**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





(Mark
      One)





x
            **QUARTERLY REPORT
                PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**





For
      the
      quarterly period ended March 31, 2007





or





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





For
      the
      transition period from  to





Commission
      File Number: 333-112246





**Morris
      Publishing Group, LLC**


**Morris
      Publishing Finance Co.***


**(Exact
      name of Registrants as specified in their charters)**





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




**725 Broad Street**
            
            **30901****Augusta,
                Georgia**
            
            **(Zip
                Code)****(Address
                of principal executive offices)**




**(706)
      724-0851**


**(Registrants’
      Telephone Number)**


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** ** ̈** ****   **No** **x**
 
 Indicate
        by check mark whether the Registrants are large accelerated filers, accelerated
        filers, or non-accelerated filers. See definition of “accelerated filer and
        large accelerated filer” in Rule 12-b2 of the Exchange Act. Check
        one:
 
 **Large
                  Accelerated Filer** ̈
              
              **Accelerated
                  Filer** ̈
              
              **Non-Accelerated
                  Filer**x
 
 Indicate
        by check mark whether the Registrant Morris Publishing Group, LLC is a shell
        company (as defined in Rule 12b-2 of the Exchange Act).
 
 **Yes** ** ̈** ****   **No** **x**
 
 
 Indicate
        by check mark whether the Registrant Morris Publishing Finance Co. is a shell
        company (as defined in Rule 12b-2 of the Exchange Act).
 
 **Yes** **x** ****   **No** ** ̈**
  ***
                *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.*





**MORRIS
      PUBLISHING GROUP, LLC**


**MORRIS
        PUBLISHING FINANCE CO.**
 **QUARTERLY
        REPORT**
 **FOR
        THE QUARTERLY PERIOD ENDED MARCH 31, 2007**
 
 **TABLE
        OF CONTENTS**


**Page****FORWARD
                    LOOKING STATEMENTS**
                
                1**PART
                    I.**Item
                    1.Financial
                    Statements:Unaudited 
condensed
                    consolidated balance sheets as of
                    March 31, 2007 and December 31, 2006
                
                2Unaudited
                    condensed consolidated statements of income for the
                    three month periods ended March 31, 2007 and 2006
                
                3Unaudited
                    condensed consolidated statements of cash flows for
                    the three month periods ended March 31, 2007 and 2006
                
                4Notes
                    to condensed consolidated financial
                    statements
                
                5Item
                    2.Management’s
                    Discussion and Analysis of Financial Condition
                    and Results of Operations
                
                10Item
                    3.Quantitative
                    and Qualitative Disclosures about Market
                    Risk
                
                18Item
                    4.Controls
                    and Procedures
                
                18**PART
                    II.**Item
                    1.Legal
                    Proceedings.
                
                19Item
                    1A.Risk
                    Factors
                
                19Item
                    2.Unregistered
                    Sales of Equity Securities and Use of
                    Proceeds.
                
                19Item
                    3.Defaults
                    Upon Senior Securities.
                
                19Item
                    4.Submission
                    of Matters to a Vote of Security
                    Holders.
                
                19Item
                    5.Other
                    Information
                
                19Item
                    6.Exhibits
                
                19
  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 revenues.
            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.


***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 7 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:





§
            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 revenues or on our business
                strategy;





§
            other
                risks and uncertainties.




-1-
 ***Table
          of Contents***




**Part
      I**


**Morris
                  Publishing Group, LLC****Consolidated
                  balance sheets****March
                  31,**
              
              **December
                  31,***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006****ASSETS**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              5,810
              
              $
              6,964Accounts
                  receivable, net of allowance for doubtful accounts of $3,095 and
                  $2,625 at
                  March 31, 2007 and December 31, 2006 , respectively
              
              
              49,983
              
              
              58,236Inventories
              
              
              4,369
              
              
              4,030Deferred
                  income taxes, net
              
              
              2,321
              
              
              2,248Prepaid
                  and other current assets
              
              
              1,474
              
              
              1,065Total
                  current assets
              
              
              63,957
              
              
              72,543NET
                  PROPERTY AND EQUIPMENT
              
              
              143,520
              
              
              144,117OTHER
                  ASSETS:Goodwill
              
              
              188,394
              
              
              188,394Intangible
                  assets, net of accumulated amortization of $65,373 and $63,961at
                  March 31,
                  2007 and December 31, 2006, respectively
              
              
              10,855
              
              
              12,267Deferred
                  loan costs and other assets, net of accumulated amortization of
                  loan costs
                  of $5,067 and $4,669 at March 31, 2007 and December 31, 2006,
                  respectively
              
              
              11,287
              
              
              11,522Total
                  other assets
              
              
              210,536
              
              
              212,183Total
                  assets
              
              $
              418,013
              
              $
              428,843**LIABILITIES
                  AND MEMBER'S DEFICIENCY IN ASSETS**CURRENT
                  LIABILITIES:Accounts
                  payable
              
              $
              10,004
              
              $
              10,399Current
                  maturities of long-term debt
              
              
              4,375
              
              
              2,188Accrued
                  interest
              
              
              4,220
              
              
              9,427Due
                  to Morris Communications
              
              
              1,706
              
              
              1,326Deferred
                  revenues
              
              
              18,754
              
              
              16,649Accrued
                  employee costs
              
              
              8,584
              
              
              12,916Other
                  accrued liabilities
              
              
              2,315
              
              
              1,556Total
                  current liabilities
              
              
              49,958
              
              
              54,461LONG-TERM
                  DEBT, less current portion
              
              
              525,625
              
              
              521,813DEFERRED
                  INCOME TAXES, less current portion
              
              
              17,427
              
              
              18,406POSTRETIREMENT
                  BENEFITS DUE TO MORRIS COMMUNICATIONS
              
              
              26,251
              
              
              25,948OTHER
                  LONG-TERM LIABILITIES
              
              
              3,980
              
              
              3,750Total
                  liabilities
              
              
              623,241
              
              
              624,378COMMITMENTS
                  AND CONTINGENCIES (NOTE 6)MEMBER'S
                  DEFICIENCY IN ASSETSMember's
                  deficit
              
              
              (171,593
              )
              
              (172,382
              )Loan
                  receivable from Morris Communications, net
              
              
              (33,635
              )
              
              (23,153
              )Total
                  member's deficiency in assets
              
              
              (205,228
              )
              
              (195,535
              )Total
                  liabilities and member's deficiency in assets
              
              $
              418,013
              
              $
              428,843*See
                  notes to consolidated financial statements.*


