8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 28, 2010

MEDIA GENERAL, INC.

(Exact name of registrant as specified in its charter)

Commonwealth of Virginia	1-6383	54-0850433
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

333 E. Franklin St., Richmond, VA	23219
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (804) 649-6000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 8.01. OTHER EVENTS.

The Company issued its consolidated financial statements as of December 27, 2009, and December 28, 2008, and for each of the three years in the period ended December 27, 2009, today by posting them to its Web site, www.mediageneral.com, in accordance with Securities and Exchange Commission rules. Those financial statements are included as Exhibit 99.1 in this Form 8-K.

Additionally, effective at the beginning of the third quarter of 2009, Media General changed its management structure from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations. The segments are: the Virginia/Tennessee Market, the Florida Market, the Mid-South Market, the North Carolina Market, the Ohio/Rhode Island Market, and Advertising Services and Other. As previously disclosed in the Quarterly Report on Form 10-Q for the quarter ended September 27, 2009, the Company changed its reported segments as a result of this change in management structure with no impact on the previously reported consolidated results of the Corporation. Additionally, the Company sold a small magazine during the third quarter of 2009 and reflected its results as a discontinued operation for all periods in accordance with applicable accounting literature.

This Current Report on Form 8-K reclassifies the historical business information related to the change in segments and the discontinued operations in the Annual Report on Form 10-K for the year ended December 28, 2008 (the “Annual Report”), in the Quarterly Report on Form 10-Q for the quarter ended March 29, 2009, and in the Quarterly Report on Form 10-Q for the quarter and six month periods ended June 28, 2009. The following items contain the reclassified information:

Form 10-K dated December 28, 2008:

Part I, Item 1. Business (filed as Exhibit 99.2).

Part I, Item 1A. Risk Factors (filed as Exhibit 99.3).

Part I, Item 2. Properties (filed as Exhibit 99.4).

Part II, Item 6. Selected Financial Data (filed as Exhibit 99.5).

Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (filed as Exhibit 99.6).

Part II, Item 8. Financial Statements and Supplementary Data (filed as Exhibit 99.7).

Form 10-Q dated March 29, 2009 (filed as Exhibit 99.8).

Form 10-Q dated June 28, 2009 (filed as Exhibit 99.9).

The reclassification of historical business information in the Annual Report or in the Forms 10-Q had no impact on the Corporation’s consolidated statements of stockholders’ equity or consolidated statements of cash flows. Note 12 to the consolidated financial statements, included in Exhibit 99.7 of this Form 8-K, describes the changes to the consolidated financial statements.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

The following exhibits are filed herewith:

Exhibit No.	Description of Exhibit
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
23.2	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
99.1	Consolidated financial statements as of December 27, 2009, and December 28, 2008, and for each of the three years in the period ended December 27, 2009
99.2	Form 10-K dated December 28, 2008, Part I, Item 1. Business
99.3	Form 10-K dated December 28, 2008, Part I, Item 1A. Risk Factors
99.4	Form 10-K dated December 28, 2008, Part I, Item 2. Properties
99.5	Form 10-K dated December 28, 2008, Part II, Item 6. Selected Financial Data
99.6	Form 10-K dated December 28, 2008, Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
99.7	Form 10-K dated December 28, 2008, Part II, Item 8. Financial Statements and Supplementary Data
99.8	Form 10-Q dated March 29, 2009
99.9	Form 10-Q dated June 28, 2009
99.10	Consolidating financial statements of Media General, Inc. as of December 27, 2009, December 28, 2008, and December 30, 2007

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 hereunto duly authorized.

	MEDIA GENERAL, INC.
	(Registrant)
Date January 28, 2010
	/S/    JOHN A. SCHAUSS
	John A. Schauss
	Vice President - Finance and Chief Financial Officer

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of Media General, Inc.:

Form S-8 (No. 2-56905),

Form S-8 (No. 33-23698),

Form S-3 (No. 33-26853),

Form S-8 (No. 33-52472),

Form S-8 (No. 333-16731),

Form S-8 (No. 333-16737),

Form S-8 (No. 333-69527),

Form S-8 (No. 333-54624),

Form S-8 (No. 333-57538),

Form S-8 (No. 333-138843),

Form S-8 (No. 333-142769), and

Form S-8 (No. 333-148976);

of our reports dated January 28, 2010, with respect to the consolidated financial statements of Media General, Inc. as of December 27, 2009, and December 28, 2008, and for each of the three fiscal years in the period ended December 27, 2009, and the effectiveness of internal control over financial reporting of Media General, Inc., for the year ended December 27, 2009 all included in Current Report on Form 8-K dated January 28, 2010.

/s/ Ernst & Young LLP

Richmond, Virginia

January 28, 2010

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of Media General, Inc.:

Form S-8 (No. 2-56905),

Form S-8 (No. 33-23698),

Form S-3 (No. 33-26853),

Form S-8 (No. 33-52472),

Form S-8 (No. 333-16731),

Form S-8 (No. 333-16737),

Form S-8 (No. 333-69527),

Form S-8 (No. 333-54624),

Form S-8 (No. 333-57538),

Form S-8 (No. 333-138843),

Form S-8 (No. 333-142769), and

Form S-8 (No. 333-148976);

of our report dated January 28, 2009, except with respect to the matters discussed in Note 12, for which the date is January 28, 2010, with respect to the consolidated financial statements and schedule of Media General, Inc. as of December 28, 2008, and December 30, 2007, and for each of the three fiscal years in the period ended December 28, 2008, and of our report dated January 28, 2009, with respect to the effectiveness of internal control over financial reporting of Media General, Inc. as of December 28, 2008 , all included in Current Report on Form 8-K dated January 28, 2010.

/s/ Ernst & Young LLP

Richmond, Virginia

January 28, 2010

EX-99.1

Exhibit 99.1

Financial Statements

INDEX

	Page
Report of Management on Media General, Inc’s Internal Control Over Financial Reporting	2
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting	3
Report of Independent Registered Public Accounting Firm	4
Consolidated Statements of Operations for the Fiscal Years Ended December 27, 2009, December 28, 2008, and December 30, 2007	5
Consolidated Balance Sheets at December 27, 2009 and December 28, 2008	6
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended December 27, 2009, December 28, 2008, and December 30, 2007	8
Consolidated Statements of Cash Flows for the Fiscal Years Ended December 27, 2009, December 28, 2008, and December 30, 2007	9
Notes 1 through 11 to the Consolidated Financial Statements	10

Report of Management on Media General, Inc.’s Internal Control over Financial Reporting

Management of Media General, Inc., (the Company) has assessed the Company’s internal control over financial reporting as of December 27, 2009, based on criteria for effective internal control over financial reporting described in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that as of December 27, 2009, the Company’s system of internal control over financial reporting was properly designed and operating effectively based upon the specified criteria.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is comprised of policies, procedures and reports designed to provide reasonable assurance, to the Company’s management and board of directors, that the financial reporting and the preparation of financial statements for external purposes has been handled in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) govern records to accurately and fairly reflect the transactions and dispositions of assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable safeguards against or timely detection of material unauthorized acquisition, use or disposition of the Company’s assets.

Internal controls over financial reporting may not prevent or detect all misstatements. Additionally, projections as to the effectiveness of controls to future periods are subject to the risk that controls may not continue to operate at their current effectiveness levels due to changes in personnel or in the Company’s operating environment.

January 28, 2010

/s/ Marshall N. Morton	/s/ John A. Schauss	/s/ O. Reid Ashe Jr.
Marshall N. Morton	John A. Schauss	O. Reid Ashe Jr.
President and	Vice President-Finance	Executive Vice President
Chief Executive Officer	and Chief Financial Officer	and Chief Operating Officer

2

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Stockholders

Media General, Inc.

We have audited Media General, Inc.’s internal control over financial reporting as of December 27, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Media General, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Media General, Inc.’s Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Media General, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 27, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Media General, Inc., as of December 27, 2009, and December 28, 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three fiscal years in the period ended December 27, 2009, and our report dated January 28, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Richmond, Virginia

January 28, 2010

3

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Media General, Inc.

We have audited the accompanying consolidated balance sheets of Media General, Inc., as of December 27, 2009, and December 28, 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 27, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Media General, Inc., at December 27, 2009, and December 28, 2008, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 27, 2009, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Media General, Inc.’s internal control over financial reporting as of December 27, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 28, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Richmond, Virginia

January 28, 2010

4

Media General, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Fiscal Years Ended
	December 27, 2009			December 28, 2008			December 30, 2007
Revenues
Publishing	$	357,502		$	436,870		$	524,775
Broadcasting		258,967			322,106			336,479
Digital media and other		41,143			38,399			35,039
Total revenues		657,612			797,375			896,293
Operating costs:
Employee compensation		300,439			380,434			399,157
Production		154,785			193,034			211,426
Selling, general and administrative		94,031			111,549			124,884
Depreciation and amortization		59,178			71,464			72,998
Goodwill and other asset impairment (Note 2)		84,220			908,701			—
Gain on insurance recovery		(1,915	)		(3,250	)		(17,604	)
Total operating costs		690,738			1,661,932			790,861
Operating income (loss)		(33,126	)		(864,557	)		105,432
Other income (expense):
Interest expense		(41,978	)		(43,449	)		(59,577	)
Impairment of and income (loss) on investments		701			(4,419	)		(34,825	)
Other, net		972			979			1,126
Total other expense		(40,305	)		(46,889	)		(93,276	)
Income (loss) from continuing operations before income taxes		(73,431	)		(911,446	)		12,156
Income tax expense (benefit)		(28,638	)		(288,191	)		2,921
Income (loss) from continuing operations		(44,793	)		(623,255	)		9,235
Discontinued operations:
Income from discontinued operations (net of income taxes of $2 in 2009, $1,727 in 2008 and $2,207 in 2007)		155			2,701			3,452
Net gain (loss) related to divestiture of discontinued operations (net of income taxes of $144 in 2009, and income tax benefit of $5,846 in 2008 and $722 in 2007)		8,873			(11,300	)		(2,000	)
Net income (loss)	$	(35,765	)	$	(631,854	)	$	10,687
Earnings (loss) per common share:
Income (loss) from continuing operations	$	(2.01	)	$	(28.21	)	$	0.39
Income (loss) from discontinued operations		0.40			(0.39	)		0.06
Net income (loss)	$	(1.61	)	$	(28.60	)	$	0.45
Earnings (loss) per common share - assuming dilution:
Income (loss) from continuing operations	$	(2.01	)	$	(28.21	)	$	0.39
Income (loss) from discontinued operations		0.40			(0.39	)		0.06
Net income (loss)	$	(1.61	)	$	(28.60	)	$	0.45

Notes to Consolidated Financial Statements begin on page 10.

5

Media General, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts)

ASSETS

	December 27, 2009			December 28, 2008
Current assets:
Cash and cash equivalents	$	33,232		$	7,142
Accounts receivable (less allowance for doubtful accounts 2009 - $5,371; 2008 - $5,961)		104,405			102,174
Inventories		6,632			12,035
Other		60,786			38,849
Assets of discontinued operations		—			12,402
Total current assets		205,055			172,602
Other assets		34,177			41,287
Property, plant and equipment, at cost:
Land		37,362			37,736
Buildings		308,538			312,141
Machinery and equipment		545,050			540,999
Construction in progress		4,191			17,229
Accumulated depreciation		(473,933	)		(454,478	)
Net property, plant and equipment		421,208			453,627
FCC licenses and other intangibles - net		220,591			245,266
Excess of cost over fair value of net identifiable assets of acquired businesses		355,017			421,470
Total assets	$	1,236,048		$	1,334,252

Notes to Consolidated Financial Statements begin on page 10.

6

LIABILITIES AND STOCKHOLDERS’ EQUITY

	December 27, 2009			December 28, 2008
Current liabilities:
Accounts payable	$	26,398		$	41,365
Accrued expenses and other liabilities		72,174			86,291
Liabilities of discontinued operations		—			3,053
Total current liabilities		98,572			130,709
Long-term debt		711,909			730,049
Retirement, post-retirement, and post-employment plans		173,017			251,175
Deferred income taxes		7,233			—
Other liabilities and deferred credits		53,066			67,092
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock ($5 cumulative convertible), par value $5 per share:
authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued 22,241,959 and 22,250,130 shares		111,210			111,251
Class B, authorized 600,000 shares; issued 551,881 shares		2,759			2,759
Additional paid-in capital		24,253			21,934
Accumulated other comprehensive loss:
Unrealized loss on derivative contracts		(9,691	)		(17,927	)
Pension and postretirement		(108,012	)		(170,212	)
Retained earnings		171,732			207,422
Total stockholders’ equity		192,251			155,227
Total liabilities and stockholders’ equity	$	1,236,048		$	1,334,252

Notes to Consolidated Financial Statements begin on page 10.

7

Media General, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except shares and per share amounts)

	Class A Shares								Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
			Common Stock
			Class A			Class B
Balance at December 31, 2006	23,556,472		$	117,782		$	2,780		$	55,173		$	(111,248	)	$	872,873		$	937,360
Net income				—			—			—			—			10,687			10,687
Unrealized loss on equity securities (net of deferred tax benefit of $912)				—			—			—			(1,600	)		—			(1,600	)
Reclassification of loss included in net income (net of deferred taxes of $1,314)				—			—			—			2,306			—			2,306
Unrealized loss on derivative contracts (net of deferred tax benefit of $1,874)				—			—			—			(3,288	)		—			(3,288	)
Pension and postretirement (net of deferred taxes of $21,021)				—			—			—			36,553			—			36,553
Comprehensive income																			44,658
Uncertain tax position adoption				—			—			—			—			(4,921	)		(4,921	)
Cash dividends to shareholders ($0.92 per share)				—			—			—			—			(21,156	)		(21,156	)
Exercise of stock options	14,800			74			—			348			—			—			422
Repurchase of common stock	(1,500,000	)		(7,500	)		—			(41,216	)		—			—			(48,716	)
Stock-based compensation				—			—			5,649			—			—			5,649
Income tax benefits relating to stock-based compensation				—			—			110			—			—			110
Other	(15,437	)		(77	)		—			(351	)		—			29			(399	)
Balance at December 30, 2007	22,055,835			110,279			2,780			19,713			(77,277	)		857,512			913,007
Net loss				—			—			—			—			(631,854	)		(631,854	)
Unrealized loss on derivative contracts ($0 tax benefit)				—			—			—			(9,510	)		—			(9,510	)
Pension and postretirement ($0 tax benefit)				—			—			—			(101,352	)		—			(101,352	)
Comprehensive loss																			(742,716	)
Cash dividends to shareholders ($0.81 per share)				—			—			—			—			(18,510	)		(18,510	)
Performance accelerated restricted stock	131,333			657			—			(1,602	)		—			274			(671	)
Stock-based compensation				—			—			5,756			—			—			5,756
Income tax benefits relating to stock-based compensation				—			—			99			—			—			99
Other	62,962			315			(21	)		(2,032	)		—			—			(1,738	)
Balance at December 28, 2008	22,250,130			111,251			2,759			21,934			(188,139	)		207,422			155,227
Net loss				—			—			—			—			(35,765	)		(35,765	)
Unrealized gain on derivative contracts (net of deferred taxes of $134)				—			—			—			8,236			—			8,236
Pension and postretirement (net of deferred taxes of $1,011)				—			—			—			62,200			—			62,200
Comprehensive income																			34,671
Performance accelerated restricted stock	(55,253	)		(276	)		—			(333	)		—			75			(534	)
Stock-based compensation				—			—			2,389			—			—			2,389
Other	47,082			235			—			263			—			—			498
Balance at December 27, 2009	22,241,959		$	111,210		$	2,759		$	24,253		$	(117,703	)	$	171,732		$	192,251

Notes to Consolidated Financial Statements begin on page 10.

8

Media General, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Years Ended
	December 27, 2009			December 28, 2008			December 30, 2007
Cash flows from operating activities:
Net income (loss)	$	(35,765	)	$	(631,854	)	$	10,687
Adjustments to reconcile net income (loss):
Depreciation		46,015			51,591			53,109
Amortization		13,177			20,270			25,341
Deferred income taxes		10,948			(272,620	)		16,289
Uncertain tax positions		(4,771	)		—			—
Impairment of and (income) loss on investments		(701	)		4,419			34,825
Goodwill and other asset impairment		84,220			908,701			—
Provision for doubtful accounts		4,087			7,690			5,929
Insurance proceeds related to repair costs		374			—			19,959
Gain on insurance recovery		(1,915	)		(3,250	)		(17,604	)
Net (gain) loss related to divestiture of discontinued operations		(8,873	)		11,300			2,000
Change in assets and liabilities:
Retirement plan contributions		(15,000	)		(10,000	)		—
Income taxes refundable		(22,587	)		(15,855	)		(17,518	)
Intraperiod tax allocation		(1,145	)		—			—
Company owned life insurance (cash surrender value less policy loans)		(1,216	)		19,137			(1,110	)
Accounts receivable and inventory		(669	)		20,710			(3,721	)
Accounts payable, accrued expenses and other liabilities		(28,985	)		(14,007	)		(6,636	)
Other, net		(3,416	)		2,526			9,279
Net cash provided by operating activities		33,778			98,758			130,829
Cash flows from investing activities:
Capital expenditures		(18,453	)		(31,517	)		(78,142	)
Purchases of businesses		—			(23,804	)		(2,525	)
Proceeds from sales of discontinued operations and investments		17,625			138,302			—
Insurance proceeds related to machinery and equipment		3,120			—			27,841
Distribution from unconsolidated affiliate		—			—			5,000
Collection (funding) of note receivable		5,000			(5,000	)		—
Other, net		2,991			5,882			8,245
Net cash provided (used) by investing activities		10,283			83,863			(39,581	)
Cash flows from financing activities:
Increase in debt		215,700			330,000			570,000
Repayment of debt		(233,840	)		(497,523	)		(588,823	)
Stock repurchase		—			—			(48,716	)
Debt issuance costs		—			(4,182	)		(1,010	)
Cash dividends paid		—			(18,510	)		(21,156	)
Other, net		169			522			743
Net cash used by financing activities		(17,971	)		(189,693	)		(88,962	)
Net increase (decrease) in cash and cash equivalents		26,090			(7,072	)		2,286
Cash and cash equivalents at beginning of year		7,142			14,214			11,928
Cash and cash equivalents at end of year	$	33,232		$	7,142		$	14,214

Notes to Consolidated Financial Statements begin on page 10.

9

Media General, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Fiscal year

The Company’s fiscal year ends on the last Sunday in December. Results for 2009, 2008 and 2007 are for the 52-week periods ended December 27, 2009, December 28, 2008 and December 30, 2007, respectively. The Company has evaluated events occurring subsequent to December 27, 2009 through January 28, 2010 for recognition and/or disclosure in these consolidated financial statements.

Principles of consolidation

The accompanying financial statements include the accounts of Media General, Inc., subsidiaries more than 50% owned and certain variable interest entities, from time to time, for which Media General, Inc. is the primary beneficiary (collectively, the Company). All significant intercompany balances and transactions have been eliminated. The equity method of accounting is used for investments in companies in which the Company has significant influence; generally, this represents investments comprising approximately 20 to 50 percent of the voting stock of companies and certain partnership interests.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company re-evaluates its estimates on an ongoing basis. Actual results could differ from those estimates.

Presentation

Certain prior-year financial information has been reclassified to conform with the current year’s presentation.

Revenue recognition

The Company’s principal sources of revenue are the sale of advertising in newspapers, the sale of newspapers to individual subscribers and distributors, and the sale of airtime on television stations. The Company also derives revenues from cable and satellite retransmissions of its broadcast programs, as well as from the sale of broadcast equipment and studio design services. In addition, the Company sells advertising on its newspaper and television Web sites and portals, and derives revenues from other online activities, including an online advergaming development firm and an online shopping portal. Advertising revenue is recognized when advertisements are published, aired or displayed, or when related advertising services are rendered. Newspaper advertising contracts, which generally have a term of one year or less, may provide rebates or discounts based upon the volume of advertising purchased during the terms of the contracts. Estimated rebates and discounts are recorded as a reduction of revenue in the period the advertisement is displayed. This requires the Company to make certain estimates regarding future advertising volumes. Estimates are based on various factors including historical experience and advertising sales trends. These estimates are revised as necessary based on actual volume realized. Subscription revenue is recognized on a pro-rata basis over the term of the subscription. Amounts received from customers in advance are deferred until earned. Revenues from fixed price contracts (such as studio design services or advergaming development) are recognized under the percentage of completion method, measured by actual cost incurred to date compared to estimated total costs of each contract. Retransmission revenues from cable and satellite are recognized based on average monthly subscriber counts and contractual rates. Commission revenues from the online shopping portal are recognized upon third-party notification of consumer purchase.

Cash and cash equivalents

Cash in excess of current operating needs is invested in various short-term instruments carried at cost that approximates fair value. Those short-term investments having an original maturity of three months or less are classified in the balance sheet as cash equivalents.

Derivatives

Derivatives are recognized as either assets or liabilities on the balance sheet at fair value. If a derivative is a hedge, a change in its fair value is either offset against the change in the fair value of the hedged item through earnings,

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or recognized in Other Comprehensive Income (OCI) until the hedged item is recognized in earnings. Any difference between the fair value of the hedge and the item being hedged, known as the ineffective portion, is immediately recognized in earnings in the line item “Other, net” during the period of change. For derivative instruments that are designated as cash flow hedges, the effective portion of the change in value of the derivative instrument is reported as a component of the Company’s OCI and is reclassified into earnings (interest expense for interest rate swaps and newsprint expense for newsprint swaps) in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the Company’s current earnings during the period of change. Derivative instruments are carried at fair value on the Consolidated Balance Sheets in the applicable line item “Other assets” or “Other liabilities and deferred credits.”

Accounts receivable and concentrations of credit risk

Media General is a diversified communications company which sells products and services to a wide variety of customers located principally in the southeastern United States. The Company’s trade receivables result from the sale of advertising and content within its operating segments. The Company routinely assesses the financial strength of significant customers, and this assessment, combined with the large number and geographic diversity of its customer base, limits its concentration of risk with respect to trade receivables. The Company maintains an allowance for doubtful accounts based on both the aging of accounts at period end and specific reserves for certain customers.

Inventories

Inventories consist principally of raw materials (primarily newsprint) and broadcast equipment, and are valued at the lower of cost or market using the specific identification method.

Self-insurance

The Company self-insures for certain employee medical and disability income benefits, workers’ compensation costs, as well as automobile and general liability claims. The Company’s responsibility for workers’ compensation and auto and general liability claims is capped at a certain dollar level (generally $100 thousand to $500 thousand depending on claim type). Insurance liabilities are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims. Estimates for projected settlements and incurred but not reported claims are based on development factors, including historical trends and data, provided by a third party.

Broadcast film rights

Broadcast film rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at the lower of cost or estimated net realizable value. Program rights and the corresponding contractual obligations are recorded as other assets (based upon the expected use in succeeding years) and as other liabilities (in accordance with the payment terms of the contract) in the Consolidated Balance Sheets when programs become available for use. Generally, program rights of one year or less are amortized using the straight-line method; program rights of longer duration are amortized using an accelerated method based on the expected useful life of the program.

Property and depreciation

Plant and equipment are depreciated, primarily on a straight-line basis, over the estimated useful lives which are generally 40 years for buildings and range from 3 to 30 years for machinery and equipment. Depreciation deductions are computed by accelerated methods for income tax purposes. Major renovations and improvements and interest cost incurred during the construction period of major additions are capitalized. Expenditures for maintenance, repairs and minor renovations are charged to expense as incurred.

Intangible and other long-lived assets

Intangible assets consist of goodwill (which is the excess of purchase price over the net identifiable assets of businesses acquired), FCC licenses, network affiliations, subscriber lists, other broadcast intangibles, intellectual property, and trademarks. Indefinite-lived intangible assets are not amortized, but finite-lived intangibles are amortized using the straight-line method over periods ranging from one to 25 years (see Note 2). Internal use software is amortized on a straight-line basis over its estimated useful life, not to exceed five to seven years.

When indicators of impairment are present, management evaluates the recoverability of long-lived tangible and finite-lived intangible assets by reviewing current and projected profitability using undiscounted cash flows of such

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assets. Annually, or more frequently if impairment indicators are present, management evaluates the recoverability of indefinite-lived intangibles using estimated discounted cash flows and market factors to determine fair value.

FCC broadcast licenses are granted for maximum terms of eight years and are subject to renewal upon application to the FCC. The terms of several of the Company’s FCC licenses have expired, however the licenses remain in effect until action on the renewal applications has been completed. The Company filed all of its applications for renewal in a timely manner prior to the applicable expiration dates and expects its applications will be approved as the FCC works through its backlog. The Company’s network affiliation agreement intangible assets are due for renewal in a weighted-average period of three years. The Company currently expects that it will renew each network affiliation agreement prior to its expiration date. Costs associated with renewing or extending intangible assets are insignificant and are expensed as incurred.

Income taxes

The Company provides for income taxes using the liability method. The provision for, or benefit from, income taxes includes deferred taxes resulting from temporary differences in income for financial statement and tax purposes. Such temporary differences result primarily from differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income. Valuation allowances are established when it is estimated that it is “more likely than not” that the deferred tax asset will not be realized. The evaluation prescribed includes the consideration of all available evidence regarding historical operating results including the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. Once a valuation allowance is established, it is maintained until a change in factual circumstances gives rise to sufficient income of the appropriate character and timing that will allow a partial or full utilization of the deferred tax asset. Any subsequent change in a valuation allowance due to a change in facts concerning the realizability of the deferred tax asset is reported as an increase or decrease in tax expense in the period in which the event or factual change occurs.

Comprehensive income

The Company’s comprehensive income consists of net income, pension and postretirement related adjustments, unrealized gains and losses on certain investments in equity securities (including reclassification adjustments), and changes in the value of derivative contracts as well as the Company’s share of Other Comprehensive Income from its investments accounted for under the equity method.

Recent accounting pronouncements

Effective with the Company’s 2009 annual financial statements, the Company began providing expanded disclosures related to its postretirement benefit plan assets. In accordance with the FASB’s Accounting Standards Codification (ASC) Topic 715, enhanced disclosures included the following: fair values of each major category of plan assets segregated into appropriate levels as required by ASC Topic 820 (Fair Value Measurement), a description of the types of investment funds used, any concentration of risk in plan assets and additional disclosures regarding investment strategy.

Note 2: Intangible Assets and Impairment

In addition to the annual impairment test, which is performed as of the first day of the fourth quarter, the Company has performed several interim impairment tests during 2008 and 2009 and recorded impairment charges in the second and fourth quarters of 2008 and third quarter of 2009. Due to the continuation of challenging business conditions in the second quarter of 2008 and the market’s perception of the value of media company stocks at that time, the Company performed an interim impairment assessment as of June 29, 2008. Business conditions worsened during the fourth quarter of that year, and the market’s perception of the value of media company stocks deteriorated further resulting in another interim impairment test as of December 28, 2008. As 2009 progressed, it became clear that the anticipated economic recovery would be delayed, leading the Company to perform a second-quarter interim impairment test, with no impairment indicated. Several developments in the third quarter of 2009 had relevance for purposes of impairment testing. First, at the beginning of the quarter the Company changed its structure from one organized by division (media platform) to one organized primarily by geographic market (see Note 6). At the same time, the Company reallocated goodwill in accordance with the new market structure. Second, the market’s perception of

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the value of media stocks rose considerably, which contributed to an increase of approximately $50 million in the estimated fair value of all of the Company’s reporting units in total. Third, there were signs of the economy bottoming out. However, continued lackluster consumer spending in the quarter resulted in further ad revenue erosion, and the Company’s expectation regarding a recovery in ad spending was delayed into 2010. These factors, together with the more granular testing required by accounting standards as a result of the Company’s new reporting structure, resulted in a third-quarter impairment test.

As a result of the testing performed in the third quarter of 2009, the Company recorded non-cash impairment charges related to goodwill totaling approximately $66 million and FCC licenses, network affiliation and other intangibles of approximately $18 million. The pretax charge totaled $84 million and was recorded on the “Goodwill and other asset impairment” line. The associated tax benefit is subject to limitations as discussed more fully in Note 3.

As a result of the testing in 2008, the Company recorded non-cash impairment charges related to goodwill (associated with its publishing operations) of $512 million, FCC licenses of $289 million, network affiliation agreements of $103 million, trade names and other intangibles assets of $2.2 million, and certain investments (whose impairment was other than temporary) and real estate of $5.7 million. The pretax charge totaled $912 million ($615 million after-tax) and was included on the line items “Goodwill and other asset impairment” and “Impairment of and income (loss) on investments” on the Consolidated Statements of Operations.

For impairment tests, the Company compares the carrying value of the reporting unit or asset tested to its estimated fair value. The fair value is determined using the estimated discounted cash flows expected to be generated by the assets along with, where appropriate, market inputs. The determination of fair value requires the use of significant judgment and estimates about assumptions that management believes are appropriate in the circumstances although it is reasonably possible that actual performance will differ from these assumptions. These assumptions include those relating to revenue growth, compensation levels, newsprint prices, discount rates and market trading multiples for broadcast and newspaper assets.

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The Company has recorded pretax cumulative impairment losses related to goodwill approximating $685 million through December 27, 2009. The following table shows the change in the gross carrying amount and the accumulated amortization for intangible assets and goodwill from December 28, 2008 to December 27, 2009, including the current-year impairment write-down:

	December 28, 2008				Change								December 27, 2009
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Acquisitions/ Other			Amortization Expense		Impairment Charge1			Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets (including network affiliation, advertiser, programming and subscriber relationships):
Virginia/Tennessee	$	55,326	$	41,130				$	1,247	$	—		$	55,326	$	42,377
Florida		1,055		1,055					—		—			1,055		1,055
Mid-South		84,048		57,483					4,287		—			84,048		61,770
North Carolina		15,347		9,591					504		(3,416	)		11,931		10,095
Ohio/Rhode Island		9,157		4,506					358		—			9,157		4,864
Advert. Serv. & Other		6,614		2,581					668		—			6,614		3,249
Total	$	171,547	$	116,346				$	7,064	$	(3,416	)	$	168,131	$	123,410
Indefinite-lived intangible assets:
Goodwill2:
Virginia/Tennessee	$	104,925			$	—				$	(8,200	)	$	96,725
Florida		43,123				—					—			43,123
Mid-South		137,775				(26	)				(19,596	)		118,153
North Carolina		43,225				—					(22,329	)		20,896
Ohio/Rhode Island		76,576				—					(15,168	)		61,408
Advert. Serv. & Other		15,846				(126	)				(1,008	)		14,712
Total goodwill		421,470				(152	)				(66,301	)		355,017
FCC licenses
Virginia/Tennessee		26,211				—					(6,211	)		20,000
Mid-South		96,945				—					(3,251	)		93,694
North Carolina		28,733				—					(4,733	)		24,000
Ohio/Rhode Island		36,004				—					—			36,004
Total FCC licenses		187,893				—					(14,195	)		173,698
Other		2,172				—					—			2,172
Total	$	611,535			$	(152	)			$	(80,496	)	$	530,887

¹ Additionally, $308 thousand of certain publishing licenses that were included in Other Assets on the accompanying Consolidated Balance Sheet were written off.

² The beginning balance for goodwill by market was based on a fair-value allocation upon adoption of the new structure at the beginning of the third quarter of 2009.

The fair value measurements determined for purposes of performing the Company’s impairment tests are considered to be Level 3 under the fair value hierarchy because they required significant unobservable inputs to be developed using estimates and assumptions determined by the Company and reflecting those that a market participant would use. Following the Company’s most recent impairment test at the beginning of the fourth quarter, approximately 30% of the Company’s goodwill and 45% of its FCC licenses were measured at fair value.

After considering the 2009 impairment charge, intangibles amortization expense is projected to be approximately $6 million in 2010 and 2011, decreasing to $3 million in 2012, and to $2 million in 2013 and 2014.

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Note 3: Taxes on Income

The Company’s effective tax rate on income (loss) from continuing operations in 2009, 2008, and 2007 was 39%, 32%, and 24%, respectively. A reconciliation of income taxes computed at the federal statutory tax rate to actual income tax expense from continuing operations is as follows:

(In thousands)	2009			2008			2007
Income taxes computed at federal statutory tax rate	$	(25,701	)	$	(319,006	)	$	4,255
Increase (reduction) in income taxes resulting from:
Impairment writedown of non-deductible goodwill		—			32,956			—
State income taxes, net of federal income tax benefit		(3,102	)		(10,687	)		513
Increase in deferred tax valuation allowance		6,529			7,527			—
Intraperiod tax allocation		(1,291	)		—			—
Change in reserve for uncertain tax positions		(4,771	)		—			—
Other		(302	)		1,019			(1,847	)
Income taxes	$	(28,638	)	$	(288,191	)	$	2,921

As of December 28, 2008, the Company established a valuation allowance against its deferred tax assets of $47.6 million. The Company evaluates the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. Due to the 2008 impairment charges, the Company had a cumulative financial reporting loss (when considering the current and two preceding years) and, therefore, under applicable accounting interpretations, could not consider expectations of future income to utilize the deferred tax assets. Other sources of income, such as income available in a carryback period, future reversal of existing temporary differences, or available tax planning strategies were taken into consideration; however, a valuation allowance was deemed necessary. While the Company has continued to make adjustments throughout 2009 to its deferred tax valuation allowance, these same basic considerations regarding the recoverability of deferred tax assets remained essentially in place. At the end of the 2009, the Company’s deferred tax asset valuation allowance stood at $23.9 million. The decrease in the valuation allowance of $23.7 million was due primarily to a decrease in deferred tax assets as a result of the November 2009 change in tax law that now permits a five-year carryback period for the Company’s 2009 net operating loss (NOL), which resulted in an income tax benefit of approximately $24.6 million.

With the passage of time, the Company will continue to generate additional deferred tax assets and liabilities related to its amortization of acquired intangible assets for tax purposes (e.g., tax amortization is expected to be approximately $76.9 million in 2010). These long-lived intangible assets are not amortized for financial reporting purposes under accounting standards applicable to accounting for goodwill and other intangible assets. Therefore, the tax amortization in future years will give rise to a temporary difference, and a tax liability (approximately $30 million in 2010), which will only reverse at the time of a further impairment or ultimate sale of the underlying intangible assets. Due to the uncertain timing of this reversal, the temporary difference cannot be considered as a source of future taxable income for purposes of determining a valuation allowance; therefore, the tax liability cannot be used to offset the deferred tax asset related to the NOL carryforward for tax purposes that will be generated by the same amortization. In accounting literature parlance, this “naked credit” (a deferred tax liability that cannot be used to offset deferred tax assets) will give rise to the need for additional valuation allowance.

Thus, the Company anticipates recording additional deferred tax valuation allowance of approximately $30 million, $25 million, and $23 million in 2010, 2011, and 2012, respectively. This additional valuation allowance will be recorded as a non-cash charge to income tax expense.

The anticipated additional income tax expense for 2010, 2011, 2012 would be altered by an event supporting reversal of a portion or all of the Company’s valuation allowance. Examples of such an event include:

• Generation of sufficient income to support the realization of the Company’s deferred tax assets

• Additional impairment charges or sales of the underlying intangible assets

• The passage of time coupled with the achievement of positive cumulative financial reporting income (generally interpreted in accounting literature as the current and two preceding years)

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The Company did not record a significant temporary difference in 2009 related to the tax amortization of intangible assets due to the $84 million impairment charge recognized in the third quarter.

Significant components of income taxes from continuing operations are as follows:

(In thousands)	2009			2008			2007
Federal	$	(29,982	)	$	(13,369	)	$	(11,303	)
State		(4,833	)		(2,204	)		(2,065	)
Current		(34,815	)		(15,573	)		(13,368	)
Federal		4,358			(265,911	)		13,432
State		61			(14,234	)		2,857
Deferred		4,419			(280,145	)		16,289
Valuation allowance		6,529			7,527			—
Change in reserve for uncertain tax positions		(4,771	)		—			—
Income taxes	$	(28,638	)	$	(288,191	)	$	2,921

Temporary differences, which gave rise to significant components of the Company’s deferred tax liabilities and assets at December 27, 2009, and December 28, 2008, are as follows:

(In thousands)	2009			2008
Deferred tax liabilities:
Difference between book and tax bases of intangible assets	$	2,986		$	7,630
Tax over book depreciation		69,666			71,526
Other		674			626
Total deferred tax liabilities		73,326			79,782
Deferred tax assets:
Employee benefits		(29,952	)		(36,688	)
Net operating losses		(7,562	)		(2,107	)
Other comprehensive income items		(58,371	)		(84,355	)
Other		(962	)		(4,270	)
Total deferred tax assets		(96,847	)		(127,420	)
Net deferred tax assets		(23,521	)		(47,638	)
Valuation allowance*		23,891			47,638
Deferred tax assets included in other current assets		6,863			—
Deferred tax liabilities	$	7,233		$	—

* The valuation allowance allocated to current assets is $2.2 million.

The Company paid income taxes of $.1 million, $1.6 million and $6.9 million, respectively, net of refunds in 2009, 2008 and 2007.

The Company adopted an accounting standard related to the uncertainty in income taxes on January 1, 2007 and recognized a net increase of approximately $4.9 million in the liability for uncertain tax positions, which was accounted for as a reduction of retained earnings, as of January 1, 2007. A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows:

(In thousands)
Balance at December 28, 2008	$	14,971
Additions for tax positions for prior years		665
Reductions for tax positions for prior years		(7,490	)
Balance at December 27, 2009	$	8,146

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The entire balance of the liability for uncertain tax positions would impact the effective rate (net of related asset for uncertain tax positions) if underlying tax positions were sustained or favorably settled. The Company recognizes interest and penalties accrued related to uncertain tax positions in the provision for income taxes. As of December 27, 2009, the liability for uncertain tax positions included approximately $3.2 million of estimated interest and penalties.

For federal tax purposes, the Company’s tax returns have been audited or closed by statute through 2005 and remain subject to audit for years 2006 and beyond. The Company has various state income tax examinations ongoing and at varying stages of completion, but generally its state income tax returns have been audited or closed to audit through 2005.

Note 4: Acquisitions, Dispositions and Discontinued Operations

In 2009, the Company sold a small magazine and its related website located in the Virginia/Tennessee Market. It also completed the sale of WCWJ in Jacksonville, Florida, which was the last of five television station divestitures under plans initiated in December 2007. The 2009 divestitures, along with certain post-closing adjustments related to the 2008 sale of the first four television stations, resulted in an after-tax gain of $8.9 million in 2009. In 2008, the Company completed the sale of the above-mentioned TV stations that were classified as held for sale in three transactions: WTVQ in Lexington, Kentucky; WMBB in Panama City, Florida and KALB/NALB in Alexandria, Louisiana; and WNEG in Toccoa, Georgia. The Company recognized gross proceeds of $78 million, including working capital adjustments which have all been settled, and an after-tax loss of $11.3 million in 2008 and $2 million in 2007 related to these divestitures. With the completion of the divestitures of all five stations, the Company generated proceeds of approximately $95 million. Depreciation and amortization of the assets for the five stations sold ceased during the first quarter of 2008.

