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TABLE OF CONTENTS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 30, 2012
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to

Commission file number: 1-9824

The McClatchy Company
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	52-2080478 (I.R.S. Employer Identification No.)
2100 "Q" Street, Sacramento, CA (Address of principal executive offices)	95816 (Zip Code)

916-321-1844
Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock, par value $.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12 (g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes ýNo

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

o Yes ýNo

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

ýYes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

ýYes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer ý Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    o Yes ý No

Based on the closing price of the registrant's Class A Common Stock on the New York Stock Exchange on June 22, 2012 the last business day of the registrant's second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $135.3 million. For purposes of the foregoing calculation only, as required by Form 10-K, the Registrant has included in the shares owned by affiliates, the beneficial ownership of Common Stock of officers and directors of the Registrant and members of their families, and such inclusion shall not be construed as an admission that any such person is an affiliate for any purpose.

Shares outstanding as of February 22, 2013:

Class A Common Stock	61,170,502
Class B Common Stock	24,800,962

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on May 14, 2013, are incorporated by reference in Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	18
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Selected Financial Data	21
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	83
Item 9A.	Controls and Procedures	83
Item 9B.	Other Information	83
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	84
Item 11.	Executive Compensation	84
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	84
Item 13.	Certain Relationships and Related Transactions, and Director Independence	84
Item 14.	Principal Accounting Fees and Services	84
PART IV
Item 15.	Exhibits, Financial Statement Schedules	85
SIGNATURES		86

PART I

Note About Forward-Looking Statements:

This annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, including statements relating to future financial performance and operations. These statements are based upon our current expectations and knowledge of factors impacting our business and are generally preceded by, followed by or are a part of sentences that include the words "believes," "expects," "anticipates," "estimates" or similar expressions. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. For all of those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, trends and uncertainties. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled "Risk Factors" (refer to Part I, Item 1A). We undertake no obligation to revise or update any forward-looking statements except as required under applicable law.

ITEM 1.               BUSINESS

Overview

The McClatchy Company (the "Company," "we," "us" or "our") is a leading local media company that provides both print and digital news and advertising services in the markets we serve. We have more than a century and a half of experience in mass and targeted media with our origins in the California Gold Rush era of 1857. Originally incorporated in California as McClatchy Newspapers, Inc., our three original California newspapers – The Sacramento Bee, The Fresno Bee and The Modesto Bee – were the core of our business until 1979, when we began to diversify geographically outside of California. At that time, we purchased two newspapers in the Northwest, the Anchorage Daily News and the Tri-City Herald in southeastern Washington. In 1986, we purchased The (Tacoma) News Tribune and in 1987, we reincorporated in Delaware. We expanded into the Carolinas when we purchased newspapers in South Carolina in 1990 and The News and Observer Publishing Company in North Carolina in 1995. In 2006, we acquired Knight-Ridder, Inc., retaining 20 daily papers and significant digital assets.

As the third largest newspaper company in the country, based upon daily circulation, our operations include 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our newspapers range from large dailies serving metropolitan areas to non-daily newspapers serving small communities. For the year ended December 30, 2012 ("fiscal year 2012"), we had an average paid daily circulation of 2.0 million and Sunday circulation of 2.7 million. We also operate local websites in each of our markets that complement our newspapers and extend our audience reach. Our owned newspapers include, among others, the Fort Worth Star-Telegram, The Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer, and The (Raleigh) News & Observer.

Our newspapers are located in 29 diverse, growth markets across the United States. The business is operated across six operating regions: California, Florida, Texas, Southeast, Midwest and Northwest. For the year ended December 30, 2012, no region represented more than 29% of total advertising revenue and no single newspaper represented more than 12.4% of total newspaper revenues. Overall, our markets are expected to achieve household growth faster than the national average from 2013-2015.

We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder, LLC, which operates the nation's largest online job website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites such as the auto website Cars.com and the rental site Apartments.com; 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com; and 11.4% of Wanderful Media (formerly ShopCo, LLC), owner of Find n Save®, a digital shopping portal that

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provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising.

McClatchy is listed on the New York Stock Exchange under the symbol MNI.

Strategy

We are committed to a three-pronged strategy to grow our media and advertising business as a leading local media company:

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First, to operate high-quality newspapers in growth markets;

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Second, to operate the leading local digital business in each of our daily newspaper markets, including websites, e-mail products, mobile services and other electronic media; and

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Third, to extend these franchises by supplementing the mass reach of the newspaper with direct marketing and direct mail products so that advertisers can capture both mass and targeted audiences with one-stop shopping.

Business Initiatives

Our local media businesses have undergone a period of tremendous structural and cyclical change. In order to maintain our position as a leading local media company and implement our strategy, we are focused on the following five major business initiatives:

Increasing Advertising Revenues

Advertising revenues comprise the vast majority of our revenues, making the quality of our sales force of utmost importance. Advertising revenues were approximately 74% of consolidated net revenues in fiscal year 2012 and 75% in the year ended December 25, 2011 ("fiscal year 2011"). Circulation revenues approximated 21% of consolidated net revenues in fiscal years 2012 and 2011.

We have a local sales force in each of our markets and believe that these sales forces are generally larger than those of other local media outlets and websites in those markets. Our sales forces are responsible for delivering to advertisers the broad array of our advertising products, including print, digital and direct marketing products. Our advertisers range from large national retail chains to local automobile dealerships to small businesses and classified advertisers. To reach national advertisers, our newspapers work with national advertising representation firms and our corporate advertising department to develop relationships and make it easier for those large advertisers to place orders.

Increasingly, our emphasis has been on growing the breadth of products offered to advertisers, particularly our digital products, while expanding our relationships with smaller advertisers. Over the last several years we have expanded our "Sunday Select" program, which delivers a package of preprinted advertisements on Sunday to non-newspaper subscribers upon their request. Also we have expanded our popular "Print and Deliver" program, which helps small advertisers create preprinted advertising inserts to reach customers near their stores.

We are also focused on developing new digital advertising products and expanding our digital business as discussed further below.

Expanding McClatchy's Digital Business

Our advertising revenues from digital advertising have increased every year for at least the past 10 years, notwithstanding weak economic conditions and structural changes in the delivery of advertising products to digital media. Our newspaper websites, e-mail projects, podcasts, mobile services and other electronic media enable us to engage our readers with real-time news and information that matters to them. For the year ended December 30, 2012, our newspaper websites attracted an average of approximately 39 million unique visitors per month, of which approximately 25% were utilizing mobile devices.

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We continue to be a newspaper industry leader in digital advertising revenues from newspaper websites as a percent of total advertising with 21.8% of advertising coming from digital products in fiscal year 2012, compared to 19.9% in fiscal year 2011. For fiscal year 2012, 54.3% of our digital advertising revenues came from advertisements placed only online; that is, they were not tied to a joint print buy, compared to 48.4% in fiscal year 2011. We believe this independent advertising revenue stream bodes well for the future of our digital business and is evidence of its importance as a delivery channel for advertisers.

Beginning in September 2012, five of our newspapers introduced new subscription packages for digital content that ended free, unlimited access to the newspapers' websites and certain mobile content. We expanded this model to our other markets in November and December 2012. The new program ("Plus Program") offers both a combined digital and print subscription and a digital-only subscription. Existing home delivery subscribers are given full access to the digital content and rolled into a bundled print and digital package for an additional fee when their subscription renews. Subscribers may "opt out" of the package and will be charged for print circulation only. A metered paywall on each of the newspaper websites requires users (generally non-subscribers) to pay for content after accessing a limited number of pages or news articles for free each month.

Our websites offer classified digital advertising products provided by companies in which we hold minority investment (as discussed above), including CareerBuilder.com for employment, Cars.com for autos and Apartments.com in the rental category.

We continue to pursue additional new digital products and offerings. In July 2012, we launched the initial phase of impressLOCAL®, our proprietary comprehensive digital marketing solution for local small- and medium-size businesses, which was rolled out to our Forth Worth, Texas and Kansas City, Missouri markets. By offering advertisers integrated packages including website customization, search engine marketing and optimization, social media presence and marketing services, and other multi-platform advertising opportunities, impressLOCAL® helps businesses improve the effectiveness of their marketing and advertising efforts. We expect to continue to roll out impressLOCAL® across certain of our other markets in 2013.

In August 2011, we completed the launch of dealsaver®, our proprietary daily deals service, across all of our markets. Unlike competitors, dealsaver® benefits from the promotional power of our local papers, their related websites and local sales forces. Since late 2010 we have been introducing Find n Save® across our markets. Find n Save® is a digital shopping portal that provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising. We have also partnered with several other leading media and publishing companies to form Wanderful Media, which provides Find n Save® with significant scale. Other investors currently include, among others, Gannett Co., Inc., The Washington Post Company and the Hearst Corporation.

Maintaining Commitment to Public Service Journalism

We believe that high-quality news content is the foundation of the mass reach necessary for the press to play its role in a democratic society. It is also the underpinning of our success in the marketplace.

We are committed to developing best-in-class journalism and local content. Our newspapers have received many national and regional awards from their peers for outstanding journalism, including 52 Pulitzer Prizes and the Robert F. Kennedy Journalism Award for coverage of human rights and social justice in each of the last four years. In February 2013, we were awarded a prestigious George Polk Award for our coverage of the civil war in Syria.

We deliver breaking news as our websites and news delivered on mobile devices compete with television and radio broadcasters for news headlines that can subsequently be expanded in our newspapers. Our news organizations can provide both targeted information and in-depth coverage as needed through newspapers, websites, mobile devices and other developing technologies.

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We believe our newspapers and digital operations are well-equipped to discover, produce and distribute premium quality content in ways that leverage our size and use technology to find efficiencies in newsgathering and distribution.

Broadening Newspapers' Audiences in Their Local Markets

Each of our daily newspapers has the largest circulation of any newspaper serving its particular community, and coupled with a local website and other digital platforms, reaches a broad audience in each market. We believe that our broad reach in each market is of primary importance in attracting advertising, which is our principal source of revenues.

Daily newspaper paid circulation was down 5.6% and Sunday circulation was down 3.1% in fiscal year 2012 compared with fiscal year 2011, reflecting, in part, print subscription price increases at about half of our newspapers during fiscal year 2012. Circulation volumes are also impacted by fragmentation of audiences faced by all media as available media outlets proliferate and readership trends change. As discussed above, during fiscal year 2012, we introduced the Plus Program digital packages at our daily newspapers. Marketing of the new model was intended, in part, to encourage print readers to take advantage of our content in digital formats. The Plus Program includes subscriptions for both combined digital and print readers and digital-only readers.

Our digital audience continues to show growth, with average local daily unique visitors at our newspapers' websites in fiscal year 2012 up 2.6% from fiscal year 2011. In addition, all our websites now offer mobile-friendly versions for smartphones, and our newspapers' content is available on e-readers, tablets and other mobile devices.

To remain the leading local media company for the communities we serve and a must-buy for advertisers, we are focused on maintaining a broad reach of print and digital audiences in each market we serve. We will continue to refine and strengthen our print platform, but our growth increasingly comes from our digital products and the beneficial impact those products have on the total audience we deliver for our advertisers.

Focusing on Cost Controls

The ongoing structural and cyclical changes in our markets demands that we respond by reengineering and restructuring our operations to achieve an efficient and sustainable cost structure. Over the past five years, we have substantially lowered our cost structure through workforce reductions, optimizing technology and maximizing printing, and distribution and content efficiencies, all while maintaining profitability at each of our newspapers.

Compensation expense is the largest component of our cash operating expenses. Technology increasingly is giving us the ability to operate more efficiently and reduce staff and related compensation expense. We actively look for opportunities to realize efficiencies by outsourcing and centralizing certain functions such as production, circulation, finance, information systems, customer call centers and advertising operations. For instance, 12 of our newspapers are now printed through outsourcing arrangements with nearby newspapers owned by us or other companies. We also believe using technology is an important component of our ability to continue to operate cost-effectively.

Our newspaper operations have emphasized restructuring moves that are generally preferred or acceptable to our audiences and advertisers, such as reducing the width of newspapers or reducing unprofitable circulation that reaches areas outside of a newspaper's core market. We are focusing our efforts on quality content production, effective sales efforts and growth in digital operations.

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Other Operational Information

Each of our newspapers is largely autonomous in our local advertising and editorial operations in order to meet most effectively the needs of the particular community it serves.

We have two operating segments. Each segment consists primarily of a group of newspapers and related businesses reporting to segment managers that are aggregated into a single reportable segment. One operating segment consists primarily of our newspaper operations in California, the Northwest and Texas while the other operating segment consists primarily of newspaper operations in the Southeast, the Gulf Coast and the Midwest. Publishers of each of the newspapers make the day-to-day decisions and report to vice presidents (segment managers). The segment managers are responsible for implementing the operating and financial plans at each of the newspapers within their respective operating segment. The corporate managers, including executive officers, set the basic business, accounting, financial and reporting policies.

Our newspapers also work together to consolidate functions and share resources regionally and across operational segments that lend themselves to such efficiencies, such as certain regional or national sales efforts, accounting functions, digital publishing systems and products, information technology functions and others. Our corporate advertising department is headed by a vice president of advertising who works with our largest advertisers in placing advertising across our operating segments' newspapers and online products. These efforts are often coordinated through the segment managers and corporate personnel.

Our newspaper business is somewhat seasonal, with peak revenues and profits generally occurring in the second and fourth quarters of each year reflecting the Spring and Thanksgiving and Christmas holidays, respectively. The first and third quarters, when holidays are not prevalent, are historically the slowest quarters for revenues and profits.

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The following table summarizes the circulation of each of our daily newspapers. These circulation figures are reported on our fiscal year basis and are not meant to reflect Alliance for Audited Media ("AAM") (formerly Audit Bureau of Circulations) reported figures. Some of our fiscal year 2011 circulation volumes have been updated to reflect additional publications, which are now allowed under AAM reporting rules.

	2012				2011
Circulation by Newspaper	Daily		Sunday		Daily		Sunday
Fort Worth Star-Telegram		201,584		271,876		204,175		233,300
The Sacramento Bee		196,519		259,957		204,638		270,171
The Kansas City (Missouri) Star		192,304		286,200		201,140		304,547
The Charlotte Observer		142,871		200,241		151,828		214,159
The Miami Herald		138,148		194,548		159,123		212,875
The (Raleigh) News & Observer		124,981		184,982		131,126		192,416
The Fresno Bee		107,815		165,137		109,935		141,117
Lexington Herald-Leader		84,715		108,430		91,031		116,417
The (Tacoma) News Tribune		74,968		98,155		79,534		103,096
The Wichita Eagle		66,072		91,621		69,318		101,281
The (Columbia, SC) State		65,883		120,687		72,450		129,072
The Modesto Bee		58,040		69,933		60,595		72,680
El Nuevo Herald (Miami, FL)		53,237		68,492		56,453		71,960
Idaho Statesman (Boise)		47,328		70,335		49,023		76,197
Belleville (Illinois) News-Democrat		43,901		55,769		47,347		56,880
Anchorage Daily News		42,293		46,354		43,954		49,321
The (Macon, GA) Telegraph		40,342		60,554		45,483		65,778
The (Myrtle Beach, SC) Sun News		34,219		46,860		36,723		51,708
The (San Luis Obispo, CA) Tribune		32,948		36,783		34,046		38,408
(Biloxi, MS) Sun Herald		31,939		36,860		35,768		41,300
The Bradenton (Florida) Herald		30,707		41,768		32,691		44,423
(Columbus, GA) Ledger-Enquirer		30,091		38,614		32,128		41,730
Tri-City (Washington) Herald		28,272		34,194		32,046		37,409
The Olympian (Washington)		22,271		27,201		24,055		29,212
The (Rock Hill, SC) Herald		19,420		23,477		21,491		25,776
The Island Packet (Hilton Head, SC)		18,992		21,881		18,655		21,526
(State College, PA) Centre Daily Times		18,043		24,467		19,217		26,306
The Bellingham (Washington) Herald		16,328		20,246		16,919		21,216
Merced (California) Sun-Star		12,401		–		12,935		–
The Beaufort (South Carolina) Gazette		9,224		9,477		9,747		10,105

Our newspapers are generally delivered by independent contractors, and subscription revenues are recorded net of direct delivery costs.

Other Operations

We also have ownership interests and investments in unconsolidated companies and joint ventures. This includes ownership in premium digital assets, including 15.0% of CareerBuilder, LLC, which operates the nation's largest online job website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites such as the auto website Cars.com and the rental site Apartments.com; and 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com. In 2011, we became an 11.4% owner of Wanderful Media (formerly ShopCo, LLC), owner of Find n Save®, a digital shopping portal that provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising.

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We capture significant value from our digital investments, including Classified Ventures and CareerBuilder, which along with other important investments provided us with an additional $38.6 million of cash distributions in fiscal year 2012.

We and the Tribune Company have a joint venture in the McClatchy-Tribune Information Service ("MCT"), which offers stories, graphics, illustrations, photos and paginated pages for print publishers and web-ready content for online publishers. All our newspapers, Washington, D.C. staff and foreign bureaus produce MCT editorial material. Content is also supplied by Tribune Company newspapers and a number of other member newspapers.

We own 49.5% of the voting stock and 70.6% of the nonvoting stock of The Seattle Times Company. The Seattle Times Company owns The Seattle Times newspaper, weekly newspapers in Puget Sound and daily newspapers located in Walla Walla and Yakima, Washington.

In addition, we own a 27.0% interest in Ponderay Newsprint Company ("Ponderay"), a general partnership, which owns and operates a newsprint mill in the state of Washington.

Raw Materials

During fiscal year 2012, we consumed approximately 159,000 metric tons of newsprint compared to 167,000 metric tons in fiscal year 2011 for our operations. The decrease in tons consumed was primarily due to lower advertising sales and circulation volumes. We currently obtain a majority of our supply of newsprint from Ponderay and SP Fiber Technologies (successor to SP Newsprint Co.), as well as a number of other suppliers, primarily under long-term contracts. We have a purchase commitment for 2013 of 81,648 metric tons of newsprint from SP Fiber Technologies.

Our earnings are sensitive to changes in newsprint prices. Newsprint expense accounted for 9.9% of total operating expenses in fiscal year 2012 and 10.3% in fiscal year 2011. However, because we have an ownership interest in Ponderay, an increase in newsprint prices, while negatively affecting our operating expenses, would increase the earnings from our share of this investment, therefore partially offsetting the increase in our newsprint expense. A decline in newsprint prices would have the opposite effect. Ponderay is also impacted by fluctuations in the cost of energy and fiber used in the paper-making process.

We estimate that we will use approximately 142,000 metric tons of newsprint in fiscal 2013, depending on the level of print advertising, circulation volumes and other business considerations. We purchased approximately 131,000 metric tons of newsprint from Ponderay and SP Fiber Technologies in 2012. See the discussion below; Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations"; and the financial statements and accompanying notes for further discussion of the impact of these investments on our business.

We fully support recycling efforts. In fiscal year 2012, 97.8% of the newsprint used by our newspapers was made up of some recycled fiber; the average content was 61.8% recycled fiber. This translates into an overall recycled newsprint average of 60.5%. During fiscal year 2012, all of our newspapers collected and recycled press waste, newspaper returns and printing plates.

Competition

Our newspapers, direct marketing programs, websites and mobile content compete for advertising revenues and readers' time with television, radio, other websites, direct mail companies, free shoppers, suburban neighborhood and national newspapers and other publications, and billboard companies, among others. In some of our markets, our newspapers also compete with other newspapers published in nearby cities and towns. Competition for advertising is generally based upon print readership levels and demographics, advertising rates, internet usage and advertiser results, while competition for circulation and readership is generally based upon the content, journalistic quality, service and the price of the newspaper.

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Our major daily newspapers are the primary general circulation newspaper in each of their respective markets. However, in recent years, newspapers have experienced difficulty maintaining or increasing print circulation levels because of a number of factors, including increased competition from other publications and other forms of media technologies available in various markets, including the internet and other new media formats that are often free for users and the proliferation of news outlets that fragments audiences. In addition, while our newspaper internet sites are generally the leading local sites in each of our major daily newspaper markets, based upon research conducted by us and various independent sources, we have noted changes in readership trends, including a shift of readers to the internet and mobile devices, and have experienced a continued shift of advertising to digital advertising. We face greater competition, particularly in the areas of employment, automotive and real estate advertising, from online competitors. To address the structural shift to digital media, our daily newspapers provide editorial content on a wide variety of platforms and formats – from our daily newspaper to leading local websites; on social network sites such as Facebook and Twitter; on smartphones and on e-readers; on websites and blogs; in niche online publications and in e-mail newsletters; through RSS (rich site summary) feeds and mobile applications. In addition, our websites offer leading digital classified products such as CareerBuilder.com, Cars.com and Apartments.com and retail and national advertising on Find n Save® portals. We also operate dealsaver®, our proprietary daily deals service, in all of our markets.

Employees – Labor

As of December 30, 2012, we had approximately 7,400 full and part-time employees (equating to approximately 6,640 full-time equivalent employees), of whom approximately 6.1% were represented by unions. Most of our union-represented employees are currently working under labor agreements with expiration dates through 2014. We have no unions at 21 of our 30 daily papers.

While our newspapers have not had a strike for decades, and we do not currently anticipate a strike occurring, we cannot preclude the possibility that a strike may occur at one or more of our newspapers when future negotiations occur. We believe that in the event of a newspaper strike we would be able to continue to publish and deliver to subscribers, a capability which is critical to retaining revenues from advertising and circulation, although there can be no assurance that we will be able to continue to publish in the event of a strike.

Compliance with Environmental Laws

We use appropriate waste disposal techniques for items such as ink and other toxic fluids. As of December 30, 2012, we have $1.0 million in letters of credit shared among various state environmental agencies and the U.S. Environmental Protection Agency to provide collateral related to existing or previously removed storage tanks. However, we do not currently have any significant environmental issues and in fiscal years 2012, 2011 and 2010 had no significant expenses or capital expenditures related to environmental control facilities.

Available Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are filed with the U.S. Securities and Exchange Commission (the "SEC"). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements and other information with the SEC. Other information includes, among other things, our Corporate Governance Guidelines, charters for each committee of the Board of Directors, Code of Business Conduct and Ethics, and Senior Officers Code of Ethics. Such reports and other information we file with the SEC are available free of charge on our website at www.mcclatchy.com/investor_relations/ and such reports are available on the SEC's website. The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at

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1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. Paper copies of any such filings and corporate governance documents are available free of charge upon request to The McClatchy Company, 2100 Q Street, Sacramento, CA 95816, Attn: Investor Relations. The contents of these websites are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be an inactive textual reference only.

ITEM 1A.            RISK FACTORS

We have significant competition in the market for news and advertising, which may reduce our advertising and circulation revenues in the future.

Our primary source of revenues is advertising, followed by circulation. In recent years, the advertising industry generally has experienced a secular shift toward internet advertising and away from other traditional media. In addition, our circulation has declined, reflecting general trends in the newspaper industry, including consumer migration toward the internet and other media for news and information. We face increasing competition from other digital sources for both advertising and circulation revenues. This competition has intensified as a result of the continued developments of digital media technologies. Distribution of news, entertainment and other information over the internet, as well as through mobile phones, tablets and other devices, continues to increase in popularity. These technological developments are increasing the number of media choices available to advertisers and audiences. As media audiences fragment, we expect advertisers to continue to allocate larger portions of their advertising budgets to digital media, which through pay-for-performance and keyword-targeted advertising can offer advertisers more directly measurable returns on investment than traditional print media. This increased competition has had and is expected to continue to have an adverse effect on our business and financial results, including negatively impacting revenues and operating income.

Our advertising revenues may decline due to weak general economic and business conditions.

The U. S. economy continues to be in a period of uncertainty. Certain aspects of the economy, including housing, employment and consumer confidence, remain challenging. These challenging economic conditions have had and are expected to continue to have an adverse effect on our advertising revenues. To the extent these economic conditions continue or worsen our business and advertising revenues will be further adversely affected, which could negatively impact our operations and cash flows and our ability to meet the covenants in our debt agreements. Our advertising revenues will be particularly adversely affected if advertisers respond to weak and uneven economic conditions by reducing their budgets or shifting spending patterns or priorities, or if they are forced to consolidate or cease operations. Consolidation across various industries, particularly large department stores and telecommunications companies, may also reduce our overall advertising revenues. In addition, seasonal variations in consumer spending cause our quarterly advertising revenues to fluctuate. Advertising revenues in the second and fourth quarters are typically higher than in the first and third quarters, reflecting the slower economic activity in those quarters and the stronger fourth-quarter holiday season. If general economic conditions and other factors cause a decline in revenues, particularly during the second or fourth quarters, we may not be able to increase or maintain our revenues for the year, which would have an adverse effect on our business and financial results.

In September 2012, we began introducing subscription packages for digital content that ended free, unlimited access to our newspapers' websites and certain mobile content. If we are not successful in the implementation of our digital subscription packages, our ability to produce anticipated circulation revenues and sustain our print and/or digital audiences may be negatively impacted.

Beginning in September 2012, five of our newspapers introduced new subscription packages, our Plus Program, for digital content that ended free, unlimited access to the newspapers' websites and certain mobile content. We expanded this model to our other markets in November and December 2012. The Plus

9

Program includes both a combined digital and print subscription and a digital-only subscription. Existing home delivery subscribers are given full access to the digital content and are automatically enrolled in a bundled print and digital package for an additional fee when their subscription renews. Subscribers who do not wish to take the new package may "opt out" of the package and will be charged for print circulation only. Further, a metered paywall on each of the newspaper websites requires users to pay for content after accessing a limited number of pages or news articles for free each month. Our ability to build a subscriber base on our digital platforms through these packages depends on market acceptance, consumer habits, pricing, an adequate online infrastructure, terms of delivery platforms and other factors. If our print subscribers opt out of the packages in greater numbers than we anticipate, we may not generate expected circulation revenues. In addition, the price increases may result in a loss of print readers, and the paywall may result in fewer page views or unique visitors to our websites if digital viewers are unwilling to pay to gain access to our digital content. Stagnation or a decline in website traffic levels may adversely affect our advertiser base and advertising rates and result in a decline in digital revenues.

Increasing popularity of digital media and the shift in consumer habits and advertising expenditures from traditional print to digital media have adversely affected and may continue to adversely affect our operating revenues and may require significant capital investments due to changes in technology.

Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increasing number of methods for delivery of news and other content and have resulted in a wide variety of consumer demands and expectations, which are also rapidly evolving. If we are unable to exploit new and existing technologies to distinguish our products and services from those of our competitors or adapt to new distribution methods that provide optimal user experiences, our business and financial results may be adversely affected.

Technological developments also pose other challenges that could adversely affect our revenues and competitive position. New delivery platforms may lead to pricing restrictions, the loss of distribution control and the loss of a direct relationship with consumers. We may also be adversely affected if the use of technology developed to block the display of advertising on websites proliferates.

Technological developments and any changes we make to our business model may require significant capital investments. We may be limited in our ability to invest funds and resources in digital products, services or opportunities and we may incur costs of research and development in building and maintaining the necessary and continually evolving technology infrastructure. Some of our existing competitors and new entrants may have greater operational, financial and other resources or may otherwise be better positioned to compete for opportunities and as a result, our digital businesses may be less successful, which could adversely affect our business and financial results.

Our quarterly financial results have fluctuated in the past and will fluctuate in the future. As a result, you should not rely upon past quarterly financial results as indicators of future performance.

Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including:

•

the timing of investments, restructuring plans and capital expenditures;

•

expenses associated with long-term plans, including our construction of and relocation to a new production facility and offices in Miami;

•

our ability to implement cost controls; and

•

the effect of the overall economy on revenues, particularly advertising revenues related to employment, real estate and consumer goods.

Accordingly, our quarterly and annual financial results may vary significantly in the future. The results of prior periods should not be relied upon as an indication of future performance. We cannot provide any

10

assurance that in future quarters, our revenue or operating results will not be below our projections or the expectations of stock market analysts or investors which could cause our stock price to decline.

Our lease for our existing Miami facilities requires that we vacate the existing facilities by the end of May 2013. If the construction of our new facilities for our Miami newspaper operations is not completed by the end of May 2013, we may incur substantial unscheduled additional costs associated with the relocation of the Miami operations.

On May 27, 2011, we sold 14.0 acres of land in Miami, including the building holding the operations of one of our subsidiaries, The Miami Herald Media Company. In connection with the sale, The Miami Herald Media Company entered into a lease agreement with the buyer pursuant to which we have continued to operate our Miami newspaper operations rent free from the existing location through May 2013, while our new facilities are being constructed. We must vacate the facilities by the end of May 2013.

If we are unable to complete the construction of new facilities and move our Miami newspaper operations to the new facilities by May 2013, or if the relocation is otherwise delayed, we may incur substantial costs to produce our newspapers using third-party vendors, or we may not be able to conduct a portion or all of our business until the relocation occurs. In addition, there could be substantial penalties required as a result of breaching our obligation under the lease to vacate our existing facilities by the May 2013 deadline. Any additional costs would adversely affect our results of operations.

If we are unable to execute cost-control measures successfully, our total operating costs may be greater than expected, which may adversely affect our profitability.

As a result of adverse general economic and business conditions and our operating results, we have taken steps to lower operating costs by reducing workforce and implementing general cost-control measures. If we do not achieve expected savings from these initiatives, or if our operating costs increase as a result of these initiatives, our total operating costs may be greater than anticipated. These cost-control measures may also affect our business and our ability to generate future revenue. Because portions of our expenses are fixed costs that neither increase nor decrease proportionately with revenues, we are limited in our ability to reduce costs in the short-term to offset any declines in revenues. If these cost-control efforts do not reduce costs sufficiently or otherwise adversely affect our business, income from continuing operations may decline.

An economic downturn and the impact on our business may result in goodwill and masthead impairment charges.

Due to the economic downturn and the decline in the price of our publicly traded common stock, we recorded masthead impairment charges of $2.8 million in fiscal year 2011 and $59.6 million in fiscal year 2008 and $3.0 billion of goodwill and masthead impairment charges in fiscal year 2007. We currently have goodwill of $1.0 billion. Further erosion of general economic, market or business conditions could have a negative impact on our business and stock price, which may require that we record additional impairment charges in the future.

Our business, reputation and results of operations could be negatively impacted by data security breaches and other security threats and disruptions.

Certain network and information systems are critical to our business activities. Network and information systems may be affected by cyber security incidents that can result from deliberate attacks or system failures. Threats include, but are not limited to, computer hackings, computer viruses, worms or other destructive or disruptive software, or other malicious activities. Our security measures may also be breached due to employee error, malfeasance, or otherwise. As a result of these breaches, an unauthorized party may obtain access to our data or our users' data or our systems may be compromised. These events evolve quickly and often are not recognized until launched against a target, so we may be unable to anticipate these techniques or to implement adequate preventative measures. Our network and information systems may also be compromised by power outages, fire, natural disasters, terrorist attacks, war or other similar events. There can be no assurance that the actions, measures and controls we have

11

implemented will be sufficient to prevent disruptions to mission critical systems, the unauthorized release of confidential information or corruption of data. Although we have experienced cyber security incidents, to date none had a material impact on our financial condition, results of operations or liquidity. Nonetheless, these types of events are likely to occur in the future and such events could disrupt our operations or other third party information technology systems in which we are involved. A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems, or infrastructure by employees, others with authorized access to our systems, or unauthorized persons could result in legal or financial liability or otherwise negatively impact our operations. They also could require significant management attention and resources, and could negatively impact our reputation among our customers, advertisers and the public, which could have a negative impact on our financial condition, results of operations or liquidity.

We are subject to significant financial risk as a result of our $1.6 billion in total consolidated debt.

As of December 30, 2012, we had approximately $1.7 billion in total principal indebtedness outstanding, including current portion of long-term debt of $83.6 million in 11.50% senior secured notes, resulting from our commitment to redeem these notes by January 17, 2013. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017. As a result of the redemptions and purchases, we reduced our total consolidated debt to $1.6 billion as of the filing of this annual report on Form 10-K. Additionally, after the purchases in February 2013 we have $304.1 million aggregate principal amounts with scheduled maturity dates in 2014 and 2017. This level of debt increases our vulnerability to general adverse economic and industry conditions and we will likely need to refinance our debt prior to its scheduled maturity. Higher leverage ratios, our credit ratings or other factors outside of our control could adversely affect our future ability to refinance maturing debt on commercially acceptable terms, or at all, or the ultimate structure of such refinancing.

Covenants in the indenture governing the notes and our other existing debt agreements will restrict our business in many ways.

The indenture governing our 9.00% Senior Secured Notes due in 2022 (the "9.00% Notes") and our secured credit agreement contain various covenants that limit, subject to certain exceptions, our ability and/or our restricted subsidiaries' ability to, among other things:

•

incur or assume liens;

•

incur additional debt or provide guarantees in respect of obligations of other persons;

•

issue redeemable stock and preferred stock;

•

pay dividends or make distributions on capital stock, repurchase, redeem or make payments on capital stock or prepay, repurchase, redeem, retire, defease, acquire or cancel certain of our existing notes or debentures prior to the stated maturity thereof;

•

make loans, investments or acquisitions;

•

create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us or to guarantee our debt, limit our or any of our subsidiaries' ability to create liens, or make or pay intercompany loans or advances;

•

enter into certain transactions with affiliates;

•

sell, transfer, license, lease or dispose of our or our subsidiaries' assets, including the capital stock of our subsidiaries; and

12

•

dissolve, liquidate, consolidate or merge with or into, or sell substantially all the assets of us and our subsidiaries, taken as a whole, to, another person

The restrictions contained in the indenture governing the 9.00% Notes and the secured credit agreement could adversely affect our ability to:

•

finance our operations;

•

make needed capital expenditures;

•

make strategic acquisitions or investments or enter into alliances;

•

withstand a future downturn in our business or the economy in general;

•

refinance our outstanding indebtedness prior to maturity;

•

engage in business activities, including future opportunities, that may be in our interest; and

•

plan for or react to market conditions or otherwise execute our business strategies.

Our ability to comply with covenants contained in the indenture for the 9.00% Notes and our secured credit agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. Even if we are able to comply with all of the applicable covenants, the restrictions on our ability to manage our business in our sole discretion could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that we believe would be beneficial to us. In addition, our obligations under the 9.00% Notes and the secured credit agreement are secured, subject to permitted liens, on a first-priority basis, and such security interests could be enforced in the event of default by the collateral agent for the secured credit agreement. In the event of such an enforcement, we cannot assure you that the proceeds from an enforcement would be sufficient to pay our obligations under the 9.00% Notes or secured credit agreement or at all.

In the future, we will need to repay our existing indebtedness and meet our obligations, and the failure to do so will adversely affect our business.