-2-
 ***Table
          of Contents***


**Morris
                      Publishing Group, LLC****Unaudited
                      condensed consolidated statements of
                      income****Three
                      months ended March 31,*****(Dollars
                      in thousands)***
                  
                  **2007**
                  
                  **2006**NET
                      OPERATING REVENUES:Advertising
                  
                  $
                  86,770
                  
                  $
                  92,373Circulation
                  
                  
                  16,825
                  
                  
                  17,544Other
                  
                  
                  4,097
                  
                  
                  4,009Total
                      net operating revenue
                  
                  
                  107,692
                  
                  
                  113,926OPERATING
                      EXPENSES:Labor
                      and employee benefits
                  
                  
                  45,002
                  
                  
                  44,032Newsprint,
                      ink and supplements
                  
                  
                  12,955
                  
                  
                  14,764Other
                      operating costs (excluding depreciation and amortization)
                  
                  
                  33,696
                  
                  
                  32,008Depreciation
                      and amortization expense
                  
                  
                  5,322
                  
                  
                  5,281Total
                      operating expenses
                  
                  
                  96,975
                  
                  
                  96,085Operating
                      income
                  
                  
                  10,717
                  
                  
                  17,841OTHER
                      EXPENSES (INCOME):Interest
                      expense, including amortization of debt issuance costs
                  
                  
                  9,319
                  
                  
                  9,000Interest
                      income
                  
                  
                  (3
                  )
                  
                  (67
                  )Other,
                      net
                  
                  
                  (44
                  )
                  
                  (11
                  )Total
                      other expenses, net
                  
                  
                  9,272
                  
                  
                  8,922INCOME
                      BEFORE INCOME TAXES
                  
                  
                  1,445
                  
                  
                  8,919PROVISION
                      FOR INCOME TAXES
                  
                  
                  657
                  
                  
                  3,582NET
                      INCOME
                  
                  $
                  788
                  
                  $
                  5,337*See
                      notes to condensed consolidated financial statements.*
  -3-
 ***Table
                of
                Contents***


**Morris
                    Publishing Group, LLC**
                ********
                
                ****
                
                ******Consolidated
                    statements of cash flows**
                ****
                
                ****
                
                ********
                
                ****
                
                ********
                **Three
                    months ended March 31,**
                *******(Dollars
                    in thousands)***
                
                **2007**
                
                **2006**OPERATING
                    ACTIVITIES:Net
                    income
                
                $
                788
                
                $
                5,337Adjustments
                    to reconcile net income to cash provided by operating
                    activities:Depreciation
                    and amortization
                
                
                5,322
                
                
                5,282Deferred
                    income taxes
                
                
                (1,052
                )
                
                (825
                )Amortization
                    of debt issuance costs
                
                
                398
                
                
                411Gain
                    on sale and disposal of fixed assets, net
                
                
                -
                
                
                (3
                )Changes
                    in assets and liabilities, net of effects of businesses
                    acquired:Accounts
                    receivable
                
                
                8,253
                
                
                3,849Inventories
                
                
                (339
                )
                
                1,165Prepaids
                    and other current assets
                
                
                (409
                )
                
                (50
                )Other
                    assets
                
                
                (163
                )
                
                (194
                )Accounts
                    payable
                
                
                (395
                )
                
                (2,234
                )Accrued
                    employee costs
                
                
                (4,332
                )
                
                (3,355
                )Accrued
                    interest
                
                
                (5,207
                )
                
                (5,310
                )Due
                    to Morris Communications
                
                
                381
                
                
                1,811Deferred
                    revenues and other liabilities
                
                
                2,864
                
                
                1,736Postretirement
                    obligations due to Morris Communications
                
                
                303
                
                
                422Other
                    long-term liabilities
                
                
                228
                
                
                184Net
                    cash provided by operating activities
                
                
                6,640
                
                
                8,226INVESTING
                    ACTIVITIES:Capital
                    expenditures
                
                
                (3,314
                )
                
                (1,330
                )Restricted
                    cash released from escrow
                
                
                -
                
                
                6,780Net
                    proceeds from sale of property and equipment
                
                
                -
                
                
                59Net
                    cash (used in) provided by investing activities
                
                
                (3,314
                )
                
                5,509FINANCING
                    ACTIVITIES:Proceeds
                    from revolving credit facility
                
                
                16,000
                
                
                26,000Repayments
                    on revolving credit facility
                
                
                (10,000
                )
                
                (25,000
                )Advances
                    on loan receivable from Morris Communications
                
                
                (10,480
                )
                
                (20,465
                )Net
                    cash used in financing activities
                
                
                (4,480
                )
                
                (19,465
                )NET DECREASE
                     IN CASH AND CASH EQUIVALENTS
                
                
                (1,154
                )
                
                (5,730
                )CASH
                    AND CASH EQUIVALENTS, beginning of period
                
                
                6,964
                
                
                12,458CASH
                    AND CASH EQUIVALENTS, end of period
                
                $
                5,810
                
                $
                6,728SUPPLEMENTAL
                    DISCLOSURES OF CASH FLOW INFORMATIONInterest
                    paid
                
                $
                14,129
                
                $
                13,899Income
                    taxes paid to Morris Communications
                
                
                1,710
                
                
                4,407Dividends
                    applied against loan receivable from Morris Communications
                
                
                -
                
                
                15,000*See
                    notes to consolidated financial statements.*
  ***Table
            of Contents***
 **MORRIS
          PUBLISHING GROUP, LLC**
 **Notes
          to condensed consolidated financial statements (unaudited)**
 **(Dollars
          in thousands)**
 **1.**
              **Basis
                  of Presentation and Change in Significant Accounting
                  Policies**  ***Basis
          of presentation*** - The
          accompanying condensed consolidated financial statements furnished herein
          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 three month interim period in 2007 are 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 keep the information presented from
          being
          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, 2006. The accounting policies that
          are
          employed are the same as those shown in Note 1 to the consolidated
          financial statements as of December 31, 2006 and 2005 and for each of three
          years ended December 31, 2006.
 
 **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 management fees totaled $4,334 and $4,598 for the three
          months
          ended March 31, 2007 and 2006, respectively. This expense compensates 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. The
          Company has recorded this management fee within other operating costs in
          the
          accompanying financial statements.
  ***Technology
          and shared services fee*** *-*  The
          Company was charged with a technology and shared services fee from Morris
          Communications, as defined in the management agreement. This fee is based
          upon
          the lesser of 2.5% of total net operating revenue of the Company or the
          actual
          technology costs applicable to the Company based upon usage. The technology
          and
          shared services fees paid to Morris Communications, which was based upon
          2.5% of
          the total net operating revenue of the Company, totaled $2,709 and $2,881
          for
          the three
          months ended March 31, 2007 and 2006, respectively. The Company has recorded
          this management fee within other operating costs in the accompanying financial
          statements.
  ***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 $1,093
          and $1,083 for the three
          months ended March 31, 2007 and 2006, 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 health 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, 2006.
 
