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, 1998.
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)
               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. [ X ]

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 19, 1999:

    Class                                  Outstanding at March 19, 1999
    -----                                  -----------------------------
    Common Stock, par value $0.125                  27,432,705

Portions of the annual  shareholders report for the year ended December 31, 1998
are  incorporated  by  reference  into  Parts I and II.  Portions  of the  proxy
statement  for the  annual  shareholders  meeting  to be held  June 2,  1999 are
incorporated by reference into Part III.
<PAGE>

                                     PART I
                                ITEM 1. BUSINESS
                                ----------------

The  Registrant  is a diversified  communications  and media  company.  Its 1998
revenues, broken down by business segments, were: publishing - 39.8%; commercial
printing - 31.8%;  broadcast  - 15.6%;  telecommunications  - 11.1%,  and direct
marketing - 1.7%. The following  indicates the percent of consolidated  revenues
derived from these activities for the past three (3) years:

        Source                      1998           1997          1996
        ------                      ----           ----          ----
               Advertising          31.8%          34.2%         34.2%
               Circulation           8.0            8.1           8.4
                                     ---            ---           ---
        Publishing                  39.8           42.3          42.6
        Broadcast                   15.6           15.1          15.3
        Commercial Printing         31.8           31.9          32.5
        Telecommunications          11.1            9.0           7.2
        Direct Marketing             1.7            1.7           2.4

Material  developments  in  the  Registrant's  business  in  1998  included  the
acquisition  of twelve (12) radio  stations,  including  seven (7) in the Boise,
Idaho  market,  two  additional  stations  in Omaha,  Nebraska,  two  additional
stations in  Knoxville,  Tennessee,  and one  additional  station  near  Tucson,
Arizona;  the  acquisition  of a  weekly  newspaper  in  Sarasota,  Florida  and
specialty publications in New Orleans,  Louisiana and Jacksonville,  Florida. It
also   divested  its  two  shoppers  and  health  and  fitness   magazine   near
Philadelphia,  Pennsylvania,  an internet  service  provider in Wisconsin  and a
majority interest in a nationwide electronic classified advertising database. In
addition to the  information  provided  below,  see Item 6, "Selected  Financial
Data," Item 7, "Management  Discussion and Analysis," and Item 8,  "Consolidated
Financial Statements and Supplementary Data."

Forward-Looking Statements

This Annual Report on Form 10-K  contains  forward-looking  statements  that may
state the Registrant's or management's intentions,  hopes, beliefs, expectations
or  predictions  for the future.  The  Registrant's  actual results could differ
materially from those projected  results due to factors  discussed  elsewhere in
this  document  and  other  factors  that  include,  but  are  not  limited  to,
uncertainties related to general economic factors, industry conditions,  cost of
newsprint or other supplies, competition, technology and year 2000 compliance.

Publications

Journal  Sentinel Inc., a wholly-owned  subsidiary of the Registrant,  publishes
the major daily newspaper in the Milwaukee,  Wisconsin market. Prior to April 2,
1995, it had published the evening  Milwaukee  Journal (The Journal) since 1882,
the Sunday edition of The Journal  (Sunday  Journal) since 1911, and the morning
Milwaukee  Sentinel  (the  Sentinel)  since it was acquired in 1962. On April 2,
1995, the daily  newspapers  were merged and became one morning  newspaper,  the
Milwaukee Journal Sentinel. 


                                       2
<PAGE>

Average paid  circulation for the twelve months ended March 31 for the last five
years, as audited by the Audit Bureau of Circulation, was:

                     1998        1997           1996         1995        1994
                   -------     --------       -------      -------     ------

Journal Sentinel   289,350      292,035       298,206        -0-          -0-
Sunday Journal     459,374      458,480       467,852      486,422      492,425
Journal              -0-         - 0 -          -0-        211,801      228,454
Sentinel             -0-         - 0 -          -0-        173,895      173,019

Advertising  volume in column  inches and  preprint  units for the  Registrant's
Milwaukee newspapers for the last five calendar years was:


                                 (in thousands)
                       1998        1997          1996        1995        1994
                       ----        ----          ----        ----        ----
Column Inches
        Full Run     2,188.0      2,319.4     2,151.5     2,289.7      2,666.0
        Part Run       803.7        292.7       250.7       257.1        213.4
Units
        Preprint         2.9          2.6         2.5         2.8          2.4


There  are  179  other  newspapers,  shoppers  and  magazines  published  in the
four-county Milwaukee market. Most of these are weekly publications, while a few
are biweekly,  fortnightly or monthly.  Of these 179 publications,  109 are paid
subscription  and 70 are  delivered  without  charge  or are  available  free at
various public locations.  These publications cover a wide variety of interests,
including community,  business, real estate, labor,  religious,  ethnic, foreign
language or other special interest newspapers.

Two (2) other daily  newspapers,  the  Waukesha  Freeman and the West Bend Daily
News,  are  published in the  four-county  Milwaukee  metropolitan  area.  These
newspapers  are  circulated  in portions of Waukesha  and  Washington  Counties,
respectively.  In addition,  editions of USA Today, Chicago Tribune, Chicago Sun
Times, Wall Street Journal,  Madison Capitol-Times,  Wisconsin State Journal and
New York Times are sold in the Milwaukee market.  The Journal Sentinel newspaper
also   competes   for   advertising   revenues   or   support   with  seven  (7)
network-affiliated   commercial   television  stations,   four  (4)  independent
television stations - (two (2) of which are low power television stations),  two
(2) public  television  stations and twenty-seven  (27) AM and FM radio stations
located  in the  four-county  market,  two (2) cable  television  companies  and
several direct mail services. One network-affiliated  television station and two
radio  stations  in the  Milwaukee  market  are  owned  by a  subsidiary  of the
Registrant.

The Journal Sentinel  maintains news bureau offices in Madison,  Wisconsin,  and
Washington,  D.C.  It also has  suburban  bureaus  in  Waukesha,  Cedarburg  and
Sturtevant,  and staff writers based in West Bend,  Green Bay and Stevens Point,
Wisconsin.  The  Journal  Sentinel  is a  member  of the  Associated  Press  and
subscribes to these wire services:  the Washington  Post-Los  Angeles Times News
Service, the New York Times News Service and the Knight-Ridder News Service. The
Journal  Sentinel  is also a  contributing  member of the  Scripps  Howard  News
Service.

                                       3
<PAGE>

During 1998, the average price per ton for newsprint increased by 5.3 % compared
to the previous year. Total  consumption for all products in 1998 was 0.2% below
1997's total. Newsprint is purchased from six Canadian suppliers. The Registrant
considers anticipated supplies for 1999 sufficient.

The Registrant also publishes through its Add, Inc. subsidiary. In January 1998,
Add,  Inc.  started  a free  weekly  newspaper  in  Connecticut  and a free auto
publication in Wisconsin.  In April 1998,  Add, Inc.  purchased one (1) free car
publication  in  Florida.  In June  1998,  Add,  Inc.  purchased  a free  weekly
newspaper  in Florida.  In August 1998,  Add,  Inc.  purchased a free  specialty
shopper in Louisiana.  In September  1998,  Add, Inc. sold two (2) free shoppers
and a free health and fitness  magazine in  Pennsylvania.  In October 1998, Add,
Inc. sold a majority interest in its nationwide  electronic classified database.
In November 1998, Add, Inc. sold its internet service provider in Wisconsin.  At
December  31,  1998,  Add,  Inc.   published  ten  (10)  weekly   newspapers  in
southwestern  Connecticut;   thirty-two  (32)  weekly  newspapers  and  one  (1)
controlled-circulation   business  publication  in  Wisconsin;  two  (2)  weekly
newspapers in Florida; fifty (50) shopper publications,  with thirty-two (32) in
Wisconsin,  eleven (11) in Ohio, three (3) in Florida,  two (2) in Vermont,  one
(1) in Massachusetts and one (1) in New York; three (3) paid auto  publications,
with  two (2) in  Louisiana  and  one (1) in  Wisconsin;  two (2)  paid  boating
publications in Florida;  six (6) free auto  publications  with two (2) in Ohio,
one (1) in Florida,  two (2) in Louisiana and one (1) in Wisconsin,  and one (1)
free monthly health and fitness publication in Louisiana.