We may not be able to generate sufficient cash internally to repay all of our indebtedness at maturity or to meet our other obligations. As of December 30, 2012, we had approximately $1.7 billion of total indebtedness outstanding, which was reduced to $1.6 billion by the end of February 2013, with our redemption of the then-outstanding 11.50% senior secured notes and the purchases of additional notes. As of the end of fiscal year 2012, the projected benefit obligations of our qualified defined benefit pension plan ("Plan") exceeded plan assets by $587.9 million. While amounts of future contributions are subject to numerous assumptions, including, among others, changes in interest rates, returns on assets in the Plan and future government regulations, we estimate that a total of approximately $25 million will be required to be contributed to the Plan in fiscal year 2014. In addition, we have a limited number of supplemental retirement plans, which provide certain key employees with additional retirement benefits. These plans have no assets; however as of December 30, 2012, our projected benefit obligations of these plans was $126.4 million. These plans are on a pay-as-you-go basis. Our ability to make payments on and to refinance our indebtedness, including the 9.00% Notes and our other series of outstanding notes, to make required contributions to the Plan, fund the supplemental retirement plans and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. Our ability to generate cash, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us to pay our indebtedness, including the 9.00% Notes and our other series of outstanding notes or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness, on or before the maturity thereof, reduce or delay capital investments or seek

13

to raise additional capital, any of which could have a material adverse effect on our operations. In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations or our ability to refinance our existing debt. The terms of existing or future debt instruments, including the indenture governing the 9.00% Notes offered hereby, may limit or prevent us from taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations, as well as on our ability to satisfy our obligations in respect of our outstanding debt.

As of December 30, 2012, we had approximately $36.1 million in face amount of letters of credit outstanding under the secured credit agreement and a current portion due on long-term debt of $83.6 million of 11.50% senior secured notes. The remaining $83.6 million of 11.50% senior secured notes was redeemed by January 17, 2013. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017. As a result of the redemptions and purchases in early 2013, we reduced our total outstanding indebtedness to $1.6 billion. Of the $1.6 billion, we have approximately $28.9 million of notes with an interest rate of 4.625% due in 2014; approximately $275.1 million of notes with an interest rate of 5.750% due in 2017; $910 million of 9.00% Notes; approximately $89.2 million of debentures with an interest rate of 7.150% due in 2027 and approximately $276.2 million of debentures with an interest rate of 6.875% due in 2029.

We may not be able to pay for or refinance existing obligations or raise any required additional capital or do so on favorable terms. Borrowing costs related to future capital raising activities may be significantly higher than our current borrowing costs, and we may not be able to raise additional capital on favorable terms, or at all, if unsettled conditions in financial markets continue to exist. We may be forced to cancel or scale back our business activities, and we may be unable to refinance our debt.

We require newsprint for operations and, therefore, our operating results may be adversely affected if the price of newsprint increases or if we experience disruptions in our newsprint supply chain.

Newsprint is the major component of our cost of raw materials. Newsprint accounted for 9.9% of our operating expenses in the year ended December 30, 2012. Accordingly, our earnings are sensitive to changes in newsprint prices. The price of newsprint has historically been volatile and may increase as a result of various factors, including:

•

declining newsprint supply from mill closures;

•

reduction in newsprint suppliers because of consolidation in the newsprint industry;

•

paper mills reducing their newsprint supply because of switching their production to other paper grades; and

•

a decline in the financial situation of newsprint suppliers.

We have not attempted to hedge price fluctuations in the normal purchases of newsprint or enter into contracts with embedded derivatives for the purchase of newsprint other than the natural hedge created by our ownership interest in Ponderay. If the price of newsprint increases materially, operating results could be adversely affected. In addition, we rely on a limited number of suppliers for deliveries of newsprint. If

14

newsprint suppliers experience labor unrest, transportation difficulties or other supply disruptions, our ability to produce and deliver newspapers could be impaired and/or the cost of the newsprint could increase, both of which would negatively affect our operating results.

A portion of our employees are members of unions, and if we experience labor unrest, our ability to produce and deliver newspapers could be impaired.

If we experience labor unrest, our ability to produce and deliver newspapers could be impaired in some locations. In addition, the results of future labor negotiations could harm our operating results. Our newspapers have not experienced a labor strike for decades. However, we cannot ensure that a strike will not occur at one or more of our newspapers in the future. As of December 30, 2012, approximately 6.1% of full-time and part-time employees were represented by unions. Most of our union-represented employees are currently working under labor agreements, with expiration dates through 2014. We face collective bargaining upon the expirations of these labor agreements. Even if our newspapers do not suffer a labor strike, our operating results could be harmed if the results of labor negotiations restrict our ability to maximize the efficiency of our newspaper operations. In addition, our ability to make short-term adjustments to control compensation and benefits costs, rebalance our portfolio of businesses or otherwise adapt to changing business needs may be limited by the terms and duration of our collective bargaining agreements.

We may be required to make greater contributions to our qualified defined benefit pension plans in the next several years than previously required, placing greater liquidity needs upon our operations.

The adverse conditions in the capital markets in 2008 had a significantly negative impact on the investment funds in our qualified defined benefit pension plan ("Plan"), which has been partially offset by returns in the capital markets since the end of 2008. The projected benefit obligations of the Plan exceeded plan assets by $587.9 million as of December 30, 2012, an increase of $165.4 million from December 25, 2011. In January 2013, we contributed $7.5 million to the Plan, reducing the underfunded obligation to $580.4 million.

The excess of benefit obligations over pension assets is expected to give rise to required pension contributions over the next several years. Legislation enacted in the second quarter of 2012 mandated a change in the discount rates used to calculate the projected benefit obligations for purposes of funding pension plans. The new legislation and calculation uses historical averages of long-term highly-rated corporate bonds (within ranges as defined in the legislation) which have an impact of applying a higher discount rate to determine the projected benefit obligations for funding and current long-term interest rates. Also, the Pension Relief Act of 2010 ("PRA") provided relief in the funding requirements of the Plan, and we have elected an option that allows the funding related to our 2009 and 2011 plan years required contributions to be paid over 15 years. However, even with the relief provided by these legislative rules, we expect future contributions to be required. In addition, adverse conditions in the capital markets and/or lower long-term interest rates may result in greater annual contribution requirements. In addition, adverse conditions in the capital markets and/or lower long-term interest rates may result in greater annual contribution requirements, placing greater liquidity needs upon our operations.

We have invested in certain digital ventures, but such ventures may not be as successful as expected, which could adversely affect our results of operations.

We continue to evaluate our business and make strategic investments in digital ventures, either alone or with partners, to further our digital growth. We have, among others, investments with other partners in CareerBuilder LLC, which operates the nation's largest online job site, CareerBuilder.com, Classified Ventures, LLC, which operates Cars.com, Apartments.com and other classified websites, and HomeFinder LLC, which operates the real estate website HomeFinder.com. The success of these ventures may be dependent to an extent on the efforts of our partners. Further, our ability to monetize the investments and/or the value we may receive upon any disposition may depend on the actions of our

15

partners. As a result, our ability to control the timing or process relating to a disposition may be limited, which could adversely affect the liquidity of these investments or the value we may ultimately attain upon disposition. If the value of the companies in which we invest declines, we may be required to record a charge to earnings. There can be no assurances that we will receive a return on these investments or that they will result in advertising growth or will produce equity income or capital gains in future years.

If we are not successful in growing and managing our digital businesses, our business, financial condition and prospects will be adversely affected.

Our future growth depends to a significant degree upon the development and management of our digital businesses. The growth of our digital businesses over the long term depends on various factors, including, among other things, the ability to:

•

continue to increase digital audiences;

•

attract advertisers to our websites;

•

maintain or increase the advertising rates on our websites;

•

exploit new and existing technologies to distinguish our products and services from those of competitors and develop new content, products and services; and

•

invest funds and resources in digital opportunities.

In addition, we expect that our digital business will continue to increase as a percentage of our total revenues in future periods. For the year ended December 30, 2012, digital advertising revenues comprised 21.8% of total advertising revenues, as compared to 19.9% for fiscal year 2011. As our digital business becomes a greater portion of our overall business, we will face a number of increased risks from managing our digital operations, including, but not limited, to the following:

•

restructuring our sales force to effectively sell advertising in the digital advertising arena versus our historical print advertising business;

•

attracting and retaining employees with skill sets and knowledge base needed to successfully operate in digital business; and

•

managing the transition to a digital business from a historical print focused business and the need to concurrently reduce the physical infrastructure, distribution infrastructure and related fixed costs associated with the historical print business.

The proliferation of digital media options on the internet provides consumers with a large number of alternative news choices that compete with traditional media companies and could adversely impact our operating results.

The increasing number of digital media options available on the internet, through social networking tools and through mobile and other devices distributing news and other content, is expanding consumer choice significantly. Faced with a multitude of media choices and a dramatic increase in accessible information, consumers may place greater value on when, where, how and at what price they consume digital content than they do on the source or reliability of such content. News aggregation websites and customized news feeds (often free to users) may reduce our traffic levels by creating a disincentive for the audience to visit our websites or use our digital applications. Online traffic is also driven by internet search results. Search engines frequently update and change the methods for directing search queries to web pages or change methodologies and metrics for valuing the quality and performance of internet traffic on delivering cost-per-click advertisements. The failure to successfully manage search engine optimization efforts across our businesses could result in significant decreases in traffic to our various websites, which could result in substantial decreases in conversion rates and repeat business, as well as increased costs if we were to replace free traffic with paid traffic, any or all of which could adversely affect our business, financial condition and results of operations. If traffic levels stagnate or decline, we may not be able to create

16

sufficient advertiser interest in our digital businesses or to maintain or increase the advertising rates of the inventory on our digital platforms.

Circulation declines could adversely affect our circulation and advertising revenues and circulation price increases could exacerbate declines in circulation volumes.

Advertising and circulation revenues are affected by circulation and readership levels of our newspapers. In recent years, newspapers have experienced difficulty maintaining or increasing print circulation levels because of a number of factors, including:

•

increased competition from other publications and other forms of media technologies available in various markets, including the internet and other new media formats that are often free for users;

•

continued fragmentation of media audiences;

•

a growing preference among some consumers to receive all or a portion of their news other than from a newspaper;

•

increases in subscription and newsstand rates; and

•

declining discretionary spending by consumers affected by negative economic conditions.

These factors could also affect our newspapers' ability to institute circulation price increases for print products. Also, print price increases have historically had an initial negative impact on circulation volumes that may not be mitigated with additional marketing and promotion. A prolonged reduction in circulation would have a material adverse effect on advertising revenues. To maintain our circulation base, we may be required to incur additional costs that we may not be able to recover through circulation and advertising revenues.

Developments in the laws and regulations to which we are subject, may result in increased costs and lower advertising revenues from our digital businesses.

We are generally subject to government regulation in the jurisdictions in which we operate. In addition, our websites are available worldwide and are subject to laws regulating the internet both within and outside the United States. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Advertising revenues from our digital businesses could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to the use of consumer data in digital media.

Adverse results from litigation or governmental investigations can impact our business practices and operating results.

From time to time, we and our subsidiaries are parties to litigation and regulatory, environmental and other proceedings with governmental authorities and administrative agencies. Adverse outcomes in lawsuits or investigations could result in significant monetary damages or injunctive relief that could adversely affect our operating results or financial condition as well as our ability to conduct our business as it is presently being conducted.

ITEM 1B.            UNRESOLVED STAFF COMMENTS

None

ITEM 2.               PROPERTIES

Our corporate headquarters are located at 2100 "Q" Street, Sacramento, California. At December 30, 2012, we had newspaper production facilities in 17 markets in 13 states. Our facilities vary in size and in total occupy about 7.0 million square feet. Approximately 2.4 million of the total square footage is leased

17

from others, while we own the properties for the remaining square footage. We own substantially all of our production equipment, although certain office equipment is leased.

We maintain our properties in good condition and believe that our current facilities are adequate to meet the present needs of our newspapers.

ITEM 3.               LEGAL PROCEEDINGS

We are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and government proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable, and outcomes are typically uncertain, and our past experience does not provide any additional visibility or predictability to estimate the range of loss that may occur because the costs, outcome and status of these types of claims and proceedings have varied significantly in the past. Accordingly, we are unable to estimate the amount or range of reasonably possible losses. Historically, such claims and proceedings have not had a material adverse effect upon our consolidated results of operations or financial condition.

ITEM 4.               MINE SAFETY DISCLOSURES

None

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PART II

ITEM 5.               MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The McClatchy Company's (the "Company," "we," "us" or "our") Class A Common Stock is listed on the New York Stock Exchange ("NYSE") under the symbol "MNI". A small amount of Class A Common Stock is also traded on other exchanges. Our Class B Common Stock is not publicly traded. As of February 22, 2013, there were approximately 5,355 and 20 record holders of our Class A and Class B Common Stock, respectively. The following table lists the high and low prices of our Class A Common Stock as reported by the NYSE for each fiscal quarter of 2012 and 2011:

Fiscal Year 2012 Quarters Ended:	High	Low
March 25, 2012	$3.04	$2.22
June 24, 2012	$2.96	$1.98
September 23, 2012	$2.42	$1.50
December 30, 2012	$3.45	$2.18

Fiscal Year 2011 Quarters Ended:	High	Low
March 27, 2011	$5.61	$3.21
June 26, 2011	$3.75	$2.30
September 25, 2011	$2.91	$1.25
December 25, 2011	$2.41	$1.05

Dividends:

During fiscal year 2009, we suspended our quarterly dividend and therefore we did not pay any cash dividends in the fiscal years 2012 or 2011. The payment and amount of future dividends remain within the discretion of the Board of Directors and will depend upon our future earnings, financial condition, and other factors considered relevant by the Board of Directors. Also, the amount of future dividends is governed by reaching certain leverage levels of earnings before interest, taxes, depreciation and amortization under our debt agreements.

Equity Securities:

During the year ended December 30, 2012, we did not sell any equity securities of the Company, which were not registered under the Securities Act of 1933, as amended. During the year ended December 30, 2012, we did not repurchase any equity securities.

Performance Graph:

The following graph compares the cumulative five-year total return attained by shareholders on The McClatchy Company's common stock versus the cumulative total returns of the S&P Midcap 400 index, a customized peer group composed of six companies ("New Peer Group") and a customized peer group composed of nine companies used during the fiscal year ended December 25, 2011 ("Old Peer Group").

Our New Peer Group is customized to include six companies that are publicly traded with at least 40% of their revenues from newspaper publishing. This peer group includes: A. H. Belo Corp., E.W. Scripps Company, Gannett Co., Journal Communications Inc., Lee Enterprises Inc. and New York Times Company. In customizing the New Peer Group we removed three companies that were included in Old Peer Group: Gatehouse Media Inc., Media General Inc., and Sun-Times Media Group, Inc. These companies were removed because they are no longer publicly traded or are smaller reporting companies.

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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among The McClatchy Company, the S&P Midcap 400 Index,
Old Peer Group, and New Peer Group

*$100 invested on 12/30/07 in stock or 12/31/07 in index, including reinvestment of dividends.
Index calculated on month-end basis.

Copyright© 2013 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

	Fiscal Years Ended:
	12/30/07		12/28/08		12/27/09		12/26/10		12/25/11		12/30/12
The McClatchy Company	$	100	$	7	$	38	$	51	$	25	$	32
S&P Midcap 400	$	100	$	64	$	88	$	111	$	109	$	129
Old Peer Group	$	100	$	22	$	47	$	46	$	38	$	49
New Peer Group	$	100	$	23	$	49	$	48	$	40	$	51

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ITEM 6.               SELECTED FINANCIAL DATA

The selected financial data set forth below should be read in conjunction with Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial statements and the related notes, and other financial data included elsewhere in this annual report. Historical results are not necessarily indicative of the results to be expected in future periods.

(in thousands, except per share amounts)	December 30, 2012 (1)			December 25, 2011			December 26, 2010			December 27, 2009			December 28, 2008
REVENUES – NET:
Advertising	$	914,738		$	956,305		$	1,049,964		$	1,143,129		$	1,568,766
Circulation		263,286			262,335			272,776			278,256			265,584
Other		52,700			51,000			52,492			50,199			66,106
		1,230,724			1,269,640			1,375,232			1,471,584			1,900,456
OPERATING EXPENSES:
Other operating expenses		919,313			943,997			1,002,945			1,130,183			1,536,343
Depreciation and amortization		125,275			121,528			133,404			142,889			142,948
Goodwill and masthead impairment		–			2,800			–			–			59,563
		1,044,588			1,068,325			1,136,349			1,273,072			1,738,854
OPERATING INCOME		186,136			201,315			238,883			198,512			161,602
NON-OPERATING (EXPENSE) INCOME:
Interest expense		(151,334	)		(165,434	)		(177,641	)		(127,276	)		(157,385	)
Interest income		88			97			550			47			1,429
Equity income in unconsolidated companies, net		31,935			27,762			11,752			2,130			(14,021	)
Gain (loss) on extinguishment of debt		(88,430	)		(1,203	)		(10,661	)		44,117			21,026
Write-down of investments and land		–			–			(24,447	)		(34,172	)		(26,462	)
Other – net		79			248			265			203			35,896
		(207,662	)		(138,530	)		(200,182	)		(114,951	)		(139,517	)
Income from continuing operations before income tax provision (benefit)		(21,526	)		62,785			38,701			83,561			22,085
Income tax provision (benefit)		(21,382	)		8,396			5,601			26,800			19,278
NET INCOME FROM CONTINUING OPERATIONS		(144	)		54,389			33,100			56,761			2,807
Income from discontinued operations, net of tax		–			–			3,083			(6,174	)		(6,758	)
NET INCOME (LOSS)	$	(144	)	$	54,389		$	36,183		$	50,587		$	(3,951	)
Basic earnings per common share:
Income from continuing operations	$	–		$	0.64		$	0.39		$	0.68		$	0.03
Discontinued operations, net of tax		–			–			0.04			(0.07	)		(0.08	)
Net income per basic common share	$	–		$	0.64		$	0.43		$	0.61		$	(0.05	)
Diluted earnings per common share:
Income from continuing operations	$	–		$	0.63		$	0.39		$	0.68		$	0.03
Discontinued operations, net of tax		–			–			0.04			(0.07	)		(0.08	)
Net income per diluted common share	$	–		$	0.63		$	0.43		$	0.61		$	(0.05	)
Dividends per common share:	$	–		$	–		$	–		$	0.09		$	0.54
CONSOLIDATED BALANCE SHEET DATA:
Total assets	$	3,005,131		$	3,040,059		$	3,146,859		$	3,299,899		$	3,522,206
Long-term debt		1,587,330			1,577,476			1,703,339			1,896,436			2,037,776
Financing obligations		279,325			272,795			–			–			–
Stockholders' equity		42,501			175,187			215,752			166,686			52,429

⁽¹⁾

Due to our fiscal calendar, the year ended on December 30, 2012 encompassed a 53-week period as compared to the other fiscal year ends identified in this table, which only have 52-week periods.

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ITEM 7.               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to Part I, Item 1 "Note About Forward-Looking Statements" and Item 1A "Risk Factors," which describes important factors that could cause actual results to differ from expectations and non-historical information contained herein. In addition, the following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the results of operations and financial condition of The McClatchy Company (the "Company," "we," "us" or "our"). MD&A should be read in conjunction with our audited consolidated financial statements and accompanying notes to the consolidated financial statements ("Notes") as of and for each of the three years in the period ended December 30, 2012, December 25, 2011 and December 26, 2010 included elsewhere in this Annual Report on Form 10-K.

Overview

We are a leading news, advertising and information provider, offering a wide array of print and digital products in each of the markets we serve. We are the third largest newspaper company in the United States, based on daily circulation. Our operations include 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our largest newspapers include the Fort Worth Star-Telegram, The Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer.

We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder, LLC, which operates the nation's largest online job website, CareerBuilder.com, 25.6% of Classified Ventures, LLC, a company that offers classified websites such as the auto website Cars.com and the rental website Apartments.com, 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com; and 11.4% of Wanderful Media (formerly ShopCo, LLC), owner of Find n Save®, a digital shopping portal that provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising.

Our fiscal year ends on the last Sunday in December. Due to our fiscal calendar, the year ended on December 30, 2012 ("fiscal year 2012") encompassed a 53-week period. The year ended December 25, 2011 ("fiscal year 2011") and the year ended December 26, 2010 ("fiscal year 2010") both consist of 52-week periods.

Our primary sources of revenues are print and digital advertising, which accounted for 74.3% of our total revenues for fiscal year 2012 compared to 75.3% in fiscal year 2011. All categories (retail, national and classified) of advertising discussed below include both print and digital advertising. Retail advertising revenues include advertising carried as a part of newspapers (run of press ("ROP") advertising), advertising inserts placed in newspapers ("preprint advertising") and/or advertising delivered digitally.

In fiscal year 2012, circulation revenues accounted for 21.4% of our total revenues compared to 20.7% in fiscal year 2011. Most of our newspapers are delivered by independent contractors. Circulation revenues are recorded net of direct delivery costs.

For fiscal year 2012, revenues from other sources, including among other, commercial printing and distribution revenues, constituted 4.3% of our total revenues compared to 4.0% in fiscal year 2011.

See "Results of Operations" section below for a discussion of our revenue performance and contribution by category for the fiscal years 2012, 2011 and 2010.

Recent Developments

Senior Secured Notes Refinanced

On December 18, 2012, we issued $910 million aggregate principal amount of 9.00% Senior Secured Notes due in 2022 ("9.00% Notes"). We received approximately $889 million, net of financing costs, in the

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offering and used the net proceeds, as well as cash on hand, to repurchase all of our outstanding $846 million in aggregate principal amount of the 11.50% Senior Secured Notes, due in 2017 ("11.50% Notes"), in two separate transactions. On December 18, 2012, we repurchased $762.4 million of the 11.50% Notes pursuant to a cash tender offer at a repurchase price of $1,103.40 for each $1,000 principal amount of 11.50% Notes tendered plus accrued and unpaid interest. In connection with the tender offer of the 11.50% Notes, we recorded a loss on the extinguishment of debt of approximately $94.5 million. By January 17, 2013, we redeemed the remaining $83.6 million aggregate principal amount of 11.50% Notes not tendered in the tender offer and will record a loss on the extinguishment of debt of approximately $9.6 million during the quarter ended March 24, 2013. See Debt and Related Matters section in the "Liquidity and Capital Resources" section below for additional information.

Third Amended and Restated Credit Agreement

In connection with the 9.00% Notes offering, described above, we entered into the Third Amended and Restated Credit Agreement ("Credit Agreement"), dated as of December 18, 2012. The Credit Agreement amends and restates in its entirety the Second Amended and Restated Credit Agreement dated June 22, 2012. The Credit Agreement provides for a $75 million revolving credit commitment, with a $50 million letter of credit subfacility, and has a maturity date of December 18, 2017. Our obligations under the Credit Agreement are secured by a first-priority security interest in certain of our assets. See Debt and Related Matters section in the "Liquidity and Capital Resources" section below for additional information.

Digital Subscriptions Packages

Beginning in September 2012, five of our newspapers introduced new subscription packages ("Plus Program") for digital content that ended free, unlimited access to the newspapers' websites and certain mobile content. We expanded this model to our other markets in November and December 2012. The Plus Program includes both a combined digital and print subscription and a digital-only subscription. Existing home delivery subscribers are given full access to the digital content and rolled into a bundled print and digital package for an additional fee when their subscription renews. Subscribers who do not wish to take the Plus Program may "opt out" of the package and will be charged for print circulation only. A metered paywall on each of the newspaper websites requires users (generally non-subscribers) to pay for content after accessing a limited number of pages or news articles for free each month.

Sale of Real Property in Miami and Subsequent Plans for Relocation

On May 27, 2011, we sold 14.0 acres of land in Miami, including the building holding the operations of one of our subsidiaries, The Miami Herald Media Company, and adjacent parking lots, for a purchase price of $236.0 million. We received cash proceeds of $230.0 million. The additional $6.0 million was held in an escrow account for our expenses incurred in connection with the relocation of our Miami operations. In April 2012, we received these funds, which were released for payment of costs associated with the relocation of the Miami operations.

In connection with the sale, The Miami Herald Media Company entered into a lease agreement with the buyer pursuant to which we have continued to operate our Miami newspaper operations rent free from the existing location through May 2013, while our new facilities are being constructed. We must vacate the facilities by the end of May 2013. As a result of our continuing involvement in the property and given the fact that we will not pay rent during this period, the sale was treated as a financing transaction. Accordingly, we will continue to depreciate the carrying value of the building until our operations are moved. In addition, we have recorded a $236.0 million liability (in financing obligations) equal to the sales proceeds received of $230.0 million plus the $6.0 million received from the escrow account for reimbursement of moving expenses. We are imputing rent based on comparable market rates, which will be reflected as interest expense until the operations are moved. As of December 30, 2012, no gain or loss has been recognized on the transaction. We expect to recognize a gain of approximately $10 million at the time the operations are moved since there will no longer be a continuing involvement with the Miami property.

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In the first quarter of 2012, we purchased approximately 6.1 acres of land located in Doral, Florida, for approximately $3.1 million. We are building a new production facility on this site for our Miami newspaper operations. In January 2012, we also entered into an operating lease for a two-story office building adjacent to the new production facility. The operating lease on the office building has initial annual base lease payments of $1.8 million beginning in May 2013 when the building is expected to be occupied. Total costs related to relocating the Miami newspaper operations and for constructing the new production facility, including the purchase of the property, construction costs, accelerated depreciation and moving expenses, are estimated to be as follows:

•

Net cash outlays for capital expenditures related to the new facilities are estimated to be $32 million. We began incurring these costs in the first quarter of 2012. During fiscal years 2012 and 2011, we incurred approximately $17.5 million and $0.4 million of net cash outlays, respectively.

•

Cash expenses to relocate the Miami newspapers' operations are expected to be $12 million. During fiscal years 2012 and 2011, our cash expenses were approximately $4.5 million and $0.9 million, respectively.

•

Accelerated depreciation of $13 million is expected to be incurred on existing assets expected to be retired or decommissioned in connection with the relocation. During fiscal year 2012, we accelerated depreciation on retired or decommissioned assets totaling approximately $8.3 million.

The relocation of the Miami newspaper operations is expected to be completed in May 2013 and related costs and expenses are expected to be incurred through the third quarter of 2013.

Other Recent Debt Reductions

In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017.

Results of Operations

Fiscal Year 2012 Compared to Fiscal Year 2011

We had a net loss in fiscal year 2012 of $0.1 million, or $0.00 per diluted share, compared to net income of $54.4 million, or $0.63 per diluted share, in fiscal year 2011. The net loss primarily resulted from the recognition of a non-operating loss on extinguishment of debt related to the repurchases of $762.4 million of our 11.50% Notes pursuant to our cash tender offer in December 2012. See Debt and Related Matters section in the "Liquidity and Capital Resources" section below for additional information related to these tender offer repurchases.

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Revenues

The following table summarizes our revenues by category, which compares fiscal year 2012 to fiscal year 2011:

	Years Ended
(in thousands)	December 30, 2012 (53 weeks)		December 25, 2011 (52 weeks)		$ Change			% Change
Advertising:
Retail	$	474,031	$	499,250	$	(25,219	)		(5.1	)
National		70,477		76,296		(5,819	)		(7.6	)
Classified:
Auto		83,396		80,823		2,573			3.2
Real estate		36,386		44,703		(8,317	)		(18.6	)
Employment		46,954		51,933		(4,979	)		(9.6	)
Other		71,544		73,950		(2,406	)		(3.3	)
Total classified		238,280		251,409		(13,129	)		(5.2	)
Direct marketing and other		131,950		129,350		2,600			2.0
Total advertising		914,738		956,305		(41,567	)		(4.3	)
Circulation		263,286		262,335		951			0.4
Other		52,700		51,000		1,700			3.3
Total revenues	$	1,230,724	$	1,269,640	$	(38,916	)		(3.1	)

During fiscal year 2012, total revenues decreased 3.1% compared to fiscal year 2011 as we continued to be impacted by the industry-wide declines in advertising revenues. The continued weak economy and a secular shift in advertising demand from print to digital products are the principal causes of the decline in total revenues. However, the 3.1% decrease in total revenues in fiscal year 2012 as compared to fiscal year 2011, is smaller than the 7.7% decrease in fiscal year 2011 as compared to fiscal year 2010. This is due to our efforts to grow revenues from our digital products to offset the expected declines in revenues from our print products, as well as the 53^rd week in fiscal year 2012. We estimate that the 53^rd week provided for an additional $16.5 million in advertising revenues, $4.9 million in circulation revenues and $22.7 million in total revenues.

Advertising Revenues

Newspaper advertising is typically display advertising, or in the case of classified, display and/or liner advertising, while digital advertising can be in the form of display, coupon or banner ads, video, search advertising and/or liner ads. Advertising printed directly in the newspaper is considered ROP advertising while preprint advertising consists of preprinted advertising inserts delivered with the newspaper.

Total advertising revenues decreased $41.6 million in fiscal year 2012 compared to fiscal year 2011. While declines during such periods were widespread among our revenue categories, the primary decrease in advertising revenues related to retail advertising and real estate classified advertising. These decreases were partially offset by increases in our digital revenues, automotive classified advertising, direct marketing and other revenues and our 53^rd week in 2012.

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The following table reflects the category of advertising revenues as a percentage of total advertising revenues for the periods presented:

	Years Ended
	December 30, 2012		December 25, 2011
Advertising:
Retail		51.8%		52.2%
National		7.7%		8.0%
Classified		26.1%		26.3%
Direct marketing and other		14.4%		13.5%
Total advertising		100.0%		100.0%

We categorize advertising revenues as follows:

•

Retail – local retailers, local stores of national retailers, department and furniture stores, restaurants and other consumer-related businesses. Retail advertising also includes revenues from preprinted advertising inserts distributed in the newspaper.

•

National – national and major accounts such as telecommunications companies, financial institutions, movie studios, airlines and other national companies.

•

Classified – local auto dealers, employment, real estate including display advertising and other classified advertising.

•

Direct Marketing and Other – advertisements in direct mail, shared mail and niche publications, total market coverage publications and other miscellaneous advertising.

Retail:

Retail advertising revenues decreased $25.2 million in fiscal year 2012 compared to fiscal year 2011. The decrease reflects lower print ROP revenues in health, building and home centers, furniture and home furnishing, and lower preprint revenues, which were partially offset by an increase in digital retail advertising revenues reflecting increases in banner and display advertisements and increased revenues from our dealsaver® daily deal product. In fiscal year 2012, compared to fiscal year 2011, we reported a decrease in print ROP advertising revenues of 8.2% and a decrease in preprint advertising revenues of 6.1%. These print ROP and preprint advertising revenue decreases were partially offset by an increase in digital retail advertising revenues of 6.4% for fiscal year 2012, compared to fiscal year 2011.

National:

National advertising revenues decreased $5.8 million in fiscal year 2012 compared to fiscal year 2011. For fiscal year 2012, compared to fiscal year 2011, print national advertising decreased 11.1% but was partially offset by an increase of 3.0% in digital national advertising revenues. The decreases in total national advertising revenues were broad-based but were partially offset by increases in the banking and political categories.

Classified:

Classified advertising revenues decreased $13.1 million in fiscal year 2012 compared to fiscal year 2011. Although the nation's housing market is showing signs that it is beginning to strengthen, the real estate category continues to represent our largest decline in classified advertising. The decrease in classified advertising revenues in fiscal year 2012 was partially a result of the weak economy and advertisers are increasingly using digital advertising, which is widely available from many competitors, instead of print advertising. For fiscal year 2012, compared to fiscal year 2011, print classified advertising decreased 10.8%, but was partially offset by an increase in digital classified advertising revenues of 4.1%. The increases in

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digital classified advertising primarily reflect stronger automotive advertising sales, as well as other classified advertising revenues, as discussed below. The following is a discussion of the major classified advertising categories for fiscal year 2012, as compared to fiscal year 2011:

•

Automotive advertising revenues increased in fiscal year 2012 by $2.6 million, or 3.2%. Print automotive advertising revenues declined 7.6% in fiscal year 2012, while digital automotive advertising revenues were up 15.2% in fiscal year 2012. These results reflect the continued migration of automotive advertising to digital platforms as well as the growing sales of automobiles in the United States during the period, in addition to the popularity of our Cars.com products with local auto dealerships.

•

Real estate advertising revenues decreased in fiscal year 2012 by $8.3 million, or 18.6%. As discussed above, real estate has also been slow to recover from the recession and real estate advertising has been moving from print to digital media. As a result, print real estate advertising revenues declined 23.5% in fiscal year 2012, while digital real estate advertising revenues were down 8.4% in fiscal year 2012 as compared to fiscal year 2011.

•

Employment advertising revenues decreased in fiscal year 2012 by $5.0 million, or 9.6%, reflecting a continued slow recovery in employment across all of our geographical markets. Print employment advertising revenues declined 12.6% in fiscal year 2012, while digital employment advertising revenues were down 6.8% in fiscal year 2012.

•

Other classified advertising revenues, which include legal, remembrance and celebration notices and miscellaneous advertising decreased in fiscal year 2012 by $2.4 million, or 3.3%. Print other classified advertising revenues declined 6.0% in fiscal year 2012, while digital other classified advertising revenues were up 7.5% in fiscal year 2012. These increases result from the migration of consumers from the print to digital media for publishing these types of events.

Digital:

Digital advertising revenues, which are included in each of the advertising categories discussed above, constituted 21.8% of total advertising revenues in fiscal year 2012 compared to 19.9% in fiscal year 2011. Total digital advertising includes digital advertising both bundled with print and sold on a stand-alone basis. Digital advertising revenues totaled $199.7 million in fiscal year 2012, representing an increase of 4.9% compared to fiscal year 2011. Digital-only advertising revenues totaled $108.3 million in fiscal year 2012. This represented an increase of 15.7% in fiscal year 2012 compared to fiscal year 2011. Digital advertising revenues sold in conjunction with print products declined 5.6% in fiscal year 2012 compared to fiscal year 2011 as a result of fewer print advertising sales.

Direct Marketing and Other:

Direct marketing and other advertising revenues increased $2.6 million during fiscal year 2012 compared to fiscal year 2011. The increase largely came as a result of growth in our "Sunday Select" product, a package of preprinted advertisements delivered to non-subscribers upon request, which grew 34.9% in fiscal year 2012 compared to fiscal year 2011.

Circulation Revenues

Circulation revenues increased $1.0 million during fiscal year 2012 compared to fiscal year 2011. Overall, our circulation revenues were negatively affected by lower circulation volumes. Daily circulation declined 5.6% in fiscal year 2012 compared to fiscal year 2011. In fiscal year 2011, daily circulation volumes had declined 4.3%. However, the decrease in circulation revenues from lower volumes was offset by selective price increases, the digital revenues from the new digital subscription packages (as discussed above in the "Recent Developments" section above) and the revenues received in the 53^rd week of fiscal year 2012. As expected, circulation volumes continue to remain lower as a result of fragmentation of audiences faced by

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all media as available media outlets proliferate and readership trends change. While we expect circulation volumes to continue to decline slightly in the year ended December 29, 2013 ("fiscal year 2013"), we expect our new Plus Program to increase circulation revenues in fiscal year 2013. We continue to look for new opportunities to reduce our declines in circulation volumes and increase our circulation revenues.