 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 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 $303
          and
          $422 for the three
          months ended March 31, 2007 and 2006, respectively.
  -5-
 ***Table
              of Contents***
  The
          Company was also allocated its portion of the postretirement health benefit
          obligation. The amounts allocated to the Company, based on total headcount were
          $26,251 and $25,948 as of March 31, 2007 and December 31, 2006,
          respectively.
 
 The
          Medicare Prescription Drug, Improvement, and Modernization Act of 2003
          provided
          a federal subsidy which began in 2006 to postretirement medical plans that
          provide prescription drug benefits to retirees. The subsidy provides 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, had the effect of decreasing
          liabilities and costs reported under the current accounting guidance for
          plans
          that were at least actuarially equivalent to the Medicare Part D benefit.
          The
          Company has reflected the effect of this subsidy in the accompanying financial
          statements.
  The
          following is an estimate of the Company’s net periodic benefit cost for all of
          2007:
 **2007**Service
                      cost
                  
                  $
                  514Interest
                      cost
                  
                  
                  1,409Unrecognized
                      gain from earlier periods
                  
                  
                  -Net
                      periodic benefit cost
                  
                  
                  1,923Less:
                      employee contributions
                  
                  
                  (711
                  )Estimated
                      net benefit expense
                  
                  $
                  1,212
 ***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 total headcount, was $3,635
          and $3,169 for the three
          months ended March 31, 2007 and 2006, 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 $2,434
          and
          $2,076 as of March 31, 2007 and December 31, 2006, respectively. The Company
          has
          recorded this liability within accrued employee costs in the accompanying
          financial statements.
 
 ***Workers’
          Compensation Expense*** -
          The
          Company has participated in Morris Communications’ workers’ 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 yet reported. The expenses allocated
          to
          the Company, based on a percentage of total salaries expense, were $772
          and
          $769 for the three
          months ended March 31, 2007 and 2006, respectively.
 
 ***Loan
          receivable from Morris Communications*** - Under
          the Company’s indenture related to the senior subordinated notes, 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
          three
          month period ended March 31, 2007, this rate was LIBOR (adjusted to the
          nearest
          1/16th) + 1.00%). 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 accrual. Interest is accrued on the average outstanding
          long-term balance each month.
 
 Given
          the
          historical practice of Morris Publishing and Morris Communications settling
          a
          significant portion of the outstanding loan receivable balance with a dividend,
          this arrangement is considered in substance a capital
  -6-
 ***Table
              of Contents***
  distribution
          transaction and is classified as contra-equity within member’s deficit. In
          addition, interest accrued on this loan receivable is reported as contra-equity
          within member’s deficiency in assets for the periods presented.
 
 The
          Company has classified the outstanding $33,635 and $23,153 loan receivable
          balances, net of the $4,099 and $3,579 in accumulated interest accrued
          on these
          receivables, as of March 31, 2007 and December 31, 2006, respectively,
          as part
          of member’s deficiency in assets.
 
 During
          the three month periods ended March 31, 2007 and 2006, the Company reported
          the
          $520 and $535, respectively, in accrued loan receivable interest as
          contra-equity. The average interest rate for the three month periods ended
          March
          31, 2007 and 2006 was 6.25% and 5.58%, respectively, on average loan receivable
          balances of $32,493 and $36,765, respectively.
 
 ***Restricted
          payments*** - 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.
 
 On
          March
          31, 2006, the Company declared and recorded a $15 million dividend to Morris
          Communications, in effect, reducing the loan receivable from Morris
          Communications by the dividend amounts. At March 31, 2007, the Company
          had
          approximately $101.0 million available for future restricted payments under
          the
          credit indenture.
 
 ***Restricted
          cash released from escrow*** - Cash
          held in escrow was comprised of proceeds from the 2005 sale of the Company’s
          former Savannah newspaper facility which the Company elected to be deposited
          into an escrow account in order to potentially fund other acquisitions
          by the
          Company or Parent through a tax-deferred Section 1031 exchange. The Parent
          acquired $5,280 in qualified replacement property during the first quarter
          of
          2006 with the reductions in the restricted escrow account being offset
          by an
          increase in loan receivable from Morris Communications. The remaining $1,500
          in
          escrow became unrestricted to the Company on the March 27, 2006 expiration
          date
          for the tax-deferred exchange.
 
 **3.**
              **Recently
                  Issued Accounting Standards** 
 The
          Company will be required to adopt FASB Statement of Financial Accounting
          Standards (“SFAS”) No. 157 *“Fair
          Value Measurements”* (“SFAS
          157”) for the fiscal year beginning January 1, 2008. SFAS 157 provides a single
          definition of fair value and a hierarchical framework for measuring it,
          as well
          as establishing additional disclosure requirements about the use of fair
          value
          to measure assets and liabilities. The Company is in the process of evaluating
          the impact of SFAS 157 on its results of operations and financial
          position.
  In
          February 2007 FASB issued SFAS No. 159, *“The
          Fair Value Option for Financial Assets and Liabilities”* (“SFAS
          159”). SFAS 159 provides the option to report certain financial assets and
          liabilities at fair value, with the intent to mitigate volatility in financial
          reporting that can occur when related assets and liabilities are recorded
          on
          different bases and is effective for fiscal years beginning after November
          15,
          2007. The Company is in the process of evaluating the impact of SFAS 159,
          if
          elected, on its results of operations and financial position.
  In
          September 2006, the FASB issued SFAS No. 158, *“Employers’
          Accounting for Defined Benefit Pension and Other Postretirement Plans”* (“SFAS
          No. 158”), an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS No.
          158 requires the recognition of the funded status of a retiree health plan
          in
          the statement of financial position, requires that changes in the funded
          status
          be recognized through comprehensive income, changes the measurement date
          for
          defined benefit plan assets and obligations to the entity’s fiscal year-end and
          expands disclosures. The recognition and disclosures under SFAS No. 158
          are
          required as of the end of the fiscal year ending after June 15, 2007, while
          the
          new measurement date is effective for fiscal years ending after December
          15,
          2008. SFAS No. 158 requires that previously disclosed but unrecognized
          gains/losses, prior service costs, and transition obligations of a retiree
          health plan be recognized at adoption of SFAS No. 158 as a component of
          shareholder’s equity in accumulated other comprehensive income, net of
          applicable income taxes.
  -7-
 ***Table
              of Contents***
  The
          measurement date for the Company’s retiree health plan obligations is currently
          the Company’s fiscal year-end so a change in measurement date is not needed. Had
          SFAS No. 158 been adopted at December 31, 2006, the Company’s accumulated other
          comprehensive income would have decreased by $1,016 and decreased member's
          deficit by $1,016.
  In
          July
          2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
          No. 48, *“Accounting
          for Uncertainty in Income Taxes”* (“FIN
          No. 48”), effective for fiscal years beginning after December 15, 2006. Under
          FIN No. 48, companies are required to make explicit disclosures about
          uncertainties in their income tax positions, including a detailed roll
          forward
          of tax benefits taken that do not qualify for financial statement recognition.
          Under FIN No. 48, the recognition of a tax benefit would only occur when
          it is
“more-likely-than-not” that the position would be sustained in a dispute with
          the taxing authority in the “court of last resort.” The
          adoption of Fin 48 had no impact on the Company at March 31, 2007.
 
