Welcome to the Q2 2009 Media General earnings conference call. (Operator Instructions) I would now like to turn the call over to Lou Anne Nabhan, Vice President.

Earlier today we announced second quarter 2009 results and the press release has been posted on our website. The comments from today's conference call will be posted immediately following the call and a replay will appear later in the day. Our presentation today does contain forward-looking statements, which are subject to various risks and uncertainties. It should be understood in the context of the company's publicly available reports filed with the SEC. Media General's future performance could differ materially from its current expectations. Our speakers today are Marshall Morton President and Chief Executive Officer, Reid Ashe Executive Vice President and Chief Operating Officer, and John Schauss Vice President in Finance and Chief Financial Officer. Let me first turn the presentation over to Marshall.

For the second quarter of 2009, net income of $21 million, $0.90 per share, compared to an impairment light and loss of $532 million a year ago. The current period included an income tax benefit of $11 million on continuing operations, including $3.6 million from a favorable determination concerning a state tax issue, and $7.5 million of tax benefit attributable to our first half results. Also in the 2009 second quarter, we had a $7.1 million gain after tax on the sale of our CW Station in Jacksonville. Excluding severance expense from both quarters and last year's impairment charge, the income from continuing operations before taxes in 2009 second quarter was $3.8 million compared with $2.6 million in the prior year, a 23% decrease in total operating expenses year-over-year, excluding impairment, was the major contributor to the improved operating results. Significantly lower expenses reflected actions we've taken on multiple fronts to align our cost structure with current revenue opportunities. These include reductions in force across the company, a furlough program in 2009, suspension of the match on our 401k plan, and the final step in appraising our pension plan as of May 31, 2009. Total revenues in the second quarter decreased 20% from last year. Looking at sequential comparisons to this year's first quarter, the revenue decline in publishing was about the same. The decline in broadcast was a little higher, which mostly reflected the fact that we did not have the benefit of the Super Bowl advertising that we had had in the first quarter. Interactive media revenues declined 5.8% compared to a 24.5% increase in the first quarter, mostly attributable to the acquisition of DealTaker.com on the first day of the second quarter last year. Our classified advertising revenue declines abated some point in the second quarter compared…

Starting with the publishing segment, classified advertising was down 35%, retail 21%, and national 19%. Circulation revenue increased to 12%, driven by higher single-copy and home delivery prices in most markets, and lower subscriber discounts. Total publishing expenses, excluding severance, decreased to 25% from last year. The expense savings came in all departments, but were most notable in salaries, benefits and newsprint. Newsprint expense decreased $3.7 million or 29%. We cut consumption by 34% through reduced Web widths, page counts, circulation volumes and advertising linage. The average price per ton for the quarter was $633 compared with $594 last year. Newsprint prices have dropped dramatically in the last two months, though, and we'll see a favorable impact in the third quarter. In the broadcast segment, local and national transactional advertising reached down 25%. The worst decline was in automotive. Political revenues in the 2009 quarter were $800,000 mostly from the Virginia gubernatorial primary. Our television advertising sales continue to beat industry averages. According to the Television Bureau's monthly group survey through May, that's the latest reporting period, industry time sales decreased 28% compared with a 26% decline for our stations. Those numbers include political advertising, both for the industry and for us. We reduced broadcast expenses in salary and benefits, media advertising, newscast production and administration. In the interactive media segment, local advertising revenue increased 18% mitigating the drop in classified. We've given our sales force better training and incentives to sell new media. The market is more receptive now. And our Yahoo and [Zilla] partnerships helped too. June was our first million dollar month in local online sales. So far this year we've booked more than $2 million in Yahoo display ads alone. That compares to $500,000 at this time last year and only $900,000 in all of 2008.…

Let me begin with below the line items in the second quarter. Interest expense of $11.3 million was approximately $700,000 higher than last year's second quarter due primarily to higher interest rates offset in large part by lower average debt levels. The significant decrease in acquisition intangibles amortization was the result of intangible assets written down last year in 2008. Corporate expense declined by nearly $3.6 million or 35%. We benefited from savings from our furlough program, from reductions in retirement related expenses, and stock-based items were down. Due to our net deferred tax asset position and required valuation allowance, together with a favorable determination concerning a state tax issue, income tax benefit of $7.5 million both for the quarter and the six-month period had an unusual relationship to pretax loss. In the year-to-date period, a 39% income tax benefit was recorded on the pretax loss from continuing operations. The remainder of the tax benefit, $3.6 million, relates to the favorable determination in the second quarter. Accordingly, the income tax benefit recognized that both the current quarter and the first half was the same. EBITDA from continuing operations was $28.6 million in this year's second quarter. Last year's amount was negative due to the impairment charge. Free cash flow in the second quarter of this year was $25 million compared with $18 million last year. Capital spending in the current quarter was $3.8 million compared with $4.5 million last year. Publishing segments expenditures were $2.6 million mainly for Web width reductions in our three metro markets. Broadcast expenditures were $1.1 million mainly for completing DTV conversion projects and for transitioning to a new sales order traffic system. Interactive media division and corporate expenditures were nominal. Debt at the end of the second quarter was $711 million compared with $730 million at the end of the first quarter of 2009. This reduction mainly reflected the use of proceeds from the sale of our CW station in Jacksonville, Florida. The maximum leverage ratio allowed by our debt covenants stepped down to 6 times compared to 6.25 times in the first quarter of this year. We came in at 5.73 times. We are pleased to come in under 5.75 times because our interest expense in the third quarter will be $1.5 million lower than it would have been had the ratio been 5.75 times or above. We remain confident that we will stay in compliance with all of our debt covenants. And now, I'll turn it back to Marshall.