Our digital traffic continues to grow with daily average local unique visitors to our newspaper websites up 2.6% in fiscal year 2012 compared to fiscal year 2011.

Operating Expenses

During fiscal year 2012, total operating expenses decreased 2.2% compared to fiscal year 2011, reflecting our continued effort to reduce costs through streamlining processes to gain efficiencies, as well as headcount reductions. As discussed above, our operating expenses for fiscal year 2012 also include a 53^rd week, which results in higher expenses during the period than the comparable period in fiscal year 2011. Operating expenses in all periods presented include restructuring-related severance as we continue to restructure our operations. Fiscal year 2012 also includes accelerated depreciation on equipment and moving expenses primarily related to the relocation of our Miami newspaper operations. During fiscal year 2011, we incurred charges related to real property in California and Texas that were sold for less than the carrying value as we continued to restructure our operations, which increased our operating expenses in that period.

The following table summarizes our operating expenses, which compares fiscal year 2012 to fiscal year 2011:

	Years Ended
(in thousands)	December 30, 2012 (53 weeks)		December 25, 2011 (52 weeks)		$ Change			% Change
Compensation expenses	$	443,401	$	457,707	$	(14,306	)		(3.1	)
Newsprint, supplements and printing expenses		140,932		145,874		(4,942	)		(3.4	)
Depreciation and amortization expenses		125,275		121,528		3,747			3.1
Other operating expenses		334,980		343,216		(8,236	)		(2.4	)
	$	1,044,588	$	1,068,325	$	(23,737	)		(2.2	)
Restructuring charges and other items	$	18,287	$	30,444	$	(12,157	)		(39.9	)
Compensation-related restructuring charges	$	4,651	$	13,853	$	(9,202	)		(66.4	)

Compensation expenses, which includes the restructuring charges discussed above, decreased $14.3 million during fiscal year 2012 compared to fiscal year 2011. Payroll expenses in fiscal year 2012 decreased 4.5% compared to fiscal year 2011, reflecting a 6.0% decline in average full-time equivalent headcount. Fringe benefits costs in fiscal year 2012 increased 4.7% compared to fiscal year 2011, primarily reflecting increases in medical costs of 9.7%. These were partially offset by lower workers compensation costs.

Newsprint, supplements and printing expenses decreased $4.9 million in fiscal year 2012 compared to fiscal year 2011. Newsprint expense decreased by 5.5% in fiscal year 2012 compared to fiscal year 2011, reflecting lower newsprint usage and to a lesser extent, lower newsprint prices. Supplement and printing expense increased 3.0% in fiscal year 2012 compared to fiscal year 2011. The increase in supplement and printing expense is also partially due to the printing of the extra paper in the 53^rd week.

Depreciation and amortization expenses increased $3.8 million in fiscal year 2012 compared to fiscal year 2011. Amounts affecting the depreciation and amortization in fiscal year 2012 include $8.8 million in accelerated depreciation on equipment primarily related to the relocation of the Miami operations and a

28

reduction in capital expenditures in fiscal years 2012 and 2011 due to adequate production capacity at our facilities.

Other operating costs decreased $8.2 million in fiscal year 2012 compared to fiscal year 2011. The decrease in other operating costs during fiscal year 2012, compared to fiscal year 2011, was due to company-wide efforts to reduce costs, including property taxes, insurance, marketing and professional services. However, the decrease was partially offset by increased costs in fiscal year 2012 related to the 53^rd week and during fiscal year 2011 we incurred charges of $10.6 million primarily resulting from real property in California and Texas that was sold.

Non-Operating Items

Interest Expense

Total interest expense decreased 8.5% during fiscal year 2012 compared to fiscal year 2011. This decrease was due to lower outstanding principal amounts of debt and the reversal of $12.3 million in interest on taxes, because of certain state tax settlements and statute expiration benefits.

Equity Income

Total income from unconsolidated investments increased 15.0% during fiscal year 2012 compared to fiscal year 2011. The increase is primarily related to our investment in Classified Ventures, which reported greater income in fiscal year 2012.

Loss on Extinguishment of Debt

During fiscal year 2012, we recorded a net loss on the extinguishment of debt of $88.4 million compared to $1.2 million in fiscal year 2011. During fiscal year 2012, we repurchased $70.5 million aggregate principal of outstanding notes in the open market and $762.4 million in conjunction with the refinancing of our 11.50% Notes. We repurchased most of the $70.5 million notes at a price lower than par value and wrote off historical discounts related to the notes we purchased, which resulted in a gain on extinguishment of debt. This gain was offset by the write-off of fees related to the refinancing of our revolving credit facility in the second quarter of fiscal year 2012 and the refinancing of our 11.50% senior secured notes in the fourth quarter of fiscal year 2012.

Income Taxes

We recorded an income tax benefit of $21.4 million for fiscal year 2012 compared to income tax expense of $8.4 million in fiscal year 2011. The benefit during fiscal year 2012 was partially due to the reversal of tax reserves for favorable settlements of state tax issues and the expiration of statute of limitations. Further, the benefit was affected by the inclusion in pre-tax loss of discrete tax items, such as (1) reduction to interest expense from the closure of statutes of limitations and audit settlements, (2) loss on the refinancing of our 11.50% Notes, (3) certain asset disposals and impairments, and (4) severance for fiscal year 2012. Excluding these items the effective tax rate expense was 42.2% in fiscal year 2012 and is higher than the federal statutory rate of 35% due primarily to the inclusion of state income taxes.

In fiscal year 2011, our tax provision of $8.4 million compared to $5.6 million in fiscal year 2010 included a benefit from a favorable settlement of certain state tax issues in the first quarter of fiscal year 2011 and expiration of statutes later in that year. Further, the effective tax rate percentage was affected by the inclusion in pre-tax income of discrete items such as reduction to interest expense from the closure of statutes of limitations and audit settlements, the extinguishment of debt, certain asset disposals, the masthead impairment, and severance for fiscal year 2011. Excluding the impact of these items, the net tax provision resulted in a tax rate of 44.0%, and exceeded the federal statutory rate of 35.0% due primarily to the inclusion of state income taxes.

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Fiscal Year 2011 Compared to Fiscal Year 2010

We reported income from continuing operations in fiscal year 2011 of $54.4 million or $0.63 per diluted share compared to income from continuing operations of $33.1 million or $0.39 per diluted share in fiscal year 2010. Total net income in fiscal year 2010 including discontinued operations was $36.2 million or $0.43 per diluted share. We did not have discontinued operations in fiscal year 2011.

Revenues

Revenues in fiscal year 2011 were $1.3 billion, down 7.7% from revenues of $1.4 billion in fiscal year 2010. Advertising revenues were $1.0 billion in fiscal year 2011, down 8.9% from fiscal year 2010, and circulation revenues were $262.3 million in fiscal year 2011, down 3.8% from fiscal year 2010.

The following table summarizes our revenues by category, which compares fiscal year 2011 with fiscal year 2010:

	Years Ended
(in thousands)	December 25, 2011		December 26, 2010		$ Change			% Change
Advertising:
Retail	$	499,250	$	550,993	$	(51,743	)		(9.4	)
National		76,296		97,068		(20,772	)		(21.4	)
Classified:
Auto		80,823		83,221		(2,398	)		(2.9	)
Real estate		44,703		55,468		(10,765	)		(19.4	)
Employment		51,933		56,032		(4,099	)		(7.3	)
Other		73,950		85,101		(11,151	)		(13.1	)
Total classified		251,409		279,822		(28,413	)		(10.2	)
Direct marketing and other		129,350		122,081		7,269			6.0
Total advertising		956,305		1,049,964		(93,659	)		(8.9	)
Circulation		262,335		272,776		(10,441	)		(3.8	)
Other		51,000		52,492		(1,492	)		(2.8	)
Total revenues	$	1,269,640	$	1,375,232	$	(105,592	)		(7.7	)

Advertising Revenues

Advertising revenues were the largest component of our revenue, accounting for 75.3% and 76.3% of total revenues in fiscal year 2011 and 2010, respectively.

Retail:

Retail advertising in fiscal year 2011 decreased $51.7 million, or 9.4% from fiscal year 2010, primarily reflecting the impact of the slow economic recovery and the secular shift to digital advertising which is substantially more competitive. Digital retail advertising in fiscal year 2011 increased $2.1 million, or 2.8% from fiscal year 2010, driven by banner, coupon and display advertisements, while print ROP advertising in fiscal year 2011 decreased $35.4 million, or 14.7% from fiscal year 2010. Preprint advertising in fiscal year 2011 decreased $18.5 million, or 7.8% from fiscal year 2010.

National:

National advertising in fiscal year 2011 decreased $20.8 million, or 21.4% from fiscal year 2010. The declines in total national advertising were primarily in the telecommunications and national automotive segments. Digital national advertising in fiscal year 2011 decreased $4.0 million, or 17.5% from fiscal year 2010.

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Classified:

In fiscal year 2011, classified advertising decreased $28.4 million, or 10.2% from fiscal year 2010. Print classified advertising in fiscal year 2011 declined $30.8 million, or 16.4%. Digital classified advertising in fiscal year 2011 increased $2.4 million, or 2.6%, primarily from growth in automotive digital advertising which was offset by declines in other categories. The following is a discussion of the major classified advertising categories:

•

Automotive advertising in fiscal year 2011 decreased $2.4 million, or 2.9%, from fiscal year 2010. Print automotive advertising in fiscal year 2011 declined $7.6 million, or 15.2% from fiscal year 2010, while digital automotive advertising in fiscal year 2011 grew $5.2 million, or 15.9% from fiscal year 2010. The better results in digital advertising, relative to other major categories, reflect the strength of our Cars.com digital products.

•

Real estate advertising in fiscal year 2011 decreased $10.8 million, or 19.4%, from fiscal year 2010. We continued to be adversely impacted by the real estate downturn. Print real estate advertising declined $10.6 million, or 25.9%, while digital real estate advertising declined $0.2 million, or 1.4% from fiscal year 2010.

•

Employment advertising in fiscal year 2011 decreased $4.1 million, or 7.3% from fiscal year 2010, reflecting a national slowdown in hiring resulting in a decrease in employment advertising. Print employment advertising declined $1.6 million, or 6.2%, while digital employment advertising decreased $2.5 million, or 8.3% from fiscal year 2010. The greater decline in digital employment advertising reflects, in part, an increase in customers going directly to our online employment vertical, CareerBuilder, in fiscal year 2011 rather than accessing CareerBuilder through our newspaper websites. The shift in audience directly to CareerBuilder decreased digital employment revenues by $1.5 million (out of the $2.5 million total decline) in fiscal year 2011 compared to fiscal year 2010.

•

Other classified advertising, which primarily includes third-party liners, legal and remembrances advertisements, decreased $11.2 million in fiscal year 2011, or 13.1% from fiscal year 2010. Print other classified declined $11.0 million in fiscal year 2011, or 15.6% from fiscal year 2010. Digital other classified declined $0.2 million, or 1.3%.

Digital:

Digital advertising revenue, which is included in each of the advertising categories discussed above, totaled $190.4 million in fiscal year 2011, an increase of 0.3% as compared to fiscal year 2010. Digital-only advertising revenues, which totaled $92.1 million in fiscal year 2011, grew 9.1% from fiscal year 2010, while digital advertising revenues sold in conjunction with print products declined 6.8% from fiscal year 2010 reflecting fewer print advertising sales.

Direct Marketing and Other:

Direct marketing advertising grew $7.5 million, or 6.2%, in fiscal year 2011 from fiscal year 2010 largely reflecting growing popularity of our "Sunday Select" product and other direct marketing products. Sunday Select is a package of preprints delivered to non-newspaper subscribers upon request.

Circulation Revenues

In fiscal year 2011, circulation revenues decreased $10.4 million, or 3.8% from fiscal year 2010, primarily reflecting lower volumes. Average paid daily circulation declined 4.3% while Sunday grew 0.2% in fiscal year 2011. Circulation volume trends improved during 2011 as our newspapers cycled the circulation initiatives taken in 2009 and, to a lesser degree, in 2010 to both cut expenses and increase prices.

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Operating Expenses

Operating expenses in fiscal year 2011 and fiscal year 2010 include severance-related restructuring charges and accelerated depreciation on equipment related to the outsourcing of printing at various newspapers. Operating expenses in fiscal year 2011 also included impairments related to mastheads and certain property, and costs of moving certain operations.

The following table summarizes our operating expenses, which compares fiscal year 2011 to the same period in fiscal year 2010:

	Years Ended
(in thousands)	December 25, 2011		December 26, 2010		$ Change			% Change
Compensation expenses	$	457,707	$	519,179	$	(61,472	)		(11.8	)
Newsprint, supplements and printing expenses		145,874		136,642		9,232			6.8
Depreciation and amortization expenses		121,528		133,404		(11,876	)		(8.9	)
Other operating expenses		343,216		347,124		(3,908	)		(1.1	)
	$	1,068,325	$	1,136,349	$	(68,024	)		(6.0	)
Restructuring charges and other items	$	30,444	$	15,863	$	14,581			91.9
Compensation-related restructuring charges	$	13,853	$	9,853	$	4,000			40.6

Operating expenses in fiscal year 2011 decreased $68.0 million, or 6.0%, from fiscal year 2010 as we continued to reduce costs to mitigate the impact of revenue declines. Operating expenses in fiscal year 2011 included $13.9 million in severance related to our continued restructuring program, $1.2 million of accelerated depreciation on equipment related to the outsourcing of printing at various newspapers, $14.5 million in impairment charges and $0.9 million in costs of moving certain operations. Operating expenses in fiscal year 2010 included $9.9 million in severance related to our restructuring plans and $6.0 million of accelerated depreciation on equipment related to the outsourcing of printing at various newspapers.

Compensation expenses in fiscal year 2011 decreased $61.5 million, or 11.8% from fiscal year 2010, and included the restructuring charges discussed above, which were greater in fiscal year 2011 than in fiscal year 2010. The decline in compensation primarily reflected reductions in staffing. On average, headcount was down 11.8% in fiscal year 2011 compared to fiscal year 2010. Fringe benefit costs in fiscal year 2011 were down $26.1 million from fiscal year 2010 primarily reflecting lower retirement costs and, to a lesser extent, lower medical costs.

Newsprint, supplement and printing expense in fiscal year 2011 increased 6.8% from fiscal year 2010 primarily reflecting higher newsprint prices, which were partially offset by lower newsprint usage. Newsprint expense in fiscal year 2011 was up 5.1% while supplement and printing expense increased 12.1% from fiscal year 2010 reflecting, in part, the costs of outsourced printing and increased sales of direct marketing products. Depreciation and amortization expenses in fiscal year 2011 declined $11.9 million compared to fiscal year 2010 and included the impact of lower accelerated depreciation on equipment related to outsourcing in 2011.

Depreciation expense was also lower because of lower capital expenditures in recent years and by other assets that became fully depreciated during the year. Other operating costs were down $3.9 million, or 1.1%, in fiscal year 2011 compared to fiscal year 2010.

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Other operating expenses in 2011 included a total of $15.4 million of impairment charges and moving costs included in restructuring and impairment charges discussed above. The reduction in other operating expenses in fiscal year 2011 primarily reflects our Company-wide efforts to reduce costs, including, among others, reductions in energy-related expenses and professional services.

Non-Operating Items

Interest:

Interest expense in fiscal year 2011 decreased $12.2 million, or 6.9%, from fiscal year 2010. Interest expense on tax reserves declined $7.6 million in fiscal year 2011 compared to fiscal year 2010 due to the expiration of certain statutes of limitation and the settlement of tax audits that resulted in the reversal of accrued interest. In addition, interest on debt was lower primarily due to lower debt balances in fiscal year 2011. In fiscal year 2010, interest expense included a $2.1 million write-off of deferred debt financing fees associated with bank term debt repaid during the year that was not associated with amendment of the credit agreement.

Equity Income:

Income from unconsolidated investments was $27.8 million in fiscal year 2011 compared to income of $11.8 million in fiscal year 2010. Our internet-related joint ventures, particularly CareerBuilder and Classified Ventures, reported greater income in fiscal year 2011 reflecting growing digital advertising revenues in their respective businesses.

Gain (Loss) on Extinguishment of Debt:

In fiscal year 2011, we purchased $121.9 million aggregate principal amount of our outstanding debt securities and recorded a loss on debt extinguishment of $1.2 million.

On February 11, 2010, we completed a refinancing of substantially all of our debt maturing in fiscal year 2011 by amending and restating our credit agreement, issuing $875.0 million in principal amount of the 11.50% senior secured notes due in 2017 and consummating a tender offer for an aggregate $171.9 million in principal amount of the 7.125% notes due in 2011 and the 15.75% senior secured notes due in 2014. On December 16, 2010, we agreed to repay all of our outstanding term debt (totaling $41.0 million) under this facility and lenders agreed to amend the Amended and Restated Credit Agreement to eliminate restrictions on the early retirement of our existing public bonds. We recognized $10.7 million in losses in fiscal year 2010 on our debt refinancing and the subsequent amendment to our Amended and Restated Credit Agreement.

Income Taxes:

Our effective income tax rate on income from continuing operations in fiscal year 2011 was 13.4% compared to 14.5% in fiscal year 2010. Our tax provision in fiscal year 2011 included a benefit from a favorable settlement of certain state tax audits in the first quarter of fiscal year 2011 and expiration of statutes later in that year. Further, the effective tax rate percentage was affected by the inclusion in pre-tax income of discrete items such as reduction to interest expense from the closure of statutes of limitations and audit settlements, the extinguishment of debt, certain asset disposals, the masthead impairment, and severance for fiscal year 2011. Excluding the impact of these items, the net tax provision resulted in a tax rate of 44.0% and exceeded the federal statutory rate of 35.0% due primarily to the inclusion of state income taxes.

The effective tax rate in fiscal year 2010 also included favorable tax settlements for certain federal and state tax issues, including expiration of the statute of limitations for open tax years for certain states. Further, the effective tax rate percentage was affected by the inclusion in pre-tax income of discrete items such as the extinguishment of debt, the write-down of an asset previously under contract to be sold, and severance for fiscal year 2010. The effective tax rate on earnings in fiscal year 2010 excluding the impact of

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these items was approximately 41.6%, and exceeded the federal statutory rate of 35.0% due primarily to the inclusion of state income taxes.

Liquidity and Capital Resources

Sources and Uses of Liquidity and Capital Resources:

Our cash and cash equivalents were $113.1 million as of December 30, 2012, compared to $86.0 million at the end of fiscal year 2011. The increased cash balance at the end of fiscal year 2012 reflects the receipt of distributions from our equity investments totaling $35.3 million in the fourth quarter of fiscal year 2012 compared to $30.3 million in the fourth quarter of fiscal year 2011. In addition, we received cash proceeds of approximately $21 million from the issuance of $910.0 million of 9.00% Notes after we repurchased $762.4 million principal amount of our 11.50% Notes pursuant to a cash tender offer and the payment of fees and accrued interest expense. However, in January 2013 we used a significant portion of the cash on hand to redeem the remaining $83.6 million principal amount of the 11.50% Notes. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017. Following the redemptions and purchases of notes in January and February 2013, we had $1.6 billion remaining in outstanding indebtedness.

We expect that most of our cash generated from operations in the foreseeable future will be used to repay debt, fund our capital expenditures and make required contributions to our qualified defined benefit pension plan ("Plan"). We estimate that purchases of property, plant and equipment ("PP&E") in fiscal year 2013 will be approximately $33 million with approximately $12 million of the amount going towards final costs of the new Miami production facility. As discussed above and in Note 4, following the redemptions and purchases of notes in January and February 2013, we had $1.6 billion remaining in outstanding indebtedness, consisting of $910 million aggregate principal amount of secured 9.00% Notes and $669.5 million aggregate principal amount of unsecured publicly-traded notes maturing in 2014, 2017, 2027, and 2029. We expect that we will need to refinance a significant portion of this debt prior to its scheduled maturity. In addition, we expect to use our cash from operations from time to time to opportunistically repurchase our outstanding debt prior to its scheduled maturity and/or reduce our debt through debt exchanges or similar transactions. We believe that our cash from operations is sufficient to satisfy our liquidity needs over the next 12 months, while maintaining adequate cash and cash equivalents.

The following table summarizes our cash flows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Cash flows provided by (used in)
Operating activities:
Continuing operations	$	52,925		$	(30,773	)	$	227,301
Discontinued operations		–			–			(2,106	)
Investing activities		(18,641	)		6,374			17,478
Financing activities		(7,216	)		92,911			(231,322	)
Increase in cash and cash equivalents	$	27,068		$	68,512		$	11,351

Operating Activities:

We generated $52.9 million of cash from continuing operating activities in fiscal year 2012, compared to using $30.8 million in fiscal year 2011 and providing $227.3 million in fiscal year 2010. The increase in cash generated from operations in fiscal year 2012 compared to fiscal year 2011 is primarily due to the

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difference in contributions to our Plan, as discussed below, and a decrease of accrued interest of approximately $31.0 million related to the retirement of notes.

The decrease in cash from continuing operating activities in fiscal year 2011 compared to fiscal year 2010 primarily related to the use of cash for the following operational purposes in 2011 (1) contribution to our Plan (see discussion of pension contributions resulting from the Miami property sale below); (2) payment of interest on the 11.50% Notes, which were issued in February 2010 but had only one semi-annual interest payment in fiscal year 2010; (3) payment of supplemental contributions accrued throughout fiscal year 2010 but payable to our 401(k) plan in fiscal year 2011; (4) payment of fiscal year 2010 employee bonuses in fiscal year 2011 (no similar payments were made in fiscal year 2010); and (5) payment of higher severance costs in 2011 than in fiscal year 2010.

Pension Plan Matters

We made a $40.0 million cash contribution to our Plan in January 2012 to meet our required contributions for fiscal year 2012, while in fiscal year 2011 we made a voluntary cash contribution of $163.0 million using a portion of our $236.0 million in proceeds from the sale of real property in Miami. In fiscal year 2011, in addition to the cash contribution, we made a non-cash contribution of certain of our real property to meet our required funding obligation. The property contributed in fiscal year 2011 was appraised at $49.7 million. In January 2013, we contributed $7.5 million of cash to the Plan to meet our required contributions in fiscal year 2013. We expect this contribution will satisfy all of our required contributions in fiscal year 2013. See Note 7 for further discussion of our contributions.

As of the end of fiscal year 2012, the projected benefit obligations of our Plan exceeded plan assets by $587.9 million compared to $422.5 million at the end of fiscal year 2011. Legislation enacted in the second quarter of 2012 mandated a change in the discount rates used to calculate the projected benefit obligations for purposes of funding pension plans. The new legislation and calculation use historical averages of long-term highly-rated corporate bonds (within ranges as defined in the legislation), which has resulted in the application of a higher discount rate to determine the projected benefit obligations for funding and current long-term interest rates.

In addition, the Pension Relief Act of 2010 ("PRA") provided relief with respect to the funding requirements of the Plan. Under the PRA, we elected an option that allows the required contributions related to our 2009 and 2011 plan years to be paid over 15 years. As a result of these two legislative actions, we estimate that under Internal Revenue Service funding rules the projected benefit obligations of our Plan exceeded plan assets by approximately $153.0 million at the end of calendar 2012. However, even with the relief provided by the two legislative rules discussed above, based on the current funding position of the Plan, we expect future contributions will be required.

While amounts of future contributions are subject to numerous assumptions, including, among others, changes in interest rates, returns on assets in the Plan and future government regulations, we estimate that a total of approximately $25 million will be required to be contributed to the Plan in fiscal year 2014. The timing and amount of payments to the Plan reflect actuarial estimates we believe to be reasonable but are subject to changes in estimates. We believe cash flows from operations will be sufficient to satisfy our contribution requirements.

Miami Facility Relocation Plans

As discussed above in Recent Developments, in conjunction with the new production facility we are building for our Miami newspaper operations and with the operating lease we entered into for a two-story office building adjacent to the new production facility, we incurred construction costs during fiscal year 2012 and expect to incur additional construction costs (as discussed below in Investing Activities). In addition, during fiscal year 2012 and during the first three quarters of fiscal year 2013, we will incur up to a total of approximately $12 million in costs related to moving expenses.

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Investing Activities:

We used $18.6 million of cash in investing activities in fiscal year 2012. We used $34.8 million for the purchase of PP&E, including $17.5 million on the new production facility in Miami. We received $38.6 million in distributions from our equity investments; $19.1 million exceeded the cumulative earnings from an investee and was considered a return of investment and therefore treated as an investing activity, while the remaining return on investment of $19.5 million is shown as an operating activity.

We generated $6.4 million of cash from investing activities in fiscal year 2011, which primarily consisted of receipts of $14.3 million in distributions from our interest in equity investments and $9.2 million from the sales of PP&E. These inflows were partially offset by $17.0 million in purchases of PP&E.

We generated $17.5 million of cash from investing activities in fiscal year 2010, which includes the receipts of $24.3 million in distributions from our interest in Classified Ventures and a $6.0 million deposit on land in Miami which was previously under contract to be sold (also see Note 3). We also received $3.0 million in proceeds from the sales of PP&E, which were offset by the purchases of PP&E.

Financing Activities:

We used $7.2 million in financing activities in fiscal year 2012. During fiscal year 2012, we received $910 million for the issuance of the 9.00% Notes (see Debt and Related Matters below), we repurchased $70.5 million aggregate principal of outstanding notes for $59.2 million in cash in privately negotiated transactions and in conjunction with the tender offer of our 11.50% Notes, we repurchased $762.4 million aggregate principal amount of the 11.50% Notes for $862.3 million in cash. In addition, we received the final payment of $6.0 million from the sale of the Miami land and building.

We generated $92.9 million from financing activities in fiscal year 2011. We received $230.0 million in proceeds from the sale of our building and land in Miami and incurred $2.6 million in costs related to the transaction. The amount is recorded as a financing obligation as discussed in Note 3. We repurchased $121.9 million of aggregate principal amount of notes for $116.9 million in cash in privately negotiated transactions in fiscal year 2011 and retired at maturity $18.1 million of 2011 notes on June 1, 2011.

We used $231.3 million for financing activities in fiscal year 2010. We received net proceeds of $864.7 million from the issuance of $875.0 million aggregate principal amount of the 11.50% senior secured notes. We used proceeds from the refinancing and cash from operations and investments to repay $330.7 million in revolving bank debt and $546.8 million in term bank debt under our credit facility. In addition, we paid $187.3 million to retire $171.9 million in aggregate principal of notes that would have matured in fiscal year 2011 and 2014. We paid $32.0 million in costs associated with the various refinancing transactions, most of which were recorded as deferred financing charges and the rest recorded as a loss on debt extinguishment.

Debt and Related Matters

As of December 30, 2012, we had approximately $1.7 billion in total principal indebtedness outstanding, including a current portion of long-term debt of $83.6 million in 11.50% Notes, resulting from our commitment to redeem the 11.50% Notes by January 17, 2013. In addition, we had the following aggregate principal amounts of debt outstanding: $910.0 million of 9.00% Notes, $66.4 million of 4.625% notes due in 2014, $286.1 million of 5.750% notes due in 2017, $89.2 million of 7.150% debentures due in 2027 and $276.2 million of 6.875% debentures due in 2029.

Credit Agreement

In connection with the issuance of the 9.00% Notes, discussed below, we entered into the Credit Agreement, dated as of December 18, 2012. The Credit Agreement amended and restated in its entirety the Second Amended and Restated Credit Agreement dated June 22, 2012. The Credit Agreement provides for $75.0 million in revolving credit commitments, with a $50.0 million letter of credit subfacility,

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and a maturity date of December 18, 2017. As of December 30, 2012, there were no draws and $36.1 million face amount of letters of credit outstanding under the Credit Agreement. As of December 30, 2012, $38.9 million, net of the letters of credit, was available under our revolving facility under the Credit Agreement. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017.

Loans under the Credit Agreement bear interest, at our option, at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio.

The financial covenants under the Credit Agreement require us to comply with a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio, each measured quarterly. We are required to maintain a consolidated total leverage ratio of not more than 6.25 to 1.00, which ratio will decrease at the end of our first fiscal quarter of 2013 to 6.00 to 1.00 for the remainder of the term of the Credit Agreement. We are also required to maintain a consolidated interest coverage ratio of at least 1.50 to 1.00.

The Credit Agreement also prohibits the payment of a dividend if a payment would not be permitted under the indenture for the senior secured notes (discussed below). Dividends under the indenture for the senior secured notes are allowed if the consolidated leverage ratio (as defined in the indenture) is less than 5.25 to 1.00 and the priority leverage ratio (as defined in the indenture) is less than 2.75 to 1.00.

As of December 30, 2012, our consolidated leverage ratio (as defined in the Credit Agreement) was 4.72 to 1.00 and consolidated interest coverage ratio (as defined in the Credit Agreement) was 2.44 to 1.00. As of December 30, 2012, we were in compliance with all financial debt covenants. Due to the significance of our outstanding debt, remaining in compliance with debt covenants is critical to our operations. If revenue declines continue beyond those currently anticipated, we expect to continue to restructure operations and reduce debt to maintain compliance with our covenants.

On June 22, 2012, we entered into a Second Amended and Restated Credit Agreement ("Previous Agreement") to amend and replace our Amended and Restated Credit Agreement from January 26, 2010. The Previous Agreement terms, among other things, (i) reduced the size of the revolving loan facility from $125.0 million to $36.1 million to cover our issuances of standby letters of credit and (ii) extended the maturity of the Previous Agreement to January 31, 2015. The new committed amount was only available for the issuance of standby letters of credit.

Senior Secured Notes and Indenture

On December 18, 2012, we issued $910 million aggregate principal amount of 9.00% Notes. We received approximately $889 million net of financing costs in the offering and used the net proceeds, as well as cash on hand, to repurchase all of our outstanding $846 million in aggregate principal amount of the 11.50% Notes, in two separate transactions. On December 18, 2012, we repurchased $762.4 million of the 11.50% Notes pursuant to a cash tender offer at a repurchase price of $1,103.40 for each $1,000 principal amount of 11.50% Notes tendered plus accrued and unpaid interest. In connection with the tender offer of the 11.50% Notes, we recorded a loss on the extinguishment of debt of approximately $94.5 million. By January 17, 2013, we redeemed the remaining $83.6 million aggregate principal amount of 11.50% Notes not tendered in the tender offer and will record a loss on the extinguishment of debt of approximately $9.6 million during the quarter ended March 24, 2013.

The indenture for the 9.00% Notes includes a number of restrictive covenants that are applicable to us and our restricted subsidiaries. The covenants are subject to a number of important exceptions and

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qualifications set forth in the indenture for the 9.00% Notes. These covenants include, among other things, restrictions on our ability to incur additional debt; make investments and other restricted payments; pay dividends on capital stock or redeem or repurchase capital stock or certain of our outstanding notes or debentures prior to stated maturity; sell assets or enter into sale/leaseback transactions; create specified liens; create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions; engage in certain transactions with affiliates; and consolidate or merge with or into other companies or sell all or substantially all of the Company's and our subsidiaries' assets, taken as a whole.

Substantially all of our subsidiaries guarantee the obligations under the 9.00% Notes and the Credit Agreement, (collectively, "senior secured debt"). We own 100% of each of the guarantor subsidiaries. Following the sale of land in Miami (see Note 3) on May 27, 2011, we have no significant independent assets or operations separate from the subsidiaries that guarantee our senior secured debt. The guarantees provided by the guarantor subsidiaries are full and unconditional and joint and several, and any of our subsidiaries, other than the subsidiary guarantors, are minor.

In addition, we have granted a security interest to the banks that are a party to the Credit Agreement and the trustee under the indenture governing the 9.00% Notes that include, but are not limited to, intangible assets, inventory, receivables and certain minority investments as collateral for the debt. The security interest does not include any PP&E; leasehold interests and improvements with respect to such PP&E, which would be reflected on our consolidated balance sheet; and shares of stock and indebtedness of our subsidiaries.

Loss on Extinguishment of Debt

During fiscal year 2012, we recorded a net loss on the extinguishment of debt of $88.4 million compared to $1.2 million in fiscal year 2011.

Off-Balance-Sheet Arrangements

As of December 30, 2012, we did not have any significant off-balance-sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

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Contractual Obligations:

As of the end of fiscal year 2012, our contractual obligations were as follows:

	Payments Due By Period
(in thousands)	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long-term debt principal (a)		1,711,589		83,595		66,438		286,138		1,275,418
Interest on long-term debt		1,327,622		131,484		253,142		250,069		692,927
Pension obligations (b)		714,341		15,830		48,188		88,483		561,840
Post-retirement obligations (b)		15,932		1,859		3,213		2,767		8,093
Workers' compensation obligations (c)		19,769		4,827		5,855		3,370		5,717
Other long-term obligations (d)		20,242		3,944		8,270		3,729		4,299
Financing obligations (e)		46,343		4,121		8,243		8,243		25,736
Other obligations:
Purchase obligations (f)		139,214		39,250		33,885		29,319		36,760
Operating leases (g)		80,415		12,276		19,689		14,381		34,069
Total (h)	$	4,075,467	$	297,186	$	446,923	$	686,499	$	2,644,859

^(a)

Includes $83.6 million of our 11.50% Notes with a maturity date due in 2017. However, we redeemed these 11.50% Notes in January 2013 (see Note 5) and therefore have included them in the "Less than 1 Year" column.



^(b)

Retirement obligations do not take into account the tax-deductibility of the payments. The timing of the payments of these obligations reflects actuarial estimates we believe to be reasonable.



^(c)

Future expected workers' compensation payments are based on undiscounted ultimate losses and are shown net of estimated recoveries.



^(d)

Primarily deferred compensation, future lease obligations and indemnification obligation reserves related to disposed newspapers.



^(e)

Financing obligations include the obligation related to the contributed property, and not the sale of property in Miami, as no cash payment will be made related to this amount. See further discussion in Notes 3 and 7.



^(f)

Primarily printing outsource agreements and capital expenditures for property, plant and equipment.



^(g)

Excludes payments on leases included in financing obligation above.



^(h)

The table excludes unrecognized tax benefits, and related penalties and interest, totaling $12.1 million because a reasonably reliable estimate of the timing of future payments, if any, cannot be determined. The table also excludes purchase commitments associated with the purchase of 81,648 metric tons of newsprint, as the price is not determinable because it is based on the market price at the time of purchase.