 **4.**
              **Long-Term
                  Debt** 
 At
          March
          31, 2007 and December 31, 2006, total debt was $530 million and $524 million,
          respectively, with $55 million and $49 million outstanding on the $175
          million
          revolving credit facility, respectively.
 
 At
          March
          31, 2007, the interest rate on the Tranche A term loan outstanding was
          6.25% and
          the weighted average interest rate on the revolver was 6.25%. The average
          interest rate on the debt outstanding was approximately 6.6745% and 6.6794% at March
          31, 2007 and December 31, 2006, respectively. The commitment fee on the
          unborrowed funds available under the revolver was 0.375% at March 31, 2007
          and
          December 31, 2006.
 
 At
          March
          31, 2007, the Company could borrow and use for general corporate purposes
          approximately $88.2 million under the Company’s most restrictive covenants which
          were from the senior bank credit facility and the Company was in compliance
          with
          all covenants under its debt arrangements.
 
 **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 when
          the facts or circumstances at any of the Company’s reporting units indicate a
          possible impairment of goodwill as a result of a continual decline in
          performance or as a result of fundamental changes in a market in accordance
          with
          SFAS 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) which have indefinite
          lives and are not currently amortized, are tested for impairment annually
          or
          when facts or circumstances indicate a possible impairment of the intangible
          assets as a result of a continual decline in performance or as a result
          of
          fundamental changes in a market.
 
 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).
 
 During
          December 2006, the Company performed the required impairment tests of goodwill
          and the indefinite-lived intangible assets, which resulted in no
          impairments.
 
 Amortization
          expense of other intangible assets for the three month period ended March
          31,
          2007 was $1,412.
  Changes
          in the carrying amounts of goodwill and other intangible assets of the
          Company
          for the three months ended March 31, 2007 were as follows:
  -8-
 ***Table
              of Contents***
 **Goodwill**
                  
                  **Other
                      intangible assets**Balance
                      at December 31, 2006
                  
                  $
                  188,394
                  
                  $
                  12,267Additions
                  
                  
                  -
                  
                  
                  -Amortization
                      expense
                  
                  
                  -
                  
                  
                  (1,412
                  )Balance
                      at March 31, 2007
                  
                  $
                  188,394
                  
                  $
                  10,855
  Other
          finite-lived and indefinite-lived intangible assets at March 31, 2007 and
          December 31, 2006 were as follows:
  **Cost**
                  
                  **Accumulated**
                    **amortization**
                  
                  **Net
                      cost****March
                      31, 2007:****Finite-lived
                      intangible assets**Subscriber
                      lists
                  
                  $
                  70,579
                  
                  $
                  64,442
                  
                  $
                  6,137Non-compete
                      agreements and other assets
                  
                  
                  61
                  
                  
                  40
                  
                  
                  21Total
                      finite-lived intangible assets
                  
                  
                  70,640
                  
                  
                  64,482
                  
                  
                  6,158**Indefinite-lived
                      intangible assets**Newspaper
                      mastheads
                  
                  
                  5,530
                  
                  
                  874
                  
                  
                  4,656Domain
                      names
                  
                  
                  58
                  
                  
                  17
                  
                  
                  41Total
                      Indefinite-lived intangible assets
                  
                  
                  5,588
                  
                  
                  891
                  
                  
                  4,697Total
                      other intangible assets
                  
                  $
                  76,228
                  
                  $
                  65,373
                  
                  $
                  10,855**December
                      31, 2006:****Finite-lived
                      intangible assets**Subscriber
                      lists
                  
                  $
                  70,579
                  
                  $
                  63,033
                  
                  $
                  7,546Non-compete
                      agreements and other assets
                  
                  
                  61
                  
                  
                  37
                  
                  
                  24Total
                      finite-lived intangible assets
                  
                  
                  70,640
                  
                  
                  63,070
                  
                  
                  7,570**Indefinite-lived
                      intangible assets**Newspaper
                      mastheads
                  
                  
                  5,530
                  
                  
                  874
                  
                  
                  4,656Domain
                      names
                  
                  
                  58
                  
                  
                  17
                  
                  
                  41Total
                      Indefinite-lived intangible assets
                  
                  
                  5,588
                  
                  
                  891
                  
                  
                  4,697Total
                      other intangible assets
                  
                  $
                  76,228
                  
                  $
                  63,961
                  
                  $
                  12,267
 **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.
  -9-
 ***Table
                of Contents***
  **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 month periods
            ended
            March 31, 2007 and 2006 and with our consolidated
            financial statements as of December 31, 2006 and 2005 and for each of
            three
            years ended December 31, 2006, filed on Form 10-K.
 
 **Overview**
 
 Morris
            Publishing owns and operates 27 daily newspapers as well as nondaily
            newspapers,
            city magazines and free community publications in the Southeast, Midwest,
            Southwest and Alaska.
 
 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 revenues from both print
            and online
            media formats.
 
 Linage,
            rate and mix of advertisement are the primary components of advertising
            revenue.
            The advertising rate depends largely on our market reach, primarily through
            circulation, online page views 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 consists primarily of commercial
            printing
            and other online revenue.
 
 During
            the first three months of 2007, advertising and circulation revenue represented
            80.6% and 15.6%, respectively, of our total net operating revenue. Our
            advertising revenue consisted of 51.0% in retail, 6.7% in national and
            42.3% in classified. Online advertising revenue, included in all advertising
            categories above, represented 10.2% of our total first quarter 2007 advertising
            revenue.
 