Despite continued economic challenges, we're finding many good reasons for optimism. We're pushing into new digital and mobile platforms and creating new ways to serve consumers and advertisers. We're driving audience growth through new products, as well as our Web-First continuous news initiative. Our mobile delivery includes new advertising and marketing services such as text messaging, mobile coupons and classified vertical applications. We are aggressively executing on our partnerships with Yahoo and [Zilla] and we're accelerating the growth of the new revenue streams tapped by DealTaker.com and Blockdot. On July 1, 2009, Media General changed its operating structure to one that is organized by geographic markets versus individual media platforms. Under the new structure, our leaders are responsible for the success of all our media properties within a defined market area, not just a particular media platform. This change puts into action our long held recognition that the customer is in charge making decisions as to how he wants his information packaged. For years now as new technologies have driven rapid change in our business, we have followed a strategy of providing multiple media platforms to deliver our news, information and entertainment, when, where and how the customer wants it. Our structural realignment opens new opportunities to put customer needs first and then provide the best solution to meet those needs without allegiance to a particular media platform. We've made our operating structure flatter and leaner at the top, which will increase our speed to market for new products and services. In the digital world it's possible to develop and test ideas with limited capital investment, another way our speed to market will be improved. I've begun a series of visits to our various properties to help employees understand our focus on serving our marketplaces and the customer requires. During…

(Operator Instructions) Your first question comes from Ed Atorino - Benchmark Capital.

If you look at the costs in the second quarter sort of by group, will there be much change quarter-to-quarter or is that sort of a good run rate number going forward? That is the first question.

I think it is a pretty reasonable expectation going forward. The cuts that we have been talking about, operating cuts, took place most recently in the early part of the second quarter.

Were there any restructuring charges in the quarter by division?

No

Thirdly, looking at 2010, what was your political from the current station base in the last off year election, what would it have been?

John is looking that, up Ed, just a second, 2006 was a very strong off year for us.

Ed, we had in 2006 $52 million of revenue

That's from the current station line up?

No, it would not be.

There was a mix there because we have sold five stations that were part of the mix in 2006 and we had just picked up the four NBC stations that we bought from NBC. We can sort that out for you on a phone call later if you would like.

No, that is no big deal. Lastly going forward, if you had to look at 2010, who knows, do you sense that this is a bottom that is going to continue to diminish, that is the rate of decline, continue to diminish any sense on bookings, whatever you call it going forward, both in newspapers and TV?

We see increasing evidence, some of it anecdotal, some coming from the Fed and Treasury department that would indicate that we're getting down there. But on a market-by-market basis, we are seeing some signs here as well. Our determination is to push new products into our markets to expand our scope so that even if there is continued softness that we're generating new revenue streams from new customers. And Ray talked about that a bit in some of our online offerings which are picking up new customers.

Last question, did you say your interest expense is going to be down in the third quarter?

John pointed out that because we came in under 5.75 times on the leverage ratio it drops us down on the grid. So, yes, it will reduce interest expense by about $1.5 million.

By the way, your stock has doubled.

Oh has it?

It's up $2.55

Thank you very much, that is good news.

See, I have been in this business a long time and rarely ever see a stock double in a few hours.

Well I appreciate the news, I have not looked at the –

Actually it's now $4.97, it's now $5.04. I could do this all day I suppose.

Ed, thank you very much.

You're welcome.

This is new media to a tee.

My God, what do I do now? Shouldn't have waited for the call I suppose, obviously, anyway.

Thank you very much

Sorry for taking so much time.

No, I enjoyed it.

(Operator Instructions) Your next question comes from Barry Lucas - Gabellie & Company.

I've got a host of questions, but let me just start with a couple on sort of price volume. Reid, I think you gave some numbers for newsprint pricing 633 versus 594. Was that the average in the quarter or is kind of the 630 transaction price?

Those are averages.

So you're either close to or about to crossover, I would think, on newsprint pricing so that you've got favorable –

Yes, we expect our third quarter average to be less than our second quarter average. John is telling me 525 is what he is looking at.

And if usage would remain constant, what would the delta be, roughly, in difference in your newsprint expense?

I don't have that second quarter tonnage in front of me.

But clearly that's going to be a tailwind where it's been a headwind in the past couple of quarters.

