Good day, ladies and gentlemen. Welcome to the fourth quarter 2009 Media General earnings conference call. My name is Katie, and I'll be your coordinator for today. At this time, all participants will be in a listen-only mode. We will be conducting a question and answer session towards the end of this conference. (Operator Instructions). I would like to now hand the call over to Lou Anne Nabhan, Vice President. Please proceed

Thank you, Katie, and good afternoon everyone. Welcome to our conference call and webcast. Earlier today Media General announced fourth quarter 2009 results. And that press release has been posted on our website. The comments on today's conference call will be posted immediately following the call. As always today's presentation contains forward looking statements that are subject to various risks and uncertainties and should be understood in the context of Media General’s publicly available reports filed with the SEC. Our future expectations could differ materially from what we give you today. 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, Finance and Chief Financial Officer. Let me turn the presentation over to Marshall.

Thank you, Lou Anne, and good afternoon everyone. The fourth quarter of 2009 marked a welcome turning point in our business performance that was both gratifying and encouraging, and reflected the early positive returns of our reorganized, market based, corporate focus. Income from continuing operations before income taxes increased 40%, to $22.9 million, compared with $16.4 million in last year's fourth quarter adjusted for severance and impairment charges. Our profit improvement reflected the benefit of the significant expense reductions we have implemented during the recession. Total operating expenses in the fourth quarter of 2009 were 22% lower than the prior year, again excluding impairment. In addition, the fourth quarter's 14% revenue decline showed some improvement from the 18% decline we had experienced in this year's third quarter. In our third quarter conference call, we reported that we had entered the fourth quarter seeing signs of strengthening in ad spending, especially on the broadcast side. I’m pleased to report today that business continued to improve as the quarter unfolded. In the month of December, total revenues were essentially even with the equivalent month of 2008, and four of our six market segments generated higher revenues Virginia/Tennessee, Mid-South, Ohio/Rhode Island and Advertising Services. In Florida, December revenues were down only 5.3%, a sign that severe depression of their economy has abated somewhat. Looking at the performance of our major revenue categories in the fourth quarter, political revenue decreased 84% from $23.4 million in last year's fourth quarter to $3.7 million this year. Our 2009 political revenues were higher than one would normally expect in an off-election year. The result of the Virginia gubernatorial election, the election for Senator Kennedy's open Senate seat in Massachusetts which benefited our Providence TV station, a special mayoral election in Birmingham, Alabama, and issues advertising related to…

Thanks, Marshall. I’ll start with our Virginia/Tennessee market, which includes a metro newspaper, the Richmond Times-Dispatch, several community newspapers and two television stations. Fourth-quarter profit in the Virginia/Tennessee market was $15.6 million, compared with $9.3 million a year ago. A 20.5% reduction in total expenses more than offset a 6.3% decline in revenues in the quarter. Revenue fell in the local, national and classified categories, partially offset by increases in circulation, printing and distribution revenues. There was little change, year-to-year, in this market’s political revenues because of the Virginia governor race in 2009. Rate increases for all our newspapers drove a 7.9% increase in circulation revenue. Printing and distribution revenue increased 67.5%. We added commercial printing customers at our new facilities in Bristol and Lynchburg and we signed new delivery agreements in Charlottesville with the Washington Post and USA Today and in Richmond with the New York Times. Our two TV stations benefited from the Virginia Governor's race and from advocacy advertising for health care. Florida market includes our converged trio of WFLA-Television, The Tampa Tribune and TBO.com, plus two smaller daily newspapers and a number of specialty publications. Profit in our Florida market of $6.6 million compared with a loss of $960 thousand in the prior year. 31% reduction in total expenses more than offset a 16% decline in revenues. Political revenue fell from $3.3 million in 2008 to $226,000 in 2009. The 16% decline in overall fourth quarter revenue was a nice improvement from the third quarter’s nearly 23% decline. While advertising was falling, circulation, syndication, printing and distribution revenues grew in Florida. Our television station and website were ahead of the prior year in local advertising, and television was ahead in national. Sunday preprints have strengthened, too. The Tampa Tribune came very close to matching its 2008…

Thank you, Reid. Let me first cover a couple below-the-line items. Interest expense of $10.3 million was 4% less than the prior year, due primarily to lower average debt levels. Our “all-in” cost of debt in the fourth quarter was approximately 5.6%. A more than 40% decrease in acquisition intangibles amortization was the result of intangible assets written down in 2008 and 2009. Corporate expense decreased 15.4%, as a result of the five furlough days in the fourth quarter and other cost reduction initiatives. As we have previously announced, we recognized the tax benefit in the fourth quarter that resulted from a change in federal tax law that allows the company to carry back its 2009 loss into years in which it paid income taxes. The amount of the tax benefit is approximately $25 million, for which a receivable has been established. The cash is expected in the middle of 2010, and we will use this tax refund for debt reduction. The effective tax rate on income or loss from continuing operations was a negative 4.5% for the fourth quarter and 39% for the full year. This unusual relationship of tax benefit to pre-tax income for the quarter is due primarily to the NOL carry back benefit as well as limitations imposed by the intraperiod tax allocation rules. We can expect those rules, along with our net deferred tax asset situation that requires a full valuation allowance, will produce an unusual relationship between our effective tax rate and pre-tax income. We expect to pay zero cash taxes in the next four years, due primarily to significant tax deductions related to the amortization of our acquired intangible assets. Capital spending in the fourth quarter was $6.8 million. For the year, total capital spending was $18.5 million, compared with $31.5 million in…