 Employee
            and newsprint costs are the primary costs at each newspaper. Our operating
            performance is affected by newsprint prices, which historically have
            fluctuated.
            Newsprint costs have represented 10 - 15% of total operating expenses.
            Historically, newsprint has been subject to significant price fluctuations
            from
            year to year, unrelated in many cases to general economic trends. Supply
            and
            demand has typically controlled pricing. We believe that current and
            future
            sources of newsprint will be sufficient to meet our current and anticipated
            requirements.
 
 From
            time
            to time, each individual newspaper may perform better or worse than our
            newspaper group as a whole due to certain local or regional conditions,
            particularly within the retail, auto, housing and labor economic
            sectors.
 
 We
            continue to see overall declines in circulation at our newspapers which
            is
            consistent with the industry as a whole. We continue to focus on circulation
            retention efforts through lengthened subscriptions periods, new payment
            methods,
            and increased service levels.
 
 In
            addition, we view our industry’s currently changing landscape as a great
            opportunity, with many of our current strategic initiatives embracing
            these
            changes to continue to move us forward. While we continue to focus on
            our core
            business, we are aggressively pursuing innovation as the key to move
            our
            newspapers into a portfolio-model business with a wide variety of products
            focusing on meeting the changing needs of our core newspaper consumers
            and
            customers in all of our markets and helping us to remain the informational
            leaders in the communities we serve.
 
 **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, subjective
            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 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.
  -10-
 ***Table
                of Contents***
  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, 2007 to the items that we disclosed as our critical accounting policies
            and
            estimates herein and in the Management’s Discussion and Analysis of Financial
            Condition and Results of Operations in our annual report dated December
            31, 2006
            filed with the Securities and Exchange Commission on Form 10-K.
 
 **Information
            availability**
 
 Our
            quarterly reports on Form 10-Q, annual reports on Form 10-K, current
            reports on
            Form 8-K and all amendments to those reports are available free of charge
            on our
            Web site, 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, this Report on Form
            10-Q.
 
 **Financial
            summary for the three months ended March 31, 2007 compared to March 31,
            2006**
 
 Compared
            to the first quarter last year, operating income was $10.7 million, down
            $7.1
            million, or 39.9%, with total operating revenue of $107.7 million, down
            $6.2
            million, or 5.5%, and total operating costs of $97.0 million, up $0.9
            million,
            or 0.9%.
 
 Since
            the
            first quarter of last year, we have acquired or introduced several new
            non-daily
            publications in or near our existing markets to better serve changing
            reader and
            advertising needs. Excluding these new products, total operating revenue
            was
            down $7.3 million, or 6.4%, and total operating costs were down $0.2
            million, or
            0.2%.
 
 Advertising
            revenue for the quarter was $86.8 million, a decrease of $5.6 million,
            or 6.1%,
            from last year. While national advertising revenue was up 1.4%, retail
            and
            classified advertising revenue were down 3.4% and 10.1%, respectively.
            The
            material variances in the advertising categories listed above are discussed
            in
            more detail in our results of operations summary, which follows.
 
 The
            first
            quarter of 2007 included one fewer Sunday compared with a year ago, slightly
            affecting our quarter-over-quarter comparisons, as Sundays usually generate
            more
            print advertising revenue than the other six days of the week.
 During
              the first quarter of 2007, our total advertising revenue results were
              primarily
              impacted by the weak advertising environment in Florida and poor performances
              from Savannah and several of our other larger newspapers.
 
 Advertising
              revenue in Jacksonville, our largest newspaper, was down $4.3 million,
              or 13.6%,
              with a steep decline in the classified run of press category and a
              significant
              decline in the retail category. Winter Haven was down $0.4 million,
              or 32.7%,
              primarily due to the weakness in the retail category, and St. Augustine
              was down
              $0.1 million, or 3.5%. Since we expect our Florida publications’ second quarter
              advertising results, particularly in the classified category, to be
              similar to
              the first quarter of this year, we are realigning our operating expenses
              and
              resources.
 
 Since
            the
            end of 2006, Jacksonville transitioned its geographically-zoned *Sun* publications to nine individual products created for separate communities
            within
            the larger market area. The *Su* n’s
            content and format has been enhanced and the publications are published
            up to
            four times a week. Web sites have been created for many of these publications,
            on which, we
            are
            anticipating that much of the content will be reader provided .
            The
            intent is to provide a marketplace for the smaller local advertiser;
            however,
            gains from this new strategy have been slower developing than anticipated.
            For
            comparison purposes, revenue from the Jacksonville newspaper and the *Sun* publications,
            herein, are combined for both periods presented.
 
 Our
            Savannah newspaper’s advertising revenue was down $0.7 million, or 9.5%, with
            weakness in the retail and classified advertising categories.
  -11-
 ***Table
                of Contents***
  In
            addition, advertising revenue from our Lubbock, Amarillo and Topeka newspapers
            was down 1.4%, 4.2% and 1.9%, respectively, or, together, down $0.4
            million.
 
 Augusta’s
            advertising revenue was up $0.1 million, or 0.6%, with the strength in
            the
            national and classified categories offset somewhat by a significant decline
            in
            the retail category.
 
 Total
            combined advertising revenue from our other 19 daily newspapers was down
            $0.4
            million, or 2.4%, with the declines in Athens and Holland contributing
            all of
            this net decrease.
 
 Advertising
            revenue from all of our non-daily publications, excluding the nine Jacksonville *Sun* weeklies, was up $0.7 million, or 12.2%, primarily due to the acquisition
            or
            introduction of the new publications in five of our existing markets.
            These new
            publications include the Barnwell (S.C.), Sylvania (Ga.), Hampton County
            (S.C.),
            Edgefield (S.C.), North Augusta (S.C.), Richmond Hill (Ga.), and Effingham
            (Ga.)
            newspapers, and the Athens’ (Ga.) *County
            Publications,* Lubbock’s
            (Tex.) *Frenship
            Today* and St.
            Augustine’s (Fla.) *Eco
            Latino* publications.
 
 In
            addition, our first quarter results reflect the industry’s shift from run of
            press (“ROP”) and preprint advertising to online advertising. Compared to the
            first quarter last year, ROP advertising was $59.0 million, down $7.1
            million,
            or 10.7%, and preprint advertising was $15.2 million, down $0.8 million,
            or
            5.1%.
 
 Online
            advertising revenue, included in all advertising categories above, was
            $8.8
            million, up $1.8 million, or 24.8%, due to the strength in the classified
            employment and retail advertising categories. Compared
            to the first quarter of last year, total page views, a key measure of
            interest
            in our Web sites, were up 13.8%; with traffic from new visitors up
            25.0%.
  During
            the first quarter of 2007, circulation revenue was $16.8 million, down
            $0.7
            million, or 4.1%, from the same period last year, with the decline in
            Jacksonville contributing over half of the decrease.
 
