---------        ---------

Total net current deferred tax asset               $   5,696        $   5,339
                                                   =========        =========

NON-CURRENT ASSETS
Accrued employee benefits                          $   7,945         $ 10,062
Litigation reserve                                     3,643            1,908
State net operating losses                             4,262            5,141
Foreign net operating losses                           2,618            1,930
Other assets                                             575              441
                                                   ---------        ---------
   Total non-current deferred tax assets              19,043           19,482
                                                   ---------        ---------

NON-CURRENT LIABILITIES
Property and equipment                               (14,326)         (13,088)
Intangible assets                                    (24,922)         (24,302)
Other liabilities                                         --              (61)
                                                   ---------        ---------
   Total non-current deferred tax liabilities        (39,248)         (37,451)
                                                   ---------        ---------

Total net non-current deferred tax liabilities     $ (20,205)       $ (17,969)
                                                   =========        =========

Valuation allowances
Domestic loss carryforwards                        $  (2,685)       $  (2,624)
Foreign loss carryforwards                            (2,618)          (1,930)
                                                   ---------        ---------
   Total valuation allowance                       $  (5,303)       $  (4,554)
                                                   =========        =========

Net deferred tax liability                         $ (19,812)       $ (17,184)
                                                   =========        =========

                                       54
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3    INCOME TAXES continued

At December 31, 2001, the Company had state net operating loss carryforwards
which begin to expire in 2002; state income tax credit carryforwards which begin
to expire in 2004; and foreign net operating loss carryforwards which begin to
expire in 2005. To the extent the Company believes there is significant
uncertainty regarding realization of such carryforwards, valuation allowances
have been provided. The Company expects to utilize these carryforwards, except
to the extent reserves have been provided.

4    OTHER LIABILITIES AND COMMITMENTS

Other liabilities consist of the following:

December 31                                           2001             2000
                                                      ----             ----

Capital lease and other obligations, average
 interest rate of 8% in 2001 and 2000              $   4,465        $   5,932
Television program contracts, due in the
 subsequent years                                        365              339
                                                   ---------        ---------
                                                       4,830            6,271
Less current portion                                   1,921            2,277
                                                   ---------        ---------
                                                       2,909            3,994
Deferred revenue                                       7,786            2,403
                                                   ---------        ---------
Total other liabilities                            $  10,695        $   6,397
                                                   =========        =========

The Company has various unsecured short-term lines of credit with banks to
support its cash requirements. At December 31, 2001, the Company had $4,420
outstanding on a $39.0 million unsecured short-term line of credit. The interest
rate at December 31, 2001 on the outstanding balance was 2.28%. The Company is
required to pay a facility fee of 0.07% on the total line of credit which
expires on March 18, 2002. The Company also has a $2.0 million unsecured
short-term line of credit. The outstanding balance at December 31, 2001 on this
line was $265 with an interest rate of 3.87%. This unsecured short-term line of
credit was increased to $15.0 million on February 7, 2002. In addition, on
January 24, 2002, the Company executed a revolving demand note in an aggregate
amount not to exceed $25.0 million, with multiple rate alternatives. The Company
is currently seeking to consolidate its debt needs into a single credit
facility.

The Company has $1,822 of standby letters of credit for business insurance
purposes. In addition, the Company has the rights to broadcast certain
television programs during the years 2002-2008 under contracts aggregating
$12,937.

                                       55
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4    OTHER LIABILITIES AND COMMITMENTS continued

The Company leases office space, certain broadcasting facilities, distribution
centers, printing plants and equipment under both short-term and long-term
leases accounted for as operating leases. Some of the lease agreements contain
renewal options and rental escalation clauses, as well as provisions for the
payment of utilities, maintenance and taxes by the Company. As of December 31,
2001 the Company's future minimum rental payments due under noncancelable
operating lease agreements consist of the following:

                   2002                           $ 14,622
                   2003                             12,579
                   2004                              9,457
                   2005                              7,090
                   2006                              3,351
             Thereafter                             13,082
                                                  --------
                                                  $ 60,181
                                                  ========

Rent expense charged to operations for 2001, 2000 and 1999 was $30,057, $26,630
and $22,912, respectively. Rental income from subleases included in operations
for 2001, 2000 and 1999 was $4,379, $4,147 and $3,874, respectively. Aggregate
future minimum rentals to be received under noncancelable subleases equal
$15,382 as of December 31, 2001.

