The following discussion of our financial condition and results of operations should be read together with our unaudited consolidated condensed financial statements for the third quarter and three quarters ended September 28, 2008, including the notes thereto.

More information regarding us is available at our website at www.journalcommunications.com. We are not including the information contained in our website as a part of, or incorporating it by reference into, this Quarterly Report on Form 10-Q. Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are made available to the public at no charge, other than a reader's own internet access charges, through a link appearing on our website. We provide access to such material through our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Forward-Looking Statements

We make certain statements in this Quarterly Report on Form 10-Q (including the information that we incorporate by reference herein) that are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in that Act, and we are including this statement for purposes of those safe harbor provisions. These forward-looking statements generally include all statements other than statements of historical fact, including statements regarding our future financial position, business strategy, budgets, projected revenues and expenses, expected regulatory actions and plans and objectives of management for future operations. We often use words such as "may," "will," "intend," "anticipate," "believe," or "should" and similar expressions in this Quarterly Report on Form 10-Q to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors could cause actual results to differ materially from those expressed or implied by those forward-looking statements. Among such risks, uncertainties and other factors that may impact us are the following:

• changes in advertising demand or the buying strategies of advertisers or the migration of certain advertising to the Internet;

• changes in newsprint prices and other costs of materials;

• changes in federal or state laws and regulations or their interpretations (including changes in regulations governing the number and types of broadcast and cable system properties, newspapers and licenses that a person may control in a given market or in total);

• changes in legislation or customs relating to the collection, management and aggregation and use of consumer information through telemarketing and electronic communication efforts;

• the availability of quality broadcast programming at competitive prices;

• changes in network affiliation agreements;

• quality and rating of network over-the-air broadcast programs, including programs changing networks and changing competitive dynamics regarding how and when programs are made available to our viewers;

• effects of the loss of commercial inventory resulting from uninterrupted television news coverage and potential advertising cancellations due to war or terrorist acts;

• effects of the rapidly changing nature of the publishing, broadcasting and printing industries, including general business issues, competitive issues and the introduction of new technologies;

• an other than temporary decline in operating results and enterprise value that could lead to further non-cash impairment charges due to the impairment of goodwill, broadcast licenses, other intangible assets and property, plant and equipment;

• the impacts of changing economic and financial market conditions and interest rates on our liquidity, on the value of our pension plan assets and on the availability of capital;

• changes in interest rates;

• the outcome of pending or future litigation;

• energy costs;

• the availability and effect of acquisitions, investments, dispositions and other capital expenditures including share repurchases on our results of operations, financial condition or stock price; and

A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from any forward-looking statements is included in "Part II, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q. We caution you not to place undue reliance on these forward-looking statements, which we have made as of the date of this Quarterly Report on Form 10-Q.

Overview

Our business segments are based on the organizational structure used by management for making operating and investment decisions and for assessing performance. Our reportable business segments are: (i) publishing; (ii) broadcasting; (iii) printing services; and (iv) other. Our publishing segment consists of the Milwaukee Journal Sentinel, which serves as the only major daily newspaper for the Milwaukee metropolitan area, and 55 community newspapers and shoppers in Wisconsin and Florida. Our broadcasting segment consists of 35 radio stations and 12 television stations in 12 states and the operation of a television station under a local marketing agreement. Our interactive media assets include about 120 online enterprises that are associated with our publishing and broadcasting segments. We also provide a wide range of commercial printing services, including printing of publications, professional journals and documentation material, through our printing services segment. Our other segment consists of a direct marketing services business and corporate expenses and eliminations.

Over the past few years, fundamentals in the newspaper industry have deteriorated significantly. Continuing weakness in automotive advertising (driven primarily by the domestic automobile industry), reductions in retail and classified run-of-press (ROP) advertising (due in part to department store consolidation, weakened employment and real estate economics and a migration of advertising to the Internet), circulation declines and online competition have negatively impacted newspaper industry revenues. Additionally, the continued housing market downturn has adversely impacted the newspaper industry, including real estate classified advertising as well as the home improvement, furniture and financial services advertising categories. These conditions, along with a weakening economy, persisted in the third quarter of 2008 and we expect them to continue in future periods.

Revenues in the broadcast industry are derived primarily from the sale of advertising time to local, national and political advertisers and to a lesser extent from barter, digital revenues, retransmission fees, network compensation and other revenues. The broadcast industry continues to experience softness in television and radio advertising resulting from general economic pressure now impacting local and national economies, primarily in the housing, automobile and retail segments.

