##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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Quarterly Report Pursuant to Section
13 or 15 (d) of

the Securities Exchange Act of 1934



For the quarterly period ended March 31, 2005



Commission File Number: 333-112246



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Morris Publishing Group, LLC

Morris Publishing Finance Co.*

(Exact name of Registrants as specified in their charters)



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|                        |  |                                         
|----------------------- |  | ----------------------------------------
|Georgia                 |  | 58-1445060                              
|Georgia                 |  | 20-0183044                              
|(State of organization) |  | (I.R.S. Employer Identification Numbers)



725 Broad Street

Augusta, Georgia 30901

(Address of principal executive offices)



(706) 724-0851

(Registrants Telephone number)



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Indicate by
check mark whether the Registrants (1) have 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) have been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



Indicate
by check mark whether the Registrants are accelerated filers (as defined in Rule 12b-2 of the Act).    Yes ̈No  x



|* | Morris Publishing Finance Co. meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure
format.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

MORRIS PUBLISHING GROUP, LLC

MORRIS PUBLISHING FINANCE CO.

QUARTERLY REPORT

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005



TABLE OF CONTENTS



|                           |  |                                                                                                                     |  |                                                                                       |  |     
|-------------------------- |  | ------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                           |  |                                                                                                                     |  |                                                                                       |  | Page
|FORWARD LOOKING STATEMENTS |  | 2                                                                                                                  
|                           | 
|PART I.                    |  |                                                                                                                    
|Item 1.                    |  |                                                                                                                     |  | Financial Statements:                                                                 |  |     
|                           |  | Unaudited condensed consolidated balance sheets as of March 31, 2005 and December 31, 2004                          |  | 3                                                                                    
|                           |  | Unaudited condensed consolidated statements of income for the three month periods ended March 31, 2005 and 2004     |  | 4                                                                                    
|                           |  | Unaudited condensed consolidated statements of cash flows for the three month periods ended March 31, 2005 and 2004 |  | 5                                                                                    
|                           |  | Notes to condensed consolidated financial statements                                                                |  | 6                                                                                    
|Item 2.                    |  |                                                                                                                     |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 11  
|Item 3.                    |  |                                                                                                                     |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 16  
|Item 4.                    |  |                                                                                                                     |  | Controls and Procedures                                                               |  | 16  
|PART II.                   |  |                                                                                                                    
|Item 1.                    |  |                                                                                                                     |  | Legal Proceedings.                                                                    |  | 17  
|Item 2.                    |  |                                                                                                                     |  | Unregistered Sales of Equity Securities and Use of Proceeds.                          |  | 17  
|Item 3.                    |  |                                                                                                                     |  | Defaults Upon Senior Securities.                                                      |  | 17  
|Item 4.                    |  |                                                                                                                     |  | Submission of Matters to a Vote of Security Holders.                                  |  | 17  
|Item 5.                    |  |                                                                                                                     |  | Other Information                                                                     |  | 17  
|Item 6.                    |  |                                                                                                                     |  | Exhibits                                                                              |  | 17  



Morris Publishing Group, LLC is a
wholly owned subsidiary of Morris Communications Company, LLC, a privately held media company. Morris Publishing Finance Co., a wholly-owned subsidiary of Morris Publishing Group, LLC, was incorporated in 2003 for the sole purpose of serving as a
co-issuer of our senior subordinated notes in order to facilitate the offering. Morris Publishing Finance Co. does not have any operations or assets of any kind and will not have any revenue. In this report, Morris Publishing,
we, us and our refer to Morris Publishing Group, LLC and its subsidiaries. Morris Communications refers to Morris Communications Company, LLC. Morris Publishing Group was formed in 2001 and assumed the
operations of the newspaper business segment of our parent, Morris Communications. Discussions of Morris Publishing and our operations prior to November 2001 include the business as previously conducted by the Morris Communications newspaper
business segment.



1



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##### Table of Contents

FORWARD LOOKING STATEMENTS



This report contains
forward-looking statements. These statements relate to future periods and include statements regarding our anticipated performance. You may find discussions containing such forward-looking statements in Managements Discussion and
Analysis of Financial Condition and Results of Operations in Item 2 of this report.



Generally, the words anticipates, believes, expects, intends, estimates, projects, plans and similar expressions identify
forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results, to differ materially from
any future results, performance or achievements expressed or implied by these forward-looking statements.



Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that these statements will be realized. Given these uncertainties, prospective investors are cautioned not to
place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this report. We assume no obligation to update or revise them or provide reasons why actual results may differ. Important factors
that could cause our actual results to differ materially from our expectations include, without limitation:



| |  |  | delay in any economic recovery or the recovery not being as robust as might otherwise have been anticipated;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | increases in financing, labor, health care and/or other costs, including costs of raw materials, such as newsprint;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | general economic or business conditions, either nationally, regionally or in the individual markets in which we conduct business (and, in particular, the Jacksonville, Florida
market), may deteriorate and have an adverse impact on our advertising or circulation revenue or on our business strategy;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | other risks and uncertainties.
| | - |  | ------------------------------



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##### Table of Contents

PART I



ITEM 1. FINANCIAL STATEMENTS



Morris Publishing Group, LLC

(Formerly Morris Communications Company, LLC

Newspaper Business Segment)