We've got a couple more conversions to 44 inches, Barry that will be essentially all done I think they'll be all done by the end of the third quarter. So there will be some continued climb there too just because of more efficient newsprint usually.

Again, on price volume, 12% increase in circulation revenues. Fairly dramatic I think, McClatchy was up 5% or 6%, so what were the volume declines daily and Sunday if you have those?

Well, they did decline and we generally don't give circulation numbers except in the context of ABC reports.

Okay, but they were down?

We can say this, Barry, that in the past there has been a rule of thumb as you increase circulation unit prices we expect a certain reduction in volume. The rule of thumb doesn't hold true in most cases this time. The reductions were less and we think we're just getting to a different spot on the demand scale where it's less price sensitive.

That was the point, that you're core reader is less price sensitive and willing to pay for content.

Right

Your next question comes from Sharon Hill - AIM Group.

I believe it was Marshall, and please correct me if I'm wrong, that said that you were traveling to Tampa and talking to the auto dealers and the various other folks there, and I applaud that. I think that that sort of face-to-face is important, especially as this economy is driving some lack of confidence, and I wanted to ask you to give me a little bit more on detail how that occurred. Are you continuing to do that in all the various regions and did the advertising executive say, okay advertisers come on in one evening and sit and talk with Marshall. How does that come about?

Yes, as to the first part of the question, I am going to visit our markets. We started with Tampa because of two things, it's our largest, we have all three media platforms there, and really Tampa set the stage as a laboratory for us in learning how to deal with the marketplace as a marketplace, as opposed to a platform specific enterprise. And in setting up the meeting, I wanted to talk to employees about their new role and new opportunities in this structure. With advertisers, local management asked a certain group of advertisers. We had approximately 14 in two different meetings of seven and spent time with them talking about how we saw the world and how we felt we could serve them, and then got them to tell us what they thought about that, so it's a useful exchange. With community leaders, of course, you're looking for what they see happening in the marketplace, and there again we've selected a group of people we thought were articulate, the local management thought was articulate, and could speak in broader terms in their own personal experience. And that was the case with the advertisers we had, too. It was a mix of regional and national advertisers, as well as some local advertisers, but all located in Tampa.

Your next question comes from Dennis Leibowitz – Act II Partners.

I was wondering, the estimates for the industry for next year seem to range from, newspaper advertising anyway, from minus 5% to minus 10%. I wonder if you thought that was realistic or too conservative or liberal. And if that were the case, given the cost structure, would you be able, assuming broadcasting is up to show profit gains.

We have not tried to yet, although we will, coming from our own forecast for revenue for next year, so there's really not a whole lot I can add to that. I can tell you we are looking for a good year in broadcasting because it ought to be a good political year for us with at least two contested statewide elections with contested primaries in Florida, our biggest market, and lots of other places politically active as well. It's an Olympic year again and we expect some economic recovery.

I think another factor to consider there is the way we have setup our new markets structure, if you'll look at the market there are a lot of places we don't serve in those markets, yet. In the digital world, you don't need physical presence to be of service, so all of our market managers are charged with expanding our scope, their importance within the full marketplace. So we look for growth in new products and new market areas as well. So, just looking at national expectations on advertising, its one element of our planning for 2010, but it's not the big piece.

Your next question is a follow-up from Ed Atorino – Benchmark.

Are you going to pay down more debt this year? Will you be able to pay down more debt?

John's got the book in front of him I'll defer to him.

Ed, we paid down from the end of 2008 to the end of the first half of the year basically with the proceeds, of course, from the sale of our Jacksonville station. There will be a slight reduction from the $711 million where we are right now to the end of the year.

Your next question is a follow-up from Barry Lucas – Gabellie & Company.

Marshall, I was hoping you could drill down a little bit more on the Yahoo partnership in a couple of areas in terms of how many papers are on the APT platform, when you're going to be fully up, what do revenues look like to the extent you can talk about that I think that would be helpful.

Reid actually prepped himself for a question like that just thinking Yahoo would be a base of the conversation today. So, Reid, let me ask you to –

We have one newspaper on the APT platform right now. We've actually slowed down the adoption of that platform because we found that Yahoo isn't quite ready for us. But as soon as they are ready, we're going to expand it aggressively. Right now today we have five markets selling Yahoo inventory with all of its behavioral targeting capabilities, and by the end of the third quarter we'll have added two more bringing us to seven.

If I can squeeze in one more quickie that corporate expense line is down pretty nicely. What might that look like for the balance of the year, Marshall?

We don't think it'll pickup any from the balance. Our goal when we began the restructuring was to get as much percentage wise out of corporate as we were asking from the operating units, and more. And then we offset that by pulling some expense routines back into corporate centralizing them and doing them less expensively. So that's the approach and I think we're pretty settled right now where we are.

There are no additional questions in queue. I would now like to turn the call back over to Marshall Morton for closing remarks.

Thank you all for your attention today. We're pleased to talk with you any time, of course, but having these conference calls and a chance to have conversation out loud is also helpful for us. I hope you all have a good day and thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a great day.