Our publishing business was challenged in the third quarter of 2008 due to the continued softening of business conditions driven by the secular and cyclical influences affecting the newspaper industry. Classified advertising revenue decreased $4.0 million in the third quarter of 2008 compared to the third quarter of 2007 in all categories. Retail advertising also decreased in the third quarter of 2008 compared to the third quarter of 2007 with weakness in a number of categories, including home improvement, automotive, communications, department stores, real estate, furniture/furnishings and airline and travel. Interactive revenue increased 14.4% to $3.9 million at our publishing businesses in the third quarter of 2008 compared to the third quarter of 2007. Our daily newspaper recorded a $3.7 million workforce reduction charge in the third quarter of 2008. Our publishing businesses experienced a 27.1% increase in newsprint pricing in the third quarter of 2008 and newsprint costs increased $0.7 million compared to the third quarter of 2007. Our publishing businesses focused on expense controls and, despite the newsprint increase and excluding the workforce reduction charge, total operating expenses decreased by 2.1% in the third quarter of 2008 compared to the third quarter of 2007. The expense decrease was primarily due to a decrease in payroll and employee benefit costs.

Revenue from broadcasting in the third quarter of 2008 increased 0.6% due to increases in political and issue and Olympic advertising revenue, an increase in revenue from our newly acquired television stations, KPSE-LP and KWBA-TV, in Palm Springs, CA and Sierra Vista, AZ (Tucson market), respectively, and an increase in interactive revenue. These revenue increases were partially offset by decreases in local and national advertising revenue. Our broadcasting business recorded a workforce reduction charge of $0.3 million in the third quarter of 2008. Total revenue and operating expenses were $0.9 million and $0.7 million, respectively, related to our newly acquired television stations. Excluding the non-cash impairment charge, total operating expenses were essentially even in the third quarter of 2008 compared to the third quarter of 2007, including the newly acquired stations, as we remained diligent in focusing on cost reductions.

Revenue at our printing services business decreased 12.2% in the third quarter of 2008 compared to the third quarter of 2007 primarily due to a decrease in revenue from printing catalogs and documentation materials. Operating earnings at our printing services business decreased primarily due to the decrease in revenue. In the fourth quarter of 2008, due to the changing mix and volume of business, full time employees were reduced by 10.0%. Revenue at our direct marketing services business decreased 6.8% in the third quarter of 2008 compared to the third quarter of 2007 primarily due to a decrease in mailing services revenue.

Interim Impairment Test
An interim impairment test results from the application of the impairment testing provisions of FASB Statement No. 142 "Goodwill and Other Intangible Assets". Impairment testing is customarily performed annually, and last had been performed as of the beginning of the fourth quarter 2007, at which time no goodwill or indefinite-lived intangible asset impairment was indicated. Due to deteriorating macro-economic factors, a prolonged adverse change in the business climate, deteriorating market conditions and results and a further decline in our stock price, we performed an interim impairment test as of September 28, 2008. Our long-lived assets include goodwill related to our reporting units and broadcast licenses and other identifiable assets at individual television and radio stations.

We based our fair value estimates, in large measure, on projected financial information which we believe to be reasonable. However, actual future results may differ from those projections, and those differences may be material. The valuation methodology used to estimate the fair value of our total company and our reporting units requires inputs and assumptions (i.e. market growth, operating profit margins, and discount rates) that reflect current market conditions as well as management judgment. The current economic downturn has negatively impacted many of those inputs and assumptions. While our September 28, 2008 interim goodwill impairment test did not result in an impairment charge, our market capitalization has declined since that time and the economic outlook has deteriorated. If market conditions and operational performance of our reporting units continues to deteriorate and management concludes that our operating results or our stock price will not improve within a reasonable period of time, we may be required to recognize a goodwill impairment charge in the near term, which could have a material impact on our financial condition and results of operations.

For broadcast licenses at individual television and radio stations, we used an income approach to estimate fair value. The fair value estimates of our broadcast licenses contain significant assumptions incorporating variables that are based on past experiences and judgments about future performance using industry normalized information for an average station within a market with the type of signal that each subject station produces. These variables include, but are not limited to: the forecasted revenue growth rate of each market (including market population, household income and retail sales), market share and profit margins of an average station within a market, estimated capital expenditures and start-up costs risk-adjusted discount rate, likely media competition within the market and expected growth rates into perpetuity to estimate terminal values. Our interim impairment tests in the third quarter of 2008 indicated that four television broadcast licenses and 13 radio broadcast licenses were impaired. We recorded a $38,762 non-cash impairment charge in the third quarter of 2008. Adverse changes in expected operating results and/or further deterioration of economic, market or business conditions could result in additional non-cash impairment charges on our broadcast licenses in future periods, which could have a material impact on our financial condition and results of operations.