Unaudited condensed consolidated balance sheets



|                                                                                                                                       |  |                |          |   |                   |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ----------------- | - | -------- | -
|(Dollars in
thousands)                                                                                                                 |  | March 31, 2005 |          |   | December 31, 2004 |  
|ASSETS                                                                                                                                 |  |                |          |   |                   |   |          |  
|CURRENT ASSETS:                                                                                                                        |  |                |          |   |                   |   |          |  
|Cash and cash equivalents                                                                                                              |  | $              | 9,445    |   |                   | $ | 20,098   |  
|Accounts receivable, net of allowance for doubtful accounts of $4,032 at March 31, 2005 and $2,981 at December 31, 2004                |  |                | 50,078   |   |                   |   | 53,973   |  
|Due from Parent                                                                                                                        |  |                |         |   |                   |   | 1,323    |  
|Inventories                                                                                                                            |  |                | 3,990    |   |                   |   | 4,645    |  
|Deferred income taxes, net                                                                                                             |  |                | 2,556    |   |                   |   | 2,556    |  
|Prepaid and other current assets                                                                                                       |  |                | 1,532    |   |                   |   | 1,715    |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total current assets                                                                                                                   |  |                | 67,601   |   |                   |   | 84,310   |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|LOAN RECEIVABLE FROM MORRIS COMMUNICATIONS                                                                                             |  |                | 22,500   |   |                   |   | 1,500    |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|NET PROPERTY AND EQUIPMENT                                                                                                             |  |                | 154,377  |   |                   |   | 155,198  |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|OTHER ASSETS:                                                                                                                          |  |                |          |   |                   |   |          |  
|Goodwill                                                                                                                               |  |                | 186,034  |   |                   |   | 186,034  |  
|Intangible assets, net of accumulated amortization of $54,230 at March 31, 2005 and $52,842 at December 31, 2004                       |  |                | 19,624   |   |                   |   | 21,011   |  
|Deferred loan costs and other assets, net of accumulated loan amortization of $2,435 at March 31, 2005 and $2,054 at December 31,
2004 |  |                | 12,918   |   |                   |   | 13,138   |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total other assets                                                                                                                     |  |                | 218,576  |   |                   |   | 220,183  |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total assets                                                                                                                           |  | $              | 463,054  |   |                   | $ | 461,191  |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|LIABILITIES AND MEMBERS DEFICIT                                                                                                       |  |                |          |   |                   |   |          |  
|CURRENT LIABILITIES:                                                                                                                   |  |                |          |   |                   |   |          |  
|Current maturities of long-term debt                                                                                                   |  | $              | 7,750    |   |                   | $ | 6,500    |  
|Accounts payable                                                                                                                       |  |                | 8,408    |   |                   |   | 9,841    |  
|Accrued interest                                                                                                                       |  |                | 3,626    |   |                   |   | 8,802    |  
|Due to Parent                                                                                                                          |  |                | 403      |   |                   |   |         |  
|Deferred revenues                                                                                                                      |  |                | 17,843   |   |                   |   | 16,962   |  
|Accrued employee costs                                                                                                                 |  |                | 14,583   |   |                   |   | 12,359   |  
|Other accrued liabilities                                                                                                              |  |                | 2,773    |   |                   |   | 2,270    |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total current liabilities                                                                                                              |  |                | 55,386   |   |                   |   | 56,734   |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|LONG-TERM DEBT, less current portion                                                                                                   |  |                | 540,625  |   |                   |   | 543,500  |  
|DEFERRED INCOME TAXES, less current portion                                                                                            |  |                | 24,527   |   |                   |   | 24,227   |  
|POSTRETIREMENT BENEFITS DUE TO MORRIS COMMUNICATIONS                                                                                   |  |                | 23,034   |   |                   |   | 22,314   |  
|OTHER LONG-TERM LIABILITIES                                                                                                            |  |                | 3,975    |   |                   |   | 3,552    |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total liabilities                                                                                                                      |  |                | 647,547  |   |                   |   | 650,327  |  
|COMMITMENTS AND CONTINGENCIES (NOTE 6)                                                                                                 |  |                |          |   |                   |   |          |  
|MEMBERS DEFICIT                                                                                                                       |  |                | (184,493 | ) |                   |   | (189,136 | )
|                                                                                                                                       |  |                |          |   |                   |   |          |  
|Total liabilities and members deficit                                                                                                 |  | $              | 463,054  |   |                   | $ | 461,191  |  
|                                                                                                                                       |  |                |          |   |                   |   |          |  



See notes to condensed consolidated
financial statements.



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##### Table of Contents

Morris Publishing Group, LLC

(Formerly Morris Communications Company, LLC

Newspaper Business Segment)



Unaudited condensed consolidated statements of income



|                                                                |  |                              |         |   |      |   |         |  
|--------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                |  | Three Months Ended March 31, |        
|(Dollars in
thousands)                                          |  | 2005                         |         |   | 2004 |  
|NET OPERATING REVENUES:                                         |  |                              |         |   |      |   |         |  
|Advertising                                                     |  | $                            | 91,501  |   |      | $ | 86,091  |  
|Circulation                                                     |  |                              | 17,880  |   |      |   | 17,868  |  
|Other                                                           |  |                              | 3,957   |   |      |   | 4,314   |  
|                                                                |  |                              |         |   |      |   |         |  
|Total net operating revenue                                     |  |                              | 113,338 |   |      |   | 108,273 |  
|                                                                |  |                              |         |   |      |   |         |  
|OPERATING EXPENSES:                                             |  |                              |         |   |      |   |         |  
|Labor and employee benefits                                     |  |                              | 44,523  |   |      |   | 43,580  |  
|Newsprint, ink and supplements                                  |  |                              | 13,942  |   |      |   | 13,022  |  
|Other operating costs (excluding depreciation and amortization) |  |                              | 33,331  |   |      |   | 29,459  |  
|Depreciation and amortization expense                           |  |                              | 5,547   |   |      |   | 5,139   |  
|                                                                |  |                              |         |   |      |   |         |  
|Total operating expenses                                        |  |                              | 97,343  |   |      |   | 91,200  |  
|                                                                |  |                              |         |   |      |   |         |  
|Operating income                                                |  |                              | 15,995  |   |      |   | 17,073  |  
|                                                                |  |                              |         |   |      |   |         |  
|OTHER EXPENSES (INCOME):                                        |  |                              |         |   |      |   |         |  
|Interest expense, including amortization of debt issuance costs |  |                              | 8,515   |   |      |   | 7,812   |  
|Interest income                                                 |  |                              | (298    | ) |      |   | (144    | )
|Other, net                                                      |  |                              | 35      |   |      |   | 532     |  
|                                                                |  |                              |         |   |      |   |         |  
|Total other expense, net                                        |  |                              | 8,252   |   |      |   | 8,200   |  
|                                                                |  |                              |         |   |      |   |         |  
|INCOME BEFORE INCOME TAXES                                      |  |                              | 7,743   |   |      |   | 8,873   |  
|PROVISION FOR INCOME TAXES                                      |  |                              | 3,100   |   |      |   | 3,532   |  
|                                                                |  |                              |         |   |      |   |         |  
|NET INCOME                                                      |  | $                            | 4,643   |   |      | $ | 5,341   |  
|                                                                |  |                              |         |   |      |   |         |  



See notes to condensed consolidated
financial statements.



