Question-and-Answer Session
Operator
(Operator Instructions) And our first question will come from Lee Westerfield with BMO Capital Markets.
Leland Westerfield - BMO Capital Markets
Thank you. Good morning, gentlemen. Two questions, if I may; first, if you can add some color as to the business conditions in Massachusetts vis-à-vis contrasting Massachusetts with your Midwest markets. That’s an operational question.
And then secondly, if you can elaborate on the differences between the leverage test and the incurrence test with regard to whether and when a dividend might be potentially reinstated.
Michael E. Reed
Thank you, Lee. Business conditions in Massachusetts, and let me start first by saying Massachusetts only represents about 20%, 21% of our business, so the geographic diversity is still an instrumental part of GateHouse and obviously a bit part of the reason why GateHouse continues to outperform the industry.
Having said that, business conditions on the top line in Massachusetts improved in the second quarter. In the first quarter, Massachusetts revenues were down a little bit over 9%. In the second quarter, our revenues in Massachusetts were down 8.1%. We seem to have seen a slight improvement in trends in that area of the country, especially with regard to real estate classifieds, so we are presently pleased with that for the second quarter.
With regard to the dividend, the future payment of the dividend, that depends on many, many factors, many of which are out of our control. The current economic condition that we are operating in today requires us to be as prudent as we can to protect the long-term opportunities for the company, and with the economic conditions being as slow as they are, the chances that things could get worse before they get better for the long-term stake of the company and its shareholders, it makes a tremendous amount of sense to pay down some debt and to actually put a bunch of cash on the balance sheet to make sure we can weather any current unforeseen worsening in the economy today.
So the long-term view of returning strong, stable cash flows to shareholders hasn’t changed but the economic environment we operate in today has made it very prudent to do what we have announced this morning.
Leland Westerfield - BMO Capital Markets
I guess, Mike, sorry to elaborate on this one, but briefly I really wanted to delve into the differences between the incurrence test and the leverage test.
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