Purchase commitments related to capital expenditures for Journal Sentinel's new
production facility were approximately $16.8 million as of December 31, 2001.
The Company expects to spend up to $110.9 million on this project to be
completed by early 2003. As of December 31, 2001, the Company has spent $83.3
million on this project.

5    STOCKHOLDERS' EQUITY

Units of beneficial interest

Employee-owners of the Company do not own shares of the Company's stock
directly. Instead, they own "Units of Beneficial Interest" (units), representing
beneficial interests in the Journal Employees' Stock Trust (the Trust)
established under the Journal Employees' Stock Trust Agreement (JESTA). The
Trust, in turn, owns shares of the Company's stock. Each unit is represented by
one share of stock held by the Trust. The Company purchases units under the
terms of JESTA and resells them to active employees. Employees owning units are
referred to as unitholders. Unit activity is as follows:

Years ended December 31                       2001         2000         1999
                                              ----         ----         ----

                                              Units        Units        Units

Beginning balance in treasury                 1,140        1,529          780
Purchases                                     2,333        2,458        2,583
Sales                                        (2,860)      (2,847)      (1,834)
                                             ------       ------       ------
   Ending balance in treasury                   613        1,140        1,529
                                             ======       ======       ======

                                       56
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5    STOCKHOLDERS' EQUITY continued

Accumulated other comprehensive loss

Accumulated other comprehensive loss consists of the following as of December
31:

                                                     2001            2000
                                                     ----            ----

Cumulative foreign currency translation
 adjustments                                       $   (957)       $  (807)
Minimum pension liability, net of tax                (2,856)            --
                                                   --------        -------
   Accumulated other comprehensive loss            $ (3,813)       $  (807)
                                                   ========        =======


6    SALES AND ACQUISITIONS

On December 31, 2001, the Company acquired the business and certain of the
assets of a television station, KIVI-TV in Boise, Idaho and a low-power
television station, KSAW-LP, in Twin Falls, Idaho. The cash purchase price for
the stations was approximately $22.1 million. The acquisition will complement
the Company's six radio broadcast stations in the Boise market and the four
television stations in other markets. The Boise market is expected to continue
to be one of the fastest growing markets in the country. Business related
synergies also are expected to be achieved as a result of the acquisition. A
summary of the preliminary purchase price allocation, which is based upon
current estimates and may be revised, is as follows: property and equipment -
$4.5 million; goodwill - $1.6 million; broadcast licenses - $10.0 million and
network affiliation agreement, included within other intangible assets - $6.0
million. Goodwill, broadcast licenses and the network affiliation agreement are
not subject to amortization under the provisions of SFAS No. 142. Goodwill is,
however, deductible for income tax purposes.

On March 2, 2001, the Company completed the sale of certain of the assets of the
Milwaukee operation of NorthStar Print Group. The cash sales price was
approximately $4.4 million.

On August 1, 1999, the Company acquired the business and substantially all of
the assets of KMIR-TV in Palm Springs, California. The cash purchase price was
approximately $30.6 million.

On June 14, 1999, the Company acquired all the issued and outstanding capital
stock of Great Empire Broadcasting, Inc. (GEB). GEB owned and operated radio
stations KFDI-AM, KFDI-FM and KICT-FM in Wichita, Kansas; KYQQ-FM in Arkansas
City, Kansas; KLLS-FM (renamed KFXJ-FM) in Augusta, Kansas; KTTS-FM and KTTS-AM
in Springfield, Missouri; KLTQ-FM (renamed KMXH-FM) in Sparta, Missouri; KVOO-FM
and KVOO-AM in Tulsa, Oklahoma; KCKI-FM in Henryetta, Oklahoma; and WOW-FM
(renamed KMXM-FM) and WOW-AM (renamed KOMJ-AM) in Omaha, Nebraska. The aggregate
acquisition price for the capital stock and related non-compete agreement was
approximately $105.3 million.

The above-mentioned completed acquisitions were accounted for using the purchase
method. Accordingly, the operating results and cash flows of the acquired
businesses are included in the Company's consolidated financial statements from
the respective dates of acquisition. Had the

                                       57
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6    SALES AND ACQUISITIONS continued

transactions occurred on January 1 of the year acquired, the effect of the
acquisitions on the Company's consolidated results of operations, for each
respective year, would not have been material.