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##### Table of Contents

Morris Publishing Group, LLC

(Formerly Morris Communications Company, LLC

Newspaper Business Segment)



Unaudited condensed consolidated statements of cash flows



|                                                                              |  |                              |         |   |      |   |         |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                              |  | Three Months Ended March 31, |        
|(Dollars in
thousands)                                                        |  | 2005                         |         |   | 2004 |  
|OPERATING ACTIVITIES:                                                         |  |                              |         |   |      |   |         |  
|Net income                                                                    |  | $                            | 4,643   |   |      | $ | 5,341   |  
|Adjustments to reconcile net income to cash provided by operating activities: |  |                              |         |   |      |   |         |  
|Depreciation and amortization                                                 |  |                              | 5,547   |   |      |   | 5,139   |  
|Deferred income taxes                                                         |  |                              | 300     |   |      |   | (179    | )
|Amortization of debt issuance costs                                           |  |                              | 381     |   |      |   | 345     |  
|Loss on disposal of property and equipment, net                               |  |                              | 19      |   |      |   | 406     |  
|Changes in assets and liabilities, net of effects of businesses acquired:     |  |                              |         |   |      |   |         |  
|Accounts receivable                                                           |  |                              | 3,895   |   |      |   | 2,155   |  
|Inventories                                                                   |  |                              | 655     |   |      |   | (161    | )
|Prepaids and other current assets                                             |  |                              | 183     |   |      |   | 812     |  
|Other assets                                                                  |  |                              | (161    | ) |      |   | (169    | )
|Accounts payable                                                              |  |                              | (1,433  | ) |      |   | 1,042   |  
|Due to Parent                                                                 |  |                              | 1,726   |   |      |   | 194     |  
|Accrued employee costs                                                        |  |                              | 2,224   |   |      |   | 3,156   |  
|Accrued interest                                                              |  |                              | (5,176  | ) |      |   | (5,346  | )
|Deferred revenues and other liabilities                                       |  |                              | 1,384   |   |      |   | 1,736   |  
|Postretirement obligations due to Morris Communications                       |  |                              | 720     |   |      |   | 672     |  
|Other long-term liabilities                                                   |  |                              | 423     |   |      |   | 174     |  
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash provided by operating activities                                     |  |                              | 15,330  |   |      |   | 15,317  |  
|INVESTING ACTIVITIES:                                                         |  |                              |         |   |      |   |         |  
|Capital expenditures                                                          |  |                              | (3,367  | ) |      |   | (2,505  | )
|Proceeds from sale of property and equipment                                  |  |                              | 9       |   |      |   |        |  
|Acquisition of businesses, net of cash acquired                               |  |                              |        |   |      |   | (770    | )
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash used in investing activities                                         |  |                              | (3,358  | ) |      |   | (3,275  | )
|FINANCING ACTIVITIES:                                                         |  |                              |         |   |      |   |         |  
|(Repayments on) proceeds from long-term debt                                  |  |                              | (1,625  | ) |      |   | 3,000   |  
|Loan receivable from Morris Communications                                    |  |                              | (21,000 | ) |      |   | (17,500 | )
|                                                                              |  |                              |         |   |      |   |         |  
|Net cash used in financing activities                                         |  |                              | (22,625 | ) |      |   | (14,500 | )
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                     |  |                              | (10,653 | ) |      |   | (2,458  | )
|CASH AND CASH EQUIVALENTS, beginning of period                                |  |                              | 20,098  |   |      |   | 7,334   |  
|                                                                              |  |                              |         |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, end of period                                      |  | $                            | 9,445   |   |      | $ | 4,876   |  
|                                                                              |  |                              |         |   |      |   |         |  
|SUPPLEMENTAL DISCLOSURES:                                                     |  |                              |         |   |      |   |         |  
|Interest paid                                                                 |  | $                            | 13,278  |   |      | $ | 12,781  |  
|Income taxes paid to Morris Communications                                    |  | $                            | 2,801   |   |      | $ | 3,050   |  



See notes to condensed consolidated
financial statements.



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MORRIS PUBLISHING GROUP, LLC

(FORMERLY MORRIS COMMUNICATIONS COMPANY, LLC NEWSPAPER BUSINESS SEGMENT

Notes to Condensed consolidated financial statements (unaudited)

(Dollars in Thousands)



1. Nature of operations and summary of significant accounting policies



Basis of Presentation and Nature of Operations  Morris Publishing Group, LLC (Morris Publishing or the Company) was formed in November 2001 from the newspaper assets of Morris
Communications Company, LLC (Morris Communications or the Parent). Prior to the formation of Morris Publishing, the newspaper business segment operated as a division of Morris Communications. Between this formation and July
2003, Morris Publishing operated as MCC Newspapers, LLC.



The accompanying
condensed consolidated financial statements furnished here reflect all adjustments, which in the opinion of management, are necessary for the fair presentation of the Companys financial position and results of operations. All such adjustments
are of a normal recurring nature. Results of operations for the interim 2005 period is not necessarily indicative of results expected for the full year. While certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted, the Company believes that the disclosures herein are adequate to make the information presented
not misleading. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2004. The accounting policies that are employed
are the same as those shown in Note 1 to the consolidated financial statements as of December 31, 2004 and 2003 and for each of three years ended December 31, 2004.



2. Transactions with Morris Communications



Management fee  The Company was charged with a management fee by Morris Communications in an amount equal to 4% of the total net operating revenue,
as defined in the management agreement. These fees totaled $4,533 and $4,149 for the three months ended March 31, 2005 and 2004, respectively. These expenses compensate Morris Communications for corporate services and costs incurred on behalf of the
Company, including executive, legal, secretarial, tax, internal audit, risk management, employee benefit administration, airplane usage and other support services.



Technology and shared services fee The Company was charged with certain technology and shared services allocated
from Morris Communications. During 2004, these costs were allocated based on actual costs, as defined in the original August 2003 management agreement. In the first quarter 2005, the management agreement was amended allocating these costs incurred,
retroactive to January 1, 2005, to the lesser of 2.5% of total net operating revenue or the actual technology costs allocated to Morris Publishing based upon usage. The technology and shared services expenses incurred by Morris Communications on
behalf of the Company totaled $2,832 and $3,531 for the three months ended March 31, 2005 and 2004, respectively.



Employees 401(k) plan  The Company participates in Morris Communications 401(k) plan. Under this plan, contributions by employees to the
401(k) plan are matched (up to 5% of pay) by Morris Communications. Expenses were allocated to the Company based on specific identification of employer matching contributions of $1,078 and $1,120 for the three months ended March 31, 2005 and 2004,
respectively.