The gains and losses related to these sales are shown on the face of the Consolidated Statements of Operations on the line “Net gain (loss) related to divestiture of discontinued operations (net of income taxes).” The results of these stations and the magazine, and their associated web sites, have been presented as discontinued operations in the accompanying Balance Sheets and the Statements of Operations for all periods presented. Income from discontinued operations in the accompanying Consolidated Statements of Operations for the years ended December 27, 2009, December 28, 2008, and December 30, 2007 included:

(In thousands)	2009		2008		2007
Revenues	$	4,084	$	24,597	$	41,708
Costs and expenses		3,927		20,169		36,049
Income before income taxes		157		4,428		5,659
Income taxes		2		1,727		2,207
Income from discontinued operations	$	155	$	2,701	$	3,452

In 2008, the Company made additions to its Advertising Services operations including: DealTaker.com, an online social shopping portal that provides coupons and bargains to its users, and NetInformer, a leading provider of mobile advertising and marketing services. Additionally, the Company purchased a small group of weekly newspapers in South Carolina and Richmond.com, a local news and entertainment portal.

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Note 5: Long-Term Debt and Other Financial Instruments

Long-term debt at December 27, 2009, and December 28, 2008, was as follows:

(In thousands)	2009		2008
Revolving credit facility	$	426,037	$	425,000
Bank term loan facility		285,844		300,000
Bank lines		—		5,000
Capitalized lease		28		49
Long-term debt	$	711,909	$	730,049

The Company has a revolving credit facility as well as a variable bank term loan agreement (together the “Facilities”) both of which mature on June 30, 2011. The Company amended its revolving credit facility and its variable bank term loan agreement in the fourth quarter of 2008. The Company’s debt covenants require the maintenance of an interest coverage ratio and a leverage ratio, as defined. Pursuant to the 2008 amendment, the maximum leverage ratios increased for the fourth quarter of 2008 and the first quarter of 2009; they subsequently reduced slightly for the first three quarters of 2009 and will also be reduced for the first three quarter of 2010 and will remain at a constant level thereafter. These covenants, which involve debt levels, interest expense, and a rolling four-quarter calculation of EBITDA (a measure of cash earnings as defined in the revolving credit agreement), affected the Company’s maximum borrowing capacity allowed by the Facilities (which was approximately $861 million at December 27, 2009). Because the leverage ratio exceeded certain pre-established levels in 2009, the Company was and remains subject to restrictions on dividends, capital spending, indebtedness, capital leases, and investments under the Facilities. The Company pledged its cash, assets, and the capital stock of its subsidiaries as collateral. Interest rates under the Facilities are based on the London Interbank Offered Rate (LIBOR) plus a margin ranging from .3% to 3.5% (2.75% at December 27, 2009), determined by the Company’s leverage ratio. The Company pays fees (.5% at December 27, 2009) on the entire commitment of the facility at a rate also based on its leverage ratio. As of December 27, 2009, the Company was in compliance with all covenants and expects that the covenants will continue to be met.

Long-term debt maturities during the five years subsequent to December 27, 2009, aggregated $711.9 million and are due in 2011.

In the third quarter of 2006, the Company entered into several interest rate swaps as part of an overall strategy to manage interest cost and risk associated with variable interest rates, primarily short-term changes in LIBOR. These interest rate swaps were designated as cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million matured in the third quarter of 2009, and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s Facilities. These swaps effectively convert a portion of the Company’s variable rate bank debt to fixed rate debt with a weighted average interest rate approximating 8.4% at December 27, 2009. The following table includes information about the Company’s derivative instruments as of December 27, 2009.

(In thousands)
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Amount of Pretax Derivative Gain Recognized in 2009 OCI
Interest rate swaps	Other liabilities and deferred credits	$	14,353	$	8,370

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The table that follows includes information about the carrying values and estimated fair values of the Company’s financial instruments at December 27, 2009, and December 28, 2008:

	2009				2008
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Investments
Trading	$	303	$	303	$	243	$	243
Liabilities:
Long-term debt:
Revolving credit facility		426,037		413,771		425,000		425,000
Bank term loan facility		285,844		277,614		300,000		300,000
Bank lines		—		—		5,000		5,000
Interest rate swap agreements		14,353		14,353		22,723		22,723

Trading securities held by the Supplemental 401(k) plan are carried at fair value and are determined by reference to quoted market prices. The fair value of the long-term debt in the chart above was estimated using discounted cash flow analyses and an estimate of the Company’s bank borrowing rate (by reference to publicly traded debt rates as of December 27, 2009) for similar types of borrowings. The interest rate swaps are carried at fair value based on the present value of the estimated cash flows the Company would have received or paid to terminate the swaps; the Company applied a discount rate that is predicated on quoted LIBOR prices and current market spreads for unsecured borrowings. Under the fair value hierarchy, the Company’s trading securities fall under Level 1 (quoted prices in active markets), and its interest rate swaps fall under Level 2 (other observable inputs).

Note 6: Business Segments

The Company is a diversified communications company located primarily in the southeastern United States. Effective at the beginning of the third quarter of 2009, the Company changed its management structure, shifting from its three-division structure (Publishing, Broadcast, and Interactive Media) to five geographic segments (Virginia/Tennessee, Florida, Mid-South, North Carolina, Ohio/Rhode Island) along with a sixth segment that includes interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-first strategy, to speed decision-making, and to create and serve new market opportunities. The Company has reclassified the corresponding items of segment information for prior years to conform with its current structure.

Revenues for the geographic markets include revenues from 18 network-affiliated television stations, three metropolitan newspapers, and 20 community newspapers, all of which have associated Web sites. Additionally, more than 200 specialty publications that include weekly newspapers and niche publications and the Web sites that are associated with many of these specialty publications are included in revenues for the geographic markets. Revenues for the sixth segment, Advertising Services & Other, are generated by three interactive advertising services companies and certain other operations including a broadcast equipment and studio design company.

Management measures segment performance based on profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of acquired intangibles is not allocated to individual segments. Intercompany sales are primarily accounted for as if the sales were at current market prices and are eliminated in the consolidated financial statements. Certain promotion in the Company’s newspapers and television stations on behalf of its online shopping portal are recognized based on incremental cost. The Company’s reportable segments are managed separately, largely based on geographic market considerations and a desire to provide services to customers regardless of the media platform or any difference in the method of delivery. In certain instances, operations have been aggregated based on similar economic characteristics. Goodwill balances of $421.5 and $917.5 million for 2008 and 2007, respectively, were included in corporate assets as they were not allocated by market until the adoption of the new structure at the beginning of the third quarter in 2009.

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Information by segment is as follows:

(In thousands)	Assets		Capital Expenditures		Revenues			Depreciation and Amortization			Operating Profit (Loss)
2009
Virginia/Tennessee	$	324,528	$	4,813	$	199,290		$	(13,807	)	$	39,644
Florida		152,264		930		158,232			(8,111	)		4,262
Mid-South		387,361		4,677		145,621			(13,426	)		21,201
North Carolina		110,031		2,520		78,762			(6,801	)		4,719
Ohio/Rhode Island		139,479		1,527		50,613			(3,371	)		10,514
Advertising Services and Other		41,618		113		26,683			(884	)		4,579
Eliminations		—		—		(1,589	)		2			(46	)
												84,873
Unallocated amounts:
Acquisition intangibles amortization		—		—					(7,064	)		(7,064	)
Corporate		80,767		3,873					(5,716	)		(27,067	)
	$	1,236,048	$	18,453	$	657,612		$	(59,178	)
Interest expense												(41,978	)
Impairment of and income (loss) on investments												701
Gain on insurance recovery												1,915
Goodwill and other asset impairment												(84,220	)
Other												(591	)
Consolidated loss from continuing operations before income taxes											$	(73,431	)
2008
Virginia/Tennessee	$	240,035	$	10,375	$	232,465		$	(15,244	)	$	40,609
Florida		110,805		3,641		201,291			(9,905	)		(1,467	)
Mid-South		277,396		6,442		171,531			(14,836	)		24,967
North Carolina		99,989		5,009		105,372			(7,371	)		11,642
Ohio/Rhode Island		75,731		623		62,921			(3,869	)		13,949
Advertising Services and Other		29,458		220		26,647			(796	)		1,495
Eliminations		—		—		(2,852	)		10			(1,113	)
												90,082
Unallocated amounts:
Acquisition intangibles amortization		—		—					(13,670	)		(13,670	)
Corporate		488,436		4,698					(5,783	)		(38,504	)
Discontinued operations		12,402		509					—
	$	1,334,252	$	31,517	$	797,375		$	(71,464	)
Interest expense												(43,449	)
Impairment of and income (loss) on investments												(4,419	)
Gain on insurance recovery												3,250
Goodwill and other asset impairment												(908,701	)
Other												3,965
Consolidated loss from continuing operations before income taxes											$	(911,446	)

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(In thousands)	Assets		Capital Expenditures		Revenues			Depreciation and Amortization			Operating Profit (Loss)
2007
Virginia/Tennessee	$	246,306	$	25,196	$	265,879		$	(13,043	)	$	64,683
Florida		102,195		8,865		253,442			(9,381	)		30,299
Mid-South		503,475		18,630		180,236			(15,070	)		30,252
North Carolina		179,589		5,829		110,308			(6,574	)		14,204
Ohio/Rhode Island		182,665		5,336		60,578			(3,799	)		10,294
Advertising Services and Other		29,469		795		34,486			(551	)		(840	)
Eliminations		—		—		(8,636	)		31			(1,755	)
												147,137
Unallocated amounts:
Acquisition intangibles amortization		—		—					(17,003	)		(17,003	)
Corporate		1,120,012		11,460					(7,608	)		(39,061	)
Discontinued operations		107,355		2,031					—
	$	2,471,066	$	78,142	$	896,293		$	(72,998	)
Interest expense												(59,577	)
Impairment of and income (loss) on investments												(34,825	)
Gain on insurance recovery												17,604
Other												(2,119	)
Consolidated income from continuing operations before income taxes											$	12,156

Note 7: Common Stock and Stock Options

Holders of the Class A common stock are entitled to elect 30% of the Board of Directors and, with the holders of Class B common stock, are also entitled to vote on the reservation of shares for stock awards and on certain specified types of major corporate reorganizations or acquisitions. Class B common stock can be converted into Class A common stock on a share-for-share basis at the option of the holder. When a dividend is paid, both classes of common stock receive the same amount per share.

Under the Company’s Long-Term Incentive Plan (LTIP), the Company has historically granted stock-based awards to key employees in the form of nonqualified stock options (Non-Qualified Stock Option Plan) and non-vested shares (Performance Accelerated Restricted Stock Plan (PARS)). At the Company’s 2006 Annual Meeting, amendments, including one allowing for additional shares to be made available for future awards, were not approved. Consequently, the Company did not grant additional stock options or PARS in 2007. The Company resumed this practice in 2008 after amendments to the LTIP were approved at the 2007 Annual Stockholder Meeting. In the first quarter of 2007, in order to maintain long-term compensation objectives for key employees, the Board adopted the Stock Appreciation Rights (SARs) Plan and approved grants of individual awards thereunder on January 31, 2007.

The LTIP is administered by the Compensation Committee and permits the grant of share options and shares to its employees. At December 27, 2009, a combined 1,308,503 shares remained available for grants of PARS (up to 354,944 shares) and stock options under the LTIP. Grant prices of stock options are equal to the fair market value of the underlying stock on the date of grant. Unless changed by the Compensation Committee, options are exercisable during the continued employment of the optionee but not for a period greater than ten years and not for a period greater than one year after termination of employment; they generally become exercisable at the rate of one-third each year from the date of grant. For awards granted prior to 2006, the optionee may exercise any option in full in the event of death or disability or upon retirement after at least ten years of service with the Company and after attaining age 55. For awards granted in 2006 and thereafter, the optionee must be 63 years of age, with ten years of service, and must be an employee on December 31 of the year of grant in order to be eligible to exercise an award upon retirement. The Company has options for approximately 53,000 shares outstanding under former plans with slightly different exercise terms.

The Company valued stock options granted in 2009 and 2008 using a binomial lattice valuation method. The volatility factor was estimated based on the Company’s historical volatility over the contractual term of the options.

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The Company also used historical data to derive the option’s expected life. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the date of grant. The dividend yield was predicated on the most current annualized dividend payment and the average stock price over the year prior to the grant date. The key assumptions used to value stock options granted in 2009 and 2008 and the resulting grant date fair values are summarized below:

	2009			2008
Risk-free interest rate		2.30	%		3.31	%
Dividend yield		2.00	%		2.90	%
Volatility factor		51.10	%		29.00	%
Expected life (years)		6.60			6.50
Exercise price	$	2.16		$	20.30
Grant date fair value	$	0.89		$	04.88

The following is a summary of option activity for the year ended December 27, 2009:

(In thousands, except per share amounts)	Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)*	Aggregate Intrinsic Value
Outstanding - beginning of year	2,223		$	45.88
Granted	584			2.16
Forfeited or expired	(446	)		46.18
Outstanding - end of year	2,361		$	35.01	6.3	$	3,194
Outstanding - end of year less estimated forfeitures	2,309		$	35.63	6.2	$	2,976
Exercisable - end of year	1,488		$	50.19	4.8	$	10

* Excludes 400 options which are exercisable during the lifetime of the optionee and 52,900 options which are exercisable during the continued employment of the optionee and for a three-year period thereafter.

The Company recognized non-cash compensation expense related to stock options of approximately $.9 million ($.6 million after-tax), $3.3 million ($2.1 million after-tax), and $3.4 million ($2.2 million after-tax) for 2009, 2008 and 2007, respectively. As of December 27, 2009, there was $.9 million of total unrecognized compensation cost related to stock options expected to be recognized over a weighted-average period of approximately 1.3 years.

The Company granted 512,600 SARs with an exercise price of $40.01 in the first quarter of 2007. Because SARS are settled in cash, the related compensation expense is variable. Due to the decline in the Company’s stock price since the grant date, the cumulative compensation expense related to SARs is not material.

Certain executives are eligible for PARS, which vest over a ten-year period. If certain earnings targets are achieved (as defined in the plan), vesting may accelerate to either a three, five or seven year period. The recipient of PARS must remain employed by the Company during the vesting period. PARS are awarded at the fair value of Class A shares on the date of the grant. All restrictions on PARS granted prior to 2001 have been released. The following is a summary of PARS activity for the year ended December 27, 2009:

(In thousands, except per share amounts)	Shares		Weighted- Average Grant Date Fair Value
Nonvested balance - beginning of year	508		$	40.42
Restrictions released	(58	)		49.48
Forfeited	(35	)		35.94
Nonvested balance - end of year	415		$	39.52

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As of the end of 2009, there was $6.8 million of total unrecognized compensation cost related to PARS under the LTIP; that cost is expected to be recognized over a weighted-average period of approximately 6 years. The amount recorded as expense in 2009, 2008 and 2007, was $1.4 million ($.9 million after-tax), $2 million ($1.3 million after-tax), and $1.8 million ($1.5 million after-tax), respectively. During 2009, 58,414 PARS with a fair value of $.1 million had restrictions released upon vesting of the 1999 grant and the retirement of a participant.

The Company has maintained a Supplemental 401(k) Plan (the Plan) for many years which allows certain employees to defer salary and obtain Company match where federal regulations would otherwise limit those amounts. The Company is the primary beneficiary of the variable interest entity that holds the Plan’s investments and consolidates the Plan accordingly. With certain 2008 amendments to the Plan, participants will now receive cash payments upon termination of employment, and participants age 55 and above can now choose from a range of investment options including the Company’s Class A common stock fund. The Plan’s liability to participants ($1.2 million and $.4 million at December 27, 2009 and December 28, 2008, respectively) is adjusted to its fair value each reporting period. The Plan’s investments ($.3 million and $.2 million at December 27, 2009 and December 28, 2008, respectively) other than its Class A common stock fund, are considered trading securities, reported as assets, and are adjusted to fair value each reporting period. Investments in the Class A common stock fund are measured at historical cost and are recorded as a reduction of additional paid-in capital. Consequently, fluctuations in the Company’s stock price will have an impact on the Company’s net income when the liability is adjusted to fair value and the common stock fund remains at historical cost. The Company recognized an expense of $.7 million ($.4 million after-tax) and a benefit of $1.7 million ($1.1 million after-tax) in 2009 and 2008, respectively, under the Plan due to the fluctuations in the Company’s stock price. The Company suspended the match on the Plan effective April 1, 2009.

Each member of the Board of Directors that is neither an employee nor a former employee of the Company (an Outside Director) participates in the Directors’ Deferred Compensation Plan. The plan provides that each Outside Director shall receive half of his or her annual compensation for services to the Board in the form of Deferred Stock Units (DSU); each Outside Director additionally may elect to receive the balance of his or her compensation in either cash, DSU, or a split between cash and DSU. Other than dividend credits (when dividends are declared), deferred stock units do not entitle Outside Directors to any rights due to a holder of common stock. DSU account balances may be settled after the Outside Director’s retirement date by a cash lump-sum payment, a single distribution of common stock, or annual installments of either cash or common stock over a period of up to ten years. The Company records expense annually based on the amount of compensation paid to each director as well as recording an adjustment for changes in fair value of DSU. The Company recognized an expense of $2.5 million ($1.6 million after-tax) and benefits of $1 million ($.6 million after-tax), and $.5 million ($.3 million after-tax) in 2009, 2008, and 2007, respectively, under the plan due to the fluctuations in the fair value of DSU.

Because both the Supplemental 401(k) Plan and the Director’s Deferred Compensation Plan were designed to align the interest of participants with those of shareholders, fluctuations in stock price have an effect on the expense recognized by the Company. Each $1 change in the Company’s stock price as of December 27, 2009 would have adjusted the Company’s pretax income by approximately $.4 million.

In the second quarter of 2007, the Company entered into an accelerated share repurchase program with an investment bank. Under this program, the investment bank delivered 1.5 million shares of Class A Common Stock to the Company for approximately $57 million ($38.10 per share). Those shares were immediately retired and accounted for as a reduction of stockholders’ equity. The share repurchase was funded with borrowings under the

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Company’s existing credit agreements. As part of the transaction, the Company entered into a forward contract with the investment bank. The forward contract was settled in the third quarter of 2007 and included a price adjustment based on the volume weighted-average price of the Company’s Class A Common Stock, as defined in the agreement. After this adjustment, the final share repurchase totaled $48.7 million ($32.48 per share).

Note 8: Retirement Plans

The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all employees hired before January 1, 2007, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. The Company also has a retiree medical savings account (established as of the beginning of 2007) which reimburses eligible employees who retire from the Company for certain medical expenses. In addition, the Company has an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992. The previously mentioned plans are collectively referred to as the “Plans.” The measurement date for the Plans is the Company’s fiscal year end.

In the second quarter of 2009, the Company amended certain of its plans so that future retirement benefits under the retirement, ERISA Excess and Executive Supplemental Retirement plans will now be based on final average earnings as of May 31, 2009. Service accruals under the retirement and ERISA Excess plans ceased at the beginning of 2007 and the retirement plan was closed to new participants at that time, but benefits had been allowed to grow based on future compensation. In the third quarter of 2009, the Company further amended the Executive Supplemental Retirement Plan so that service provided after January 31, 2010 will not increase a participant’s benefit. The two plan amendments in 2009 resulted in a net curtailment gain of $2.0 million and adjusted Other Comprehensive Income (OCI) by approximately $37 million pretax due to the remeasurement. As a result of these actions, all three plans are effectively frozen. These changes did not affect the benefits of current retirees.

Benefit Obligations

The following table provides a reconciliation of the changes in the Plans’ benefit obligations for the years ended December 27, 2009, and December 28, 2008:

	Pension Benefits						Other Benefits
(In thousands)	2009			2008			2009			2008
Change in benefit obligation:
Benefit obligation at beginning of year	$	417,555		$	408,293		$	41,552		$	47,748
Service cost		596			944			227			415
Interest cost		24,150			26,125			2,500			3,011
Participant contributions		—			—			1,276			1,454
Plan amendments		(2,023	)		—			—			—
Actuarial (gain) loss		6,197			258			(89	)		(7,008	)
Benefit payments, net of subsidy		(19,600	)		(18,065	)		(5,176	)		(4,068	)
Curtailments		(36,562	)		—			—			—
Benefit obligation at end of year	$	390,313		$	417,555		$	40,290		$	41,552

The accumulated benefit obligation at the end of 2009 and 2008 was $390 million and $368 million, respectively. The Company’s policy is to fund benefits under the supplemental executive retirement, excess, and all postretirement benefits plans as claims and premiums are paid. As of December 27, 2009, and December 28, 2008, the benefit obligation related to the supplemental executive retirement and ERISA excess plans included in the preceding table was $42.1 million and $48.6 million, respectively. The Plans’ benefit obligations were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2009		2008		2009		2008
Discount rate	6.10	%	6.50	%	6.10	%	6.50	%
Compensation increase rate	—		4.00		4.00		4.00

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A 8% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2009 (9.0% for 2008). This rate was assumed to decrease gradually each year to a rate of 5% in 2016 and remain at that level thereafter. These rates have an effect on the amounts reported for the Company’s postretirement obligations. A one-percentage point increase or decrease in the assumed health care trend rates would change the Company’s accumulated postretirement benefit obligation by approximately $800 thousand, and the Company’s net periodic cost by less than $60 thousand.

Plan Assets

The following table provides a reconciliation of the changes in the fair value of the Plans’ assets for the years ended December 27, 2009, and December 28, 2008:

	Pension Benefits						Other Benefits
(In thousands)	2009			2008			2009			2008
Change in plan assets:
Fair value of plan assets at beginning of year	$	209,049		$	308,408		$	—		$	—
Actual return on plan assets		52,789			(93,105	)		—			—
Employer contributions		16,825			11,811			4,288			2,963
Participant contributions		—			—			1,276			1,454
Benefit payments		(19,600	)		(18,065	)		(5,564	)		(4,417	)
Fair value of plan assets at end of year	$	259,063		$	209,049		$	—		$	—

Under the fair value hierarchy, the Company’s retirement plan assets fall under Level 1 (quoted prices in active markets) and Level II (other observable inputs). The following table provides the fair value by each major category of plan assets at December 27, 2009:

	Level 1		Level 2
U.S. Small/Mid Cap Equity	$	28,772	$	—
U.S. Large Cap Equity		56,234		35,798
International/Global Equity		11,898		37,331
Fixed Income		64,106		23,072

The asset allocation for the Company’s funded retirement plan at the end of 2009 and 2008, and the asset allocation range for 2010, by asset category, are as follows:

	Asset allocation Range	Percentage of Plan Assets at Year End
Asset Category	2010	2009		2008
Equity securities	60% - 75%	66	%	64	%
Fixed income securities	25% - 45%	34	%	36	%
Total		100	%	100	%

As plan sponsor of the funded retirement plan, the Company’s investment strategy is to achieve a rate of return on the plan’s assets that, over the long-term, will fund the plan’s benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plan’s returns is the asset allocation policy. The Company’s investment policy provides absolute ranges (30-50% U.S. large cap equity, 5-17% U.S. small/mid cap equity, 10-30% international/global equity, 25-45% fixed income, and 0-5% cash) for the plan’s long-term asset mix. The Company periodically (at least annually) reviews and rebalances the asset mix if necessary.

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The Company also reviews the plan’s overall asset allocation to determine the proper balance of securities by market capitalization, value or growth, U.S., international or global, or the addition of other asset classes.

An investment policy is updated frequently and distributed to the investment managers. Periodically, the Company evaluates each investment manager to determine if that manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices. The policy contains general guidelines for prohibited transactions such as:

• borrowing of money

• purchase of securities on margin

• short sales

• pledging any securities except loans of securities that are fully-collateralized

• purchase or sale of futures or options for speculation or leverage

Restricted transactions include:

• purchase or sale of commodities, commodity contracts, or illiquid interests in real estate or mortgages

• purchase of illiquid securities such as private placements

• use of various futures and options for hedging or for taking limited risks with a portion of the portfolio’s assets

Funded Status

The following table provides a statement of the funded status of the Plans at December 27, 2009, and December 28, 2008:

	Pension Benefits						Other Benefits
(In thousands)	2009			2008			2009			2008
Amounts recorded in the balance sheet:
Current liabilities	$	(2,119	)	$	(1,735	)	$	(2,957	)	$	(2,652	)
Noncurrent liabilities		(129,131	)		(206,771	)		(37,333	)		(38,900	)
Net amount recognized	$	(131,250	)	$	(208,506	)	$	(40,290	)	$	(41,552	)

The following table provides a reconciliation of the Company’s accumulated other comprehensive income prior to any deferred tax effects:

	Pension Benefits									Other Benefits
(In thousands)	Net actuarial loss			Prior service (credit) cost			Total			Net actuarial gain			Prior service (credit) cost			Total
December 28, 2008	$	209,672		$	(170	)	$	209,502		$	(13,373	)	$	13,548		$	175
Current year change		(62,097	)		170			(61,927	)		389			(1,721	)		(1,332	)
December 27, 2009	$	147,575		$	—		$	147,575		$	(12,984	)	$	11,827		$	(1,157	)

The Company anticipates recognizing $2 million of actuarial loss and $1.7 million of prior service cost, both of which are currently in accumulated other comprehensive income, as a component of its net periodic cost in 2010. The Company currently anticipates making contributions of $15 million to its Retirement Plan in 2010, although only $6 million of contributions would be required.

Expected Cash Flows

The following table includes amounts that are expected to be contributed to the Plans by the Company and amounts the Company expects to receive in Medicare subsidy payments. It reflects benefit payments that are made from the Plans’ assets as well as those made directly from the Company’s assets and includes the participants’ share

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of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company’s best estimate given its current knowledge; actual amounts could be materially different.

(In thousands)	Pension Benefits		Other Benefits		Medicare Subsidy Receipts
Employer Contributions
2010 (expectation) to participant benefits	$	17,119	$	3,046	$	—
Expected Benefit Payments / Receipts
2010		20,101		3,443		(397	)
2011		21,123		3,694		(401	)
2012		22,183		3,751		(405	)
2013		23,365		4,092		(412	)
2014		24,275		4,420		(411	)
2015-2019		133,920		20,230		(2,311	)

Net Periodic Cost

The following table provides the components of net periodic benefit cost for the Plans for fiscal years 2009, 2008, and 2007:

	Pension Benefits									Other Benefits
(In thousands)	2009			2008			2007			2009			2008			2007
Service cost	$	596		$	944		$	1,096		$	227		$	415		$	491
Interest cost		24,150			26,125			24,995			2,500			3,011			2,943
Expected return on plan assets		(23,682	)		(25,898	)		(24,808	)		—			—			—
Amortization of prior-service (credit) cost		(193	)		(53	)		(53	)		1,721			1,721			1,721
Amortization of net loss (gain)		2,625			5,525			8,296			(1,065	)		(377	)		(74	)
Curtailment gain		(2,000	)		—			—			—			—			—
Net periodic benefit cost	$	1,496		$	6,643		$	9,526		$	3,383		$	4,770		$	5,081

The net periodic costs for the Company’s pension and other benefit plans were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2009		2008		2009		2008
Discount rate*	6.64	%	6.50	%	6.50	%	6.50	%
Expected return on plan assets	8.25		8.50		—		—
Compensation increase rate	4.00		4.00		4.00		4.00

* 2009 reflects a blended average discount rate for the initial valuation and two subsequent remeasurements.

The reasonableness of the expected return on the funded retirement plan assets was determined by four separate analyses: 1) review of 10 years of historical data of portfolios with similar asset allocation characteristics done by a third party, 2) analysis of 20 years of historical performance assuming the current portfolio mix and investment manager structure done by a third party, 3) review of the Company’s actual portfolio performance over the past 5 years, and 4) projected portfolio performance for 10 years, assuming the plan’s asset allocation range, done by a third party. Net periodic costs for 2010 will use a discount rate of 5.75%, and an expected rate of return on plan assets of 8.25%.

The Company also sponsors a 401(k) plan covering substantially all employees under which the Company matches 100% of participant pretax contributions up to a maximum of 5% of the employee’s salary. The Company

27

suspended the match effective April 1, 2009. Eligible account balances may be rolled over from a prior employer’s qualified plan. Contributions charged to expense under the plan were $2.4 million, $10.3 million, and $16.4 million (including profit sharing) in 2009, 2008 and 2007, respectively.

Note 9: Investments

In the second quarter of 2008, the Company and its two equal partners completed the sale of SP Newsprint Company (SPNC) to White Birch Paper Company. The sale generated proceeds to the Company of approximately $60 million which were used to reduce debt; associated income taxes approximated $20 million. In the second quarter of 2009, a small adverse adjustment related to working capital was recognized, and in the third quarter of 2009, a small favorable resolution of a retained liability for an income tax dispute at SPNC was recorded.

In the fourth quarter of 2007, the Company recorded a pretax write-down to its investment in SPNC (in addition to the Company’s equity in SPNC’s net loss) of $10.7 million. In 2008, the Company recorded an additional net loss of $1.6 million based on the estimated fair values of certain post-closing items. These losses were included in the Statement of Operations in the line item “Impairment of and income (loss) on investments.”

For the year ended December 30, 2007, SP Newsprint recorded net sales of $572.1 million, a gross loss of $.5 million, and a net loss of $59.9 million; the Company recorded $20 million as its equity share of the net loss of SPNC in 2007.

The Company purchased approximately 48 thousand tons of newsprint from SPNC in 2009 at market prices, which totaled $26 million and approximated 83% of the Company’s newsprint needs. In 2008 and 2007, the Company purchased approximately 55 thousand and 58 thousand tons, respectively, of newsprint from SPNC which approximated 63% and 56% of the Company’s newsprint needs in each of those years and totaled approximately $31 million and $30 million in 2008 and 2007, respectively. The Company is committed to purchase a minimum of approximately 42 thousand tons of newsprint in 2010 and 35 thousand tons per year through 2013.

In 2008, the Company wrote off its entire remaining investment of $1.9 million (which was included as a part of the Company’s pretax impairment charge discussed in Note 2) in a company that produces interactive entertainment including games; the Company recovered $.5 million of its investment in the latter part of 2008. Additionally, the Company carried this investment at fair value and recognized a write-down of $3.6 million in 2007, to reflect the decrease in fair value due to the extended period the stock price of this publicly traded security was below the Company’s carrying value.

28

Note 10: Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share from continuing operations as presented in the Consolidated Statements of Operations:

	2009						2008						2007
(In thousands, except per share amounts)	Loss (Numerator)			Shares (Denominator)	Per Share Amount		Loss (Numerator)			Shares (Denominator)	Per Share Amount		Income (Numerator)			Shares (Denominator)	Per Share Amount
Basic and Diluted EPS
Income (loss) from continuing operations	$	(44,793	)				$	(623,255	)				$	9,235
Distributed earnings attributable to participating securities		—						(504	)					(421	)
Income (loss) from continuing operations available to common stock-holders	$	(44,793	)	22,245	$	(2.01)	$	(623,759	)	22,113	$	(28.21)	$	8,814		22,656	$	0.39

Note 11: Commitments, Contingencies and Other

Broadcast film rights

Over the next 5 years the Company is committed to purchase approximately $25 million of program rights that currently are not available for broadcast, including programs not yet produced. If such programs are not produced, the Company’s commitment would expire without obligation.

Lease obligations

The Company rents certain facilities and equipment under operating leases. These leases extend for varying periods of time ranging from one year to more than twenty years and in many cases contain renewal options. Total rental expense from continuing operations amounted to $6.8 million in 2009, $7.9 million in 2008 and $8 million in 2007. Minimum rental commitments for continuing operations under operating leases with noncancelable terms in excess of one year are as follows: 2010 – $6.4 million; 2011 – $5 million; 2012 – $3.8 million; 2013 – $2.1 million; 2014 – $1.2 million; subsequent years – $7.8 million.

Barter transactions

The Company engages in barter transactions primarily with its television air time and recognized revenues of $9.4 million, $10.3 million and $10.2 million in 2009, 2008 and 2007, respectively.

Interest

In 2009, 2008 and 2007, the Company’s interest expense related to continuing operations was $42 million (net of $.2 million capitalized), $43.4 million (net of $.2 million capitalized) and $59.6 million (net of $1.4 million capitalized), respectively. Interest paid during 2009, 2008 and 2007, net of amounts capitalized, was $36.3 million, $41.3 million and $58.3 million, respectively.

Other current assets

Other current assets included program rights of $15.4 million at December 27, 2009 and December 28, 2008. Additionally, as of December 27, 2009, the Company had $27.8 million of refundable income taxes primarily as a result of the tax law change discussed in Note 3.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

(In thousands)	2009		2008
Payroll and employee benefits	$	23,472	$	29,280
Unearned revenue		19,431		20,837
Program rights		14,677		14,876
Other		14,594		21,298
Total	$	72,174	$	86,291

29

Insurance Recoveries

In the third quarter of 2009, the Company received cash of $3.5 million related to the collapse of a television tower at WSPA in South Carolina following a storm; a portion of that settlement related to clean-up costs of the site. The Company wrote off the net book value of the destroyed tower totaling $1.3 million and recorded a gain of $1.9 million as the insured value of the property exceeded its net book value. In the second quarter of 2007, one of three presses at the Company’s Richmond Times-Dispatch printing facility caught fire. In the fourth quarter of 2007, the Company reached a settlement with the insurance company and received cash of $47.7 million which covered the damaged press as well as the Company’s clean-up and repair costs. A portion of that settlement related to repair and clean-up costs in subsequent years. In 2007, the Company wrote off the net book value of the destroyed equipment totaling $10.2 million and recorded a gain of $17.6 million as the insured value of the property exceeded its net book value. In 2008, the Company identified a more cost-effective method to clean the equipment and remediate the facility than previously anticipated, and consequently, recorded a pretax gain of $3.3 million related to the insurance settlement. Gains in all years were recorded on the Statements of Operations in the line item “Gain on insurance recovery.”

Other

The FCC mandated a reallocation of a portion of the broadcast spectrum to others, including Sprint/Nextel. According to the FCC order, broadcasters must surrender their old equipment to prevent interference within a narrowed broadcasting frequency range. In exchange for the relinquished equipment, Sprint/Nextel provided broadcasters with new digital equipment and reimbursed associated out-of-pocket expenses. The Company recorded gains of $2.6 million in 2009, $5.2 million in 2008, and $.9 million in 2007 in the line item “Selling, general and administrative” on the Consolidated Statements of Operations. The Company’s television stations have completed the replacement of equipment; the Company does not expect further gains under the program.

Severance

In an effort to better align its costs with current revenue opportunities, the Company implemented cost-reduction plans which included voluntary and non-voluntary separation programs. These workforce reductions were in response to a general economic downturn, and particularly, to the deep housing-induced recession in the Florida market. As the Company reduced its workforce, severance costs of $6.6 million, $10.9 million and $3 million were included in operating expenses for 2009, 2008 and 2007, respectively. Accrued severance costs are included in “Accrued expenses and other liabilities” on the Consolidated Balance Sheet. Following is a summary of activity in accrued severance for these work-force reductions:

(In thousands)	Virginia/ Tennessee			Florida			Mid- South			North Carolina			Ohio/ Rhode Island			Advertising Services & Other			Corporate			Consolidated
Accrued severance-12/30/2007	$	9		$	262		$	—		$	—		$	—		$	158		$	—		$	429
Severance expense		1,474			4,939			1,445			712			1,124			301			913			10,908
Severance payments		(613	)		(3,679	)		(359	)		(329	)		(217	)		(238	)		(746	)		(6,181	)
Accrued severance-12/28/2008		870			1,522			1,086			383			907			221			167			5,156
Severance expense		2,623			2,051			389			688			330			334			170			6,585
Severance payments		(3,368	)		(3,573	)		(1,462	)		(1,060	)		(1,237	)		(536	)		(270	)		(11,506	)
Accrued severance-12/27/2009	$	125		$	—		$	13		$	11		$	—		$	19		$	67		$	235

30

EX-99.2

Exhibit 99.2

Part I

Item 1. Business

General

Media General, Inc. is a leading provider of proprietary local news and information over multiple media platforms in leading small- and mid-size communities throughout the Southeastern United States. The Company owns three metro and 20 community newspapers and 18 network-affiliated broadcast television stations. Each newspaper and television station has a full-service associated web site. The Company’s television stations are mostly ranked number one or two in their respective markets, and its newspapers are the number one print brand in virtually all of their respective markets. The Company’s Web sites are fast growing and attract new audience and advertisers every year.

Increasingly the Company’s online content is accessed by mobile devices, and the Company also pushes news and advertising content to mobile devices on demand. In addition, the Company has been adding new interactive advertising services to its product mix. These include interactive games used by advertisers for branding and promotion and also a Top 15 shopping and coupon Web site called DealTaker.com. The Company owns 200 specialty publications targeted at specific communities of interest and most have an associated Web site.

The Company was founded in 1850 as a newspaper company in Richmond, Virginia and later diversified into broadcast television. The Company has grown through acquisition, mostly by purchasing high-quality, privately-owned local media entities in the Southeast. The Company was incorporated in Virginia and became a public company in 1969. The Company has approximately 4,700 full-time equivalent employees.

The Company’s revenues are derived mostly from advertising that is placed with its leading local media platforms that connect its advertisers to the audiences they seek to reach. The Company’s business is seasonally the strongest in the holiday-intensive fourth and second quarters.

In 2009, the Company shifted its management structure from a product-based structure to a market-based structure. This change brought all platforms within a given market under the responsibility of a single leader. By eliminating platform-bias in decision making, the Company is accelerating its digital strategy and increasing its speed to market with customer-focused solutions. This capability is critical at a time when technology and customer preferences are constantly and rapidly changing. The Company has also moved aggressively to transform its sales force to focus on all of its platforms in a market, thereby providing a total media solution to advertisers.

Geographic Operations

The geographic operations as of December 27, 2009 included publishing, television stations and Web sites in contiguous markets as shown on the following map.

Virginia / Tennessee

The Virginia / Tennessee Market consists of eight daily newspapers and two TV stations. For the year ended December 27, 2009, the Virginia / Tennessee region generated approximately $200 million in revenue and $ 40 million in operating profit, or 30% and 47% of total company revenue and operating profit, respectively.