7    LITIGATION AND CONTINGENCIES

The Company is subject to various legal actions, administrative proceedings and
claims arising out of the ordinary course of business. Management believes that
such unresolved legal actions and claims will not materially affect the
consolidated results of operations, financial position or cash flows of the
Company. Although it is not possible to predict the outcome of litigation with
certainty, through December 31, 2001 the Company has accrued $10.0 million for
potential adverse outcomes in such actions. The accrual is included in other
current liabilities in the accompanying Consolidated Balance Sheet. The Company
periodically reevaluates its exposure on such claims and makes adjustments to
its accruals as appropriate.

Newspaper Merger Class Action Suit -- On May 4, 1999, five former employees
filed a lawsuit in the Milwaukee County Circuit Court. This suit was in
connection with the 1995 merger of the Milwaukee Journal and Milwaukee Sentinel.
The plaintiffs allege that an internal memorandum created a contract permitting
members of the plaintiff class to sell back units at any time over a period of
up to ten years, depending on their years of unit ownership. The Company asserts
that it was widely communicated and known that units were required to be sold
back to the Company ratably over a specified time period. This lawsuit has been
granted class action status to include all other unitholders who separated from
the Company as part of the merger. In 2000 the judge ruled in favor of the
plaintiff's summary judgment motion that the separation agreement permits the
sell back of units at any time during the sell-back period. The Company
disagrees with this ruling. A trial is not expected to begin any earlier than
June 2002.

8    WORKFORCE REDUCTION AND BUSINESS TRANSITION CHARGES

During 2001, the Company recorded a pretax charge of $6,055 for voluntary and
involuntary workforce reduction programs and business transition costs. The
charge consisted primarily of $3,602 in termination benefits for approximately
200 employees, of which $2,460 remains unpaid at December 31, 2001. In addition,
the Company recorded $2,453 for shutdown costs of its IPC operations in Ireland
and in transitioning the IPC Eastern and IPC Western Regions into one
operational unit called IPC U.S. Operations. These costs included $732 in
termination benefits for about 90 employees.

9    SEGMENT ANALYSIS

Journal Communications Inc. is an employee-owned, diversified communications
company with operations primarily in the United States and France. Revenues from
external customers are generated, and long-lived assets are located, primarily
in the United States. The Company is organized based upon its distinct operating
divisions and has seven reporting segments consisting of Journal Sentinel,
Journal Broadcast Group, Norlight Telecommunications, IPC Communication
Services, Add, Inc., NorthStar Print Group and PrimeNet Marketing Services.


                                       58
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9    SEGMENT ANALYSIS continued

Journal Sentinel daily publishes the Milwaukee Journal Sentinel and includes
Journal Interactive, a division that designs and maintains internet web sites,
including JSOnline.com. Journal Broadcast Group owns and operates 36 radio
stations, five television stations and one low-power television station that
sell advertising and broadcast programming to target audiences. Norlight
Telecommunications is a full service provider of telecommunication services for
the carrier and business markets. It owns and operates one of the largest fiber
optic networks in the Midwest. IPC Communication Services serves the publishing,
software, entertainment and government markets by providing printing, CD-ROM
mastering and replication, diskette duplication, assembly and complete
fulfillment. Add, Inc. is a publisher of over 100 paid and free newspapers and
shoppers. It also engages in commercial printing. NorthStar Print Group employs
a wide array of printing technologies to produce labels for consumer and
industrial manufacturers. PrimeNet Marketing Services provides personalized
direct marketing services to merchandisers and manufacturers.

The accounting policies of the reportable segments are the same as those
described in the "Principal Accounting Policies" outlined in Note 1.

The following tables summarize revenue, earnings (loss) before income taxes,
depreciation and amortization, and capital expenditures for the years ended
December 31 and identifiable total assets at December 31:

                                             2001         2000         1999
                                             ----         ----         ----

REVENUE
Journal Sentinel                           $218,849     $236,994     $237,160
Journal Broadcast Group                     134,801      149,886      130,857
Norlight Telecommunications                 151,992      126,586      101,428
IPC Communication Services                  126,154      123,178      111,278
Add, Inc.                                   106,281      112,662      112,169
NorthStar Print Group                        55,647       59,568       58,832
PrimeNet Marketing Services                  35,903       34,360       27,634
Corporate and eliminations                   (4,783)      (3,823)      (4,191)
                                           --------     --------     --------
                                           $824,844     $839,411     $775,167
                                           ========     ========     ========