39

Critical Accounting Policies

The accompanying MD&A is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments routinely require adjustment. The most significant areas involving estimates and assumptions are amortization and/or impairment of goodwill and other intangibles, pension and post-retirement expenses, insurance reserves, and our accounting for income taxes. We believe the following critical accounting policies, in particular, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Goodwill and Intangible Impairment:

We test goodwill for impairment annually (at year-end) or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such indicators of impairment may include, but are not limited to, changes in business climate such as an economic downturn, significant operating cash flow declines related to our newspapers or a major change in the assessment of future operations of our newspapers, or a sustained decline in our stock price below the per-share book value of stockholders' equity. We conducted our annual impairment testing as of December 30, 2012, December 25, 2011, and December 26, 2010.

Summary of Approach and Analysis of Impairments

The required two-step approach to test for impairment requires the use of accounting judgments and estimates of future operating results. Because accounting standards require that impairment testing be done at a reporting unit level, we perform this testing on our operating segments (which are considered reporting units). An impairment charge generally is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. We estimated fair value of the reporting units using a combination of a discounted cash flow ("DCF") model and market based approaches. The assumptions used in estimating fair value are based upon a combination of historical results and trends, new industry developments, future cash flow projections, and relevant comparable company valuation multiples for the market based approach. Such assumptions are subject to change as a result of changing economic and competitive conditions. The market based approach used in the valuation effort includes guideline public company method. The various valuation methods are weighted to reach a fair value conclusion for our operating reporting units. Assumptions used in the DCF model including the following:

•

The projected cash flows are based on estimates of revenues, newsprint expenses and other cash costs. While these estimates are always inherently subject to risks and uncertainties, the ability to project future operations (and in particular advertising revenues) is difficult.

•

The discount rate is determined using our weighted average cost of capital, adjusted for risks perceived by investors which are implicit in our publicly-traded stock price.

•

The amount of a goodwill impairment charge requires management to allocate the fair value of the reporting units to all of the assets and liabilities of that unit (including any unrecognized intangible assets), using our best judgments and estimates in valuing the reporting unit, to determine the implied fair value of goodwill.

•

The resulting total fair value of the reporting units is then reconciled to our market capitalization, giving effect to an appropriate control premium. A goodwill impairment charge

40

is recorded to the extent that the implied goodwill values are below the book value of goodwill for the reporting units.

Fair value calculations by their nature require us to make assumptions about future operating results that can be difficult to predict with certainty. They are influenced by our views of future advertising trends in the industry and in the markets in which we operate newspapers. The variability in these trends and the difficulty in projecting advertising growth, in particular, in each newspaper market are impacted by the declines in advertising in recent years. We implemented restructuring plans which have mitigated the impact of these declines on our cash flows and helped stabilize operations. Based on our analysis, at December 30, 2012, the fair values of our reporting units that primarily consists of operations in California, the Northwest and Texas, exceeded the carrying value by approximately 34%, and the operating segment that primarily consists of operations in the Southeast, the Gulf Coast and the Midwest exceeded the carrying value by approximately 22%.

Masthead Considerations:

Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually (at year-end), or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief from royalty approach that utilizes a DCF to determine the fair value of each newspaper masthead. Our judgments and estimates of future operating results in determining the reporting unit fair values are consistently applied to each newspaper in determining the fair value of each newspaper masthead.

We performed our annual impairment tests on newspaper mastheads as of December 30, 2012, December 25, 2011, and December 26, 2010. As a result of our testing, we recorded a charge of $2.8 million for masthead impairments in fiscal year 2011. No impairment charges to the value of mastheads were recorded in 2012 or 2010.

Other Intangible Assets Considerations:

Long-lived assets such as intangible assets are subject to amortization (primarily advertiser and subscriber lists) and are tested for recoverability whenever events or change in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. No impairment loss was recognized on intangible assets subject to amortization in fiscal years 2012, 2011 or 2010.

Pension and Post-Retirement Benefits:

We have significant pension and post-retirement benefit costs and credits that are developed from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and expected returns on plan assets. We are required to consider current market conditions, including changes in interest rates, in establishing these assumptions. Changes in the related pension and post-retirement benefit costs or credits may occur in the future because of changes resulting from fluctuations in our employee headcount and/or changes in the various assumptions.

Current standards of accounting for defined benefit pension plans and post-retirement benefit plans requires recognition of (1) the funded status of a pension plan (difference between the plan assets at fair value and the projected benefit obligation) and (2) the funded status of a post-retirement plan (difference between the plan assets at fair value and the accumulated benefit obligation), as an asset or liability on the balance sheet. At December 30, 2012, net retirement obligations in excess of the retirement plans' assets were $714.3 million. This amount included $126.4 million for non-qualified plans that do not have assets and $587.9 for our qualified plan. At December 25, 2011, net retirement obligations in excess of retirement

41

plans' assets were $530.6 million. This amount included $108.1 million for non-qualified plans that do not have assets and $422.5 million for our qualified plan.

We used discount rates of 3.31% to 5.31% and an assumed long-term return on assets of 8.25% to calculate our retirement plan expenses in 2012.

For fiscal year 2012, a change in the weighted average rates would have had the following impact on our net benefit cost:

•

A decrease of 50 basis points in the long-term rate of return would have increased our net benefit cost by approximately $6.5 million;

•

A decrease of 25 basis points in the discount rate would have increased our net benefit cost by approximately $0.4 million.

For fiscal year 2013, we expect to reduce our long-term return on assets from 8.25% to 8.00%.

Income Taxes:

Our current and deferred income tax provisions are calculated based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. These estimates are reviewed and adjusted, if needed, throughout the year. Adjustments between our estimates and the actual results of filed returns are recorded when identified.

The amount of income taxes paid is subject to periodic audits by federal and state taxing authorities, which may result in proposed assessments. These audits may challenge certain aspects of our tax positions such as the timing and amount of deductions and allocation of taxable income to the various tax jurisdictions. Income tax contingencies require significant judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the effective tax rate and cash flows in future periods.

Insurance:

We are insured for workers' compensation using both self-insurance and large deductible programs. We rely on claims experience in determining an adequate provision for insurance claims.

We used a discount rate of 1.1% to calculate workers' compensation reserves as of December 30, 2012. A decrease of 25 basis points in the discount rate would have had an immaterial effect on total workers' compensation reserves. A 10% increase in the claims would have increased the total workers' compensation reserves, net of estimated recoveries, by approximately $2.0 million.

Recent Accounting Pronouncements

For information regarding the impact of certain recent accounting pronouncements, see Note 1 "Summary of Significant Accounting Policies".

42

ITEM 7A.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term "market risk" refers to the risk of loss arising from adverse changes in interest rates and credit risk. The disclosure is not meant to be a precise indicator of expected future losses, but rather an indicator of reasonably possible losses. Our exposure to market risk primarily relates to discount rates used in our pension liabilities.

Interest Rate Risks in our Debt Obligations

Substantially all of our outstanding debt is composed of fixed-rate bonds and, therefore, is not subject to interest rate fluctuations.

Discount Rate Risks in our Pension and Post-Retirement Obligations

The discount rate used to measure our obligations under our qualified defined benefit pension plan is generally based upon long-term interest rates on highly-rated corporate bonds. Hence, changes in long-term interest rates may have a significant impact on the funding position of our qualified defined pension plan. We estimate that a 1.0% increase in our discount rate could decrease our pension obligations by approximately $225.0 million. Based on current interest rates, the amount of contributions due to the plan and the timing of the payments of these obligations are included in the table of contractual obligations above and reflect actuarial estimates we believe to be reasonable.

43

ITEM 8.               FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm	45
Consolidated Statements of Operations	46
Consolidated Statements of Comprehensive Income (Loss)	47
Consolidated Balance Sheets	48
Consolidated Statements of Cash Flows	49
Consolidated Statements of Stockholders' Equity	50
Notes to Consolidated Financial Statements	51

44

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of The McClatchy Company:

We have audited the accompanying consolidated balance sheets of The McClatchy Company and subsidiaries (the "Company") as of December 30, 2012 and December 25, 2011 and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended December 30, 2012. We also have audited the Company's internal control over financial reporting as of December 30, 2012 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management Report on Internal Control Over Financial Reporting." Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company and subsidiaries as of December 30, 2012 and December 25, 2011 and the results of their operations and their cash flows for each of the three years in the period ended December 30, 2012, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 30, 2012, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/S/ DELOITTE & TOUCHE LLP

Sacramento, California
March 5, 2013

45

THE MCCLATCHY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)

	Years Ended
	December 30, 2012 (53 weeks)			December 25, 2011 (52 weeks)			December 26, 2010 (52 weeks)
REVENUES – NET:
Advertising	$	914,738		$	956,305		$	1,049,964
Circulation		263,286			262,335			272,776
Other		52,700			51,000			52,492
		1,230,724			1,269,640			1,375,232
OPERATING EXPENSES:
Compensation		443,401			457,707			519,179
Newsprint, supplements and printing expenses		140,932			145,874			136,642
Depreciation and amortization		125,275			121,528			133,404
Other operating expenses		334,980			343,216			347,124
		1,044,588			1,068,325			1,136,349
OPERATING INCOME		186,136			201,315			238,883
NON-OPERATING (EXPENSE) INCOME:
Interest expense		(151,334	)		(165,434	)		(177,641	)
Interest income		88			97			550
Equity income in unconsolidated companies, net		31,935			27,762			11,752
Loss on extinguishment of debt, net		(88,430	)		(1,203	)		(10,661	)
Write-down of investments and land		–			–			(24,447	)
Other – net		79			248			265
		(207,662	)		(138,530	)		(200,182	)
Income (loss) from continuing operations before income tax provision (benefit)		(21,526	)		62,785			38,701
Income tax provision (benefit)		(21,382	)		8,396			5,601
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		(144	)		54,389			33,100
Income from discontinued operations, net of tax		–			–			3,083
NET INCOME (LOSS)	$	(144	)	$	54,389		$	36,183
Basic earnings per common share:
Income (loss) from continuing operations	$	–		$	0.64		$	0.39
Discontinued operations, net of tax		–			–			0.04
Net income (loss) per basic common share	$	–		$	0.64		$	0.43
Diluted earnings per common share:
Income (loss) from continuing operations	$	–		$	0.63		$	0.39
Discontinued operations, net of tax		–			–			0.04
Net income (loss) per diluted common share	$	–		$	0.63		$	0.43
Weighted average number of common shares used to calculate basic and diluted earnings per share:
Basic		85,744			85,211			84,760
Diluted		85,744			86,044			85,539

See notes to consolidated financial statements.

46

THE MCCLATCHY COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)

	Years Ended
	December 30, 2012 (53 weeks)			December 25, 2011 (52 weeks)			December 26, 2010 (52 weeks)
NET INCOME (LOSS)	$	(144	)	$	54,389		$	36,183
OTHER COMPREHENSIVE INCOME (LOSS):
Pension and post retirement plans:
Unrealized net gain (loss) and other components of benefit plans, net of taxes of $88,622, $66,725 and $(4,940)		(132,871	)		(100,087	)		7,410
Investment in unconsolidated companies:
Other comprehensive income (loss), net of taxes of $528, $336 and $(35)		(791	)		(506	)		53
Other comprehensive income (loss)		(133,662	)		(100,593	)		7,463
Comprehensive income (loss)	$	(133,806	)	$	(46,204	)	$	43,646

See notes to consolidated financial statements.

47

THE MCCLATCHY COMPANY
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share amounts)

	December 30, 2012			December 25, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	113,088		$	86,020
Trade receivables (net of allowances of $5,920 in 2012 and $7,341 in 2011)		177,225			179,046
Other receivables		9,555			13,990
Newsprint, ink and other inventories		30,145			28,842
Deferred income taxes		14,406			16,605
Other current assets		31,558			20,473
		375,977			344,976
Property, plant and equipment, net		733,729			760,977
Intangible assets:
Identifiable intangibles – net		528,002			586,160
Goodwill		1,012,011			1,012,011
		1,540,013			1,598,171
Investments and other assets:
Investments in unconsolidated companies		299,603			304,893
Other assets		55,809			31,042
		355,412			335,935
	$	3,005,131		$	3,040,059
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	83,016		$	–
Accounts payable		48,588			44,727
Accrued pension liabilities		15,830			37,462
Accrued compensation		39,124			42,928
Income taxes payable		2,327			13,063
Unearned revenue		69,492			73,352
Accrued interest		18,675			49,686
Other accrued liabilities		14,273			15,676
		291,325			276,894
Non-current liabilities:
Long-term debt		1,587,330			1,577,476
Deferred income taxes		39,719			139,296
Pension and postretirement obligations		712,584			516,668
Financing obligations		279,325			272,795
Other long-term obligations		52,347			81,743
		2,671,305			2,587,978
Commitments and contingencies
Stockholders' equity:
Common stock $.01 par value:
Class A (authorized 200,000,000 shares, issued 61,098,820 in 2012 and 60,865,566 in 2011)		611			609
Class B (authorized 60,000,000 shares, issued 24,800,962 in 2012 and 2011)		248			248
Additional paid-in capital		2,219,163			2,219,161
Accumulated deficit		(1,696,176	)		(1,696,032	)
Treasury stock at cost, 6,034 shares in 2012 and 260,170 shares in 2011		(29	)		(1,145	)
Accumulated other comprehensive loss		(481,316	)		(347,654	)
		42,501			175,187
	$	3,005,131		$	3,040,059

See notes to consolidated financial statements.

48

THE MCCLATCHY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

	Years Ended
	December 30, 2012			December 25, 2011			December 26, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(144	)	$	54,389		$	36,183
Less income from discontinued operations, net of tax		–			–			(3,083	)
		(144	)		54,389			33,100
Reconciliation to net cash from continuing operations:
Depreciation and amortization		125,275			121,528			133,404
(Gain) loss on disposal of equipment (including impairments)		(988	)		9,397			(254	)
Contribution to qualified defined benefit pension plan		(40,000	)		(163,000	)		(8,235	)
Retirement benefit expense		1,384			816			5,568
Stock-based compensation expense		3,523			5,174			4,626
Deferred income taxes		(9,548	)		(18,964	)		(26,023	)
Equity income in unconsolidated companies		(31,935	)		(27,762	)		(11,752	)
Distributions of income from equity investments		19,550			17,375			–
Loss on extinguishment of debt		88,430			1,203			10,661
Write-off of deferred financing cost		–			–			2,148
Write-down of investments and land		–			–			24,447
Other		(133	)		5,717			2,896
Changes in certain assets and liabilities:
Trade receivables		1,821			4,695			22,099
Inventories		(1,303	)		4,480			3,052
Other assets		(4,406	)		2,694			(11,299	)
Accounts payable		(1,799	)		(4,256	)		523
Accrued compensation		4,564			(24,583	)		8,264
Income taxes		(58,229	)		(16,443	)		(6,568	)
Other liabilities		(43,137	)		(3,233	)		40,644
Net cash provided by (used in) continuing operations		52,925			(30,773	)		227,301
Net cash used in discontinued operations		–			–			(2,106	)
Net cash provided by (used in) operating activities		52,925			(30,773	)		225,195
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(34,788	)		(16,984	)		(15,628	)
Proceeds from sale of property, plant and equipment and other		1,925			9,201			2,952
Proceeds from sale of investments		–			2,893			–
Proceeds from deposit for land		–			–			6,000
Purchase of certificate of deposits		(2,222	)		–			–
Distributions from equity investments		19,050			14,250			24,274
Equity investments and other-net		(2,606	)		(2,986	)		(120	)
Net cash provided by (used in) investing activities		(18,641	)		6,374			17,478
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes		910,000			–			864,710
Repayment of term bank debt		–			–			(546,800	)
Repayment of revolving bank debt, net		–			–			(330,700	)
Repurchase of public notes and related expenses		(900,481	)		(134,555	)		(155,410	)
Purchase of privately held 15.75% notes due 2014		–			(447	)		(31,929	)
Payment of financing costs		(20,990	)		(2,552	)		(31,986	)
Proceeds from financing obligation related to Miami transaction		6,000			230,000			–
Other		(1,745	)		465			793
Net cash provided by (used in) financing activities		(7,216	)		92,911			(231,322	)
Increase in cash and cash equivalents		27,068			68,512			11,351
Cash and cash equivalents at beginning of period		86,020			17,508			6,157
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	113,088		$	86,020		$	17,508

See notes to consolidated financial statements.

49

THE MCCLATCHY COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Amounts in thousands, except share and per share amounts)

	Common Stock
												Accumulated Other Comprehensive Income (Loss)
	Class A $.01 par value			Class B $.01 par value		Additional Paid-In Capital			Accumulated Deficit						Treasury Stock			Total
Balance at December 27, 2009	$	597		$	248	$	2,207,122		$	(1,786,604	)	$	(254,524	)	$	(153	)	$	166,686
Net income		–			–		–			36,183			–			–			36,183
Other comprehensive income		–			–		–			–			7,463			–			7,463
Issuance of 573,347 Class A shares under stock plans		6			–		1,161			–			–			–			1,167
Stock compensation expense		–			–		4,626			–			–			–			4,626
Purchase of 78,143 shares of treasury stock		–			–		–			–			–			(379	)		(379	)
Tax impact from stock plans		–			–		6			–			–			–			6
Balance at December 26, 2010		603			248		2,212,915			(1,750,421	)		(247,061	)		(532	)		215,752
Net income		–			–		–			54,389			–			–			54,389
Other comprehensive loss		–			–		–			–			(100,593	)		–			(100,593	)
Issuance of 587,118 Class A shares under stock plans		6			–		973			–			–			–			979
Stock compensation expense		–			–		5,174			–			–			–			5,174
Purchase of 144,125 shares of treasury stock		–			–		–			–			–			(613	)		(613	)
Tax impact from stock plans		–			–		99			–			–			–			99
Balance at December 25, 2011		609			248		2,219,161			(1,696,032	)		(347,654	)		(1,145	)		175,187
Net loss		–			–		–			(144	)		–			–			(144	)
Other comprehensive loss		–			–		–			–			(133,662	)		–			(133,662	)
Issuance of 942,250 Class A shares under stock plans		9			–		38			–			–			–			47
Stock compensation expense		–			–		3,523			–			–			–			3,523
Purchase of 454,860 shares of treasury stock		–			–		–			–			–			(1,171	)		(1,171	)
Retirement of 708,996 shares of treasury stock		(7	)		–		(2,280	)		–			–			2,287			–
Tax impact from stock plans		–			–		(1,279	)		–			–			–			(1,279	)
Balance at December 30, 2012	$	611		$	248	$	2,219,163		$	(1,696,176	)	$	(481,316	)	$	(29	)	$	42,501

See notes to consolidated financial statements.

50

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES

The McClatchy Company (the "Company," "we," "us" or "our") is a leading news, advertising and information provider, offering a wide array of print and digital products in each of the markets it serves. As the third largest newspaper company in the United States based on daily circulation, our operations include 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our largest newspapers include the Fort Worth Star-Telegram, The Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer.

We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder, LLC, which operates the nation's largest online job website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites such as the auto website Cars.com and the rental website Apartments.com; 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com; and 11.4% of Wanderful Media (formerly ShopCo, LLC), owner of Find n Save®, a digital shopping portal that provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising.

Our fiscal year ends on the last Sunday in December. Due to our fiscal calendar, the year ended on December 30, 2012 ("fiscal year 2012") encompassed a 53-week period. The year ended December 25, 2011 ("fiscal year 2011") and the year ended December 26, 2010 ("fiscal year 2010") both consist of 52-week periods.

We are listed on the New York Stock Exchange under the symbol MNI.

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Discontinued operations

We divested of 13 newspapers from 2006 through 2007. The sales contracts for several of the disposed newspapers include indemnification obligations. Expenses and credits related to disposed newspaper operations have been recorded as discontinued operations (see Note 8). There were no discontinued operations in fiscal years 2012 or 2011.

Revenue recognition

We recognize revenues from advertising placed in a newspaper, a website and/or a mobile service over the advertising contract period or as services are delivered, as appropriate, and recognize circulation revenues as newspapers are delivered over the applicable subscription term. Circulation revenues are recorded net of direct delivery costs.

We enter into certain revenue transactions, primarily related to advertising contracts and circulation subscriptions that are considered multiple element arrangements (arrangements with more than one deliverable). As such we must: (1) determine whether and when each element has been delivered; (2) determine fair value of each element using the selling price hierarchy of vendor-specific objective evidence of fair value, third party evidence or best estimated selling price, as applicable and (3) allocate the total price among the various elements based on the relative selling price method.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Other revenues are recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentives, including special pricing agreements, promotions and other volume-based incentives and net of sales tax collected from the customer. Revisions to these estimates are charged to revenues in the period in which the facts that give rise to the revision become known.

Concentrations of credit risks

Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 30, 2012, we had no cash balances at financial institutions in excess of federal insurance limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable.

Allowance for doubtful accounts

We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. Generally, we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable. However, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided.

We provide an allowance for doubtful accounts as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of year	$	7,341		$	7,836		$	10,298
Charged to costs and expenses		6,089			8,309			7,479
Amounts written off		(7,510	)		(8,804	)		(9,941	)
Balance at end of year	$	5,920		$	7,341		$	7,836

Newsprint, ink and other inventories

Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first-in, first-out method) or current market value.

Property, plant and equipment

Property, plant and equipment ("PP&E") are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in fiscal year 2012, 2011 or 2010. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, plant and equipment consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011			Estimated Useful Lives
Land	$	311,959		$	308,489
Building and improvements		364,951			362,091			5-60 years
Equipment		775,397			784,592			2-25 years	(1)
Construction in process		24,014			4,463
		1,476,321			1,459,635
Less accumulated depreciation		(742,592	)		(698,658	)
Property, plant and equipment, net	$	733,729		$	760,977

⁽¹⁾

Presses are 9-25 years and other equipment is 2-15 years

We record depreciation using the straight-line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $67.1 million, $63.2 million and $74.8 million in fiscal years 2012, 2011 and 2010, respectively.

Investments in unconsolidated companies

We use the equity method of accounting for our investments in, and earnings or losses of, companies that we do not control but over which we do exert significant influence. We consider whether the fair values of any of our equity method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If we consider any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 2 for discussion of investments in unconsolidated companies.

Segment reporting

Our primary business is the publication of newspapers and related digital and direct marketing products. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Each operating segment consists primarily of a group of newspapers reporting to segment managers. One operating segment consists primarily of our newspaper operations in California, the Northwest and Texas, while the other operating segment consists primarily of newspaper operations in the Southeast, the Gulf Coast and the Midwest.

Goodwill and intangible impairment

We test for impairment of goodwill annually, at year-end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required two-step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered reporting units. An impairment loss generally is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate and private and public market trading multiples for newspaper assets for the market based approach. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. See Note 4 for additional discussion.

Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year-end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief from royalty approach which utilizes a discounted cash flow model, as discussed above, to determine the fair value of each newspaper masthead. See Note 4 for additional discussion.

Long-lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We have had no impairment of long-lived assets during fiscal years 2012, 2011 or 2010. See Note 4 for additional discussion.

Stock-based compensation

All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their fair values. At December 30, 2012, we had five stock-based compensation plans. See an expanded discussion of our stock plans in Note 10.

Total stock-based compensation expense consisted of the following:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Stock-based compensation expense	$	3,523	$	5,174	$	4,626

Income taxes

We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

Current accounting standards in the United States prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise's tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value of financial instruments

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1	–	Unadjusted quoted prices available in active markets for identical investments as of the reporting date.
Level 2	–	Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies.
Level 3	–	Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Cash and cash equivalents, accounts receivable, certificate of deposits (in other assets) and accounts payable.    The carrying amount of these items approximates fair value.

Long-term debt.    The fair value of long-term debt is determined using quoted market prices and other inputs that were derived from available market information including the current market activity of our publicly-traded notes and bank debt, trends in investor demand and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual. At December 30, 2012, the estimated fair value and carrying value of long-term debt was $1.6 billion and $1.7 billion, respectively.

Accumulated Comprehensive income (loss)

We record changes in our net assets from non-owner sources in our Consolidated Statements of Stockholders' Equity. Such changes relate primarily to valuing our pension liabilities, net of tax effects.

Our accumulated other comprehensive loss, net of tax, consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011
Minimum pension and post-retirement liability	$	(473,448	)	$	(340,577	)
Other comprehensive loss related to equity investments		(7,868	)		(7,077	)
	$	(481,316	)	$	(347,654	)

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings per share (EPS)

Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock options, restricted stock units and restricted stock and are computed using the treasury stock method. The weighted average anti-dilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation consisted of the following:

	Years Ended
(shares in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Anti-dilutive stock options		6,814		5,772		4,283

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012. We will adopt this standards update and revise our disclosure, as required, beginning with the first quarter of fiscal year 2013.

In July 2012, the FASB issued an accounting standards update with new guidance on annual impairment testing of indefinite-lived intangible assets. The standards update allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If based on its qualitative assessment an entity concludes it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. The standards update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this standard will not have an impact on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In the first quarter of fiscal year 2012, we adopted the amended accounting guidance related to goodwill impairment testing. The new guidance provides the option to perform a qualitative assessment by applying a more likely than not scenario to determine whether the fair value of a reporting unit is less than its carrying amount, which may then allow a company to skip the annual two-step quantitative goodwill impairment test depending on the determination. The adoption of this standard did not have a material impact on our consolidated financial results or disclosures.

In the first quarter of fiscal year 2012, we adopted the single authoritative guidance on a framework on how to measure fair value and on what disclosures to provide about fair value measurements. The standard also clarified existing fair value measurement disclosures and made other amendments to current guidance. The adoption of these amended standards did not have a material impact on our consolidated financial results or disclosures.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

In the first quarter of fiscal year 2012, we adopted the guidance that revised the manner in which entities present comprehensive income in their financial statements. The new guidance removed the presentation options in previous guidance and required entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The new guidance did not change the items that must be reported in other comprehensive income. Accordingly, we have presented net income (loss) and other comprehensive income (loss) in two consecutive statements.

2.    INVESTMENTS IN UNCONSOLIDATED COMPANIES

Our ownership interest and investment in unconsolidated companies consisted of the following:

(in thousands) Company	% Ownership Interest		December 30, 2012		December 25, 2011
CareerBuilder, LLC		15.0	$	210,365	$	218,805
Classified Ventures, LLC		25.6		69,907		66,886
HomeFinder, LLC		33.3		2,573		1,628
Seattle Times Company (C-Corporation)		49.5		–		–
Ponderay (general partnership)		27.0		11,375		11,800
Other		Various		5,383		5,774
			$	299,603	$	304,893

We received dividends and other equity distributions from our investments in unconsolidated companies as follows:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011
CareerBuilder, LLC	$	15,000	$	7,500
Classified Ventures, LLC		18,908		17,375
Other		4,692		6,750
	$	38,600	$	31,625

We purchased some of our newsprint supply from Ponderay Newsprint Company ("Ponderay") during fiscal years 2012, 2011 and 2010.

Our investment in The Seattle Times Company ("STC") is zero as a result of accumulative losses in previous years exceeding our carrying value. No future income or losses from STC will be recorded until our carrying value on our balance sheet is restored through future earnings by STC.

We also incurred expenses related to the purchase of products and services provided by these companies, for the uploading and hosting of online advertising on behalf of our newspapers' advertisers.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

2.    INVESTMENTS IN UNCONSOLIDATED COMPANIES (continued)

The following table summarizes expenses incurred for products provided by unconsolidated companies, which are recorded in operating expenses as follows:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
CareerBuilder, LLC	$	1,197	$	1,230	$	1,272
Classified Ventures, LLC		14,390		12,552		11,073
Ponderay (general partnership)		23,813		20,414		23,048

As of December 30, 2012, and December 25, 2011, we had approximately $1.5 million and $3.6 million, respectively, payable collectively to CareerBuilder, LLC and Ponderay.

The tables below present the summarized financial information for our investments in unconsolidated companies on a combined basis:

(in thousands)	December 30, 2012		December 25, 2011
Current assets	$	412,959	$	480,050
Noncurrent assets		584,773		563,286
Current liabilities		304,317		359,891
Noncurrent liabilities		246,543		228,713
Equity		446,872		454,732

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Net revenues	$	1,427,657	$	1,332,394	$	1,195,755
Operating income		169,236		154,257		102,863
Net income		141,387		171,305		95,855

3.    MIAMI LAND AND BUILDING

On January 31, 2011, our contract to sell certain land in Miami terminated pursuant to its terms because the buyer ("developer") did not consummate the transaction by the closing deadline in the contract ("Miami Contract"). Under the terms of the Miami Contract, we are entitled to receive a $7.0 million termination fee and we have filed a claim against the developer to obtain the payment. As of December 30, 2012, we have not received the payment, nor have we recorded any amounts in our financial statements related to this fee pending the resolution of this claim. We previously received approximately $16.5 million in nonrefundable deposits, which we used to repay debt.

On May 27, 2011, we sold 14.0 acres of land in Miami, including a building, which holds the operations of one of our subsidiaries, The Miami Herald Media Company, and adjacent parking lots, for a purchase price of $236.0 million. Approximately 9.4 acres of this Miami land was previously subject to the terminated Miami Contract discussed above. We received cash proceeds of $230.0 million. The additional $6.0 million was held in an escrow account for our expenses incurred in connection with the relocation of

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

3.    MIAMI LAND AND BUILDING (continued)

our Miami operations. In April 2012, we received these funds, which were released for payment of costs associated with the relocation of the Miami operations.

As part of the sale transaction, The Miami Herald Media Company will continue to operate from its existing location through May 2013 rent-free. As a result of our continuing involvement in the property and given the fact that we will not pay rent during this period, the sale was treated as a financing transaction. Accordingly, we will continue to depreciate the carrying value of the building until our operations are moved. In addition, we have recorded a $236.0 million liability (in financing obligations) equal to the sales proceeds received of $230.0 million plus the $6.0 million received from the escrow account for reimbursement of moving expenses. We are imputing rent based on comparable market rates, which will be reflected as interest expense until the operations are moved. As of December 30, 2012, no gain or loss has been recognized on the transaction. We expect to recognize a gain of approximately $10 million at the time the operations are moved since there will no longer be a continuing involvement with the Miami property.

In the first quarter of 2012, we purchased approximately 6.1 acres of land located in Doral, Florida, for approximately $3.1 million. We are building a new production facility on this site for our Miami newspaper operations. In January 2012, we also entered into an operating lease for a two-story office building adjacent to the new production facility. The operating lease on the office building has initial annual base lease payments of $1.8 million beginning in May 2013, when the building is expected to be occupied. Total costs related to relocating the Miami newspaper operations and for constructing the new production facility, including the purchase of the property, construction costs, accelerated depreciation and moving expenses, are estimated to be as follows:

•

Net cash outlays for capital expenditures related to the new facilities are estimated to be $32 million. We began incurring these costs in the first quarter of 2012. During fiscal years 2012 and 2011, we incurred approximately $17.5 million and $0.4 million of net cash outlays, respectively.

•

Cash expenses to relocate the Miami newspapers' operations are expected to be $12 million. During fiscal years 2012 and 2011, our cash expenses were approximately $4.5 million and $0.9 million, respectively.

•

Accelerated depreciation of $13 million is expected to be incurred on existing assets expected to be retired or decommissioned in connection with the relocation. During fiscal year 2012, we accelerated depreciation on retired or decommissioned assets totaling approximately $8.3 million.

The relocation of the Miami newspaper operations is expected to be completed in May 2013 and related costs and expenses are expected to be incurred through the third quarter of fiscal year 2013.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

4.    INTANGIBLE ASSETS AND GOODWILL

Changes in identifiable intangible assets and goodwill consisted of the following:

(in thousands)	December 25, 2011			Impairment Charges/ Adjustments		Amortization Expense			December 30, 2012
Intangible assets subject to amortization	$	834,961		$	–	$	–		$	834,961
Accumulated amortization		(452,388	)		–		(58,158	)		(510,546	)
		382,573			–		(58,158	)		324,415
Mastheads		203,587			–		–			203,587
Goodwill		1,012,011			–		–			1,012,011
Total	$	1,598,171		$	–	$	(58,158	)	$	1,540,013

(in thousands)	December 26, 2010			Impairment Charges/ Adjustments			Amortization Expense			December 25, 2011
Intangible assets subject to amortization	$	834,911		$	50		$	–		$	834,961
Accumulated amortization		(394,073	)		–			(58,315	)		(452,388	)
		440,838			50			(58,315	)		382,573
Mastheads		206,387			(2,800	)		–			203,587
Goodwill (1)		1,014,257			(2,246	)		–			1,012,011
Total	$	1,661,482		$	(4,996	)	$	(58,315	)	$	1,598,171

⁽¹⁾

In 2011 we identified an error in the timing of the release of certain unrecognized tax benefits obtained in the 2006 acquisition of Knight Ridder. We corrected this error by decreasing goodwill by $2.5 million in 2011. We have determined that the impact of this error is not material to the previously issued consolidated financial statements.

Accumulated changes in indefinite lived intangible assets and goodwill as of December 30, 2012, consisted of the following:

	Original Gross Amount		Accumulated Impairment			Carrying Amount
(in thousands)
Mastheads	$	683,000	$	(479,413	)	$	203,587
Goodwill		3,587,007		(2,574,996	)		1,012,011
Total	$	4,270,007	$	(3,054,409	)	$	1,215,598

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

4.    INTANGIBLE ASSETS AND GOODWILL (continued)

Amortization expense was $58.2 million, $58.3 million and $58.7 million in fiscal year 2012, 2011 and 2010, respectively. The estimated amortization expense for the five succeeding fiscal years is as follows:

Year	Amortization Expense (in thousands)
2013	$	57,004
2014		52,524
2015		48,030
2016		47,721
2017		48,552

5.    LONG-TERM DEBT

All of our long-term debt is in fixed rate obligations. As of December 30, 2012 and December 25, 2011, our outstanding long-term debt consisted of senior secured notes and unsecured notes. If applicable, they are stated net of unamortized discounts totaling $41.2 million and $57.0 million as of December 30, 2012 and December 25, 2011, respectfully. The unamortized discounts resulted from recording assumed liabilities at fair value during a 2006 acquisition or from the issuance of the 11.50% Senior Secured Notes due in 2017 ("11.50% Notes") at an original issue discount.

