Hearst Television Inc.

In this most eventful year for our company, our employees worked diligently to maintain excellent coverage and community service, while managing the most challenging economic uncertainty in the history of our industry.

Under the banner of "Project Economy," the men and women of Hearst Television's news departments are informing and assisting our viewers during these difficult times. Our ongoing coverage, tailored specifically for issues facing each of our markets, is our response to viewer concerns in their daily lives.

Our competitive goal continues to be market leadership, and we are achieving local ratings success in most of our television and radio markets. KCCI in Des Moines and WMUR in Manchester were recently honored with three national Edward R. Murrow awards, from a pool of regional honorees that included a total of 19 Hearst Television citations. This year, we earned a remarkable fifth consecutive Walter Cronkite Award and a Peabody Award - our fifth within the last seven years. The distinguished Cronkite and Peabody judges acknowledged our excellent coverage of the 2008 Presidential campaign.

While the broadcast journalists within Hearst Television have been focused on our product, our sales and marketing colleagues are at the forefront of providing important research on media-consumption patterns. We believe in our product and our strength as an advertising medium. We are prepared to respond to an economic upturn with evidence of the size and buying power of our audience.

At the same time, we are helping to set the groundwork for mobile digital TV as part of Hearst's membership in the Open Mobile Video Coalition (OMVC). Over the air television is our main business, but new platforms are critical to long term strategic planning.

Because of our reputation as a leading operator of local television stations, Hearst management played a key role in the development, and implementation of the successful nationwide transition to digital television. We consider participation in the creation of industry policy and platforms as a responsibility of a leading broadcast company.

We are doing important work in 2009, coming off of an historic 2008 during which the people of Hearst Television reported on an unprecedented presidential campaign weather emergencies and, of course, the most severe U.S. economic crisis in decades. Not to mention the everyday local stories that touch America's communities and their people. Every week Hearst Television stations and Web sites reach virtually every home in their communities, keeping viewers informed, entertained and engaged.

Competitive success and the quality of local service is a hallmark of our company. We serve our audiences and our marketing partners well. As a company, we are confronting today's challenges and the new realities of our business in a proactive way, without losing faith in what's possible for our important local media franchises in better economic times to come. We are addressing change, we are considering and implementing new business models, and we are focused on a strategy that will make us the premier local media brand, serving viewers on three screens - Television, Internet, and Mobile - keeping in step with how people use media in today and tomorrow's fast changing world.

As we confront these most challenging times, and the complex questions about the future of media, we do so from the perspective of a media enterprise with a history and legacy of 122 years. From its humble but visionary beginnings in 1887, Hearst Corporation has grown to become one of the world's prominent media companies, with a diversified asset base that includes many of the most well known and successful media brands - in magazines, newspapers, cable television programming, and entertainment and syndication. Dating back to the early days of radio in the '20s, and of television in the '40s and '50s, electronic local media has been an integral part of the Hearst media portfolio.

To be sure, the Company and our management predecessors have witnessed many good times, and a few bad times as well, over the past 12 decades. Every step of the way we have always recognized the absolute imperative of content, the value of the story teller, and the gifted contributions of our editors and producers to create media products that connect with our viewer-customers and help our marketing customers meet their objectives. These long-held values are much in evidence throughout Hearst Television today. As we talk with our colleagues at every level, we are inspired by their energy, enthusiasm, pride, and the positive culture we observe throughout the company.

The media business of the future is not for the faint of heart, but we are optimistic about the opportunities that lie ahead for us. The fittest, the strongest, and the most innovative of media companies will surely survive, and indeed thrive, in the years to come. We are such a company, and we are up to the challenges and opportunities on the road ahead.