Printing

IPC Communication Services, Inc., a wholly-owned subsidiary,  specializes in the
production,  management of inventory and materials  procurement  and fulfillment
for  customers in the  technology  and  publications  industries.  This includes
printing of documentation  manuals for hardware and software  manufacturers  and
the duplication of CD-ROMs,  DVDs, masters,  disks and tapes and the printing of
medical,  legal and technical  journals for various trade  associations.  IPC is
based in St. Joseph,  Michigan, and has additional operations in Foothill Ranch,
California;  Austin, Texas and Roncq, France. The Registrant does not anticipate
supply restrictions in 1999 for the raw materials IPC utilizes.

NorthStar Print Group,  Inc., a wholly-owned  subsidiary of the  Registrant,  is
headquartered  in Brown Deer,  Wisconsin,  and has  manufacturing  operations in
Brown Deer, Green Bay and Watertown, Wisconsin, and Norway, Michigan. It employs
a wide array of printing  technologies in the various  markets it serves.  These
include sheet-fed offset,  rotogravure and flexographic  processes that are used
to print  point-of-purchase  materials,  labels for consumer  goods and industry
manufacturers (including in-mold labels), and out-of-home media. NorthStar Print
Group, Inc., is one of the nation's largest producers of beer bottle labels. The
Registrant believes its supply of raw materials is adequate.

Trumbull Printing, Inc., though a wholly-owned subsidiary of the Registrant,  is
managed  by  a  subsidiary   of  Add,  Inc.  that  is  co-located  in  Trumbull,
Connecticut.  Trumbull  Printing,  Inc., is a web offset  printer of newspapers,
newspaper inserts and other publications.  The Registrant believes its principal
raw materials, paper and ink will be in sufficient supply in 1999.


                                       4
<PAGE>

Broadcasting

Journal Broadcast Group, Inc., a wholly-owned subsidiary of the Registrant,  was
re-incorporated  in Nevada  as  Journal  Broadcast  Corporation  in March  1998.
Thereafter,   Journal   Broadcast   Corporation   incorporated   a  wholly-owned
subsidiary, which was named Journal Broadcast Group, Inc.

Journal Broadcast  Corporation operates television station KTNV, an affiliate of
the ABC Television Network, in Las Vegas,  Nevada, and holds the licenses of all
of the Registrant's broadcast stations. Its subsidiary, Journal Broadcast Group,
Inc.,  operates two (2) television stations and twenty-three (23) radio stations
in eight (8) states. All operate under licenses from the Federal  Communications
Commission.

The Registrant's three (3) Milwaukee broadcast operations,  WTMJ-TV, WTMJ-AM and
WKTI-FM,  consistently  rank high in audience  rating  surveys.  Competition for
advertising  revenue  in the  ten-county  area  of  dominant  influence  ("ADI")
includes six (6) other network-affiliated  commercial televisions stations, four
(4) independent  television stations (two (2) of which are low-power  television
stations),  two (2) public  television  stations,  twenty-five  (25) other radio
stations,  two  (2)  cable  television  companies,  ten  (10)  daily  newspapers
(including  one owned by  Registrant),  and  numerous  weekly  newspapers.  News
reporting and editorial operations at WTMJ-TV,  WTMJ-AM and WKTI-FM,  Milwaukee,
are independent of the Registrant's Milwaukee newspaper operations.

The broadcast stations of Journal Broadcast Group, Inc. are:

Station               Location                     Network Affiliation 
-----------------------------------------------------------------------
WTMJ-TV        Milwaukee, WI                       NBC Television
WTMJ-AM        Milwaukee, WI                       ABC Information
WKTI-FM        Milwaukee, WI                       ABC Contemporary
WSYM-TV        Lansing, Michigan                   Fox Television
KOSR-AM        Omaha, Nebraska                     USA Radio, One-on-One Sports
KEZO-FM        Omaha, Nebraska         
KSRZ-FM        Omaha, Nebraska                     ABC Contemporary
KESY-FM        Omaha, Nebraska         
KBBX-AM        Omaha, Nebraska         
KKCD-FM        Omaha, Nebraska         
KMXZ-FM        Tucson, Arizona         
KFFN-AM        Tucson, Arizona                     CBS Spectrum
KZPT-FM        Tucson, Arizona                     CBS Spectrum
KIXD-FM        Tucson, Arizona  
WMYU-FM        Knoxville, Tennessee                ABC News Wire
WWST-FM        Knoxville, Tennessee
WQIX-FM        Knoxville, Tennessee
WQBB-AM        Knoxville, Tennessee
KJOT-FM        Boise, Idaho
KQXR-FM        Boise, Idaho
KGEM-AM        Boise, Idaho                        ABC Information, Westwood One
                                                    Adult Standards
KCID-FM        Boise, Idaho

                                       5
<PAGE>

KCID-AM        Ontario, Oregon                    ABC
KSRV-AM        Ontario, Oregon                    ABC
KSRV-FM        Ontario, Oregon                    ABC

In August 1998, Journal Broadcast  Corporation  reached an agreement to purchase
the stock of Great Empire  Broadcasting,  Inc., which owns and operates thirteen
(13) radio  stations  in the  Wichita,  Kansas,  Springfield,  Missouri,  Omaha,
Nebraska and Tulsa,  Oklahoma markets.  The stations are:  KFDI-AM,  KFDI-FM and
KICT-FM,  Wichita,  Kansas;  KYQQ-FM,  Arkansas City, Kansas;  KLLS-FM,  August,
Kansas; KTTS-AM and KTTS-FM,  Springfield,  Missouri; KLTQ-FM, Sparta, Missouri;
WOW-AM and WOW-FM, Omaha,  Nebraska;  KVOO-AM and KVOO-FM,  Tulsa, Oklahoma; and
KCKI-FM, Henryetta, Oklahoma. This acquisition will take effect upon approval by
the Federal Communications Commission.

Telecommunications

Norlight   Telecommunications,   Inc.,  a  wholly-owned   subsidiary,   provides
state-of-the-art   telecommunications  services.   Norlight's  carrier  services
(wholesale) provide network transmission  solutions to other  telecommunications
carriers by offering  bulk  transmission  capacity,  including  custom  designed
networks.   Norlight  has  entered  into  a  fiber-optic  network   construction
agreement,  which will  significantly  expand its available capacity in Michigan
and Indiana in 1999. Norlight's  business-to-business  service provides advanced
data communications  products,  specifically  dedicated  circuits,  frame relay,
Internet access and switched voice services (including  domestic,  international
and calling card services) to medium and large  businesses in the Upper Midwest.
Norlight's  satellite  and video  services  provide  terrestrial  and  satellite
transmission of broadcast quality video signals.

Direct Marketing

PrimeNet Marketing Services, Inc., a wholly-owned subsidiary,  is located in St.
Paul, Minnesota and Clearwater, Florida. The St. Paul division is engaged in the
business of  providing  marketing  database  services,  consulting  and computer
mailing  services,  customized  laser printing,  lettershop work and fulfillment
services.  The Clearwater  division  (formerly known as Mega Direct,  Inc.) is a
direct mail operation offering customers design services,  printing, direct mail
production and processing and fulfillment.