The face values of the notes, as well as the carrying values are as follows:

			Carrying Value
(in thousands)	Face Value at December 30, 2012		December 30, 2012		December 25, 2011
Notes:
9.00% senior secured notes due in 2022	$	910,000	$	910,000	$	–
11.50% senior secured notes due in 2017		83,595		83,016		843,652
4.625% notes due in 2014		66,438		64,326		77,406
5.750% notes due in 2017		286,138		273,559		318,624
7.150% debentures due in 2027		89,188		83,291		82,891
6.875% debentures due in 2029		276,230		256,154		254,903
Long-term debt	$	1,711,589	$	1,670,346	$	1,577,476
Less current portion				83,016		–
Total long-term debt, net of current			$	1,587,330	$	1,577,476

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

5.    LONG-TERM DEBT (continued)

During the year ended December 30, 2012, we repurchased $832.9 million of notes in privately negotiated transactions or through the tender offer, discussed below, as follows:

(in thousands)	Face Value
11.50% senior secured notes due in 2017	$	767,405
4.625% notes due in 2014		15,000
5.750% notes due in 2017		50,500
Total notes repurchased	$	832,905

Loss on Extinguishment of Debt

During fiscal year 2012, we recorded a net loss on the extinguishment of debt of $88.4 million compared to $1.2 million in fiscal year 2011. During fiscal year 2012, we repurchased $70.5 million aggregate principal of outstanding notes in the open market and $762.4 million in conjunction with the refinancing of our 11.50% Notes. We repurchased most of the $70.5 million notes at a price lower than par value and wrote off historical discounts related to the notes we purchased, which resulted in a gain on extinguishment of debt. This gain was offset by the write-off of fees related to the refinancing of our revolving credit facility in the second quarter of fiscal year 2012 and the refinancing of our 11.50% Notes in the fourth quarter of fiscal year 2012.

Credit Agreement

In connection with the issuance of the 9.00% Senior Secured Notes due in 2022 ("9.00% Notes"), discussed below, we entered into the Third Amended and Restated Credit Agreement ("Credit Agreement"), dated as of December 18, 2012. The Credit Agreement amended and restated in its entirety the Second Amended and Restated Credit Agreement dated June 22, 2012. The Credit Agreement provides for $75.0 million in revolving credit commitments, with a $50.0 million letter of credit subfacility, and has a maturity date of December 18, 2017. Our obligations under the Credit Agreement are secured by a first-priority security interest in certain of our assets. As of December 30, 2012, there were no draws and $36.1 million face amount of letters of credit outstanding under the Credit Agreement. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017.

Loans under the Credit Agreement bear interest, at our option, at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio.

The financial covenants under the Credit Agreement require us to comply with a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio, each measured quarterly. We are required to maintain a consolidated total leverage ratio of not more than 6.25 to 1.00, which ratio will decrease at the end of our first fiscal quarter of 2013 to 6.00 to 1.00 for the remainder of the term of the Credit Agreement. We are also required to maintain a consolidated interest coverage ratio of at least 1.50 to 1.00.

62

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

5.    LONG-TERM DEBT (continued)

The Credit Agreement also prohibits the payment of a dividend if a payment would not be permitted under the indenture for the senior secured notes (discussed below). Dividends under the indenture for the senior secured notes are allowed if the consolidated leverage ratio (as defined in the indenture) is less than 5.25 to 1.00 and the priority leverage ratio (as defined in the indenture) is less than 2.75 to 1.00. As of December 30, 2012, we were in compliance with all financial debt covenants.

On June 22, 2012, we entered into a Second Amended and Restated Credit Agreement ("Previous Agreement") to amend and replace our Amended and Restated Credit Agreement from January 26, 2010. The Previous Agreement terms, among other things, (i) reduced the size of the revolving loan facility from $125.0 million to $36.1 million to cover our issuances of standby letters of credit and (ii) extended the maturity of the Previous Agreement to January 31, 2015. The new committed amount was only available for the issuance of standby letters of credit.

Senior Secured Notes and Indenture

On December 18, 2012, we issued $910 million aggregate principal amount of 9.00% Notes. We received approximately $889 million net of financing costs in the offering and used the net proceeds, as well as cash on hand, to repurchase all of our outstanding $846 million in aggregate principal amount of the 11.50% Notes, in two separate transactions. On December 18, 2012, we repurchased $762.4 million of the 11.50% Notes pursuant to a cash tender offer at a repurchase price of $1,103.40 for each $1,000 principal amount of 11.50% Notes tendered plus accrued and unpaid interest. In connection with the tender offer of the 11.50% Notes, we recorded a loss on the extinguishment of debt of approximately $94.5 million. By January 17, 2013, we redeemed the remaining $83.6 million aggregate principal amount of 11.50% Notes not tendered in the tender offer and will record a loss on the extinguishment of debt of approximately $9.6 million during the quarter ended March 24, 2013.

The indenture for the 9.00% Notes includes a number of restrictive covenants that are applicable to us and our restricted subsidiaries. The covenants are subject to a number of important exceptions and qualifications set forth in the indenture for the 9.00% Notes. These covenants include, among other things, restrictions on our ability to incur additional debt; make investments and other restricted payments; pay dividends on capital stock or redeem or repurchase capital stock or certain of our outstanding notes or debentures prior to stated maturity; sell assets or enter into sale/leaseback transactions; create specified liens; create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions; engage in certain transactions with affiliates; and consolidate or merge with or into other companies or sell all or substantially all of the Company's and our subsidiaries' assets, taken as a whole.

Substantially all of our subsidiaries guarantee the obligations under the 9.00% Notes and the Credit Agreement, (collectively, "senior secured debt"). We own 100% of each of the guarantor subsidiaries. Following the sale of land in Miami (see Note 3) on May 27, 2011, we have no significant independent assets or operations separate from the subsidiaries that guarantee our senior secured debt. The guarantees provided by the guarantor subsidiaries are full and unconditional and joint and several, and any of our subsidiaries, other than the subsidiary guarantors, are minor.

In addition, we have granted a security interest to the banks that are a party to the Credit Agreement and the trustee under the indenture governing the 9.00% Notes that include, but are not limited to, intangible assets, inventory, receivables and certain minority investments as collateral for the debt. The security interest does not include any PP&E; leasehold interests and improvements with respect to such PP&E,

63

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

5.    LONG-TERM DEBT (continued)

which would be reflected on our consolidated balance sheet; and shares of stock and indebtedness of our subsidiaries.

Maturities

The following table presents the approximate annual maturities of outstanding long-term debt as of December 30, 2012, based upon our required payments, for the next five years and thereafter:

Year	Payments (in thousands)
2013 (1)	$	83,595
2014		66,438
2015		–
2016		–
2017		286,138
Thereafter		1,275,418
Debt principal	$	1,711,589

⁽¹⁾

As of December 30, 2012, we had committed to redeem our 11.50% Notes with a maturity date in 2017 in January 2013 (as discussed above). Therefore, we have included them in the "2013" column.

6.    INCOME TAXES

Income tax provision (benefit) related to continuing operations consist of:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Current:
Federal	$	4,701		$	28,913		$	26,625
State		(16,535	)		(1,553	)		4,999
Deferred:
Federal		(4,701	)		(3,316	)		(16,672	)
State		(4,847	)		(15,648	)		(9,351	)
Income tax provision	$	(21,382	)	$	8,396		$	5,601

64

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

6.    INCOME TAXES (continued)

The effective tax rate expense (benefit) for continuing operations and the statutory federal income tax rate are reconciled as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Statutory rate		(35.0	)%		35.0%			35.0%
State taxes, net of federal benefit		7.7			0.3			0.5
Changes in estimates		0.2			0.6			2.9
Changes in unrecognized tax benefits		(56.3	)		(13.6	)		(7.6	)
Settlements		(32.6	)		(10.4	)		(19.5	)
Other		4.0			1.5			3.2
Stock compensation		12.7			–			–
Effective tax rate		(99.3	)%		13.4%			14.5%

The components of deferred tax assets and liabilities consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011
Deferred tax assets:
Compensation benefits	$	308,392		$	228,367
State taxes		4,984			17,500
State loss carryovers		5,815			10,759
Other		5,280			6,065
Total deferred tax assets		324,471			262,691
Valuation allowance		(4,110	)		(9,514	)
Net deferred tax assets		320,361			253,177
Deferred tax liabilities:
Depreciation and amortization		233,214			258,957
Investments in unconsolidated subsidiaries		64,317			65,604
Debt discount		15,059			18,114
Deferred gain on debt		33,084			33,193
Total deferred tax liabilities		345,674			375,868
Net deferred tax liabilities	$	25,313		$	122,691

The valuation allowance relates to state net operating loss and capital carryovers. It decreased by $5.4 million in fiscal year 2012 and decreased by $5.2 million during 2011.

We have varying amounts of net operating loss totaling approximately $264.2 million and capital loss carryovers totaling approximately $1.7 million in several states. The net operating losses expire in various years between 2020 and 2032 if not used. The capital loss carryovers will expire in 2013 if not used prior to that time. We have approximately $1.3 million of state tax credit carryovers which do not expire.

65

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

6.    INCOME TAXES (continued)

As of December 30, 2012, we had approximately $12.1 million of long-term liabilities relating to uncertain tax positions consisting of approximately $8.6 million in gross unrecognized tax benefits (primarily state tax positions before the offsetting effect of federal income tax) and $3.5 million in gross accrued interest and penalties. If recognized, substantially all of the net unrecognized tax benefits would impact the effective tax rate. It is reasonably possible that a reduction of up to $5.8 million of unrecognized tax benefits and related interest may occur within the next 12 months as a result of the closure of certain audits and the expiration of statutes of limitations. Net accrued interest and penalties at December 30, 2012, December 25, 2011, and December 26, 2010, were approximately $2.5 million, $15.5 million and $21.0 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits consists of the following:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of fiscal year	$	30,463		$	51,992		$	53,359
Increases based on tax positions in prior year		–			1,409			7,529
Decreases based on tax positions in prior year		(9,933	)		(13,475	)		(1,148	)
Increases based on tax positions in current year		745			2,213			1,811
Settlements		(643	)		–			(784	)
Lapse of statute of limitations		(11,983	)		(11,676	)		(8,775	)
Balance at end of fiscal year	$	8,649		$	30,463		$	51,992

As of December 30, 2012, the following tax years and related taxing jurisdictions were open:

Taxing Jurisdiction	Open Tax Year	Years Under Exam
Federal	2009-2012
Oregon	2006-2012	2006-2008
Florida	2009-2012	2009-2010
Washington, D.C.	2006, 2009-2012	2006
New York	2008-2012	2008-2011
Illinois	2008-2012	2008-2009
California	2008-2012	2009-2010
Other States	2006-2012

7.    EMPLOYEE BENEFITS

We have a qualified defined benefit pension plan ("Plan") covering substantially all of our employees who began their employment prior to March 31, 2009. Effective March 31, 2009, the Plan was frozen such that no new participants may enter the Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned.

We also have a limited number of supplemental retirement plans to provide key employees hired prior to March 31, 2009, with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. We paid $8.2 million in fiscal year 2012, $7.4 million in fiscal year 2011 and $7.5 million in fiscal year 2010 for these plans.

66

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

The following tables provide reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status as of December 30, 2012, and December 25, 2011:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Benefit Obligation
Benefit obligation, beginning of year	$	1,763,859		$	1,634,124		$	27,474		$	30,585
Service cost		5,540			5,600			–			–
Interest cost		91,898			92,961			946			1,358
Plan participants' contributions		–			–			817			1,044
Actuarial (gain)/loss		305,952			120,283			(2,400	)		(1,796	)
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Plan amendment		–			–			(7,620	)		–
Administrative expenses		(4,818	)		(5,449	)		–			–
Benefit obligation, end of year	$	2,073,218		$	1,763,859		$	15,932		$	27,474

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Plan Assets
Fair value of plan assets, beginning of year	$	1,233,305		$	1,051,410		$	–		$	–
Actual return on plan assets		171,481			50,778			–			–
Employer contribution		48,122			220,227			2,468			2,673
Plan participants' contributions		–			–			817			1,044
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Administrative expenses		(4,818	)		(5,449	)		–			–
Fair value of plan assets, end of year	$	1,358,877		$	1,233,306		$	–		$	–

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Funded Status
Fair value of plan assets	$	1,358,877		$	1,233,306		$	–		$	–
Benefit obligations		(2,073,218	)		(1,763,859	)		(15,932	)		(27,474	)
Funded status and amount recognized, end of year	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

67

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

Amounts recognized in the consolidated balance sheets at December 30, 2012 and December 25, 2011 consists of:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Current liability	$	(15,830	)	$	(37,462	)	$	(1,859	)	$	(3,897	)
Noncurrent liability		(698,511	)		(493,091	)		(14,073	)		(23,577	)
	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

Amounts recognized in accumulated other comprehensive income for the years ended December 30, 2012 and December 25, 2011 consist of:

	Pension Benefits				Post-retirement Benefits
(in thousands)	2012		2011		2012			2011
Net actuarial loss/(gain)	$	815,385	$	585,839	$	(11,380	)	$	(9,634	)
Prior service cost/(credit)		26		41		(14,952	)		(8,618	)
	$	815,411	$	585,880	$	(26,332	)	$	(18,252	)

The elements of retirement and post-retirement costs for continuing operations are as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Pension plans:
Service Cost	$	5,540		$	5,600		$	5,885
Interest Cost		91,898			92,961			93,796
Expected return on plan assets		(107,760	)		(104,251	)		(96,151	)
Prior service cost amortization		14			14			14
Actuarial loss		12,687			6,726			2,229
Net pension expense		2,379			1,050			5,773
Net post-retirement benefit (credit) expense		(995	)		(234	)		(205	)
Deferred compensation plan expense (credit)		–			(71	)		10,790
Net retirement expenses	$	1,384		$	745		$	16,358

Our discount rate was determined by matching a portfolio of long-term, non-callable, high quality bonds to the plans' projected cash flows.

Weighted average assumptions used for valuing benefit obligations were:

	Pension Benefit Obligations				Post-retirement Obligations
	2012		2011		2012		2011
Discount rate		4.17%		5.32%		3.39%		4.26%

68

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

Weighted average assumptions used in calculating expense:

	Pension Benefit Expense						Post-retirement Expense
	December 30, 2012		December 25, 2011		December 26, 2010		December 30, 2012	December 25, 2011		December 26, 2010
Expected long-term return on plan assets		8.25%		8.25%		8.25%	N/A		N/A		N/A
Discount rate		5.31%		5.90%		6.05%	4.26%/3.31% (1)		4.84%		5.09%

⁽¹⁾

4.26% for January 2012 to September 2012; 3.31% for October 2012 to December 2012 due to plan change.

For the post-retirement plans, the medical cost trend rates are expected to decline from 7.5% in 2012 to 5.0% by the year 2018. As of December 30, 2012, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $0.6 million and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $0.6 million. As of December 25, 2011, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $1.1 million, and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $1.0 million.

Contributions and Cash Flows

In January 2011, we contributed owned real property from seven locations to our Plan. The Plan obtained independent appraisals of the property and, based on these appraisals, recorded the contribution at the fair value of $49.7 million. We entered into leases for the seven contributed properties for 10 years and expect to continue to use the seven properties in our newspaper operations. The properties are managed on behalf of the Plan by an independent fiduciary.

The contribution and leaseback of the properties was treated as a financing transaction and, accordingly, we continue to depreciate the carrying value of the properties in our financial statements. No gain or loss has been recognized on the contribution. Our pension obligation was reduced by $49.7 million and a long-term and short-term financing obligation was recorded on the date of the contribution. The financing obligation is reduced by a portion of the lease payments made to the Plan each month. The balance of this obligation at December 30, 2012, was $46.3 million.

In May 2011, we used proceeds from the sale of property in Miami (see Note 3) to contribute $163.0 million to the Plan.

In January 2012, we contributed $40.0 million of cash to the Plan. In January 2013, we contributed $7.5 million of cash to the Plan, which we expect will satisfy all of our required contributions in fiscal year 2013. We do not expect to make any additional contributions to the Plan during fiscal year 2013.

69

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

Expected benefit payments to retirees under our retirement and post-retirement plans over the next 10 years are summarized below:

(in thousands)	Retirement Plans (1)		Post-retirement Plans
2013	$	91,119	$	1,859
2014		93,630		1,681
2015		97,071		1,532
2016		100,499		1,427
2017		105,278		1,340
2018-2022		582,046		5,448
Total	$	1,069,643	$	13,287

⁽¹⁾

Largely to be paid from the qualified defined benefit pension plan

Plan Assets

Our investment policies are designed to maximize Plan returns within reasonable and prudent levels of risk, with an investment horizon of greater than 10 years so that interim investment returns and fluctuations are viewed with appropriate perspective. The policy also aims to maintain sufficient liquid assets to provide for the payment of retirement benefits and plan expenses, hence, small portions of the equity and debt investments are held in marketable mutual funds.

Our policy seeks to provide an appropriate level of diversification of assets, as reflected in its target allocations, as well as limits placed on concentrations of equities in specific sectors or industries. It uses a mix of active managers and passive index funds and a mix of separate accounts, mutual funds, common collective trusts and other investment vehicles.

Our assumed long-term return on assets was developed using a weighted average return based upon the Plan's portfolio of assets and expected returns for each asset class, taking into account projected inflation, interest rates and market returns. The assumed return was also reviewed in light of historical and recent returns in total and by asset class.

As of December 30, 2012 and December 25, 2012, the target allocations for the plan assets were 60% equity securities, 28% debt securities, 7% real estate securities and 5% commodities.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

The table below summarizes the plan's financial instruments for fiscal year 2012 that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above:

	2012
	Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1,161	$	–	$	–	$	1,161
Mutual fund		257,398		–		–		257,398
Corporate debt instruments		–		98		–		98
U.S. Government securities		–		107,337		–		107,337
Common collective trusts		–		928,730		–		928,730
Real estate		–		–		51,579		51,579
Other		–		–		6,408		6,408
Total	$	258,559	$	1,036,165	$	57,987		1,352,711
Pending trades								6,166
							$	1,358,877

The table below summarizes changes in the fair value of the plan's Level 3 investment assets held for the year ended December 30, 2012:

(in thousands)	Real Estate			Private Equity			Total
Beginning Balance, December 25, 2011	$	50,530		$	8,899		$	59,429
Purchases, issuances, sales, settlements		–			–			–
Realized gains		3,747			27			3,774
Transfer in or out of level 3		(3,747	)		(3,820	)		(7,567	)
Unrealized gains		1,049			1,302			2,351
Ending Balance, December 30, 2012	$	51,579		$	6,408		$	57,987

71

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

The table below summarizes the plan's financial instruments for fiscal year 2011 that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above:

	2011 Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	30,816	$	–	$	–	$	30,816
Mutual funds		40,861		–		–		40,861
Corporate stock		211		–		–		211
Corporate debt instruments		–		86,776		–		86,776
U.S. Government securities		–		236,063		–		236,063
Common collective trusts		–		764,983		–		764,983
Mortgage and asset backed securities		–		22,265		–		22,265
Real estate		–		–		50,530		50,530
Other		–		14,418		8,899		23,317
Total	$	71,888	$	1,124,505	$	59,429		1,255,822
Pending trades								(22,516	)
							$	1,233,306

The table below summarizes changes in the fair value of the plan's Level 3 investment assets held for the year ended December 25, 2011:

(in thousands)	Real Estate			Private Equity		Receivable			Total
Beginning Balance, December 26, 2010	$	–		$	7,792	$	28,936		$	36,728
Purchases, issuances, sales, settlements		49,710			–		(28,936	)		20,774
Realized gains		3,472			–		–			3,472
Transfer in or out of level 3		(3,472	)		–		–			(3,472	)
Unrealized gains		820			1,107		–			1,927
Ending Balance, December 25, 2011	$	50,530		$	8,899	$	–		$	59,429

Cash and cash equivalents.    The carrying value of these items approximates fair value.

Mutual funds.    These investments are publicly traded investments, which are valued using the Net Asset Value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis.

Corporate stock.    The fair value of corporate stock is based on the exchange quoted market prices. When quoted prices are not available for identical stock, an industry standard valuation model is used which maximizes observable inputs.

Corporate debt instruments.    The fair value of corporate debt instruments is based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar debt instruments, the fair value is based upon an industry valuation model, which maximizes observable inputs.

72

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

7.    EMPLOYEE BENEFITS (continued)

U.S. Government securities.    U.S. government securities primarily consist of investments in U.S. Treasury Bonds, Indexed Linked Bonds and Treasury Inflation Protected Securities. The fair value of U.S. government securities is based on quoted market prices when available or is based on yields currently available on comparable securities or on an industry valuation model, which maximizes observable inputs.

Common collective trusts.    These investments are valued based on the NAV of the underlying investments and are provided by the fund issuers. NAV for these funds represent the quoted price in a non-market environment. There are no restrictions on participants' ability to withdraw funds from the common collective trusts.

Mortgage and asset backed securities.    Mortgage and asset backed securities are valued using quotes from independent pricing vendors based on recent trading activity and other relevant information, including market interest rate curves, referenced credit spreads, and estimated prepayment rates, where applicable.

Real estate.    On January 14, 2011, we contributed Company-owned real property from seven locations to our Plan. The Plan obtained independent appraisals of the property, and based on these appraisals, the Plan recorded the contribution at fair value on January 14, 2011. The properties are leased by us for our newspaper operations. The properties are managed on behalf of the Plan by an independent fiduciary, and the terms of the leases between us and the Plan were negotiated with the fiduciary. The property is valued by independent appraisals conducted under the direction of the independent fiduciary.

Other.    Other includes:

Private equity fund.    Private equity funds represent investments in limited partnerships, which invest in start-up or other private companies. Fair value is estimated based on valuations of comparable public companies, recent sales of comparable private and public companies, and discounted cash flow analysis of portfolio companies and is included as a Level 3 investment in the table above.

401(k) Plan

We provide or subsidize certain life insurance benefits for employees. In addition we have separate deferred compensation plans ("401(k) plan") for employees, which enable qualified employees to voluntarily defer compensation. On March 31, 2009, we temporarily suspended our matching contribution to the 401(k) plan. The 401(k) plan, as amended, includes a Company match (once reinstated) and a supplemental contribution that is tied to our performance (as defined in the plan).

8.    CASH FLOW INFORMATION

Cash paid during the fiscal year 2012, 2011 and 2010 for interest and income taxes were:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Interest paid (net of amount capitalized) (1)	$	173,742	$	152,543	$	123,402
Income taxes paid (net of refunds)		37,137		32,613		37,246

⁽¹⁾

The fiscal year 2012 interest paid includes $30.0 million of interest accelerated as a result of the refinance of the 11.50% Notes as discussed in Note 5.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

8.    CASH FLOW INFORMATION (continued)

In January 2011, we contributed real property valued at $49.7 million to our defined benefit pension plan and have recorded a financing obligation equal to the same amount for leases entered into with the defined benefit pension plan for our operations. In addition, in 2011 we sold property in Miami but retained use of the property rent free through May 2013. As a result the transaction was treated as a financing transaction (see Note 3 for a description of this transaction and the related accounting treatment) and land was transferred to PP&E.

These non-cash transactions are summarized below:

	Year Ended
(in thousands)	December 25, 2011
Financing obligation for contribution of real property to pension plan	$	49,710
Reduction of pension obligation		(49,710	)
Non-refundable deposits offset against carrying value of land		(16,500	)
Increase in PP&E for land transferred from other assets		116,000

We had $5.7 million, $1.2 million and $0.9 million of non-cash financing activities related to purchases of PP&E on credit as of the end of fiscal years 2012, 2011 and 2010, respectively. We had $1.0 million of non-cash financing activities related to financing costs for our 9.00% Notes issuance as of the end of fiscal year 2012.

Net cash from operating activities of discontinued operations are summarized below:

(in thousands)	December 26, 2010
Income (loss) from discontinued operations	$	3,083
Reconciliation to net cash from discontinued operations:
Changes in assets and liabilities and other, net		(5,189	)
Net cash from operating activities of discontinued operations	$	(2,106	)

We had no discontinued operations in fiscal years 2012 or 2011.

9.    COMMITMENTS AND CONTINGENCIES

As of December 30, 2012, we had purchase obligations primarily related to printing outsource agreements and capital expenditures for property, plant and equipment expiring at various dates through 2028, totaling

74

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

9.    COMMITMENTS AND CONTINGENCIES (continued)

$139.2 million. The following table summarizes our purchase obligations as of December 30, 2012 and the estimated timing and effect the obligations will have on our liquidity and cash flows in future periods:

Year	(in thousands)
2013	$	39,250
2014		18,039
2015		15,846
2016		14,966
2017		14,353
Thereafter		36,760
Total	$	139,214

As of December 30, 2012, we had a fiscal year 2013 purchase commitment of 81,648 metric tons of newsprint from SP Fiber Technologies.

Lease commitments

We rent certain facilities and equipment under operating leases expiring at various dates through 2028. Total rental expense, included in other operating expenses, from continuing operations amounted to $12.5 million in fiscal year 2012, $13.3 million in fiscal year 2011 and $14.5 million in fiscal year 2010. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses.

We sublease office space to other companies under noncancellable agreements that expire at various dates through 2019. Sublease income from operating leases totaled $3.8 million, $4.4 million and $3.0 million in fiscal year 2012, 2011 and fiscal year 2010, respectively.

Minimum rental commitments under operating leases with non-cancelable terms in excess of one year and sublease income from leased space are:

(in thousands)
	Lease Obligation		Sublease Income
Year						Net Amount
2013	$	12,276	$	(2,968	)	$	9,308
2014		10,798		(1,899	)		8,899
2015		8,891		(1,412	)		7,479
2016		7,419		(733	)		6,686
2017		6,962		(310	)		6,652
Thereafter		34,069		(441	)		33,628
Total	$	80,415	$	(7,763	)	$	72,652

Self-Insurance

We retain the risk for workers' compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 30, 2012, we compiled our historical data pertaining to the self-insurance experiences and

75

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

9.    COMMITMENTS AND CONTINGENCIES (continued)

actuarially developed the ultimate loss associated with our self-insurance programs for workers' compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs.

The undiscounted ultimate losses of all our self-insurance reserve related to our workers' compensation liabilities, net of insurance recoveries at December 30, 2012 and December 25, 2011, were $19.8 million and $20.5 million, respectively. Based on historical payment patterns, we expect payments of undiscounted ultimate losses, net of estimated insurance recoveries of approximately $9.1 million, to be as follows:

Year	Net Amount (in thousands)
2013	$	4,827
2014		3,377
2015		2,478
2016		1,889
2017		1,481
Thereafter		5,717
Total	$	19,769

We discount the net amount above to present value using an approximate risk-free rate over the average life of our insurance claims. For the years ended December 30, 2012 and December 25, 2011, the discount rate used was 1.1% and 1.4%, respectively. The present value of all self-insurance reserves, net of estimated insurance recoveries, for our workers' compensation liability recorded at December 30, 2012 and December 25, 2011, was $19.8 million and $20.4 million, respectively.

Legal Proceedings and other contingent claims

We are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the consolidated financial statements as we believe that any such losses are not probable.

We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. In fiscal year 2010, we reversed a reserve, and recorded income, of $6.5 million related to certain of the indemnification obligations as the related newspapers paid current amounts and showed us their ability to continue to meet their obligations.

In addition to the $36.1 million of standby letters of credit secured under the Credit Agreement (see Note 5 for further discussion), we have $2.2 million in letters of credit arising from insurance and other potential claims. These letters of credit are collateralized with $2.2 million in certificates of deposit and are recorded as other long-term assets in our consolidated balance sheet.

76

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

10.    COMMON STOCK AND STOCK PLANS

Common Stock

We have two classes of stock; Class A and Class B Common Stock. Both classes of stock participate equally in dividends. Holders of Class B are entitled to one vote per share and to elect as a class 75% of the Board of Directors, rounded down to the nearest whole number. Holders of Class A Common Stock are entitled to one-tenth of a vote per share and to elect as a class 25% of the Board of Directors, rounded up to the nearest whole number.

Class B Common Stock is convertible at the option of the holder into Class A Common Stock on a share-for-share basis.

The holders of shares of Class B Common Stock are parties to an agreement, the intent of which is to preserve control of the Company by the McClatchy family. Under the terms of the agreement, the Class B shareholders have agreed to restrict the transfer of any shares of Class B Common Stock to one or more "Permitted Transferees," subject to certain exceptions. A "Permitted Transferee" is any of our current holders of shares of Class B Common Stock; any lineal descendant of Charles K. McClatchy (1858 to 1936); or a trust for the exclusive benefit of, or in which all of the remainder beneficial interests are owned by, one or more lineal descendants of Charles K. McClatchy.

Generally, Class B shares can be converted into shares of Class A Common Stock and then transferred freely (unless, following conversion, the outstanding shares of Class B Common Stock would constitute less than 25% of the total number of all our outstanding shares of common stock). In the event that a Class B shareholder attempts to transfer any shares of Class B Common Stock in violation of the agreement, or upon the happening of certain other events enumerated in the agreement as "Option Events," each of the remaining Class B shareholders has an option to purchase a percentage of the total number of shares of Class B Common Stock proposed to be transferred equal to such remaining Class B shareholder's ownership percentage of the total number of outstanding shares of Class B Common Stock. If all the shares proposed to be transferred are not purchased by the remaining Class B shareholders, we have the option of purchasing the remaining shares. The agreement can be terminated by the vote of the holders of 80% of the outstanding shares of Class B Common Stock who are subject to the agreement. The agreement will terminate on September 17, 2047, unless terminated earlier in accordance with its terms.

Stock Plans

During fiscal year 2012, we had five stock-based compensation plans, which are described below.

We have two stock option plans which reserved Class A Common shares for issuance to key employees – the 1994 and 1997 plans ("Employee Plans"). Terms of each of the Employee Plans are substantially the same. Options are granted at the market price of the Class A Common Stock on the date of grant. The options vest in installments over four years, and once vested are exercisable up to 10 years from the date of grant. Although the plans permit us, at our sole discretion, to settle unexercised options by granting stock appreciation rights, we do not intend to avail ourselves of this alternative for option grants made under these plans. Both of these plans (which had 122,500 outstanding grants at December 30, 2012) have expired and have been replaced by the 2004 stock incentive plan.

Our amended and restated stock option plan for outside directors (the "2001 Director Plan") provided for the issuance of shares of Class A Common Stock. Generally, under this plan each non-employee director was granted, at the conclusion of each regular annual meeting of stockholders, an option to purchase shares of Class A Common Stock at fair market value on the date of the grant. Terms of the 2001 Director

77

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

10.    COMMON STOCK AND STOCK PLANS (continued)

Plan are similar to the terms of the Employee Plans. This plan (which had 21,000 outstanding grants at December 30, 2012) expired and was replaced by the 2004 stock incentive plan (see the discussion below).

We have a stock incentive plan (the "2004 Plan") that reserves 9,000,000 Class A Common shares for issuance to key employees and outside directors. Terms of the 2004 Plan are similar to the Employee Plans and 2001 Director Plan, except that the 2004 Plan permits the following type of incentive awards in addition to common stock, stock options and stock appreciation rights ("SARs"): restricted stock, unrestricted stock, stock units and dividend equivalent rights.

We award stock-settled SARs in lieu of stock options. The SARs were granted at fair market value, have a 10-year term and generally vest in four equal annual installments beginning on March 1 following the year for which the award was made.

In May 2012 the shareholders approved The McClatchy Company 2012 Omnibus Incentive Plan ("2012 Plan"). The 2012 Plan generally provides for granting of stock options or SARs only at an exercise price at least equal to fair market value on the grant date; a 10-year maximum term for stock options and SARs; no repricing of stock options or SARs without prior shareholder approval; and no reload or "evergreen" share replenishment features.

Prior to fiscal year 2012, we also had an Amended Employee Stock Purchase Plan (the "Purchase Plan"), which reserved 4,625,000 shares of Class A Common Stock for issuance to employees. Eligible employees were able to purchase shares at 85% of "fair market value" (as defined by the Purchase Plan) through payroll deductions. In the third quarter of fiscal year 2011, we issued shares from our Purchase Plan that exhausted substantially all of the shares reserved under the plan for issuance and we suspended the plan at that time.

Stock Plans Activity

In fiscal year 2012, we granted 15,000 shares of Class A Common Stock to each non-employee director, resulting in the issuance of 150,000 shares from the 2012 Plan. In fiscal year 2011, we granted 15,000 shares of Class A Common Stock to each non-employee director, resulting in the issuance of 150,000 shares from the 2004 Plan.

We granted restricted stock units ("RSUs") at fair market value on the date of grant to certain key employees from the 2004 Plan and 2012 Plan as summarized below. The RSUs generally vest two to three years after grant date but terms of each grant is at the discretion of the compensation committee of the board of directors.

78

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

10.    COMMON STOCK AND STOCK PLANS (continued)

The following table summarizes the RSUs stock activity:

	RSUs			Weighted Average Grant Date Fair Value
Nonvested – December 27, 2009		845,000		$	3.42
Nonvested – December 26, 2010		845,000		$	3.42
Granted		740,000		$	4.08
Forfeited		(140,000	)	$	3.70
Nonvested – December 26, 2011		1,445,000		$	3.73
Granted		1,082,000		$	2.59
Vested		(765,000	)	$	3.42
Forfeited		(660,000	)	$	3.48
Nonvested – December 30, 2012		1,102,000		$	2.98

As of December 30, 2012, the total fair value of the RSUs that vested during the period was $2.0 million. As of December 30, 2012, there were $1.5 million of unrecognized compensation costs for nonvested RSUs, which are expected to be recognized over 1.8 years.

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

10.    COMMON STOCK AND STOCK PLANS (continued)

Outstanding options and SARs are summarized as follows:

	Options/ SARs			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding December 26, 2009		7,039,850		$	26.79	$	3,086
Granted		10,000		$	4.96
Exercised		(119,250	)	$	1.70	$	388
Forfeited		(44,250	)	$	7.07
Expired		(254,150	)	$	40.53
Outstanding December 26, 2010		6,632,200		$	26.82	$	6,060
Granted		1,078,500		$	4.08
Exercised		(152,750	)	$	1.73	$	382
Forfeited		(132,250	)	$	3.99
Expired		(702,450	)	$	47.86
Outstanding December 25, 2011		6,723,250		$	22.01	$	874
Granted		1,017,500		$	2.76
Exercised		(27,250	)	$	1.70	$	33
Forfeited		(1,217,750	)	$	54.52
Expired		(301,250	)	$	48.33
Outstanding December 30, 2012		6,194,500		$	11.45	$	1,846
Vested and Expected to Vest December 30, 2012		5,970,603		$	11.74	$	1,810
Options exercisable:
December 26, 2010		3,572,450				$	869
December 25, 2011		4,082,500				$	397
December 30, 2012		3,826,250				$	1,335

As of December 30, 2012, there were $2.6 million of unrecognized compensation costs related to options and SARs granted under our plans. The cost is expected to be recognized over a weighted average period of 2.5 years.