EARNINGS (LOSS) BEFORE INCOME TAXES
Journal Sentinel                           $ 23,313     $ 38,356     $ 43,042
Journal Broadcast Group                      15,460       30,420       27,817
Norlight Telecommunications                  48,033       40,118       32,474
IPC Communication Services                   (1,748)       4,786        4,341
Add, Inc.                                       374         (729)       4,095
NorthStar Print Group                          (504)        (889)         650
PrimeNet Marketing Services                  (1,191)         106       (2,596)
Corporate and eliminations                   (1,925)      (3,201)         918
Net interest and dividends                    1,328          968        4,273
                                           --------     --------     --------
                                           $ 83,140      $109,935    $115,014
                                           ========     ========     ========


                                       59
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9    SEGMENT ANALYSIS continued

                                             2001         2000         1999
                                             ----         ----         ----
DEPRECIATION AND AMORTIZATION
Journal Sentinel                           $  8,336     $  8,213     $  8,407
Journal Broadcast Group                      13,287       13,584       10,564
Norlight Telecommunications                  14,735       11,376        9,656
IPC Communication Services                    6,780        7,362        7,713
Add, Inc.                                     5,688        6,205        5,645
NorthStar Print Group                         2,056        2,478        2,565
PrimeNet Marketing Services                   1,175        1,226        1,518
Corporate and eliminations                      382          549          585
                                           --------     --------     --------
                                           $ 52,439     $ 50,993     $ 46,653
                                           ========     ========     ========


CAPITAL EXPENDITURES
Journal Sentinel                           $ 47,071     $ 47,120     $ 10,670
Journal Broadcast Group                      10,260        7,674        5,868
Norlight Telecommunications                  27,509       28,779       37,010
IPC Communication Services                    1,830        8,510        6,111
Add, Inc.                                     2,645        3,959        7,055
NorthStar Print Group                           614        1,086        1,582
PrimeNet Marketing Services                     364          613          659
Corporate and eliminations                       70          130          361
                                           --------     --------     --------
                                           $ 90,363     $ 97,871     $ 69,316
                                           ========     ========     ========


                                             2001         2000
                                             ----         ----
IDENTIFIABLE TOTAL ASSETS
Journal Sentinel                           $145,200     $110,025
Journal Broadcast Group                     296,723      279,055
Norlight Telecommunications                 122,649      110,399
IPC Communication Services                   50,494       57,611
Add, Inc.                                    62,941       70,492
NorthStar Print Group                        24,079       27,506
PrimeNet Marketing Services                  13,181       14,168
Corporate and eliminations                   17,049       18,371
                                           --------     --------
                                           $732,316     $687,627
                                           ========     ========


                                       60
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10   QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                           2001 Quarters

                         First     Second      Third     Fourth      Total
                         -----     ------      -----     ------      -----

Revenue                $185,065   $194,849   $252,158   $192,772   $824,844
Cost of sales           107,860    108,931    148,089    110,602    475,482
Net earnings              8,854     12,571     15,431     10,901     47,757
Basic and diluted
 earnings per share    $   0.32   $   0.45   $   0.54   $   0.39   $   1.70

                                           2000 Quarters

                         First     Second      Third     Fourth      Total
                         -----     ------      -----     ------      -----

Revenue                $184,951   $192,887   $256,812   $204,761   $839,411
Cost of sales           101,332    103,270    140,365    116,495    461,642
Net earnings             13,837     16,752     19,793     16,002     66,384
Basic and diluted
 earnings per share    $   0.51   $   0.62   $   0.73   $   0.59   $   2.45

The Company divides its calendar year into thirteen four-week accounting
periods, except that the first and thirteenth periods may be longer or shorter
to the extent necessary to make each accounting year end on December 31. The
Company follows a practice of reporting its quarterly information at the end of
the third accounting period (its first quarter), at the end of the sixth
accounting period (its second quarter), and at the end of the tenth accounting
period (its third quarter).

                                       61
<PAGE>






REPORT OF ERNST & Young LLP,
Independent Auditors

The Board of Directors and Stockholders
Journal Communications Inc.

We have audited the accompanying consolidated balance sheets of Journal
Communications Inc. as of December 31, 2001 and 2000, and the related
consolidated statements of earnings, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the 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 provide 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 Journal
Communications Inc. at December 31, 2001 and 2000, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.



/s/ Ernst & Young LLP

Milwaukee, Wisconsin
January 25, 2002, except for note 4 as to which the date is February 7, 2002

                                       62