Compliance with Environmental Laws

The Registrant does not currently  anticipate the need for  significant  capital
expenditures  and  expects  no  material  adverse  effects  to its  earnings  or
competitive  position to maintain compliance with environmental laws in 1999 and
2000.

Impact of Year 2000 Issue

The Registrant's statement on the Year 2000 Issue is presented in Exhibit 13, as
written  in  "Management's  Discussion  and  Analysis"  on  pages 4 and 5 of the
Registrant's Annual Report, and is incorporated herein by reference.

                                       6
<PAGE>

Methods of Distribution

The Registrant's  newspapers are distributed through networks of carriers,  most
of whom are independent contractors. Advertising for Registrant's newspapers and
broadcast   stations  is  generally  sold  by  employees,   with  some  national
advertising obtained by agents. Sales for the Registrant's  commercial printing,
telecommunications  and direct  marketing  operations are generally  obtained by
employees and a limited number of agents.

Employees

The Registrant and its subsidiaries,  as of December 31, 1998, had approximately
4,848 full-time and 2,120 part-time employees.

Financial Information About Industry Segments

Financial  information about Registrant's industry segments is presented in Note
8 to the Registrant's  Consolidated  Financial  Statements appearing on pages 15
and 16 of Registrant's Annual Report and is incorporated herein by reference.

                               ITEM 2. PROPERTIES
                               ------------------

Principal  properties  operated by the  Registrant  and its  subsidiaries  as of
December 31, 1998, are summarized as follows:
<TABLE>
<CAPTION>

Subsidiary                   Location              How Held                 Square Footage
------------------------------------------------------------------------------------------
<S>                          <C>                   <C>                        <C>    
Journal Sentinel Inc.
(Publishing)

Offices/Plant                Milwaukee, WI         Owned                      464,000
Garage                       Milwaukee, WI         Owned                       67,500
Distribution Centers         Milwaukee, WI         Leased or Owned            348,029
Inserting Plant              Milwaukee, WI         Leased                      89,000

Add, Inc.
(Publishing)
Offices/Plants               WI, OH, MA, FL        Owned or Leased            284,269
                             VT, NY, LA

Hometown Publications, Inc.
(Publishing)
Office                       Shelton, CT           Leased                       8,500


                                       7
<PAGE>
<CAPTION>


Subsidiary                   Location              How Held             Square Footage
--------------------------------------------------------------------------------------
<S>                          <C>                   <C>                         <C>    
Auto Mart Publishing, Inc.
(Publishing)
Office                       Dayton and            Leased                        3,620
                             Columbus, OH

Community Newspapers, Inc.
(Publishing)
Offices/Plant                Oak Creek, New        Owned/Leased                 29,450
                             Berlin, and
                             Waukesha, WI

Trumbull Printing, Inc.
(Commercial Printing)
Office/Plant                 Trumbull, CT          Owned                        86,000

Journal Broadcast Corporation
(Broadcasting)
KTNV-TV Studios              Las Vegas, NV         Owned                        20,300

Journal Broadcast Group, Inc.
(Broadcasting)
Office and Studios           Milwaukee, WI         Owned                       101,500
WSYM-TV Studios              Lansing, MI           Leased                       13,173
Office & Studios             Knoxville, TN         Owned                         6,400
Office & Studios             Knoxville, TN         Leased                        2,000
Office and Studios           Omaha, NE             Leased                       12,200
Office and Studios           Tucson, AZ            Leased                        8,883
Office and Studios           Boise, ID
                             and Ontario, OR       Owned                         5,700

NorthStar Print Group, Inc.
(Commercial Printing)
Office/Plant                 Brown Deer, WI        Owned                       128,360
Office/Plant                 Norway, MI            Owned                       108,000
Office/Plant                 Watertown, WI         Owned                        60,000

Label Products & Design Inc.
(Commercial Printing)
Office and Plant             Green Bay, WI         Owned                        39,620

IPC Communication Services, Inc.
(Commercial Printing)
Office/Plant/Warehouse       St. Joseph, MI        Leased                     326,000

                                       8
<PAGE>
<CAPTION>

Subsidiary                   Location              How Held             Square Footage
--------------------------------------------------------------------------------------
<S>                          <C>                   <C>                         <C>    
IPC Communication Services, Inc. (continued)
Office/Plant                 Foothill Ranch, CA    Leased                      200,992
Office/Warehouse             Austin, TX            Leased                        8,000

IPC Communication Services, S.A.
(Commercial Printing)
Office/Plant                 Roncq, France         Leased                       73,400

Norlight Telecommunications, Inc.
(Telecommunications)
Office/Satellite Antennae    Skokie, IL            Leased                        6,094
Office                       St. Paul, MN          Leased                        2,400
Office                       Brookfield, WI        Leased                       33,575
Office                       Green Bay, WI         Leased                        1,450
Office                       Buffalo Grove, IL     Leased                        2,716

PrimeNet Marketing Services, Inc.
(Direct Marketing)
Office/Plant                 St. Paul, MN          Leased                       87,218
Office/Plant                 Clearwater, FL        Leased                       32,000
</TABLE>

                            ITEM 3. LEGAL PROCEEDINGS
                            -------------------------

The  Registrant  is involved in various  claims and lawsuits  incidental  to its
business,  which, in the opinion of management,  will not have a material effect
in the aggregate on the its financial position or operations.

           ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
           -----------------------------------------------------------
                                      None.

                    ITEM 4A. EXECUTIVE OFFICERS OF REGISTRANT
                    -----------------------------------------

The executive  officers of  Registrant,  as of March 19, 1999,  all of whom 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 2, 1999,
are:

Name                  Age    Office                           Held Since
----                  ---    ------                           ----------
Steven J. Smith       48     Chairman & CEO                   December 1, 1998
Douglas G. Kiel       50     President                        December 1, 1998
Paul M. Bonaiuto      48     Executive Vice President/CFO     June 3, 1997
Keith K. Spore        56     Senior Vice President            September 6, 1995
Robert M. Dye         51     Vice President                   March 6, 1990
Stephen O. Huhta      43     Vice President                   June 8, 1993

                                       9
<PAGE>

Ronald G. Kurtis      51     Vice President                   June 8, 1993
James J. Ditter       37     Vice President                   September 6, 1995
William T. Lutzen     37     Vice President                   June 7, 1994
Daniel L. Harmsen     43     Vice President                   March 5, 1996
Mark J. Keefe         39     Vice President                   June 4, 1996
Douglas G. Hosking    42     Vice President                   September 4, 1996
Richard J. Gasper     55     Vice President                   June 4, 1996
Todd K. Adams         40     Vice President                   June 4, 1996
Karen O. Trickle      42     Vice President                   March 2, 1999
                             & Treasurer                      December 3, 1996
Paul E. Kritzer       56     Vice President                   June 5, 1990
                             & Secretary                      September 1, 1992
Richard A. Williams   61     Assistant Secretary              June 3, 1997
James P. Prather      41     Vice President                   March 2, 1999
Carl D. Gardner       42     Vice President                   March 2, 1999

All of the executive officers of the Registrant except Messrs. Hosking and Keefe
and Ms.  Trickle have been employed by the Company in key  management  positions
for more than five (5) years. Mr. Hosking joined the Registrant in April 1996 as
President  of IPC  Communication  Services,  Inc.  Previously  he had been  Vice
President  for  commercial  development  and  general  manager of the food fiber
division  of Opta Food  Ingredients,  Inc.,  for two years  and  Executive  Vice
President of Courier Corp.,  San Francisco,  a national book printer.  Mr. Keefe
joined the  Registrant  in  October  1995 as  President  of  PrimeNet  Marketing
Services,  Inc.  Prior  to  that  he  had  been a Vice  President  for  Donnelly
Marketing, Inc., St. Louis Park, Minnesota, from January 1994 to September 1995,
and a Vice  President of FDC, Inc. (a subsidiary  of Fingerhut  Corporation)  in
Minnetonka,  Minnesota.  Ms.  Trickle  started with the  Registrant in September
1996,  was elected  Treasurer in December 1996 and Vice President in March 1999.
Previously,  she had been Assistant Treasurer  (International) for Harnischfeger
Industries, Inc., Brookfield,  Wisconsin, from September 1994 to September 1996,
and Assistant  Treasurer  for Applied  Power,  Inc.,  Butler,  Wisconsin,  up to
September 1994.