The following tables summarize information about stock options and SARs outstanding in the stock plans at December 30, 2012:

Range of Exercise Prices	Options/SARs Outstanding		Average Remaining Contractual Life		Weighted Average Exercise Price		Options/SARs Exercisable		Weighted Average Exercise Price
$1.50 – $9.07		4,273,500		6.85	$	2.94		1,941,000	$	2.65
$9.73 – $35.94		1,128,750		4.17	$	13.20		1,128,750	$	13.20
$40.95 – $73.36		756,500		2.63	$	54.93		756,500	$	54.93
Total		6,158,750		5.82	$	11.45		3,826,250	$	16.10

80

THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

10.    COMMON STOCK AND STOCK PLANS (continued)

The weighted average remaining contractual life on options exercisable at December 30, 2012, was 4.46 years. The weighted average remaining contractual life of options vested and expected to vest at December 30, 2012, was 5.73 years. The fair value of the stock options and SARs granted was estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected life of the options represents the period of time that options granted are expected to be outstanding using the historical exercise behavior of employees. The expected dividend yield is based on historical dividends declared per year, giving consideration for any anticipated change and the estimated stock price over the expected life of the options based on historical experience. Expected volatility was based on historical volatility for a period equal to the stock option's expected life for shares granted. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	2012		2011		2010
Expected life in years		6.52		6.16		6.10
Dividend yield		NIL		NIL		NIL
Volatility		0.90		0.87		0.83
Risk-free interest rate		1.22%		2.53%		2.77%
Weighted average exercise price of options/SARs granted	$	2.76	$	4.08	$	4.96
Weighted average fair value of options/SARs granted	$	2.09	$	3.03	$	3.57

Through the third quarter of fiscal year 2011, we also offered eligible employees the option to purchase Class A Common Stock under the Purchase Plan. The expense associated with the plan was computed using a Black-Scholes option valuation model with similar assumptions to those described for stock options, except that volatility is computed using a one-year look back given the short-term nature of this option. Expense associated with the Purchase Plan is included in the stock-related compensation. There was no such plan or expense during fiscal year 2012.

11.    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Our business is somewhat seasonal with peak revenues and profits generally occurring in the second and fourth quarters of each year as a result of increased advertising activity during the holiday seasons. The first and third quarters are historically the slowest quarters for revenues and profits. Our quarterly results are summarized as follows:

	Quarters Ended
(in thousands, except per share amounts)	March 25, 2012			June 24, 2012		September 23, 2012		December 30, 2012
Net Revenues	$	288,301		$	299,294	$	287,465	$	355,664
Operating income	$	27,975		$	42,935	$	32,479	$	82,747
Net income (loss)	$	(2,087	)	$	26,865	$	5,093	$	(30,015	)
Net income (loss) per share	$	(0.02	)	$	0.31	$	0.06	$	(0.35	)

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THE MCCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 30, 2012, DECEMBER 25, 2011 AND DECEMBER 26, 2010

11.    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (continued)

	Quarters Ended
(in thousands, except per share amounts)	March 27, 2011			June 26, 2011		September 25, 2011		December 25, 2011
Net Revenues	$	303,734		$	314,250	$	300,219	$	351,437
Operating income	$	20,455		$	45,133	$	45,443	$	90,284
Net income (loss)	$	(1,962	)	$	4,947	$	9,399	$	42,005
Net income (loss) per share	$	(0.02	)	$	0.06	$	0.11	$	0.49

The following are significant activities in fiscal year 2012:

•

During the quarter ended March 25, 2012, we incurred a gain on extinguishment of debt totaling $4.4 million related to bonds that were repurchased in the open market.

•

During the quarter ended June 24, 2012, we had a reversal of non-cash interest expense totaling $7.8 million related to the release of tax reserves. In addition, we had a favorable adjustment to net income totaling $7.0 million for a tax settlement related to state tax positions previously taken.

•

As discussed in Note 1, our fiscal year 2012 reporting period is a 53-week year versus a 52-week year in 2011, and as a result, the quarter ended December 30, 2012 includes 14 weeks compared to 13 weeks in the quarter ended December 25, 2011. Also, during the quarter ended December 31, 2012, in connection with our refinance of our 11.50% Notes, as described in Note 5, we recognized $94.5 million as a loss on extinguishment of debt.

The following are significant activities in fiscal year 2011:

•

In the quarter ended March 27, 2011, we incurred impairment charges of approximately $10.3 million, which were recorded to other operating expenses related to the value of the real estate assets sold for less than carrying value. We also incurred severance charges totaling $4.5 million related to restructuring of our newspaper operations. These amounts were partially offset by a favorable tax settlement for $9.9 million related to state tax positions previously taken. A tax benefit of $7.6 million was recognized and the related interest expense was reduced by $3.7 million.

•

In the quarter ended June 26, 2011, we incurred severance charges totaling $7.6 million related to restructuring of newspaper operations.

82

ITEM 9.               CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.            CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

Our management evaluated, with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a - 15(e) or 15d - 15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective at that time to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure and that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission Rules and Forms.

Changes in internal control over financial reporting.

There was no change in our internal control over financial reporting that occurred during the last fiscal quarter of fiscal 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934, as amended Rules 13a-15(f). The Company's internal control system over financial reporting is designed to provide reasonable assurance regarding the preparation and fair presentation of the Company's financial statements presented in accordance with generally accepted accounting principles in the United States of America.

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management of the Company assessed the effectiveness of the Company's internal control over financial reporting as of December 30, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on management's assessment and those criteria, management believes that the Company's internal control over financial reporting was effective as of December 30, 2012.

The McClatchy Company's independent registered public accounting firm has issued an attestation report on the Company's internal control over financial reporting. This report appears in Item 8 – "Financial Statements and Supplementary Data"

ITEM 9B.            OTHER INFORMATION

Not Applicable.

83

PART III

ITEM 10.            DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Incorporated herein by reference from the proxy statement for the annual meeting of our stockholders to be filed pursuant to Regulation 14A within 120 days after our fiscal year-end of December 30, 2012.

ITEM 11.            EXECUTIVE COMPENSATION

Incorporated herein by reference from the proxy statement for the annual meeting of our stockholders to be filed pursuant to Regulation 14A within 120 days after our fiscal year-end of December 30, 2012.

ITEM 12.            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated herein by reference from the proxy statement for the annual meeting of our stockholders to be filed pursuant to Regulation 14A within 120 days after our fiscal year-end of December 30, 2012.

ITEM 13.            CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated herein by reference from the proxy statement for the annual meeting of our stockholders to be filed pursuant to Regulation 14A within 120 days after our fiscal year-end of December 30, 2012.

ITEM 14.            PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated herein by reference from the proxy statement for the annual meeting of our stockholders to be filed pursuant to Regulation 14A within 120 days after our fiscal year-end of December 30, 2012.

84

PART IV

ITEM 15.            EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)&(c)	Financial Statements and Financial Statement Schedules filed as a part of this Report are listed in Item 8 – "Financial Statements and Supplementary Data".
(b)	Exhibits listed on the accompanying Index of Exhibits are filed or furnished as part of this report, following the signature pages.

85

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE MCCLATCHY COMPANY
(Registrant)

	/s/ Patrick J. Talamantes Patrick J. Talamantes, President, Chief Executive Officer and Director
March 5, 2013

86

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Patrick J. Talamantes Patrick J. Talamantes	President, Chief Executive Officer And Director (Principal Executive Officer)	March 5, 2013
/s/ R. Elaine Lintecum R. Elaine Lintecum	Vice President-Finance, Chief Financial Officer and Treasurer (Principal Financial Officer)	March 5, 2013
/s/ Hai Nguyen Hai Nguyen	Controller (Principal Accounting Officer)	March 5, 2013
/s/ Kevin S. McClatchy Kevin S. McClatchy	Chairman of the Board	March 5, 2013
/s/ Elizabeth Ballantine Elizabeth Ballantine	Director	March 5, 2013
/s/ Leroy Barnes, Jr. Leroy Barnes, Jr.	Director	March 5, 2013
/s/ Molly Maloney Evangelisti Molly Maloney Evangelisti	Director	March 5, 2013
/s/ Kathleen Foley Feldstein Kathleen Foley Feldstein	Director	March 5, 2013
/s/ Brown McClatchy Maloney Brown McClatchy Maloney	Director	March 5, 2013
/s/ William B. McClatchy William B. McClatchy	Director	March 5, 2013
/s/ Theodore R. Mitchell Theodore R. Mitchell	Director	March 5, 2013
/s/ S. Donley Ritchey S. Donley Ritchey	Director	March 5, 2013
/s/ Frederick R. Ruiz Frederick R. Ruiz	Director	March 5, 2013

87

INDEX OF EXHIBITS
(Item 15 (a) 3.)

		Incorporated by reference herein
Exhibit Number	Description	Form	Exhibit	File Date/Period End Date
3.1	The Company's Restated Certificate of Incorporation, dated June 26, 2006	10-Q	3.1	June 25, 2006
3.2	The Company's Bylaws as amended and restated effective March 20, 2012	8-K	3.1	March 22, 2012
10.1	Amended and Restated Credit Agreement, dated as of February 11, 2010, among the Company, the lenders from time to time party thereto, Bank of America, N.A., Administrative Agent, Swing Line Lender and L/C Issuer	8-K	10.1	February 17, 2010
10.2	Amendment No 1 to the Amended and Restated Credit Agreement, dated as of February 11, 2010, among the Company and Bank of America, N.A., Administrative Agent, Swing Line Lender and L/C Issuer	8-K	10.1	December 20, 2010
10.3	Amended and Restated Guaranty dated as of September 26, 2008, executed by certain subsidiaries of The McClatchy Company in favor of the lenders under the Credit Agreement	8-K	10.3	September 30, 2008
10.4	Security Agreement dated as of September 26, 2008, executed by The McClatchy Company and certain of its subsidiaries in favor of Bank of America, N.A., as Administrative Agent	8-K	10.2	September 30, 2008
10.5	Commitment Reduction and Amendment and Restatement Agreement, dated as of June 22, 2012, among the Company and Bank of America, N.S., as Administrative Agent	8-K	10.1	June 25, 2012
10.6	Second Amended and Restated Credit Agreement, dated as of June 22, 2012, among the Company, the lenders from time to time party thereto, and Bank of America, N.A., Administrative Agent and L/C Issuer	10-Q	10.2	June 25, 2012
10.7	Third Amended and Restated Credit Agreement dated December 18, 2012 among the Company, the Lenders from time to time party thereto, and Bank of America N.A., Administrative Agent, Swing Line Lender and L/C Issuer	8-K	10.1	December 20, 2012
10.8	Purchase Agreement, dated February 4, 2010, by and among the Company, certain of the Company's subsidiaries and J.P. Morgan Securities Inc. as Representative of the several Initial Purchasers relating to the 11.50% Senior Secured Notes due in 2017	8-K	10.1	February 9, 2010

88

		Incorporated by reference herein
Exhibit Number	Description	Form	Exhibit	File Date/Period End Date
10.9	Purchase Agreement dated December 3, 2012, by and among the Company, certain of the Company's subsidiaries and J.P. Morgan Securities LLC as Representative of the several Initial Purchasers relating to the $910 million 9.00% Senior Secured Notes due 2022
10.10	Indenture, dated February 11, 2010 among The McClatchy Company, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. relating to the 11.50% Senior Secured Notes due 2017	8-K	4.1	February 17, 2010
10.11	Second Supplemental Indenture dated December 11, 2012 among The McClatchy Company, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. relating to the 11.50% Senior Secured Notes due to 2017	8-K	4.1	December 20, 2012
10.12	Indenture, dated as of November 4, 1997, between Knight-Ridder, Inc. and The Chase Manhattan Bank of New York, as Trustee, [Knight-Ridder's Registration Statement on Form S-3]	S-3	4.1	October 10, 1997
10.13	First Supplemental Indenture, dated as of June 1, 2001, Knight-Ridder, Inc.; The Chase Manhattan Bank of New York, as original Trustee; and The Bank of New York, as series Trustee [Knight-Ridder, Inc. Report on Form 8-K]	8-K	4	June 1, 2001
10.14	Second Supplemental Indenture, dated as of November 1, 2004, among Knight-Ridder, Inc., JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, and The Bank of New York Trust Company, N.A., as series trustee for the Notes [Knight-Ridder, Inc. Report on Form 8-K]	8-K	4.1	November 4, 2004
10.15	Third Supplemental Indenture, dated as of August 16, 2005, among Knight-Ridder, Inc., JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as trustee, and The Bank of New York Trust Company, N.A., as series trustee for the Notes [Knight-Ridder, Inc. Report on Form 8-K]	8-K	4.1	August 22, 2005
10.16	Fourth Supplemental Indenture dated June 27, 2006, between the Company and Knight-Ridder Inc.	10-Q	10.4	June 25, 2006

89

			Incorporated by reference herein
Exhibit Number		Description	Form	Exhibit	File Date/Period End Date
10.17		Indenture dated December 18, 2012 among The McClatchy Company, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. relating to the 9.00% Senior Secured Notes due 2022	8-K	4.2	December 20, 2012
10.18		Registration Rights Agreement, dated February 11, 2010, between The McClatchy Company and J. P. Morgan Securities Inc., relating to the 11.50% Senior Secured Notes due 2017	8-K	4.2	February 17, 2010
10.19		Registration Rights Agreement dated December 18, 2012 between The McClatchy Company and J. P. Morgan Securities LLC, relating to the 9.00% Senior Secured Notes due 2022	8-K	4.3	December 20, 2012
10.20		Purchase and Sale Agreement Between the Company, a Delaware corporation, and Richwood, Inc., a Florida corporation and Bayfront 2011 Property, LLC dated May 26, 2011	10-Q	10.42	June 26, 2011
10.21	*	The McClatchy Company Management Objective Plan Description	10-K	10.4	December 30, 2000
10.22	*	The Company's Amended and Restated Long-Term Incentive Plan	8-K	99.1	May 23, 2005
10.23	*	Amendment No. 1 to the Company's Amended and Restated Long-Term Incentive Plan	10-Q	10.26	June 29, 2008
10.24	*	Amended and Restated Supplemental Executive Retirement Plan	10-K	10.4	December 29, 2002
10.25	*	Amendment Number 1 to The McClatchy Company Supplemental Executive Retirement Plan	8-K	10.1	February 10, 2009
10.26	*	Amended and Restated McClatchy Company Benefit Restoration Plan	8-K	10.1	July 29, 2011
10.27	*	Amended and Restated McClatchy Company Bonus Recognition Plan	8-K	10.2	July 29, 2011
10.28	*	Amended and Restated 1994 Stock Option Plan	10-Q	10.15	July 1, 2001
10.29	*	Amended and Restated 1997 Stock Option Plan	10-K	10.7	December 29, 2002
10.30	*	Amendment 1 to The McClatchy Company 1997 Stock Option Plan dated January 23, 2007	10-K	10.16	December 31, 2006
10.31	*	The Company's Amended and Restated 2001 Director Stock Option Plan	10-K	10.13	December 26, 2004
10.32	*	Amendment 1 to The McClatchy Company 2001 Director Option Plan dated January 23, 2007	10-K	10.18	December 31, 2006
10.33	*	The Company's Amended and Restated Employee Stock Purchase Plan	10-Q	10.28	June 29, 2008

90

			Incorporated by reference herein
Exhibit Number		Description	Form	Exhibit	File Date/Period End Date
10.34	*	The Company's 2004 Stock Incentive Plan, as amended and restated	10-Q	10.25	June 29, 2008
10.35	*	Form of Chief Executive Stock Appreciation Rights Agreement related to the Company's 2004 Stock Incentive Plan	10-K	10.25	December 30, 2007
10.36	*	Form of 2004 Stock Incentive Plan Nonqualified Stock Option Agreement	8-K	99.1	December 16, 2004
10.37	*	Form of Restricted Stock Agreement related to the Company's 2004 Stock Incentive Plan	8-K	99.1	January 28, 2005
10.38	*	Form of Restricted Stock Unit Agreement related to the Company's 2004 Stock Incentive Plan	8-K	10.1	December 18, 2009
10.39	*	The McClatchy Company 2012 Omnibus Incentive Plan	DEF 14A	Appendix A	April 2, 2012
10.40	*	Form of Restricted Stock Unit Agreement under The McClatchy Company 2012 Omnibus Incentive Plan	8-K	10.3	May 18, 2012
10.41	*	Form of Stock Appreciation Right Agreement under The McClatchy Company 2012 Omnibus Incentive Plan	8-K	10.2	May 18, 2012
10.42	*	Amended and Restated Employment Agreement between the Company and Gary B. Pruitt dated October 2, 2003	10-K	10.10	December 28, 2003
10.43	*	Second Amendment to Amended and Restated Employee Agreement for Mr Pruitt	8-K	10.2	February 10, 2009
10.44	*	Employment Agreement between the Company and Patrick Talamantes dated May 16, 2012	8-K	10.1	May 18, 2012
10.45	*	The Company's Amended and Restated CEO Bonus Plan	10-Q	10.27	June 29, 2008
10.46	*	2012 Senior Executive Retention Bonus Plan	8-K	10.4	May 18, 2012
10.47	*	Form of Indemnification Agreement between the Company and each of its officers and directors	8-K	99.1	May 23, 2005
12		Computation of Earnings to Fixed Charges
21		Subsidiaries of the Company
23		Consent of Deloitte & Touche LLP
23.1		Consent of PricewaterhouseCoopers LLP
31.1		Certification of the Chief Executive Officer of The McClatchy Company pursuant to Rule 13a-14(a) under the Exchange Act
31.2		Certification of the Chief Financial Officer of The McClatchy Company pursuant to Rule 13a-14(a) under the Exchange Act
32.1	**	Certification of the Chief Executive Officer of The McClatchy Company pursuant to 18 U.S.C. Section 1350

91

			Incorporated by reference herein
Exhibit Number		Description	Form	Exhibit	File Date/Period End Date
32.2	**	Certification of the Chief Financial Officer of The McClatchy Company pursuant to 18 U.S.C. Section 1350
99.1		Consolidated balance sheets of Classified Ventures, LLC as of December 31, 2012 and December 31, 2011 and the related consolidated statements of operations, changes in members' equity, and statements of cash flows for each of the three years in the period ended December 31, 2012 and Report of Independent Auditors as it relates to 2012.
101.INS	**	XBRL Instance Document
101.SCH	**	XBRL Taxonomy Extension Schema
101.CAL	**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	**	XBRL Extension Definition Linkbase
101.LAB	**	XBRL Taxonomy Extension Label Linkbase
101.PRE	**	XBRL Taxonomy Extension Presentation Linkbase

*

Compensation plans or arrangements for the Company's executive officers and directors

**

Furnished, not filed

92

EX-10.9

Exhibit 10.9

$910,000,000

THE MCCLATCHY COMPANY

9.000% Senior Secured Notes due 2022

Purchase Agreement

December 3, 2012

J.P. Morgan Securities LLC

As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

Ladies and Gentlemen:

The McClatchy Company, a Delaware corporation (the “Company”), proposes to issue and sell to the several initial purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), for whom you are acting as representative (the “Representative”), $910,000,000 aggregate principal amount of its 9.000% Senior Secured Notes due 2022 (the “Securities”).  The Securities will be issued pursuant to an Indenture to be dated as of December 18, 2012 (the “Indenture”) among the Company, the guarantors from time to time party thereto (the “Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), and will be guaranteed on a senior secured basis, jointly and severally, by each of the Guarantors listed on Schedule 2 hereto (the “Guarantees”).

The Securities will be sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption therefrom.  The Company and the Guarantors have prepared a preliminary offering memorandum dated November 28, 2012 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering Memorandum”) setting forth information concerning the Company, the Guarantors and the Securities.  Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of this Agreement.  The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum, the other Time of Sale Information (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this purchase agreement (the “Agreement”). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Preliminary Offering Memorandum. References herein to the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum shall be deemed to refer to and include any document incorporated by reference therein prior to the Time of Sale (as defined below) unless specifically otherwise indicated

and any reference to “amend,” “amendment” or “supplement” with respect to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to refer to and include any documents filed after such date and incorporated by reference therein.  References herein to the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum shall be deemed to refer to and include the preliminary Canadian offering memorandum dated November 28, 2012 (the “Preliminary Canadian Offering Memorandum”) and the Canadian offering memorandum dated the date hereof (the “Final Canadian Offering Memorandum”), respectively.

At or prior to the time when sales of the Securities by an Initial Purchaser were first made (the “Time of Sale”), the Company had prepared the following information (collectively, the “Time of Sale Information”):  the Preliminary Offering Memorandum, as supplemented and amended by the written communications listed on Annex A hereto including the term sheet substantially in the form of Annex B here to.

The Company and the Guarantors will secure their obligations under the Securities and the Guarantees by first-priority security interests in the Collateral (as defined below), subject to Permitted Liens (as defined under the caption “Description of notes” in the Offering Memorandum), as described in the Time of Sale Information.  In connection with the offering, the Company and the Guarantors, as applicable, and the Collateral Agent (as defined in Section 13), will enter into a Security Agreement (as defined in Section 13), the Trademark Security Agreement (as defined in Section 13) and the Copyright Security Agreement (as defined in Section 13), providing for, among other things, the Company and the Guarantors party thereto to grant a security interest in the Collateral as security for their obligations under the Securities and the Guarantees. For the purposes of this Agreement, the term “Collateral” shall have the meaning assigned to such term in the Time of Sale Information and Offering Memorandum.

On or prior to the Closing Date, the Company will enter into an Amendment and Restatement Agreement that will, subject to the satisfaction of specified conditions, amend and restate the Second Amended and Restated Credit Agreement, dated as of June 22, 2012 with Bank of America, N.A., as administrative agent (the “Credit Facility”) immediately prior to the closing of the offering of the notes (the “Credit Facility Amendment”).  Concurrently with the offering, the Company and Guarantors will enter into an intercreditor agreement (the “Intercreditor Agreement”), to be dated the Closing Date (as defined below) by and between Bank of America, N.A., as collateral agent for the lenders under the Company’s Credit Facility and the Collateral Agent, and (ii) pursuant to an Offer to Purchase and Consent Solicitation Statement and related letter of transmittal, each dated as of November 28, 2012, as amended and restated by the Amended and Restated Offer to Purchase and Consent Solicitation Statement and related letter of transmittal, each dated as of December 3, 2012 (together, the “Offer to Purchase”), the Company has commenced a cash tender offer (the “Tender Offer”) for any and all of its outstanding 11.50% senior secured notes due 2017 (the “2017 Notes”) and consent solicitation (the “Consent Solicitation”) of registered holders of the 2017 Notes to permit certain proposed amendments and waivers to the indenture, dated as of February 11, 2010 (as amended and supplemented, the “2017 Indenture”) among the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee under the 2017 Indenture (the “2017 Notes Trustee”).  If the Company does not receive tenders from holders of at least two-thirds in aggregate principal amount of outstanding 2017 Notes on or before the Early Tender Date (as

2

defined in the Offer to Purchase), on the Closing Date the Company will terminate the Tender Offer and Consent Solicitation and deliver an irrevocable notice of redemption to the 2017 Notes Trustee for all outstanding 2017 Notes and satisfy and discharge their obligations with respect to the 2017 Indenture in accordance with the 2017 Indenture (the “2017 Notes Redemption”).  As described in the Time of Sale Information and the Offering Memorandum, proceeds from the issuance and sale of the Securities shall be used to (i) (x) pay consideration to holders who tender their 2017 Notes in the Tender Offer to the extent the Company obtains the requisite consents under the Consent Solicitation and enters into the Supplemental Indenture (as defined in the Offer to Purchase) or (y) satisfy and discharge the 2017 Notes and (ii) pay fees and expenses in connection with the Tender Offer and Consent Solicitation, the Credit Facility Amendment and the issuance and sale of the Securities. For purposes of this Agreement, the term “Transactions” shall refer to, collectively, the issuance and sale of the Securities, the consummation of the Tender Offer and Consent Solicitation or the 2017 Notes Redemption, the entering into of the Credit Facility Amendment, the entering into of the Intercreditor Agreement and the payment of related fees and expenses in connection with the foregoing.

Holders of the Securities (including the Initial Purchasers and their direct and indirect transferees) will be entitled to the benefits of a Registration Rights Agreement, to be dated the Closing Date and substantially in a form reasonably acceptable to the Representative (the “Registration Rights Agreement”), pursuant to which the Company and the Guarantors will agree to file one or more registration statements with the Securities and Exchange Commission (the “Commission”) providing for the registration under the Securities Act of the resale of the Securities or the Exchange Securities referred to (and as defined) in the Registration Rights Agreement and the related Guarantees.

The Company and the Guarantors hereby confirm their agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

1.             Purchase and Resale of the Securities.

(a)           The Company agrees to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements of the Company and the Guarantors set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal to 98.3375% of the principal amount thereof plus accrued interest, if any, from December 18, 2012 to the Closing Date.  The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

(b)           The Company understands that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Time of Sale Information.  Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i)            it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a “QIB”) and an accredited investor within the meaning of Rule 501(a) of Regulation D under the Securities Act (“Regulation D”);

3

(ii)           it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act; and

(iii)          it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except:

(A)          within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; or

(B)          in accordance with the restrictions set forth in Annex C hereto.

(c)           Each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the “no registration” opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and 6(h), counsel for the Company and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (b) above (including Annex C hereto), and each Initial Purchaser hereby consents to such reliance.

(d)           The Company and the Guarantors acknowledge and agree that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser; provided that such offers and sales shall be made in a accordance with the provisions of this Agreement.

(e)           The Company and the Guarantors acknowledge and agree that each Initial Purchaser is acting solely in the capacity of an arm’s length contractual counterparty to each of the Company and the Guarantors with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or fiduciary to, or agent of, the Company, the Guarantors or any other person.  Additionally, neither the Representative nor any other Initial Purchaser is advising the Company, the Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Company and the Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representative nor any other Initial Purchaser shall have any responsibility or liability to the Company or the Guarantors with respect thereto.  Any review by the Representative or any Initial Purchaser of the Company, the Guarantors and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representative or such Initial Purchaser, as the case may be, and shall not be on behalf of the Company, the Guarantors or any other person.

4

2.             Payment and Delivery.

(a)           Payment for and delivery of the Securities will be made at the offices of Cahill Gordon & Reindel LLP, 1271 Avenue of the Americas, New York, New York 10020 at 10:00 A.M., New York City time, on December 18, 2012, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company may agree upon in writing.  The time and date of such payment and delivery is referred to herein as the “Closing Date.”

(b)           Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative against delivery to the nominee of The Depository Trust Company (“DTC”), for the account of the Initial Purchasers, of one or more global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Company.  The Global Note will be made available for inspection by the Representative not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

3.             Representations and Warranties of the Company and the Guarantors.  The Company and the Guarantors jointly and severally represent and warrant to each Initial Purchaser that:

(a)           Preliminary Offering Memorandum, Time of Sale Information and Offering Memorandum.  The Preliminary Offering Memorandum, as of its date, did not, the Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, and the Offering Memorandum, in the form first used by the Initial Purchasers to confirm sales of the Securities and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum, the Time of Sale Information or the Offering Memorandum.

(b)           Additional Written Communications.  The Company and the Guarantors (including their agents and representatives, other than the Initial Purchasers in their capacity as such) have not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company and the Guarantors or their agents and representatives (other than a communication referred to in clauses (i), (ii) and (iii) below) an “Issuer Written Communication”) other than (i) the Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on Annex A hereto, including a term sheet or pricing supplement substantially in the form of Annex B hereto, which constitute part of the Time of Sale Information, and (iv) any electronic road show or other written communications, in each case used in accordance with Section 4(c).  Each such Issuer Written Communication, when taken together with the Time of Sale Information at the

5

Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation and warranty with respect to any statements or omissions made in each such Issuer Written Communication in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in any Issuer Written Communication.

(c)           Incorporated Documents.  The documents incorporated by reference in each of the Time of Sale Information and the Offering Memorandum, when filed with the Commission, conformed or will conform, as the case may be, in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading provided, however, that no representation is made as to any statement or omission that shall have been superseded or modified in either (i) a document subsequently filed with the Commission and incorporated by reference in each of the Time of Sale Information and the Offering Memorandum or (ii) each of the Time of Sale Information and the Offering Memorandum.

(d)           Financial Statements.  The financial statements and the related notes thereto included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum present fairly in all material respects the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the consolidated results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby except as set forth in the Time of Sale Information and the Offering Memorandum; and the other financial information of the Company and its subsidiaries included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum has been derived from the accounting records of the Company and its subsidiaries and presents fairly in all material respects the information shown thereby.  The interactive data in eXtensible Business Reporting Language included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(e)           No Material Adverse Change.  Except as disclosed in the Time of Sale Information and the Offering Memorandum (exclusive of any amendment or supplement thereto after the Time of Sale), since the date of the most recent financial statements of the Company included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum (i) there has not been any change in the capital stock (other than the issuance of the shares of Common Stock, options or restricted stock units to purchase or acquire shares of Common Stock granted under, or contracts or commitments pursuant to, the Company’s previous or currently existing stock option,

6

employee stock purchase and other similar officer, director or employee benefit plans or the issuance of the Common Stock upon the exercise of outstanding options and warrants) or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position or results of operations of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority.

(f)            Organization and Good Standing.  The Company and each of its subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses as currently conducted requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified, in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial position or results of operations of the Company and its subsidiaries taken as a whole or on the performance by the Company and the Guarantors of their obligations under the Securities and the Guarantees (a “Material Adverse Effect”).  The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule 3 to this Agreement.

(g)           Capitalization.  The Company has the capitalization as set forth in each of the Time of Sale Information and the Offering Memorandum under the heading “Capitalization”; and all the outstanding shares of capital stock or other equity interests of the subsidiaries of the Company have been duly and validly authorized and issued, are, to the extent applicable, fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

(h)           Due Authorization.  The Company and each of the Guarantors have full right, power and authority to execute and deliver this Agreement, the Securities, the Indenture (including each Guarantee set forth therein), the Exchange Securities (including the related Guarantees), the Registration Rights Agreement, the Security Documents (as defined in Section 13), the Intercreditor Agreement and the Credit Facility Amendment  (collectively, the “Transaction Documents”), grant security interests in the Collateral thereunder and perform their respective obligations hereunder and thereunder; and, on the

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Closing Date, all action required to be taken for the granting of the security interests in the Collateral and the consummation of the Transactions has been duly and validly taken.

(i)            The Indenture.  The Indenture has been duly authorized by the Company and each of the Guarantors and on the Closing Date will be duly executed and delivered by the Company to each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability including principles of good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or equity) (collectively, the “Enforceability Exceptions”); and on the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

(j)            The Securities and the Guarantees.  The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by each of the Guarantors and, when the Securities have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, the Guarantees will be valid and legally binding obligations of each of the respective Guarantors, enforceable against each of the respective Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

(k)           The Exchange Securities.  On the Closing Date, the Exchange Securities (including the related Guarantees) will have been duly authorized by the Company and each of the Guarantors and, when duly executed, authenticated, issued and delivered as contemplated by the Registration Rights Agreement and in accordance with the provisions of the Indenture, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company as issuer with respect to the Exchange Securities, and each of the Guarantors, as guarantors, with respect to the respective Guarantees related to the Exchange Securities, enforceable against the Company and each of the respective Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

(l)            Purchase and Registration Rights Agreements.  This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.  The Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and on the Closing Date will be duly executed and delivered by the Company and each of the Guarantors and, when duly executed and delivered in accordance

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with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

(m)          Other Transaction Documents.  (i) The Security Documents have been duly authorized by the Company and each Guarantor to the extent a party thereto, (ii) the Credit Facility Amendment has been duly authorized by the Company and each Guarantor to the extent a party thereto and (iii) the Intercreditor Agreement has been duly authorized by the Company and each Guarantor to the extent a party thereto.  When the Credit Facility Amendment, the Intercreditor Agreement and each of the Security Documents have been duly executed and delivered, each of the Credit Facility Amendment, the Intercreditor Agreement and the Security Documents will constitute legal, valid and binding agreements of the Company and each Guarantor to the extent a party thereto, enforceable against the Company and each Guarantor to the extent a party thereto in accordance with their terms, subject to the Enforceability Exceptions.

(n)           Descriptions of the Transaction Documents.  Each Transaction Document conforms in all material respects to the description, if any, thereof contained in each of the Time of Sale Information and the Offering Memorandum.

(o)           No Violation or Default.  Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any applicable law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or its subsidiaries or any of their properties or assets, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(p)           No Conflicts.  The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof, the granting of the security interest in the Collateral and the consummation of the Transactions contemplated by the Transaction Documents will not (i) upon the effectiveness of the Credit Facility Amendment in accordance with its terms, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries (other than any lien, charge or encumbrance created or imposed by the Transaction Documents) pursuant to, any indenture, lease, mortgage,

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deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) assuming the accuracy of the representations and warranties of the Initial Purchasers contained herein and their compliance with their agreements contained herein, result in the violation of any applicable law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(q)           No Consents Required.  Assuming the accuracy of the representations and warranties of the Initial Purchasers contained herein and their compliance with their agreements contained herein, no consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required on the part of the Company or the Guarantors for the execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the Transactions contemplated by the Transaction Documents, except for (i) such consents, approvals, authorizations, orders and registrations or qualifications as have been obtained, (ii) such consents, approvals, authorizations, orders and registrations or qualifications as may be required (1) under applicable state and foreign securities laws in connection with the purchase and resale of the Securities by the Initial Purchasers, (2) with respect to the Exchange Securities (including the related Guarantees) under the Securities Act, the Trust Indenture Act and applicable state securities laws as contemplated by the Registration Rights Agreement, (3) under the Uniform Commercial Code as from time to time in effect in the relevant jurisdictions or other relevant personal property security legislation, each as from time to time in effect in the relevant jurisdictions or (4) by the United States Patent and Trademark Office or the United States Copyright Office or the applicable intellectual property legislation, rules or regulations in effect in the other relevant jurisdictions and (iii) such consents, approvals, authorizations, orders and registrations or qualifications as are expressly contemplated by the Transaction Documents.

(r)            Legal Proceedings.  Except as described in each of the Time of Sale Information and the Offering Memorandum, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is a party or may be a party or to which any property of the Company or any of its subsidiaries, to the knowledge of the Company is or may be subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect; and to the Company’s knowledge, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or by others.

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(s)            Independent Accountants.  Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

(t)            Title to Real and Personal Property.  Except as disclosed in each of the Time of Sale Information and the Offering Memorandum, the Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(u)           Title to Intellectual Property.  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or as set forth in the Time of Sale Information and the Offering Memorandum, the Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others that if true would result in a Material Adverse Effect.

(v)           No Undisclosed Relationships.  No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders or other affiliates of the Company or any of its subsidiaries, on the other, that would be required by the Securities Act to be described in a registration statement on Form S-1 to be filed with the Commission and that is not so described in each of the Time of Sale Information and the Offering Memorandum.

(w)          Investment Company Act.  Neither the Company nor any of its subsidiaries is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in each of the Time of Sale Information and the Offering Memorandum none of them will be, an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).

(x)           Taxes.  Except, in each case, for (i) any such taxes or tax deficiencies that are currently being contested in good faith by appropriate proceedings and for which the Company has established adequate reserves in accordance with generally accepted accounting

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principles or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (1) the Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof and (2) there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.

