INITIAL AUDIT REPORT JULY 1, DECEMBER 31, 2006

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1 JULY 1, DECEMBER 31, 2006 W W W. V E R I F I E D A U D I T. C O M THE CHRONICLE Chronicle Publishing2, Inc Main St Larkspur, CA (415) ; (415) (Fax) PUBLICATION DESCRIPTION: The Chronicle is a community newspaper published Monday through Friday afternoons, and Sunday mornings, by Chronicle Publishing2, Inc. It is available at racks and delivered to homes in-and-around Marin County. Features include a news section, classifieds, sports, local events, and more. VERIFICATION OF DISTRIBUTION, PRINTING AND INTERNAL RECORDS: Verification of distribution is conducted by appropriate survey methodology(s). Free home delivery is verified by telephone interviews with households within the publication's delivery areas. Target (free rack) distribution is confirmed by field verification of the number of copies distributed and the number of copies remaining at the close of the distribution period. An audit of internal records is conducted by a professional circulation auditor in conformity with accepted circulation auditing procedures, prior to Verified's issuance of an initial audit report and annually thereafter. This audit of internal records includes a review of source printing, distribution and subscription records as well as supporting financial documents. Please see the following pages for additional details. DAILY CIRCULATION: SIX MONTH AVERAGE THE CHRONICLE THE CHRONICLE THE CHRONICLE FREE CIRCULATION DAILY WEDNESDAY SUNDAY CARRIER 8,621 TOTAL FREE 8,621 PAID CIRCULATION CARRIER 9,346 9,323 10,812 MAIL RACKS AND CONCESSIONS TOTAL PAID 10,005 9,972 11,745 TOTAL QUALIFIED CIRCULATION 10,005 18,593 11,745 AVERAGE PRESS RUN 10,951 20,322 12,557 PRESS RUN AS OF 12/31/ ,120 20,380 12,580 QUALIFIED CIRCULATION HISTORY 3 MONTHS ENDING DECEMBER, ,394 19,653 11,781 3 MONTHS ENDING SEPTEMBER, ,090 19,590 11,711 BASIC PRICE: $0.50 per Single Copy Act# 9992

2 The Chronicle - Daily CIRCULATION DATA FOR ISSUE DATE: 12/07/2006 TOTAL QUALIFIED CIRCULATION: 10,090 DISTRIBUTION ANALYSIS BY COUNTY: COUNTY NAME DISTRIBUTION MARIN COUNTY 10,305 MISCELLANEOUS 164 TOTAL GROSS DISTRIBUTION 10,469 LESS RACK/DEALER RETURNS (379) TOTAL QUALIFIED CIRCULATION 10, SAN RAFAEL POPULATION/HOUSEHOLDS 28,747/11,761 12,959 c 1,711 1, % 15%/ 13% MEDIAN HOUSEHOLD INCOME $86, % 210.1% Carrier 1,599 RACE*** 81%-W 2%-B 8%-A 9%-O Paid Rack/Dealer 112 HISPANIC ORIGIN*** HO: 10% SAN RAFAEL POPULATION/HOUSEHOLDS 40,861/15,525 16,511 c 1,617 1, % 10%/ 10% AVERAGE HOUSEHOLD SIZE % 100.0% MEDIAN HOUSEHOLD INCOME $75, % 182.9% Carrier 1,487 RACE*** 69%-W 2%-B 6%-A 23%-O Paid Rack/Dealer 130 HISPANIC ORIGIN*** HO: 33% LARKSPUR POPULATION/HOUSEHOLDS 6,872/3,383 3,595 c 1,549 1, % 46%/ 43% AVERAGE HOUSEHOLD SIZE % 76.9% MEDIAN HOUSEHOLD INCOME $93, % 227.1% Carrier 1,411 RACE*** 90%-W 1%-B 4%-A 5%-O Paid Rack/Dealer 138 HISPANIC ORIGIN*** HO: 6% MILL VALLEY POPULATION/HOUSEHOLDS 29,626/13,095 13,590 c 1,358 1, % 10%/ 10% MEDIAN HOUSEHOLD INCOME $117, % 283.5% Carrier 1,253 RACE*** 87%-W 1%-B 6%-A 5%-O Paid Rack/Dealer BELVEDERE TIBURON POPULATION/HOUSEHOLDS 12,165/5,315 5,627 c 1,305 1, % 25%/ 23% MEDIAN HOUSEHOLD INCOME $148, % 359.7% Carrier 1,180 RACE*** 90%-W 1%-B 5%-A 4%-O Paid Rack/Dealer CORTE MADERA POPULATION/HOUSEHOLDS 9,350/3,842 4,156 c 1,268 1, % 33%/ 31% AVERAGE HOUSEHOLD SIZE % 92.3% MEDIAN HOUSEHOLD INCOME $101, % 244.8% Carrier 1,143 RACE*** 84%-W 1%-B 7%-A 7%-O Paid Rack/Dealer 125 HISPANIC ORIGIN*** HO: 7% GREENBRAE POPULATION/HOUSEHOLDS 12,099/5,454 5,729 c % 17%/ 16% MEDIAN HOUSEHOLD INCOME $106, % 256.8% Carrier 850 RACE*** 91%-W 1%-B 4%-A 4%-O Paid Rack/Dealer 60 HISPANIC ORIGIN*** HO: 4% FAIRFAX POPULATION/HOUSEHOLDS 8,473/3,739 3,683 c % 16%/ 16% MEDIAN HOUSEHOLD INCOME $76, % 186.0% Carrier 267 RACE*** 89%-W 1%-B 3%-A 7%-O Paid Rack/Dealer 70 HISPANIC ORIGIN*** HO: 7% Sponsored/Third Pa 250