Retiree health care benefits  The Company
participates in Morris Communications retiree health care plan, which provides certain health care benefits for eligible retired employees and their dependents. The plan requires the Company to be separately liable for its portion of the
postretirement benefit obligation. Accordingly, the Company and Morris Communications have completed a formal actuarial valuation of the postretirement obligation for the Company as of and for the year ended December 31, 2004.



Under Morris Communications plan, full-time employees who were hired before January 1,
1992 and retire after ten years of service are eligible for these benefits. Full-time employees hired on or after January 1, 1992 must have 25 years of service to be eligible. Generally, this plan pays a percentage of most medical expenses (reduced
for any deductible) after payments made by government programs and other group coverage. This plan is unfunded. Lifetime



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##### Table of Contents

benefits under the plan are limited to $100 per employee. Expenses related to this plan have been allocated to the Company based on total headcount. The
expenses allocated to the Company, and the related contributions recorded were $720 and $672 for the three months ended March 31, 2005 and 2004, respectively.



The Company was also allocated its portion of the postretirement benefit obligation. The amounts allocated to the Company, based on total headcount were $23,034 and
$22,314 as of March 31, 2005 and December 31, 2004, respectively.



The
following is an estimate of the Companys net periodic benefit cost for 2005:





|                                         |  |   |       |  
|---------------------------------------- |  | - | ----- | -
|Components of net periodic benefit cost: |  |   |       |  
|                                         | 
|Service cost                             |  | $ | 723   |  
|Interest cost at 6.25%                   |  |   | 2,200 |  
|Unrecognized gain from earlier periods   |  |   | 782   |  
|                                         |  |   |       |  
|Net periodic benefit cost                |  |   | 3,705 |  
|Less: employee portion                   |  |   | (938  | )
|                                         |  |   |       |  
|Estimated net benefit expense            |  | $ | 2,767 |  



The Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 will provide a federal subsidy beginning in 2006 to postretirement medical plans that provide prescription drug benefits to retirees. The subsidy will provide plan sponsors 28% of individual retirees
annual prescription drug costs (in dollars) between $250 and $5,000 for retirees who are eligible for but opt out of Medicare Part D Prescription coverage.



This subsidy, when integrated with current claim costs, would have the effect of decreasing liabilities and costs reported under the current accounting guidance for plans
that are at least actuarially equivalent to the Medicare Part D benefit.



The
following is a comparison of the benefits offered by the Companys retiree health care plan and the Medicare D plan:



|                          |  |                                                       |  |                         
|------------------------- |  | ----------------------------------------------------- |  | ------------------------
|(In dollars)              |  | Medicare part D                                       |  | Morris Publishing       
|Deductible                |  | $250                                                  |  | $0                      
|Coinsurance Non-preferred |  | 75% for the first $2,250 Then 95% in excess of
$5,100 |  | 100% Preferred/80%      
|Copay                     |  | None                                                  |  | $10 (generic) up to $40 
|Retiree Cost              |  | $420/year                                             |  | $0 with medical coverage



From this comparison of benefits, it
is evident the Companys postretirement medical benefits are at least actuarially equivalent to Medicare Part D. Once more guidance is issued the cost savings will be calculated for the plan going forward.



Health and disability plan  The Company has participated in Morris
Communications health and disability plan for active employees. Accordingly, Morris Communications has allocated to the Company certain expenses associated with the payment of current obligations and the estimated amounts incurred but not yet
reported. The expense allocated to the Company based on the formal actuarial valuation or total headcount, was $3,578 and $3,588 for the three months ended March 31, 2005 and 2004, respectively.



The Company was also allocated its portion of the health and disability obligation. The
amounts allocated to the Company, based on total headcount, were $2,648 and $2,296 as of March 31, 2005 and December 31, 2004, respectively.



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##### Table of Contents

Workers compensation expense  The Company has participated in Morris Communications
workers compensation self-insurance plan. Accordingly, Morris Communications has allocated to the Company certain expenses associated with the payment of current obligations and the estimated amounts incurred but not reported. The expenses
allocated to the Company, based on a percentage of total salaries expense, were $810 and $538 for the three months ended March 31, 2005 and 2004, respectively.



Loan receivable from Morris Communications  Under its debt arrangements, the Company is permitted to loan up to $40 million at any one time to
Morris Communications or any of its wholly owned subsidiaries outside the Publishing Group, solely for purposes of funding its working capital, capital expenditures and acquisition requirements. The Company is also permitted to invest in or lend an
additional $20 million at any one time outstanding to Morris Communications or any other Person(s), as defined in the debt indenture.



The interest-bearing portion of all loans from the Company to Morris Communications bear the same rate as the borrowings under the Credit Agreement (for the first three
months 2005, this rate was LIBOR (adjusted to the nearest 1/16th) + 2.25%). The Company distinguishes between intercompany transactions incurred in the ordinary course of business and settled on a monthly basis (which do not bear interest) and those
of a more long-term nature that are subject to an interest charge. Interest is accrued on the average outstanding long-term balance each month.



The interest accrued and paid on the loans to Morris Communications for the three months ended March 31, 2005 and 2004 was $296 and $139, respectively, on an average loan
balances of $18,105 and $15,035, respectively. The average interest rate was 4.854% and 3.375% for the three month period ended 2005 and 2004, respectively.



The Company is permitted under its debt arrangement to make restricted payments, which includes dividends and loans to affiliates in excess of the permitted limits
described above, up to the sum of (1) 100% of the Companys cumulative consolidated income before interest, taxes, depreciation and amortization (Consolidated EBITDA, as defined in the indenture) earned subsequent to the debts
August 2003 issue date less (2) 140% of the consolidated interest expense of the Company for such period. At March 31, 2005, the Company had approximately $36 million available for future restricted payments under the credit indenture.



3. Acquisitions



In March 2004, the Company acquired Capital City Weekly, a weekly newspaper located in Juneau, Alaska. The acquisition was accounted for as
a purchase and had an aggregate purchase price, including closing costs of approximately $852. The purchase price was allocated to the estimated fair value of assets and liabilities acquired. The excess purchase price over the $52 fair value of the
tangible net assets was allocated with $476 allocated to goodwill, $274 allocated to subscriber and advertiser relations, and $50 allocated to noncompetition agreements. The subscriber and advertiser relations are being amortized over a 15-year life
and the noncompetition agreement over a 5-year life.