 Other
            income was $4.1 million, up $0.1 million, or 2.2%, with most
            of the increase from the USA Sunday magazine.
 
 Total
            labor and employee benefit costs were up $1.0 million, or 2.2%, newsprint,
            ink
            and supplements costs were down $1.8 million, or 12.3%, and other operating
            costs, excluding depreciation and amortization, were up $1.7 million,
            or 5.3%.
            Depreciation and amortization expense was up slightly from the same quarter
            last
            year.
 
 Excluding
            our new publications, total labor and employee benefit costs were up
            0.8%,
            newsprint, ink and supplements costs were down 12.8%, and other operating
            costs,
            excluding depreciation and amortization, were up 4.0%.
 Interest  and
            loan
            amortization expense increased by $0.3 million, or 3.5%, due to short-term
            interest rate increases.
 
 On
            March
            31, 2006, we declared and recorded a $15 million dividend to Morris
            Communications, in effect, reducing the loan receivable from Morris
            Communications by the dividend amounts.
 
 Our
            effective tax rate was 45.5 % for first quarter of 2007, compared to
            40.2% for
            the same quarter last year.
 
 Net
            income for the first quarter of 2007 was $0.8 million, down $4.5 million
            from
            $5.3 million during the same period last year.
 
 **Yahoo!
            newspaper consortium**
 
 As
            the
            rollout of *Yahoo!
            HotJobs* at our
            daily newspaper’s Web sites is beginning, we see our partnership in the
            newspaper consortium with *Yahoo!* as a
            very strategic move from both a revenue and growth in audience perspective.
            In
            addition to *HotJobs* ,
            we,
            through our newspaper consortium, are also working on many other new
            initiatives
            with *Yahoo!;* focusing
            on several key areas:
  -12-
 ***Table
                of Contents***
  The
            first
            is deploying and leveraging *Yahoo!’s* highly
            touted advertising inventory management system, which will allow us to
            target
            visitors with ads that match their specific interests.
 
 The
            inventory management system will also give *Yahoo!’s* and
            other national sales forces the ability to sell regional and national
            ads into
            our sites in a seamless way. It will also allow our sales forces to place
            the
            ads of local advertisers in front of visitors on *Yahoo!’s* Web
            site. These are typically people we have not reached with our print or
            online
            products.
 
 Because
            the *Yahoo!* partnership names our newspapers as “Trusted News Sources,” headlines from our
            newspapers will appear all across *Yahoo!’s* Web
            sites and utilities, such as *Yahoo!
            Mail* and *Messenger* .
            We
            expect this to attract significant new traffic to our websites, which
            we will
            monetize with advertising.
 
 Finally, *Yahoo!* will
            help put our newspapers into the paid Search business, through *Yahoo!’s* “Content
            Match,” or contextual ad solution and through *Yahoo!’s* keyword
            ads that appear on pages of web search results.
 
 **Results
            of operations for the three months ended March 31, 2007 compared to March
            31,
            2006**
 
 ***Net
            operating revenue.*** The
            table below presents the total net operating revenue and related statistics
            for
            the three month periods ended March 31, 2007 and 2006:
 ***(Dollars
                        in thousands)***
                    
                    **Three
                        months ended March 31,**
                    
                    **Percentage
                        change****2007**
                    
                    **2006**
                    
                    **2007
                        vs. 2006****Net
                        operating revenues**AdvertisingRetail
                    
                    $
                    44,251
                    
                    $
                    45,798
                    
                    
                    (3.4
                    %)National
                    
                    
                    5,794
                    
                    
                    5,716
                    
                    
                    1.4
                    %Classified
                    
                    
                    36,725
                    
                    
                    40,859
                    
                    
                    (10.1
                    %)Total
                        advertising revenues
                    
                    
                    86,770
                    
                    
                    92,373
                    
                    
                    (6.1
                    %)Circulation
                    
                    
                    16,825
                    
                    
                    17,544
                    
                    
                    (4.1
                    %)Other
                    
                    
                    4,097
                    
                    
                    4,009
                    
                    
                    2.2
                    %Total
                        net operating revenues
                    
                    $
                    107,692
                    
                    $
                    113,926
                    
                    
                    (5.5
                    %)
  Retail
            advertising revenue:
 
 Total
            retail advertising revenue was $44.3 million, down $1.5 million, or 3.4%,
            from
            the first quarter last year. Excluding our new non-daily publications,
            retail
            advertising revenue was down $2.2 million, or 4.8%.
 
 During
            the first quarter of 2007, preprint retail revenue was down $0.5 million,
            or
            3.4%; while ROP retail advertising revenue was down $2.3 million, or
            8.5%, from
            the same period last year. Retail advertising revenue from specialty
            products
            printed by us, but not a part of main newspaper product, was up $0.5
            million, or
            14.5%.
 
 Retail
            online revenue was $2.3 million, up $0.8 million, or 49.4%, from the
            first three
            months last year, with solid gains in Augusta, Lubbock, Amarillo, Athens
            and
            Topeka.
 
 Our
            Jacksonville newspaper’s retail advertising revenue was down $0.6 million, or
            5.6%, with declines in the ROP, preprint and online categories. Winter
            Haven was
            down $0.4 million, or 41.6%, primarily due to the decline in the preprint
            category, and St. Augustine was down $0.1 million, or 4.6%.
 
 Jacksonville’s
            results reflect some large decreases from major advertisers, without
            any gains
            from new advertisers.
 
 Our
            Savannah newspaper’s retail advertising revenue was down $0.4 million, or 10.2%;
            with most of the losses from the banking and telecommunications
            sector.
 
 In
            addition, retail advertising revenue from our Augusta, Amarillo and Topeka
            newspapers was down 3.6%, 3.5% and 4.9%, respectively, or, together,
            down $0.4
            million.
  -13-
 ***Table
                of Contents***
  Total
            retail advertising revenue from our other 19 daily newspapers was down
            $0.1
            million, or 1.2%, with the solid gain in Juneau offset by the declines
            in
            Athens, Grand Island, Independence and Holland.
 
 Excluding
            the $1.3 million in retail advertising revenue from our new non-daily
            publications and the Jacksonville weeklies, retail advertising for the
            non-daily
            publications was down $0.3 million, or 5.6%.
 
 Classified
            advertising revenue:
 
 Total
            classified advertising revenue was $36.7 million, down $4.1 million,
            or 10.1%,
            from the first three months in 2006. Excluding
            our new non-daily publications, classified advertising revenue was down
            $4.4
            million, or 10.7%.
 