3 The Chronicle - Daily (continued) MISCELLANEOUS 164 TOTAL GROSS DISTRIBUTION 10,469 Carrier 9,190 Mail 164 Paid Rack/Dealer 865 LESS RACK/DEALER RETURNS (379) TOTAL QUALIFIED CIRCULATION 10,090 The Chronicle - Wednesday CIRCULATION DATA FOR ISSUE DATE: 11/08/2006 TOTAL QUALIFIED CIRCULATION: 19,822 DISTRIBUTION ANALYSIS BY COUNTY: COUNTY NAME DISTRIBUTION MARIN COUNTY 20,097 MISCELLANEOUS 153 TOTAL GROSS DISTRIBUTION 20,250 LESS RACK/DEALER RETURNS (428) TOTAL QUALIFIED CIRCULATION 19, LARKSPUR POPULATION/HOUSEHOLDS 6,872/3,383 3,595 c 1,306 2,370 3, % 100+%/100+% AVERAGE HOUSEHOLD SIZE % 76.9% MEDIAN HOUSEHOLD INCOME $93, % 227.1% Carrier 3,308 RACE*** 90%-W 1%-B 4%-A 5%-O Paid Rack/Dealer 213 HISPANIC ORIGIN*** HO: 6% NIE BELVEDERE TIBURON POPULATION/HOUSEHOLDS 12,165/5,315 5,627 c 1,690 1,259 2, % 55%/ 52% MEDIAN HOUSEHOLD INCOME $148, % 359.7% Carrier 2,635 RACE*** 90%-W 1%-B 5%-A 4%-O Paid Rack/Dealer 194 NIE MILL VALLEY POPULATION/HOUSEHOLDS 29,626/13,095 13,590 c 1,579 1,266 2, % 22%/ 21% MEDIAN HOUSEHOLD INCOME $117, % 283.5% Carrier 2,635 RACE*** 87%-W 1%-B 6%-A 5%-O Paid Rack/Dealer 130 NIE SAN RAFAEL POPULATION/HOUSEHOLDS 28,747/11,761 12,959 c 894 1,526 2, % 21%/ 19% MEDIAN HOUSEHOLD INCOME $86, % 210.1% Carrier 2,157 RACE*** 81%-W 2%-B 8%-A 9%-O Paid Rack/Dealer 88 HISPANIC ORIGIN*** HO: 10% NIE 100 Sponsored/Third Pa GREENBRAE POPULATION/HOUSEHOLDS 12,099/5,454 5,729 c 993 1,413 2, % 44%/ 42% MEDIAN HOUSEHOLD INCOME $106, % 256.8% Carrier 2,271 RACE*** 91%-W 1%-B 4%-A 4%-O Paid Rack/Dealer 60 HISPANIC ORIGIN*** HO: 4% NIE CORTE MADERA POPULATION/HOUSEHOLDS 9,350/3,842 4,156 c 781 1,240 2, % 53%/ 49% AVERAGE HOUSEHOLD SIZE % 92.3% MEDIAN HOUSEHOLD INCOME $101, % 244.8% Carrier 1,771 RACE*** 84%-W 1%-B 7%-A 7%-O Paid Rack/Dealer 125 HISPANIC ORIGIN*** HO: 7% NIE 125