Daily Newspapers:

		Circulation (000s)*
Daily Newspapers	Market	Daily	Sunday
Richmond Times-Dispatch	Richmond, VA	143	184
The News & Advance	Lynchburg, VA	29	36
Bristol Herald Courier	Bristol, VA	30	33
The Daily Progress	Charlottesville, VA	24	27
Danville Register & Bee	Danville, VA	17	19
News & Messenger	Prince William County, VA	16	15
Culpeper Star-Exponent	Culpeper, VA	7	7
The News Virginian	Waynesboro, VA	6	6
		272	327

* All Circulation data represents average net paid circulation for the nine-month period ended September 2009.

Television Operations**:

Market	Market Rank	Station	Affiliation	Station Rank	Audience % Share		Expiration Date of Primary Network Agreement
Roanoke-Lynchburg, VA	67	WSLS	NBC	3	9	%	1/1/2012
Tri-Cities, TN-VA	93	WJHL	CBS	2	14	%	12/31/2014

** Source: The Nielsen Company (November 2009)

Florida

The Florida Market consists of three daily newspapers and one TV station. For the year ended December 27, 2009, the Florida region generated $158 million in revenue and $4 million in operating profit, or 24% and 5% of total company revenue and operating profit, respectively.

Daily Newspapers:

		Circulation (000s)*
Daily Newspapers	Market	Daily	Sunday
The Tampa Tribune	Tampa, FL	167	266
Hernando Today	Brooksville, FL	3	3
Highlands Today	Sebring, FL	3	3
		173	272

Television Operations:

Market	Market Rank	Station	Affiliation	Station Rank	Audience % Share		Expiration Date of Primary Network Agreement
Tampa, FL	14	WFLA	NBC	2 (Tied)	7	%	1/1/2012

Mid-South

The Mid-South Market consists of four daily newspapers and 13 TV stations. For the year ended December 27, 2009, the Mid-South region generated approximately $146 million in revenue and $21 million in operating profit, or 22% and 25% of total company revenue and operating profit, respectively.

Daily Newspapers:

		Circulation (000s)*
Daily Newspapers	Market	Daily	Sunday
Dothan Eagle	Dothan, AL	30	31
Morning News	Florence, SC	26	29
Opelika-Auburn News	Opelika, AL	14	14
Jackson County Floridan	Marianna, FL	5	6
		75	80

Television Operations:

Market	Market Rank	Station	Affiliation	Station Rank	Audience % Share		Expiration Date of Primary Network Agreement
Greenville, SC/Spartanburg, SC	36	WSPA	CBS	1	12	%	6/30/2015
Ashville, NC	36	WYCW	CW	5 (Tied)	2	%	9/17/2011
Birmingham, AL	40	WVTM	NBC	4	5	%	1/1/2012
Mobile, AL/Pensacola, FL	60	WKRG	CBS	1 (Tied)	12	%	4/2/2015
Jackson, MS	90	WJTV	CBS	1	16	%	12/31/2014
Savannah, GA	96	WSAV	NBC	2	9	%	1/1/2012
Charleston, SC	97	WCBD	NBC	2	11	%	1/1/2012
Myrtle Beach/Florence, SC	104	WBTW	CBS	1	18	%	6/30/2015
Augusta, GA	114	WJBF	ABC	2	13	%	6/30/2014
Columbus, GA	128	WRBL	CBS	2	10	%	3/31/2015
Hattiesburg, MS	167	WHLT	CBS	2	6	%	8/31/2015

North Carolina

The North Carolina Market consists of five daily newspapers and two TV stations. For the year ended December 27, 2009, the North Carolina region generated $79 million in revenue and $5 million in operating profit, or 12% and 6% of total company revenue and operating profit, respectively.

Daily Newspapers:

		Circulation (000s)*
Daily Newspapers	Market	Daily	Sunday
The Winston-Salem Journal	Winston-Salem, NC	70	84
Hickory Daily Record	Hickory, NC	18	21
Statesville Record & Landmark	Statesville, NC	12	15
The News Herald	Morganton, NC	9	10
The McDowell News	Marion, NC	4	—
		113	130

Television Operations:

Market	Market Rank	Station	Affiliation	Station Rank	Audience % Share		Expiration Date of Primary Network Agreement
Raleigh-Durham, NC	26	WNCN	NBC	4	4	%	1/1/2012
Greenville, NC	103	WNCT	CBS	1	13	%	12/31/2014

Ohio / Rhode Island

The Ohio / Rhode Island Market consists of two TV stations. For the year ended December 27, 2009, the Ohio / Rhode Island region generated approximately $51 million in revenue and $11 million in operating profit, or 8% and 12% of total company revenue and operating profit, respectively.

Television Operations:

Market	Market Rank	Station	Affiliation	Station Rank	Audience % Share		Expiration Date of Primary Network Agreement
Columbus, OH	34	WCMH	NBC	3	9	%	1/1/2012
Providence/New Bedford, RI	53	WJAR	NBC	1	12	%	1/1/2012

Advertising Services & Other

Advertising Services & Other consists of several growing digital media enterprises. The segment focuses on driving audience and revenue growth by serving customers with innovative products in digital media. In April of 2008, the Company acquired DealTaker.com, a Dallas-based online social shopping and coupon site, which specializes in driving online shoppers to merchant sites in exchange for a sales-based commission. Also in 2008, the Company acquired NetInformer, a California-based mobile marketing and advertising services provider. The Company owns Blockdot, Inc., a Dallas-based advergaming and branded entertainment company, which serves major brands with creative and innovative gaming and messaging solutions. Collectively, these enterprises comprise the Company’s Advertising Services Group. The enterprises within the Advertising Services Group compete for revenue associated with advergame production, shopping and coupons, business and mobile marketing and advertising services. Additionally, the Company’s Professional Communications Systems operating unit derives revenue from the sale and integration of broadcast equipment to third parties including other broadcasters, corporate and governmental enterprises, and colleges and universities. For the year ended December 27, 2009, the Advertising Services & Other segment generated $27 million in revenue and $5 million in operating profit or 4% and 5% of total company revenue and operating profit, respectively.

Broadcast Regulation

Television broadcasters have implemented the transition from analog to digital technology in accordance with a mandated conversion timetable established by the FCC through the Digital Television Transition and Public Safety Act of 2005, as amended in February 2009. Congress amended the Communications Act to establish a deadline subsequently extended to June 12, 2009, for the completion of the transition from analog to digital television broadcasting. As of June 12, 2009, the FCC required all full-power broadcast television stations in the United States to terminate analog service and offer only digital television broadcast service.

All of our stations are broadcasting a digital signal and are operating with final, full post-digital transition facilities. As a result of the digital transition, television broadcast stations can provide mobile digital television. We expect mobile television to increase our viewership and generate additional revenues; however, we are uncertain when this will occur.

On December 18, 2007, the FCC adopted a revised media ownership rule regulating the common ownership of a newspaper and a television station in the same market. The FCC amended the 1975 absolute ban on newspaper/broadcast cross-ownership by adopting waiver standards that would presumptively allow a newspaper to own one television station or one radio station in the 20 largest markets, subject to certain limitations. The amended waiver criteria also presume that all other newspaper/broadcast combinations in all other markets will not be in the public interest, but this presumption can be overcome if the applicant can show, based on criteria prescribed by the FCC, that either media property is “failed” or “failing,” or if the transaction will result in a new source of news in the market. These new cross-ownership regulations would liberalize the ban that remained in place as a result of a stay imposed by the United States Court of Appeals for Third Circuit (the “Third Circuit”) in 2003. The rules adopted in the FCC’s December 18, 2007 order will not become effective until the Third Circuit lifts its present stay. In addition, the FCC announced that it would grant permanent waivers to the existing newspaper/broadcast combinations that were grandfathered in conjunction with adoption of the 1975 rule and certain combinations that involve one newspaper and one broadcast property in the same market. As a result of these actions, the FCC granted or continued permanent waivers to the Company’s combined newspaper-television operations in the following television markets: Tampa, Florida; Tri-Cities (Tennessee and Virginia); Myrtle Beach-Florence, South Carolina; and Columbus, Georgia. Some parties sought judicial review of the FCC’s December 18, 2007 order modifying its waiver standards and granting the Company’s permanent waivers, and that proceeding is now pending before the Third Circuit. Some parties also petitioned the FCC to reconsider its decision to modify the waiver standards and to grant the Company’s permanent waivers, and those petitions remain pending at the FCC. Other parties have asked the full FCC to review a decision of the FCC’s Media Bureau granting renewals of licenses for these stations on the ground that petitions against these applications raising cross ownership concerns had been mooted by the FCC’s decision to grant waivers to these combinations in December 2007. The Company’s newspaper-television partnership in Roanoke/Lynchburg/Danville, Virginia does not require an FCC waiver.

Although the Company is gratified that the FCC has provided permanent waivers to the stations operating in four of its convergence markets, the Company will continue to press for cross-ownership relief in all markets, regardless of size.

Newspaper and Television Affiliated Web sites

The Company operates Web sites affiliated with each of its newspapers and television stations. The Web sites feature content complementary, but increasingly more augmentative in nature, to its newspaper and television offerings. Online revenues from these Web sites are derived primarily from local and national advertising, which includes various classified products as well as display and sponsorship advertisements. The Company has been directing additional resources focused on the online-only products available for customers.

Strategic Partnerships

In December 2006, the Company entered into a strategic partnership with Yahoo!, Inc., as a founding member of a groundbreaking national consortium of more than 30 media companies representing more than 800 newspapers. Since then, the Company transitioned the online career sections of its daily newspapers to the Yahoo! HotJobs platform. The Company also integrated search capability and began distributing targeted local content across Yahoo!’s network of sites. The Company has plans to fully roll-out Yahoo!’s state-of-the-art ad serving and management platform, which will provide Media General advertisers with the ability to reach larger audiences with greater targeting opportunities. The Company also works with Zillow, the premier Internet real estate company, in a fashion similar to the Yahoo! partnership. The Company expects both Internet partnerships to drive audience and profitable revenue growth for years to come. Late in 2008, the Company acquired Richmond.com, a city portal Web site that serves the Richmond, Virginia, things-to-do, local search and entertainment market.

Publishing Raw Materials

The primary raw material we use in our publishing operations is newsprint, which is purchased at market prices from various Canadian and United States sources, including SPNC, in which we sold our one-third equity interest in the second quarter of 2008. Our publishing operations consumed approximately 84 thousand short tons of newsprint in 2008 of which 55 thousand short tons were purchased from SPNC. We purchased 48 thousand short tons of newsprint from SPNC in 2009. Our management believes that sources of supply under existing arrangements, including a commitment to purchase 42 thousand short tons from SPNC continues to be adequate in 2010. We also are committed to purchase a minimum of approximately 35 thousand tons of newsprint from SPNC in both 2011 and 2012, respectively.

Competition

All of the Company’s markets compete for readers’, viewers’, and users’ most precious commodity – time – principally on the basis of content, quality of service and price. From advertising, we derive our revenue. We compete for advertisers in our markets with newspapers published nationally and, sometimes, in nearby cities and towns, with magazines, with radio, broadcast and cable television stations, with the Internet and mobile delivery devices, and with virtually all other promotional media. Many of these sources of competition emanate from outside the geographic boundaries of a particular market and use technologies that are evolving quite rapidly. Our local leading media assets, multimedia strategy and our high performance multimedia sales force are a competitive strength for us in the Southeastern, United States. We believe the longevity of our operations and quality of our products and services have resulted in the Company obtaining consumer confidence in our brands.

EX-99.3

Exhibit 99.3

Item 1A. Risk Factors

The following paragraphs describe several risk factors which are unique to the Company:

The Company is subject to risks of decreased advertising revenues and potentially adverse effects of emerging technologies.

The Company’s revenue is primarily driven by advertiser spending, which is generally lower in the first and third fiscal quarters as consumer activity slows during those periods. Additionally, advertising revenue for broadcast stations tends to be higher in even-numbered years, when both political and Olympics coverage occurs. The level of advertising revenue across all markets is also dependent on a variety of factors including:

• economic conditions in the Southeast, particularly in Tampa Bay, Florida, Richmond, Virginia, and central North Carolina;

• changes in the makeup of the population in the Company’s markets;

• competition from other newspapers, television broadcasters, and Internet sites;

• mergers and bankruptcies of large advertisers;

The Company’s revenues are largely derived from publishing enterprises and television stations, which operate in mature businesses. Today’s “on demand” culture has shifted consumers’ historical newspaper reading and television viewing behaviors, particularly among younger segments of the population. As a result, the Company’s revenues are being challenged by new, often-times Internet-based, competitors who have differing business models. The shift in consumer behaviors has the potential to modify the terms and conditions of future television network affiliation agreements. The ongoing economic and credit crises also exacerbate these trends. In addition, these conditions have caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, lower consumer and business spending, and lower consumer net worth. The resulting pressure on the labor and retail markets and the downturn in consumer confidence have weakened the economic climate in all of the markets in which the Company does business and have had an adverse effect on the Company’s advertising revenues. The Company’s future success depends upon its ability to evolve and adapt its publishing and television station operations to this changing business environment. If the Company is unable to do so, the Company’s revenues and results of operations may be materially adversely affected.

A significant change in the price of newsprint will make operating results more volatile.

Newsprint, the Company’s most significant raw material, is a commodity whose price continually responds to supply/demand imbalances. Historically, its price has been quite volatile. Higher newsprint prices have, in the past, provided a net benefit to the Company by virtue of its one-third investment in SPNC. However, as indicated in Item 1 in Exhibit 99.2 of this Form 8-K, with the sale of SPNC in early 2008, the Company is now solely a newsprint consumer. Consequently, effective with that sale, lower newsprint prices in the future benefit the Company’s operating results and higher newsprint prices in the future adversely affect the Company’s operating results.

Television broadcasters are highly regulated.

The ownership, operation and sale of broadcast television stations, including those licensed to the Company, are subject to the jurisdiction of the FCC, which engages in extensive regulation of the broadcasting industry under authority granted by the Communications Act, including authority to promulgate rules and regulations governing broadcasting. The Communications Act requires broadcasters to serve the public interest. Among other things, the

FCC assigns frequency bands; determines stations’ locations and operating parameters; issues, renews, revokes and modifies station licenses; regulates and limits changes in ownership or control of station licenses; regulates equipment used by stations; regulates station employment practices; regulates certain program content and commercial matters in children’s programming; has the authority to impose penalties for violations of its rules or the Communications Act; and imposes annual fees on stations. Reference should be made to the Communications Act, as well as to the FCC’s rules, public notices and rulings for further information concerning the nature and extent of federal regulation of broadcast television stations.

Congress and the FCC have under consideration, and in the future may adopt, new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation, ownership transferability and profitability of the Company’s television stations and affect the ability of the Company to acquire additional stations. In addition to the matters noted above, these include, for example, spectrum use fees, reallocation of portions of the television broadcast spectrum to other uses or reductions in the amount of spectrum allotted to television stations; restrictions on the ability of same-market television stations to engage in shared services, joint sales, or other cooperative arrangements to reduce operating costs, political advertising rates, potential restrictions on the advertising of certain products (such as alcoholic beverages), program content, increased fines for rule violations and ownership rule changes. Other matters that could potentially affect the Company’s television stations include technological innovations and developments generally affecting competition in the mass communications industry for viewers or advertisers, such as home video recorders and players, satellite radio and television services, cable television systems, newspapers, outdoor advertising, and Internet delivered video programming services.

The FCC adopted a new waiver standard to its newspaper/broadcast ownership rule in December 2007. Nevertheless, uncertainty about media ownership regulations and adverse economic conditions may continue to dampen the acquisition market until the courts have had an opportunity to review the FCC’s recent action and, perhaps, until Congress considers whether it wishes to take any further action in this area.

Additionally, a rejection or reconsideration of license renewals and waivers by the FCC could have a material, adverse effect on the Company’s business. Some parties have requested that the FCC reconsider its decision to grant waivers to the Company’s newspaper television combinations in Columbus, Georgia; Florence – Myrtle Beach, South Carolina; and Tri-Cities (Tennessee and Virginia). Other parties have asked the full FCC to review a decision of the FCC’s Media Bureau granting renewals of licenses for these stations on the ground that petitions against these applications raising cross ownership concerns had been mooted by the FCC’s decision to grant waivers to these combinations in December 2007. Typically, the FCC begins processing renewal applications over the last month of the renewal term. Since the television license renewal cycle commenced in June 2004, however, the FCC has held up almost all television renewal applications filed by affiliates of the major networks pending FCC disposition of a backlog of indecency and other complaints against the networks’ programming. The Company filed all of its applications for renewal in a timely manner prior to the applicable expiration dates and expects its applications will be approved as the FCC works through its backlog. In these circumstances, the Communications act provides that the Company may continue to operate under its broadcast licenses pending final action on its renewal applications.

The Company strongly supports the complete elimination of all newspaper/broadcast cross-ownership restrictions. The FCC’s recent modification of the cross-ownership rule could contribute generally to increased realignments of media entities and the convergence of various types of media. The opportunity for realignments and convergence may benefit the Company but, as other companies also may realign their properties, regulatory changes also could increase competition in the Company’s markets and could adversely affect the Company’s future operating results.

The television broadcast industry recently completed the mandated transition to an advanced digital television (“DTV”) transmission system. DTV transmissions deliver improved video and audio signals including high definition television and have substantial multiplexing and data transmission capabilities. All television broadcasters were required to cease analog broadcasting by June 12, 2009. The conversion of the Company’s stations from the analog broadcast format to the digital broadcast format has been expensive. All of the Company’s television stations are broadcasting a digital signal and are operating with final full post-digital transition facilities.

The Company’s operating results are dependent in part on the success of programming aired by the Company’s television stations, which depends in part upon factors beyond the Company’s control.

The Company’s advertising revenues are dependent in part on the success of the Company’s local, network and syndicated programming. The Company makes significant commitments to acquire rights to television programs under multi-year agreements. The success of such programs is dependent partly upon unpredictable factors such as audience preferences, competing programming, and the availability of other entertainment activities. If a particular program is not popular in relation to its costs, the Company may not be able to sell enough advertising to cover the costs of the program. In some instances, the Company may have to replace or cancel programs before their costs have been fully amortized, resulting in write-offs that increase operating costs.

In addition, FCC rules affect the network-affiliate relationship. Among other things, these rules require network affiliation agreements to (i) prohibit networks from requiring affiliates to clear time previously schedule for other use, (ii) permit an affiliate to preempt network programs it believes are unsuitable for its audience, and (iii) permit affiliates to substitute programs believed to be of greater local or national importance than network programming. In 2008, the FCC resolved a petition to review certain of these rules by clarifying its limitations on the extent to which the networks can exert control over the operations of their affiliates.

Furthermore, the non-renewal or termination of a network affiliation agreement or a change in network affiliations could have a material adverse effect on the Company. In return for network programming, the Company’s stations broadcast network-inserted commercials during that programming and, in some cases, receive cash payments from networks, and in other cases, the Company makes cash payments to certain networks. The Company’s major network affiliation agreements will be renegotiated in the next few years, beginning with the Company’s NBC agreement that expires at the beginning of 2012. At this time, the Company cannot predict the final outcome of future negotiations for those affiliation agreements or for any others and what impact, if any, they may have on the Company’s financial condition and results of operations. Some of the networks with which the Company’s stations are affiliated may require the Company, upon renewal of affiliation agreements, to reduce or eliminate network compensation and, in specific cases, to make cash payments to the network, and to accept other material modifications of existing affiliation agreements. Consequently, not all of the Company’s affiliation agreements may remain in place and each network may decline to continue to provide programming or compensation to the Company’s stations on the same basis as it currently provides. If any of the Company’s stations cease to maintain affiliation agreements with networks for any reason, the Company would need to find alternative sources of programming, which may be less attractive and more expensive.

A change in network affiliation in a given television market may have many short-term and long-term consequences, depending upon the circumstances surrounding the change. Potential short-term consequences include: a) increased marketing costs and increased internal operating costs, which can vary widely depending on the amount of marketing required to educate the audience regarding the change and to maintain the station’s viewing audience; b) short term loss of market share or slower market growth due to advertiser uncertainty about the switch; c) costs of building a new or larger news operation; d) other increases in station programming costs, if necessary; and 3) the cost of equipment needed to conform the station’s programming, equipment and logos to the new network affiliation. Long-term consequences are more difficult to assess, due to the cyclical nature of each of the major networks’ share of the audience that changes from year-to-year with programs coming to the end of their production cycle, and the audience acceptance of new programs in the future and the fact that national network audience ratings are not necessarily indicative of how a network’s programming is accepted in an individual market. The circumstances that may surround a network affiliation switch cause uncertainty as to the actual costs that will be incurred by the Company and, if these costs are significant, the switch could have a material adverse impact on the income the Company derives from the affected station.

In addition, syndication agreements are licenses to broadcast programs that are produced by production companies. Such programming can form a significant component of a station’s programming schedule. Syndication agreements are subject to cancellation, which may affect a station’s programming schedule, and the Company cannot be certain that the Company will continue to be able to acquire rights to syndicated programs once the Company’s current contracts for these programs end.

If the Company is unable to secure or maintain carriage of its television stations’ signals over cable, telco video, and/or direct broadcast satellite systems, the Company’s television stations may not be able to compete effectively.

Pursuant to FCC rules, local television stations may elect every three years to either (1) require cable and/or direct broadcast satellite operators to carry the stations’ signals of (2) enter into retransmission consent negotiations for carriage. Failure to reach timely retransmission consent agreements with the relevant operators may harm the Company’s business. There is no assurance that we will be able to agree on terms acceptable to us, which could lead to reduction in our revenue from cable and satellite retransmission consent agreements. If we are unable to reach retransmission consent agreements with cable companies, satellite providers, and telecommunication providers for the carriage of our stations’ signals, we could lose revenues and audience share. In addition, certain of the networks with which we are affiliated may attempt to require us to share revenue from retransmission consent agreements with them as part of renewing expiring affiliation agreements or pursuant to certain rights contained in existing affiliation agreements.

The Company’s pension and postretirement benefit plans are currently underfunded. A declining stock market and lower interest rates could affect the value of its retirement plan assets and increase the Company’s postretirement obligations.

The Company has a qualified non-contributory defined benefit retirement plan which as of December 27, 2009, was underfunded in the amount equal to $131 million which covers substantially all employees hired before January 1, 2007, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. There is also an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992 and a retirement

medical savings account established as of January 1, 2007. Although the Company has frozen benefits under these plans, two significant elements in determining pension expense are the expected return on plan assets and the discount rate used in projecting obligations. Large declines in the stock market such as those seen in 2008 and lower rates of return could increase the Company’s expense and cause additional cash contributions to the pension plan.

The Company may experience lost advertising, damaged property and increased expense due to natural disasters.

Due to the Company’s concentration in the Southeast United States, the Company’s operations are particularly susceptible to tropical storms, tornados and hurricanes. These storms can cause lost advertising revenue and higher expenses if either the Company’s geographic markets are threatened or are directly in the path of the storms. Additionally, the Company’s property could experience severe damage in the event of a major storm.

Further impairment of the value of the Company’s intangible assets is possible, depending on the value of its stock and future operating results.

Although the Company has written down its intangible assets (including goodwill) by more than $900 million in 2008 and $80 million in 2009, further impairment charges are possible. The Company periodically evaluates its intangible assets to determine if their carrying values are recoverable. Factors which influence the evaluation include the Company’s stock price and its expected future operating results. If the carrying value is no longer deemed to be recoverable, a charge to earnings may be necessary. Although those charges are non-cash in nature and do not affect the Company’s operations, they could affect future reported results of operations and reduce the Company’s stockholders’ equity.

EX-99.4

Exhibit 99.4

Item 2. Properties

The headquarters buildings of Media General, Inc., and the Richmond Times-Dispatch are owned by the Company and are adjacent to one another in Richmond, Virginia. The Company owns a third adjacent building which houses the Advertising Services & Other segment along with certain operations and support management. The Richmond newspaper is printed at a production and distribution facility in Hanover County, Virginia, near Richmond. The Company owns nine community newspapers in Virginia; these newspapers are printed in four production facilities in Virginia and distributed from facilities in or around their respective cities. Two of the Company’s 18 television stations are located in the Virginia/Tennessee market.

The Company’s broadcast television station, WFLA-TV in Tampa, Florida, owns its headquarters and studio building; this building adjoins The Tampa Tribune production plant and office building. This structure also serves as a multimedia news center where efforts are combined and information is shared among The Tampa Tribune, WFLA-TV and TBO.com. The headquarters of the Company’s Brooksville and Sebring, Florida, daily newspapers are located on leased property in their respective cities.

In North Carolina, the Winston-Salem newspaper is headquartered in one facility in downtown Winston-Salem; its newspaper is printed at a nearby production and distribution facility. Six daily newspapers in North Carolina are printed at the two production facilities in North Carolina and distributed from facilities located in or around their respective cities. Additionally, two television stations are located in the North Carolina market.

The remaining four daily newspapers are in the Mid-South market, two are located in Alabama one just across the state line in Florida, and one in South Carolina. The Mid-South market has three production facilities, two in Alabama and one in South Carolina. A majority (11) of the Company’s television stations are located in the Mid-South market of South Carolina, Georgia, Alabama and Mississippi; and the remaining two television stations are located in the Ohio/Rhode Island market.

Substantially all of the television stations are located on land owned by the Company. Eleven stations own their tower and the land, two stations own their tower but lease the land, four stations participate in 50/50 partnerships that own both the tower and the land or own the tower but lease the land, and two stations lease space on towers. The Company owns substantially all of its newspaper production equipment, production buildings and the land where these production facilities reside.

Advertising Services & Other leases space in Dallas, Texas for its advergaming operations, in Plano, Texas for its online social shopping and coupon business, and in San Ramon, California for its mobile business.

The Company considers all of its properties, together with the related machinery and equipment contained therein, to be well maintained, in good operating condition, and adequate for its present needs. The Company has pledged its assets as collateral under the current debt agreements. The Company continually evaluates future needs and from time-to-time will undertake significant projects to replace or upgrade facilities. New facilities in Bristol, Virginia and Opelika, Alabama were put in service in 2006. New facilities in Lynchburg, Virginia and Myrtle Beach, South Carolina were completed in 2008.

EX-99.5

Exhibit 99.5

PART II

Item 6. Selected Financial Data

Certain of the following data were compiled from the consolidated financial statements of Media General, Inc., and should be read in conjunction with those statements (Exhibit 99.7 of this Form 8-K) and Management’s Discussion and Analysis (Exhibit 99.6 of this Form 8-K).

(In thousands, except per share amounts)	2008			2007		2006		2005			2004
Summary of Operations
Operating revenues (a) (c)	$	797,375		$	896,293	$	929,216	$	824,294		$	805,154
Income (loss) from continuing operations (d)	$	(623,255	)	$	9,235	$	62,136	$	77,991		$	73,358
Net income (loss) (b) (c) (d)	$	(631,854	)	$	10,687	$	79,042	$	(243,042	)	$	80,185
Per Share Data: (a) (b) (c) (d)
Income (loss) from continuing operations	$	(28.21	)	$	0.39	$	2.56	$	3.30		$	3.09
Income (loss) from discontinued operations		(0.39	)		0.06		0.72		0.19			0.29
Cumulative effect of change in accounting principle		—			—		—		(13.83	)		—
Net income (loss)	$	(28.60	)	$	0.45	$	3.28	$	(10.34	)	$	3.38
Per Share Data – assuming dilution: (a) (b) (c) (d)
Income (loss) from continuing operations	$	(28.21	)	$	0.39	$	2.56	$	3.28		$	3.07
Income (loss) from discontinued operations		(0.39	)		0.06		0.72		0.19			0.29
Cumulative effect of change in accounting principle		—			—		—		(13.76	)		—
Net income (loss)	$	(28.60	)	$	0.45	$	3.28	$	(10.29	)	$	3.36
Other Financial Data:
Total assets (a) (d)	$	1,334,252		$	2,471,066	$	2,505,228	$	1,975,354		$	2,480,335
Working capital (excluding discontinued assets and liabilities) (a) (c)		32,544			72,099		65,684		61,041			33,086
Capital expenditures		31,517			78,142		93,896		74,424			37,835
Total debt		730,049			897,572		916,320		485,304			533,280
Cash dividends per share		0.81			0.92		0.88		0.84			0.80

^(a) In the third quarter of 2006, the Company acquired WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WJAR in Providence, Rhode Island and WVTM in Birmingham, Alabama.

^(b) Includes the recognition in the first quarter of 2005 of a charge, related to using the direct method to revalue FCC licenses, of $325.5 million (net of a tax benefit of $190.7 million) as the cumulative effect of a change in accounting principle resulting from applying Goodwill accounting.

^(c) In the third quarter of 2009, the Company sold a small magazine in the Virginia/Tennessee market. In 2008, the Company completed the sales of WTVQ in Lexington, Kentucky, WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia. In the first quarter of 2008 and in the fourth quarter of 2007, the Company recorded after-tax losses of $11.3 million and $2 million, respectively, related to these divestitures. Additionally, the Company subsequently sold WCWJ in Jacksonville, Florida, in April 2009 and recorded an after-tax gain of $4.8 million on the divestiture. In the second half of 2006, the Company sold KWCH in Wichita, Kansas (including that station’s three satellites), WIAT in Birmingham, Alabama, WDEF in Chattanooga, Tennessee, and KIMT in Mason City, Iowa. The Company reported a gain of $11 million (net of income taxes of $6.7 million). The results of these stations (including WCWJ), the magazine and their associated websites have been presented as discontinued operations for all periods presented.

^(d) In 2008, the Company recorded non-cash impairment charges totaling $912 million ($615 million after tax) related primarily to its intangible assets.

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EX-99.6

Exhibit 99.6

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion addresses the principal factors affecting the Company’s financial condition and operations during the past three years and should be read in conjunction with the consolidated financial statements and the Five-Year Financial Summary found in Exhibit 99.7 and Exhibit 99.5 of this Form 8-K, respectively.

OVERVIEW

The Company is a diversified communications company located primarily in the southeastern United States. Its mission is to be the leading provider of high-quality news, information and entertainment in the Southeast by continually building its position of strength in strategically located markets. The Company is committed to providing excellent local content in growth markets over multiple platforms, to continually developing new products and services that will stimulate audience and revenue growth, and to nurturing traditional audience viewership while cultivating the expanding role of online media. Effective at the beginning of the third quarter of 2009, the Company changed its management structure, shifting from its three-division structure (Publishing, Broadcast, and Interactive Media) to five geographic segments (Virginia/Tennessee, Florida, Mid-South (South Carolina/Georgia/Alabama/Mississippi), North Carolina, Ohio/Rhode Island) along with a sixth segment that includes interactive advertising services and certain other operations. This was done to more closely connect the Company to its customers and non-customers, to accelerate its Web-First strategy, to speed decision-making, and to create and serve new market opportunities. The Company’s three metro, 20 community newspapers and more than 200 weekly newspapers and other targeted publications, as well as 18 network-affiliated broadcast television stations and all related web sites are managed in the geographic region they serve. The Advertising Services & Other Segment primarily consists of the Company’s three growing interactive advertising services companies and certain other operations including a broadcast equipment and studio design company.

While the signs of a weakening economy were noticeable toward the end of 2006 and more pronounced throughout the following year, 2008 ushered in nearly unprecedented economic turmoil. Most companies, and particularly those in the media industry, were directly impacted by the adverse effects on consumer confidence and consequential lower advertiser spending levels. The Company’s Florida Market (which include The Tampa Tribune, WFLA-TV, and TBO.com) was the first of the Company’s markets to be materially impacted, as a housing-induced recession in Florida which began in late 2006 served as an indicator of what was to follow throughout the country; unfortunately, many of the Company’s other markets are following similar paths. The following chart illustrates the sharp drop in operating profits at the Company’s Florida Market in the later part of 2006 and throughout 2007, culminating with a small operating loss by the close of 2008. Unfavorable market conditions in the Tampa Bay region in 2008 and 2007 were amplified because they followed several years of booming growth in that area. Prior to 2006, the Florida Market contributed meaningfully to the Company’s year-over-year rise in operating profits; however, beginning in late 2006, it was responsible for a sizeable portion of the decline in operating profits.

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Advertising sales comprise the main source of the Company’s revenue. The distribution of advertising revenues in the United States continues to shift among numerous established media, as well as many new entrants, resulting in increased competition. The Company recognizes the impending challenges facing its geographic regions, not only from Internet competition, but also from structural changes in industries that have historically been major purchasers of print advertising, from a floundering economy punctuated by a sharp downturn in Florida’s economy, and from an upcoming odd-numbered year which translates into the absence of Political and Olympic advertising for the television operations. The Company itself can do little to influence the weak economy or change the cyclical nature of odd-numbered years, but it has made strategic plans to capitalize on the expansion of Web-based advertising. While the pace and intensity of a shift away from traditional print advertising remains a concern, the Internet and all of its potential presents tremendous opportunity. Maximizing this potential is a key strategy of all of the Company’s geographic markets.

The Company has created a “Web-First” approach to news reporting which provides an immediate platform for breaking news and positions the digital media in each of its geographies for strong long-term growth. Additionally, the Company continues to focus on cultivating key partnership opportunities with established online presences such as Yahoo!, on creating ways to grow revenues through niche publications (by expanding and building upon the success of its over 200 weekly newspapers and targeted publications), and on facilitating the success of its interactive advertising services companies which represent a valuable and expanding source of revenues.

ACQUISITIONS AND DISPOSITIONS

In 2007, several plans were set in motion which allowed for a substantial reduction in debt in 2008, a renewed focus on the Company’s core business as a pure media company, and a heightened focus on the expanding role of interactive media service companies. In 2008, the

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Company purchased Dealtaker.com, an online social shopping portal that provides coupons and bargains to its users, and NetInformer, a leading provider of mobile advertising and marketing services. Additionally, the Company sold its one-third ownership stake in SP Newsprint Company to White Birch Paper Company. That sale substantially reduced the earnings volatility the Company experienced in recent years due to the highly cyclical nature of newsprint prices. Additionally, the Company sold four TV stations and their associated websites in three transactions in 2008 including WTVQ in Lexington, Kentucky, WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia. The Company also completed the sale of WCWJ in Jacksonville, Florida, in the second quarter of 2009. Primarily as a result of proceeds generated from these divestitures, long-term debt was reduced by more than $165 million in 2008. The sale of WCWJ resulted in a reduction of approximately $16 million in long-term debt in 2009.

In 2006, the Company acquired four NBC owned and operated television stations and disposed of several CBS stations in markets which were not strategically aligned with the Company’s vision. The stations acquired included WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WVTM in Birmingham, Alabama, and WJAR in Providence, Rhode Island. This acquisition expanded the Company’s southeastern footprint to include the key Raleigh-Durham market. The divested stations included KWCH in Wichita, Kansas (including that station’s three satellites), WIAT in Birmingham, Alabama (as agreed upon when granted FCC approval for the purchase of WVTM in Birmingham), WDEF in Chattanooga, Tennessee, and KIMT in Mason City, Iowa.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires that management make various estimates and assumptions that have an impact on the assets, liabilities, revenues, and expenses reported. The Company considers an accounting estimate to be critical if that estimate requires assumptions be made about matters that were uncertain at the time the accounting estimate was made, and if changes in the estimate (which are reasonably likely to occur from period to period) would have a material impact on the Company’s financial condition or results of operations. The Audit Committee of the Board of Directors has reviewed the development, selection and disclosure of these critical accounting estimates. While actual results could differ from accounting estimates, the Company’s most critical accounting estimates and assumptions are in the following areas:

Intangible assets

The Company reviews the carrying values of both goodwill and other identified intangible assets, including FCC licenses, in the fourth quarter each year, or earlier if events indicate impairment may have arisen, utilizing discounted cash flow models and market-based models. The preparation of the discounted cash flow models requires significant management judgment with respect to revenue growth, compensation levels, newsprint prices, discount rates and market trading multiples for broadcast and newspaper assets. The preparation of the market-based models requires the collection of estimated peer company data as to revenues and EBITDA, as well as an assessment of enterprise values by looking at stock prices and debt levels. These key assumptions for both the discounted cash flow and market-based models work in concert with one another. Changes to one variable may necessitate changes to other variables. Challenging business conditions and the market’s perception of the value of media company stocks prompted the Company to perform an interim impairment test as of the end of the second quarter in 2008 that resulted in an impairment charge in that quarter. The Company performed its annual impairment test at the beginning of the fourth quarter of 2008 with no additional impairment

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indicated. However, business conditions worsened during the fourth quarter, and the market’s perception of the value of media company stocks deteriorated further resulting in both another interim impairment test and the recognition of additional impairment as of December 28, 2008.

As 2009 progressed, it became clear that the anticipated economic recovery would be delayed, leading the Company to perform a second-quarter 2009 interim impairment test, with no impairment indicated. Several developments in the third quarter of 2009 had relevance for purposes of impairment testing. First, at the beginning of the quarter the Company changed its structure from one organized by division (media platform) to one organized primarily by geographic market (see Note 6 to the Financial Statements in Exhibit 99.7 of this Form 8-K). At the same time, the Company reallocated goodwill in accordance with the new market structure. Second, the market’s perception of the value of media stocks rose considerably, which contributed to an increase of approximately $50 million in the estimated fair value of all of the Company’s reporting units in total. Third, there were signs of the economy bottoming out. However, continued lackluster consumer spending in the quarter resulted in further ad revenue erosion, and the Company’s expectation regarding a recovery in ad spending was delayed into 2010. These factors, together with the more granular testing required by accounting standards as a result of the Company’s new reporting structure, resulted in the recognition of additional impairment from the third-quarter 2009 impairment test. As a result of the testing performed in the third quarter of 2009, the Company recorded non-cash impairment charges related to goodwill totaling approximately $66 million and FCC licenses, network affiliation and other intangibles of approximately $18 million.

Since the estimated fair values that arise in both the discounted cash flow and market-based models are subject to change based on the Company’s performance and stock prices, peer company performance and stock prices, overall market conditions, and the state of the credit markets, future impairment charges are possible.

Pension plans and postretirement benefits

The determination of the liabilities and cost of the Company’s pension and other postretirement plans requires the use of assumptions. The actuarial assumptions used in the Company’s pension and postretirement reporting are reviewed annually with independent actuaries and compared with external benchmarks, historical trends, and the Company’s own experience to determine that its assumptions are reasonable. The assumptions used in developing the required estimates include the following key factors:

• Discount rates

• Expected return on plan assets

• Salary growth

• Mortality rates

• Health care cost trends

• Retirement rates

• Expected contributions

A one percentage-point change in the expected long-term rate of return on plan assets would have resulted in a change in pension expense for 2008 of approximately $3 million. A one percentage-point change in the discount rate would have raised or lowered by more than $4 million the plans’ 2008 expense and would have changed the plans’ projected obligations by approximately $55 to $65 million as of the end of 2008. Effective for fiscal 2007, the Company redesigned its defined benefit and defined contribution retirement plans and also added certain new employee benefit programs. The changes included: freezing the service accrual in the defined benefit retirement plan for existing employees (while closing this plan to new employees), increasing the maximum

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company match in the 401(k) defined contribution plan to 5% from 4% of an employee’s earnings (the entire match has been suspended effective April 1, 2009), adding a profit sharing feature to the 401(k) plan, and establishing new retiree medical savings accounts. The Company took these steps to reduce the volatility of future pension expense and contributions while continuing to offer competitive retirement benefits to its employees. Subsequent to the close of 2008, the Company took the final steps to fully freeze all benefits under its retirement plans.