 Online
            classified advertising revenue was up $1.8 million, or 24.8%, with most
            of the
            increase driven by the employment category. During the first quarter
            of 2007,
            classified ROP advertising revenue was down $4.8 million, or 13.7%, and
            classified preprint advertising revenue was down $0.2 million, or
            41.5%.
 
 Our
            Jacksonville newspaper’s classified advertising revenue was down $3.8 million,
            or 22.7%, with large declines in the employment and real estate ROP category.
            St. Augustine was down $0.1 million, or 4.8%, all in the employment category,
            and Winter Haven was down overall $0.1 million, or 13.4%. We expect the
            downturn
            in Jacksonville’s classified category to continue the same trend into the second
            quarter of this year.
  Our
            Savannah newspaper’s classified advertising revenue was down $0.4 million, or
            11.3%; all from the auto and employment ROP category.
 
 In
            addition, classified advertising revenue from our Lubbock and Amarillo
            newspapers was down 1.0% and 1.1%, respectively. Augusta and Topeka were
            both up
            1.9% from the first quarter last year, with strength in the real estate
            category.
 
 Total
            classified advertising revenue from our other 19 daily newspapers was
            down $0.1
            million, or 1.4%, with the solid employment category gain in Grand Island
            offset
            by the declines in Athens, and Holland. Athens’ was down $0.2 million, or 13.9%,
            with large losses in the auto and employment categories.
 
 Excluding
            the $0.6 million in classified advertising revenue from our new non-daily
            publications and the Jacksonville weeklies, classified advertising for
            the
            non-daily publications was up $0.1 million, or 3.5%. The Echoland Shopper
            was up
            $0.1 million, or 123.6%.
 
 National
            advertising revenue:
 
 Total
            national advertising revenue was $5.8 million, up $0.1 million, or 1.4%,
            from
            the first quarter last year. The solid gains in Jacksonville, Augusta,
            and
            Savannah were offset by the declines in Lubbock, Amarillo and Juneau.
            Augusta
            was up $0.2 million, or 50.9%.
 
 Circulation
            revenue:
 
 During
            the first quarter of 2007, circulation revenue was $16.8 million, down
            $0.7
            million, or 4.1%, from the same quarter last year.
 
 Average
            daily single copies and home delivery copies remained soft, down approximately
            5.2% and 1.0%, respectively.
 
 Sunday
            circulation continued its trend down, with average single copy and home
            delivery
            down approximately 5.5% and 0.7%, respectively. Jacksonville and Augusta
            contributed most of this decline, with both newspapers experiencing steep
            declines in single copy and third party sales. Both newspapers have cut
            back on
            last year’s aggressive third party sales programs.
  -14-
 ***Table
                of Contents***
  Other
            revenue:
 
 Commercial
            printing revenue was $2.4 million, down $0.1 million, or 5.0%. Other
            miscellaneous operating income was up $0.2 million, or 12.5%, primarily
            due to
            the increase in the USA Sunday weekend magazine promotional
            revenue.
 
 During
            the first quarter of 2006, we reached an agreement with the Atlanta
            Journal-Constitution (“AJC”) to license *Skirt!* magazine
            for the Atlanta market. We received a one-time fee during the first quarter
            of
            2006 and will continue to receive royalty fees based upon the agreement.
            We have
            recently licensed Skirt! magazines for the Knoxville (Ten.) market and
            are
            currently negotiating licenses in other markets. Total royalty fees received
            from these license agreements were slightly less than $0.1 million for
            the first
            quarter of 2007.
 
 ***Net
            operating expense*** *.* The
            table below presents the total operating expenses and related statistics
            for the
            newspaper operations for the three month periods ended March 31, 2007
            and
            2006:
 
 ***(Dollars
                        in thousands)***
                    
                    **Three
                        months ended March 31,**
                    
                    **Percentage
                        change****2007**
                    
                    **2006**
                    
                    **2007
                        vs. 2006****Operating
                        expenses**Labor
                        and employee benefits
                    
                    $
                    45,002
                    
                    $
                    44,032
                    
                    
                    2.2
                    %Newsprint,
                        ink and supplements
                    
                    
                    12,955
                    
                    
                    14,764
                    
                    
                    (12.3
                    %)Other
                        operating costs
                    
                    
                    33,696
                    
                    
                    32,008
                    
                    
                    5.3
                    %Depreciation
                        and amortization
                    
                    
                    5,322
                    
                    
                    5,281
                    
                    
                    0.8
                    %Total
                        operating expenses
                    
                    $
                    96,975
                    
                    $
                    96,085
                    
                    
                    0.9
                    %
 
 Labor
            and employee benefits:
 
 During
            the first quarter of 2007, total labor and employee benefits cost was
            $45.0
            million, up $1.0 million, or 2.2%.
 
 Compared
            to the first quarter last year, salaries and wages were $31.1 million,
            up $1.3
            million, or 4.2%, primarily due to a 2.5% average pay increase and the
            increase
            in head count. FTE’s (or full time equivalent employees) were up by 2.0%.
 
 Commissions
            and bonuses were $5.5 million, down $0.6 million, or 9.7%, from the same
            period
            last year, due to the decrease in advertising sales.
 
 Employee
            medical insurance cost was $3.6 million, up $0.5 million, or 14.7%, due
            to the
            increase in claims experience and higher headcounts.
 
 Compared
            to the first three months last year, postretirement benefit cost was
            $0.3
            million, down $0.1 million, or 28.2%.
 
 Excluding
            the labor and employee benefits cost directly related to our new non-daily
            publications, our total labor and employee costs were up $0.4 million,
            or 0.9%,
            with salaries and wages up 2.8%, commissions and bonuses down 11.1%,
            and total
            employee benefit costs up 2.7%. FTE’s were up just slightly from the same
            quarter last year.
 
 Newsprint,
            ink and supplements cost:
 
 During
            the first quarter of 2007, newsprint, ink and supplements cost was $13.0
            million, down $1.8 million, or 12.3%.
 
 Compared
            to the first quarter of 2006, total newsprint expense was $11.2 million,
            down
            $1.3 million, or 10.7%, due to the 2.6% decrease in newsprint consumption
            and
            the 8.3% decrease in the average cost per tonne of newsprint. We anticipate
            the
            downward trend in consumption and average cost of newsprint to continue
            into the
            end of 2007.
 