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

There is no established public trading market for the Registrant's common stock.
Units  representing  beneficial  interests  in  the  Registrant's  common  stock
("Units") can be purchased only by full-time  employees with ninety (90) days of
service and part-time  employees  with two  consecutive  years of service of one
thousand  (l,000) hours each year.  On December 1, 1998,  the Board of Directors
approved an increase  effective January 5, 1999, in authorized common stock from
14,400,000 to 28,800,000 shares,  reduced the par value from $0.25 to $0.125 per
share and approved a two-for-one  common stock split.  All  references to shares
and  per-share  amounts have been  restated to reflect  this stock split.  As of
March 19,  1999,  the Journal  Employees'  Stock Trust,  dated May 15, 1937,  as
amended (the "Trust"),  owned of record 25,920,000 shares, or 90%, of the issued
and outstanding common stock of the Registrant.

                                       10
<PAGE>

The Trust issues Units, each representing a beneficial  interest in one share of
the  Registrant's  stock, to eligible  employees  ("Unitholders").  On March 19,
1999,  3,623   Unitholders  owned  23,033,941  Units   (representing   84.0%  of
Registrant's  outstanding common stock) and thus were the beneficial owners of a
like number of shares of the  Registrant's  stock held by the Trust. The balance
of 2,886,059 Units issued by the Trust were, on the above date, held by personal
trusts and employee  benefit trusts and by the  Registrant,  treated as treasury
stock and not voted.

Prior to all meetings of  shareholders  of the  Registrant,  the trustees of the
Trust ("Trustees") are required to deliver to each active  employee-Unitholder a
proxy, with the right of substitution, for the number of the Registrant's shares
represented by his or her Units.

Unitholders  may sell their  Units  only  through  procedures,  and at a formula
price, dictated pursuant to the Stock Trust Agreement, under which the Trust was
formed,  and the policy  determinations  of the Trustees.  Whenever a Unitholder
ceases to be an employee, for any reason except retirement, corporate downsizing
or  divestiture,  he or she must offer his or her Units for resale  through  the
corporate  treasury  to active  employees  designated  by the  President  of the
Registrant  or the  Registrant.  Employees  who retire  may retain a  decreasing
percentage  of their Units for up to ten (10) years after the first  anniversary
of their  retirement.  Employees who are separated  from the  Registrant  due to
divestiture or downsizing may retain a decreasing  percentage of their Units for
up to five (5) years after the first anniversary of their separation.  All Units
held by retirees are voted by the  Trustees.  Units may also be held by employee
benefit  trusts,  and  Unitholders  may transfer Units to personal trusts and to
charitable,  educational or religious trusts.  All Units held by such trusts are
likewise voted by the Trustees. As of March 19, 1999, retirees, personal trusts,
an employee benefit trust, and other trusts held 7,358,836 Units, representing a
beneficial interest in 26.8% of the Registrant's outstanding common stock.

All of the Trustees  are  directors  of the  Registrant.  They have no financial
interest in the  Registrant's  stock  owned by the Trust other than  through the
Units they own individually.

The  Registrant's  unit  price and  dividend  history  for the past  decade  are
presented in the following table:

                          Employee Stock Ownership Plan
                          -----------------------------

                      Unit          Unit    Unit Price                   Total
                      Price         Price   Increase      Cash           Annual
Year                  Begin         End     (Decrease)    Dividend       Return
----                  -----         ---     ----------    --------       ------
1998 - 4th Qtr        24.46         25.48       1.02         0.27        22.5%
1998 - 3rd Qtr        23.24         24.46       1.22         0.28
1998 - 2nd Qtr        22.29         23.24       0.95         0.27
1998 - 1st Qtr        21.69         22.29       0.60         0.28
1997 - 4th Qtr        20.90         21.69       0.79         0.27        22.7
1997 - 3rd Qtr        19.90         20.90       1.00         0.28
1997 - 2nd Qtr        19.23         19.90       0.67         0.27
1997 - 1st Qtr        18.58         19.23       0.65         0.28
1996                  18.12         18.58       0.46         1.10         8.6
1995                  17.70         18.12       0.42         1.05         8.3

                                       11
<PAGE>

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
1991                  15.74         16.30          0.56         0.90         9.3
1990                  14.83         15.74          0.91         0.85        11.9
1989                  13.33         14.83          1.51         0.85        17.7

In October 1996, the Trustees,  stockholders  and  Unitholders of the Registrant
adopted an amendment to the Journal  Employees'  Stock Trust Agreement to change
the Option Price Formula used to calculate the price of Units.  The  multiplier,
which  progressively  increases  in each of the 13 periods  of the  Registrant's
fiscal  year,  will  continue  to  increase by 8.5% each year for the next three
years, 1999-2001.  The five-year phase-in of the multiplier will be completed by
the end of 2001,  when a multiplier of 1.5 will become a permanent  component of
the Option Price  Formula.  The Trustees  believed that the Option Price Formula
amendment  would  cause the Unit price to be  approximately  75% of the price at
which the Units would trade if they were  publicly-traded  securities at the end
of the  five-year  phase-in  period,  based upon market  conditions  existing in
October 1996.

In addition  to the  Journal  Employees'  Stock  Trust,  there are two (2) other
record  holders of stock of the  Registrant.  The Registrant is not aware of any
recent sales of stock.

                         ITEM 6. SELECTED FINANCIAL DATA
                         -------------------------------

Selected  financial  data of the  Registrant  is presented  in the  Registrant's
Annual  Report on pages 6 and 7 (included in Exhibit  13),  and is  incorporated
herein by reference.

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

Management's  Discussion and Analysis is presented below and is not incorporated
by reference from the Registrant's Annual Report included as Exhibit 13.

CONSOLIDATED
Revenue was $732.4 million in 1998 compared with $674.5 million in 1997, an 8.6%
increase.  In 1996,  revenue was $622.2  million.  Earnings  before income taxes
increased 7% to $102.7 million in 1998.  1997 earnings  before income taxes were
$95.9 million, an increase from $70.7 million in 1996.

During 1998, the  telecommunications  segment continued to grow at a rapid pace.
Revenue for the segment grew 34.8% while pretax  earnings  increased  95.6%.  In
1997 and 1996,  significant  investments in Norlight's  fiber optic network were
made and have resulted in increased  revenue and pretax earnings in 1998. In the
broadcast segment,  revenue from political advertising and the acquisition of 12
radio stations  contributed to the 13% revenue  increase.  The printing  segment
reported a pretax loss due primarily to the closing of IPC's Northern California
plant.  The  pretax  cost to close the plant was $7.3  million.  Revenue  in the
publications  segment increased modestly while pretax earnings grew 6.9%. Pretax
earnings grew despite an increase in the cost of newsprint. The direct marketing
segment  experienced revenue growth and reduced its pretax loss by approximately
$1 million.