(y)           Licenses and Permits.  The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in each of the Time of Sale Information and the Offering Memorandum, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in each of the Time of Sale Information and the Offering Memorandum, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course except where such revocation, modification or non-renewal would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(z)           No Labor Disputes.  Except as disclosed in the Time of Sale Information and Offering Memorandum, no labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company and each of the Guarantors, is contemplated or threatened and neither the Company nor any Guarantor is aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of the Company’s or the Company’s subsidiaries’ principal suppliers, except, in each case, as would not reasonably be expected have a Material Adverse Effect.

(aa)         Compliance with Environmental Laws.  (i) The Company and its subsidiaries (x) are in compliance with any and all applicable federal, state and local laws, rules, regulations, requirements, decisions and orders relating to the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, and (z) have not received notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants; (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each of clauses (i) and (ii) above, for any such failure to comply, or failure to receive required permits, licenses, certificates, or other authorizations or approvals, or cost or liability, as would not, individually or in the aggregate, have a Material Adverse Effect or would not require disclosure pursuant to the Commission’s Regulation S-K. Except as described in each of the Time of Sale Information and the Offering Memorandum, (x) there are no proceedings that are

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pending, or that are known by the Company to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $10.0 million or more will be imposed, (y) the Company and its subsidiaries are not aware of any noncompliance by them with Environmental Laws, or liabilities or other obligations of them under Environmental Laws or laws concerning hazardous or toxic substances or wastes, pollutants or contaminants, that would reasonably be expected to have a Material Adverse Effect.

(bb)         Compliance with ERISA.  Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”)  is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the United States Internal Revenue Service  (the “IRS”) or an application for such a letter is currently being processed by the IRS with respect thereto, has been established under a prototype plan for which an IRS opinion letter has been obtained by the plan sponsor and is valid as to the adopting employer, or is within its applicable remedial amendment period under Section 401(b) of the Code and, to the knowledge of the Company, nothing has occurred which would prevent, or cause the loss of, such qualification. No Plan has failed prior to, or after, the effectiveness of the Pension Protection Act of 2006, as amended from time to time (the “Pension Act”), to satisfy the minimum funding standard within the meaning of Section 412 of the Code or Section 302 of ERISA, as of the last day of the most recent fiscal year of such Plan ended prior to the date as of which this representation is made. Neither the Company nor any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code)  is (A) prior to the effectiveness of the Pension Act, required to give security to any Plan pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, or on or after the effectiveness of the Pension Act, required to make an additional contribution or give security to any Plan pursuant to Section 436 of the Code or Section 206(g) of ERISA, or (B) subject to a lien in favor of a Plan, under either Section 302(f) of ERISA or Section 412(m) of the Code prior to the effectiveness of the Pension Act, or under Section 303(k) of the ERISA or Section 430(k) of the Code on and after the effectiveness of the Pension Act.

(cc)         Disclosure Controls.  The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.  The Company and its subsidiaries

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have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

(dd)         Accounting Controls.  The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  The Company and its subsidiaries maintain internal accounting controls sufficient to provide reasonable assurance (i) that the maintenance of records is in reasonable detail that accurately and fairly reflects the transactions and disposition of assets; (ii) that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and receipts and expenditures are being made only in accordance with the authorizations of management and directors; and (iii) regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company’s and its Subsidiaries’ assets that could have a material effect on the Company’s consolidated financial statements. Except as disclosed in each of the Time of Sale Information and the Offering Memorandum, there are no material weaknesses or significant deficiencies in the Company’s internal controls.

(ee)         Insurance.  The Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in amounts as is customary for companies engaged in similar businesses in similar industries and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at a reasonable cost from similar insurers as may be necessary to continue its business.

(ff)          No Unlawful Payments.  Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company and each of the Guarantors, any director, officer, agent, employee or any other person acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(gg)         Compliance with Money Laundering Laws.  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all relevant jurisdictions, the rules and regulations thereunder and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding

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by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any of the Guarantors, threatened.

(hh)         Compliance with OFAC.  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(ii)           Solvency.  On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and the Refinancing (as defined in the Time of Sale Information and the Offering Memorandum) and the other Transactions as described in each of the Time of Sale Information and the Offering Memorandum) will be Solvent.  As used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such date (i) the present fair market value (or present fair saleable value) of the assets of the Company is not less than the total amount required to pay the probable liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance of the Securities as contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature; and (iv) the Company is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged.

(jj)           No Restrictions on Subsidiaries.  No subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock or similar ownership interest to the Company or any subsidiary, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company in each case, except for restrictions contemplated by the Indenture and except for restrictions permitted by the Credit Agreement that the Company has determined are not likely to materially impair the Company’s ability to make scheduled payments or principal and interest on the Notes when due.

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(kk)         No Broker’s Fees.  Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

(ll)           Rule 144A Eligibility.  On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

(mm)      No Integration.  Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

(nn)         No General Solicitation or Directed Selling Efforts.  None of the Company or any of its affiliates (as defined in Rule 501(b) of Regulation D) or any other person acting on its or their behalf (other than the Initial Purchasers or persons acting on their behalf, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act (“Regulation S”), and all such persons have complied with the offering restrictions requirement of Regulation S.

(oo)         Securities Law Exemptions.  Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 1(b) (including Annex C hereto) and their compliance with their agreements set forth herein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum (it being understood that no representation is given as to any subsequent resale of the Securities by purchasers of the Securities from the Initial Purchasers), to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act

(pp)         No Stabilization.  Neither the Company nor any of the Guarantors has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

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(qq)         Forward-Looking Statements.  No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained or incorporated by reference in any of the Time of Sale Information or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(rr)           Statistical and Market Data.  Nothing has come to the attention of the Company or any Guarantor that has caused the Company or such Guarantor to believe that the statistical and market-related data included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.

(ss)          Sarbanes-Oxley Act.  The Company and each of the Company’s directors or officers, in their capacities as such, has complied in all material respects with the provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

(tt)           Liens and Security Interests in Personal Property.  The Security Documents, when executed and delivered, will create in favor of the Collateral Agent for the benefit of the holders of Securities, the Collateral Agent and the Trustee on behalf of the holders of the Securities, valid and enforceable first-priority security interests (subject to Permitted Liens) in and liens on the rights of the Company and each Guarantor in the property in which a security interest is purported to be granted under such Security Documents and upon, or as a result of, the filing of Uniform Commercial Code financing statements in appropriate form and with the appropriate governmental authorities (including payment of all necessary fees and taxes) and upon the taking of the other actions described in the Security Documents, such security interests in the rights of the Company and each Guarantor in such property will constitute a perfected security interest in all right, title and interest in the property in which a security interest is purported to be granted to the extent such perfection can be obtained upon the taking of such actions and will be subject only to Permitted Liens.

(uu)         Transfer of Collateral.  The Company and the Guarantors collectively own, have rights in or have the power to transfer rights in the Collateral, free and clear of any liens other than (i) the security interests granted pursuant to the Security Documents, (ii) Liens expressly permitted to exist on the Collateral under the Indenture.

Any certificate signed by any officer of the Company, the Guarantors or their respective subsidiaries and delivered to the Initial Purchasers or counsel for the Initial Purchasers in connection with the offering of the Securities and, when issued, the Guarantees, shall be deemed a joint and several representation and warranty by each of the Company, the Guarantors and their respective subsidiaries, as to matters covered thereby, to the Initial Purchasers.

4.             Further Agreements of the Company and the Guarantors.  The Company and each of the Guarantors jointly and severally covenant and agree with each Initial Purchaser that:

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(a)           Delivery of Copies.  Until the earlier to occur of (i) the completion of the initial resale of the Securities by the Initial Purchasers and (ii) the nine month anniversary of the Closing Date, the Company will deliver, without charge, to the Initial Purchasers as many copies of the Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the Offering Memorandum (including all amendments and supplements thereto) as the Representative may reasonably request.

(b)           Offering Memorandum, Amendments or Supplements.  During the period beginning the date hereof and the ending upon the earlier to occur of (i) the completion of the initial resale of the Securities by the Initial Purchasers and (ii) the nine month anniversary of the Closing Date, before finalizing the Offering Memorandum or making or distributing any amendment or supplement to any of the Time of Sale Information or the Offering Memorandum or filing with the Commission any document that will be incorporated by reference therein, the Company will furnish to the Representative and counsel for the Initial Purchasers a copy of the proposed Offering Memorandum or such amendment or supplement or document to be incorporated by reference therein for review, and will not distribute any such proposed Offering Memorandum, amendment or supplement or file any such document with the Commission to which the Representative reasonably objects; provided, however, that the Representative shall not object to any such filing if the Company obtains advice of outside counsel that such filing is required under the rules and regulations of the Securities Act or Exchange Act; provided further that the Company shall have the right to file with the Commission any report required to be filed by the Company under the Exchange Act (based on the advice of the Company’s internal or external counsel) no later than the time period required by the Exchange Act.

(c)           Additional Written Communications.  Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication, the Company and the Guarantors will furnish to the Representative and counsel for the Initial Purchasers a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Representative reasonably objects.

(d)           Notice to the Representative.  The Company will advise the Representative promptly, and confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when such Time of Sale Information, Issuer Written Communication or the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its commercially reasonable efforts to prevent the issuance of any

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such order preventing or suspending the use of any Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will use commercially reasonable efforts to obtain as soon as possible the withdrawal thereof.

(e)           Time of Sale Information.  If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Time of Sale Information to comply with applicable law, the Company will promptly notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to any of the Time of Sale Information (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented (including such documents to be incorporated therein by reference) will not, in the light of the circumstances under which they were made, be misleading or so that any of the Time of Sale Information will comply with applicable law.

(f)            Ongoing Compliance of the Offering Memorandum.  If at any time prior to the earlier of (i) the completion of the initial resale of the Securities and (ii) the nine month anniversary of the Closing Date, (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with applicable law, the Company will promptly notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented (including such documents to be incorporated by reference therein) will not, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with applicable law.

(g)           Blue Sky Compliance.  The Company will qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions (including Canada) as the Representative shall reasonably request and will continue such qualifications in effect so long as required for the initial offering and resale of the Securities by the Initial Purchasers; provided that neither the Company nor any of the Guarantors shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

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(h)           Clear Market.  During the period from the date hereof through and including the date that is 90 days after the date hereof, neither the Company nor any of the Guarantors will, without the prior written consent of J.P. Morgan Securities LLC, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Company or any of the Guarantors and having a tenor of more than one year; provided that the foregoing shall not apply to the sale of Securities under this Agreement or the Exchange Securities.

(i)            Use of Proceeds.  The Company will apply the net proceeds from the sale of the Securities as described in each of the Time of Sale Information and the Offering Memorandum under the heading “Use of proceeds”.

(j)            Supplying Information.  While the Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company and each of the Guarantors will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(k)           DTC.  The Company will use its commercially reasonable efforts to assist the Initial Purchasers in arranging for the Securities to be eligible for clearance and settlement through DTC.

(l)            No Resales by the Company.  Until the earlier of the one year anniversary of the Closing Date and the completion of the exchange offer contemplated by the Registration Rights Agreement, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for sales of Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act.

(m)          No Integration.  Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

(n)           No General Solicitation or Directed Selling Efforts.  None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers and persons acting on their behalf, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S.

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(o)           No Stabilization.  Neither the Company nor any of the Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

5.             Certain Agreements of the Initial Purchasers.  Each Initial Purchaser hereby represents and agrees that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell or the solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum and the Offering Memorandum, (ii) any written communication that contains either (a) no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) or (b) “issuer information” that was included (including through incorporation by reference) in the Time of Sale Information or the Offering Memorandum, (iii) any written communication listed on Annex A or prepared pursuant to Section 4(c) above (including any electronic road show), (iv) any written communication prepared by such Initial Purchaser and approved by the Company in advance in writing or (v) any written communication relating to or that contains the terms of the Securities and/or other information that was included (including through incorporation by reference) in the Time of Sale Information or the Offering Memorandum.

6.             Conditions of Initial Purchasers’ Obligations.  The obligation of each Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance in all material respects by the Company and each of the Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions:

(a)           Representations and Warranties.  The representations and warranties of the Company and the Guarantors contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Company, the Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.

(b)           No Downgrade.  Subsequent to the earlier of (A) the Time of Sale and (B) the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the Company or any of its subsidiaries, the Securities or any other debt or preferred stock issued or guaranteed by the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined under Section 3(a)(62) under the Exchange Act; and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by the Company or any of its subsidiaries (other than an announcement with positive implications of a possible upgrading).

(c)           No Material Adverse Change.  No event or condition of a type described in Section 3(e) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Offering Memorandum (excluding any amendment or supplement thereto) the effect of which in the reasonable judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities

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on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.

(d)           Officer’s Certificate.  The Representative shall have received on and as of the Closing Date a certificate of an executive officer of the Company who has specific knowledge of the Company’s and the Guarantors’ financial matters and is satisfactory to the Representative (i) confirming that such officer has carefully reviewed the Time of Sale Information and the Offering Memorandum and, to the knowledge of such officer, the representations set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company and the Guarantors in this Agreement are true and correct and that the Company and the Guarantors have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c) above.

(e)           Comfort Letters.  On the date of this Agreement and on the Closing Date, Deloitte & Touche LLP shall have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchasers and the board of directors of the Company, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum; provided that the letter delivered on the Closing Date shall use a “cut off” date reasonably acceptable to the Representative.

(f)            Opinions and 10b-5 Statement of Counsel for the Company.  Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Company, shall have furnished to the Representative, at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex D hereto.

(g)           Opinions of Local Counsel. Local counsel, reasonably acceptable to the Representative and listed on Annex E hereto for each jurisdiction set forth therein, shall have furnished to the Representative opinion letters in a form and substance reasonably satisfactory to the Representative, substantially to the effect set forth in Annex F.

(h)           Opinion and 10b-5 Statement of Counsel for the Initial Purchasers.  The Representative shall have received on and as of the Closing Date an opinion and 10b-5 statement of Cahill Gordon & Reindel LLP, counsel for the Initial Purchasers, with respect to such matters as the Representative may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

(i)            No Legal Impediment to Issuance.  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal,

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state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees.

(j)            Good Standing.  The Representative shall have received on and as of the Closing Date satisfactory evidence of the good standing of the Company and its subsidiaries in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions.

(k)           Registration Rights Agreement.  The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement that shall have been executed and delivered by a duly authorized officer of the Company and each of the Guarantors.

(l)            DTC.  The Securities shall be eligible for clearance and settlement through DTC on or prior to the Closing Date.

(m)          Indenture.  At the Closing Date, the Company, the Guarantors and the Trustee shall have entered into the Indenture, and the Initial Purchasers shall have received counterparts, conformed as executed, thereof.

(n)           Security Documents.  At the Closing Date, the Collateral Agent shall have received each of the Security Documents executed by the parties thereto and Uniform Commercial Code financing statements in appropriate form for filing and filings with the United States Patent and Trademark Office and the United States Copyright Office in appropriate form for filing in each case as applicable.  Each such document shall be in form and substance reasonably satisfactory to the Representative and in full force and effect and the Company and the Guarantors shall have taken all actions required by the Security Documents to be taken as of such date.  The Representative shall also have received (i) copies of Uniform Commercial Code, United States Patent and Trademark Office and United States Copyright Office, tax and judgment lien searches, bankruptcy and pending lawsuit searches or equivalent reports or searches, each of a recent date, listing all effective financing statements, lien notices or comparable documents that name the Company or any Guarantor as Debtor and that are filed in those state jurisdictions in which the Company or such Guarantor is organized and such other searches that the Representative deems necessary or appropriate, none of which encumber the Collateral covered or intended to be covered by the Security Documents, subject only to Permitted Liens.

(o)           The Credit Facility Amendment.  Immediately prior to the Closing Date, the Credit Facility Amendment shall have become effective.

(p)           The Intercreditor Agreement. At the Closing Date, the Intercreditor Agreement shall have become effective.

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(q)           2017 Notes.  At the Closing Date, the Company shall have accepted all 2017 Notes tendered in the Tender Offer and executed the Supplemental Indenture or shall have terminated the Tender Offer in accordance with the Offer to Purchase and the Company shall have delivered irrevocable notice to the 2017 Notes Trustee of the redemption of all outstanding 2017 Notes (after giving effect to the 2017 Notes purchased in the Tender Offer on the Early Settlement Date (as defined in the Offer to Purchase), if any) and shall have satisfied and discharged the 2017 Notes.

(r)            Additional Documents.  On or prior to the Closing Date, the Company and the Guarantors shall have furnished to the Representative such further certificates and documents as the Representative may reasonably request.

All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers.

7.             Indemnification and Contribution.

(a)           Indemnification of the Initial Purchasers.  The Company and the Guarantors jointly and severally agree to indemnify and hold harmless each Initial Purchaser, its affiliates, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other reasonable expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, any of the other Time of Sale Information, any Issuer Written Communication or the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities (including such legal fees and expenses) arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use therein.

(b)           Indemnification of the Company and the Guarantors.  Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors and each of their respective directors and officers and each person, if any, who controls the Company or any of the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities (including, without limitation, reasonable legal fees and other reasonable expenses incurred in a connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred) that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative

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expressly for use in the Preliminary Offering Memorandum, any of the other Time of Sale Information, any Issuer Written Communication or the Offering Memorandum (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following:  the fourth sentence of the eleventh paragraph and the thirteenth paragraph, each under the heading “Plan of distribution” in the Preliminary Offering Memorandum and the Offering Memorandum.

(c)           Notice and Procedures.  If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above.  If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm for any Initial Purchaser, its affiliates, directors and officers and any control persons of such Initial Purchaser shall be designated in writing by J.P. Morgan Securities LLC and any such separate firm for the Company, the Guarantors, their respective directors and officers and any control persons of the Company and the Guarantors shall be designated in writing by the Company.  The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified

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Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

(d)           Contribution.  If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total discounts and commissions received by the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the aggregate offering price of the Securities.  The relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Guarantor or by the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e)           Limitation on Liability.  The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other reasonable expenses incurred by such Indemnified Person in connection with any such action or claim.  Notwithstanding the provisions of this Section 7, in no event shall an Initial Purchaser be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Initial Purchasers’ obligations to contribute pursuant to this

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Section 7 are several in proportion to their respective purchase obligations hereunder and not joint.

(f)            Non-Exclusive Remedies.  The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

8.             Termination.  This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company, if after the execution and delivery of this Agreement and on or prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the Nasdaq Global Select Market; (ii) trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the reasonable judgment of the Representative, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery, of the Securities on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.

9.             Defaulting Initial Purchaser.

(a)           If, on the Closing Date, any Initial Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company on the terms contained in this Agreement.  If, within 36 hours after any such default by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such Securities on such terms.  If other persons become obligated or agree to purchase the Securities of a defaulting Initial Purchaser, either the non defaulting Initial Purchasers or the Company may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Initial Purchasers may be necessary in the Time of Sale Information, the Offering Memorandum or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Time of Sale Information or the Offering Memorandum that effects any such changes.  As used in this Agreement, the term “Initial Purchaser” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Securities that a defaulting Initial Purchaser agreed but failed to purchase.

(b)           If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-

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defaulting Initial Purchaser to purchase the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder plus such Initial Purchaser’s pro rata share (based on the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made.

(c)           If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchasers.  Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company or the Guarantors, except that the Company and each of the Guarantors will continue to be liable for the payment of expenses as set forth in Section 10 hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in effect.

(d)           Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have to the Company, the Guarantors or any non-defaulting Initial Purchaser for damages caused by its default.

10.          Payment of Expenses.

(a)           Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Guarantors jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the preparation and printing of the Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the Offering Memorandum (including any amendment or supplement thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the reasonable fees and expenses of the Company’s and the Guarantors’ counsel and independent accountants; (v) all reasonable out-of-pocket costs and expenses of the Initial Purchasers (including, without limitation, 50% of the reasonable fees, disbursements and other charges of legal counsel and other experts up to $250,000); provided that, if the Initial Purchasers default in their obligation to purchase the Securities, such that no Securities are purchased hereunder or if this Agreement is terminated pursuant to Section 8 (other than Section 8(ii)), the Company has no obligation pursuant to this clause (v); (vi) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities under the laws of such United States and Canadian jurisdictions as the Representative may designate, the preparation, printing and distribution of a Blue Sky Memorandum (including filing fees and the related fees and expenses of counsel for the Initial Purchasers); (vii) any fees charged by rating agencies for rating the Securities; (viii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (ix) all expenses and application fees incurred in connection with the application for the approval of the Securities for book-entry transfer by DTC; and (x) all expenses incurred by the Company in connection

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with any “road show” presentation to potential investors (except that, subject to Section 10(b), the Initial Purchasers shall pay 50% of the cost of any aircraft used in connection with the “road show”).

(b)           If (i) this Agreement is terminated pursuant to Section 8(ii) (other than as the result of an event of the type described in Section 8(i)), (ii) the Company for any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the Securities for any reason permitted under this Agreement, the Company and each of the Guarantors jointly and severally agrees to reimburse the Initial Purchasers for all out-of-pocket costs and expenses (including the reasonable fees and expenses of their counsel and the full cost of any aircraft used in connection with the “road show”) reasonably incurred by the Initial Purchasers in connection with this Agreement and the offering contemplated hereby.

11.          Persons Entitled to Benefit of Agreement.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Initial Purchaser referred to in Section 7 hereof.  Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.  No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor merely by reason of such purchase.

12.          Survival.  The respective indemnities, rights of contribution, representations, warranties (it being understood that such representations and warranties are made only as of the date hereof and as of the date of any officer’s certificate delivered pursuant to Section 6(d)) and agreements of the Company, the Guarantors and the Initial Purchasers contained in this Agreement or made by or on behalf of the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Guarantors or the Initial Purchasers.

13.          Certain Defined Terms.  For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “Exchange Act” means the Securities Exchange Act of 1934, as amended; (d) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; (e) the term “written communication” has the meaning set forth in Rule 405 under the Securities Act; (f) the term  “Collateral Agent” shall mean The Bank of New York Mellon Trust Company, N.A., in its capacity as collateral agent for the holders of the Securities; (g) the term “Security Agreement” shall mean the security agreement to be dated as of the Closing Date, among the Company, the Guarantors and the Collateral Agent; (h) the term “Trademark Security Agreement” shall mean the trademark security agreement to be dated as of the Closing Date, among the Company, the Guarantors party thereto and the Collateral Agent; (i) the term “Copyright Security Agreement” shall mean the copyright security agreement to be dated as of the Closing Date, among the Company, the Guarantors party thereto and the Collateral Agent; and (j) the term “Security Documents” shall mean (i) the Security Agreement, (ii) the Trademark Security Agreement, (iii) the Copyright Security Agreement and (iv) any other

29

instruments evidencing or creating or purporting to create a security interest in favor of the Collateral Agent to secure the Securities and the Guarantees.

14.          Miscellaneous.

(a)           Authority of the Representative.  Any action by the Initial Purchasers hereunder may be taken by J.P. Morgan Securities LLC on behalf of the Initial Purchasers, and any such action taken by J.P. Morgan Securities LLC shall be binding upon the Initial Purchasers.

(b)           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication.  Notices to the Initial Purchasers shall be given to the Representative c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179 (fax: (212) 270-1063); Attention: Richard Gabriel.  Notices to the Company and the Guarantors shall be given c/o The McClatchy Company, 2100 “Q” Street, Sacramento, California 95816 (fax: (916) 326-5586); Attention: Karole Morgan-Prager, with a copy to Wilson Sonsini Goodrich Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304 (fax: (650) 493-6811); Attention Michael A. Occhiolini.

(c)           Governing Law, etc.  This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York.  THE COMPANY, EACH GUARANTOR AND EACH INITIAL PURCHASER EACH IRREVOCABLY AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY TO THIS AGREEMENT OR THE PERFORMANCE HEREOF.  The Company and each guarantor irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in the County and City of New York over any suit, action or proceeding arising out of or relating to this agreement.  Service of process, summons, notice or document by registered mail addressed to the Company or any Guarantor shall be effective service of process against such person for such suit, action or proceeding brought in any such court.  The Company and each Guarantor irrevocably and unconditionally waives any objection to the laying of venue in any suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum.  A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction the Company or any Guarantor is or may be subject, by suit upon judgment.  The Company and each Guarantor further agrees that nothing herein shall affect any Initial Purchaser’s right to effect service of process in any other manner permitted by law or bring a suit, action or proceeding (including a proceeding for enforcement of a judgment) in any other court or jurisdiction in accordance with applicable law.

(d)           Counterparts.  This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

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(e)           Amendments or Waivers.  No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

(f)            Headings.  The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

15.          Compliance with USA Patriot Act.  In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.

[Remainder of page intentionally left blank]

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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours,
THE MCCLATCHY COMPANY
By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	Vice President, Finance,
		Chief Financial Officer and Treasurer

[Signature Page to Purchase Agreement]

ABOARD PUBLISHING, INC.

ANCHORAGE DAILY NEWS, INC.

BELTON PUBLISHING COMPANY, INC.

BISCAYNE BAY PUBLISHING, INC.

CASS COUNTY PUBLISHING COMPANY

COLUMBUS LEDGER-ENQUIRER, INC.

CYPRESS MEDIA, INC.

EAST COAST NEWSPAPERS, INC.

GULF PUBLISHING COMPANY, INC.

HLB NEWSPAPERS, INC.

KELTATIM PUBLISHING COMPANY, INC.

KEYNOTER PUBLISHING COMPANY, INC.

LEE’S SUMMIT JOURNAL, INCORPORATED

LEXINGTON H-L SERVICES, INC.

MACON TELEGRAPH PUBLISHING COMPANY

MAIL ADVERTISING CORPORATION

MCCLATCHY INTERACTIVE WEST

MCCLATCHY INVESTMENT COMPANY

MCCLATCHY NEWSPAPERS, INC.

MCCLATCHY U.S.A., INC.

MIAMI HERALD MEDIA COMPANY

NEWSPRINT VENTURES, INC.

NITTANY PRINTING AND PUBLISHING COMPANY

NOR-TEX PUBLISHING, INC.

OLYMPIC-CASCADE PUBLISHING, INC.

PACIFIC NORTHWEST PUBLISHING COMPANY, INC.

STAR-TELEGRAM, INC.

TACOMA NEWS, INC.

THE BRADENTON HERALD, INC.

THE CHARLOTTE OBSERVER PUBLISHING COMPANY

THE NEWS AND OBSERVER PUBLISHING COMPANY

THE STATE MEDIA COMPANY

THE SUN PUBLISHING COMPANY, INC.

TRIBUNE NEWSPRINT COMPANY

WICHITA EAGLE AND BEACON PUBLISHING COMPANY, INC.

WINGATE PAPER COMPANY

By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	Vice President

[Signature Page to Purchase Agreement]

MCCLATCHY INTERACTIVE LLC
MCCLATCHY MANAGEMENT SERVICES, INC.
By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	President
BELLINGHAM HERALD PUBLISHING, LLC
IDAHO STATESMAN PUBLISHING, LLC
OLYMPIAN PUBLISHING, LLC
By:	Pacific Northwest Publishing Company, Inc., its Sole Member
By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	Vice President
CYPRESS MEDIA, LLC
By:	Cypress Media, Inc.,
	its Sole Member
By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	Vice President
SAN LUIS OBISPO TRIBUNE, LLC
By:	The McClatchy Company,
	its Sole Member
By:	/s/ Elaine Lintecum
	Name:	Elaine Lintecum
	Title:	Vice President

[Signature Page to Purchase Agreement]

Accepted: December 3, 2012
J.P. MORGAN SECURITIES LLC
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By:	/s/ Earl E. Dowling
	Authorized Signatory

[Signature Page to Purchase Agreement]

SCHEDULE 1

Initial Purchaser	Principal Amount
J.P. Morgan Securities LLC	$
Merrill Lynch, Pierce, Fenner & Smith Incorporated	$
Credit Suisse Securities (USA) LLC	$
Total	$	910,000,000

SCHEDULE 2

Guarantors

Aboard Publishing, Inc., a Florida corporation

Anchorage Daily News, Inc., an Alaska corporation

Bellingham Herald Publishing, LLC, a Delaware limited liability company

Belton Publishing Company, Inc., a Missouri corporation

Biscayne Bay Publishing, Inc., a Florida corporation

Cass County Publishing Company, a Missouri corporation

Columbus-Ledger Enquirer, Inc., a Georgia corporation

Cypress Media, Inc., a New York corporation

Cypress Media, LLC, a Delaware limited liability company

East Coast Newspapers, Inc., a South Carolina corporation

Gulf Publishing Company, Inc., a Mississippi corporation

HLB Newspapers, Inc., a Missouri corporation

Idaho Statesman Publishing, LLC, a Delaware limited liability company

Keltatim PublishingCompany, Inc., a Kansas corporation

Keynoter Publishing Company, Inc., a Florida corporation

Lee’s Summit Journal, Incorporated, a Missouri corporation

Lexington H-L Services, Inc., a Kentucky corporation

Macon Telegraph Publishing Company, a Georgia corporation

Mail Advertising Corporation, a Texas corporation

McClatchy Interactive LLC, a Delaware limited liability company

McClatchy Interactive West, a Delaware corporation

McClatchy Investment Company, a Delaware corporation

McClatchy Management Services, Inc., a Delaware corporation

McClatchy Newspapers, Inc., a Delaware corporation

McClatchy U.S.A., Inc., a Delaware corporation

Miami Herald Media Company, a Delaware corporation

Newsprint Ventures, Inc., a California corporation

Nittany Printing and Publishing Company, a Pennsylvania corporation

Nor-Tex Publishing, Inc., a Texas corporation

Olympian Publishing, LLC, a Delaware limited liability company

Olympic-Cascade Publishing, Inc., a Washington corporation

Pacific Northwest Publishing Company, Inc., a Florida corporation

Quad County Publishing, Inc., an Illinois corporation

San Luis Obispo Tribune, LLC, a Delaware limited liability company

Star-Telegram, Inc., a Delaware corporation

Tacoma News, Inc., a Washington corporation

The Bradenton Herald, Inc., a Florida corporation

The Charlotte Observer Publishing Company, a Delaware corporation

The News and Observer Publishing Company, a North Carolina corporation

The State Media Company, a South Carolina corporation

The Sun Publishing Company, Inc., a South Carolina corporation

Tribune Newsprint Company, a Utah corporation

Wichita Eagle and Beacon Publishing Company, Inc., a Kansas corporation

Wingate Paper Company, a Delaware corporation

2

SCHEDULE 3

Subsidiaries of The McClatchy Company

Aboard Publishing, Inc., a Florida corporation

Anchorage Daily News, Inc., an Alaska corporation

Bellingham Herald Publishing, LLC, a Delaware limited liability company

Belton Publishing Company, Inc., a Missouri corporation

Big Valley, Inc.

Biscayne Bay Publishing, Inc., a Florida corporation

Cass County Publishing Company, a Missouri corporation

Columbus-Ledger Enquirer, Inc., a Georgia corporation

Cypress Media, Inc., a New York corporation

Cypress Media, LLC, a Delaware limited liability company

Dagren, Inc.

Double A Publishing, Inc.

East Coast Newspapers, Inc., a South Carolina corporation

El Dorado Newspapers

The Gables Publishing Company

Gulf Publishing Company, Inc., a Mississippi corporation

HLB Newspapers, Inc., a Missouri corporation

Idaho Statesman Publishing, LLC, a Delaware limited liability company

Keltatim PublishingCompany, Inc., a Kansas corporation

Keynoter Publishing Company, Inc., a Florida corporation

Lee’s Summit Journal, Incorporated, a Missouri corporation

Lexington H-L Services, Inc., a Kentucky corporation

Macon Telegraph Publishing Company, a Georgia corporation

Mail Advertising Corporation, a Texas corporation

McClatchy Interactive LLC, a Delaware limited liability company

McClatchy Interactive West, a Delaware corporation

McClatchy International, Inc.

McClatchy Investment Company, a Delaware corporation

McClatchy Leasing Company

McClatchy Management Services, Inc., a Delaware corporation

McClatchy Net Ventures

McClatchy News Services

McClatchy Newspaper Sales, Inc.

McClatchy Newspapers, Inc., a Delaware corporation

McClatchy Newsprint Company

McClatchy Property, Inc.

McClatchy Resources

McClatchy Sales, Inc.

McClatchy Shared Services

McClatchy U.S.A., Inc., a Delaware corporation

Mediastream, Inc.

Miami Herald Media Company, a Delaware corporation

N&O Holdings, Inc.

Newsprint Ventures, Inc., a California corporation

Nittany Printing and Publishing Company, a Pennsylvania corporation

Nor-Tex Publishing, Inc., a Texas corporation

Oak Street Development Corporation

Olympian Publishing, LLC, a Delaware limited liability company

Olympic-Cascade Publishing, Inc., a Washington corporation

Pacific Northwest Publishing Company, Inc., a Florida corporation

Quad County Publishing, Inc., an Illinois corporation

Richwood, Inc.

Runways Pub, Inc.

San Luis Obispo Tribune, LLC, a Delaware limited liability company

Star-Telegram, Inc., a Delaware corporation

Tacoma News, Inc., a Washington corporation

The Bradenton Herald, Inc., a Florida corporation

The Charlotte Observer Publishing Company, a Delaware corporation

The News and Observer Publishing Company, a North Carolina corporation

The State Media Company, a South Carolina corporation

The Sun Publishing Company, Inc., a South Carolina corporation

Tribune Newsprint Company

Wichita Eagle and Beacon Publishing Company, Inc., a Kansas corporation

Wingate Paper Company, a Delaware corporation

2

ANNEX A

a.             Additional Time of Sale Information

1.             Term sheet containing the terms of the securities, substantially in the form of Annex B.

ANNEX B

See attached.

Pricing term sheet dated December 3, 2012 to Preliminary Offering Memorandum dated November 28, 2012 of The McClatchy Company (the “Company”)

This pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum.  The information in this pricing term sheet supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum.  Defined terms used and not defined herein have the meaning ascribed to them in the Preliminary Offering Memorandum.

The notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and are being offered only to (1) “qualified institutional buyers” as defined in Rule 144A under the Securities Act and (2) outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act.