Subsequent Event
On October 6, 2008, Journal Community Publishing Group, Inc., our community newspapers and shopper business of our publishing segment, purchased the assets of Waupaca Publishing Company for approximately $7.0 million, subject to certain closing adjustments. The purchase consists of several Waupaca-area newspapers and additional print publications and associated Internet websites as well as Waupaca Publishing Company's commercial printing business and the related real estate and buildings. We believe this purchase, combined with our existing paid weekly newspapers in the area, will provide additional media offerings in Waupaca County, Wisconsin for our readers and advertisers and will extend our niche media offerings.

Results of Operations
Third Quarter Ended September 28, 2008 compared to the Third Quarter Ended September 30, 2007
Continuing Operations

Our consolidated revenue in the third quarter of 2008 was $136.3 million, a decrease of $8.1 million, or 5.6%, compared to $144.4 million in the third quarter of 2007. Our consolidated operating costs and expenses in the third quarter of 2008 were $80.5 million, an increase of $1.0 million, or 1.2%, compared to $79.5 million in the third quarter of 2007. Our consolidated selling and administrative expenses in the third quarter of 2008 were $44.0 million, an increase of $0.6 million, or 1.3%, compared to $43.4 million in the third quarter of 2007. Our broadcast license impairment was $38.8 million in the third quarter of 2008.

                                                               Percent of               Percent of
                                                                  Total                    Total
                                                      2008       Revenue       2007       Revenue
                                                   ---------- ------------- ---------- -------------
                                                                 (dollars in millions)
Revenue:
Publishing                                         $   59.5         43.6 %  $   65.2          45.1 %
Broadcasting                                           54.0         39.6        53.7          37.2
Printing services                                      16.1         11.8        18.3          12.7
Other                                                   6.7          5.0         7.2           5.0
                                                   --------   ----------    --------   -----------
   Total revenue                                      136.3        100.0       144.4         100.0
Total operating costs and expenses                     80.5         59.1        79.5          55.1
Selling and administrative expenses                    44.0         32.3        43.4          30.0
Broadcast license impairment                           38.8         28.4          --            --
                                                   --------   ----------    --------   -----------
Total operating costs and expenses and selling
  and administrative expenses                         163.3        119.8       122.9          85.1
                                                   --------   ----------    --------   -----------
Total operating earnings (loss)                    $  (27.0 )      (19.8 )% $   21.5          14.9 %
                                                   --------   ----------    --------   -----------

The decrease in total revenue was due to a decrease in classified ROP advertising in all categories at our publishing businesses, a decrease in local advertising revenue at our television and radio stations, a decrease in revenue from printing catalogs at our printing services business, a decrease in retail ROP and preprint advertising at our publishing businesses, a decrease in national advertising revenue at our television and radio stations, a decrease in national ROP and preprint advertising revenue at our daily newspaper, a decrease in developmental revenue at our television and radio stations and a decrease in mailing services revenue at our direct marketing services business. These revenue decreases were partially offset by an increase in political and issue and Olympic advertising revenue at our television stations, an increase in commercial printing revenue at our daily newspaper and an increase in interactive advertising revenue at our publishing and broadcasting businesses.

The increase in total operating costs and expenses was due to a workforce reduction charge at our daily newspaper and television and radio stations, an increase in newsprint and paper costs, operating costs and expenses related to our newly acquired television stations, KPSE-LP and KWBA-TV, and an increase in interactive fees related to the increase in interactive revenue. These expense increases were partially offset by decreases in payroll and employee benefits at our daily newspaper (excluding the workforce reduction charge in the third quarter of 2008), at our printing services business, our community newspapers and shoppers and our direct marketing services businesses. Outside printing costs decreased at our daily newspaper due to the decrease in direct marketing advertising revenue and at our community newspapers and shoppers business due to the decrease in advertising revenue in our Florida publications.

The increase in selling and administrative expenses is primarily due to a workforce reduction charge at our daily newspaper, an insurance settlement in the third quarter of 2007 at our daily newspaper, selling and administrative expenses related to our newly acquired television stations and a workforce reduction charge at our broadcasting business. These expense increases were partially offset by decreases in payroll and employee benefit costs (excluding the workforce reduction charges) at our daily newspaper and television and radio stations, at our community newspapers and shoppers business and our printing services business.