                                       12
<PAGE>

1998 COMPARED WITH 1997

Publications
------------
The  publications  segment  includes daily and weekly  newspapers,  shoppers and
specialty publications.

Revenue was $291.8  million in 1998,  up 2% compared with 1997 revenue of $286.1
million. In 1998, earnings before taxes were $43.5 million, a 6.9% increase over
1997 earnings of $40.7 million.

Journal Sentinel Inc. is the largest company in the publications segment.  Total
revenue in 1998 increased 4.7% to $235.7 million from $225.1 million in 1997. In
1998,  earnings  before taxes  increased  15.7% over 1997 despite a $2.1 million
increase in the cost of newsprint.  The Registrant  expects  newsprint  costs in
1999 to be lower than they were in 1998.

Advertising  revenue was $181.3  million in 1998 compared with $171.4 million in
1997.  This is an  increase  of 5.8% over  1997.  The major  contributor  to the
increase was classified employment advertising. Classified revenue compared with
1997 increased $5.5 million or 6.4%. Retail preprints  increased $2.4 million or
13% compared with 1997. General ROP (run of press) revenue grew $400,000 in 1998
compared with 1997. Revenue from Journal Sentinel's shared and solo mail program
reached $6.1 million in 1998 compared with only $1 million in 1997. This program
was  started in 1997.  Revenue  from  retail ROP  decreased  $4.5  million or 8%
compared with 1997.

Circulation  revenue  totaled  $50.6  million,  a decrease  of  $500,000 or 0.9%
compared with 1997.  Revenue  decreased  principally  due to a decline in Sunday
single copy sales and the discontinuation of the Badger Plus publication.

Add Inc. is the other company in the publications  segment. Its 1998 revenue was
$56 million,  an 8.2% decrease  compared  with 1997 revenue of $61 million.  The
additional  revenue from a full year of Community  Newspapers Inc.  (acquired in
October  1997)  of  $11.1  million  was  offset  by  revenue  declines  from the
Wisconsin,  Ohio and  Louisiana  operations.  The  declines  are  attributed  to
sluggish  display  advertising,  soft regional  markets and  lower-than-expected
insert sales. The publications in Pennsylvania were sold during 1998, which also
resulted in an unfavorable revenue comparison with 1997.

Add Inc.  pretax  earnings in 1998 were  $490,000  compared with $3.4 million in
1997.  While CNI  reported  pretax  earnings of $1.2  million,  pretax  earnings
declined in the Wisconsin, Florida, Ohio and Louisiana groups.

Broadcast
---------
The broadcast segment includes 3 television stations and 23 radio stations owned
by Journal  Broadcast  Group Inc.  In 1998,  revenue was $115.1  million,  a 13%
increase  over 1997 revenue of $101.9  million.  Earnings  before taxes were $34
million and $38.2 million in 1998 and 1997,  respectively.  In 1997, the company
reported  a pretax  gain on the  trade  of the  radio  station  in  Kansas  City
(KQRC-FM)  for two stations in Knoxville  (WWST-FM and WMYU-FM) of $7.8 million.
Excluding the gain on the exchange of KQRC,  pretax  earnings  increased  11.8 %
over 1997.

                                       13
<PAGE>

Revenue from the  television  stations was $72.3  million,  a 9.4% increase over
1997 revenue of $66.1 million. Increased market share in Milwaukee, double-digit
market growth in Las Vegas and 1998 election  year  advertising  of $5.1 million
contributed  to the revenue  growth.  Pretax  earnings of $28.8  million in 1998
represented a 19.1% increase over 1997 pretax earnings of $24.2 million.

Revenue from the radio  stations was $42.8  million,  a 19.6% increase over 1997
revenue of $35.8  million.  Revenue  growth in 1998 is  attributed  to increased
market share in Milwaukee and 1998 acquisitions in Omaha, Tucson,  Knoxville and
Boise.  Pretax  earnings  were $5.2  million  and $14  million in 1998 and 1997,
respectively.  Without  the  pretax  gain on the trade of the radio  station  in
Kansas  City,  1998  pretax  earnings  declined  15%  compared  with 1997 pretax
earnings.  The  decline  in  pretax  earnings  at the  radio  group was due to a
combination of  amortization  costs related to new  acquisitions  and lower than
anticipated  results at KIXD-FM in  Tucson,  the Boise  group and the  Knoxville
group.

In August 1998, Journal Broadcast  Corporation announced an agreement to acquire
the  stock of Great  Empire  Broadcasting  Inc.,  a radio  group of 13  stations
headquartered  in Wichita,  Kansas.  Pending  approval  of the FCC,  the Company
expects to complete the  acquisition in early 1999. The cash purchase price will
be approximately $100 million.

Printing
--------
1998 revenue for NorthStar  Print Group Inc. was $56.4  million,  a $1.2 million
decrease  from the prior year's  revenue of $57.6  million.  NorthStar  reported
pretax  earnings of $1.3  million in 1998  compared  with $2.4  million in 1997.
Revenue increased at the Norway / Watertown  operation by $800,000 while revenue
decreased $2 million at the  Milwaukee and Green Bay  operations.  In Milwaukee,
decreased  revenue and earnings before taxes in 1998 primarily  reflect the loss
of two major customers.  Green Bay reported a slight revenue and pretax earnings
decline in 1998.

IPC  Communication  Services'  revenue decreased 1.3% to $125.5 million in 1998.
The revenue  decrease is  attributed  to the closure of the Northern  California
plant during the second half of 1998. In 1997,  revenue was $127.1  million.  In
1998, IPC had a pretax loss of $11.3 million, which includes plant closure costs
of $7.3 million. IPC reported a pretax loss of $7.4 million in 1997.

Add Inc.'s  printing  plants  had  revenue  of $51.8  million  in 1998,  a 67.6%
increase  over  1997  revenue  of $30.9  million.  The  increase  was due to the
acquisition of Dixie Web, a printing plant in Louisiana,  in mid-1997.  In 1998,
pretax  earnings  decreased  to $4.7  million  from $5.5  million  in 1997.  The
decrease in pretax earnings reflects the loss of major printing customers at the
Connecticut printing plant.

Telecommunications
------------------
In 1998, revenue at Norlight  Telecommunications Inc. was $81.9 million, a 34.8%
increase  over the prior year's  revenue of $60.8  million.  Pretax  earnings of
$24.1  million in 1998 grew 95.6% over 1997 pretax  earnings  of $12.3  million.
Both revenue and pretax  earnings  growth were results of burgeoning  demand for
telecommunication  services  and  the  company's  ability  to  effectively  sell
capacity  available  as  a  consequence  of  continued   investment  in  network
expansion.  In 1998,  Norlight  sold a small  segment of the business  targeting
small  business  and  residential  long  distance  service  customers.  In 1997,
Norlight recorded a $1.7 million reserve for the pretax loss on the sale.


                                       14
<PAGE>

Direct Marketing
----------------

Revenue  for  PrimeNet  Marketing  Services  was $12.9  million in 1998,  a 6.6%
increase  from  $12.1  million  in 1997.  The  reported  pretax  loss in 1998 of
$365,000 is  approximately  $1 million less than the pretax loss of $1.3 million
reported in 1997.

PrimeNet's  St. Paul operation had revenue of $5.6 million which was an increase
of $750,000 over 1997. The operation's pretax loss was $735,000,  representing a
$564,000 improvement from 1997.