4 The Chronicle - Wednesday (continued) FAIRFAX POPULATION/HOUSEHOLDS 8,473/3,739 3,683 c 537 1,403 1, % 52%/ 53% MEDIAN HOUSEHOLD INCOME $76, % 186.0% Carrier 1,888 RACE*** 89%-W 1%-B 3%-A 7%-O Paid Rack/Dealer 27 HISPANIC ORIGIN*** HO: 7% NIE SAN RAFAEL POPULATION/HOUSEHOLDS 40,861/15,525 16,511 c , % 12%/ 11% AVERAGE HOUSEHOLD SIZE % 100.0% MEDIAN HOUSEHOLD INCOME $75, % 182.9% Carrier 1,515 RACE*** 69%-W 2%-B 6%-A 23%-O Paid Rack/Dealer 75 HISPANIC ORIGIN*** HO: 33% NIE 100 Sponsored/Third Pa 150 MISCELLANEOUS 153 TOTAL GROSS DISTRIBUTION 20,250 Carrier 18,180 Mail 153 Paid Rack/Dealer 912 LESS RACK/DEALER RETURNS (428) TOTAL QUALIFIED CIRCULATION 19,822 The Chronicle - Sunday CIRCULATION DATA FOR ISSUE DATE: 11/26/2006 TOTAL QUALIFIED CIRCULATION: 11,771 DISTRIBUTION ANALYSIS BY COUNTY: COUNTY NAME DISTRIBUTION MARIN COUNTY 12,097 MISCELLANEOUS 167 TOTAL GROSS DISTRIBUTION 12,264 LESS RACK/DEALER RETURNS (493) TOTAL QUALIFIED CIRCULATION 11, SAN RAFAEL POPULATION/HOUSEHOLDS 40,861/15,525 16,511 c 2,019 2, % 13%/ 12% AVERAGE HOUSEHOLD SIZE % 100.0% MEDIAN HOUSEHOLD INCOME $75, % 182.9% Carrier 1,789 RACE*** 69%-W 2%-B 6%-A 23%-O Paid Rack/Dealer 230 HISPANIC ORIGIN*** HO: 33% SAN RAFAEL POPULATION/HOUSEHOLDS 28,747/11,761 12,959 c 1,905 1, % 16%/ 15% MEDIAN HOUSEHOLD INCOME $86, % 210.1% Carrier 1,635 RACE*** 81%-W 2%-B 8%-A 9%-O Paid Rack/Dealer 270 HISPANIC ORIGIN*** HO: 10% CORTE MADERA POPULATION/HOUSEHOLDS 9,350/3,842 4,156 c 1,709 1, % 44%/ 41% AVERAGE HOUSEHOLD SIZE % 92.3% MEDIAN HOUSEHOLD INCOME $101, % 244.8% Carrier 1,544 RACE*** 84%-W 1%-B 7%-A 7%-O Paid Rack/Dealer 165 HISPANIC ORIGIN*** HO: 7% MILL VALLEY POPULATION/HOUSEHOLDS 29,626/13,095 13,590 c 1,539 1, % 12%/ 11% MEDIAN HOUSEHOLD INCOME $117, % 283.5% Carrier 1,468 RACE*** 87%-W 1%-B 6%-A 5%-O Paid Rack/Dealer 71

5 The Chronicle - Sunday (continued) LARKSPUR POPULATION/HOUSEHOLDS 6,872/3,383 3,595 c 1,380 1, % 41%/ 38% AVERAGE HOUSEHOLD SIZE % 76.9% MEDIAN HOUSEHOLD INCOME $93, % 227.1% Carrier 1,210 RACE*** 90%-W 1%-B 4%-A 5%-O Paid Rack/Dealer 170 HISPANIC ORIGIN*** HO: 6% BELVEDERE TIBURON POPULATION/HOUSEHOLDS 12,165/5,315 5,627 c 1,342 1, % 25%/ 24% MEDIAN HOUSEHOLD INCOME $148, % 359.7% Carrier 1,232 RACE*** 90%-W 1%-B 5%-A 4%-O Paid Rack/Dealer GREENBRAE POPULATION/HOUSEHOLDS 12,099/5,454 5,729 c 1,242 1, % 23%/ 22% MEDIAN HOUSEHOLD INCOME $106, % 256.8% Carrier 1,046 RACE*** 91%-W 1%-B 4%-A 4%-O Paid Rack/Dealer 196 HISPANIC ORIGIN*** HO: 4% FAIRFAX POPULATION/HOUSEHOLDS 8,473/3,739 3,683 c % 26%/ 26% MEDIAN HOUSEHOLD INCOME $76, % 186.0% Carrier 901 RACE*** 89%-W 1%-B 3%-A 7%-O Paid Rack/Dealer 60 HISPANIC ORIGIN*** HO: 7% MISCELLANEOUS 167 TOTAL GROSS DISTRIBUTION 12,264 Carrier 10,825 Mail 166 Paid Rack/Dealer 1,273 LESS RACK/DEALER RETURNS (493) TOTAL QUALIFIED CIRCULATION 11,771

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7 ANNUAL AUDIT REPORT Intentionally Blank Verified conducts audits of printing, distribution, and financial records, as well other data to substantiate circulation data submitted to Verified. These audits follow guidelines prepared in conformity with generally accepted circulation auditing procedures involving records covering all distribution methods utilized for qualified circulation during the period(s) covered by the reports. The results of these audits warrant the issuance of audit reports as true and accurate statements of the qualified circulation of the client publication. VERIFIED AUDIT CIRCULATION swears that to the best of its knowledge all statements contained in this report are true. September 5, 2008