Self-insurance liabilities

The Company self-insures for certain medical and disability benefits, workers’ compensation costs, and automobile and general liability claims with specified stop-loss provisions for high-dollar claims. The Company estimates the liabilities for these items (approximately $20 million at December 28, 2008) based on historical experience and advice from actuaries and claim administrators. Actual claims experience as well as changes in health care cost trends could result in the Company’s eventual cost differing from the estimate.

Income taxes

The Company files income tax returns with various state tax jurisdictions in addition to the Internal Revenue Service and is regularly audited by both federal and state tax agencies. From time to time, those audits may result in proposed adjustments. The Company has considered the alternative interpretations that may be assumed by the various tax agencies and does not anticipate any material impact on its earnings as a result of the various audits. The Company adopted Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, in the first quarter of 2007. This interpretation requires that income tax positions recognized in an entity’s tax returns have a more-likely-than-not chance of being sustained prior to recording the related tax benefit in the financial statements. If subsequent information becomes available that changes the more-likely-than-not assessment of either a previously unrecognized or recognized tax benefit, the corresponding tax benefit or expense would be recorded in the period in which the information becomes available.

The Company records income tax expense and liabilities in accordance with SFAS No. 109, Accounting for Income Taxes, under which deferred tax assets and liabilities are recorded for the differing treatments of various items of income and expense for financial reporting versus tax reporting purposes. Under this standard, the Company evaluates the need, if any, for a valuation allowance for deferred tax assets. The Company ordinarily bases its estimate of deferred tax assets and liabilities on current tax laws and rates as well as expected future income. However, the Company was in a net deferred tax asset position at the end of 2008 and, although the Company fully expects to utilize the underlying tax benefits, it could not assume future taxable income due to a cumulative book loss in recent years (the direct result of non-cash intangible asset impairment charges) and therefore, established a valuation allowance.

Due to the requirements of accounting interpretations related to the Company’s amortization of intangible assets for income tax purposes, the Company anticipates recording additional deferred tax valuation allowance of $30 million, $25 million and $23 million in 2010, 2011, and 2012, respectively. This additional valuation allowance will be recorded as a non-cash charge to income tax expense. An explanation of this additional valuation allowance as well as a description of the situation and events that would alter it are described fully in Note 4 to the Company’s 2009 third quarter Form 10-Q. Significant changes in enacted federal and state tax laws or in expected future earnings might impact income tax expense and deferred tax assets and liabilities as well as the valuation allowance.

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Summary

Management believes, given current facts and circumstances, supplemented by the expertise and concurrence of external resources, including actuaries and accountants, that its estimates and assumptions are reasonable and are in accordance with GAAP. Management further believes that the assumptions and estimates actually used in the financial statements, taken as a whole, represent the most appropriate choices from among reasonably possible alternatives and fairly present the financial position, results of operations and cash flows of the Company. Management will continue to discuss key estimates with the Audit Committee of the Board of Directors.

RESULTS OF OPERATIONS

Net income

The Company recorded a net loss of $632 million in 2008, and net income of $11 million and $79 million in 2007 and 2006, respectively. In order to facilitate a meaningful comparison of results for the last three years, several items merit separate consideration. Challenging business conditions and the market’s perception of the value of media company stocks prompted the Company to perform an interim impairment test as of the end of the second quarter in 2008 that resulted in an impairment charge in that quarter. The Company performed its annual impairment test at the beginning of the fourth quarter of 2008 with no additional impairment indicated. However, business conditions worsened during the fourth quarter, and the market’s perception of the value of media company stocks deteriorated further, resulting in an additional impairment at the end of 2008. As a result of this testing, in 2008 the Company recorded aggregate impairment charges related to goodwill of $512 million for publishing operations, FCC licenses of $289 million, network affiliation agreements of $103 million, trade names and other intangible assets related to broadcast operations of $2.2 million, and certain investments and real estate of $5.7 million, resulting in after-tax non-cash impairment charges totaling $615 million. For a more complete discussion regarding these impairment charges, see Note 3 to the Financial Statements in Exhibit 99.7 of this Form 8-K. As indicated earlier, the Company completed the sale of four television stations in 2008 and recorded after-tax losses of $11.3 million in 2008 and $2 million in 2007 related to these divestitures. Additionally, the Company sold several CBS stations in 2006 resulting in an after-tax gain of $11 million. The results of the sold stations (and their associated web sites), WCWJ (sold in the second quarter of 2009) and a small Virginia magazine (sold in the third quarter of 2009) have been reported as discontinued operations for all years presented. See Note 2 in Exhibit 99.7 of this Form 8-K for a detailed discussion of the Company’s acquisitions and divestitures.

The Company also consummated the sale of SP Newsprint Company (SPNC) in the second quarter of 2008 and increased the year-end pre-tax sale-related costs and write-downs it originally recorded in 2007 of approximately $15 million by another $1.6 million in 2008 based on the estimated value of certain post-closing items. In addition to these losses, the Company’s share of SPNC’s underlying operating results was a loss of $16.3 million in 2007 compared to income of $10.5 million in 2006. The decline in 2007 was due to the impact of lower newsprint prices and higher raw material costs in that year. The total after-tax impact of the SP Newsprint operations was an after-tax loss of $1 million and $18.7 million in 2008 and 2007, respectively, and after-tax income of $6.4 million in 2006. See Note 4 in Exhibit 99.7 of this Form 8-K for a more complete discussion of the SPNC sale. The remainder of this discussion focuses only on results from continuing operations.

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In an effort to better align its costs with the current business environment, the Company implemented various cost-reduction plans which included voluntary and non-voluntary separation programs. These workforce reductions were in response to a general economic downturn, and particularly, to the deep housing-induced recession in the Florida market. As the Company reduced its workforce, severance costs of $10.9 million, $3 million, and $1 million were included in operating expenses for 2008, 2007, and 2006, respectively. Accrued severance costs are included in “Accrued expenses and other liabilities” on the Consolidated Balance Sheet. The following summarized the activity in accrued severance for these workforce reductions:

(In thousands)	Virginia/ Tennessee			Florida			Mid- South			North Carolina			Ohio/ Rhode Island			Advertising Services & Other			Corporate			Consolidated
Accrued severance-12/31/2006	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Severance expense		341			1,594			212			156			41			459			154			2,957
Severance payments		(332	)		(1,332	)		(212	)		(156	)		(41	)		(301	)		(154	)		(2,528	)
Accrued severance-12/30/2007		9			262			—			—			—			158			—			429
Severance expense		1,474			4,939			1,445			712			1,124			301			913			10,908
Severance payments		(613	)		(3,679	)		(359	)		(329	)		(217	)		(238	)		(746	)		(6,181	)
Accrued severance-12/28/2008	$	870		$	1,522		$	1,086		$	383		$	907		$	221		$	167		$	5,156

In 2008, there was a $98.9 million (11%) decrease in revenues. Mitigating the significant drop in revenues were cost containment efforts put in place beginning in the Florida market in 2007 and continuing throughout the rest of the geographic markets in 2008. These cost containment efforts resulted in a $60 million, or 7.4%, decrease in operating costs (excluding severance and costs related to consolidation of printing facilities). Partially offsetting the downturn in year-over-year operating results were: a 27% decrease in interest expense in the current year (due to lower interest rates and decreased average debt levels), a $4 million increase in gains on fixed asset sales, a $3.3 million reduction in intangibles amortization expense due primarily to the write down of network affiliation assets resulting from the mid-year impairment charge, and lower costs for performance-based incentives. Additionally, the Company recorded a deferred tax valuation allowance in 2008, $7.5 million of which was recorded in income tax expense (See Note 7 to the Financial Statements in Exhibit 99.7 of this Form 8-K).

In 2007, the Company recorded a $17.6 million pre-tax gain on an insurance settlement related to a fire at the Company’s Richmond Times-Dispatch printing facility that occurred in the second quarter of that year; an additional $3.3 million pre-tax gain was recorded in 2008 as the Company identified a more cost-effective method to clean the equipment and remediate the facility than previously anticipated. Additionally, fiscal 2006 included an extra (53^rd) week, which contributed approximately $18 million in revenues and $2.5 million to net income and, accordingly, influenced virtually all comparisons of 2007 and 2006 results.

In 2007, two factors contributed almost equally to the year-over-year downturn from 2006. First, revenue declined $33 million from the prior year, reflecting substantially reduced political advertising in the odd-numbered year. Second, operating profits fell as all major advertising categories were down from the prior year due in large part to the pronounced

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economic downturn in Florida’s economy. Also impacting the first half of 2007 was higher interest expense as a result of increased debt levels associated with the acquisition of the NBC stations acquired in the third quarter of 2006.

Segment Results

As previously mentioned, the third quarter of 2009 marked the beginning of the Company’s shift from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations; collectively, they contain all of the operations that were formerly part of the Publishing, Broadcast and Interactive Media segments. The geographically-managed segments are: Virginia/Tennessee, Florida, Mid-South, North Carolina, and Ohio/Rhode Island.

Geographic Markets

Revenues

Revenues are grouped in the following classifications within their geographic segments:

(in millions) 2008	Virginia/ Tennessee		Florida		Mid- South		North Carolina		Ohio/ Rhode Island		Total Geographic Markets
Advertising	$	186.6	$	179.4	$	151.7	$	89.4	$	58.3	$	665.4
Subscription/Content/Circulation		38.1		10.5		9.6		11.7		1.1		71.0
Other		7.8		11.4		10.2		4.3		3.5		37.2
2007
Advertising	$	219.3	$	232.9	$	161.7	$	95.1	$	56.6	$	765.6
Subscription/Content/Circulation		37.7		10.1		9.1		10.7		—		67.6
Other		8.9		10.4		9.4		4.5		4.0		37.2
2006
Advertising	$	224.4	$	288.6	$	157.4	$	90.2	$	42.7	$	803.3
Subscription/Content/Circulation		39.8		10.9		8.4		11.1		—		70.2
Other		10.0		8.3		11.6		4.3		1.1		35.3

In general, advertising revenue is derived from four sources: Local, National, Classified and Political. While a tough advertising market plays a significant role in lower Local and National advertising revenues, in 2008 this trend was somewhat mitigated by the 2008 Summer Olympics. In 2008, Local revenues were down due to lower general advertising levels in reaction to the stunted economy; categories which struggled the most over the past three years included the department store, home improvement and home furnishing categories. National revenues fell primarily due to weak spending levels in the automotive, telecommunications and pharmaceutical categories. The 2007 Local and National revenues increased due to the 2006 acquisitions.

Classified advertising suffered the largest portion of the revenue decline as employment, automotive and real estate advertising decreased in virtually all markets, but particularly in the Florida market, where Classified fell 44% in 2008 and 54% in 2007 from the prior year equivalent period. The decline in Classified results would have been more severe had it not been for the Company’s relationship with Yahoo! HotJobs which allowed for higher rates due to the increase in volume brought about by that relationship. Total consolidated Local, National and Classified advertising trends, year over year are as follows:

	Year-to-date Change
	2008 vs 2007		2007 vs 2006
Local	-8.9	%	5.3	%
National	-19.6	%	12.6	%
Classified	-30.3	%	-21.0	%

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Broadcast political advertising time sales are typically elevated in even-numbered years as a result of the national and statewide political races which generate additional advertising dollars. These events, or their absence in a given year, cause a certain cyclicality which is demonstrated in the following graph that shows Political advertising as a percentage of total television time sales.

Revenues in the Virginia/Tennessee Market fell $33.4 million or 12.6% in 2008 compared to 2007 and fell $8.3 million or 3.1% in 2007 compared to 2006. In 2008, decreased Local and Classified advertising of approximately $32 million were the largest contributors to the year-over-year declines driven by the current recession-induced environment. Improved Political advertising and subscription revenue in 2008 were largely offset by decreased National advertising. In 2007, the majority of the decrease in revenue was attributable to reduced Classified and Political advertising.

Revenues in the Florida Market were responsible for over half the total consolidated revenue decline in 2008 and over two-thirds of the revenue decline in 2007 as the market remains in a pronounced recession. The revenue decreases of $52.2 million, or 20.6%, in 2008 compared to 2007 and $54.4 million, or 17.7%, in 2007 compared to 2006 reflected the significantly weakened advertising environment across all sources of advertising dollars. Only Political advertising revenues in 2008 slightly mitigated this trend with a $5.6 million improvement year-over-year due to strong spending associated with the presidential campaigns, U.S. congressional races, and issue spending. A predictable, but nonetheless large ($9.5 million), decline in Political advertising exacerbated the 2007 lower revenue trend.

Revenues in the Mid-South Market fell $8.7 million, or 4.8%, in 2008 compared to 2007 and increased $2.8 million, or 1.6%, in 2007 compared to 2006. With 11 of the Company’s 18

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network-affiliated television stations, the Mid-South Market is significantly influenced by Political advertising. Political advertising improved $6.7 million in 2008 from 2007 with the strong election year offsetting in part the decline in Local and National advertising due to weakness in the automotive advertising category. In 2007, political advertising declined $9.8 million from 2006 which was more than offset by the improved revenue generated from having a full year of operating results for the 2006 acquisitions.

Revenues in the North Carolina Market declined 4.5% in 2008 and increased 4.4% in 2007 from the comparable periods in 2007 and 2006. In 2008, the North Carolina Market’s decrease in Local, National and Classified advertising was partially offset by a $7 million improvement in Political advertising revenues from the segment’s two broadcast stations (similar to the Mid-South Market) and a $1 million increase in subscription/content/circulation revenues reflecting meaningful progress in increasing cable and satellite retransmission revenues. In 2007, the Company saw improved revenues generated from the impact of a full year of the 2006 acquisition of one NBC affiliated station.

Revenues in the Ohio/Rhode Island Market improved $2.3 million or 3.9% in 2008 compared to 2007 and improved $16.8 million or 38.2% in 2007 compared to 2006. The Ohio/Rhode Island Market is comprised of two of the NBC affiliated stations acquired in 2006 and their websites; as such it is the Company’s only geographic market which does not include any newspaper operations and is consequently less influenced by Classified advertising, but more affected by the ebb and flow of Political and Olympic revenues in corresponding odd and even-numbered years. In 2008, Political advertising improved $10.3 million which more than offset the economic-based decreases in Local and National advertising; subscription/content/circulation revenues improved $1.1 million due to increases in retransmission fees. The 2007 improvement in revenue reflects a full year’s results for the acquired stations.

Operating Expenses

The Company has reacted to the challenging advertising environment by reducing costs across all markets while achieving greater efficiencies and implementing aggressive actions to better align expenses with current economic opportunities. This included a workforce reduction across the entire Company which resulted in an approximate 18% decrease in personnel from the end of 2006 to the end of 2008. As discussed previously, the Company’s results included pretax charges of approximately $10.9 million, $3 million and $1 million in 2008, 2007, and 2006, respectively, which were comprised of severance costs as the result of workforce reductions in most operations. Excluding the aforementioned severance costs, total employee compensation expense decreased a substantial 6.7% from 2007 due to the combination of several factors, including: the elimination of positions, lower commissions, and the absence of profit sharing expense in 2008.

In 2008 and 2007, production costs were down primarily due to lower newsprint costs. In 2008, despite higher average newsprint prices per ton, (up $73 per ton to $613 per ton), newsprint costs were down $6 million due to reduced consumption as a result of newspaper redesigns, lower advertising linage, decreased circulation volumes, and concerted conservation efforts. In 2007, newsprint costs were down $16.1 million due to reduced consumption as a result of switching to lighter weight newsprint, concerted conservation efforts and decreased advertising and circulation volumes, as well as to lower average newsprint prices which were down $58 per ton. Additionally, the consolidation of certain production facilities helped to reduce production costs.

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In both 2008 and 2007, selling general and administrative expense reductions were derived from savings in the areas of circulation sales, promotion and repairs and maintenance, particularly in the Florida Market. In 2008 and 2007 depreciation increased $1.8 million and $6.1 million resulting from capital spending for the replacement of certain newspaper production facilities and due to new digital broadcast equipment which the Company had virtually completed and put in place as part of the government-mandated conversion to broadcast high definition television by the end of 2007.

Operating expenses in the Virginia/Tennessee Market decreased $9.3 million in 2008 compared to 2007 and decreased $6.9 million in 2007 compared to 2006. Consistent with the overall trend, lower employee compensation costs made up a significant portion of the operating expense decrease; compensation costs before severance decreased $7.1 million (7.4%) and $5.2 million (5.4%) in 2008 and 2007, respectively, compared to the prior year. Additionally, reductions in newsprint costs of $1.9 million in 2008 and $4.8 million in 2007 contributed to the 2008 and 2007 cost decreases, partially offset by increases in depreciation.

Responding to the difficult operating environment in Florida, the reduction in operating expenses of $20.3 million in the Florida Market represented over half of the Company’s operating expense reductions in 2008. Excluding the severance costs, the Florida operations reduced employee compensation costs by $12.3 million, or 12.5%, and newsprint costs decreased $3.8 million. In addition to the areas of expense reduction already discussed, the Florida Market further reduced departmental costs by approximately $6 million due to savings in circulation sales, promotion and repairs and maintenance. In 2007, the Florida Market reduced operating expenses by $13.9 million from 2006 levels. Similar to 2008, the 2007 reductions were achieved through staff reductions of 9%, newsprint savings and elimination of selling, general and administrative costs.

Operating expenses in the Mid-South Market, which has a higher concentration of television stations, decreased 2.3% in 2008 compared to 2007 primarily due to a concerted effort to reduce advertising and promotion expenses, travel and entertainment, marketing and compensation costs (through a 7% reduction in employee headcount). These reductions were offset in part, by severance costs and increased production costs.

Operating expense decreases in 2008 in the North Carolina market are consistent with the overall trend of reduced headcount (down 6%), reduced newsprint costs and a focus on driving down the more discretionary spending for repairs and maintenance, promotional and marketing costs.

Operating expenses in the Ohio/Rhode Island Market decreased 2.6% in 2008 compared to 2007 largely driven by reductions in departmental spending primarily in the more discretionary areas of marketing and promotion.

In 2007, operating expenses increased in the Mid-South, North Carolina and Ohio/Rhode Island Markets compared to 2006 due to a full year of operations for the NBC affiliated stations acquired in 2006.

Advertising Services & Other

Advertising Services & Other (ASO) primarily includes:

• Blockdot - a leading advergaming business;

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• Dealtaker.com - an online social shopping portal that was acquired at the beginning of the second quarter of 2008;

• NetInformer - a leading provider of mobile advertising and marketing services purchased in the fourth quarter of 2008;

• Production Services - comprised primarily of a provider of broadcast equipment and studio design services.

Revenues in the Advertising Services & Other segment decreased $7.8 million in 2008 compared to 2007 as the result of two factors. First, sales in Production Services fell $11.8 million as the digital conversion to broadcast high definition was substantially completed at the end of 2007 and second, sales at Blockdot were down $2.3 million as the pace of advergaming sales reflected the sluggish economy. These reductions were offset, in part, by the acquisition in the first half of 2008 of DealTaker.com, which generated revenues of $5.7 million in 2008. In 2007, Advertising Services & Other revenues increased $6.5 million primarily due to the growth of Blockdot, where advergaming revenues tripled.

Operating costs were down 21% in 2008 due largely to Production Services. Costs were up $6 million (20.6%) in 2007 primarily due to $1.9 million in increased operating costs at Blockdot and a write-down of $2.7 million of interactive investments.

Operating Profit (Loss)

The following chart shows the change in operating profit by market; the year-over-year movement in market operating profit was driven by the underlying fluctuations in revenue and expense as detailed in the previous discussion.

Change in Operating Profit/(Loss)

	2008 versus 2007					2007 versus 2006
($ in millions)	Amount			Percent		Amount			Percent
Virginia/Tennessee	$	(24.1	)	(37.2	)	$	(1.3	)	(2.0	)
Florida		(31.7	)	—			(40.5	)	(57.2	)
Mid-South		(5.3	)	(17.5	)		(8.4	)	(21.7	)
North Carolina		(2.6	)	(18.0	)		(3.2	)	(18.4	)
Ohio/Rhode Island		3.6		35.5			(9.5	)	(48.0	)
Advertising Services & Other		2.3		—			0.3		(26.5	)
Eliminations/Disc. Ops		0.7		36.6			1.3		43.3
	$	(57.1	)	(38.8	)	$	(61.3	)	(29.4	)

In 2008, the Virginia/Tennessee and Florida Markets were responsible for the majority of the operating profit shortfall from the prior year. Lower operating expenses in these markets were unable to overcome decreased revenues. Both markets were impacted by significantly reduced advertising in their publishing operations as compared to the other geographic markets with significant broadcast stations which benefitted from strong 2008 Political advertising revenue. Advertising Services & Other operating profit benefitted from the second-quarter 2008 acquisition of DealTaker.com which produced robust operating profits of $3.9 million.

In 2007, the Florida Market’s economic decline and increased depreciation expenses were largely responsible for the decrease in operating profits. Operating profits in 2007 in the

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Mid-South, North Carolina and Ohio/Rhode Island Markets were impacted by higher employee compensation from higher sales commissions as the Company worked to replace Political revenues through sales development initiatives and higher depreciation costs which increased over 10% on new digital equipment in 2007 across the Company for the government-mandated conversion to broadcast high definition television.

Interest expense

Interest expense decreased $16.1 million in 2008 from the prior year due almost equally to a decrease in the Company’s average effective borrowing rate of 100 basis points (to 5.35%) and to an approximate $105 million decline in average debt levels, primarily the result of the application of proceeds from the sales of SP Newsprint and four television stations to debt reduction during 2008.

In the third quarter of 2006, the Company entered into three interest rate swaps (where it pays a fixed rate and receives a floating rate) to manage interest cost and cash flows associated with variable interest rates, primarily short-term changes in LIBOR, not to trade such instruments for profit or loss. The interest rate swaps are carried at fair value based on a discounted cash flow analysis (predicated on quoted LIBOR prices) of the estimated amounts the Company would have received or paid to terminate the swaps. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million matured in 2009, and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s $300 million bank term loan. These swaps effectively convert the Company’s variable rate bank debt to fixed rate debt with a weighted average interest rate approximating 7.3% at December 28, 2008.

Income taxes

The Company’s effective tax rate on income (loss) from continuing operations was 32% (on a pre-tax loss), 24% (on pre-tax income, including a one-time tax benefit discussed below) and 37% (on pre-tax income) in 2008, 2007 and 2006, respectively. The increase in the 2008 rate was due primarily to the absence of the state tax benefit recognized in 2007. The sharp reduction in the 2007 rate was due to the relatively greater impact that favorable permanent differences (book versus tax) had on the current year’s reduced pre-tax income and to a tax benefit of $786 thousand that the Company recognized in the third quarter of 2007 to record the favorable resolution of an outstanding state income tax assessment.

As of December 28, 2008, the Company established a valuation allowance against its entire net deferred tax asset of $47.6 million because cumulative pretax income in recent years was in an overall loss position primarily due to the current-year impairment charges. There was no valuation allowance as of December 30, 2007. A portion of the valuation allowance ($7.5 million) affected the Consolidated Statement of Operations and was reflected in the Company’s 2008 effective tax rate of 32%; the remainder affected comprehensive income items. See Note 7 to the Financial Statements in Exhibit 99.7 for a complete discussion of the Company’s deferred tax asset valuation allowance.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 at the beginning of fiscal 2007. The Company recognized a $4.9 million net increase in the liability for uncertain tax positions, which was accounted for as a reduction of retained earnings, as of January 1, 2007. See Note 7 to the Financial Statements in Exhibit 99.7 for a complete discussion of the adoption of this standard and the roll-forward of the liability of uncertain tax positions.

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Other

The Company has certain plans in place, mainly the Supplemental 401(k) Plan and the Director’s Deferred Compensation Plan, which are designed to align the interests of the participants with those of the shareholders. Future fluctuations in the Company’s stock price could have a significant effect on the amount of expense recognized. Each $1 change in the Company’s stock price as of September 27, 2009 would have affected the Company’s pre-tax income by approximately $.3 million.

LIQUIDITY

The country has been faced with both an economic crisis, the effect of which on the Company’s operating results has been discussed earlier, and a credit crisis, which has also impacted the Company. However, the steps that the Company has taken to lower its debt levels and renegotiate its bank agreements, plus other available operating measures, should allow the Company the flexibility necessary to operate within the debt covenants at a cost that is manageable.

Entering 2006, the Company had in place a $1 billion revolving credit facility ($180 million outstanding), $200 million in senior notes, $95 million in debt that existed as the result of consolidating certain variable interest entities in which the Company had controlling financial interest by virtue of certain real property leases, and $10 million in bank lines. The Company was subject to both interest coverage and leverage ratio covenants. This debt structure not only served the Company’s operating needs but allowed the Company to make significant strategic acquisitions like the purchase of four NBC stations in mid-2006 when total debt outstanding reached a peak of $1.06 billion. Subsequent to that acquisition, the Company announced a plan to lower its debt through a combination of television station sales and by using operating cash flow to repay debt. By the end of 2006, the Company had replaced the $200 million of senior notes with a $300 million bank term loan and completed the sales of certain television stations with gross proceeds of $135 million. However, its operating performance, particularly in its largest market in Florida, began to weaken late in the year. The Company repaid $144 million of the outstanding debt in the later half of 2006 even with capital spending of $94 million mostly related to the government-mandated conversion to digital television and replacement of certain newspaper production facilities.

As the wider economy deteriorated in 2007, the weakness in Tampa deepened and the Company’s other markets were affected to a greater degree. Even as the Company was taking steps on the operating side to reduce its expenses, it reassessed its portfolio of assets and initiated the process to sell its interest in SP Newsprint and certain other television stations. During that year it also repaid the $95 million of variable interest debt by using existing capacity under its revolving credit facility. In the fourth quarter of 2007, the Company amended certain provisions of its debt agreements to increase the maximum leverage ratio covenant and reduce the minimum interest ratio covenant for a period of three fiscal quarters. The Company’s covenants have historically involved - and continue to involve - debt levels, interest expense, and a rolling four-quarter calculation of EBITDA (a measure of cash earnings as defined in the revolving credit agreement) and thus a decline in operating performance adversely affects these ratios. Despite these difficult economic times and capital expenditures that totaled $78 million, the Company repaid $19 million of debt in 2007.

Unfortunately, both the wider economy and the Company’s markets worsened in 2008. The Company took additional steps on the operating side to reduce costs. During the year, it also

14

completed the sale of SP Newprint and four television stations (the Company entered into an agreement for the sale of a fifth station, WCWJ, which was completed in the second quarter of 2009) yielding aggregate proceeds of $138 million. The Company also reduced its capital spending to $32 million as expenditures for digital television and newspaper production facility replacements were largely completed, and in the fourth quarter it cut its dividend approximately in half. The Company made acquisitions totaling $24 million in 2008, primarily targeting online and Advertising Services companies reflecting the strategic direction in which the Company is headed. The Company repaid debt of $168 million during 2008. The Company also amended its credit agreements just before the end of 2008.

At the end of 2008, the Company’s debt consisted of a modified revolving credit facility of $600 million ($425 million outstanding at year end), the term loan of $300 million, and $5 million outstanding under bank lines. These facilities mature in 2011. Pursuant to the 2008 amendments, the maximum leverage ratio covenants were increased for the fourth quarter of 2008 and the first quarter of 2009; they will subsequently be reduced slightly for the remainder of 2009 and for the first three quarters of 2010, and will remain at a constant level thereafter. The minimum interest coverage ratio covenant was also reduced through the first quarter of 2009 and will be increased slightly for the remaining term of the Facilities. The borrowing capacity on the modified revolving credit facility was reduced from $1 billion to $600 million, and interest rate margins on both facilities were increased. Additional annual borrowing capacity reductions will be made based on the Company’s excess cash flow, as defined. If the leverage ratio were to exceed certain levels, the amended agreements also contain restrictions on dividends, capital spending, indebtedness, capital leases, and investments. The Company pledged its cash and assets and the capital stock of its subsidiaries as collateral.

Since mid-2006, the Company has repaid $330 million of debt. It has also taken actions to be fully compliant with its covenants, and it continues to take prudent actions to ensure it will be in compliance with its covenants going forward. In January 2009, the Company announced the suspension of dividends to shareholders. Additionally, in order to continue to address operating costs for 2009, the Company suspended the 401(k) match for the last nine months of the year and does not anticipate paying profit sharing or management bonuses (neither of which were paid in 2008). Capital spending will be limited as well. The Company’s current operating plan contemplates further debt reduction in 2009. Given the economic climate facing the country, there is uncertainty about the Company’s operating results in the short term but the Company is closely monitoring operating results and their effect on debt covenants. The Company believes that its operating cash flow over the next year together with its debt agreements provides the necessary flexibility to manage its working capital and capital expenditure needs while developing new products and revenue streams and maintaining existing ones.

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The Company does not have material off-balance sheet arrangements.

The table that follows shows long-term debt and other specified obligations of the Company:

(In millions)	Payments Due By Periods
Contractual obligations1	Total		2009		2010 2011		2012 2013		2013 and beyond
Long-term debt:2
Revolving credit facility	$	425.0	$	—	$	425.0	$	—	$	—
Term loan		300.0		—		300.0		—		—
Other		5.1		5.0		0.1		—		—
Operating leases3		31.2		6.9		10.9		5.3		8.1
Broadcast film rights4		50.5		14.9		34.2		1.1		0.3
Estimated benefit payments from Company assets5		67.5		4.5		10.8		13.4		38.8
Purchase obligations6		190.4		125.9		44.9		15.7		3.9
Total specified obligations	$	1,069.7	$	157.2	$	825.9	$	35.5	$	51.1

¹ Other than the estimated benefit payments from Company assets and Broadcast film rights disclosed above and discussed further below, the table excludes items contained in “Other liabilities and deferred credits” on the Consolidated Balance Sheets, primarily because the ultimate timing and amount of these future payments is not determinable. As disclosed in Note 7 in Exhibit 99.7 of this Form 8-K, the Company had a non-current liability for uncertain tax positions of approximately $15 million at December 28, 2008. The Company cannot reasonably estimate the amount or period in which the ultimate settlement of these uncertain tax positions will occur, therefore the contractual obligations table excludes this liability.

² The Company has the legal right to prepay its long-term debt without penalty; accordingly, no future interest expense has been included.

³ Minimum rental commitments under noncancelable lease terms in excess of one year.

⁴ Broadcast film rights include both recorded short-term and long-term liabilities for programs which have been produced and unrecorded commitments to purchase film rights which are not yet available for broadcast.

⁵ Actuarially estimated benefit payments under pension and other benefit plans expected to be funded directly from Company assets through 2018 which excludes expected contributions to the qualified pension plan. The Company contributed $15 million in 2009 and expects to contribute $20 million in 2010 to its qualified pension plan, which is in excess of the expected minimum funding requirements. A further discussion is included in the paragraph that follows this chart.

⁶ Purchase obligations include: 1) all current liabilities not otherwise reported in the table that will require cash settlement, 2) significant purchase commitments for fixed assets, and 3) significant non-ordinary course contract-based obligations. Purchase obligations exclude the Company’s purchase commitment to SPNC for newsprint as the contract is based on market prices which are highly volatile. As indicated in Note 4 in Exhibit 99.7 of this Form 8-K, the Company is committed to purchase a minimum of approximately 48 thousand, 42 thousand, and 35 thousand tons of newsprint, respectively from SPNC in 2009, 2010, and 2011.

As was the case with many companies’ pension plans, the Company’s unfunded obligation widened significantly in 2008 (see Note 9 to the Financial Statements in Exhibit 99.7 of this Form 8-K) due primarily to a 32% decline in the value of plan assets. Although not required to do so,

16

the Company made contributions of $15 million to its Retirement Plan in 2009 and currently anticipates making $15 million in 2010. By making contributions before they are required – as it has in the past – the Company expects to limit the ultimate amount that it will need to contribute. Many factors influence the required funding for the plan including the return on invested assets, funding requirements that are set forth by ERISA in enacting the laws passed by Congress, and the long-term discount rates that are applied to the funds’ benefit liabilities. The amounts shown in the table do not reflect plan contributions. If the factors noted above remain unchanged, the Company’s required contributions in subsequent years would be more in the range of the 2010 contribution.

* * * * * * *

Certain statements in this annual report that are not historical facts are “forward-looking” statements, as that term is defined by the federal securities laws. Forward-looking statements include statements related to pending transactions and contractual obligations, critical accounting estimates and assumptions, the impact of the Internet, and expectations regarding the effects and timing of debt compliance, the Yahoo! agreements, newsprint prices, pension and post-retirement plans, general advertising levels and political advertising levels, and the effects of changes to FCC regulations. Forward-looking statements, including those which use words such as the Company “believes,” “anticipates,” “expects,” “estimates,” “intends,” “projects,” “plans,” “hopes” and similar words, are made as of the date of this filing and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. The reader should understand that it is not possible to predict or identify all risk factors. Consequently, any such list should not be considered a complete statement of all potential risks or uncertainties.

These forward-looking statements should be considered in light of various important factors that could cause actual results to differ materially from estimates or projections including, without limitation: changes in advertising demand, changes to pending accounting standards, changes in circulation levels, changes in relationships with broadcast networks and lenders, the availability and pricing of newsprint, fluctuations in interest rates, the performance of pension plan assets, health care cost trends, regulatory rulings including those related to ERISA and tax law, natural disasters, and the effects of acquisitions, investments and dispositions on the Company’s results of operations and its financial condition. Actual results may differ materially from those suggested by forward-looking statements for a number of reasons including those described in Exhibit 99.3 “Risk Factors” of this Form 8-K.

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EX-99.7

Exhibit 99.7

Item 8. Financial Statements and Supplementary Data

INDEX

	Page
Report of Management on Media General, Inc’s Internal Control Over Financial Reporting	2
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting	3
Report of Independent Registered Public Accounting Firm	4
Consolidated Statements of Operations for the Fiscal Years Ended December 28, 2008, December 30, 2007, and December 31, 2006	5
Consolidated Balance Sheets at December 28, 2008, and December 30, 2007	6
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended December 28, 2008, December 30, 2007, and December 31, 2006	8
Consolidated Statements of Cash Flows for the Fiscal Years Ended December 28, 2008, December 30, 2007, and December 31, 2006	9
Notes 1 through 12 to the Consolidated Financial Statements	10
Quarterly Review (unaudited)	31
Schedule II – Valuation and Qualifying Accounts and Reserves for the Fiscal Years Ended December 28, 2008, December 30, 2007 and December 31, 2006	32

1

Report Of Management On Media General, Inc.’s Internal Control Over Financial Reporting

Management of Media General, Inc., (the Company) has assessed the Company’s internal control over financial reporting as of December 28, 2008, based on criteria for effective internal control over financial reporting described in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that as of December 28, 2008, the Company’s system of internal control over financial reporting was properly designed and operating effectively based upon the specified criteria.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is comprised of policies, procedures and reports designed to provide reasonable assurance, to the Company’s management and board of directors, that the financial reporting and the preparation of financial statements for external purposes has been handled in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) govern records to accurately and fairly reflect the transactions and dispositions of assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable safeguards against or timely detection of material unauthorized acquisition, use or disposition of the Company’s assets.

Internal controls over financial reporting may not prevent or detect all misstatements. Additionally, projections as to the effectiveness of controls to future periods are subject to the risk that controls may not continue to operate at their current effectiveness levels due to changes in personnel or in the Company’s operating environment.

January 28, 2009

Marshall N. Morton	John A. Schauss	O. Reid Ashe Jr.
President and Chief Executive Officer	Vice President-Finance and Chief Financial Officer	Executive Vice President and Chief Operating Officer

2

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Stockholders

Media General, Inc.

We have audited Media General, Inc.’s internal control over financial reporting as of December 28, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Media General, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Media General, Inc.’s Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Media General, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 28, 2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Media General, Inc., as of December 28, 2008, and December 30, 2007, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three fiscal years in the period ended December 28, 2008, and our report dated January 28, 2009, expressed an unqualified opinion thereon.

January 28, 2009

3

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Media General, Inc.

We have audited the accompanying consolidated balance sheets of Media General, Inc., as of December 28, 2008, and December 30, 2007, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 28, 2008. Our audits also included the financial statement schedule listed in the accompanying index in Item 8. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Media General, Inc., at December 28, 2008, and December 30, 2007, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 28, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 7 to the financial statements, in 2007 the Company changed its method of accounting for uncertain income tax positions to comply with the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Media General, Inc.’s internal control over financial reporting as of December 28, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 28, 2009, expressed an unqualified opinion thereon.

Richmond, Virginia

January 28, 2009, except with respect to the matters discussed in Note 12, for which the date is January 28, 2010.

4

Media General, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Fiscal Years Ended
	December 28, 2008			December 30, 2007			December 31, 2006 (53 weeks)
Revenues
Publishing	$	436,870		$	524,775		$	580,883
Broadcasting		322,106			336,479			322,808
Digital media and other		38,399			35,039			25,525
Total revenues	$	797,375		$	896,293		$	929,216
Operating costs:
Employee compensation		380,434			399,157			395,832
Production		193,034			211,426			215,682
Selling, general and administrative		111,549			124,884			115,413
Depreciation and amortization		71,464			72,998			66,163
Goodwill and other asset impairment (Note 3)		908,701			—			—
Gain on insurance recovery		(3,250	)		(17,604	)		—
Total operating costs		1,661,932			790,861			793,090
Operating income (loss)		(864,557	)		105,432			136,126
Other income (expense):
Interest expense		(43,449	)		(59,577	)		(48,505	)
Impairment of and income (loss) on investments		(4,419	)		(34,825	)		9,898
Other, net		979			1,126			1,022
Total other expense		(46,889	)		(93,276	)		(37,585	)
Income (loss) from continuing operations before income taxes		(911,446	)		12,156			98,541
Income tax (benefit) expense		(288,191	)		2,921			36,405
Income (loss) from continuing operations		(623,255	)		9,235			62,136
Discontinued operations:
Income from discontinued operations (net of income taxes of $1,727 in 2008, $2,207 in 2007 and $3,757 in 2006)		2,701			3,452			5,877
Net gain (loss) related to divestiture of discontinued operations (net of income taxes of $5,846 in 2008, $722 in 2007 and $6,748 in 2006)		(11,300	)		(2,000	)		11,029
Net income (loss)	$	(631,854	)	$	10,687		$	79,042
Earnings (loss) per common share:
Income (loss) from continuing operations	$	(28.21	)	$	0.39		$	2.56
Income (loss) from discontinued operations		(0.39	)		0.06			0.72
Net income (loss)	$	(28.60	)	$	0.45		$	3.28
Earnings (loss) per common share - assuming dilution:
Income (loss) from continuing operations	$	(28.21	)	$	0.39		$	2.56
Income (loss) from discontinued operations		(0.39	)		0.06			0.72
Net income (loss)	$	(28.60	)	$	0.45		$	3.28

Notes to Consolidated Financial Statements begin on page 10.