PrimeNet's  Clearwater  operation  had revenue of $7.3 million in 1998  compared
with $7.2 million in 1997. Pretax earnings were $370,000 in 1998. Earnings broke
even in 1997.

1997 COMPARED WITH 1996
-----------------------

Publications
------------

Revenue was $286.1  million in 1997,  up 8% compared with 1996 revenue of $264.9
million. In 1997, pretax earnings were $40.7 million, a 28.4% increase over 1996
earnings of $31.7 million.

Journal  Sentinel's  total revenue in 1997 increased 7.4% to $225.1 million from
$209.5 million in 1996. The 1997 pretax earnings  increased 29.8% over 1996. The
dramatic  growth in 1997 pretax earnings was the result of lower newsprint price
(per ton) compared to 1996 and substantial growth in advertising revenue.

Advertising  revenue was $171.4  million in 1997 compared with $155.9 million in
1996.  This was an  increase of 9.9% over 1996.  Classified,  retail ROP (run of
press) and preprints and general ROP all reported revenue increases in 1997 over
1996.  General preprints showed a slight decrease over 1996.  Classified revenue
accounted  for $10.4  million of the  revenue  increase  in 1997 over 1996.  The
majority of the classified increase was from employment advertising.

Circulation revenue totaled $51.1 million, a decrease of $0.1 million from 1996.
The reasons for the decline in 1997 were a slight  decrease in daily revenue and
the elimination of Badger Plus.  Sunday Journal Sentinel revenue showed a slight
increase  over 1996.  Packer  Plus  circulation  revenue  topped the one million
dollar mark in 1997.

Add Inc.  1997  revenue was $61 million,  a 10.1%  increase  compared  with 1996
revenue of $55.4 million.  Pretax earnings in 1997 showed an 11.3% increase from
the prior year as a result of the contribution from the acquisition of Community
Newspapers Inc. (CNI) and  significant  improvements in the Southern Ohio group.
In 1997,  revenue from the  Florida,  Southeastern  Wisconsin,  Ohio and Vermont
operations  increased by $2 million while revenue for the Central  Wisconsin and
Pennsylvania  operations  decreased by $0.5 million.  During 1997,  the Ohio and
Southeastern  Wisconsin  operations  showed  improvements  in earnings  over the
previous year while those in Florida and Connecticut showed declines.

                                       15
<PAGE>

Broadcast
---------
In 1997,  revenue was $101.9 million, a 6.5% increase over 1996 revenue of $95.7
million.  The 1997 revenue increase was due to excellent audience ratings at the
Registrant's  broadcast  stations,  radio  station  acquisitions  in  Omaha  and
Knoxville and the popularity and success of the Green Bay Packers. The broadcast
division  acquired one additional radio station in Omaha and exchanged the radio
station in Kansas City  (KQRC-FM)  for two  stations in  Knoxville  (WWST-FM and
WMYU-FM)  in 1997.  The  Company  reported a pretax gain on the trade of KQRC of
$7.8 million.  Pretax earnings in 1997 increased 30.2% over 1996.  Excluding the
gain on the exchange of KQRC, pretax earnings increased 3.5% over 1996.

In 1997, the Company's television stations accounted for 64.9% of the division's
revenue and 67.9% of its pretax  earnings.  Revenue and pretax  earnings were up
for the Las Vegas  television  station  over 1996.  The  Milwaukee  and  Lansing
television  stations  reported  flat to lower  revenue and pretax  earnings over
1996.

The Company's radio stations' pretax earnings excluding the gain on the exchange
of KQRC  increased  8.7% to $6.1 million in 1997  compared  with $5.7 million in
1996.

Printing
--------
The 1997 revenue for NorthStar Print Group Inc. was $57.6 million, a 4% increase
from the prior  year's  revenue of $55.4  million.  NorthStar  increased  pretax
earnings to $2.4 million from pretax  earnings of $1.4 million in 1996.  Revenue
increased at the Green Bay and  Norway/Watertown  operations  while  revenue was
flat  at the  Milwaukee  operation.  All  locations  showed  improved  operating
productivity.

IPC  Communications  Services' (IPC) revenue increased 6.7% to $127.1 million in
1997. In 1996,  revenue was $119.2  million.  In 1997,  IPC had a pretax loss of
$7.4 million which is $5.7 million less than the loss in 1996.

The  printing  plants of Add Inc.  had revenue of $30.9  million in 1997, a 6.8%
increase over 1996 revenue of $28.9 million.  In 1997, pretax earnings increased
by 14.3% to $5.5 million from 1996.

Telecommunications
------------------
In 1997, revenue for Norlight  Telecommunications  Inc. was $60.8 million, a 34%
increase  over the prior year's  revenue of $45.4  million.  Pretax  earnings at
Norlight  increased  37.5% in 1997 compared  with 1996.  Both revenue and pretax
earnings  growth  were the result of  effectively  selling  additional  capacity
available as a consequence of the major network expansion  (redundant SONET ring
capacity) embarked upon in 1996 and completed in 1997. In 1997, Norlight entered
into a definitive  agreement to sell a small  segment of the business  targeting
small  business  and  residential  long  distance  service  customers.  In 1997,
Norlight recorded a $1.7 million reserve for the pretax loss on the sale.



                                       16
<PAGE>

Direct Marketing
----------------
Revenue from PrimeNet  Marketing  Services was $12.1 million in 1997, down 18.7%
from 1996 revenue of $14.9 million.  In 1997, the segment reported a pretax loss
of $1.3 million compared to pretax earnings of $1.3 million in 1996.

PrimeNet's  St. Paul division had a decrease in revenue of 23.4% in 1997 to $4.9
million,  down from $6.4  million in 1996.  The 1997 pretax loss of $1.3 million
compares  with a loss of  $0.2  million  in  1996.  The  decreased  revenue  and
increased  losses  in 1997  primarily  reflect  the loss of  PrimeNet's  largest
customer.

The  Clearwater  division had revenue of $7.2 million in 1997 compared with $8.5
million in 1996.  Pretax  earnings were breakeven in 1997 compared with earnings
of $1.5 million in 1996. The  Clearwater  division was  strategically  realigned
under the management of PrimeNet Marketing Services in early 1997.

Other Income and Expense
------------------------

Dividend and  interest  income was $6.3  million,  a slight  increase  from $6.2
million  in  1997.  The  increase  in 1998  was the  result  of an  increase  in
short-term  investments,  which was offset by a decline in  short-term  interest
rates. Dividend and interest income was $3.4 million in 1996.

Income Taxes
------------

Income taxes were 40.9% of pretax  earnings in 1998,  41.4% in 1997 and 41.9% in
1996.  Changes in the  effective  tax rate are a result of state  income  taxes,
foreign net  operating  losses and  permanent  tax  differences.  Permanent  tax
differences exist for goodwill amortization on acquisitions before 1993.

Net Earnings
------------

Net earnings for 1998 were $60.7  million or $2.16 per share,  compared with net
earnings of $56.2 million or $2.05 per share in 1997. In 1996,  net earnings for
the year were $41  million  or $1.57 per  share.  Per  share  amounts  have been
restated to reflect  the  two-for-one  stock  split that  occurred on January 5,
1999.

Liquidity and Capital Resources
-------------------------------

Cash  provided by  operations,  which is a  significant  source of the Company's
liquidity,  totaled  $109.4  million,  $109.2 million and $94.8 million in 1998,
1997 and 1996, respectively.

Principal  uses of cash for  investing  purposes  during  this  period  were for
property and equipment  expenditures and acquisitions.  Capital expenditures for
property and equipment  totaled $45.2 million in 1998, $39.4 million in 1997 and
$33.8 million in 1996.  The Company also has continued to be active in acquiring
other  businesses.  Cash used for acquisitions was $42.5 million,  $21.1 million
and $17  million in 1998,  1997 and 1996,  respectively.  Cash  provided  by the
liquidation of the corporate life insurance  investment  pool was $21 million in
1998.