Capital City
Weeklys results of operations have been recorded in the consolidated statements of income from the date of acquisition. The pro forma effect on net income had this acquisition been reflected as of the beginning of the year acquired and the
previously reported year would not have been material.



4. Long-term debt



On March 31, 2005, the Company made scheduled principal payments of
$1,250 and $375 on the Tranche A and Tranche C loans, respectively. Under the current credit agreement, interest is incurred at the alternative base rate (ABR) or the Eurodollar rate, plus applicable margin as defined. The ABR is the greater of the
federal funds rate plus 0.5% or prime. The Eurodollar rate is LIBOR. At March 31, 2005, the interest rates on the debt outstanding were 4.625% and 4.875% for the Tranche A and Tranche C loans, respectively, and the interest rate on the revolver was
5.125%. At December 31, 2004 and March 31, 2005, no amount was outstanding on the $150 million revolving credit line. The commitment fee on the amount available on the revolving credit line is 0.5%. As of March 31, 2005, the Company was in
compliance with all covenants under our debt arrangements.



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5. Goodwill and Other Intangible Assets



Goodwill is the excess of cost over fair market value of tangible net assets acquired. Goodwill is not presently amortized but tested for
impairment annually or if certain circumstances indicate a possible impairment may exist in accordance with FAS No. 142, Goodwill and Other Intangible Assets.



Other intangible assets acquired consist primarily of mastheads and licenses on various acquired properties, customer lists, as well as
other assets. Other intangible assets acquired (mastheads and domain names) have indefinite lives and are not currently amortized, but are tested for impairment annually or if certain circumstances indicate a possible impairment may exist. Certain
other intangible assets acquired (subscriber lists, non-compete agreements and other assets) are amortized over their estimated useful lives (from 5 to 20 years).



Changes in the carrying amounts of goodwill and other intangible assets of the Company for the three months ended March 31, 2005 were as
follows:



|                             |  |          |         |                         |   |        |  
|---------------------------- |  | -------- | ------- | ----------------------- | - | ------ | -
|                             |  | Goodwill |         | Other intangible assets |  
|Balance at December 31, 2004 |  | $        | 186,034 |                         | $ | 21,011 |  
|Amortization expense         |  |          |        |                         |   | (1,387 | )
|                             |  |          |         |                         |   |        |  
|Balance at March 31, 2005    |  | $        | 186,034 |                         | $ | 19,624 |  



Other intangible assets at March 31,
2005 and December 31, 2004 were as follows:



|                                        |  |      |        |                          |   |          |  |   |       
|--------------------------------------- |  | ---- | ------ | ------------------------ | - | -------- |  | - | ------
|                                        |  | Cost |        | Accumulated amortization |   | Net cost
|March 31, 2005:                         |  |      |        |                          |   |          |  |   |       
|Newspaper mastheads                     |  | $    | 5,310  |                          | $ | 874      |  | $ | 4,436 
|Subscriber lists                        |  |      | 68,409 |                          |   | 53,308   |  |   | 15,101
|Domain names                            |  |      | 75     |                          |   | 32       |  |   | 43    
|Non-compete agreements and other assets |  |      | 60     |                          |   | 16       |  |   | 44    
|                                        |  |      |        |                          |   |          |  |   |       
|Total other intangible assets           |  | $    | 73,854 |                          | $ | 54,230   |  | $ | 19,624
|                                        |  |      |       
|December 31, 2004:                      |  |      |        |                          |   |          |  |   |       
|Newspaper mastheads                     |  | $    | 5,310  |                          | $ | 874      |  | $ | 4,436 
|Subscriber lists                        |  |      | 68,409 |                          |   | 51,924   |  |   | 16,485
|Domain names                            |  |      | 75     |                          |   | 32       |  |   | 43    
|Non-compete agreements and other assets |  |      | 60     |                          |   | 13       |  |   | 47    
|                                        |  |      |        |                          |   |          |  |   |       
|Total other intangible assets           |  | $    | 73,854 |                          | $ | 52,843   |  | $ | 21,011



Pre-tax amortization expense of other
intangible assets for the three months ended March 31, 2005 was $1,387. The remaining expense for the last nine months of 2005 and for the four succeeding years and thereafter for the existing intangible assets is as follows:



Intangible Amortization



|           |  |   |       
|---------- |  | - | ------
|2005       |  | $ | 4,174 
|2006       |  |   | 5,556 
|2007       |  |   | 2,221 
|2008       |  |   | 569   
|2009       |  |   | 550   
|Thereafter |  |   | 2,118 
|           |  |   |       
|Total      |  | $ | 15,188



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6. Commitments and Contingencies



The Company and its subsidiaries are parties to several claims and lawsuits arising in the course of their normal business activities.
Although the ultimate outcome of these suits cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material effect on the Companys condensed consolidated financial statements.



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



The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2005
and 2004 and with our consolidated financial statements for the year ended December 31, 2004.



Executive overview



Morris Publishing
was formed in 2001 as MCC Newspapers LLC to own and operate the newspaper business historically operated by our parent, Morris Communications Company, LLC. Discussions of Morris Publishing and our results of operations include the
business as previously conducted by the Morris Communications newspaper business segment. We changed our name to Morris Publishing Group, LLC in July 2003.



Morris Publishing owns and operates 26 daily and 12 non-daily newspapers, 4 city magazines and numerous other free publications, primarily
located in mid-sized to small markets across the United States. While most of our revenue is generated from advertising and circulation from our newspaper operations, we also print and distribute periodical publications and operate commercial
printing operations in conjunction with our newspapers. In addition, our newspaper operations generate revenue from both print and online media formats.



Lineage, rate and mix of advertisement are the primary components of advertising revenue. The advertising rate depends largely on our market reach, primarily through
circulation, and market penetration. The number of copies sold and the amount charged to our customers are the primary components of circulation revenue. Our other revenue consist primarily of commercial printing and other online revenue.



For the quarter ended March 31, 2005, advertising revenue represented 81% of
total net operating revenue. Retail, classified and national advertising revenue represented 51%, 42%, and 7%, respectively, of total advertising revenue. Circulation revenue comprised 16% of total net operating revenue, down from 17% in 2004.



Employee and newsprint costs are the primary costs at each newspaper. Our
operating performance is mostly affected by newsprint prices, which historically have fluctuated substantially along with our local markets. From time to time, each individual newspaper may perform better or worse than our newspaper group as a whole
due to certain local conditions, particularly within the retail, auto, housing and labor markets. However, such variances at each newspaper do not have a long term affect on the performance of our newspaper segment, our only reporting segment.