5

Media General, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts)

ASSETS

	December 28, 2008			December 30, 2007
Current assets:
Cash and cash equivalents	$	7,142		$	14,214
Accounts receivable (less allowance for doubtful accounts 2008 - $5,961; 2007 - $5,981)		102,174			133,576
Inventories		12,035			6,676
Other		38,849			52,040
Assets of discontinued operations		12,402			107,355
Total current assets		172,602			313,861
Investments in unconsolidated affiliates		—			52,360
Other assets		41,287			65,674
Property, plant and equipment, at cost:
Land		37,736			37,120
Buildings		312,141			299,326
Machinery and equipment		540,999			522,447
Construction in progress		17,229			41,217
Accumulated depreciation		(454,478	)		(425,137	)
Net property, plant and equipment		453,627			474,973
FCC licenses and other intangibles - net		245,266			646,677
Excess of cost over fair value of net identifiable assets of acquired businesses		421,470			917,521
Total assets	$	1,334,252		$	2,471,066

Notes to Consolidated Financial Statements begin on page 10.

6

LIABILITIES AND STOCKHOLDERS’ EQUITY

	December 28, 2008			December 30, 2007
Current liabilities:
Accounts payable	$	41,365		$	32,654
Accrued expenses and other liabilities		86,291			101,753
Liabilities of discontinued operations		3,053			5,614
Total current liabilities		130,709			140,021
Long-term debt		730,049			897,572
Retirement, post-retirement and post-employment plans		251,175			147,578
Deferred income taxes		—			311,588
Other liabilities and deferred credits		67,092			61,300
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock ($5 cumulative convertible), par value $5 per share: authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued 22,250,130 and 22,055,835 shares		111,251			110,279
Class B, authorized 600,000 shares; issued 551,881 and 555,992 shares		2,759			2,780
Additional paid-in capital		21,934			19,713
Accumulated other comprehensive loss:
Unrealized loss on derivative contracts		(17,927	)		(8,417	)
Pension and postretirement		(170,212	)		(68,860	)
Retained earnings		207,422			857,512
Total stockholders’ equity		155,227			913,007
Total liabilities and stockholders’ equity	$	1,334,252		$	2,471,066

Notes to Consolidated Financial Statements begin on page 10.

7

Media General, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except shares and per share amounts)

	Class A		Common Stock						Additional Paid-in			Accumulated Other Comprehensive			Retained
	Shares		Class A			Class B			Capital			Income (Loss)			Earnings			Total
Balance at December 25, 2005	23,490,696		$	117,453		$	2,780		$	44,856		$	(64,618	)	$	815,355		$	915,826
Net income				—			—			—			—			79,042			79,042
Unrealized loss on equity securities (net of deferred tax benefit of $176)				—			—			—			(309	)		—			(309	)
Reclassification of loss included in net income (net of deferred tax benefit of $254)				—			—			—			446			—			446
Unrealized loss on derivative contracts (net of deferred tax benefit of $899)				—			—			—			(1,578	)		—			(1,578	)
Minimum pension liability (net of deferred taxes of $5,359)				—			—			—			10,048			—			10,048
Comprehensive income																			87,649
Pension and postretirement adoption (SFAS #158) (net of deferred tax benefit of $31,477)				—			—			—			(55,237	)		—			(55,237	)
Cash dividends to shareholders ($0.88 per share)				—			—			—			—			(21,180	)		(21,180	)
Exercise of stock options	55,700			279			—			1,324			—			—			1,603
Stock-based compensation				—			—			8,244			—			—			8,244
Income tax benefits relating to stock-based compensation				—			—			306			—			—			306
Other	10,076			50			—			443			—			(344	)		149
Balance at December 31, 2006	23,556,472			117,782			2,780			55,173			(111,248	)		872,873			937,360
Net income				—			—			—			—			10,687			10,687
Unrealized loss on equity securities (net of deferred tax benefit of $912)				—			—			—			(1,600	)		—			(1,600	)
Reclassification of loss included in net income (net of deferred tax benefit of $1,314)				—			—			—			2,306			—			2,306
Unrealized loss on derivative contracts (net of deferred tax benefit of $1,874)				—			—			—			(3,288	)		—			(3,288	)
Pension and postretirement (net of deferred taxes of $21,021)				—			—			—			36,553			—			36,553
Comprehensive income																			44,658
Uncertain tax position adoption (FIN #48)				—			—			—			—			(4,921	)		(4,921	)
Cash dividends to shareholders ($0.92 per share)				—			—			—			—			(21,156	)		(21,156	)
Exercise of stock options	14,800			74			—			348			—			—			422
Repurchase of common stock	(1,500,000	)		(7,500	)		—			(41,216	)		—			—			(48,716	)
Stock-based compensation				—			—			5,649			—			—			5,649
Income tax benefits relating to stock-based compensation				—			—			110			—			—			110
Other	(15,437	)		(77	)		—			(351	)		—			29			(399	)
Balance at December 30, 2007	22,055,835			110,279			2,780			19,713			(77,277	)		857,512			913,007
Net loss				—			—			—			—			(631,854	)		(631,854	)
Unrealized loss on derivative contracts				—			—			—			(9,510	)		—			(9,510	)
Pension and postretirement				—			—			—			(101,352	)		—			(101,352	)
Comprehensive loss																			(742,716	)
Cash dividends to shareholders ($0.81 per share)				—			—			—			—			(18,510	)		(18,510	)
Performance accelerated restricted stock	131,333			657			—			(1,602	)		—			274			(671	)
Stock-based compensation				—			—			5,756			—			—			5,756
Income tax benefits relating to stock-based compensation				—			—			99			—			—			99
Other	62,962			315			(21	)		(2,032	)		—			—			(1,738	)
Balance at December 28, 2008	22,250,130		$	111,251		$	2,759		$	21,934		$	(188,139	)	$	207,422		$	155,227

Notes to Consolidated Financial Statements begin on page 10.

8

Media General, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Years Ended
	December 28, 2008			December 30, 2007			December 31, 2006 (53 weeks)
Cash flows from operating activities:
Net income (loss)	$	(631,854	)	$	10,687		$	79,042
Adjustments to reconcile net income (loss):
Depreciation		51,591			53,109			47,791
Amortization		20,270			25,341			24,842
Deferred income taxes		(272,620	)		16,289			11,176
Impairment of and loss (income) on investments		4,419			34,825			(9,898	)
Goodwill and other asset impairment		908,701			—			—
Provision for doubtful accounts		7,690			5,929			5,660
Insurance proceeds related to repair costs		—			19,959			—
Gain on insurance recovery		(3,250	)		(17,604	)		—
Net loss (gain) related to divestiture of discontinued operations		11,300			2,000			(11,029	)
Change in assets and liabilities:
Retirement plan contributions		(10,000	)		—			(15,000	)
Retirement plan accrual		2,599			5,444			16,543
Income taxes refundable		(15,855	)		(17,518	)		711
Company owned life insurance (cash surrender value less policy loans)		19,137			(1,110	)		(2,143	)
Accounts receivable and inventory		20,710			(3,721	)		(6,779	)
Accounts payable, accrued expenses and other liabilities		(14,007	)		(6,636	)		(1,699	)
Other, net		(73	)		3,835			18,842
Net cash provided by operating activities		98,758			130,829			158,059
Cash flows from investing activities:
Capital expenditures		(31,517	)		(78,142	)		(93,896	)
Purchases of businesses		(23,804	)		(2,525	)		(611,385	)
Proceeds from sales of discontinued operations and investments		138,302			—			135,111
Insurance proceeds related to machinery and equipment		—			27,841			—
Distribution from unconsolidated affiliate		—			5,000			2,000
Funding of note receivable		(5,000	)
Other, net		5,882			8,245			(2,853	)
Net cash provided (used) by investing activities		83,863			(39,581	)		(571,023	)
Cash flows from financing activities:
Increase in debt		330,000			570,000			1,459,000
Repayment of debt		(497,523	)		(588,823	)		(1,027,984	)
Stock repurchase		—			(48,716	)		—
Debt issuance costs		(4,182	)		(1,010	)		(1,780	)
Cash dividends paid		(18,510	)		(21,156	)		(21,180	)
Other, net		522			743			1,861
Net cash (used) provided by financing activities		(189,693	)		(88,962	)		409,917
Net (decrease) increase in cash and cash equivalents		(7,072	)		2,286			(3,047	)
Cash and cash equivalents at beginning of year		14,214			11,928			14,975
Cash and cash equivalents at end of year	$	7,142		$	14,214		$	11,928

Notes to Consolidated Financial Statements begin on page 10.

9

Media General, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Fiscal year

The Company’s fiscal year ends on the last Sunday in December. Results for 2008 and 2007 are for the 52-week periods ended December 28, 2008 and December 30, 2007, respectively; results for 2006 are for the 53-week period ended December 31, 2006.

Principles of consolidation

The accompanying financial statements include the accounts of Media General, Inc., subsidiaries more than 50% owned and certain variable interest entities, from time to time, for which Media General, Inc. is the primary beneficiary (collectively the Company). All significant intercompany balances and transactions have been eliminated. The equity method of accounting is used for investments in companies in which the Company has significant influence; generally, this represents investments comprising approximately 20 to 50 percent of the voting stock of companies and certain partnership interests. Other investments are generally accounted for using the cost method.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company re-evaluates its estimates on an ongoing basis. Actual results could differ from those estimates.

Presentation

Certain prior-year financial information has been reclassified to conform with the current year’s presentation.

Revenue recognition

The Company’s principal sources of revenue are the sale of advertising in newspapers, the sale of newspapers to individual subscribers and distributors, and the sale of airtime on television stations. In addition, the Company sells advertising on its newspaper and television websites and portals, and derives revenues from other online activities, including an online advergaming development firm and an online shopping portal. The Company also derives revenue from the sale of broadcast equipment and studio design services. Advertising revenue is recognized when advertisements are published, aired or displayed, or when related advertising services are rendered. Newspaper advertising contracts, which generally have a term of one year or less, may provide rebates or discounts based upon the volume of advertising purchased during the terms of the contracts. Estimated rebates and discounts are recorded as a reduction of revenue in the period the advertisement is displayed. This requires the Company to make certain estimates regarding future advertising volumes. Estimates are based on various factors including historical experience and advertising sales trends. These estimates are revised as necessary based on actual volume realized. Subscription revenue is recognized on a pro-rata basis over the term of the subscription. Amounts received from customers in advance are deferred until earned. Revenues from fixed price contracts (such as studio design services or advergaming development) are recognized under the percentage of completion method, measured by actual cost incurred to date compared to estimated total costs of each contract. Commission revenues from the online shopping portal are recognized upon third-party notification of consumer purchase.

Cash and cash equivalents

Cash in excess of current operating needs is invested in various short-term instruments carried at cost that approximates fair value. Those short-term investments having an original maturity of three months or less are classified in the balance sheet as cash equivalents.

Derivatives

Derivatives are recognized as either assets or liabilities on the balance sheet at fair value. If a derivative is a hedge, a change in its fair value is either offset against the change in the fair value of the hedged item through earnings, or recognized in Other Comprehensive Income (OCI) until the hedged item is recognized in earnings. Any difference

10

between the fair value of the hedge and the item being hedged, known as the ineffective portion, is immediately recognized in earnings in the line item “Other, net” during the period of change. For derivative instruments that are designated as cash flow hedges, the effective portion of the change in value of the derivative instrument is reported as a component of the Company’s OCI and is reclassified into earnings (interest expense for interest rate swaps and newsprint expense for newsprint swaps) in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the Company’s current earnings during the period of change. Derivative instruments are carried at fair value on the Consolidated Balance Sheets in the applicable line item “Other assets” or “Other liabilities and deferred credits”.

Accounts receivable and concentrations of credit risk

Media General is a diversified communications company which sells products and services to a wide variety of customers located principally in the southeastern United States. The Company’s trade receivables result from its publishing, broadcast and interactive media operations. The Company routinely assesses the financial strength of significant customers, and this assessment, combined with the large number and geographic diversity of its customer base, limits its concentration of risk with respect to trade receivables. The Company maintains an allowance for doubtful accounts based on both the aging of accounts at period end and specific allocations for certain customers.

Inventories

Inventories consist principally of raw materials (primarily newsprint) and broadcast equipment, and are valued at the lower of cost or market using the specific identification method.

Self-Insurance

The Company self-insures for certain employee medical and disability income benefits, workers’ compensation costs, as well as automobile and general liability claims. The Company’s responsibility for workers’ compensation and auto and general liability claims is capped at a certain dollar level (generally $100 thousand to $500 thousand depending on claim type). Insurance liabilities are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims. Estimates for projected settlements and incurred but not reported claims are based on development factors, including historical trends and data, provided by a third party.

Broadcast film rights

Broadcast film rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at the lower of cost or estimated net realizable value. Program rights and the corresponding contractual obligations are recorded as other assets (based upon the expected use in succeeding years) and as other liabilities (in accordance with the payment terms of the contract) in the Consolidated Balance Sheets when programs become available for use. Generally, program rights of one year or less are amortized using the straight-line method; program rights of longer duration are amortized using an accelerated method based on expected useful life of the program.

Property and depreciation

Plant and equipment are depreciated, primarily on a straight-line basis, over their estimated useful lives which are generally 40 years for buildings and range from 3 to 30 years for machinery and equipment. Depreciation deductions are computed by accelerated methods for income tax purposes. Major renovations and improvements and interest cost incurred during the construction period of major additions are capitalized. Expenditures for maintenance, repairs and minor renovations are charged to expense as incurred.

Intangible and other long-lived assets

Intangibles consist of goodwill (which is the excess of purchase price over the net identifiable assets of businesses acquired), FCC licenses, network affiliations, subscriber lists, other broadcast intangibles, intellectual property, and trademarks. Indefinite-lived intangible assets are not amortized, but finite-lived intangibles are amortized using the straight-line method over periods ranging from one to 25 years (note 3). Internal use software is amortized on a straight-line basis over its estimated useful life, not to exceed five to seven years.

When indicators of impairment are present, management evaluates the recoverability of long-lived tangible and finite-lived intangible assets by reviewing current and projected profitability using undiscounted cash flows of such

11

assets. Annually, or more frequently if impairment indicators are present, management evaluates the recoverability of indefinite-lived intangibles using estimated discounted cash flows and market factors to determine their fair value.

Income taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under the standard, the Company evaluates the need for a valuation allowance for deferred tax assets, if any.

Comprehensive income

The Company’s comprehensive income consists of net income, pension and postretirement related adjustments, unrealized gains and losses on certain investments in equity securities (including reclassification adjustments), and changes in the value of derivative contracts as well as the Company’s share of Other Comprehensive Income from its investments accounted for under the equity method.

Recent accounting pronouncements

In September 2006, the FASB issued FAS No. 157, Fair Value Measurements, which established a common definition for fair value under U.S. generally accepted accounting principles and created a framework for measuring fair value. The Company adopted FAS 157 at the beginning of 2008 for financial assets and liabilities. In February 2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for non-financial assets and liabilities that are measured on a non-recurring basis. These non-financial items include reporting units and intangible assets measured at fair value in impairment tests and non-financial assets acquired and non-financial liabilities assumed in a business combination. The Company adopted FAS 157 at the beginning of 2009 for non-financial assets and liabilities.

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. EITF 03-6-1 clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are to be included in the computation of earnings per share under the two-class method described in SFAS No. 128, Earnings Per Share. EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and requires all prior-period earnings per share to be adjusted retrospectively, as reflected in these financial statements for the years ended 2008, 2007 and 2006. The adoption of EITF 03-6-1 did not have a material effect on the Company’s consolidated financial statements; prior-period earnings per share were impacted by 1% to 4%.

In December 2007, the FASB issued FASB Statement No. 141(R), Business Combinations, which amended the provisions of FAS 141 and will provide international conformity with respect to accounting for business combinations. Some of the more significant aspects of this Statement include: the acquiring entity in a business combination must recognize 100% of the assets acquired and liabilities assumed in the transaction as well as any minority interest; the acquisition date is the measurement point for all consideration; and transaction costs related to the business combination are required to be expensed. This statement is effective for fiscal years beginning after December 15, 2008. The Company expects SFAS 141(R) to have a significant impact on its accounting for future business combinations.

Note 2: Acquisitions, Dispositions and Discontinued Operations

In the third quarter of 2009, the Company sold a small magazine and its related website located in the Virginia/Tennessee Market and has reported it as a discontinued operation for all prior periods.

In 2008, the Company completed the sale of the following four TV stations that were classified as held for sale in three transactions: WTVQ in Lexington, Kentucky; WMBB in Panama City, Florida and KALB/NALB in Alexandria, Louisiana; and WNEG in Toccoa, Georgia. The Company recognized gross proceeds of $78 million, including working capital adjustments which have all been settled, and an after-tax loss of $11.3 million in 2008 and $2 million in 2007 related to these divestitures. Additionally, the Company sold WCWJ in Jacksonville, Florida in the second quarter of 2009. With the completion of the divestitures of all five stations, the Company generated proceeds of approximately $95 million. Depreciation and amortization of assets sold and held for sale ceased during the first quarter of 2008.

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In the second half of 2006, the Company sold KWCH in Wichita, Kansas (including that station’s three satellites), WIAT in Birmingham, Alabama, WDEF in Chattanooga, Tennessee, and KIMT in Mason City, Iowa, to three different buyers. Gross proceeds from the divestitures were $135 million, including working capital; a net after-tax gain of $11 million was recorded. The Company facilitated these transactions as a tax-deferred, like-kind exchange in conjunction with the acquisition of four NBC stations (discussed below). Depreciation and amortization of assets sold ceased during the second quarter of 2006.

The 2008 and 2007 losses related to the 2008 station sales, and the 2006 net gain from the stations sold in that year, are shown on the face of the Consolidated Statements of Operations on the line “Net gain (loss) related to divestiture of discontinued operations (net of income taxes).” The results of these stations (as well as WCWJ and the magazine) and their associated web sites have been presented as discontinued operations in the accompanying Balance Sheets and the Statements of Operations for all periods presented. Income from discontinued operations in the accompanying Consolidated Statements of Operations for the years ended December 28, 2008, December 30, 2007 and December 31, 2006 included:

(In thousands)	2008		2007		2006
Revenues	$	24,597	$	41,708	$	72,665
Costs and expenses		20,169		36,049		63,031
Income before income taxes		4,428		5,659		9,634
Income taxes		1,727		2,207		3,757
Income from discontinued operations	$	2,701	$	3,452	$	5,877

As of December 28, 2008, the assets of discontinued operations consisted of $3.4 million of current and other assets, $4 million of fixed assets, and $5 million of goodwill. As of December 30, 2007, the assets of discontinued operations consisted of $9.9 million of current and other assets, $19 million of goodwill, $22.2 million of fixed assets and $56.3 million of FCC licenses and other intangibles.

In 2008, the Company made several additions to its Advertising Services operations including: DealTaker.com, an online social shopping portal that provides coupons and bargains to its users and NetInformer, a leading provider of mobile advertising and marketing services. Additionally, the Company purchased a small group of weekly newspapers in South Carolina and Richmond.com, a local news and entertainment portal.

The Company completed the acquisition of four NBC owned and operated television stations at the beginning of the third quarter of 2006 for $609 million, including transaction costs. This transaction was accounted for as a purchase and has been included in the Company’s consolidated results of operations since its date of acquisition. The stations acquired were: WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WVTM in Birmingham, Alabama, and WJAR in Providence, Rhode Island.

The following summary presents the Company’s unaudited pro forma consolidated results of operations for the year ended December 31, 2006 as if the acquisition of the four television stations from NBC had been completed as of the beginning of the period presented. The pro forma does not purport to be indicative of what would have occurred had the acquisition actually been made as of such date, nor is it indicative of results which may occur in the future.

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(In thousands, except per share amounts)	Year Ended December 31, 2006
Revenues	$	980,210
Income from continuing operations	$	57,937
Income from discontinued operations		5,877
Gain on sale of discontinued operations		11,029
Net income	$	74,843
Earnings per common share - assuming dilution:
Income from continuing operations	$	2.38
Discontinued operations, including 2006 gain on sale of $0.46 per share		0.72
Net income	$	3.10

Note 3: Intangible Assets and Impairment

Due to the continuation of challenging business conditions in the second quarter of 2008 and the market’s perception of the value of media company stocks, the Company performed an interim impairment assessment as of June 29, 2008 that resulted in the Company recording impairment in that quarter. The Company performed its annual impairment test at the beginning of the fourth quarter of 2008 with no additional impairment indicated. However, business conditions worsened during the fourth quarter, and the market’s perception of the value of media company stocks deteriorated further resulting in both another interim impairment test and additional impairment as of December 28, 2008. The Company’s long-lived assets include goodwill related to the Company’s 2008 reporting units which was based on the 2008 reporting structure (publishing, broadcast and interactive media), identifiable assets at individual television stations (including FCC licenses and network affiliation agreements) and newspapers, fixed assets, and certain other investments and assets held for sale. The Company determined that certain of these long-lived assets were impaired by measuring the estimated discounted and undiscounted cash flows expected to be generated by the assets to determine their fair value and by comparing the result to their carrying value. The determination of fair value requires the use of significant judgment and estimates about assumptions that management believes were appropriate in the circumstances although it is reasonably possible that actual performance will differ from these assumptions. The most significant assumptions include those relating to revenue growth, compensation levels, newsprint prices, discount rates and market trading multiples for broadcast and newspaper assets. As a result of this impairment testing the Company recorded non-cash impairment charges related to goodwill related to publishing operations of $512 million, FCC licenses of $289 million, network affiliation agreements of $103 million, trade names and other intangible assets of $2.2 million, and certain investments (whose impairment was other than temporary) and real estate of $5.7 million. The charge totaled $912 million ($615 million after-tax) and was included on the line items “Goodwill and other asset impairment” and “Impairment of and income (loss) on investments.”

At June 29, 2009, when the Company changed its structure to one organized primarily by geographic market (see Note 6), the carrying amount of goodwill was allocated to the new segments. Impairment tests prior to that change were performed based on goodwill balances and cash flows under the previous segment structure. Therefore, the Company is unable to reflect the reallocation of the goodwill impairment charge taken during 2008 and the prior-year goodwill balances by the current geographic segment structure.

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The following table shows the change in the gross carrying amount and the accumulated amortization for intangible assets and goodwill from December 30, 2007 to December 28, 2008, including the above-mentioned impairment write-down:

	December 30, 2007				Changes							December 28, 2008
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Acquisitions		Amortization Expense		Impairment Charge1			Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets
(including network affiliation, advertiser, programming and subscriber relationships):
Virginia/Tennessee	$	61,932	$	38,376	$	—	$	2,754	$	(6,606	)	$	55,326	$	41,130
Florida		1,055		1,055		—		—		—			1,055		1,055
Mid-South		154,929		49,702		900		7,781		(71,781	)		84,048		57,483
North Carolina		20,052		8,415		—		1,176		(4,705	)		15,347		9,591
Ohio/Rhode Island		29,530		3,246		—		1,260		(20,373	)		9,157		4,506
Advertising services & other		2,570		1,882		4,044		699		—			6,614		2,581
Total	$	270,068	$	102,676	$	4,944	$	13,670	$	(103,465	)	$	171,547	$	116,346
Indefinite-lived intangible assets:
Goodwill	$	917,521			$	15,690			$	(511,741	)	$	421,470
FCC licenses
Virginia/Tennessee		38,385				—				(12,174	)		26,211
Mid-South		230,288				—				(133,343	)		96,945
North Carolina		94,907				—				(66,174	)		28,733
Ohio/Rhode Island		113,700				—				(77,696	)		36,004
Total FCC licenses		477,280				—				(289,387	)		187,893
Other		2,005				1,927				(1,760	)		2,172
Total	$	1,396,806			$	17,617			$	(802,888	)	$	611,535

¹ Additionally, $5.7 million of investments and real estate were written down.

After considering the above, intangibles amortization expense is projected to be approximately $7 million in 2009, decreasing to $6 million in 2010 and 2011, to $3 million in 2012, and to $2 million in 2013.

Note 4: Investments

In the second quarter of 2008, the Company and its two equal partners completed the sale of SP Newsprint Company (SPNC) to White Birch Paper Company. The sale generated proceeds to the Company of approximately $60 million which were used to reduce debt; associated income taxes approximated $20 million. Under the purchase agreement, the partners retained liabilities for certain retirement, environmental, and income tax issues; the final post-closing working capital settlement has been referred to an arbiter and will not be finalized until 2009. In the fourth quarter of 2007, the Company recorded a pre-tax write-down to its investment in SPNC (in addition to the Company’s equity in SPNC’s net loss) of $10.7 million. In 2008, the Company recorded an additional net loss of $1.6 million based on the estimated fair values of certain post-closing items. These losses were included in the Statement of Operations in the line item “Impairment of and income (loss) on sale of investments.” The chart below presents the summarized financial information for the Company’s investment in SPNC at December 30, 2007 and for the two years then ended.

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SP Newsprint Company

(In thousands)	2007
Current assets	$	120,392
Noncurrent assets		349,082
Current liabilities		233,586
Noncurrent liabilities		51,842
(In thousands)	2007			2006
Net sales	$	572,125		$	638,377
Gross profit (loss)		(525	)		84,509
Net income (loss)		(59,939	)		31,562
Company’s equity in net income (loss)		(19,980	)		10,521
Additional write-down of Company’s investment		(10,656	)		—

The Company purchased approximately 55 thousand tons of newsprint from SPNC in 2008 at market prices, which totaled $31 million and approximated 63% of the Company’s newsprint needs; in 2007 and 2006, the Company purchased approximately 58 thousand and 57 thousand tons, respectively, of newsprint from SPNC which approximated 56% and 46% of the Company’s newsprint needs in each of those years and totaled approximately $30 million and $34 million in 2007 and 2006, respectively. The Company is committed to purchase a minimum of approximately 48 thousand, 42 thousand and 35 thousand tons of newsprint from SPNC in 2009, 2010, and 2011, respectively.

In 2008, the Company wrote-off its entire remaining investment of $1.9 million (which was included as a part of the Company’s pretax impairment charge discussed in Note 3) in a company that produces interactive entertainment including games; the Company was able to recover $.5 million of its investment in the latter part of 2008. Additionally, the Company carried this investment at fair value and recognized write-downs in 2007 and 2006 of $3.6 million and $700 thousand, respectively, to reflect its decrease in approximate fair value due to the extended period the stock price of this publicly traded security was below the Company’s carrying value.

Note 5: Long-Term Debt and Other Financial Instruments

Long-term debt at December 28, 2008, and December 30, 2007, was as follows:

(In thousands)	2008		2007
Revolving credit facility	$	425,000	$	595,000
Bank term loan facility		300,000		300,000
Bank lines		5,000		2,500
Capitalized lease		49		72
Long-term debt	$	730,049	$	897,572

The Company has a revolving credit facility as well as a $300 million variable bank term loan agreement (together the “Facilities”) both of which mature in 2011. In the fourth quarter of 2007, the Company amended the Facilities to increase the maximum leverage ratio covenant and reduce the minimum interest ratio covenant for a period of three fiscal quarters. As a result of the continuation of challenging business conditions, the Company again amended its revolving credit facility and its variable bank term loan agreement in the fourth quarter of 2008. The Company’s debt covenants require the maintenance of an interest coverage ratio in addition to a leverage ratio, as defined. Pursuant to the 2008 amendments, the maximum leverage ratio covenants were increased for the fourth quarter of 2008 and the first quarter of 2009; they will subsequently be reduced slightly for the remainder of 2009 and for the first three quarters of 2010, and will remain at a constant level thereafter. The minimum interest coverage ratio covenant was also reduced through the first quarter of 2009 and will be increased slightly for the remaining term of the Facilities. The borrowing capacity on the revolving credit facility was reduced from $1 billion to $600 million, and interest

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rate margins on both facilities were increased. Additional annual borrowing capacity reductions will be made based on the Company’s excess cash flow, as defined. If the leverage ratio were to exceed certain levels, the amended agreements also contain restrictions on dividends, capital spending, indebtedness, capital leases, and investments. The Company pledged its cash and assets and the capital stock of its subsidiaries as collateral. Interest rates under the Facilities are based on the London Interbank Offered Rate (LIBOR) plus a margin ranging from .3% to 3.5% (1.35% at December 28, 2008), determined by the Company’s leverage ratio. The Company pays fees (.4% at December 28, 2008) on the entire commitment of the facility at a rate also based on its leverage ratio. At the time of the latest amendment, the Company incurred approximately $4.8 million in new amendment fees and expensed $1.1 million of existing unamortized debt issuance costs. As of December 28, 2008, the Company was in compliance with all covenants and expects that the covenants will continue to be met.

At December 28, 2008, the Company had borrowings of $5 million from bank lines due within one year with an interest rate of 3.25% that were classified as long-term debt in accordance with the Company’s intention and ability to refinance these obligations on a long-term basis under existing facilities.

Long-term debt maturities during the five years subsequent to December 28, 2008, aggregating $730 million, were $5 million in 2009 and $725 million in 2011.

In the third quarter of 2006, the Company entered into several interest rate swaps as part of an overall strategy to manage interest cost and risk associated with variable interest rates, primarily short-term changes in LIBOR. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million will mature in 2009 and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s Facilities. These swaps effectively convert the Company’s variable rate bank debt to fixed rate debt with a weighted average interest rate approximating 7.3% at December 28, 2008. The following table includes information about the Company’s derivative instruments as of December 28, 2008.

(In thousands)
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value		Amount of Pre-tax Derivative Loss Recognized in 2008 OCI
Interest rate swaps	Other liabilities and deferred credits	$	22,723	$	9,510

The table that follows includes information about the carrying values and estimated fair values of the Company’s financial instruments at December 28, 2008, and December 30, 2007:

(In thousands)	2008		2007
Assets:
Investments
Trading	$	243	$	—
Available-for-sale		—		1,874
Liabilities:
Long-term debt:
Revolving credit facility		425,000		595,000
Bank term loan facility		300,000		300,000
Bank lines		5,000		2,500
Interest rate swap agreements		22,723		13,214

At times when the Company has investments with a readily determinable value and that are classified as available-for-sale, they are carried at fair value, with unrealized gains or losses, net of deferred taxes, reported as a separate component of stockholders’ equity. Trading securities are held by the supplemental 401(k) plan and are carried

17

at fair value as described in Note 8. The carrying value of the long-term debt in the chart above approximates its fair value. The interest rate swaps are carried at fair value based on a discounted cash flow analysis (predicated on quoted LIBOR prices) of the estimated amounts the Company would have received or paid to terminate the swaps. Under the fair value hierarchy set forth by FAS 157, the Company’s interest rate swaps fall under Level 2 (Other Observable Inputs).

Note 6: Business Segments

The Company is a diversified communications company located primarily in the southeastern United States. Effective at the beginning of the third quarter of 2009, the Company changed its management structure, shifting from its three-division structure (Publishing, Broadcast, and Interactive Media) to five geographic segments (Virginia/Tennessee, Florida, Mid-South, North Carolina, Ohio/Rhode Island) along with a sixth segment that includes interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-first strategy, to speed decision-making, and to create and serve new market opportunities. The Company has reclassified the corresponding items of segment information for earlier periods to conform with its current structure.

Revenues for the geographic markets include revenues from 18 network-affiliated television stations, three metro newspapers, and 20 community newspapers, all of which have associated Web sites. Additionally, more than 200 specialty publications that include weekly newspapers and niche publications and the Web sites that are associated with many of these specialty publications are included in revenues for the geographic markets. Additionally, more than 200 specialty publications that include weekly newspapers and niche publications and the Web sites that are associated with many of these specialty publications. Revenues for the sixth segment, Advertising Services & Other, are generated by three interactive advertising services companies and certain other operations including a broadcast equipment and studio design company.

Management measures segment performance based on profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of acquired intangibles is not allocated to individual segments. Intercompany sales are primarily accounted for as if the sales were at current market prices and are eliminated in the consolidated financial statements. Certain promotion in the Company’s newspapers and television stations on behalf of its online shopping portal are recognized based on incremental cost. The Company’s reportable segments are managed separately, largely based on geographic market considerations and a desire to provide services to customers regardless of the media platform or any difference in the method of delivery. In certain instances, operations have been aggregated based on similar economic characteristics.

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(In thousands)	Segment Assets		Capital Expenditures		Revenues			Depreciation and Amortization			Operating Profit (loss)
2008
Virginia/Tennessee	$	240,035	$	10,375	$	232,465		$	(15,244	)	$	40,609
Florida		110,805		3,641		201,291			(9,905	)		(1,467	)
Mid-South		277,396		6,442		171,531			(14,836	)		24,967
North Carolina		99,989		5,009		105,372			(7,371	)		11,642
Ohio/Rhode Island		75,731		623		62,921			(3,869	)		13,949
Advertising Services and Other		29,458		220		26,647			(796	)		1,495
Eliminations		—		—		(2,852	)		10			(1,113	)
												90,082
Unallocated amounts:
Acquisition intangibles amortization		—		—					(13,670	)		(13,670	)
Corporate		488,436		4,698					(5,783	)		(38,504	)
Discontinued operations		12,402		509					—
	$	1,334,252	$	31,517	$	797,375		$	(71,464	)
Interest expense												(43,449	)
Impairment of and income (loss) on investments												(4,419	)
Gain on insurance recovery												3,250
Goodwill and other asset impairment												(908,701	)
Other												3,965
Consolidated loss from continuing operations before income taxes											$	(911,446	)
2007
Virginia/Tennessee	$	246,306	$	25,196	$	265,879		$	(13,043	)	$	64,683
Florida		102,195		8,865		253,442			(9,381	)		30,299
Mid-South		503,475		18,630		180,236			(15,070	)		30,252
North Carolina		179,589		5,829		110,308			(6,574	)		14,204
Ohio/Rhode Island		182,665		5,336		60,578			(3,799	)		10,294
Advertising Services and Other		29,469		795		34,486			(551	)		(840	)
Eliminations		—		—		(8,636	)		31			(1,755	)
												147,137
Unallocated amounts:
Acquisition intangibles amortization		—		—					(17,003	)		(17,003	)
Corporate		1,120,012		11,460					(7,608	)		(39,061	)
Discontinued operations		107,355		2,031					—
	$	2,471,066	$	78,142	$	896,293		$	(72,998	)
Interest expense												(59,577	)
Impairment of and income (loss) on investments												(34,825	)
Gain on insurance recovery												17,604
Other												(2,119	)
Consolidated income from continuing operations before income taxes											$	12,156

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(In thousands)	Segment Assets		Capital Expenditures		Revenues			Depreciation and Amortization			Operating Profit (loss)
2006
Virginia/Tennessee	$	242,545	$	17,847	$	274,157		$	(12,810	)	$	66,040
Florida		105,305		11,604		307,846			(9,695	)		70,827
Mid-South		503,757		31,695		177,426			(12,373	)		38,656
North Carolina		177,949		4,964		105,645			(5,531	)		17,414
Ohio/Rhode Island		181,918		307		43,825			(1,694	)		19,768
Advertising Services & Other		30,570		788		28,036			(2,745	)		(1,143	)
Eliminations		—		—		(7,719	)		—			(3,094	)
												208,468
Unallocated amounts:
Acquisition intangibles amortization		—		—		—			(16,233	)		(16,233	)
Corporate *		1,150,325		16,270		—			(5,082	)		(40,998	)
Discontinued operations		112,857		10,421		—			—
	$	2,505,226	$	93,896	$	929,216		$	(66,163	)
Interest expense												(48,505	)
Impairment of and income (loss) on investments												9,898
Other												(14,089	)
Consolidated income from continuing operations before income taxes											$	98,541

* Goodwill balances of $421,470, $917,521 and $916,021 for 2008, 2007 and 2006, respectively were included in corporate assets

Note 7: Taxes on Income

Significant components of income taxes from continuing operations are as follows:

(In thousands)	2008			2007			2006
Federal	$	(13,369	)	$	(11,303	)	$	23,147
State		(2,204	)		(2,065	)		2,082
Current		(15,573	)		(13,368	)		25,229
Federal		(265,911	)		13,432			8,298
State		(14,234	)		2,857			2,878
Deferred		(280,145	)		16,289			11,176
Valuation allowance		7,527			—			—
Income taxes	$	(288,191	)	$	2,921		$	36,405

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Temporary differences, which gave rise to significant components of the Company’s deferred tax liabilities and assets at December 28, 2008, and December 30, 2007, are as follows:

(In thousands)	2008			2007
Deferred tax liabilities:
Difference between book and tax bases of intangible assets	$	7,630		$	303,252
Tax over book depreciation		71,526			87,346
Other		626			567
Total deferred tax liabilities		79,782			391,165
Deferred tax assets:
Employee benefits		(36,688	)		(37,271	)
Net operating losses		(2,107	)		(2,107	)
Other comprehensive income items		(84,355	)		(44,245	)
Other		(4,270	)		(5,908	)
Total deferred tax assets		(127,420	)		(89,531	)
Net deferred tax (assets) liabilities		(47,638	)		301,634
Valuation allowance		47,638			—
Deferred tax assets included in other current assets		—			9,954
Deferred tax liabilities	$	—		$	311,588

As of December 28, 2008, the Company established a valuation allowance against its entire net deferred tax asset of $47.6 million because cumulative pretax income in recent years was in an overall loss position primarily due to the current year impairment charges. The valuation allowance as of December 30, 2007 was zero. The majority ($40.1 million) of the valuation allowance was associated with deferred taxes on other comprehensive loss (OCL) items and therefore was recorded directly to the OCL component of Stockholders’ Equity. The remaining $7.5 million affected the Consolidated Statement of Operations. The Company believes that it is reasonably possible that this valuation allowance will be reduced significantly in the next year through normal amortization, creation of other deferred tax liabilities, and the economic stimulus proposals currently under consideration to extend and expand the NOL carryback provisions.