Thank you, John. As we enter 2010, several of our TV stations are reporting that automotive advertising is continuing to improve, driving up rates faster than expected in some places. Newspapers are reporting good results with annual contract renewals, with many significant gains in spending and very few reductions. For the full year we have increased our forecast for political revenues from the $32 million to $34 million range we estimated in December to $42 million. We expect robust spending as a result of the Democratic response to the Republican wins in Virginia, New Jersey and Massachusetts. Our Florida and Ohio markets in particular stand to benefit. In addition, we believe last week's Supreme Court decision will provide a positive impact as corporations and unions can more easily advertise to support or oppose candidates and also engage in issues of advertising during the final days of the campaign. As I mentioned last time, we reached agreement in the Augusta, Georgia, market for our ABC station to provide the NBC affiliate owned by Schurz Communications with sales, local news and other operational services starting this month and that arrangement is underway. Since announcing that joint operating agreement, we've been approached by broadcasters in other markets about similar arrangements. We'll keep you posted of developments in these areas where we see good potential. We expect to continue to derive significant strength from our reorganization from a product-based structure to a market-based structure. As mentioned earlier, this change has enabled us to accelerate our digital strategy, engage more employees in innovation, and get to market faster with customer-focused solutions. Our re-aligned sales force will continue its focus on cross-selling among all platforms so as to provide a total media solution to advertisers. That concludes our report. Now we'll be pleased to take your questions.

(Operator Instructions). Your first question comes from the line of Ed Atorino of Benchmark. Please proceed.

Could you sort of go over that tax situation again and maybe what would you be looking at as sort of a quote a tax rate pro forma for 2010? You say you're not going to pay any cash taxes but then you have got that other non-cash charge in there. Just sort of play with the model, I guess.

I think that's exactly right, Ed, is to look at your modeling to be no cash taxes being paid next year. I think if you look at a normalized 39% for the year that would be the appropriate amount. This valuation allowance since the deferred tax asset position will be approximately 30 million next year, and that tax benefit will be available to us in future years when we have net income to offset it, and the net income because of these net deferred tax assets rules we need to have net income for three consecutive years or actually two years plus the current year.

Got you on that one. Secondly, you mentioned auto as being a big driver. Anything else turning around in TV and could you also talk about the strength in newspapers? Is it lopsided to certain areas? Is classified getting better?

Ed, there is no real significant improvement in classified yet. We had a good holiday season in retail. Our preprint business seems to be improving. In television, it’s pretty widespread improvement.

That's what I have been hearing, yeah.

And that's helping push rates up. Inventories are tightening in most places.

Did I hear this right, you're now looking for 42 million in political from 32, 34?

That's right.

Not surprised for some reason.

We're pushing.

I think Washington is in trouble and they're going to see -- anyway, I don't want to get into – I can talk for an hour about that. Thank you very much.

We take paid advertising.

Yes.

Your next question comes from the line of Barry Lucas from Gabelli & Company. Please proceed.

Thank you. Good afternoon. Couple of quickies. Just staying with political, that new $42 million figure would compare with what for the '08 total and if you have in '06, I know you added the four NBCs, but just trying to gauge what an off year non-presidential year looks like.

In 2006, Barry, it was just a little bit over $50 million. 2007, since I have these numbers in front of me, I'll just read these off to you, 9.8 million, '08, 38 million, and of course '09 at 6.2 million and as Marshall and Reid had mentioned the 42 expectation for this year 2010.

Great. Want to move back to the expense side. Looking at the revenue improvement that we hope will come through mid single digit, and expense coming back, I understand the furloughs, but what happens if the revenue improvements do not materialize?

We have got a plan in place that if they don't materialize we have other ways to attack it with expense cuts. At this point, we feel very solid on the revenue improvements, so we know where they're coming from, and we know why they are coming, and a lot of its coming from new lines of business. So there is no question that improving economy is helping us. We are also seeing new revenue streams coming our way from new customers. So we won't shy away from cutting expenses if we need to. But at this point that seems like a remote option. Our employees ask me that question, too, and we point out that it’s within the realm of their work to keep the furloughs at bay and our intention is to keep them at bay.

Okay. Last area, newsprint expense unlikely to repeat the kind of decline we have seen. What are you seeing in pricing and when do you really cycle past that where we might expect to see some actual newsprint price increases?