                                       17
<PAGE>

Cash used in financing activities totaled $25.4 million,  $4.5 million and $52.8
million in 1998,  1997 and 1996,  respectively.  Dividends paid during 1998 were
$31.1 million or $1.10 per share,  compared with $30.2 million ($1.10 per share)
in 1997 and $28.6 million ($1.10 per share) in 1996. Additionally, the net sales
of treasury  stock  totaled  $5.3  million  and $26.3  million in 1998 and 1997,
respectively.  In 1996, the Company had net purchases of treasury stock of $17.2
million.

Net  working  capital at the end of 1998  increased  to $136  million  from $113
million at the end of 1997. Commitments for television programs not yet produced
as of December  31,  1998,  were $7 million.  On January 22,  1999,  the Company
executed an unsecured  short-term  line of credit in an aggregate  amount not to
exceed $35  million.  The Company  expects to use the line of credit for general
corporate purposes.

Year 2000
---------
Project  Phases - The Company  initiated  an  enterprise-wide  effort in 1997 to
address  the issues  related to the ability of computer  programs  and  embedded
technology to properly  distinguish  between years beginning with "20" and "19".
The project plan includes six phases:

1.     An awareness  phase,  to educate and prepare  staff at all levels for the
       effort required to complete the project;

2.     A  planning  phase,  during  which  a  comprehensive   inventory  of  all
       technology  is  completed,  assessed  for  risk,  investigated  for known
       compliance, vendors and suppliers surveyed, and strategies for upgrade or
       replacement of non-compliant systems planned;

3.     A remediation phase, during which corrective actions planned in the prior
       phase are completed;

4.     A testing phase,  during which both corrected  systems and those believed
       to  be  compliant   are  verified  for  correct   handling  of  the  year
       calculations;

5.     An  implementation  phase,  which includes  placing into production those
       systems that passed tests successfully, and

6.     A contingency  planning  phase,  which  includes  planning for individual
       system issues,  as well as each company's  planning for Year 2000 related
       issues outside of their control.

Current  Status of the Year 2000  Project  - By the end of 1998,  the  awareness
phase  had been  under  way for more than a year and was  expected  to  continue
throughout the project. The inventory was substantially completed,  including an
assessment of the risk associated with each item and vendor.  Vendor surveys had
been sent to approximately 80% of the critical  suppliers of the Company,  and a
majority of the responses had been received.  Through these efforts and those of
a  consultant  contracted  in  1998 to  assist  with  the  planning  phase,  the
compliance status of over 80% of the technology  identified during the inventory
was known. As a result,  corrective action for  approximately  two-thirds of the
Company's technology impacted by the Year 2000 had been planned.

Corrective  actions were complete for a majority of the critical  systems of the
Company by December 31, 1998. These included  systems  impacting the delivery of
goods or  services,  safety,  or revenues of the Company.  The Company  plans to
replace or  upgrade  all  critical,  date-impacted  technology  by July 1, 1999.
Non-critical  systems are generally in the planning  phase.  In both cases,  the
Company  plans to use both  internal and  external  resources to make the needed
corrections to software and embedded technologies.

                                       18
<PAGE>

Communications  with vendors and  suppliers is being  reviewed to determine  the
extent to which the Company may be vulnerable to the failure of these  suppliers
to resolve  their own Year 2000  issues.  The Company will assess and attempt to
mitigate its risks with respect to the failure of these entities to be Year 2000
ready through a variety of options,  including  contingency  planning and vendor
selection, where practical.

The Company  plans to complete all phases of its Year 2000 project on time based
upon the results to date and certain assumptions of future events, including the
continued  availability  of resources,  suppliers  meeting their  commitments to
deliver  needed  upgrades or  replacements  and other factors.  However,  actual
results could differ materially from those planned.  Specific factors that might
cause  such  material   differences   include,  but  are  not  limited  to,  the
availability and cost of personnel  needed to complete the project,  the ability
to locate and correct all impacted technology and similar uncertainties.

Costs - Based on the  assessment  to date,  the Company has  estimated  that the
operating  costs  associated  with the Year 2000  project to date have been $2.3
million.  This includes the cost of third-party  resources used to assist in the
assessment  of  technology  at each of the  subsidiaries  and an estimate of the
internal labor costs  associated with the project.  The total estimated  capital
costs,  much of which would have been  incurred  regardless of Year 2000 issues,
were $5.9 million through the end of 1998.

The Company  estimates  capital costs for 1999 and through the completion of the
project to be $1.2 million.  Labor and other operating costs associated with the
project are  estimated at $2.7 million for the same  period.  At this time,  the
Company does not anticipate  delaying any major information systems projects due
to the Year 2000 project.

Risks - The Year 2000 is a complex and  significant  project  and,  accordingly,
contains the risk of underestimating  the tasks,  resources and costs associated
with its  successful  completion.  The risk of not finding a material  Year 2000
problem that may impact normal business activities or operation also exists. Due
to the general uncertainty inherent in the Year 2000 problem,  resulting in part
from the uncertainty of the Year 2000 readiness of suppliers and customers,  the
Company is unable to determine at this time whether the consequences of the Year
2000  failures  will  have  a  material  impact  on  the  Company's  results  of
operations,  cash flows or financial condition.  Through the efforts of the Year
2000  project,  the  Company  is making  every  effort  to  reduce  the level of
uncertainty  about the Year 2000 problem and,  through its contingency  planning
efforts, mitigate the associated risks.

Contingency  Plan - Each of the  operating  companies  is  expected  to complete
contingency  planning at the system and company level.  In part, the contingency
plan's goal is to attempt to minimize identified  third-party  exposures.  While
some of the subsidiaries have begun this effort, a majority of the companies are
expected to begin this effort in earnest in the latter half of 1999.

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

                                       20
<PAGE>

productivity,  cost containment programs and, where the competitive  environment
exists, increased selling prices. See the publications section for discussion of
the impact of newsprint costs.

       ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
       -------------------------------------------------------------------

The Company had a  cash-equivalent  portfolio of $121.2  million on December 31,
1998,  consisting of commercial  paper, bank certificates of deposit and a money
market  fund.  Early in 1999,  the  Company  plans to reduce  its  portfolio  by
approximately  $100 million for the  acquisition  of Great Empire  Broadcasting,
Inc.  Therefore,  a 10% change in the  interest  rate is not  expected to have a
material impact on the Company's results of operations.  The Company has minimal
operations  outside  the United  States  and has not  entered  into any  foreign
currency derivative instruments.

                    ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
                    -----------------------------------------
                             AND SUPPLEMENTARY DATA
                             ----------------------

The Registrant's Financial Statements with Report of Independent Public Auditors
are  presented  in  Exhibit  13,  as  provided  on  pages  6  through  16 of the
Registrant'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, 1999. Information about executive officers of
the Company is included in Part I 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, 1999.

                ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                -------------------------------------------------
                              OWNERS AND MANAGEMENT
                              ---------------------

The  following  chart  states  the  equity  ownership  of each  Director  of the
Registrant:
<TABLE>
<CAPTION>

                                                                        Percent of
                             Held Office    Units Held                  Ownership
Name                  Age    Since          as of March 19. 1999(1)     *denotes  1%
----                  ---    -----          --------------------        -------------
<S>                    <C>   <C>                     <C>                            <C>  
Todd K. Adams          40    June 4, 1996            38,990                         *
Reginald A. Beene      37    June 2, 1998             1,540                         *

                                       21
<PAGE>

Paul M. Bonaiuto       48    June 8, 1993            51,120                         *
Glenn A. Bowman        42    June 2, 1998             1,250                         *
James J. Ditter        37    September 6, 1995       29,198                         *
Robert M. Dye          51    March 6, 1990          102,240                         *
James L. Forbes        66    September 4, 1996        --(3)
Richard J. Gasper      55    June 4, 1996            36,064                         *
Douglas G. Hosking     42    September 4, 1996       20,668                         *
Stephen O. Huhta       43    June 8, 1993            81,710                         *
Robert A. Kahlor       65    September 4, 1992      193,701                         *
Mark J. Keefe          39    June 4, 1996            23,630                         *
Douglas G. Kiel        50    June 4, 1991            81,998                         *
Paul E. Kritzer        56    June 5, 1990            91,590                         *
Ronald G. Kurtis       51    June 8, 1993           128,500                         *
David G. Meissner      61    June 7, 1988            -- (2)                         -- (2)
John E. Mollwitz       56    June 2, 1998            37,070                         *
Shawn P. O'Neill       34    June 2, 1998             1,652                         *
Roger D. Peirce        61    September 4, 1996        --(3)
Steven J. Smith        48    June 2, 1987           172,060                         *
Keith K. Spore         56    September 6, 1995       62,000                         *
Anthony D. Stevens     36    December 1, 1998         5,234                         *
Mark W. Sukovich       30    June 2, 1998             5,690                         *
Richard A. Williams    61    June 3, 1997           123,790                         *
Paris J. Wright        35    June 2, 1998             2,276                         *
Robert T. Zynda        27    June 2, 1998             3,132                         *

(1)    A "Unit" is  equivalent  to  beneficial  interest in one (1) share of the
       common stock of the Registrant.

(2)    Mr.  Meissner owns no Units but is an officer and director of Matex Inc.,
       which owns 2,640,000  shares of stock of the  Registrant,  or 9.2% of the
       outstanding stock. Mr. Meissner's wife is also an officer and director of
       Matex  Inc.  and  together  with her  children  owns or has a  beneficial
       interest  in 33% of the  outstanding  common  stock  of Matex  Inc.  Mrs.
       Meissner also has a 33%  beneficial  interest in 240,000 shares of common
       stock of the Registrant.  Other members of Mrs.  Meissner's family own or
       have a beneficial  interest in the remaining 67% of the Matex Inc. shares
       and the 240,000 shares of stock of the Registrant.

(3)    Under the terms of the  Trust,  non-employees  are not  permitted  to own
       Units.
</TABLE>

             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, 1999.


                                       22
<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:

                                                      Registrant's Annual Report
                                                      Page Number
                                                      -----------
     Consolidated Balance Sheets at
            December 31, 1998 and 1997                         8

     Consolidated Statements of Earnings
            for each of the three years in
            the period ended
            December 31, 1998                                  9

     Consolidated Statements of Cash Flows
            for each of the three years in the
            period ended December 31, 1998                     10

     Consolidated Statements of Retained
            Earnings for each of the three years
            in the period ended December 31, 1998              11

     Notes to Consolidated Financial Statements                11-16

     Financial Statement Schedules:                   Registrant's 10-K
            Consolidated schedules for each of the    Page Number     
            three years in the period ended
            December 31, 1998:
            II - Valuation and qualifying accounts             23

       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 27 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  Registrant  during
       the quarter ended December 31, 1998.

                                       22
<PAGE>



                           JOURNAL COMMUNICATIONS INC.

          SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

                  Years ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>

               Balance at           Additions             Deductions            Balance
               beginning            charged to            from                  at end
               of  year             earnings              allowances (a)        of year
               --------             --------              --------------        -------
Allowance 
for doubtful 
receivables:


<S>            <C>                  <C>                   <C>                <C>       
        1998   $3,443,746           $3,790,236            $2,889,161         $4,344,821


        1997   $3,241,512           $3,817,193            $3,614,959         $3,443,746


        1996   $2,475,670           $4,184,527            $3,418,685         $3,241,512


Note:

(a) Accounts receivable written off, less recoveries, against the allowance.
</TABLE>



                                      
                                       23

<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/Todd K. Adams                                         March 31, 1999
Todd K. Adams, Director


/s/Reginald A. Beene                                     March 31, 1999
Reginald A. Beene, Director


/s/Paul M. Bonaiuto                                      March 31, 1999
Paul M. Bonaiuto, Director & Chief Financial Officer
  (Principal Financial Officer)


                                                         March  , 1999
Glenn A. Bowman, Director


                                                         March  , 1999
James J. Ditter, Director


/s/Robert M Dye                                          March 31, 1999
Robert M. Dye, Director


                                                         March   , 1999
James L. Forbes, Director

                                       24
<PAGE>


                                                         March   , 1999
Richard J. Gasper, Director


                                                         March   , 1999
Douglas G. Hosking, Director


                                                         March   , 1999
Steven O. Huhta, Director


                                                         March   , 1999
Robert A. Kahlor, Director


                                                         March    , 1999
Mark J. Keefe, Director


/s/Douglas G. Kiel                                       March  31, 1999
Douglas G. Kiel, Director


/s/Paul E. Kritzer                                       March  31, 1999
Paul E. Kritzer, Director


                                                         March    , 1999
Ronald G. Kurtis, Director


                                                         March    , 1999
David G. Meissner, Director


/s/John E. Mollwitz                                      March  31, 1999
John E. Mollwitz, Director


/s/Shawn P. O'Neill                                      March  31, 1999
Shawn P. O'Neill, Director

                                       25
<PAGE>


                                                         March    , 1999
Roger D. Peirce, Director



/s/Steven J. Smith                                       March  31, 1999
Steven J. Smith, Director & Chief Executive Officer
  (Principal Executive Officer)


/s/Keith K. Spore                                        March  31, 1999
Keith K. Spore, Director


/s/Anthony D. Stevens                                    March  31, 1999
Anthony D. Stevens, Director


                                                         March    , 1999
Mark W. Sukovich, Director


/s/Richard A. Williams                                   March  31, 1999
Richard A. Williams, Director


/s/Paris J. Wright                                       March  31, 1999
Paris J. Wright, Director


/s/Robert T. Zynda                                       March  31, 1999
Robert T. Zynda, Director



                                       26

<PAGE>



                           JOURNAL COMMUNICATIONS INC.

                                INDEX TO EXHIBITS
                                  (Item 14(a))

Exhibits                                                         Form 10-K
--------                                                         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]).                                          
                                                     
(9.1)     The  Journal  Employees'  Stock  Trust  Agreement,
        dated May 15, 1937,  as amended  (incorporated  by
        reference  to  Exhibit 9 of the  Annual  Report on
        Form 10-K of Journal  Communications  Inc. for the
        fiscal year ended  December  31, 1995  [Commission
        File No. 0-7831]).                                
 
(9.2)   Further  amendment  to Stock  Trust  Agreement  as
        approved  by   unitholders  on  October  30,  1996
        (incorporated  by  reference  to  Exhibit A to the                      
        Definitive   Proxy   Statement   of  the   Journal                      
        Employees'  Stock  Trust  included  in the Trust's                      
        Schedule  14A filed  October  1, 1996  [Commission                      
        File No. 0-7832]).         
        
(13)    Portions of Registrant's Annual Report, filed herewith          28-40

(21)    Subsidiaries of the Registrant, filed herewith                  41

(23)    Consent of Independent Auditors, filed herewith                 42

(27)    Financial Data Schedule, filed herewith                         43-44

                                       27