Reconciliation of income taxes computed at the federal statutory tax rate to actual income tax expense from continuing operations is as follows:

(In thousands)	2008			2007			2006
Income taxes computed at federal statutory tax rate	$	(319,006	)	$	4,255		$	34,489
Increase (reduction) in income taxes resulting from:
Impairment writedown of non-deductible goodwill		32,956			—			—
State income taxes, net of federal income tax benefit		(10,687	)		513			3,221
Increase in deferred tax valuation allowance		7,527			—			—
Other		1,019			(1,847	)		(1,305	)
Income taxes	$	(288,191	)	$	2,921		$	36,405

The Company paid income taxes of $1.6 million, $6.9 million and $27.1 million, respectively, net of refunds in 2008, 2007 and 2006.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (FIN 48), on January 1, 2007. The Company recognized an approximate $4.9 million net increase in the liability for uncertain tax positions, which was accounted for as a reduction of retained earnings, as of January 1, 2007. A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows:

(In thousands)
Balance at December 31, 2007	$	15,421
Reductions based on tax positions related to the current year		(600	)
Additions for tax positions for prior years		736
Reductions for tax positions for prior years		(586	)
Balance at December 28, 2008	$	14,971

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The entire balance of the liability for uncertain tax positions would impact the effective rate (net of related asset for uncertain tax positions) if underlying tax positions were sustained or favorably settled. The Company recognizes interest and penalties accrued related to uncertain tax positions in the provision for income taxes. At December 28, 2008, the liability for uncertain tax positions included approximately $5.9 million of estimated interest and penalties.

For federal tax purposes, the Company’s tax returns have been audited or closed by statute through 2004 and remain subject to audit for years 2005 and beyond. The Company has various state income tax examinations ongoing and at varying stages of completion, but generally its state income tax returns have been audited or closed to audit through 2004.

Note 8: Common Stock and Stock Options

Holders of the Class A common stock are entitled to elect 30% of the Board of Directors and, with the holders of Class B common stock, also are entitled to vote on the reservation of shares for stock awards and on certain specified types of major corporate reorganizations or acquisitions. Class B common stock can be converted into Class A common stock on a share-for-share basis at the option of the holder. Both classes of common stock receive the same dividends per share.

Under the Company’s Long-Term Incentive Plan (LTIP), the Company has historically granted stock-based awards to key employees in the form of nonqualified stock options (Non-Qualified Stock Option Plan) and non-vested shares (Performance Accelerated Restricted Stock Plan (PARS)). At the Company’s 2006 Annual Meeting, amendments, including one allowing for additional shares to be made available for future awards, were not approved. Consequently, the Company did not grant additional stock options or PARS in 2007. The Company resumed this practice in 2008 after amendments to the LTIP were approved at the 2007 Annual Stockholder Meeting. In the first quarter of 2007 in order to maintain long-term compensation objectives for key employees, the Board adopted the Stock Appreciation Rights (SARs) Plan and approved grants of individual awards thereunder on January 31, 2007.

The LTIP is administered by the Compensation Committee and permits the grant of share options and shares to its employees. At December 28, 2008, a combined 1,412,522 shares remained available for grants of PARS (no more than 320,558) and stock options under the LTIP. Grant prices of stock options are equal to the fair market value of the underlying stock on the date of grant. Unless changed by the Compensation Committee, options are exercisable during the continued employment of the optionee but not for a period greater than ten years and not for a period greater than one year after termination of employment; they generally become exercisable at the rate of one-third each year from the date of grant. For awards granted prior to 2006, the optionee may exercise any option in full in the event of death or disability or upon retirement after at least ten years of service with the Company and after attaining age 55. For awards granted in 2006 and thereafter, the optionee must be 63 years of age, with ten years of service, and must be an employee on December 31 of the year of grant in order to be eligible to exercise an award upon retirement. The Company has options for approximately 60,000 shares outstanding under former plans with slightly different exercise terms.

The Company valued stock options granted in 2008 and 2006 using a binomial lattice valuation method. The volatility factor was estimated based on the Company’s historical volatility over the contractual term of the options. The Company also used historical data to derive the option’s expected life. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the date of grant. The dividend yield was predicated on the current annualized

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dividend payment and the average stock price over the year prior to the grant date. The key assumptions used to value stock options granted in 2008 and 2006 and the resulting grant date fair values are summarized below:

	2008			2006
Risk-free interest rate		3.31	%		4.40	%
Dividend yield		2.90	%		1.40	%
Volatility factor		29.00	%		28.00	%
Expected life (years)		6.50			6.60
Exercise price	$	20.30		$	49.66
Grant date fair value	$	4.88		$	15.50

The following is a summary of option activity for the year ended December 28, 2008:

(In thousands, except per share amounts)	Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)*	Aggregate Intrinsic Value
Outstanding-beginning of year	1,869		$	54.54
Granted	600			20.30
Exercised	—			—
Forfeited or expired	(246	)		49.31
Outstanding-end of year	2,223		$	45.88	6.0	$	—
Outstanding-end of year less estimated forfeitures	2,195		$	46.17	6.0	$	—
Exercisable - end of year	1,524		$	55.03	4.7	$	—

* Excludes 900 options which are exercisable during the lifetime of the optionee and 61,000 options which are exercisable during the continued employment of the optionee and for a three-year period thereafter

The Company recognized non-cash compensation expense related to stock options of approximately $3.3 million ($2.1 million after-tax), $3.4 million ($2.2 million after-tax), and $5.6 million ($3.6 million after-tax) for 2008, 2007 and 2006, respectively. As of December 28, 2008, there was $1.5 million of total unrecognized compensation cost related to stock options expected to be recognized over a weighted-average period of approximately 2 years.

As indicated earlier, the Company granted SARs in lieu of stock options in 2007. A SAR, which is settled in cash and designed to help align key employees’ interests with those of the Company’s stockholders, provides the grantee the ability to benefit from appreciation in the value of the Company’s Class A Common Stock. The amount realized upon exercise of a SAR is the difference between the fair market value of Class A Common Stock on the date of grant and the fair market value of Class A Common Stock on the date of exercise, subject to a maximum increase in value of 100%. SARs vest ratably over a three-year period from the date of grant and have a maximum five-year term. SARs vest immediately upon the grantee’s death or disability during employment or upon retirement after age 63 with ten years of service provided that the grantee is employed on December 31 of the year in which the SAR was granted. Upon termination of employment, the grantee has up to 12 months thereafter to exercise any vested SAR.

The Company granted 512,600 SARs with an exercise price of $40.01 in the first quarter of 2007 at a grant-date fair value of $8.79 using a binomial lattice valuation method. Each quarter, the Company records compensation expense or benefit ratably over the service period and adjusts for changes in the fair value of SARs. Due to the decline

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in the Company’s stock price since the grant date, the cumulative compensation cost related to SARs is nominal. However, stock prices approaching the exercise price would cause the compensation cost recognized to be higher due to the variable nature of expense under the SARs Plan.

Certain executives are eligible for Performance Accelerated Restricted Stock (PARS), which vests over a ten-year period. If certain earnings targets are achieved (as defined in the plan) vesting may accelerate to either a three, five or seven year period. The recipient of PARS must remain employed by the Company during the vesting period. PARS is awarded at the fair value of Class A shares on the date of the grant. All restrictions on PARS granted prior to 1999 have been released. The following is a summary of PARS activity for the year ended December 28, 2008:

(In thousands, except per share amounts)	Shares		Weighted- Average Grant Date Fair Value
Nonvested balance - beginning of year	441		$	56.24
Granted	245			20.30
Restrictions released	(104	)		53.15
Forfeited	(74	)		50.04
Nonvested balance - end of year	508		$	40.42

As of the end of 2008, there was $9.4 million of total unrecognized compensation cost related to PARS under the LTIP; that cost is expected to be recognized over a weighted-average period of approximately 6.8 years. The amount recorded as expense in 2008, 2007 and 2006, was $2 million ($1.3 million after-tax), $1.8 million ($1.5 million after-tax), and $2.6 million ($2.2 million after-tax), respectively. During 2008, 103,873 PARS with a fair value of $1.4 million had restrictions released upon the retirement of a participant.

The Company has maintained a Supplemental 401(k) Plan (the Plan) for many years which allows certain employees to defer salary and obtain Company match where federal regulations would otherwise limit those amounts. The Company is the primary beneficiary of the variable interest entity that holds the Plan’s investments and consolidates the Plan accordingly. With certain 2008 amendments to the Plan, participants will now receive cash payments upon termination of employment, and participants age 55 and above can now choose from a range of investment options including the Company’s Class A common stock fund. The Plan’s liability ($.4 million at December 28, 2008) to participants is adjusted to its fair value each reporting period. The Plan’s investments ($.2 million at December 28, 2008), other than its Class A common stock fund, are considered trading securities, reported as assets, and are adjusted to fair value each reporting period. Investments in the Class A common stock fund are measured at historical cost and are recorded as a reduction of additional paid-in capital. Consequently, fluctuations in the Company’s stock price will have an impact on the Company’s net income when the liability is adjusted to fair value and the common stock fund remains at historical cost. The Company recognized a benefit of $1.7 million ($1.1 million after-tax) in 2008 under the Plan due to the decrease in the Company’s stock price. The Company has suspended the match on the Plan from April 1, 2009 through December 31, 2009.

Each member of the Board of Directors that is neither an employee nor a former employee of the Company (an Outside Director) participates in the Directors’ Deferred Compensation Plan. The plan provides that each Outside Director shall receive half of his or her annual compensation for services to the Board in the form of Deferred Stock Units (DSU); each Outside Director additionally may elect to receive the balance of his or her compensation in either cash, DSU, or a split between cash and DSU. Other than dividend credits, deferred stock units do not entitle Outside Directors to any rights due to a holder of common stock. DSU account balances may be settled after the Outside Director’s retirement date by a cash lump-sum payment, a single distribution of common stock, or annual installments of either cash or common stock over a period of up to ten years. The Company records expense annually based on the amount of compensation paid to each director as well as recording an adjustment for changes in fair value of DSU. In 2008, 2007, and 2006, the Company recognized benefits of $1 million ($.6 million after-tax), $.5 million ($0.3 million after-tax), and $.4 million ($.2 million after-tax), respectively, under the plan due to the decrease in fair value of DSU.

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Because both the Supplemental 401(k) Plan and the Director’s Deferred Compensation Plan were designed to align the interest of participants with those of shareholders, fluctuations in stock price have an effect on the expense recognized by the Company. Each $1 change in the Company’s stock price as of December 28, 2008 would have adjusted the Company’s pre-tax income by approximately $.3 million.

In the second quarter of 2007, the Company entered into an accelerated share repurchase program with an investment bank. Under this program, the investment bank delivered 1.5 million shares of Class A Common Stock to the Company for approximately $57 million ($38.10 per share). Those shares were immediately retired and accounted for as a reduction of stockholders’ equity. The share repurchase was funded with borrowings under the Company’s existing credit agreements. As part of the transaction, the Company entered into a forward contract with the investment bank. The forward contract was settled in the third quarter and included a price adjustment based on the volume weighted-average price of the Company’s Class A Common Stock, as defined in the agreement. After this adjustment, the final share repurchase totaled $48.7 million ($32.48 per share).

Note 9: Retirement Plans

The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all employees hired before January 1, 2007, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. The Company also has a retiree medical savings account (established as of the beginning of 2007) which reimburses eligible employees who retire from the Company for certain medical expenses. In addition, the Company also has an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992. The previously mentioned plans are collectively referred to as the “Plans”. The measurement date for the Plans is the Company’s fiscal year end.

In 2006, the Company redesigned its defined benefit and defined contribution retirement plans effective January 1, 2007, and added certain new employee benefit programs. These changes reduced the volatility of future pension expense while continuing to provide competitive retirement benefits to employees. The changes included freezing the service accrual in the current defined benefit retirement plan for existing employees (while closing this plan to new employees), increasing the maximum Company match in the current 401(k) defined contribution plan to 5% from 4% of an employee’s earnings, adding a profit sharing component to the 401(k) plan, and establishing a retiree medical savings account.

Benefit Obligations

The following table provides a reconciliation of the changes in the Plans’ benefit obligations for the years ended December 28, 2008, and December 30, 2007:

	Pension Benefits						Other Benefits
(In thousands)	2008			2007			2008			2007
Change in benefit obligation:
Benefit obligation at beginning of year	$	408,293		$	437,267		$	47,748		$	50,995
Service cost		944			1,096			415			491
Interest cost		26,125			24,995			3,011			2,943
Participant contributions		—			—			1,454			1,121
Plan amendments		—			(18	)		—			2,189
Actuarial (gain) loss		258			(38,239	)		(7,008	)		(6,828	)
Benefit payments, net of subsidy		(18,065	)		(16,808	)		(4,068	)		(3,163	)
Benefit obligation at end of year	$	417,555		$	408,293		$	41,552		$	47,748

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The accumulated benefit obligation at the end of 2008 and 2007 was $368 million and $349 million, respectively. The Company’s policy is to fund benefits under the supplemental executive retirement, excess, and all postretirement benefits plans as claims and premiums are paid. As of December 28, 2008 and December 30, 2007, the benefit obligation related to the supplemental executive retirement and ERISA excess plans included in the preceding table was $48.6 million and $46.4 million, respectively. The Plans’ benefit obligations were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2008		2007		2008		2007
Discount rate	6.50	%	6.50	%	6.50	%	6.50	%
Compensation increase rate	4.00		4.00		4.00		4.00

A 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2008 (9.5% for 2007). This rate was assumed to decrease gradually each year to a rate of 5% in 2015 and remain at that level thereafter. These rates have an effect on the amounts reported for the Company’s postretirement obligations. A one-percentage point increase or decrease in the assumed health care trend rates would change the Company’s accumulated postretirement benefit obligation by approximately $800 thousand, and the Company’s net periodic cost by less than $100 thousand.

Plan Assets

The following table provides a reconciliation of the changes in the fair value of the Plans’ assets for the years ended December 28, 2008, and December 30, 2007:

	Pension Benefits						Other Benefits
(In thousands)	2008			2007			2008			2007
Change in plan assets:
Fair value of plan assets at beginning of year	$	308,408		$	297,622		$	—		$	—
Actual return on plan assets		(93,105	)		25,860			—			—
Employer contributions		11,811			1,734			2,963			2,524
Participant contributions		—			—			1,454			1,121
Benefit payments		(18,065	)		(16,808	)		(4,417	)		(3,645	)
Fair value of plan assets at end of year	$	209,049		$	308,408		$	—		$	—

The asset allocation for the Company’s funded retirement plan at the end of 2008 and 2007, and the asset allocation range for 2009, by asset category, are as follows:

	Asset Allocation Range		Percentage of Plan Assets at Year End
Asset Category	2009		2008		2007
Equity securities	45	%-75%	64	%	73	%
Fixed income securities	25	%-45%	36	%	27	%
Total			100	%	100	%

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As plan sponsor of the funded retirement plan, the Company’s investment strategy is to achieve a rate of return on the plan’s assets that, over the long-term, will fund the plan’s benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plan’s returns is the asset allocation policy. The Company’s investment policy provides absolute ranges (45%-75% equity, 25%-45% fixed income) for the plan’s long-term asset mix. The Company periodically (at least annually) reviews and rebalances the asset mix if necessary. The Company also reviews the plan’s overall asset allocation to determine the proper balance of securities by market capitalization, value or growth, U.S., international or global, or the addition of other asset classes. Periodically, the Company evaluates each investment manager to determine if that manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices.

Funded Status

The following table provides a statement of the funded status of the Plans at December 28, 2008, and December 30, 2007:

	Pension Benefits						Other Benefits
(In thousands)	2008			2007			2008			2007
Amounts recorded in the balance sheet:
Current liabilities	$	(1,735	)	$	(1,660	)	$	(2,652	)	$	(3,466	)
Noncurrent liabilities		(206,771	)		(98,225	)		(38,900	)		(44,282	)
Net amount recognized	$	(208,506	)	$	(99,885	)	$	(41,552	)	$	(47,748	)

The following table provides a reconciliation of the Company’s accumulated other comprehensive income prior to any deferred tax effects:

	Pension Benefits							Other Benefits
(In thousands)	Net actuarial loss		Prior service (credit) cost			Total		Net actuarial gain			Prior service (credit) cost			Total
December 30, 2007	$	95,937	$	(224	)	$	95,713	$	(6,741	)	$	15,269		$	8,528
Current year change		113,735		54			113,789		(6,632	)		(1,721	)		(8,353	)
December 28, 2008	$	209,672	$	(170	)	$	209,502	$	(13,373	)	$	13,548		$	175

The Company anticipates recognizing $6.5 million of actuarial loss and $1.7 million of prior service cost, both of which are currently in accumulated other comprehensive income, as a component of its net periodic cost in 2009.

Expected Cash Flows

The following table includes amounts that are expected to be contributed to the Plans by the Company and amounts the Company expects to receive in Medicare subsidy payments. It reflects benefit payments that are made from the Plans’ assets as well as those made directly from the Company’s assets and includes the participants’ share of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company’s best estimate given its current knowledge; actual amounts could be materially different.

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(In thousands)	Pension Benefits		Other Benefits		Medicare Subsidy Receipts
Employer Contributions
2009 (expectation) to participant benefits	$	16,735	$	2,737	$	—
Expected Benefit Payments / Receipts
2009		18,297		3,140		(403	)
2010		19,236		3,254		(411	)
2011		20,722		3,510		(416	)
2012		22,253		3,831		(422	)
2013		23,885		4,183		(433	)
2014-2018		139,829		21,640		(2,358	)

Net Periodic Cost

The following table provides the components of net periodic benefit cost for the Plans for fiscal years 2008, 2007, and 2006:

	Pension Benefits									Other Benefits
(In thousands)	2008			2007			2006			2008			2007			2006
Service cost	$	944		$	1,096		$	14,535		$	415		$	491		$	396
Interest cost		26,125			24,995			25,235			3,011			2,943			2,559
Expected return on plan assets		(25,898	)		(24,808	)		(25,306	)		—			—			—
Amortization of prior-service (credit) cost		(53	)		(53	)		11			1,721			1,721			1,182
Amortization of net loss (gain)		5,525			8,296			7,412			(377	)		(74	)		—
Curtailment loss		—			—			497			—			—			—
Net periodic benefit cost	$	6,643		$	9,526		$	22,384		$	4,770		$	5,081		$	4,137

The net periodic costs for the Company’s pension and other benefit plans were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2008		2007		2008		2007
Discount rate	6.50	%	6.00	%	6.50	%	6.00	%
Expected return on plan assets	8.50		8.50		—		—
Compensation increase rate	4.00		4.00		4.00		4.00

The reasonableness of the expected return on the funded retirement plan assets was determined by four separate analyses: 1) review of 10 years of historical data of portfolios with similar asset allocation characteristics done by a third party, 2) analysis of 20 years of historical performance assuming the current portfolio mix and investment manager structure done by a third party, 3) review of the Company’s actual portfolio performance over the past 5 years, and 4) projected portfolio performance for 10 years, assuming the plan’s asset allocation range, done by a third party. Net periodic costs for 2009 will use a discount rate of 6.5%, an expected rate of return on plan assets of 8.25%, and a compensation increase rate of 4%.

The Company also sponsors a 401(k) plan covering substantially all employees under which the Company matches 100% of participant pretax contributions up to a maximum of 5% of the employee’s salary. Eligible account balances may be rolled over from a prior employer’s qualified plan. Contributions charged to expense under the plan

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were $10.3 million, $16.4 million (including profit sharing) and $8.7 million in 2008, 2007 and 2006, respectively. The Company has suspended this match from April 1, 2009 through December 31, 2009.

Note 10: Earnings Per Share

The following chart is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for income from continuing operations as presented in the Consolidated Statements of Operations.

	2008							2007						2006
(In thousands, except per share amounts)	Income (Numerator)			Shares (Denominator)	Per Share Amount			Income (Numerator)			Shares (Denominator)	Per Share Amount		Income (Numerator)			Shares (Denominator)	Per Share Amount
Basic and Diluted EPS
Income (loss) from continuing operations	$	(623,255	)					$	9,235					$	62,136
Distributed and undistributed earnings attributable to participating securities		(504	)						(421	)					(1,685	)
Income (loss) from continuing operations allocable to common stockholders	$	(623,759	)	22,113	$	(28.21	)	$	8,814		22,656	$	0.39	$	60,451		23,597	$	2.56

Note 11: Commitments, Contingencies and Other

Broadcast film rights

Over the next 6 years the Company is committed to purchase approximately $35.4 million of program rights that currently are not available for broadcast, including programs not yet produced. If such programs are not produced, the Company’s commitment would expire without obligation.

Capital commitments

The Company currently has several projects underway including the replacement of a centralized traffic system in its broadcast properties, as well as upgrading certain press equipment in the Virginia/Tennesse, Florida and North Carolina markets. Remaining commitments on these projects at December 28, 2008, totaled approximately $6 million.

Lease obligations

The Company rents certain facilities and equipment under operating leases. These leases extend for varying periods of time ranging from one year to more than twenty years and in many cases contain renewal options. Total rental expense from continuing operations amounted to $7.9 million in 2008, $8 million in 2007, and $6.9 million in 2006. Minimum rental commitments for continuing operations under operating leases with noncancelable terms in excess of one year are as follows: 2009 – $6.9 million; 2010 – $6.1 million; 2011 – $4.8 million; 2012 – $3.5 million; 2013 – $1.8 million; subsequent years – $8.1 million.

Interest

In 2008, 2007 and 2006, the Company’s interest expense related to continuing operations was $43.4 million (net of $.2 million capitalized), $59.6 million (net of $1.4 million capitalized) and $48.5 million (net of $1 million capitalized), respectively. Interest paid during 2008, 2007 and 2006, net of amounts capitalized, was $41.3 million, $58.3 million and $48.4 million, respectively.

Other current assets

Other current assets included program rights of $15.4 million and $14.3 million at December 28, 2008, and December 30, 2007, respectively.

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Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

(In thousands)	2008		2007
Payroll and employee benefits	$	29,339	$	34,391
Unearned revenue		20,837		21,213
Fire damage repair costs received in advance (see below)		1,330		14,428
Program rights		14,876		13,673
Other		19,909		18,048
Total	$	86,291	$	101,753

Insurance Recovery

In the second quarter of 2007, one of three presses at the Company’s Richmond Times-Dispatch printing facility caught fire; damage to the remainder of the facility was minimal and the remaining presses were back in operation the next day. In the fourth quarter of 2007, the Company reached a settlement with the insurance company and received cash of $47.7 million which covered the damaged press as well as the Company’s clean-up and repair costs. A portion of that settlement related to repair and clean-up costs in subsequent years. In 2007, the Company wrote off the net book value of the destroyed equipment totaling $10.2 million and recorded a gain of $17.6 million due to the insured value of the property exceeding its net book value. In 2008, the Company identified a more cost-effective method to clean the equipment and remediate the facility than previously anticipated, and consequently, recorded pre-tax gains of $3.3 million related to the insurance settlement. Gains in both years were recorded on the Statements of Operations in the line item “Gain on insurance recovery.”

Other

The FCC has mandated a reallocation of a portion of the broadcast spectrum to others, including Sprint/Nextel. According to the FCC order, broadcasters must surrender their old equipment to prevent interference within a narrowed broadcasting frequency range. In exchange for the relinquished equipment, Sprint/Nextel has been providing broadcasters with new digital equipment and reimbursing associated out-of-pocket expenses. Over the next year, Sprint/Nextel will continue to provide the Company with new equipment which is capable of meeting the narrowed broadcasting frequency criteria. The Company recorded gains of $5.2 million in 2008 and $.9 million in 2007 in the line item “Selling, general and administrative” on the Consolidated Statements of Operations and anticipates recording additional gains approaching $2.5 million in total over the next year relating to the new equipment.

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Severance

In an effort to better align its costs with current revenue opportunities, the Company implemented cost-reduction plans which included voluntary and non-voluntary separation programs. These work-force reductions were in response to a general economic downturn, and particularly, to the deep housing-induced recession in the Florida market. As the Company reduced its workforce, severance costs of $10.9 million, $3 million, and $1 million were included in operating expenses for 2008, 2007, and 2006, respectively. Accrued severance costs are included in “Accrued expenses and other liabilities” on the Consolidated Balance Sheet. The following summarized the activity in accrued severance for these work-force reductions:

(In thousands)	Virginia/ Tennessee			Florida			Mid- South			North Carolina			Ohio/ Rhode Island			Advertising Services & Other			Corporate			Consolidated
Accrued severance-12/31/2006	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Severance expense		341			1,594			212			156			41			459			154			2,957
Severance payments		(332	)		(1,332	)		(212	)		(156	)		(41	)		(301	)		(154	)		(2,528	)
Accrued severance-12/30/2007		9			262			—			—			—			158			—			429
Severance expense		1,474			4,939			1,445			712			1,124			301			913			10,908
Severance payments		(613	)		(3,679	)		(359	)		(329	)		(217	)		(238	)		(746	)		(6,181	)
Accrued severance-12/28/2008	$	870		$	1,522		$	1,086		$	383		$	907		$	221		$	167		$	5,156

Note 12: Revised Financial Information

The Consolidated Balance Sheet and Consolidated Statement of Operations and Notes 1, 2, 3, 6, 7 and 11 have been revised for the effects of the Company’s change in segments, the reporting as a discontinued operation of the sale of a small Virginia magazine and related web site, and to add detail to severance disclosures. Because these statements are being filed subsequent to the adoption of FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, the Company has also revised its calculation of earnings per share on the Statements of Operations and in Notes 2 and 10.

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Schedule II - Valuation and Qualifying Accounts and Reserves

Fiscal Years Ended December 28, 2008, December 30, 2007, and December 31, 2006

(in thousands)	Balance at beginning of period (a)		Additions charged to expense-net (a)		Additions charged to other comprehensive loss		Deductions net (a)			Transfers (b)		Balance at end of period (a)
2008
Allowance for doubtful accounts	$	5,981	$	7,852	$	—	$	(9,002	)	$	1,130	$	5,961
Deferred tax asset valuation allowance (c)	$	—	$	7,527	$	40,111	$	—		$	—	$	47,638
2007
Allowance for doubtful accounts	$	6,422	$	5,944	$	—	$	(6,416	)	$	31	$	5,981
2006
Allowance for doubtful accounts	$	5,736	$	5,819	$	—	$	(5,307	)	$	174	$	6,422

^(a) Amounts presented for continuing operations for all periods.

^(b) Amounts associated with acquisitions of businesses.

^(c) The Company established a valuation allowance against its entire net deferred tax asset in 2008 (see Note 7 of the audited financial statements).

32

EX-99.8

Exhibit 99.8

MEDIA GENERAL, INC.

TABLE OF CONTENTS

March 29, 2009

		Page
Part I. Financial Information
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets – March 29, 2009 and December 28, 2008	2
	Consolidated Condensed Statements of Operations - Three months ended March 29, 2009 and March 30, 2008	4
	Consolidated Condensed Statements of Cash Flows - Three months ended March 29, 2009 and March 30, 2008	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(000’s except shares)

	March 29, 2009		December 28, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	8,506	$	7,142
Accounts receivable - net		83,830		102,174
Inventories		10,324		12,035
Other		29,790		38,849
Assets of discontinued operations		11,709		12,402
Total current assets		144,159		172,602
Other assets		42,451		41,287
Property, plant and equipment - net		444,551		453,627
FCC licenses and other intangibles - net		243,467		245,266
Excess of cost over fair value of net identifiable assets of acquired businesses		421,318		421,470
	$	1,295,946	$	1,334,252

See accompanying notes.

2

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(000’s except shares and per share data)

	March 29, 2009			December 28, 2008
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	30,285		$	41,365
Accrued expenses and other liabilities		80,711			86,291
Liabilities of discontinued operations		2,874			3,053
Total current liabilities		113,870			130,709
Long-term debt		730,092			730,049
Retirement, post-retirement and post-employment plans		252,878			251,175
Other liabilities and deferred credits		63,327			67,092
Stockholders’ equity:
Preferred stock ($5 cumulative convertible), par value $5 per share, authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued 22,239,337 and 22,250,130 shares		111,197			111,251
Class B, authorized 600,000 shares; issued 551,881 shares		2,759			2,759
Additional paid-in capital		22,169			21,934
Accumulated other comprehensive loss		(186,515	)		(188,139	)
Retained earnings		186,169			207,422
Total stockholders’ equity		135,779			155,227
	$	1,295,946		$	1,334,252

See accompanying notes.

3

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(000’s except for per share data)

	Three Months Ended
	March 29, 2009			March 30, 2008
Revenues
Publishing	$	89,732		$	112,212
Broadcasting		59,853			74,217
Digital media and other		9,548			7,557
Total revenues		159,133			193,986
Operating costs:
Employee compensation		86,564			102,382
Production		43,602			48,334
Selling, general and administrative		25,211			29,224
Depreciation and amortization		15,318			18,327
Total operating costs		170,695			198,267
Operating loss		(11,562	)		(4,281	)
Other income (expense):
Interest expense		(9,972	)		(12,289	)
Investment loss - unconsolidated affiliate		—			(21	)
Other, net		243			208
Total other expense		(9,729	)		(12,102	)
Loss from continuing operations before income taxes		(21,291	)		(16,383	)
Income tax benefit		—			(6,612	)
Loss from continuing operations		(21,291	)		(9,771	)
Discontinued operations
Income from discontinued operations (net of taxes)		38			816
Loss related to divestiture of operations (net of taxes)		—			(11,300	)
Net loss	$	(21,253	)	$	(20,255	)
Loss per common share:
Loss from continuing operations	$	(0.96	)	$	(0.45	)
Discontinued operations		—			(0.47	)
Net loss	$	(0.96	)	$	(0.92	)
Loss per common share – assuming dilution:
Loss from continuing operations	$	(0.96	)	$	(0.45	)
Discontinued operations		—			(0.47	)
Net loss	$	(0.96	)	$	(0.92	)
Dividends paid per common share	$	—		$	0.23

See accompanying notes.

4

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(000’s)

	Three Months Ended
	March 29, 2009			March 30, 2008
Operating activities:
Net loss	$	(21,253	)	$	(20,255	)
Adjustments to reconcile net loss:
Depreciation and amortization		15,322			18,709
Deferred income taxes		—			4,974
Investment loss - unconsolidated affiliate		—			21
Net loss related to divestiture of operations		—			11,300
Change in assets and liabilities:
Accounts receivable and inventories		20,384			28,610
Accounts payable, accrued expenses, and other liabilities		(11,481	)		4,735
Income taxes refundable		216			(10,774	)
Other, net		(2,739	)		(1,789	)
Net cash provided by operating activities		449			35,531
Investing activities:
Capital expenditures		(4,133	)		(7,959	)
Collection of receivable note		5,000			—
Other, net		21			(301	)
Net cash provided (used) by investing activities		888			(8,260	)
Financing activities:
Increase in debt		79,500			96,000
Payment of debt		(79,457	)		(119,006	)
Dividends paid		—			(5,257	)
Other, net		(16	)		54
Net cash provided (used) by financing activities		27			(28,209	)
Net increase (decrease) in cash and cash equivalents		1,364			(938	)
Cash and cash equivalents at beginning of period		7,142			14,214
Cash and cash equivalents at end of period	$	8,506		$	13,276

See accompanying notes.

5

MEDIA GENERAL, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting, and with applicable quarterly reporting regulations of the Securities and Exchange Commission. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and, accordingly, should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2008 and the Company’s Financial Statements and Management’s Discussion and Analysis in Exhibits 99.6 and 99.7 of this Form 8-K. See Note 11 regarding certain reclassifications.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim financial information have been included.

2. Inventories are principally raw materials (primarily newsprint).

3. In the third quarter of 2009, the Company sold a small magazine and its related web site located in the Virginia/Tennessee Market and has reported it as a discontinued operation for all prior periods. In the first quarter of 2008, the Company had five held-for-sale television stations which were classified as discontinued operations. During 2008, the Company completed the sale of four of those TV stations in three transactions: WTVQ in Lexington, Kentucky; WMBB in Panama City, Florida, along with KALB/NALB in Alexandria, Louisiana; and WNEG in Toccoa, Georgia. The Company recognized an after-tax loss of $11.3 million in the first quarter of 2008 related to these divestitures. Subsequent to the end of the first quarter of 2009, the Company completed the sale of WCWJ in Jacksonville, Florida, and recorded a gain in the second quarter. Results of discontinued operations are presented below for the first quarter of 2009 and 2008:

	Quarter Ended
(In thousands)	March 29, 2009		March 30, 2008
Revenues	$	2,276	$	9,318
Costs and expense		2,238		7,980
Income before income taxes		38		1,338
Income taxes		—		522
Income from discontinued operations	$	38	$	816

4. The following table sets forth, by level within the fair value hierarchy, the assets and liabilities measured at fair value on a recurring basis on the Company’s balance sheet at March 29, 2009:

(In thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)
Assets
Trading securities	$	247	$	—
Liabilities
Interest rate swaps		—		21,100

6

Fair value of interest rate swaps is based on a discounted cash flow analysis, predicated on quoted London Interbank Offered Rate (LIBOR) prices, of the estimated amounts the Company would have received or paid to terminate the swaps. Trading securities are held by the supplemental 401(k) plan and are carried at fair value and are determined by reference to quoted market prices.

In the third quarter of 2006, the Company entered into several interest rate swaps as part of an overall strategy to manage interest cost and risk associated with variable interest rates, primarily short-term changes in LIBOR. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million will mature in August of 2009 and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s Facilities. These swaps effectively convert the Company’s variable rate bank debt to fixed rate debt with a weighted average interest rate approximating 7.3% at March 29, 2009. The following table includes information about the Company’s derivative instruments as of March 29, 2009.

(In thousands)
Derivatives designated as hedging instruments	Balance sheet location	Fair Value		Amount of pretax derivative gain recognized in OCI in 2009
Interest rate swaps	Other liabilities and deferred credits	$	21,100	$	1,624

5. The Company is a diversified communications company located primarily in the southeastern United States. Effective at the beginning of the third quarter of 2009, the Company changed its management structure, shifting from its three-division structure (Publishing, Broadcast, and Interactive Media) to five geographic segments (Virginia/Tennessee, Florida, Mid-South, North Carolina, Ohio/Rhode Island) along with a sixth segment that includes interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-First strategy, to speed decision-making, and to create and serve new market opportunities. The Company has reclassified the corresponding items of segment information for earlier periods to conform with its current structure.

Revenues for the geographic markets include revenues from 18 network-affiliated television stations, three metro newspapers, and 20 community newspapers, all of which have associated Web sites. Additionally, more than 200 specialty publications that include weekly newspapers and niche publications and the Web sites that are associated with many of these specialty publications are included in revenues for the geographic markets. Revenues for the sixth segment, Advertising Services & Other, are generated by three interactive advertising services companies and certain other operations including a broadcast equipment and studio design company.

Management measures segment performance based on profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of acquired intangibles is not allocated to individual segments although the intangible assets themselves are included in identifiable assets for each segment. Intercompany sales are primarily accounted for as if the sales were at current market prices and are eliminated in the consolidated financial statements. Certain promotion in the Company’s newspapers and television stations on behalf of its online shopping portal are recognized based on incremental cost. The Company’s reportable segments are managed separately, largely based on geographic market considerations and a desire to provide services to customers regardless of the media platform or any difference in the method of delivery. In certain instances, operations have been aggregated based on similar economic characteristics.

7

The following table sets forth the Company’s current and prior-period financial performance by segment:

(In thousands)	Revenues			Depreciation & Amortization			Operating Profit (Loss)
Three Months ended March 29, 2009
Virginia/Tennessee	$	46,840		$	(3,658	)	$	2,036
Florida		42,240			(2,096	)		(3,030	)
Mid-South		33,798			(3,391	)		1,066
North Carolina		18,981			(1,696	)		(1,559	)
Ohio/Rhode Island		11,086			(845	)		160
Advertising Services & Other		6,562			(225	)		591
Eliminations		(374	)		1			(44	)
								(780	)
Unallocated amounts:
Acquisition intangibles amortization					(1,799	)		(1,799	)
Corporate expense					(1,609	)		(8,634	)
	$	159,133		$	(15,318	)
Interest expense								(9,972	)
Other								(106	)
Consolidated loss from continuing operations before income taxes							$	(21,291	)
Three Months ended March 30, 2008
Virginia/Tennessee	$	58,188		$	(3,795	)	$	8,972
Florida		52,641			(2,379	)		196
Mid-South		41,605			(3,797	)		4,248
North Carolina		24,318			(1,778	)		711
Ohio/Rhode Island		12,998			(1,151	)		278
Advertising Services & Other		5,197			(160	)		(847	)
Eliminations		(961	)		7			(471	)
								13,087
Unallocated amounts:
Acquisition intangibles amortization					(3,825	)		(3,825	)
Corporate expense					(1,449	)		(11,250	)
	$	193,986		$	(18,327	)
Interest expense								(12,289	)
Equity in net loss of unconsolidated affiliates								(21	)
Other								(2,085	)
Consolidated loss from continuing operations before income taxes							$	(16,383	)

8

6. In January of 2009, the Company adopted FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. EITF 03-6-1 clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are to be included in the computation of earnings per share. The Company adjusted the prior-period earnings per share calculation which resulted in a $.01 per share change. The adoption of EITF 03-6-1 is not material to the Company’s prior-period earnings per share calculations. The following table sets forth the computation of basic and diluted earnings per share from continuing operations:

	Quarter Ended March 29, 2009							Quarter Ended March 30, 2008
(In thousands, except per share amounts)	Loss (Numerator)			Shares (Denominator)	Per Share Amount			Loss (Numerator)			Shares (Denominator)	Per Share Amount
Basic and Diluted EPS:
Loss from continuing operations	$	(21,291	)					$	(9,771	)
Distributed earnings attributable to participating securities		—							(141	)
Loss from continuing operations attributable to common stockholders	$	(21,291	)	22,181	$	(0.96	)	$	(9,912	)	22,112	$	(0.45	)

7. The following table provides the components of net periodic employee benefits expense for the Company’s benefit plans for the first quarter of 2009 and 2008:

	Pension Benefits						Other Benefits
(In thousands)	March 29, 2009			March 30, 2008			March 29, 2009			March 30, 2008
Service cost	$	190		$	225		$	75		$	125
Interest cost		6,502			6,525			650			750
Expected return on plan assets		(6,240	)		(6,525	)		—			—
Amortization of prior-service (credit)/cost		(13	)		(25	)		450			450
Amortization of net loss/(gain)		1,777			1,350			(225	)		(125	)
Net periodic benefit cost	$	2,216		$	1,550		$	950		$	1,200

Subsequent to the end of the first quarter 2009, the Company amended its plans so that future retirement benefits under the retirement, ERISA Excess and Executive Supplemental Retirement plans will now be based on final average earnings as of May 31, 2009. Service accruals under the retirement plan ceased at the beginning of 2007 and the plan was closed to new participants at that time, but benefits had been allowed to grow based on future compensation. This change does not affect the benefits of current retirees. In the second quarter, the Company expects to record a modest curtailment gain.