You know, newsprint price expense for 2010, Barry, we look at that being slightly below where we ended 2009. Obviously, we think that the price per ton will increase in 2010, but we're basically keeping our eye on that very carefully. Where prices really end up with the bankruptcy of a number of mills, you know, has kind of influx as you know.

On the other hand, year 2009 we were not completely down to 44 inch width but as of this past fall we are, so we'll have a full year of more efficient use of newsprint which offsets some of the expected increase in price.

(Operator Instructions). Your next question comes from the line of Ken Silver [ph] from RBS. Please proceed.

The tax refunds that you said you were going to get in the I think the first quarter, I missed how much that was.

25 million, and that actually will be in the second quarter, Ken.

Great. Thanks. And then in terms of the free cash flow guidance that you gave, that's after interest, it’s after CapEx, it’s after cash taxes but you don't have any, and it’s also after any estimate for working capital?

Yeah. This will be purely for debt reduction, the $48 million to $50 million.

Are you estimating in that number a significant move in working capital?

Not a significant move, no.

Okay. Great. And then can you give any color on first quarter newspaper revenue?

We gave some color on revenue expectations in December. We haven't updated that yet.

Okay. Great. And then did you I guess the last time that the Super Bowl was on CBS I don't know if you have this number handy, do you know how much that helped the TV revenue?

We're not looking at a big year-to-year change in Super Bowl revenue because it was on NBC last year. We got eight NBC stations. We got eight CBS stations.

Got it. Okay that's a good point. And then Olympics, I guess the last time the Winter Olympics were held, you had fewer NBCs, right?

Probably.

That would have been in…

'06?

’08.

The Winter Olympics.

That’s in ’06.

’06, yes.

Before we bought them, you are right.

So it’s hard to I mean, what about summer? I guess you have them in the Summer Olympics, right?

We did.

Did you ever quantify how much that helped the quarterly revenue, then?

Sure we did. We must have been asked the question.

Okay. I'll go dig it out. That's fine.

Your next question comes from the line of Gary Julian [ph] from (inaudible). Please proceed.

I was wondering with respect to the general revenue guidance that you had given if you can provide or if it is possible to provide some outlook vis-à-vis the three merge media outlets of your business, publishing, broadcasting, interactive, I guess that’s the first question. And the second question is, just on again to reconcile to the free cash flow guidance you had given on expected (inaudible) rates on your credit facilities, I notice that I think you have one swap that expires, I guess one remaining swap, so maybe if you can provide guidance vis-à-vis your effective interest rate projection for 2010? Thank you.

Barry, we didn't update the revenue forecast for 2010. I think the best guidance I can give you there is to go back to look at what we gave at the UBS conference when we are talking to the large group, and there we were reasonably specific on 2010, but that was done within a framework of fourth quarter and things have firmed up since then. John, what can you offer on that?

If you look at our all in interest rates for debt with fees, for 2009 we were at 5.90. Looking at 2010, with the potential of a refinancing, I think it would be hard to estimate at this time, because we have not definitively decided how we're going to proceed there, but 5.9 was the all-in rate for 2009.

So vis-à-vis the free cash flow projection you provided that the interest rate that you'd use is the same rate?

No, actually, it is higher. It’s an all in and it’s just a bogey at this point at 9%.

And that amount is an assumption you made for what a refinancing may look like obviously not having completed it yet.

That's correct.

(Operator Instructions) Your next question comes from the line of Dennis Leibowitz from Act II Partners. Please proceed.

Just to continue on that last question about the revenue breakdown, the guidance you gave on political alone would without any organic improvement be if I figured this right a 14% improvement in broadcast and you are only looking for mid-single digit for the whole company, and I was wondering what that implies about newspapers and I wondered if you wouldn't mind repeating what you said at the UBS conference? The second question I had is if you could explain the reason for the big jump again in capital expenditures.

We suppressed capital spending this past year severely, down under $20 million, so big jump. We're really talking about going back to a level that we would consider not very robust. So we are still watching very carefully. On what we said at the UBS conference, I don't have the script in front of me. I am sorry. I think we were zero to down slightly for newspapers is my recollection.

If that were the case given the relative breakdowns and if I am correct that broadcasting would be up 14% just on political, why would the overall be up as little as mid single digits?

Remember political advertising revenue is not completely additive. It replaces some transactional advertising.

Strong year crowds [ph] out the transactional.

Again, we have Summer Olympics as well that we didn't have in 2009.

At this time I am showing you have no further questions. I'd like to now hand the call back over to Mr. Morton for closing remarks.

Thank you, Katie. Thank you all for participating in our call this afternoon. And we are encouraged about the trends that we have seen over the past six months since our change from a platform basis to a market basis. It’s unleashed an awful lot of activity that's been positive for us, particularly in helping us learn how to grow the digital side of the house using the strengths that we've got in the content legacy side of the house, so I guess they are clicking well for us. We've entered 2010 on a strong note. We are glad to talk to you all about it today. Thank you very much.

Ladies and gentlemen, thank you for your participation in today's conference call. You may now disconnect. Have a wonderful day.