We recorded a $38.8 million non-cash impairment charge in the third quarter of 2008 for four television broadcast licenses and 13 radio broadcast licenses. We did not record non-cash impairment charges in the third quarter of 2007.

                                               Percent of             Percent of
                                                  Total                  Total
                                                Operating              Operating
                                      2008      Earnings      2007     Earnings
                                    --------- ------------- -------- -------------
                                                (dollars in millions)
Publishing                          $   1.1           4.3 % $  9.4          43.7 %
Broadcasting                          (29.1 )      (108.0 )    9.7          45.3
Printing services                       0.8           3.0      2.4          11.0
Other                                   0.2           0.7       --            --
                                    -------   -----------   ------   -----------
Total operating earnings (loss)     $ (27.0 )       100.0 % $ 21.5         100.0 %
                                    -------   -----------   ------   -----------

The decrease in total operating earnings was primarily due to the $38.8 million non-cash impairment charge for broadcast licenses and the decrease in revenue in our publishing, printing services and direct marketing services businesses.

Our consolidated Adjusted EBITDA in the third quarter of 2008 was $19.1 million, a decrease of $9.6 million, or 33.3%, compared to $28.7 million in the third quarter of 2007. We define Adjusted EBITDA as net earnings (loss) excluding gain from discontinued operations, net, provision (benefit) for income taxes, total other expense, net (which is entirely comprised of interest income and expense), depreciation and amortization and non-cash impairment charges. Management uses adjusted EBITDA, among other things, to evaluate our operating performance and to value prospective acquisitions. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA should not be considered in isolation of, or as a substitute for, net earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA, as we calculate it, may not be comparable to EBITDA measures reported by other companies.

The following table presents a reconciliation of our consolidated net earnings to consolidated Adjusted EBITDA for the third quarter of 2008 and the third quarter of 2007:

                                                2008           2007
                                           --------------- ------------
                                              (dollars in millions)
Net earnings (loss)                         $     (17.1 )   $    13.1
Gain from discontinued operations, net               --          (1.3 )
Provision (benefit) for income taxes              (11.8 )         7.7
Total other expense, net                            1.9           1.9
Depreciation                                        6.8           6.8
Amortization                                        0.5           0.5
Broadcast license impairment                       38.8            --
                                           ------------    ----------
Adjusted EBITDA                             $      19.1     $    28.7
                                           ------------    ----------

The decrease in Adjusted EBITDA is consistent with decreases in operating earnings in our publishing and printing services segments for the reasons described above.

Revenue from publishing in the third quarter of 2008 was $59.5 million, a decrease of $5.7 million, or 8.8%, compared to $65.2 million in the third quarter of 2007. Operating earnings from publishing were $1.1 million, a decrease of $8.3 million, or 87.7%, compared to $9.4 million in the third quarter of 2007.

                                         2008                               2007
                          ---------------------------------- ----------------------------------
                                       Community                          Community
                             Daily     Newspapers               Daily     Newspapers             Percent
                           Newspaper   & Shoppers    Total    Newspaper   & Shoppers    Total    Change
                          ----------- ------------ --------- ----------- ------------ --------- ---------
                                                  (dollars in millions)
Advertising revenue:
  Retail                   $   20.2    $    6.6    $  26.8    $   21.5    $     7.1   $  28.6      (6.3 )
  Classified                   11.1         1.5       12.6        14.9          1.7      16.6     (24.0 )
  National                      1.7          --        1.7         2.4           --       2.4     (29.0 )
  Direct marketing              0.7          --        0.7         0.8           --       0.8     (12.6 )
  Other                          --         0.1        0.1          --          0.1       0.1      31.3
                          ---------   ---------    -------   ---------   ----------   -------
Total advertising
revenue..                      33.7         8.2       41.9        39.6          8.9      48.5     (13.6 )
Circulation revenue            12.9         0.3       13.2        12.9          0.2      13.1       0.2
Other revenue                   3.5         0.9        4.4         2.5          1.1       3.6      23.3
                          ---------   ---------    -------   ---------   ----------   -------
Total revenue              $   50.1    $    9.4    $  59.5    $   55.0    $    10.2   $  65.2      (8.8 )
                          ---------   ---------    -------   ---------   ----------   -------
Operating earnings         $    0.9    $    0.2    $   1.1    $    9.2    $     0.2   $   9.4     (87.7 )
                          ---------   ---------    -------   ---------   ----------   -------

Advertising revenue in the third quarter of 2008 accounted for 70.5% of total . . .