9

8. The Company’s comprehensive loss consisted of the following:

	Quarter Ended
(In thousands)	March 29, 2009			March 30, 2008
Net loss	$	(21,253	)	$	(20,255	)
Unrealized gain (loss) on derivative contracts (net of deferred tax benefit of $2,998 in 2008)		1,624			(5,261	)
Change in pension and postretirement (net of deferred tax benefit of $79)		—			(139	)
Unrealized holding loss on equity securities (net of deferred tax benefit of $59)		—			(103	)
Comprehensive loss	$	(19,629	)	$	(25,758	)

9. The Company accounts for severance benefits related to workforce reductions in accordance with FASB Statement No. 112, Employers’ Accounting for Postemployment Benefits, and accrues the related expense when payment of severance benefits is both probable and the amount is reasonably estimable. During the first quarter of 2009, the Company recorded $4.5 million in severance expense in selling, general and administrative expenses related to involuntary employee terminations. The workforce reductions, the majority of which are expected to be completed in the second quarter, were in response to secular changes within the industry, the deepening economic recession and the Company’s continued efforts to align its costs with the current business environment. Severance expense and related cash payments were nominal for the first quarter of 2008. The following table represents a summary of severance activity by segment (in thousands) for the three months ended March 29, 2009. Accrued severance costs are included in “Accrued expenses and other liabilities” on the consolidated condensed balance sheets:

(In thousands)	Virginia/ Tennessee			Florida			Mid-South			North Carolina			Ohio/ Rhode Island			Advertising Services & Other			Corporate			Consolidated
Accrued severance -
December 28, 2008	$	870		$	1,522		$	1,086		$	383		$	907		$	221		$	167		$	5,156
Severance expense		2,136			965			422			543			239			218			—			4,523
Severance payments		(732	)		(1,462	)		(834	)		(382	)		(362	)		(226	)		(51	)		(4,049	)
Accrued severance -
March 29, 2009	$	2,274		$	1,025		$	674		$	544		$	784		$	213		$	116		$	5,630

10. The FCC has mandated a reallocation of a portion of the broadcast spectrum to others, including Sprint/Nextel. According to the FCC order, broadcasters must surrender their old equipment to prevent interference within a narrowed broadcasting frequency range. In exchange for the relinquished equipment, Sprint/Nextel has been providing broadcasters with new digital equipment and reimbursing associated out-of-pocket expenses. During the remainder of 2009, Sprint/Nextel will continue to provide the Company with new equipment which is capable of meeting the narrowed broadcasting frequency criteria. The Company recorded gains of $.8 million and $.7 million in the first quarters of 2009 and 2008, respectively, in the line item “Selling, general and administrative” on the Consolidated Statements of Operations and anticipates recording additional gains approaching $1.7 million in total over the next two quarters relating to the new equipment.

10

11. The Consolidated Condensed Balance Sheet and Consolidated Condensed Statements of Operations and Notes 1, 3, 5, 6 and 9 have been revised for the effects of the Company’s change in segments and the reporting of the sale of a small business magazine and related web site as a discontinued operation.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

The Company is a diversified communications company located primarily in the southeastern United States. Effective at the beginning of the third quarter of 2009, Media General changed its management structure from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-first strategy, to speed decision-making, and to create and serve new market opportunities. This market-based approach is a natural extension of the Company’s mission, which is to be the leading provider of high-quality news, information and entertainment in the Southeast by continually building its position of strength in strategically located markets.

The following map shows the locations and composition of the Company’s operating assets within its new management structure.

The Company’s fiscal year ends on the last Sunday in December.

11

RESULTS OF OPERATIONS

The Company recorded a net loss of $21.3 million in the first quarter of 2009, which was not significantly higher than the loss of $20.3 million recorded in the equivalent quarter of 2008. However, more than half of the 2008 loss was due to an $11.3 million loss related to the divestiture of certain television stations. The company sold four TV stations and their associated Web sites in 2008: WTVQ in Lexington, Kentucky, WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia. Subsequent to the end of the first quarter of 2009, the Company completed the sale of its final held-for-sale station, WCWJ in Jacksonville, Florida. The remainder of this discussion focuses only on results from continuing operations.

The Company experienced losses from continuing operations of $21.3 million and $9.8 million in the first quarters of 2009 and 2008, respectively. This $11.5 million quarter-over-quarter decline included reduced revenues from all five geographic markets, severance expense related to workforce reductions, and the absence of any income tax benefit in 2009, partially offset by lower interest, bonus, and intangibles amortization expense. Segment operating results decreased from a $13 million profit in the first quarter of 2008 to a loss of $800,000 in 2009 (a 72% decline excluding $4.5 million in severance expense in 2009) due primarily to approximately 25% declines in advertising revenues as all advertising categories were down in all geographic markets. The Company significantly reduced operating expenses to temper the revenue decline. Additionally, no income tax benefit was recorded in the first quarter of 2009 due to a full tax valuation allowance being established at the end of 2008 (see the Income Taxes section of this MD&A for a further discussion). Also benefiting the bottom line were a 19% decrease in interest expense (driven by reduced average debt levels and a small drop in average interest rates), a $2 million, or 53% decline in intangibles amortization expense (due to 2008 impairment write-downs of network affiliation agreement intangibles), and the virtual absence of bonus expense (due to reduced current-year operating expectations).

MARKET RESULTS

As previously mentioned, the third quarter of 2009 marked the Company’s shift from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations; collectively, they contain all of the operations that were formerly part of the Publishing, Broadcast and Interactive Media segments. The geographically-managed segments include: Virginia/Tennessee, Florida, Mid-South, North Carolina, and Ohio/Rhode Island.

Revenues

As part of this reorganization, revenues have been grouped primarily into five major categories: Local (including the category that was formerly Retail in the Publishing Division), National, Political (which includes Political advertising as was traditionally reported), Classified, and Subscription/Content/Circulation (which includes newspaper circulation, broadcast retransmission revenues, and interactive subscription and content revenues). The following chart summarizes the total consolidated period-over-period changes in these select revenue categories:

2009 versus 2008

	Q1 Change
(In thousands)	Amount			Percent
Local	$	(17,435	)	(17.9	)
National		(6,416	)	(18.5	)
Political		(4,273	)	(96.2	)
Classified		(14,978	)	(38.4	)
Subs/Content/Circulation		3,537		20.6

12

While the tough advertising environment played a significant role in lower Local and National advertising revenues, period-over-period comparisons were also directly affected by the reduction in Political revenues, as expected in this off-election year; markets which have a higher mix of broadcast stations over newspapers were obviously more affected by this category. Classified advertising was hampered by continued softness in the auto, real estate and employment categories. However, Subscription/Content/Circulation revenues made meaningful progress as a rise in cable and satellite retransmission revenues contributed approximately 70% of the growth and an increase in newspaper circulation (the result of higher rates) was responsible for the remainder.

Revenues in the Virginia/Tennessee Market fell 20% in the first quarter of 2009 as compared to 2008. Decreased Local and Classified advertising were the largest reasons for the period-over-period declines, driven by the current recession-induced environment. Partially offsetting weak advertising revenues were strong Subscription/Content/Circulation revenues which showed solid growth due to rate increases across all newspapers as well as to excellent broadcast retransmission revenues.

Revenues in the Florida Market decreased from $52.6 million to $42.2 million, or 20%, in the first quarter of the year compared to the first three months of 2008. Local and National advertising both declined 16% on weakness in the department store and home furniture categories and Classified advertising (down 41%) continued to show significant weakness due to the erosion of employment, real estate and automotive advertising.

Revenues in the Mid-South Market fell $7.8 million or 19% as Local and National advertising were down 20% and 26%, respectively, from the prior-year levels. As anticipated, Political advertising was almost nonexistent in 2009 as compared to $2.4 million in the first quarter of last year. Following the trend, strong Subscription/Content/Circulation revenues partially offset the other revenue shortfalls.

Revenues in the North Carolina Market declined 22% in the first quarter of 2009 from the first three months of 2008. Cutbacks in Local and Classified advertising comprised most of the revenue shortfall in the North Carolina Market.

Revenues in the Ohio/Rhode Island Market decreased 15% in the first quarter of 2009 compared to the first quarter of 2008. This is the Company’s only geographic market which does not include any newspapers and is consequently less influenced by Classified advertising, but more affected by the ebb and flow of Political and Olympic revenues in corresponding odd and even-numbered years. Local advertising was down 15%, with lower National and Political advertising comprising the remainder of the period-over-period declines. As with all of the other geographic markets, Subscription/Content/Circulation revenues showed increases and partially offset lower advertising revenues.

Operating Expenses

Efforts aimed at adjusting the cost structure of the Company have been successful as evidenced by a 12% reduction in total operating expenses (including severance charges of $4.5 million in 2008). Total compensation costs in first quarter of 2009 declined 16%, or 20% before severance costs, due to lower employee counts, the elimination of positions at most locations, lower commissions, the consolidation of certain production facilities, and savings from mandatory unpaid furlough days (discussed in further detail in the Liquidity section of this MD&A). Despite markedly higher average newsprint prices, up $135/ton (to $675/ton), newsprint costs were down 7% in the first quarter of 2009 due to reduced consumption as a result of newspaper redesigns, lower advertising linage, decreased circulation volumes, and concerted conservation efforts including web-width reductions. Additionally, the Company also achieved departmental savings in the areas of circulation sales, repairs and maintenance, production supplies, outside services, employee relocation and reduced discretionary spending.

13

Operating expenses in the Virginia/Tennessee Market decreased 8.9% in the first quarter of 2009 from the first quarter of 2008. The largest portion of this decrease was attributable to lower compensation expense; reduced discretionary spending in the areas of circulation sales, repairs and maintenance and production supplies was responsible for a substantial part of the remaining decrease.

Operating expenses in the Florida Market were down $7.2 million or 14% the first quarter of 2009 from the first quarter of 2008. Compensation expense reductions of $5.1 million were responsible for the majority of the decline in operating expenses, with the remainder due to reduced newsprint costs and departmental savings.

Operating expenses in the Mid-South Market fell 13% in the first quarter of 2009 from the same period in 2008. The majority of the savings came from lower compensation cost and departmental savings. This market has a heavier mix of broadcast stations than newspapers and therefore, while newsprint costs were down, they were proportionally less significant to the overall cost savings than in other markets.

Operating expenses in the North Carolina Market declined 13% in the first quarter as compared to 2008’s first quarter. Approximately half of the savings in the quarter were realized from lower compensation cost. Lower departmental spending contributed the remaining savings.

Operating expenses in the Ohio/Rhode Island Market were down $1.8 million, or 14%, in the quarter from the first quarter of 2008 due primarily to a 17% reduction in compensation cost. The remaining savings were achieved primarily through concerted efforts to control discretionary spending in areas such as marketing, promotion and travel. Newsprint was not a factor as the Company does not operate any newspapers in the Ohio/Rhode Island Market.

ADVERTISING SERVICES & OTHER

Advertising Services & Other (ASO) primarily includes:

• Blockdot - a leading advergaming business;

• Dealtaker.com - an online social shopping portal that was acquired at the beginning of the second quarter of 2008;

• NetInformer - a leading provider of mobile advertising and marketing services purchased in the fourth quarter of 2008;

• Production Services - comprised primarily of a provider of broadcast equipment and studio design services.

Revenues in ASO increased $1.4 million or 26% in the first quarter of 2009 over the first quarter of 2008. The revenue increase in the first quarter was driven by $2.3 million of revenues generated by Dealtaker.com which was acquired at the beginning of the second quarter of 2008. Blockdot exhibited solid improvement in its advergaming revenues as a result of successful sales initiatives. These advances were partially offset by a reduction in revenue in the Production Services operations as the economy and the recently completed digital upgrade has reduced demand for this operation’s services.

Operating expenses were flat quarter over quarter as the incremental operating costs from Dealtaker.com were offset by lower cost of goods sold at Production Services, in line with the previously mentioned reduced volume of work.

Operating Profit (Loss)

The following chart shows the change in operating profit by market for the first three months of 2009 and 2008; the period-over-period movement in market operating profit was driven by the underlying fluctuations in revenue and expense as detailed in the previous discussion.

14

Change in Market Operating Profits

2009 versus 2008

	Q1 Change
(In thousands)	Amount			Percent
Virginia/Tennessee	$	(6,936	)	(77.3	)
Florida		(3,226	)	—
Mid-South		(3,182	)	(74.9	)
North Carolina		(2,270	)	—
Ohio/Rhode Island		(118	)	(42.4	)
Adv. Services & Other		1,438		—
Eliminations		427		90.7
Total	$	(13,867	)	(106.0	)

In the first quarter of 2009, the Virginia/Tennessee, Florida and Mid-South Markets were responsible for the majority of the operating profit shortfall from last year’s first quarter; these markets incurred additional severance costs of $2.1 million, $1.0 million, and $.4 million, respectively from the prior year. Lower operating expenses in these markets were unable to overcome decreased revenues and increased severance costs. All markets were impacted by reduced advertising revenues, particularly Classified. Helping to offset this trend, in part, was significant improvement in the ASO segment driven by the purchase of Dealtaker.com and cost savings at Production Services.

INTEREST EXPENSE

Interest expense decreased $2.3 million in the first quarter of 2009 from the prior-year equivalent quarter due primarily to an approximate $125 million decline in average debt levels and, to a much smaller degree, to a small drop in the average interest rate to 5.3%. Proceeds from the sales of SP Newsprint and four television station in 2008 drove the debt reduction.

In the third quarter of 2006, the Company entered into three interest rate swaps (where it pays a fixed rate and receives a floating rate) to manage interest cost and cash flows associated with variable interest rates, primarily short-term changes in LIBOR, not to trade such instruments for profit or loss. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million and maturities of either three or five years. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s $300 million bank term loan. These swaps effectively convert the Company’s variable rate bank term loan to fixed rate debt with a weighted average interest rate approximating 7.3% at March 29, 2009.

INCOME TAXES

The effective tax rate for the quarter was zero percent compared to 40.4% a year ago. There was no net income tax expense or benefit recorded in the quarter due to the fact that the Company had recorded a full deferred tax asset valuation allowance at the beginning of the year and expects to have a full valuation allowance at the end of the year. Therefore, any income tax expense or benefit that would otherwise be recognized is being offset by the change in the valuation allowance. Absent the valuation allowance the effective tax rate for the quarter would have been approximately 39%.

LIQUIDITY

Net cash generated from operating activities in the first quarter of 2009 was $.4 million. During the quarter, the Company collected a $5 million note receivable related to its sale of SP Newsprint in 2008 and made capital expenditures of $4 million. Based on the general economic environment and outlook, the Company has reduced its capital spending plans by postponing various projects.

At March 29, 2009, the Company had in place a $588 million revolving credit facility and a $294 million variable-rate bank term loan facility (together the “Facilities”). The term loan is with essentially the same syndicate

15

of banks that provides the Company’s revolving credit facility. At the end of the first quarter, there were borrowings of $436 million outstanding under the revolving credit facility and $294 million under the bank term loan; the total amount remained largely unchanged in the quarter. The Facilities have both interest coverage and leverage ratio covenants. Under the terms of the Facilities, the maximum leverage ratio covenant will be reduced slightly for the remainder of 2009 (beginning with the second quarter) and for the first three quarters of 2010, and will remain at a constant level thereafter. Also effective for the second quarter of 2009, the minimum interest coverage ratio will be increased slightly for the remaining term of the Facilities. These covenants, which involve debt levels, interest expense, and a rolling four-quarter calculation of EBITDA (a measure of cash earnings as defined in the revolving credit agreement), can affect the Company’s maximum borrowing capacity allowed by the Facilities (approximately $768 million at March 29, 2009). Annual borrowing capacity reductions will be made based on the Company’s excess cash flow, as defined. Because the leverage ratio exceeds certain present levels, the Facilities contain restrictions on dividends, capital spending, indebtedness, capital leases, and investments, as defined. The Company was in compliance with all covenants at quarter-end and, as covenants tighten, the Company expects to remain in compliance with them going forward by taking the steps necessary to maintain EBITDA.

As the economy has deteriorated, the Company has responded to the economic crisis with several aggressive actions to improve its cash flow. These actions include suspending the Company’s match for the 401(k) Plan for the last three quarters of 2009, a minimum of ten mandatory unpaid furlough days for all employees spread across the first three quarters of 2009 (4 days in the first quarter and 3 days in each of the second and third quarters), and the Board of Directors suspending the Company dividend. As discussed earlier, the Company has significantly reduced its workforce, and effective May 31, will freeze benefits under its retirement plan. All of these actions will conserve cash in either the short- or long-term, or both.

Subsequent to the end of the first quarter, the Company completed the sale of WCWJ in Jacksonville, Florida and used the proceeds to reduce debt. The combined commitment under the Facilities is now $866 million. The Company believes that internally generated funds provided by operations, together with the unused portion of the Facilities as well as the proceeds generated by the sale of WCWJ, provide it with the flexibility to manage working capital needs and finance capital expenditures.

* * * * * * * *

Certain statements in this quarterly report that are not historical facts are “forward-looking” statements, as that term is defined by the federal securities laws. Forward-looking statements include statements related to accounting estimates and assumptions, expectations regarding credit facilities, acquisitions and dispositions, the impact of cost-containment measures, staff reductions, retirement plan changes, the Internet, the Yahoo! agreements, debt compliance, general advertising levels and political advertising levels. Forward-looking statements, including those which use words such as the Company “believes,” “anticipates,” “expects,” “estimates,” “intends,” “projects,” “plans,” “may” and similar words, are made as of the date of this filing and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements.

Some significant factors that could affect actual results include: the effect of the credit crisis on advertising demand, interest rates or energy prices, the availability and pricing of credit and newsprint, changes to pending accounting standards, health care cost trends, a natural disaster, the level of political advertising, the performance of acquisitions, and regulatory rulings and laws.

16

EX-99.9

Exhibit 99.9

MEDIA GENERAL, INC.

TABLE OF CONTENTS

June 28, 2009

		Page
Part I.        Financial Information
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets – June 28, 2009 and December 28, 2008	2
	Consolidated Condensed Statements of Operations – Three and six months ended June 28, 2009 and June 29, 2008	4
	Consolidated Condensed Statements of Cash Flows – Six months ended June 28, 2009 and June 29, 2008	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(000’s except shares)

	June 28, 2009		December 28, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	5,750	$	7,142
Accounts receivable - net		85,464		102,174
Inventories		7,650		12,035
Other		26,258		38,849
Assets of discontinued operations		214		12,402
Total current assets		125,336		172,602
Other assets		39,051		41,287
Property, plant and equipment - net		435,536		453,627
FCC licenses and other intangibles - net		241,680		245,266
Excess of cost over fair value of net identifiable assets of acquired businesses		421,318		421,470
	$	1,262,921	$	1,334,252

See accompanying notes.

2

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(000’s except shares and per share data)

	June 28, 2009			December 28, 2008
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,494		$	41,365
Accrued expenses and other liabilities		67,494			86,291
Liabilities of discontinued operations		82			3,053
Total current liabilities		94,070			130,709
Long-term debt		711,458			730,049
Retirement, post-retirement and post-employment plans		188,872			251,175
Other liabilities and deferred credits		56,111			67,092
Stockholders’ equity:
Preferred stock ($5 cumulative convertible), par value $5 per share, authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued 22,282,393 and 22,250,130 shares		111,412			111,251
Class B, authorized 600,000 shares; issued 551,881 shares		2,759			2,759
Additional paid-in capital		22,758			21,934
Accumulated other comprehensive loss		(131,276	)		(188,139	)
Retained earnings		206,757			207,422
Total stockholders’ equity		212,410			155,227
	$	1,262,921		$	1,334,252

See accompanying notes.

3

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(000’s except for per share data)

	Three Months Ended						Six Months Ended
	June 28, 2009			June 29, 2008			June 28, 2009			June 29, 2008
Revenues
Publishing	$	89,305		$	111,924		$	179,037		$	224,136
Broadcasting		64,124			81,851			123,977			156,068
Digital media and other		9,958			10,477			19,506			18,034
Total revenues		163,387			204,252			322,520			398,238
Operating costs:
Employee compensation		73,587			102,609			160,151			204,991
Production		39,527			48,055			83,129			96,390
Selling, general and administrative		21,559			27,259			46,770			56,483
Depreciation and amortization		15,057			19,023			30,375			37,349
Goodwill and other assets impairment		—			778,318			—			778,318
Gain on insurance recovery		—			(2,750	)		—			(2,750	)
Total operating costs		149,730			972,514			320,425			1,170,781
Operating income (loss)		13,657			(768,262	)		2,095			(772,543	)
Other income (expense):
Interest expense		(11,257	)		(10,548	)		(21,229	)		(22,837	)
Impairment of and loss on investments		(209	)		(5,940	)		(209	)		(5,961	)
Other, net		166			305			409			513
Total other expense		(11,300	)		(16,183	)		(21,029	)		(28,285	)
Income (loss) from continuing operations before income taxes		2,357			(784,445	)		(18,934	)		(800,828	)
Income tax benefit		(10,955	)		(250,955	)		(10,955	)		(257,567	)
Income (loss) from continuing operations		13,312			(533,490	)		(7,979	)		(543,261	)
Discontinued operations
Income from discontinued operations (net of taxes)		156			1,278			194			2,094
Loss related to divestiture of operations (net of taxes)		7,120			—			7,120			(11,300	)
Net income (loss)	$	20,588		$	(532,212	)	$	(665	)	$	(552,467	)
Net Income (loss) per common share:
Income (loss) from continuing operations	$	0.57		$	(24.18	)	$	(0.36	)	$	(24.60	)
Discontinued operations		0.33			0.06			0.33			(0.42	)
Net income (loss)	$	0.90		$	(24.12	)	$	(0.03	)	$	(25.02	)
Net Income (loss) per common share – assuming dilution:
Income (loss) from continuing operations	$	0.57		$	(24.18	)	$	(0.36	)	$	(24.60	)
Discontinued operations		0.33			0.06			0.33			(0.42	)
Net income (loss)	$	0.90		$	(24.12	)	$	(0.03	)	$	(25.02	)
Dividends paid per common share	$	—		$	0.23		$	—		$	0.46

See accompanying notes.

4

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(000’s)

	Six Months Ended
	June 28, 2009			June 29, 2008
Operating activities:
Net loss	$	(665	)	$	(552,467	)
Adjustments to reconcile net loss:
Depreciation and amortization		30,383			37,735
Deferred income taxes		—			(262,301	)
Impairment of and loss on investments		209			5,961
Goodwill and other asset impairment		—			778,318
Net (gain) loss related to divestiture of operations		(7,120	)		11,300
Gain on insurance recovery		—			(2,750	)
Change in assets and liabilities:
Accounts receivable and inventories		21,354			23,472
Accounts payable, accrued expenses, and other liabilities		(23,621	)		(7,729	)
Retirement plan contribution		(5,000	)		—
Intraperiod tax allocation		(6,619	)		—
Other		(5,658	)		6,349
Net cash provided by operating activities		3,263			37,888
Investing activities:
Capital expenditures		(7,978	)		(12,446	)
Proceeds from sales of discontinued operations and investment		16,942			76,665
Collection (funding) of receivable note		5,000			(5,000	)
Purchase of businesses		—			(22,536	)
Other, net		(219	)		555
Net cash provided by investing activities		13,745			37,238
Financing activities:
Increase in debt		137,800			206,500
Payment of debt		(156,392	)		(274,011	)
Dividends paid		—			(10,515	)
Other, net		192			—
Net cash used by financing activities		(18,400	)		(78,026	)
Net decrease in cash and cash equivalents		(1,392	)		(2,900	)
Cash and cash equivalents at beginning of period		7,142			14,214
Cash and cash equivalents at end of period	$	5,750		$	11,314

See accompanying notes.

5

MEDIA GENERAL, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting, and with applicable quarterly reporting regulations of the Securities and Exchange Commission. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and, accordingly, should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2008 and the company’s Financial Statements and Management’s Discussion and Analysis in Exhibits 99.6 and 99.7 of this Form 8-K. The Company has evaluated events occurring subsequent to June 28, 2009 and through August 5, 2009 for recognition and/or disclosure in this Form 10-Q. See Note 14 regarding certain reclassifications.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim financial information have been included.

2. Inventories are principally raw materials (primarily newsprint).

3. Due to the continuation of challenging business conditions and the market’s perception of the value of media company stocks, the Company performed two interim impairment tests in 2008 (in addition to its regular annual impairment test) which resulted in impairment being recorded in the second and fourth quarters of 2008. The Company’s long-lived assets include goodwill related to the Company’s reporting units, identifiable assets at individual television stations and newspapers (including FCC licenses and network affiliation agreements), fixed assets, and certain other investments and assets held for sale. The Company determined that certain of these long-lived assets were impaired by measuring the estimated discounted and undiscounted cash flows expected to be generated by the assets to determine their fair value and by comparing the result to their carrying value. The determination of fair value requires the use of significant judgment and estimates about assumptions that management believes were appropriate in the circumstances. These assumptions include those relating to revenue growth, compensation levels, newsprint prices, discount rates and market trading multiples for broadcast and newspaper assets. As a result of the testing as of June 29, 2008, the Company recorded non-cash impairment charges related to goodwill in the Publishing Division of $512 million, FCC licenses in the Broadcast Division of $198 million, network affiliation agreements in the Broadcast Division of $67 million, trade names in the Broadcast Division of $.5 million, and certain investments (whose impairment was other than temporary) and assets held for sale of $4.4 million. The pretax charge totaled $782 million ($532 million after-tax) and was included on the line items “Goodwill and other assets impairment” and “Impairment of and loss on investments” on the Consolidated Condensed Statements of Operations.

At June 29, 2009, when the Company changed its structure to one organized primarily by geographic market, the carrying amount of goodwill was allocated to the new segments. Impairment tests prior to that change were performed based on goodwill balances and cash flows under the previous segment structure. Therefore, the Company is unable to reflect the reallocation of the goodwill impairment charge taken during 2008 and the prior-year goodwill balances by the current geographic segment structure.

Due to the continuation of the recession-driven economy and the Company’s revised expectation that, in spite of signs of firming, meaningful recovery will not begin until 2010, the Company performed another impairment test in the second quarter of 2009. No impairment was indicated as a result of the test, using methods substantially similar to those described above. As discussed in Note 6, effective with the third quarter, the Company changed its management structure which resulted in a greater number of operating segments and reporting units for future impairment testing. As anticipated, the Company recorded an additional impairment charge in the third quarter of 2009; see Note 3 of the Company’s 2009 third-quarter Form10-Q for a complete discussion of the charge.

6

4. In the third quarter of 2009, the Company sold the assets of a small magazine and its related web site in Virginia and has reported it as a discontinued operation for all prior periods. In the first quarter of 2008, the Company had five held-for-sale television stations which were classified as discontinued operations. During 2008, the Company completed the sale of four of those TV stations in three transactions: WTVQ in Lexington, Kentucky; WMBB in Panama City, Florida, along with KALB/NALB in Alexandria, Louisiana; and WNEG in Toccoa, Georgia. The Company recognized an after-tax loss of $11.3 million in the first quarter of 2008 related to these divestitures. In the second quarter of 2009, the Company completed the sale of WCWJ in Jacksonville, Florida, and recorded an after-tax gain of $7.1 million related to this divestiture. Results of discontinued operations are presented below for the second quarter and six months period of 2009 and 2008:

	Quarter Ended					Six Months Ended
(In thousands)	June 28, 2009			June 29, 2008		June 28, 2009			June 29, 2008
Revenues	$	1,224		$	8,515	$	3,500		$	17,833
Costs and expense		1,124			6,420		3,362			14,400
Income before income taxes		100			2,095		138			3,433
Income taxes		(56	)		817		(56	)		1,339
Income from discontinued operations	$	156		$	1,278	$	194		$	2,094

5. The following table includes information about the carrying values and estimated fair values of the Company’s financial instruments at June 28, 2009 and December 28, 2008:

	June 28, 2009				December 28, 2008
(In thousands)	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value
Assets
Investments
Trading	$	262	$	262	$	243	$	243
Liabilities
Long-term debt:
Revolving credit facility		423,698		416,932		425,000		425,000
Bank term loan		287,722		283,127		300,000		300,000
Bank lines		—		—		5,000		5,000
Interest rate swaps		18,290		18,290		22,723		22,723

Trading securities are held by the Supplemental 401(k) plan and are carried at fair value and are determined by reference to quoted market prices. The fair value of the long-term debt in the chart above was estimated using discounted cash flow analyses and an estimate of the Company’s bank borrowing rate (by reference to publicly traded debt rates as of June 28, 2009) for similar types of borrowings. The interest rate swaps are carried at fair value based on a discounted cash flow analysis (predicated on quoted LIBOR prices) of the estimated amounts the Company would have received or paid to terminate the swaps. Under the fair value hierarchy set forth by SFAS 157, the Company’s trading securities fall under Level 1 (quoted prices in active markets) and its interest rate swaps and long-term debt fall under Level 2 (other observable inputs).

7

In the third quarter of 2006, the Company entered into several interest rate swaps as part of an overall strategy to manage interest cost and risk associated with variable interest rates, primarily short-term changes in LIBOR. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million will mature in August of 2009 and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s long-term debt. These swaps effectively convert the Company’s variable rate bank debt to fixed rate debt with a weighted average interest rate approximating 8.3% at June 28, 2009, based on margins at that date. The following table includes information about the Company’s derivative instruments as of June 28, 2009.

(In thousands)
Derivatives designated as hedging instruments	Balance sheet location	Fair Value		Amount of pretax derivative gain recognized in OCI in 2009
Interest rate swaps	Other liabilities and deferred credits	$	18,290	$	4,433

6. The Company is a diversified communications company located primarily in the southeastern United States Effective at the beginning of the third quarter of 2009, the Company changed its management structure, shifting from its three-division structure (Publishing, Broadcast, and Interactive Media) to five geographic segments (Virginia/Tennessee, Florida, Mid-South, North Carolina, Ohio/Rhode Island) along with a sixth segment that includes interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-first strategy, to speed decision-making, and to create and serve new market opportunities. The Company has reclassified the corresponding items of segment information for earlier periods to conform with its current structure.

Revenues for the geographic markets include revenues from 18 network-affiliated television stations, three metro newspapers, and 20 community newspapers, all of which have associated Web sites. Additionally, more than 200 specialty publications that include weekly newspapers and niche publications and the Web sites that are associated with many of these specialty publications are included in revenues for the geographic markets. Revenues for the sixth segment, Advertising Services & Other, are generated by three interactive advertising services companies and certain other operations including a broadcast equipment and studio design company.

Management measures segment performance based on profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of acquired intangibles is not allocated to individual segments although the intangible assets themselves are included in identifiable assets for each segment. Intercompany sales are primarily accounted for as if the sales were at current market prices and are eliminated in the consolidated financial statements. Certain promotion in the Company’s newspapers and television stations on behalf of its online shopping portal are recognized based on incremental cost. The Company’s reportable segments, are managed separately, largely based on geographic market considerations and a desire to provide services to customers regardless of the media platform or any difference in the method of delivery. In certain instances, operations have been aggregated based on similar economic characteristics.

8

The following table sets forth the Company’s current and prior-year financial performance by segment:

(In thousands)	Revenues			Depreciation & Amortization			Operating Profit (Loss)
Three Months ended June 28, 2009
Virginia/Tennessee	$	50,587		$	(3,486	)	$	11,324
Florida		37,627			(2,094	)		193
Mid-South		36,941			(3,397	)		5,971
North Carolina		19,675			(1,696	)		1,483
Ohio/Rhode Island		12,614			(847	)		2,577
Advertising Services & Other		6,242			(224	)		776
Eliminations		(299	)		—			(5	)
								22,319
Unallocated amounts:
Acquisition intangibles amortization		—			(1,787	)		(1,787	)
Corporate expense		—			(1,526	)		(6,629	)
	$	163,387		$	(15,057	)
Interest expense								(11,257	)
Loss on investments								(209	)
Other								(80	)
Consolidated income from continuing operations before income taxes							$	2,357
Three Months ended June 29, 2008
Virginia/Tennessee	$	60,511		$	(4,288	)	$	11,409
Florida		51,569			(2,466	)		(1,908	)
Mid-South		44,097			(3,772	)		6,913
North Carolina		26,656			(1,770	)		2,445
Ohio/Rhode Island		14,617			(1,119	)		2,070
Advertising Services & Other		7,419			(201	)		488
Eliminations		(617	)		1			(383	)
								21,034
Unallocated amounts:
Acquisition intangibles amortization					(3,957	)		(3,957	)
Corporate expense					(1,451	)		(10,224	)
	$	204,252		$	(19,023	)
Interest expense								(10,548	)
Impairment of and loss on investments								(5,940	)
Gain on insurance recovery								2,750
Goodwill and other asset impairment								(778,318	)
Other								758
Consolidated loss from continuing operations before income taxes							$	(784,445	)

9

(In thousands)	Revenues			Depreciation & Amortization			Operating Profit (Loss)
Six months ended June 28, 2009
Virginia/Tennessee	$	97,427		$	(7,144	)	$	13,360
Florida		79,867			(4,190	)		(2,837	)
Mid-South		70,739			(6,788	)		7,037
North Carolina		38,656			(3,392	)		(76	)
Ohio/Rhode Island		23,700			(1,692	)		2,737
Advertising Services & Other		12,804			(449	)		1,367
Eliminations		(673	)		1			(49	)
								21,539
Unallocated amounts:
Acquisition intangibles amortization					(3,586	)		(3,586	)
Corporate expense					(3,135	)		(15,263	)
	$	322,520		$	(30,375	)
Interest expense								(21,229	)
Equity in net loss of unconsolidated affiliates								(209	)
Other								(186	)
Consolidated loss from continuing operations before income taxes							$	(18,934	)
Six months ended June 29, 2008
Virginia/Tennessee	$	118,699		$	(8,083	)	$	20,381
Florida		104,210			(4,845	)		(1,712	)
Mid-South		85,702			(7,569	)		11,161
North Carolina		50,974			(3,548	)		3,156
Ohio/Rhode Island		27,615			(2,270	)		2,348
Advertising Services & Other		12,616			(361	)		(359	)
Eliminations		(1,578	)		9			(854	)
								34,121
Unallocated amounts:
Acquisition intangibles amortization					(7,782	)		(7,782	)
Corporate expense					(2,900	)		(21,474	)
	$	398,238		$	(37,349	)
Interest expense								(22,837	)
Impairment of and net loss on investments								(5,961	)
Gain on insurance recovery								2,750
Goodwill and other asset impairment								(778,318	)
Other								(1,327	)
Consolidated loss from continuing operations before income taxes							$	(800,828	)

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7. In January of 2009, the Company adopted FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. EITF 03-6-1 clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are to be included in the computation of earnings per share. The Company adjusted the prior-period earnings per share calculation which resulted in a $.01 per share change in both the second quarter and six-month period of 2008. The following table sets forth the computation of basic and diluted earnings per share from continuing operations:

	Quarter Ended June 28, 2009							Quarter Ended June 29, 2008
(In thousands, except per share amounts)	Income (Numerator)			Shares (Denominator)	Per Share Amount			Loss (Numerator)			Shares (Denominator)	Per Share Amount
Basic and Diluted EPS:
Income (loss) from continuing operations	$	13,312						$	(533,490	)
Distributed and distributed earnings attributable to participating securities		(646	)						(158	)
Income (loss) from continuing operations available to common stockholders	$	12,666		22,253	$	0.57		$	(533,648	)	22,074	$	(24.18	)
	Six Months Ended June 28, 2009							Six Months Ended June 29, 2008
(In thousands, except per share amounts)	Loss (Numerator)			Shares (Denominator)	Per Share Amount			Loss (Numerator)			Shares (Denominator)	Per Share Amount
Basic and Diluted EPS:
Income (loss) from continuing operations	$	(7,979	)					$	(543,261	)
Undistributed earnings attributable to participating securities		—							(299	)
Income (loss) from continuing operations available to common stockholders	$	(7,979	)	22,217	$	(0.36	)	$	(543,560	)	22,093	$	(24.60	)

8. The following table provides the components of net periodic employee benefits expense for the Company’s benefit plans for the second quarter and first six months of 2009 and 2008:

	Quarter Ended
	Pension Benefits						Other Benefits
(In thousands )	June 28, 2009			June 29, 2008			June 28, 2009			June 29, 2008
Service cost	$	142		$	247		$	50		$	82
Interest cost		5,906			6,536			617			755
Expected return on plan assets		(5,814	)		(6,424	)		—			—
Amortization of prior-service (credit)/cost		(79	)		(2	)		424			411
Amortization of net loss/(gain)		270			1,414			(280	)		(64	)
Curtailment charge		50			—			—			—
Net periodic benefit cost	$	475		$	1,771		$	811		$	1,184

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	Six Months Ended
	Pension Benefits						Other Benefits
(In thousands)	June 28, 2009			June 29, 2008			June 28, 2009			June 29, 2008
Service cost	$	332		$	472		$	125		$	207
Interest cost		12,408			13,061			1,267			1,505
Expected return on plan assets		(12,054	)		(12,949	)		—			—
Amortization of prior-service (credit)/cost		(92	)		(27	)		874			861
Amortization of net loss/(gain)		2,047			2,764			(505	)		(189	)
Curtailment charge		50			—			—			—
Net periodic benefit cost	$	2,691		$	3,321		$	1,761		$	2,384

In the second quarter of 2009, the Company amended its plans so that future retirement benefits under the retirement, ERISA Excess and Executive Supplemental Retirement plans will now be based on final average earnings as of May 31, 2009. Service accruals under the retirement and ERISA Excess plans ceased at the beginning of 2007 and the retirement plan was closed to new participants at that time, but benefits had been allowed to grow based on future compensation. This change does not affect the benefits of current retirees. In the second quarter, because of the curtailment of the retirement and ERISA Excess plans, the Company recorded a net curtailment charge of $50,000 and adjusted OCI by $53 million net of tax.