 Due
            to
            the change in consumption, ink expense decreased 2.3% to $0.7 million,
            and
            supplements expense decreased 29.4% to $1.1 million.
  -15-
 ***Table
                of Contents***
  Other
            operating costs:
  Compared
            to the first quarter last year, total other operating costs were $33.7
            million,
            up $1.7 million, or 5.3%, with $0.4 million of the increase directly
            attributed
            to the start up of our new publications. Bad debt expense was up $0.6
            million,
            or 108.6%. The remainder of the net increase was due to the increases
            in
            advertising and miscellaneous administrative costs.
 
 The
            combined technology and shared services fee and management fee charged
            by our
            parent under the management agreement totaled $5.6 million for the first
            quarter, down $0.4 million, or 6.1%, from the first quarter last year.
 
 **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
            the
            borrowing capacity under revolving credit facilities, will be sufficient
            to meet
            our ongoing operating needs. Cash flow generated from operations is our
            primary
            source of liquidity.
 
 Our
            primary needs for cash are funding operating expense, 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
            $5.8 million at March 31, 2007, down $1.2 million from $7.0 million at
            December
            31, 2006.
 
 ***Operating
            activities.***  Net
            cash
            provided by operations was $6.6 million for the first three months of
            2007, down
            $2.4 million from $8.2 million for the same period in 2006.
 
 Current
            assets were $64.0 million and current liabilities were $50.0 million as of March
            31, 2007 as compared to current assets of $72.5 million and current liabilities
            of $54.5 million as of December 31, 2006. We manage our working capital
            through
            the utilization of our revolving credit facility. The outstanding balance
            on the
            revolving credit facility is classified as a long-term liability, in
            accordance
            with its terms.
 
 ***Investment
            activities.*** Net cash
            used in investing activities was $3.3 million for the first three months
            of 2007
            compared to $5.5 million provided by investing activities for the same
            period in
            2006.
  For
            the
            first three months in 2007, we spent $3.3 million on property, plant
            and
            equipment, of which, $2.1 million was spent on Savannah's new printing
            press. The remaining $1.8 million commitment on the printing press is
            scheduled to be paid by the end of 2007.  Our total capital expenditures
            for the first quarter of last year was $1.3 million.
  For
            2007,
            we expect our total capital expenditures to be between $15 million and
            $20
            million.
  ***Financing
            activities.*** Net
            cash
            used in financing activities was $4.5 million for the first three months
            of 2007
            compared to $19.5 million used in financing activities for the same period
            in
            2006.
 
 *Period
            end debt summary:*
 
 Total
            debt was $530 million at March 31, 2007, up from $524 million at December
            31,
            2006. We had $55 million outstanding on our new revolving credit facility,
            up $6
            million from $49 million at December 31, 2006.
 
 As
            of
            March 31, 2006, our total debt was $522 million with $47 million outstanding
            under our $175 million revolving credit facility.
 
 As
            of
            March 31, 2007, our annualized cost of debt outstanding was approximately
            6.6745%, up from 6.538% at the end of the same quarter last year.
 
 -16-
 ***Table
                of Contents***
  At
            March
            31, 2007, we could borrow and use for general corporate purposes approximately
            $88.2 million under the most restrictive covenants of our debt
            arrangements.
  *Loan
            receivable from Morris Communications:*
 
 Our
            indenture, with certain restrictions described in Note 2 of our financial
            statements, allows us to make loans to Morris Communications. The total
            loan
            outstanding at March 31, 2007 was $33.6million, up $10.4 million from
            $23.2
            million at December 31, 2006.
 
 The
            interest-bearing portion of all loans from us to our parent bear the
            same rate
            as the borrowings under the Credit Agreement (currently, this rate is
            LIBOR
            (adjusted to the nearest 1/16th) + 0.875%). We distinguish 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 accrual. Interest is accrued on the average
            outstanding long-term balance each month.
 
 Given
            the
            historical practice of us and our parent settling a significant portion
            of the
            outstanding loan receivable balance with a dividend, this arrangement
            is
            considered in substance a capital distribution transaction and is classified
            as
            contra-equity within member’s deficit. In addition, interest accrued on this
            loan receivable is reported as contra-equity within member’s deficiency in
            assets for the periods presented. (See Note 2)
 
 We
            have
            classified the outstanding loan receivable balances, net of the $4.1
            million and
            $3.6 million in accumulated interest accrued on these receivables as
            of March
            31, 2007 and December 31, 2006, respectively, as part of member’s deficiency in
            assets.
 
 During
            the three month periods ended March 31, 2007 and 2006, we reported the
            $0.5
            million and $0.5 million, respectively, in accrued loan receivable interest
            as
            contra-equity. The average interest rate for the three month periods
            ended March
            31, 2007 and 2006 was 6.25% and 5.58%, respectively, on average loan
            receivable
            balances of $32.5 million and $36.8 million, respectively.
 
 *Dividends:*
 
 We,
            with
            certain restrictions under our indenture, may make dividend payments
            to our
            parent to fund its cash needs for general business purposes, capital
            expenditures and acquisitions. At March 31, 2007, we had an additional
            $101.0
            million available for future restricted payments under the notes
            indenture.
 
 On
            March
            31, 2006, we declared and recorded a $15 million dividend to Morris
            Communications that, in turn, utilized the distribution to reduce its
            debt to
            us.
 
 **Morris
            Publishing Finance Co. overview**
 
 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.
  -17-
 ***Table
                of Contents***
 **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
              December 31, 2006 filed with the Securities and Exchange Commission
              on Form
              10-K.
 
 Although
              some of the our outstanding debt is at a fixed rate, increases in the
              interest
              rates applicable to borrowings under our bank credit facilities would
              result in
              increased interest expense and a reduction in our net income. (See
              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 regarding
              long-term
              debt).
 
 Based
              on
              our $230 million of variable rate debt at March 31, 2007, a 1.0% increase
              or
              decrease in interest rates on this variable-rate debt would decrease
              or increase
              our annual interest expense by $2.3 million and net income by $1.4
              million.
  **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, 2007. 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 us in reports that we file
              or submit
              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.
 
 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, 2007, that
              has
              materially affected, or is reasonably likely to materially affect,
              our internal
              control over financial reporting.
  -18-
 **Item
          1. Legal Proceedings.**
 
 None.
 
 **Item
          1A. Risk Factors.**
 
 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.**
 31.1
                
                Rule
                    13a-14(a)
                    Certifications31.2
                
                Rule
                    13a-14(a)
                    Certifications32.1
                
                Section
                    1350
                    Certifications
  -19-
 ***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
                    11, 2007
                
                **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 11, 2007
                
                **By:**
                
                /s/
                    Steve K. Stone**Steve
                    K. Stone****Chief
                    Financial Officer****(On
                    behalf of the Registrant,**
                  **and
                    as its Principal Financial
                    Officer)**




-20-