Our primary operating strategy is to grow our market share and to operate
efficiently in all markets. Our initiatives have been directed at improving our local news and information content, enhancing our online formats to complement our daily newspapers, creating cost saving synergies through our weekly and other niche
publications, and investing in technology that enables us to account for, print, produce and deliver our products more efficiently. Since declines in circulation and readership of daily newspapers have resulted in a loss of advertising market share
in our industry, we continue to focus on circulation retention efforts through lengthened subscriptions periods, enhanced payment methods; and increased service levels.



The results of our operations are as follows:



First quarter operating income was $16.0 million, down $1.1 million, or 6.3%, from $17.1 million for the same period in 2004. The $5.1 million, or 4.7%, increase in total
net operating revenue was more than offset by the $6.2 million, or 6.7%, increase in operating costs.



Interest and loan amortization expense increased by $0.7 million to $8.5 million primarily due to a slight increase in net borrowings and in interest rates.



Net income for the first quarter 2005 was $4.6 million, down $0.7 million from $5.3 million
in the prior year.



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Our results for the first quarter of 2005 were unusually affected by the city of Jacksonville hosting the NFLs 2005
Super Bowl in February (a non-recurring event for us). In order to provide more meaningful discussion of our results, we have estimated the direct impact of the Super Bowl on our various categories of revenues and expenses; however, these estimates
are not exact and may not take into account the indirect or incidental impact of the Super Bowl.



Total net operating revenue was up 4.7%, driven primarily by Jacksonville. During the quarter, Jacksonville realized $1.1 million in additional revenue attributed to the Super Bowl, of which $0.9 million was in
retail, $0.1 million was in national and $0.1 million in classified. Jacksonvilles total net operating revenue increased by 10.4%, accounting for 70.5% of our total increase. During 2004, Jacksonville received another $0.2 million from the
Super Bowl, primarily in retail advertising.



Excluding the Super Bowl revenue,
total net operating revenue for all of our markets increased 3.7%, an improvement over the 3.3% increase during the same quarter last year.



Jacksonvilles advertising and circulation revenue increased 11.5% and 2.9%, respectively, while our other markets combined reported a total advertising revenue
increase of 3.6% and a circulation revenue decrease of 1.1%.



Augusta and
Savannah had total net operating revenue growth of 4.4% and 4.5%, respectively. Augustas strength was driven by a significant increase in retail advertising revenue, offset by significant decreases in classified advertising revenue and
circulation revenue. Savannah reported strong gains in both classified and retail advertising revenue and in circulation revenue, offset by a significant decrease in national advertising revenue.



Lubbocks and Amarillos total net operating revenue increased by a modest 2.2% and
0.3%, respectively, with both markets having significant declines in circulation revenue and little classified revenue growth. Topekas total net operating revenue decreased by 10.2%, resulting from significant declines in both retail
advertising revenue and circulation revenue.



Total net operating revenue from
our non daily publications increased 4.9%. Skirt! magazines, our new free distribution womens magazine, reported total operating revenue of $0.8 million, a $0.5 million increase from the same quarter last year, due primarily to the
start up of new magazines in Jacksonville, Charlotte and Savannah.



Total
online revenue this quarter grew 24.7% compared to last year and accounted for approximately 4.6% of all advertising revenue, up from 3.9% a year ago. Total online advertising revenue grew 22.0% to $4.8 million from $3.7 million during the same
quarter last year.



During the first quarter 2005, total operating cost was up
6.7% compared to a 5.3% increase a year ago. Operating costs were impacted by the direct costs related to the Super Bowl, cycling the costs of new Skirt! magazines in Jacksonville, Charlotte, and Savannah, rent associated with Savannahs
new administrative and production facility, a charge taken due to the bankruptcy of one of our larger advertisers, and an increase in the average cost of newsprint.



Excluding Jacksonvilles $1.2 million in direct Super Bowl cost, total operating cost for all of our markets increased 5.5%.



Critical accounting policies and estimates



Critical accounting policies are those that are most significant to the portrayal of our
financial position and results of operations and require difficult, objective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts in our condensed consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to our revenues, allowances for bad debts, asset
impairments, post-retirement benefits, self-insurance and casualty, management fees, income taxes and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with managements expectations, the
actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.



We believe there have been no significant changes during the quarter ended March 31, 2005 to the items that we disclosed



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as our critical accounting policies and estimates in Managements Discussion and Analysis of Financial Condition and Results of Operations in our annual
report dated March 31, 2005 filed with the Securities and Exchange Commission on Form 10-K.



Information availability



Our annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports are available free of charge on our web site,www.morris.com, as soon as feasible after such reports are electronically filed
with or furnished to the Securities and Exchange Commission. In addition, information regarding corporate governance at Morris Publishing and our parent, Morris Communications, is also available on our web site. The information on our web site is
not incorporated by reference into, or as part of, the Report on Form 10-Q.



Results of operations for the three months ended March 31, 2005 and March 31, 2004



Operating revenue. The table below presents operating revenue and related statistics for newspaper operations for the three months ended March 31, 2005 compared to the three months ended March 31, 2004:



|                        |  |                              |         |                                 |   |                                            |  |                                            |       |  |        |  |       
|----------------------- |  | ---------------------------- | ------- | ------------------------------- | - | ------------------------------------------ |  | ------------------------------------------ | ----- |  | ------ |  | ------
|                        |  | Morris Publishing Group, LLC |         | Excluding SuperBowl revenue*   
|                        |  | Three Months endedMarch 31,  |         | Change over same period in 2004 |   | Percentage change over same period in 2004 |  | Percentage change over same period in 2004
|(Dollars in thousands)  |  | 2005                         |         | 2004                            |   |                                            | 
|Net operating revenues: |  |                              |         |                                 |   |                                            |  |                                            |       |  |        |  |       
|Advertising             |  |                              |         |                                 |   |                                            |  |                                            |       |  |        |  |       
|Retail                  |  | $                            | 46,744  |                                 | $ | 44,745                                     |  | $                                          | 1,999 |  | 4.5%   |  | 2.5%  
|Classified              |  |                              | 38,093  |                                 |   | 34,444                                     |  |                                            | 3,649 |  | 10.6%  |  | 10.4% 
|National                |  |                              | 6,664   |                                 |   | 6,902                                      |  |                                            | (238) |  | (3.4)% |  | (5.0)%
|                        |  |                              |         |                                 |   |                                            |  |                                            |       |  |        |  |       
|Total                   |  |                              | 91,501  |                                 |   | 86,091                                     |  |                                            | 5,410 |  | 6.3%   |  | 5.1%  
|Circulation             |  |                              | 17,880  |                                 |   | 17,868                                     |  |                                            | 12    |  | 0.1%   |  | (0.1)%
|Other                   |  |                              | 3,957   |                                 |   | 4,314                                      |  |                                            | (357) |  | (8.3)% |  | (8.4)%
|                        |  |                              |         |                                 |   |                                            |  |                                            |       |  |        |  |       
|Net operating revenues  |  | $                            | 113,338 |                                 | $ | 108,273                                    |  | $                                          | 5,065 |  | 4.7%   |  | 3.7%  