9. The Company’s comprehensive loss consisted of the following:

	Quarter Ended					Six Months Ended
(In thousands)	June 28, 2009		June 29, 2008			June 28, 2009			June 29, 2008
Net income (loss)	$	20,588	$	(532,212	)	$	(665	)	$	(552,467	)
Unrealized (loss) gain on derivative contracts (net of deferred taxes)		2,348		5,373			3,972			112
Change in pension and postretirement (net of deferred taxes)		52,892		1,951			52,892			1,812
Unrealized holding gain on equity securities (net of deferred taxes)		—		103			—			—
Comprehensive income (loss)	$	75,828	$	(524,785	)	$	56,199		$	(550,543	)

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10. The Company accounts for severance benefits related to workforce reductions in accordance with FASB Statement No. 112, Employers’ Accounting for Postemployment Benefits, and accrues the related expense when payment of severance benefits is both probable and the amount is reasonably estimable. During the first six months of 2009, the Company recorded $6 million in severance expense in selling, general and administrative expenses related to involuntary employee terminations. The workforce reductions, the majority of which were completed in the second quarter, were in response to the deepening economic recession and the Company’s continued efforts to align its costs with the current business environment. The Company recorded severance expense of $1.5 million and $6 million in the second quarter and first half of 2009, as compared to $5.4 million in the first half of 2008 (virtually all of which was recorded in the second quarter of 2008). The following table represents a summary of severance activity by segment (in thousands) for the six months ended June 28, 2009. Accrued severance costs are included in “Accrued expenses and other liabilities” on the Consolidated Condensed Balance Sheets:

(In thousands)	Virginia/ Tennessee			Florida			Mid-South			North Carolina			Ohio/ Rhode Island			Advertising Services & Other			Corporate			Consolidated
Accrued severance -
December 28, 2008	$	870		$	1,522		$	1,086		$	383		$	907		$	221		$	167		$	5,156
Severance expense		2,479			2,085			382			597			215			282			8			6,048
Severance payments		(3,146	)		(3,196	)		(1,357	)		(975	)		(1,084	)		(407	)		(59	)		(10,224	)
Accrued severance -
June 28, 2009	$	203		$	411		$	111		$	5		$	38		$	96		$	116		$	980
Accrued severance -
December 28, 2007	$	9		$	262		$	—		$	—		$	—		$	158		$	—		$	429
Severance expense		540			3,305			229			390			250			33			679			5,426
Severance payments		(328	)		(1,371	)		(228	)		(147	)		(250	)		(21	)		(679	)		(3,024	)
Accrued severance -
June 28, 2008	$	221		$	2,196		$	1		$	243		$	—		$	170		$	—		$	2,831

11. The FCC has mandated a reallocation of a portion of the broadcast spectrum to others, including Sprint/Nextel. According to the FCC order, broadcasters must surrender their old equipment to prevent interference within a narrowed broadcasting frequency range. In exchange for the relinquished equipment, Sprint/Nextel has been providing broadcasters with new digital equipment and reimbursing associated out-of-pocket expenses. During the remainder of 2009, Sprint/Nextel will continue to provide the Company with new equipment which is capable of meeting the narrowed broadcasting frequency criteria. The Company recorded gains of $38 thousand and $1.3 million in the second quarters of 2009 and 2008, respectively, and gains of $.9 million and $2 million for the first six months of 2009 and 2008, respectively, in the line item “Selling, general and administrative” on the Consolidated Condensed Statements of Operations. The Company anticipates recording additional gains approaching $1.6 million in total in the next quarter relating to the new equipment.

12. In the second quarter of 2009, intraperiod tax allocation rules led to variations in the customary relationship between income tax expense and pretax accounting income resulting in an income tax benefit on pretax income and income tax expense on discontinued operations and other comprehensive income. The year-to-date tax benefit, excluding a $3.6 million state tax benefit recognized in the second quarter in connection with a favorable determination of a state tax issue, bore a more customary relationship (39%) to the pretax loss from continuing operations in the first half of 2009.

13. In the second quarter of 2008, the Company and its two equal partners completed the sale of SP Newsprint to White Birch Paper Company. The sale generated proceeds of approximately $60 million which were used to reduce debt and pay income taxes in 2008; a small adjustment related to working capital was recognized in 2009.

14. The Consolidated Condensed Balance Sheet and Consolidated Condensed Statements of Operations and Notes 1, 3, 4, 6, 7 and 10 have been revised for the effects of the Company’s change in segments and the reporting of the sale of a small business magazine and related web site as a discontinued operation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

The Company is a diversified communications company located primarily in the southeastern United States. Effective at the beginning of the third quarter of 2009, Media General changed its management structure from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations. This change was undertaken to more closely connect the Company to its customers and non-customers, to accelerate its Web-first strategy, to speed decision-making, and to create and serve new market opportunities. This market-based approach is a natural extension of the Company’s mission, which is to be the leading provider of high-quality news, information and entertainment in the Southeast by continually building its position of strength in strategically located markets.

The following map shows the locations and composition of the Company’s operating assets within its new management structure.

The Company’s fiscal year ends on the last Sunday in December.

RESULTS OF OPERATIONS

The Company recorded net income of $20.6 million in the second quarter of 2009 and a net loss of $.7 million in the first six months of the year, as compared to a net loss of $532.2 million and $552.5 million in the equivalent 2008 periods. Embedded within these results are two items which merit separate discussion: discontinued operations and impairment charges. The Company sold four TV stations and their associated Web sites

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in 2008: WTVQ in Lexington, Kentucky, WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia. The Company completed the sale of its final held-for-sale station, WCWJ in Jacksonville, Florida, in the second quarter of 2009. The Company recognized an after-tax gain of $7.1 million in 2009 and an after-tax loss of $11.3 million in 2008 related to these divestitures. See Note 4 for a further discussion of discontinued operations. Challenging business conditions and the market’s perception of the value of media company stocks prompted the Company to perform an interim impairment test as of the end of the second quarter of 2008. As a result of this testing, the Company recorded impairment charges in 2008 related to goodwill in the Publishing Division of $512 million, FCC licenses in the Broadcast Division of $198 million, network affiliation agreements in the Broadcast Division of $67 million, trade names in the Broadcast Division of $.5 million, and investments and assets held for sale of $4.4 million, resulting in an after-tax non-cash impairment charge of $532 million. For a more complete discussion regarding this impairment charge, see Note 3. The remainder of this discussion focuses only on results from continuing operations.

In the second quarter of 2009, the Company had income from continuing operations of $13.3 million as compared to a loss from continuing operations of $533.5 million in the comparable quarter of 2008; excluding the $532 million after-tax impairment charge in 2008 the loss was $1.4 million. Most of the improvement was due to income taxes. The quarter included an $11 million tax benefit that was the result of a favorable determination concerning a state tax issue and an intraperiod tax allocation of tax benefits recorded on the Company’s loss from continuing operations (see the Income Taxes section of this MD&A for a further discussion). Severance costs, which were lower than the second quarter of 2008 by $3.9 million, benefitted the current quarter’s reduction in operating losses and were the catalyst for significantly reduced operating costs in the face of continuing declines in advertising revenues. Additionally, the bottom line benefited from a 55% decline in intangibles amortization expense (due to the 2008 impairment write-downs of network affiliation agreement intangibles), a mandatory employee furlough program, the suspension of the company match on the 401(k) plan, and a favorable adjustment for medical expense and reduced compensation costs due to lower employee counts.

The Company recorded a loss from continuing operations of $8.1 million in the first six months of 2009 as compared to a loss of $543.3 million in the first half of 2008; excluding the $532 million after-tax impairment charge in the first half of 2008, the loss was $11.2 million. As with the quarter, reduced operating costs played a large role in the Company’s improved year-over-year results. Employee compensation expenses were down 22% which served to temper a 19% revenue decline. Additional cost savings were achieved for reasons similar to those in the second quarter such as lower intangibles expense, the furlough program, the absence of the company match on the 401(k) plan, and workforce reductions.

MARKET RESULTS

As previously mentioned, the third quarter of 2009 marked the Company’s shift from three platform-based divisions to five geographic market segments and a sixth segment that includes the Company’s interactive advertising services and certain other operations; collectively, they contain all of the operations that were formerly part of the Publishing, Broadcast and Interactive Media segments. The geographically-managed segments include: Virginia/Tennessee, Florida, Mid-South, North Carolina, and Ohio/Rhode Island.

Revenues

As part of this reorganization, revenues have been grouped primarily into five major categories: Local (including the category that was formerly Retail in the Publishing Division), National, Political (which includes Political advertising as was traditionally reported), Classified, and Subscription/Content/Circulation (which includes newspaper circulation, broadcast retransmission revenues, and interactive subscription and content revenues). The following chart summarizes the total consolidated period-over-period changes in these select revenue categories:

Change in Market Revenues by Major Category

2009 versus 2008

	Q2 Change					Year-to-date Change
(In thousands)	Amount			Percent		Amount			Percent
Local	$	(23,558	)	(22.0	)	$	(40,993	)	(20.0	)
National		(8,644	)	(23.5	)		(15,060	)	(21.0	)
Political		(2,016	)	(71.7	)		(6,289	)	(86.7	)
Classified		(13,445	)	(35.9	)		(28,423	)	(37.2	)
Subs/Content/Circulation		4,709		28.0			8,334		24.6

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While the tough advertising environment played a significant role in lower Local and National advertising revenues, period-over-period comparisons were also directly affected by the reduction in Political revenues, as expected in this off-election year; markets which have a higher mix of broadcast stations over newspapers were obviously more affected by this category. Classified advertising was hampered by continued softness in the auto, real estate and employment categories. However, Subscription/Content/Circulation revenues made meaningful progress as a rise in cable and satellite retransmission revenues contributed approximately two-thirds of the growth and an increase in newspaper circulation (the result of higher rates) was responsible for the remainder.

Revenues in the Virginia/Tennessee Market fell 16% and 18% in the second quarter and first six months of 2009 as compared to equivalent prior-year periods. Decreased Local and Classified advertising were the largest reasons for the period-over-period declines, driven by the current recession-induced environment. Partially offsetting weak advertising revenues were strong Subscription/Content/Circulation revenues which showed solid growth due to rate increases across all newspapers as well as to excellent broadcast retransmission revenues.

Revenues in the Florida Market were down 27% and 23% in the second quarter and year-to-date of 2009 from comparable 2008 periods. Local advertising declined 29% and 23% in the quarterly and year-to-date periods, respectively, on weakness in the department store and home furniture categories. Classified advertising continued to show declines due to the erosion of employment, real estate and automotive advertising.

Revenues in the Mid-South Market fell 16% and 18% in the second quarter and first six months of 2009 as compared to equivalent 2008 periods as Local and National advertising were down over 20% from the prior-year levels. As anticipated, Political advertising was almost nonexistent in 2009 as compared to $3.5 million in the first six months of last year. Following the trend, strong Subscription/Content/Circulation revenues partially offset the other revenue shortfalls.

Revenues in the North Carolina Market declined 26% and 24% in the second quarter and year-to-date of 2009 from the same periods of 2008. Cutbacks in Local and Classified advertising comprised most of the revenue shortfall in the North Carolina Market.

Revenues in the Ohio/Rhode Island Market decreased 14% in both the second quarter and first six months of 2009 from comparable prior-year periods. This is the Company’s only geographic market which does not include any newspapers and is consequently less influenced by Classified advertising, but more affected by the ebb and flow of Political and Olympic revenues in corresponding odd and even-numbered years. Local advertising was down 16% in both the second quarter and first six months of 2009, with lower National and Political advertising comprising the remainder of the period-over-period declines. As with all of the other geographic markets, Subscription/Content/Circulation revenues showed increases and partially offset lower advertising revenues.

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Operating Expenses

Cost-containment efforts aimed at reducing the cost structure of the Company have been successful as evidenced by a 23% and 17% reduction in total operating expenses (excluding impairment charges) in the second quarter and first six months of 2009 from equivalent prior-year periods. Total compensation costs declined 28% in the quarter and 22% in the first six months of 2009 due to lower employee counts, the elimination of positions at most locations, lower commissions, the consolidation of certain production facilities, and savings from mandatory unpaid furlough days (discussed in further detail in the Liquidity section of this MD&A). Additionally, despite higher average newsprint prices, up $39/ton (to $633/ton) in the second quarter and up $90/ton (to $656/ton) in the first half of 2009, newsprint costs were down 29% and 18% in those similar periods due to reduced consumption as a result of lower advertising linage, decreased circulation volumes, and concerted conservation efforts including web-width reductions.

Operating expenses in the Virginia/Tennessee Market decreased $9.9 million or 20% and $14.3 million or 14.5% in the second quarter and first six months of 2009 from those same periods in 2008. The largest portion of this decrease was attributable to a 35% and 21% reduction in compensation expense in the second quarter and first six months from the equivalent prior-year periods. Reduced newsprint cost was responsible for a substantial part of the remaining decrease.

Operating expenses in the Florida Market were down $16 million (30%) and $23.2 million (22%) in the second quarter and year-to-date period of 2009 as compared to equivalent prior-year periods. The Florida Market, through its severance programs, reduced compensation costs by $9.8 million and $14.9 million in the second quarter and six months ended June 28, 2009 compared to the same periods in 2008. The Florida Market also achieved meaningful departmental savings in the areas of circulation sales, production supplies and reduced discretionary spending.

Operating expenses in the Mid-South Market fell 17% and 15% in the current quarter and first six months of 2009 from similar periods in 2008. The majority of the savings came from lower compensation cost. This market has a heavier mix of broadcast stations than newspapers and therefore, while newsprint costs were down, they were proportionally less significant to the overall cost savings than in other markets.

Operating expenses in the North Carolina Market declined 25% in the second quarter and 19% in the first six months of 2009 as compared to 2008’s second quarter and year-to-date period. Approximately half of the savings in both the quarter and year-to-date were realized from lower compensation cost. Lower newsprint costs combined with reduced departmental spending contributed the remaining savings.

Operating expenses in the Ohio/Rhode Island Market were down 28% and 17% in the quarter and first six months of the current year from similar 2008 periods due primarily to lower compensation cost. The remaining savings were achieved primarily through concerted efforts to control discretionary spending. Newsprint was not a factor as the Company does not operate any newspapers in the Ohio/Rhode Island Market.

ADVERTISING SERVICES & OTHER

Advertising Services & Other (ASO) primarily includes:

• Blockdot - a leading advergaming business;

• Dealtaker.com - an online social shopping portal that was acquired at the beginning of the second quarter of 2008;

• NetInformer - a leading provider of mobile advertising and marketing services purchased in the fourth quarter of 2008;

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• Production Services – comprised primarily of a provider of broadcast equipment and studio design services.

Revenues in ASO fell $1.2 million (16%) and improved 2% in the second quarter and first six months of 2009 over the equivalent prior-year periods. The change in revenue in the second quarter was primarily due to a $1.9 million reduction in revenue in the Production Services operations as the economy and the recently completed digital upgrade has reduced demand for this operation’s services. This reduction in revenue was partially offset by strong revenue growth from Dealtaker.com (particularly in the first six months of 2009 as compared to 2008 when its results included only three months of ownership) reflecting increased traffic and visitors buying from merchant sites. Blockdot exhibited solid improvement in its advergaming revenues as a result of successful sales initiatives.

Operating expenses were down 21% and 12% in the second quarter and first six months of 2009 from the equivalent prior-year periods due primarily to lower compensation costs. Additionally, lower cost of goods sold was in line with the previously mentioned reduced volume of work at Production Services.

Operating Profit (Loss)

The following chart shows the change in operating profit by market for the second quarter and first six months of 2009 and 2008; the period-over-period movement in market operating profit was driven by the underlying fluctuations in revenue and expense as detailed in the previous discussion.

Change in Market Operating Profits

2009 versus 2008

	Q2 Change					Year-to-date Change
(In thousands)	Amount			Percent		Amount			Percent
Virginia/Tennessee	$	(85	)	(0.7	)	$	(7,021	)	(34.4	)
Florida		2,101		—			(1,125	)	65.7
Mid-South		(942	)	(13.6	)		(4,124	)	(37.0	)
North Carolina		(962	)	(39.3	)		(3,232	)	—
Ohio/Rhode Island		507		24.5			389		16.6
Adv. Services & Other		288		59.0			1,726		—
Eliminations/Disc. Ops		378		98.7			805		94.3
Total	$	1,285		6.1		$	(12,582	)	(36.9	)

In the second quarter of 2009, the Florida Market was responsible for the majority of the operating profit improvement from last year’s second quarter. Lower operating expenses, resulting from cost reduction initiatives, in this market were able to overcome decreased revenues.

In the first six months of 2009, the Virginia/Tennessee, Mid-South, and North Carolina Markets contributed the largest portion of the year-over-year operating profit shortfall. Anemic Classified advertising was the common thread among these markets, while depressed Local revenues at the Virginia/Tennessee and North Carolina Markets contributed as well. The Florida Market showed lesser declines as a substantial portion of their reduced revenues was offset by lower compensation costs and decreased newsprint expense.

INTEREST EXPENSE

Interest expense increased $.7 million in the second quarter from 2008’s same quarter due to a 100 basis point increase (to 5.9%) in the Company’s all-in borrowing rate, partially offset by an approximate $90 million decline in average debt levels. Interest expense declined $1.6 million in the year to date from the first half of 2008 due to a $105 million decline in average debt levels, partially offset by a small increase in the average interest rate to 5.5%. Proceeds from the sales of SP Newsprint and four television station in 2008 drove the debt reduction.

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In the second quarter of 2006, the Company entered into three interest rate swaps (where it pays a fixed rate and receives a floating rate) to manage interest cost and cash flows associated with variable interest rates, primarily short-term changes in LIBOR, not to trade such instruments for profit or loss. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million and maturities of either three or five years. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s borrowings. These swaps effectively convert the Company’s variable rate bank term loan to fixed rate debt with a weighted average interest rate approximating 8.3% at June 28, 2009.

INCOME TAXES

In the second quarter and first half of 2009, the Company recorded an income tax benefit attributable to continuing operations and income tax expense on discontinued operations and other comprehensive income. The income tax benefit was comprised of two components: a $7.5 million tax benefit on its loss from continuing operations for the year-to-date period and a discrete tax benefit related to a favorable determination of a state tax issue ($3.6 million) resulting in an unusual effective tax rate. In the first six months of 2009, the Company benefitted income from continuing operations at a 39% rate (excluding the one-time tax benefit related to the state tax issue) compared to 32.2% a year ago. The increase in the 2009 tax rate was primarily due to the relatively low effective tax rate related to the impairment charge recorded in the second quarter of last year.

LIQUIDITY

Net cash generated from operating activities in the first half of 2009 was $3.3 million. Additionally, the Company completed the sale of its fifth held-for-sale television station, WCWJ, which yielded proceeds of approximately $17 million. During the year, the Company collected a $5 million note receivable related to its sale of SP Newsprint in 2008, incurred capital expenditures of $8 million and made a retirement plan contribution of $5 million. Based on the general economic environment and outlook, the Company has reduced its capital spending plans by postponing various projects.

At June 28, 2009, the Company had in place a $578 million revolving credit facility and a $288 million variable-rate bank term loan facility (together the “Facilities”). The term loan is with essentially the same syndicate of banks that provides the Company’s revolving credit facility. At the end of the second quarter, there were borrowings of $424 million outstanding under the revolving credit facility and $288 million under the bank term loan. The Facilities have both interest coverage and leverage ratio covenants. Under the terms of the Facilities, the maximum leverage ratio covenant was reduced slightly for the remainder of 2009 beginning with the second quarter and will reduce again for the first three quarters of 2010; it will remain at a constant level thereafter. Also effective for the second quarter of 2009, the minimum interest coverage ratio increased slightly for the remaining term of the Facilities. These covenants, which involve debt levels, interest expense, and a rolling four-quarter calculation of EBITDA (a measure of cash earnings as defined in the revolving credit agreement), can affect the Company’s maximum borrowing capacity allowed by the Facilities (which was approximately $33.5 million as of the filing date). Annual borrowing capacity reductions will be made based on the Company’s excess cash flow, as defined. Because the leverage ratio exceeds certain preset levels, the Facilities contain restrictions on dividends, capital spending, indebtedness, capital leases, and investments, as defined. The Company was in compliance with all covenants at quarter-end and, as covenants tighten, the Company expects to remain in compliance with them going forward by taking the steps necessary to maintain EBITDA and reduce debt.

As the economy has deteriorated, the Company responded to the economic crisis with several aggressive actions to improve its cash flow. These actions included suspending the Company’s match for the 401(k) Plan for the last three quarters of 2009, a minimum of ten mandatory unpaid furlough days for all employees spread across the first three quarters of 2009 (4 days in the first quarter and 3 days in each of the second and third quarters), and the Board of Directors suspending the Company dividend. As discussed earlier, the Company has significantly reduced its workforce, and effective May 31, froze benefits under its retirement plan. All of these actions will conserve cash in either the short- or long-term, or both.

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In the second quarter, the Company completed the sale of WCWJ in Jacksonville, Florida and used the proceeds to reduce debt. The combined commitment under the Facilities is now $866 million. The Company believes that internally generated funds provided by operations, together with the unused portion of the Facilities, provide it with the flexibility to manage working capital needs and finance planned capital expenditures.

* * * * * * * *

Certain statements in this quarterly report that are not historical facts are “forward-looking” statements, as that term is defined by the federal securities laws. Forward-looking statements include statements related to accounting estimates and assumptions, expectations regarding credit facilities, acquisitions and dispositions, the impact of cost-containment measures, staff reductions, retirement plan changes, the Internet, the Yahoo! agreements, debt compliance, general advertising levels and political advertising levels. Forward-looking statements, including those which use words such as the Company “believes,” “anticipates,” “expects,” “estimates,” “intends,” “projects,” “plans,” “may” and similar words, are made as of the date of this filing and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements.

Some significant factors that could affect actual results include: the effect of the credit crisis on advertising demand, asset impairments, interest rates or energy prices, the availability and pricing of credit and newsprint, changes to pending accounting standards, health care cost trends, a natural disaster, the level of political advertising, the performance of acquisitions, and regulatory rulings and laws.

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EX-99.10

Exhibit 99.10

Guarantor Financial Information

From time to time, the Company’s subsidiaries may guarantee the debt securities of the parent company. The following financial information presents condensed consolidating balance sheets, statements of operations, and statements of cash flows for the parent company, the Guarantor Subsidiaries, and the non-Guarantor Subsidiaries, which is comprised of certain variable interest entities for which the Company is the primary beneficiary, together with certain eliminations as of December 27, 2009, December 28, 2008 and December 30, 2007.

Media General, Inc.

Condensed Consolidating Balance Sheet

As of December 27, 2009

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
ASSETS
Current assets:
Cash & cash equivalents	$	31,691		$	1,541		$	—		$	—		$	33,232
Accounts receivable, net		—			104,405			—			—			104,405
Inventories		2			6,630			—			—			6,632
Other current assets		3,141			83,375			—			(25,730	)		60,786
Total current assets		34,834			195,951			—			(25,730	)		205,055
Investment in and advances to subsidiaries		191,298			1,688,840			—			(1,880,138	)		—
Intercompany note receivable		742,219			—			—			(742,219	)		—
Other assets		16,928			16,946			303			—			34,177
Property, plant & equipment, net		28,702			392,506			—			—			421,208
Excess cost over fair value		—			355,017			—			—			355,017
FCC licenses and other intangibles		—			220,591			—			—			220,591
TOTAL ASSETS	$	1,013,981		$	2,869,851		$	303		$	(2,648,087	)	$	1,236,048
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,074		$	17,330		$	—		$	(6	)	$	26,398
Accrued expenses and other liabilities		24,537			73,367			—			(25,730	)		72,174
Total current liabilities		33,611			90,697			—			(25,736	)		98,572
Long-term debt		711,881			28			—			—			711,909
Intercompany loan		—			742,219			—			(742,219	)		—
Deferred income taxes		—			7,233			—			—			7,233
Retirement, post-retirement and post-employment plans		173,017			—			—			—			173,017
Other deferred credits		46,740			5,162			1,164			—			53,066
Stockholders’ equity
Common stock		113,969			4,872			—			(4,872	)		113,969
Additional paid-in capital		26,011			2,435,790			(1,919	)		(2,435,629	)		24,253
Accumulated other comprehensive income		(117,703	)		—			—			—			(117,703	)
Retained earnings		26,455			(416,150	)		1,058			560,369			171,732
Total stockholders’ equity		48,732			2,024,512			(861	)		(1,880,132	)		192,251
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,013,981		$	2,869,851		$	303		$	(2,648,087	)	$	1,236,048

Media General, Inc.

Condensed Consolidating Statements of Operations

Fiscal Year Ended December 27, 2009

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Median General Consolidated
Revenues	$	28,685		$	756,395		$	—		$	(127,468	)	$	657,612
Operating costs:
Employee compensation		27,882			271,900			657			—			300,439
Production		—			157,131			—			(2,346	)		154,785
Selling, general and administrative		(4,291	)		223,438			—			(125,116	)		94,031
Depreciation and amortization		2,484			56,696			—			(2	)		59,178
Goodwill and other asset impairment		—			84,220			—			—			84,220
Gain on insurance recovery		—			(1,915	)		—			—			(1,915	)
Total operating costs		26,075			791,470			657			(127,464	)		690,738
Operating income (loss)		2,610			(35,075	)		(657	)		(4	)		(33,126	)
Other income (expense):
Interest expense		(41,971	)		(7	)		—			—			(41,978	)
Intercompany interest income (expense)		42,217			(42,217	)		—			—			—
Impairment of and income on investments		—			701			—			—			701
Investment income (loss)—consolidated affiliates		(41,055	)		—			—			41,055			—
Other, net		1,151			(179	)		—			—			972
Total other income (expense)		(39,658	)		(41,702	)		—			41,055			(40,305	)
Loss from continuing operations before income taxes		(37,048	)		(76,777	)		(657	)		41,051			(73,431	)
Income tax benefit		(1,283	)		(27,355	)		—			—			(28,638	)
Loss from continuing operations		(35,765	)		(49,422	)		(657	)		41,051			(44,793	)
Income from discontinued operations (net of taxes)		—			155			—			—			155
Gain related to divestiture of operations (net of taxes)		—			8,873			—			—			8,873
Net loss		(35,765	)		(40,394	)		(657	)		41,051			(35,765	)
Other comprehensive income (net of tax)		70,436			—			—			—			70,436
Comprehensive income (loss)	$	34,671		$	(40,394	)	$	(657	)	$	41,051		$	34,671

Media General, Inc.

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended December 27, 2009

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	20,480		$	13,291		$	7		$	—		$	33,778
Cash flows from investing activities:
Capital expenditures		(1,221	)		(17,232	)		—			—			(18,453	)
Proceeds from sale of discontinued operations		17,625			—			—			—			17,625
Insurance proceeds related to machinery and equipment		—			3,120			—			—			3,120
Net change in intercompany note receivable		7,781			—			—			(7,781	)		—
Collection of receivable note		—			5,000			—			—			5,000
Other, net		(623	)		3,614			—			—			2,991
Net cash provided (used) by investing activities		23,562			(5,498	)		—			(7,781	)		10,283
Cash flows from financing activities:
Increase in debt		215,700			—			—			—			215,700
Payment of debt		(233,819	)		(21	)		—			—			(233,840	)
Net change in intercompany loan		—			(7,781	)		—			7,781			—
Other, net		175			1			(7	)		—			169
Net cash (used) provided by financing activities		(17,944	)		(7,801	)		(7	)		7,781			(17,971	)
Net increase (decrease) in cash and cash equivalents		26,098			(8	)		—			—			26,090
Cash and cash equivalents at beginning of year		5,593			1,549			—			—			7,142
Cash and cash equivalents at end of period	$	31,691		$	1,541		$	—		$	—		$	33,232

Media General, Inc.

Condensed Consolidating Balance Sheet

As of December 28, 2008

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
ASSETS
Current assets:
Cash & cash equivalents	$	5,593		$	1,549		$	—		$	—		$	7,142
Accounts receivable, net		—			102,174			—			—			102,174
Inventories		2			12,033			—			—			12,035
Other current assets		2,699			67,463			—			(31,313	)		38,849
Assets of discontinued operations		—			12,402			—			—			12,402
Total current asset		8,294			195,621			—			(31,313	)		172,602
Investment in and advances to subsidiaries		300,565			1,597,504			—			(1,898,069	)		—
Intercompany note receivable		750,000			—			—			(750,000	)		—
Other assets		47,165			18,315			243			(24,436	)		41,287
Property, plant & equipment, net		30,860			422,767			—			—			453,627
Excess cost over fair value		—			421,470			—			—			421,470
FCC licenses and other intangibles		—			245,266			—			—			245,266
TOTAL ASSETS	$	1,136,884		$	2,900,943		$	243		$	(2,703,818	)	$	1,334,252
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,024		$	25,347		$	—		$	(6	)	$	41,365
Accrued expenses and other liabilities		25,519			92,086			—			(31,314	)		86,291
Liabilities of discontinued operations		—			3,053			—			—			3,053
Total current liabilities		41,543			120,486			—			(31,320	)		130,709
Long-term debt		730,000			49			—			—			730,049
Intercompany loan		—			750,000			—			(750,000	)		—
Retirement, post-retirement and post-employment plans		251,175			—			—			—			251,175
Other deferred credits		60,087			7,014			440			(449	)		67,092
Stockholders’ equity
Common stock		114,010			4,872			—			(4,872	)		114,010
Additional paid-in capital		23,846			2,436,495			(1,912	)		(2,436,495	)		21,934
Accumulated other comprehensive income		(188,139	)		—			—			—			(188,139	)
Retained earnings		104,362			(417,973	)		1,715			519,318			207,422
Total stockholders’ equity		54,079			2,023,394			(197	)		(1,922,049	)		155,227
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,136,884		$	2,900,943		$	243		$	(2,703,818	)	$	1,334,252

Media General, Inc.

Condensed Consolidating Statements of Operations

Fiscal Year Ended December 28, 2008

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
Revenues	$	39,395		$	922,853		$	—		$	(164,873	)	$	797,375
Operating costs:
Employee compensation		32,190			349,961			(1,715	)		(2	)		380,434
Production		—			197,758			—			(4,724	)		193,034
Selling, general and administrative		(1,204	)		272,881			—			(160,128	)		111,549
Depreciation and amortization		2,784			68,690			—			(10	)		71,464
Goodwill and other asset impairment		—			908,701			—			—			908,701
Gain on insurance recovery		—			(3,250	)		—			—			(3,250	)
Total operating costs		33,770			1,794,741			(1,715	)		(164,864	)		1,661,932
Operating income (loss)		5,625			(871,888	)		1,715			(9	)		(864,557	)
Other income (expense):
Interest expense		(43,441	)		(8	)		—			—			(43,449	)
Intercompany interest income (expense)		42,653			(42,653	)		—			—			—
Impairment of and loss on investments		(39	)		(4,380	)		—			—			(4,419	)
Investment income (loss)-consolidated affiliates		(630,589	)		—			—			630,589			—
Other, net		875			104			—			—			979
Total other income (expense)		(630,541	)		(46,937	)		—			630,589			(46,889	)
Income (loss) from continuing operations before income taxes		(624,916	)		(918,825	)		1,715			630,580			(911,446	)
Income tax expense (benefit)		6,938			(295,129	)		—			—			(288,191	)
Income (loss) from continuing operations		(631,854	)		(623,696	)		1,715			630,580			(623,255	)
Income from discontinued operations (net of taxes)		—			2,701			—			—			2,701
Loss related to divestiture of operations (net of taxes)		—			(11,300	)					—			(11,300	)
Net income (loss)		(631,854	)		(632,295	)		1,715			630,580			(631,854	)
Other comprehensive loss (net of tax)		(110,862	)		—			—			—			(110,862	)
Comprehensive income (loss)	$	(742,716	)	$	(632,295	)	$	1,715		$	630,580		$	(742,716	)

Media General, Inc.

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended December 28, 2008

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
Cash flows from operating activities:
Net cash (used) provided by operating activities	$	(59,545	)	$	158,213		$	90		$	—		$	98,758
Cash flows from investing activities:
Capital expenditures		(4,698	)		(26,819	)		—			—			(31,517	)
Purchase of businesses		(23,804	)		—			—			—			(23,804	)
Proceeds from sales of discontinued operations and investments		78,836			59,466			—			—			138,302
Net change in intercompany note receivable		186,500			—			—			(186,500	)		—
Funding of note receivable		—			(5,000	)		—			—			(5,000	)
Other, net		5,833			49			—			—			5,882
Net cash provided (used) by investing activities		242,667			27,696			—			(186,500	)		83,863
Cash flows from financing activities:
Increase in debt		330,000			—			—			—			330,000
Repayment of debt		(497,500	)		(23	)		—			—			(497,523	)
Debt issuance costs		(4,182	)		—			—			—			(4,182	)
Cash dividends paid		(18,510	)		—			—			—			(18,510	)
Net change in intercompany loan		—			(186,500	)		—			186,500			—
Other, net		610			2			(90	)		—			522
Net cash (used) provided by financing activities		(189,582	)		(186,521	)		(90	)		186,500			(189,693	)
Net decrease in cash and cash equivalents		(6,460	)		(612	)		—			—			(7,072	)
Cash and cash equivalents at beginning of year		12,053			2,161			—			—			14,214
Cash and cash equivalents at end of period	$	5,593		$	1,549		$	—		$	—		$	7,142

Media General, Inc.

Condensed Consolidating Balance Sheet

As of December 30, 2007

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Eliminations			Media General Consolidated
ASSETS
Current assets:
Cash & cash equivalents	$	12,053		$	2,161		$	—		$	14,214
Accounts receivable, net		—			133,576			—			133,576
Inventories		1			6,825			(150	)		6,676
Other current assets		11,368			77,774			(37,102	)		52,040
Assets of discontinued operations		—			107,355			—			107,355
Total current assets		23,422			327,691			(37,252	)		313,861
Investment in unconsolidated affiliates		1,435			50,925			—			52,360
Investment in and advances to subsidiaries		891,486			1,591,428			(2,482,914	)		—
Intercompany note receivable		936,500			—			(936,500	)		—
Other assets		45,989			21,212			(1,527	)		65,674
Property, plant & equipment, net		87,440			387,533			—			474,973
Excess cost over fair value		—			917,521			—			917,521
FCC licenses and other intangibles		—			646,677			—			646,677
TOTAL ASSETS	$	1,986,272		$	3,942,987		$	(3,458,193	)	$	2,471,066
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,903		$	19,757		$	(6	)	$	32,654
Accrued expenses and other liabilities		31,626			107,229			(37,102	)		101,753
Liabilities of discontinued operations		—			5,614			—			5,614
Total current liabilities		44,529			132,600			(37,108	)		140,021
Long-term debt		897,500			72			—			897,572
Intercompany loan		—			936,500			(936,500	)		—
Deferred income taxes		(14,510	)		326,098			—			311,588
Retirement, post-retirement and post-employment plans		147,578			—			—			147,578
Other deferred credits		56,114			4,231			955			61,300
Stockholders’ equity
Common stock		113,059			4,872			(4,872	)		113,059
Additional paid-in capital		19,713			2,412,059			(2,412,059	)		19,713
Accumulated other comprehensive income		(74,816	)		(2,461	)		—			(77,277	)
Retained earnings		797,105			129,016			(68,609	)		857,512
Total stockholders’ equity		855,061			2,543,486			(2,485,540	)		913,007
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,986,272		$	3,942,987		$	(3,458,193	)	$	2,471,066

Media General, Inc.

Condensed Consolidating Statements of Operations

Fiscal Year Ended December 30, 2007

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
Revenues	$	38,278		$	1,043,095		$	—		$	(185,080	)	$	896,293
Operating costs:
Employee compensation		34,847			364,324			—			(14	)		399,157
Production		—			220,528			—			(9,102	)		211,426
Selling, general and administrative		15,319			312,474			(26,976	)		(175,933	)		124,884
Depreciation and amortization		4,434			68,205			390			(31	)		72,998
Gain on insurance recovery		—			(17,604	)		—			—			(17,604	)
Total operating costs		54,600			947,927			(26,586	)		(185,080	)		790,861
Operating income (loss)		(16,322	)		95,168			26,586			—			105,432
Other income (expense):
Interest expense		(58,337	)		(5	)		(1,235	)		—			(59,577	)
Intercompany interest income (expense)		60,407			(60,407	)		—			—			—
Investment loss—unconsolidated affiliates		(756	)		(34,069	)		—			—			(34,825	)
Investment income (loss)—consolidated affiliates		9,406			—			—			(9,406	)		—
Other, net		3,233			(2,194	)		87			—			1,126
Total other income (expense)		13,953			(96,675	)		(1,148	)		(9,406	)		(93,276	)
Income (loss) from continuing operations before income taxes		(2,369	)		(1,507	)		25,438			(9,406	)		12,156
Income tax expense (benefit)		(13,056	)		6,103			9,874			—			2,921
Income (loss) from continuing operations		10,687			(7,610	)		15,564			(9,406	)		9,235
Income from discontinued operations (net of taxes)		—			3,452			—			—			3,452
Loss related to divestiture of operations (net of taxes)		—			(2,000	)		—			—			(2,000	)
Net income (loss)		10,687			(6,158	)		15,564			(9,406	)		10,687
Other comprehensive income (net of tax)		33,265			706			—			—			33,971
Comprehensive income (loss)	$	43,952		$	(5,452	)	$	15,564		$	(9,406	)	$	44,658

Media General, Inc.

Condensed Consolidating Statements of Cash Flows

Fiscal Year Ended December 30, 2007

(In thousands, unaudited)

	Media General Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Media General Consolidated
Cash flows from operating activities:
Net cash provided (used) by operating activities	$	125,593		$	(94,326	)	$	99,562		$	—		$	130,829
Cash flows from investing activities:
Capital expenditures		(11,460	)		(66,682	)		—			—			(78,142	)
Purchase of business		(2,525	)		—			—			—			(2,525	)
Insurance proceeds related to machinery and equipment		—			27,841			—			—			27,841
Net change in intercompany note receivable		(125,500	)		—			—			125,500			—
Distribution from unconsolidated affiliate		—			5,000			—			—			5,000
Other, net		5,584			2,661			—			—			8,245
Net cash (used) provided by investing activities		(133,901	)		(31,180	)		—			125,500			(39,581	)
Cash flows from financing activities:
Increase in debt		570,000			—			—			—			570,000
Repayment of debt		(493,500	)		(3	)		(95,320	)		—			(588,823	)
Stock repurchase		(48,716	)		—			—			—			(48,716	)
Debt issuance costs		(1,010	)		—			—			—			(1,010	)
Cash dividends paid		(21,156	)		—			—			—			(21,156	)
Net change in intercompany loan		—			125,500			—			(125,500	)		—
Other, net		4,985			—			(4,242	)		—			743
Net cash provided (used) by financing activities		10,603			125,497			(99,562	)		(125,500	)		(88,962	)
Net increase (decrease) in cash and cash equivalents		2,295			(9	)		—			—			2,286
Cash and cash equivalents at beginning of year		9,758			2,170			—			—			11,928
Cash and cash equivalents at end of period	$	12,053		$	2,161		$	—		$	—		$	14,214