---

|* | Jacksonville received an additional $1.1 million in net operating revenues directly related to the citys hosting the NFLs Super Bowl in February 2005, of which $0.9
million was retail, $0.1 million was national, $0.1 million was classified, $29 thousand in circulation, and $5 thousand in other income.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The decrease in national advertising revenue was driven by the discontinuation in 2004 of a Disney test market program from which Jacksonville earned $0.3 million in the
first quarter last year. Jacksonvilles losses in revenue due to the acquisition of AT&T Wireless by Cingular were offset by the national advertising revenue generated by the Super Bowl. In addition, Savannahs and Amarillos
national advertising revenue decreased 6.4% and 20.3%, resulting from the discontinuation or reduction in preprint advertising.



Jacksonville, Augusta, Savannah and Lubbock showed strength in retail advertising, with revenue up 7.5%, 10.7%, 7.1% and 7.3%, respectively, together accounting for 92%
of total retail advertising revenue growth. Jacksonville contributed 43% of the growth.



Classified advertising revenue growth continued to be driven principally by the strength of the real estate and the help wanted advertising categories. However, the automotive classified category was down, continuing its trend.



Jacksonvilles strength accounted for approximately 76% of our total classified
revenue growth. Its classifieds were up 20.7%, with real estate up 18.7%, employment up 17.6%, color charges up 66.3%, and auto up 3.9%. The new Real Estate Weeklysection along with the Builders Showcase section were major
contributors to Jacksonvilles real estate and color charges categories. Jacksonvilles employment rebounded from a weak first quarter 2004.



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During the first quarter, average daily circulation copies were down 1.7%, compared to the same quarter last year. The
continued weakness in circulation in many of our markets was offset by the strength in Jacksonville and Savannah. The National Do-Not-Call List continues to affect our sales pressure efforts.



The decrease in other revenue was primarily due to the $0.3 million decrease in commercial
printing revenue.



Operating expenses. The table below presents
operating costs for newspaper operations for the three months ended March 31, 2005 compared to the three months ended March 31, 2004:



|                               |  |                              |        |                                 |   |                                            |  |                                            |       |  |       |  |      
|------------------------------ |  | ---------------------------- | ------ | ------------------------------- | - | ------------------------------------------ |  | ------------------------------------------ | ----- |  | ----- |  | -----
|                               |  | Morris Publishing Group, LLC |        | Excluding Super Bowl Cost *    
|                               |  | Three Months ended March 31, |        | Change over same period in 2004 |   | Percentage change over same period in 2004 |  | Percentage change over same period in 2004
|(Dollars in
thousands)         |  | 2005                         |        | 2004                            |   |                                            | 
|Operating expenses:            |  |                              |        |                                 |   |                                            |  |                                            |       |  |       |  |      
|Labor and employee benefits    |  | $                            | 44,523 |                                 | $ | 43,580                                     |  | $                                          | 943   |  | 2.2%  |  | 2.0% 
|Newsprint, ink and supplements |  |                              | 13,942 |                                 |   | 13,022                                     |  |                                            | 920   |  | 7.1%  |  | 4.8% 
|Other operating costs          |  |                              | 33,331 |                                 |   | 29,459                                     |  |                                            | 3,872 |  | 13.1% |  | 10.5%
|Depreciation and amortization  |  |                              | 5,547  |                                 |   | 5,139                                      |  |                                            | 408   |  | 7.9%  |  | 7.9% 
|                               |  |                              |        |                                 |   |                                            |  |                                            |       |  |       |  |      
|Total operating expenses       |  | $                            | 97,343 |                                 | $ | 91,200                                     |  | $                                          | 6,143 |  | 6.7%  |  | 5.5% 

---

|* | Jacksonvilles first quarter 2005 expense directly related to the Super Bowl totaled $1.2 million, of which $0.1 million was employee cost, $0.3 million was newsprint, and
$0.8 million was other operating cost.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During the first
quarter 2005, the increase in employee cost was driven primarily by increases in wages, incentive based compensation and payroll tax expense. Commissions and bonuses were up $0.1 million, or 1.8%, salaries were up $0.7 million, or 2.3%, and payroll
tax expense was up $0.2 million, or 7.5%. Health insurance cost remained flat with the prior year.



During the first quarter 2005, Jacksonvilles 8.8% increase in total employee cost was driven by an increase in employees, commissions and wages Excluding Jacksonville, total employee cost remained flat with last
year, with the 5.9% decrease in employees offsetting average wage and commission increases. The 7.9% decrease in Topekas employee cost was driven by a 14.5% decrease in employees. Topekas market remains soft.



During the first quarter 2005, newsprint expense increased $0.5 million, or 5.0%, to $11.5
million. The 10.2% increase in the average cost per ton was offset by a 5.2% decrease in newsprint consumption. Jacksonvilles newsprint consumption increased 5.7% compared to last year due to increased Super Bowl lineage. We anticipate
additional newsprint price increases during the remainder of 2005.



The cost of
supplements expense increased $0.3 million, or 18.8%, to $1.8 million., primarily due to the expiration at the end of 2004 of a favorable vendor contract and Jacksonvilles additional Super Bowl inserts. Jacksonvilles supplement expense
increased 18.4%, accounting for 60% of the total increase.



Jacksonvilles
ink cost was up 32.5% for the period compared to a 15.1% total increase for all of our markets, due to the additional lineage and color charges for the Super Bowl and the increase in circulation.



The increase in other operating cost was due to the $1.1 million increase in total
production, distribution, newsgathering and advertising cost, the $0.8 million increase in bad debt expense, the $0.5 million increase in professional services, the $0.5 million increase in rent and the $1.3 million increase in travel and other
administrative cost, that were offset by the $0.3 million decrease in the combined technology and shared services fee and the management fee we pay to Morris Communications.



Jacksonville and Skirt! magazines accounted for $0.8 million and $0.3 million, respectively, of the increase in the advertising,
production, distribution and editorial costs. The increase in bad debt expense stemmed primarily from the accrual of $0.8 million in potential Winn Dixie bankruptcy losses.



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During 2004, technology and shared services fees were allocated based on MStars, the technology subsidiary of our
parent company, actual costs, as defined in the original management agreement with Morris Communications. During the first quarter 2005, we amended the management services agreement, limiting the maximum technology and shared services fee in 2005
and beyond to 2.5% of our total net operating revenue.



During the first
quarter 2005, this fee totaled $2.8 million (based on 2.5% of total net operating revenue) compared to the $3.5 million in technology cost allocated to us by MStar a year ago. MStars technology cost for the first quarter 2005 were $5.9
million, slightly more than 25% of its anticipated annual cost. The combined management fee totaled $7.4 million in the first quarter 2005. For the remainder of 2005, we expect the combined cost for both the technology and shared services fee and
the management fee (based on 4% of our total net operating revenue) to be flat with 2004.



Liquidity and capital resources



We
believe that our principal sources of liquidity, which are existing cash and cash equivalents, cash flows provided from operating activities, and borrowing capacity under revolving credit facilities, will be sufficient to meet our operating
requirements for the next three years. Cash flow generated from operations is the companys primary source of liquidity.



Our primary needs for cash are funding operating expenses, debt service on our bank credit facilities and the senior subordinated notes, capital expenditures, income
taxes, dividends and loans to affiliates, acquisitions and working capital. We have pursued, and will continue to pursue, a business strategy that includes selective acquisitions and new product development.



Cash was $9.4 million at March 31, 2005, down from $20.1 million at December 31, 2004.



Operating activities. Net cash provided by operations was $15.3
million in the first quarter 2005. The $0.7 million reduction in net income was offset by the net change in assets and liabilities.



Investment activities. During the first quarter 2005 we spent $3.4 million on property, plant and equipment. We anticipate capital expenditures for 2005 to
total between $20.0 million and $25.0 million.



Financing
activities. During the first quarter 2005, we paid a total of $1.6 million in scheduled principal payments on our two term loans. As of March 31, 2005, our total debt was $548.4 million with no loans outstanding under our $150 million
revolving credit facility.



As of March 31, 2005, our annualized cost of debt
outstanding was approximately 5.825%, up from 5.5% at the end of the same quarter last year. At the end of the first quarter 2005, we could borrow and use for general corporate purposes approximately $100 million under the most restrictive covenants
of our debt arrangements.



Our credit facility and indenture allow us to make
loans to our parent. The total loans outstanding at March 31, 2005 was $22.5 million, a $21.0 million increase from $1.5 million at December 31, 2004. The $0.4 million due to parent at March 2005 and the $1.3 million due from parent at December 31,
2004 were both from end of period intercompany allocations.



For the first
quarter 2005, the average net amounts loaned to Morris Communications were $18.1 million at an average interest rate of 4.854%. The loan is repayable on demand and bears the same interest rate as our revolving credit facilityLIBOR plus 2.25%
which at March 31, 2005 was 5.125%.



At March 31, 2005, the Company had
approximately $36 million available for future dividend payments under the credit indenture.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



There have been no material changes regarding the registrants critical accounting policies from the critical accounting policies discussed under the registrants market risk position from the information
provided in our annual report dated March 31, 2005 filed with the Securities and Exchange Commission on Form 10-K The quantitative and qualitative disclosures about market risk are discussed under the caption Market Risk in
Managements Discussion and Analysis of Financial Condition and Results of Operations in said annual report.



ITEM 4. CONTROLS AND PROCEDURES



Our management
carried out an evaluation, with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures as of March 31, 2005. Based upon that evaluation, our chief executive
officer and chief financial officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by the company in reports that it files or submits under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.



As part of our strategic initiative to centralize and improve the effectiveness and efficiency of our newspapers operations, we continue to convert each
newspapers operating and media systems over to Morris Communications Shared Services Center. At March 31, 2005, we had converted eight of our larger newspapers to the operating platform and we anticipate converting most of the remaining
newspapers to this platform by the end of the second quarter 2005. Management believes the centralization of these functions will further enhance our existing internal controls.



There has not been any change in our internal control over financial reporting in connection with the evaluation required by Rule 13A-15(d)
under the Exchange Act that occurred during the three month period ended March 31, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II



|Item 1. | Legal Proceedings.
|------- | ------------------



None.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------



None.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------



None.



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



None.



|Item 5. | Other Information.
|------- | ------------------



None.



|Item 6. | Exhibits
|------- | --------



|              |  |                              
|------------- |  | -----------------------------
|ExhibitNumber |  | Exhibit Description          
|31.1          |  | Rule 13a-14(a) Certifications
|              | 
|31.2          |  | Rule 13a-14(a) Certifications
|              | 
|32.1          |  | Section 1350 Certifications  



17



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##### Table of Contents

SIGNATURES



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



|                   |  |                              |  |                                                                      
|------------------ |  | ---------------------------- |  | ---------------------------------------------------------------------
|                   |  | MORRIS PUBLISHING GROUP, LLC
|                   |  |                             
|Date: May 13, 2005 |  | By:                          |  | /s/ Steve K. Stone                                                   
|                   |  |                              |  | Steve K. Stone                                                       
|                   |  |                              |  | Chief Financial Officer                                              
|                   |  |                              |  | (On behalf of the Registrant, and as its principal financial officer)



SIGNATURES



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



|                   |  |                               |  |                                                                      
|------------------ |  | ----------------------------- |  | ---------------------------------------------------------------------
|                   |  | MORRIS PUBLISHING FINANCE CO.
|                   |  |                              
|Date: May 13, 2005 |  | By:                           |  | /s/ Steve K. Stone                                                   
|                   |  |                               |  | Steve K. Stone                                                       
|                   |  |                               |  | Chief Financial Officer                                              
|                   |  |                               |  | (On behalf of the Registrant, and as its principal financial officer)



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