Issuer:	The McClatchy Company
Security Description:	Senior Secured Notes
Distribution:	144A/RegS with Registration Rights
Principal Amount:	$910,000,000, which represents an increase of $160,000,000 from the Preliminary Offering Memorandum
Gross Proceeds:	$910,000,000
Coupon:	9.000%
Maturity:	December 15, 2022
Issue Price:	100.000%, plus accrued interest from December 18, 2012
Yield to Maturity:	9.000%
Spread to Treasury:	+737 basis points
Benchmark:	UST 1.625% due November 15, 2022
Interest Payment Dates:	December 15 and June 15, commencing June 15, 2013
Equity Clawback:	Up to 35% at 109.000% prior to December 15, 2015
Optional Redemption:	Make-whole call at T+50bps prior to December 15, 2017, then:

On or after:	Price:
December 15, 2017	104.500	%
December 15, 2018	103.000	%
December 15, 2019	101.500	%
December 15, 2020 and thereafter	100.000	%

Change of Control:	Putable at 101% of principal plus accrued and unpaid interest
Trade Date:	December 3, 2012
Settlement Date:	December 18, 2012 (T+11)
CUSIP:	144A: 579489 AF2 Reg S: U57365 AC9
ISIN:	144A: US579489AF22 Reg S: USU57365AC99
Denominations:	2,000x1,000

Initial Purchasers:	J.P. Morgan Securities LLC
	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	Credit Suisse Securities (USA) LLC
Other Changes to Preliminary Offering Memorandum:
Concurrent Transactions:	On December 3, 2012, we amended and restated the note tender offer and Consent Solicitation, to (i) increase the amount we are offering to purchase in our note tender offer from “up to $700.0 million” to “any and all” of our outstanding 2017 notes, (ii) modify the proposed amendments requested in the Consent Solicitation to eliminate substantially all of the restrictive covenants and events of default contained in the indenture governing the 2017 notes and release all of the collateral securing the 2017 notes from the liens created under the collateral documents in favor of the holders of 2017 notes, and (iii) modify the expected early settlement date with respect to notes validly tendered and not validly withdrawn prior to the early tender date to be December 18, 2012. If the Requisite Consents are received prior to the early tender date, on the closing date of this offering we will deliver a notice of redemption for any 2017 notes not tendered in the note tender offer to redeem such 2017 notes at a redemption price per $1,000 principal amount of 2017 notes determined in accordance with the indenture for the 2017 notes. If the Requisite Consents are not received on or prior to the early tender date, we will terminate the note tender offer, and on the closing date we will deliver a notice of redemption for all outstanding 2017 notes to redeem such 2017 notes at a redemption price per $1,000 principal amount of 2017 notes determined in accordance with the indenture for the 2017 notes and will satisfy and discharge our obligations with respect to the indenture for the 2017 notes, all in accordance with the indenture for the 2017 notes. As a result of the changes to the concurrent note tender offer, the closing of this offering will no longer be conditioned on the Company’s receipt of the Requisite Consents at or prior to closing of this offering and the Preliminary Offering Memorandum will be modified to reflect that the 2017 notes will not remain outstanding after the closing of this offering.
	As of September 23, 2012, on an adjusted basis after giving effect to the Refinancing:
	·      we and the guarantors would have had approximately $1.7 billion of total indebtedness;
	·we and the guarantors would have had approximately $994.3 million of total secured indebtedness consisting of the notes and approximately $46.0 million of loans and approximately $38.3 million of undrawn letters of credit outstanding under the Amended and Restated Credit Agreement; we would also have had approximately $5.7 million of availability under the Amended and Restated

2

	Credit Agreement;
	·      we and the guarantors would have had approximately $718.0 million of existing unsecured indebtedness that was effectively subordinated to the notes and the guarantees to the extent of the value of the collateral for the notes and the guarantees; and
	·      our non-guarantor subsidiaries would have had approximately $3.7 million of indebtedness and no other liabilities (excluding intercompany balances and obligations of a type not required to be reflected on a balance sheet prepared in accordance with GAAP), which are structurally senior to the notes and the guarantees.
Summary Historical Consolidated Financial Information and Other Data:	The “Dividends from equity investments” for the nine months ended September 23, 2012 are changed from “3,951” to “2,874”; the “Dividends from equity investments for the last twelve months ended September 23, 2012 are changed from “34,123” to “33,046”; “Adjusted EBITDA” for the nine months ended September 23, 2012 is changed from “$210,248” to “$209,171” and “Adjusted EBITDA” for the last twelve months ended September 23, 2012 is changed from “366,897” to “365,820”, in each case in Dollars in thousands.
Capitalization:	The “As Adjusted” column to the Capitalization Table on page 40 of the Preliminary Offering Memorandum will be replaced as follows:

	September 23, 2012
	Actual(1)		As adjusted
	(in thousands)
Cash and cash equivalents	$	15,749	$	—	(2)
Debt:
Revolving credit facility(3)	$	0	$	46,000
Term loans
9.000% senior secured notes offered hereby	—		910,000
4.625% notes due in 2014	66,438		66,438
11.50% senior secured notes due 2017	846,000		—
5.750% notes due in 2017	286,138		286,138
7.150% debentures due in 2027	89,188		89,188
6.875% debentures due in 2029	276,230		276,230
Total debt	1,563,994		1,673,994
Total stockholders’ equity(4)	210,299		210,299
Total capitalization	$	1,774,293	$	1,884,293

(1)Amounts reflect principal amount of debt, not including any discounts or premiums recorded in the Company’s financial statements.

(2)Does not reflect increases in cash and cash equivalents since September 23, 2012.  Reflects use of cash and cash equivalents to finance a portion of the Refinancing, including to pay accrued and unpaid interest on the 2017 notes from the last interest payment date to, but excluding, the early settlement date of the note tender offer.

(3)Our Amended and Restated Credit Agreement will consist of a $90.0 million revolving credit facility, of which approximately $46.0 million is expected to be borrowed at the closing of the offering (excluding $38.3 million of undrawn letters of credit).

(4)Does not reflect any gain or loss as a result of the Refinancing.

3

Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded.  Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.

4

ANNEX C

Restrictions on Offers and Sales Outside the United States

In connection with offers and sales of Securities outside the United States:

(a)           Each Initial Purchaser acknowledges that the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act.

(b)           Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i)           Such Initial Purchaser has offered and sold the Securities, and will offer and sell the Securities, (A) as part of their distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date, only in accordance with Regulation S under the Securities Act (“Regulation S”) or Rule 144A or any other available exemption from registration under the Securities Act.

(ii)            None of such Initial Purchaser or any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities, and all such persons have complied and will comply with the offering restrictions requirement of Regulation S.

(iii)            At or prior to the confirmation of sale of any Securities sold in reliance on Regulation S, such Initial Purchaser will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases Securities from it during the distribution compliance period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities and the date of original issuance of the Securities, except in accordance with Regulation S or Rule 144A or any other available exemption from registration under the Securities Act.  Terms used above have the meanings given to them by Regulation S.”

(iv)           Such Initial Purchaser has not and will not enter into any contractual arrangement with any distributor with respect to the distribution of the Securities,

except with its affiliates that agree to comply with the provisions of this Annex C or with the prior written consent of the Company.

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in this Agreement have the meanings given to them by Regulation S.

(c)           Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i)           it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the United Kingdom Financial Services and Markets Act 2000 (the “FSMA”) does not apply to the Company or the Guarantors; and

(ii)            it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

(d)           Each Initial Purchaser acknowledges that no action has been or will be taken by the Company that would permit a public offering of the Securities, or possession or distribution of any of the Time of Sale Information, the Offering Memorandum, any Issuer Written Communication or any other offering or publicity material relating to the Securities, in any country or jurisdiction where action for that purpose is required.

(e)           Each Initial Purchaser severally agrees that, in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), it has not made and will not make an offer of the Securities to the public in that Relevant Member State other than:

(i)            to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(ii)           to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the initial purchaser; or

(iii)          in any other circumstances falling within Article 3(2) of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of the Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer

2

and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

(f)            Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell in the Netherlands any Securities with a denomination of less than €50,000 (or its other currency equivalent) other than to persons who trade or invest in securities in the conduct of a profession or business (which includes banks, stockbrokers, insurance companies, pension funds, other institutional investors and finance companies and treasury departments of large enterprises) unless one of the other exemptions from or exceptions to the prohibition contained in article 3 of the Dutch Securities Transactions Supervision Act 1995 (Wet toezicht effectenverkeer 1995) is applicable and the conditions attached to such exemption or exception are complied with.

3

ANNEX D

Form of Opinions of Wilson Sonsini Goodrich & Rosati, Professional Corporation

ANNEX E

Local Counsel Opinions

Jurisdiction	Local Counsel
Alaska	Davis Wright Tremaine LLP
Florida	Holland & Knight LLP
Georgia	Carlton Fields, P.A.
Kansas	Fleeson, Gooing, Coulson & Kitch, L.L.C.
Kentucky	Stoll Keenon Ogden, PLLC
Illinois	Lewis, Rice & Fingerish, L.C.
Mississippi	Watkins Ludlam Winter & Stennis, P.A.
Missouri	Lewis, Rice & Fingerish, L.C.
North Carolina	McGuireWoods LLP
Pennsylvania	Eisenstein & Bower, LLP
South Carolina	Wyche, Burgess, Freeman & Parham, P.A.

ANNEX F

Form of Opinion of Local Counsel for the Guarantors

1.Each Subsidiary Guarantor is a corporation duly incorporated and validly existing under the laws of the State of [                    ] and is in good standing under such laws.  Each Subsidiary Guarantor has the requisite corporate power to carry on its business as currently conducted.

2.Each Subsidiary Guarantor has the corporate power to (a) guarantee the Notes and (b) execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations under the terms of the Transaction Documents to which it is a party.

3.All corporate action on the part of the Subsidiary Guarantor, its directors and shareholders necessary for the authorization, execution and delivery of the Transaction Documents to which it is a party, and the performance by the Subsidiary Guarantor of its obligations under the Transaction Documents to which it is a party, has been taken.

4.The Purchase Agreement has been duly authorized, executed and delivered by each Subsidiary Guarantor.

5.The Indenture has been duly authorized, executed and delivered by each Subsidiary Guarantor.

6.The Guarantees of the Subsidiary Guarantors have been duly authorized, executed and delivered by each Subsidiary Guarantor.

7.The Registration Rights Agreement has been duly authorized, executed and delivered by each Subsidiary Guarantor.

8.The Security Agreement has been duly authorized, executed and delivered by each Subsidiary Guarantor.

9.The Intercreditor Agreement has been duly authorized, executed and delivered by each Subsidiary Guarantor.

10.The issue and sale of the Guarantees by the Subsidiary Guarantors, the compliance by the Subsidiary Guarantors with all of the provisions of the Transaction Documents to which it is a party, and the consummation of the transactions contemplated by the Transaction Documents to which it is a party will not (a) violate any provision of the [Certificate/Articles] of Incorporation or Bylaws of the Subsidiary Guarantor or (b) violate any statute, rule or regulation known to us to be customarily applicable to transactions of this nature.

11.No consent, approval, authorization, order, registration or qualification of or with any such U.S. Federal or [                    ] court or governmental agency or body, the State of

[                    ] under the [                    ] Corporation Law, is required for the issue and sale of the Guarantees by each of the Subsidiary Guarantors or the consummation of the transactions contemplated by the Transaction Documents to which it is a party.

12.If a financing statement in the form of the UCC-1 Financing Statement is communicated to the [                    ] [Secretary of State] by an authorized method of communication and an amount equal to the applicable filing fee is tendered to such filing office, such filing office will have an obligation to accept such financing statement.  Upon acceptance of the UCC-1 Financing Statement by such filing office, the security interest in the collateral described in both the UCC-1 Financing Statement and the Security Agreement, and for which perfection under [Article/Division] 9 of the [                    ] Uniform Commercial Code may occur by the filing of a UCC-1 financing statement with the [                    ] [Secretary of State], will be perfected.

2

EX-12

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Exhibit 12

The McClatchy Company
COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO
(in thousands, except ratio data)

	Year Ended
	December 30, 2012			December 25, 2011			December 26, 2010			December 27, 2009			December 28, 2008
Fixed Charge Computation
Interest expenses:
Net interest expense	$	151,334		$	165,434		$	177,641		$	127,276		$	157,385
Plus: Capitalized interest		748			193			101			200			192
Gross interest		152,082			165,627			177,742			127,476			157,577
Interest on unrecognized tax benefits		11,689			5,960			(1,632	)		(920	)		(9,478	)
Amortization of debt discount		(9,821	)		(11,092	)		(11,327	)		(7,442	)		(4,911	)
Interest component of rent expense		5,666			4,509			5,021			5,501			6,098
Total fixed charges	$	159,616		$	165,004		$	169,804		$	124,615		$	149,286
Earnings Computation
Income from continuing operations before income taxes	$	(21,526	)	$	62,785		$	38,701		$	83,561		$	22,085
(Earnings) losses of equity investments(1)		(31,935	)		(27,762	)		(11,752	)		(2,130	)		14,021
Impairment related charge recorded by equity investee(2)		–			–			2,947			2,022			16,947
Interest on unrecognized tax benefits		(11,689	)		(5,960	)		1,632			920			9,478
Distributed income of equity investees		38,600			31,625			24,274			1,135			1,740
Add: Fixed charges		159,616			165,004			169,804			124,615			149,286
Less: Capitalized interest		(748	)		(193	)		(101	)		(200	)		(192	)
Total earnings as adjusted	$	132,318		$	225,498		$	225,505		$	209,923		$	213,365
Ratio Of Earnings to Fixed Charges		0.83			1.37			1.33			1.68			1.43

⁽¹⁾

The earnings from equity investments in 2012 includes the Company's portion (approximately $7 million) of an impairment related charge that was recoreded by an equity investee.



⁽²⁾

Reflects the Company's portion of loss related to an impairment and recorded in "Write-down of investments and land held for sale" in the Consolidated Statement of Income.

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Exhibit 12

The McClatchy Company COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO (in thousands, except ratio data)

EX-21

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Exhibit 21

THE MCCLATCHY COMPANY

SUBSIDIARIES

The following is a list of subsidiaries of the Company as of December 30, 2012, omitting subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary.

Name of Entity	Jurisdiction of Organization
Aboard Publishing, Inc.	Florida
Anchorage Daily News, Inc.	Alaska
Bellingham Herald Publishing, LLC	Delaware
Belton Publishing Company, Inc.	Missouri
Big Valley, Inc.	California
Biscayne Bay Publishing, Inc.	Florida
Cass County Publishing Company	Missouri
Columbus-Ledger Enquirer, Inc.	Georgia
Cypress Media, Inc.	New York
Cypress Media, LLC	Delaware
Dagren, Inc.	Florida
Double A Publishing, Inc.	Florida
East Coast Newspapers, Inc.	South Carolina
El Dorado Newspapers	California
Gulf Publishing Company, Inc.	Mississippi
HLB Newspapers, Inc.	Missouri
Idaho Statesman Publishing, LLC	Delaware
Keltatim Publishing Company, Inc.	Kansas
Keynoter Publishing Company, Inc.	Florida
Lee's Summit Journal, Inc.	Missouri
Lexington H-L Services, Inc.	Kentucky
Macon Telegraph Publishing Company	Georgia
Mail Advertising Corporation	Texas
McClatchy Interactive LLC	Delaware
McClatchy Interactive West	Delaware
McClatchy International, Inc.	Delaware
McClatchy Investment Company	Delaware
McClatchy Leasing Company, Inc.	Florida
McClatchy Management Services, Inc.	Delaware
McClatchy Net Ventures, Inc.	Delaware
McClatchy News Services, Inc.	Michigan
McClatchy Newspaper Sales, Inc.	New York
McClatchy Newspapers, Inc.	Delaware
McClatchy Newsprint Company	Florida
McClatchy Property, Inc.	Florida
McClatchy Resources, Inc.	Florida
McClatchy Sales, Inc.	Delaware
McClatchy Shared Services, Inc.	Florida
McClatchy U.S.A., Inc.	Delaware
Mediastream, Inc.	Delaware
Miami Herald Media Company	Delaware
N&O Holdings, Inc.	Delaware
Newsprint Ventures, Inc.	California
Nittany Printing and Publishing Company	Pennsylvania
Nor-Tex Publishing, Inc.	Texas

Name of Entity	Jurisdiction of Organization
Oak Street Redevelopment Corporation	Missouri
Olympian Publishing, LLC	Delaware
Olympic-Cascade Publishing, Inc.	Washington
Pacific Northwest Publishing Company, Inc.	Florida
Quad County Publishing, Inc.	Illinois
Richwood, Inc.	Florida
Runways Pub, Inc.	Delaware
San Luis Obispo Tribune, LLC	Delaware
Star-Telegram, Inc.	Delaware
Tacoma News, Inc.	Washington
The Bradenton Herald, Inc.	Florida
The Charlotte Observer Publishing Company	Delaware
The Gables Publishing Company	Florida
The News and Observer Publishing Company	North Carolina
The State Media Company	South Carolina
The Sun Publishing Company, Inc.	South Carolina
Tribune Newsprint Company	Utah
Wichita Eagle and Beacon Publishing Company, Inc.	Kansas
Wingate Paper Company	Delaware

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Exhibit 21

THE MCCLATCHY COMPANY SUBSIDIARIES

EX-23

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Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements No. 33-21704, No. 33-24096, No. 33-37300, No. 33-65104, No. 33-56717, No. 333-42903, No. 333-59811, No. 333-61214, and No. 333-181167 on Form S-8 and No. 333-47909 on Form S-3 of our report dated March 5, 2013, relating to the consolidated financial statements of The McClatchy Company, and the effectiveness of The McClatchy Company's internal control over financial reporting, appearing in this Annual Report on Form 10-K of The McClatchy Company for the year ended December 30, 2012.

/s/ DELOITTE & TOUCHE LLP

Sacramento, California
March 5, 2013

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Exhibit 23

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 33-21704, 33-24096, 33-37300, 33-65104, 33-56717, 333-42903, 333-59811, 333-61214, and 333-181167) and on Form S-3 (No. 333-47909) of the McClatchy Company of our report dated February 22, 2013, relating to the financial statements of Classified Ventures, LLC, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

March 5, 2013

EX-31.1

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Exhibit 31.1

CERTIFICATION

I, Patrick J. Talamantes, certify that:

1.

I have reviewed this annual report on Form 10-K of The McClatchy Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 5, 2013 /s/  Patrick J. Talamantes
      Patrick J. Talamantes
      Chief Executive Officer

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

CERTIFICATION

I, R. Elaine Lintecum, certify that:

1.

I have reviewed this annual report on Form 10-K of The McClatchy Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 5, 2013 /s/  R. Elaine Lintecum
      R. Elaine Lintecum
      Chief Financial Officer

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Exhibit 31.2

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the annual report of The McClatchy Company (the "Company") on Form 10-K for the fiscal year ended December 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patrick J. Talamantes, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 5, 2013 /s/  Patrick J. Talamantes
      Patrick J. Talamantes
      Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to The McClatchy Company and will be retained by The McClatchy Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certificate is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.

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Exhibit 32.1

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the annual report of The McClatchy Company (the "Company") on Form 10-K for the fiscal year ended December 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, R. Elaine Lintecum, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 5, 2013 /s/  R. Elaine Lintecum
      R. Elaine Lintecum
      Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to The McClatchy Company and will be retained by The McClatchy Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certificate is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.

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Exhibit 32.2

EX-99.1

Exhibit 99.1

Classified Ventures, LLC

Consolidated Financial Statements

For the Years Ended December 31, 2012, 2011 and 2010

Classified Ventures, LLC

Index

December 31, 2012, 2011 and 2010

	Page(s)
Report of Independent Auditors
Financial Statements
Consolidated Balance Sheets	1
Consolidated Statements of Operations	2
Consolidated Statements of Cash Flows	3
Consolidated Statements of Changes in Members’ Equity	4
Notes to Consolidated Financial Statements	5-17

Independent Auditor’s Report

To the Board of Directors and Members of Classified Ventures, LLC

We have audited the accompanying consolidated financial statements of Classified Ventures, LLC and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2012 and December 31, 2011, and the related consolidated statements of operations, of changes in members’ equity and of cash flows for each of the three years ended December 31, 2012.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits.  We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Classified Ventures, LLC and its subsidiaries at December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years ended December 31, 2012, 2011, and 2010 in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Chicago, IL

February 22, 2013

Classified Ventures, LLC

Consolidated Balance Sheets

December 31, 2012 and 2011

(In thousands of dollars)	2012		2011
Assets
Current assets
Cash and cash equivalents	$	19,059	$	30,882
Restricted cash	—		45,253
Marketable securities held in trust	2,267		2,280
Accounts receivable, net of allowance for doubtful accounts of $1,858 and $1,818 respectively	64,248		51,252
Affiliate Investor accounts receivable	8,522		8,147
Prepaid expenses & other current assets	7,240		5,801
Total current assets	101,336		143,615
Property and equipment, net of accumulated depreciation	19,906		17,252
Marketable securities held in trust, less current portion	8,832		8,137
Goodwill	15,868		15,868
Investment	5,002		—
Definite lived intangible assets	343		601
Total assets	$	151,287	$	185,473
Liabilities and Members' Equity
Current liabilities
Accounts payable	$	9,550	$	9,270
Accrued compensation and related costs	13,426		12,125
Accrued expenses & other current liabilities	21,812		25,090
Dividend payable	—		45,253
Deferred revenue	852		1,723
Current portion deferred Long Term Incentive Plan	2,267		2,280
Total current liabilities	47,907		95,741
Deferred Long Term Incentive Plan, less current portion	8,104		7,649
Deferred rent	3,940		4,829
Total liabilities	59,951		108,219
Commitments and contingencies (Note 16)
Members' equity	91,336		77,254
Total liabilities and members' equity	$	151,287	$	185,473

The accompanying notes are an integral part of these financial statements.

1

Classified Ventures, LLC

Consolidated Statements of Operations

Years Ended December 31, 2012, 2011 and 2010

(In thousands of dollars)	2012			2011			2010
Operating revenue
Net revenue	$	353,624		$	300,931		$	256,866
Net revenue Affiliate Investor	79,613			70,923			64,103
Total net operating revenue	$	433,237		$	371,854		$	320,969
Operating expenses
Product support, technology and operations	102,892			88,302			78,036
Marketing and sales	188,375			163,277			141,245
General and administrative	34,239			32,311			32,058
Affiliate revenue share	19,808			15,185			13,176
Total operating expenses	345,314			299,075			264,515
Operating income	87,923			72,779			56,454
Other income (loss)
Interest income	—			12			72
Gain (loss) on investments	908			(26		)	841
Income from continuing operations	88,831			72,765			57,367
Discontinued operations
(Loss) from discontinued operations (including goodwill impairment charges of $11,513 in 2010)	(749		)	(316		)	(12,121		)
Net income	$	88,082		$	72,449		$	45,246

The accompanying notes are an integral part of these financial statements.

2

Classified Ventures, LLC

Consolidated Statements of Cash Flows

Years Ended December 31, 2012, 2011 and 2010

(In thousands of dollars)	2012			2011			2010
Cash flows from operating activities
Net income	$	88,082		$	72,449		$	45,246
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	9,300			9,099			8,974
Goodwill impairment charges	—			—			11,513
Deferred compensation	3,031			2,405			2,216
Loss on disposition of property and equipment	15			—			—
Loss (gain) on trading securities related to deferred compensation	(908		)	26			(841		)
Provision for accounts receivable	2,453			1,302			2,120
Purchase of trading securities related to deferred compensation plan	(2,363		)	(2,755		)	(2,217		)
Change in operating assets and liabilities
Accounts receivable	(15,824		)	(12,888		)	(6,663		)
Prepaid expenses and other current assets	(1,439		)	92			1,536
Accounts payable	(363		)	(3,044		)	(5,774		)
Accrued expenses and other current liabilities	(2,601		)	5,397			3,808
Deferred revenue	(871		)	804			(1,084		)
Deferred rent	(889		)	(822		)	(1,146		)
Other long term liabilities	—			(8		)	632
Net cash provided by operating activities	77,623			72,057			58,320
Cash flows from investing activities
Change in restricted cash	45,253			(18,884		)	(26,369		)
Purchase of patent	—			—			(150		)
Proceeds from the sale of property and equipment	42			—			—
Purchase of investment	(5,002		)	—			—
Purchase of property and equipment	(10,486		)	(5,926		)	(8,916		)
Net cash provided / (used) in investing activities	29,807			(24,810		)	(35,435		)
Cash flows from financing activities
Dividend paid to investors	(119,253		)	(49,126		)	(68,631		)
Business acquisition earnout payment	—			—			(1,138		)
Net cash used in financing activities	(119,253		)	(49,126		)	(69,769		)
Net decrease in cash	(11,823		)	(1,879		)	(46,884		)
Cash and cash equivalents
Beginning of years	30,882			32,761			79,645
End of years	$	19,059		$	30,882		$	32,761
Supplemental disclosure of noncash investing and financing activities
Purchases of property, plant and equipment in accrued liabilities and accounts payables at the end of the years	$	1,635		$	367		$	269
Dividends declared but not paid	—			18,874			26,369

The accompanying notes are an integral part of these financial statements.

3

Classified Ventures, LLC

Consolidated Statements of Changes in Members’ Equity

Years Ended December 31, 2012, 2011 and 2010

(Units and dollars in thousands)

	Members’ Equity
	Common Units						Treasury Units									Additional
	Class A			Class B			Class A				Class B					Paid-In			Accumulated
	Units	Amount		Units	Amount		Units		Amount		Units		Amount			Capital			Deficit			Total
Balance at December 31, 2009	184,873	$	1,848	1,579	$	16	(5,710	)	$	—	(1,579	)	$	(2,416	)	$	468,960		$	(345,849	)	$	122,559
Net Income																			45,246			45,246
Dividends paid to investors																(68,631		)				(68,631		)
Dividend payable to investor																(26,369		)				(26,369		)
Balance at December 31, 2010	184,873	$	1,848	1,579	$	16	(5,710	)	$	—	(1,579	)	$	(2,416	)	$	373,960		$	(300,603	)	$	72,805
Net Income																			72,449			72,449
Dividends paid to investors																(49,126		)				(49,126		)
Dividend payable to investor																(18,874		)				(18,874		)
Balance at December 31, 2011	184,873	$	1,848	1,579	$	16	(5,710	)	$	—	(1,579	)	$	(2,416	)	$	305,960		$	(228,154	)	$	77,254
Net Income																			88,082			88,082
Dividends paid to investors																(74,000		)				(74,000		)
Balance at December 31, 2012	184,873	$	1,848	1,579	$	16	(5,710	)	$	—	(1,579	)	$	(2,416	)	$	231,960		$	(140,072	)	$	91,336

The accompanying notes are an integral part of these financial statements.

4

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

1.Summary of Significant Accounting Policies

Basis of Presentation

Classified Ventures, LLC (the “Company”) is a strategic joint venture among five large media partners whose objectives are to collectively capitalize on revenue growth in the online classified categories of automotive, rentals and real estate. The strategic partners are Gannett Co., Inc., The McClatchy Company, Tribune Company, The Washington Post Company and A.H. Belo Corporation (the “Investors”).

The Company provides online services in classified advertising marketplaces that build upon the local capabilities and expertise of its affiliated network of approximately 120 newspapers and television stations (the “Affiliates”). Investor Affiliates are Affiliates that are owned by our Investors and Non-Investor Affiliates are Affiliates that are not owned by our Investors.  In the automotive category, the Company has the nationally branded website, cars.com ™, (www.cars.com). In the rentals category, the Company has the nationally branded website, apartments.com™, (www.apartments.com). In the real estate category, the Company has the nationally branded website, HomeGain.com™, (www.homegain.com).

In February 2009, the Company purchased the assets of ApartmentHomeLiving.com, an online classified listing site for apartment rental properties based in Austin, Texas, for a cash payment of $2 million. The agreement also provided for additional payments to be made if certain earnings and traffic targets were met in the future, such payments totaled $1.5 million in 2010 and $1.7 million in 2009. This purchase enhances the product offering of Apartments.com along with expanding the existing customer base.

The Company provided administrative services to HomeFinder.com through a shared services agreement. The Company’s 2012, 2011 and 2010 financial results recognize revenue from the shared services agreement to the extent that expenses were incurred on behalf of the HomeFinder.com business. The services are charged at cost resulting in no impact to net income.

Revenue Recognition

The primary source of revenue for the Company is from the sale of online subscription advertising products for the automotive, rentals and real estate industry segments. Online advertising sales to Affiliates, auto dealers, property managers, real estate agents, brokers and private parties are recognized as the service is delivered. Revenue is recorded net of credits.

The Company also sells banner and sponsorship advertising on its websites, pursuant to fixed fee or transaction based contracts. The customers are billed for impressions delivered or click-throughs on their advertisements.  An impression is the display of an advertisement to an end-user on the website and is a measure of volume.  A click-through occurs when an end-user clicks on an impression.  Revenue is recognized evenly over the contract term for fixed fee contracts where a minimum number of impressions or click-throughs is not guaranteed.  Revenue is recognized as the service is delivered for transaction based contracts. If the impressions or click-throughs delivered are less than the amount billed, the difference is recorded as deferred revenue and recognized as earned.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated.

5

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of deposits in money market funds.

Restricted Cash

The Company had restricted cash of $0 and $45 million at December 31, 2012 and 2011, respectively, which was restricted to be used to pay dividends declared and payable in 2011 and 2010 to one of the Investors. The full restricted amount was disbursed to the Investor on February 9, 2012.

Marketable Securities Held in Trust

The Company’s marketable securities held in trust relate to the deferred compensation plan (see Note 13) and are classified as trading securities, with unrealized gains and losses included in the Company’s consolidated statements of operations. The marketable securities held in trust were $11.1 million, $10.4 million and $9.4 million as of December 31, 2012, 2011 and 2010, respectively.

Property and Equipment

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives as follows:

Computer software and hardware	3-5 years
Furniture and fixtures	7 years
Leasehold improvements	shorter of lease term or estimated useful life

Normal repairs and maintenance are expensed as incurred. The costs and related accumulated depreciation of assets sold or disposed of are removed from the balance sheet and any resulting gain or loss is included in the consolidated statement of operations.

Equity Investments

Investments in 20% to 50% owned companies, in which the Company has the ability to exercise significant influence over operating and financial policies of the invested company, but does not control the entity, are accounted for using the equity method. Non-marketable equity investments are recorded using the cost method or the equity method of accounting, depending on the facts and circumstances of each investment. Non-marketable investments in preferred shares that that do not meet criteria of in-substance common stock are accounted at cost. The Company’s non-marketable equity investments are classified within other long-term assets on the consolidated balance sheets.

Under current accounting guidance, the Company is exempt from estimating the annual fair value of the cost method investment if no impairment indicators are present because it meets all the following criteria: is a non-public entity, has total assets less than $100 million as of the financial reporting date and has no instrument that, in whole or in part, is accounted for as a derivative instrument.  The Company assesses annually if there are any identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment which may indicate impairment.  See Note 7 for additional investment information.

6

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

Goodwill

Goodwill represents the excess of the total purchase price of acquisitions over the fair value of the acquired assets. Goodwill is not amortized, but is subject to an impairment review annually and whenever indicators of impairment exist. Starting in 2012, the option was available to the Company to use the qualitative assessment of impairment.  The Company chose to test for goodwill impairment, at the reporting unit level, using the two-step process. The first step involves a comparison of the estimated fair value of each reporting unit with its carrying value. Fair value is estimated using discounted cash flows of the reporting unit based on planned growth rates, and estimates of discount rates and residual values. If the carrying value exceeds the fair value, the second step of the process is necessary. The second step measures the difference between the carrying value and implied fair value of goodwill. If the carrying value exceeds fair value, goodwill is considered impaired and is reduced to fair value.  The Company has goodwill as a result of its past acquisitions.  See Note 5 for additional goodwill disclosures.

Valuation of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets to be held or used whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying value of a long-lived asset is considered impaired when the projected undiscounted cash flows are less than the carrying value. No impairment losses were incurred in 2012 and 2011. In 2010, impairment losses incurred were immaterial.

Website and Product Development Costs

Website product development costs are capitalized based upon the nature of the costs incurred and the stage of the website’s development.

For software developed or obtained for internal use, the Company capitalizes costs based upon the nature of the costs incurred and the stage of software development. Internal-use software costs capitalized were immaterial for 2012 and 2011.

Advertising Expenses

The Company expenses all advertising costs as incurred.  Total advertising expense was $86.4 million, $77.3 million, and $67.2 million for the years ended December 31, 2012, 2011, and 2010, respectively.

Income Taxes

As a limited liability company, the Company, excluding HomeGain, is generally not subject to income taxes. HomeGain, a C corporation, accounts for income taxes in accordance with ASC 740, Income Taxes, and related accounting guidance.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used for, but are not limited to, the accounting for: allowance for uncollectible accounts receivable, depreciation and amortization, useful lives of definite-lived assets, accrued expenses, goodwill, commitments and contingencies, among others.

7

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of accounts receivable. To date, accounts receivable have primarily been derived from advertising fees billed to Affiliates, auto dealers, property managers, private parties, banner and sponsorship advertising clients and automobile manufacturers located in the United States. At December 31, 2012 and 2011, net accounts receivable from total Affiliates was $11.0 million and $10.6 million, respectively, which represented 15% and 18%, respectively, of the net accounts receivable. At December 31, 2012 and 2011, net accounts receivable from Investor Affiliates was $8.5 million and $8.2 million, respectively, which represents 12% and 14%, respectively of the net accounts receivable. At December 31, 2012 and 2011, net accounts receivable from Non-Investor Affiliates was $2.5 million and $2.4 million, respectively, which represents 3% and 4%, respectively of the net accounts receivable.

No Affiliate individually had accounts receivable greater than 10% of the consolidated total. The Company requires no collateral to support accounts receivable and maintains reserves for potential credit losses. Historically, such losses have been within management’s expectations. The Company maintains reserves based upon the expected collectability of accounts receivable and establishes specific reserves when appropriate. The Company also has potential credit risk concentration in the auto manufacturing and newspaper publishing sectors. Of the gross accounts receivable balance of $74.6 million and $61.2 million as of December 31, 2012 and 2011, respectively, the auto manufacturing and newspaper publishing sectors represent 26% and 27% and 15% and 27%, respectively as of December 31, 2012 and 2011.  No individual customer had a significant revenue concentration.

Changes in the allowance for doubtful accounts are as follows:

	2012			2011			2010
Balance at January 1	$	1,818		$	2,388		$	2,786
Charges to expenses	2,453			1,302			2,120
Write-offs, net of recoveries	(2,413		)	(1,872		)	(2,518		)
Balance at December 31	$	1,858		$	1,818		2,388

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued liabilities.  Due to the short-term nature of these items, the carrying values are deemed to approximate fair value.

8

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

2.Recently Issued Pronouncements

In July 2012, the FASB issued guidance related to the testing of indefinite-lived intangible assets for impairment.  The guidance provides an entity the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived asset is impaired.  If an entity concludes that it is more likely than not that an indefinite-lived intangible asset is not impaired, no further analysis is required.  However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount.  The guidance also gives the entity the option to bypass the qualitative assessment for any period and proceed directly to performing the quantitative impairment test and resume performing the qualitative assessment in any subsequent period. The Company adopted this guidance for fiscal years beginning on January 1, 2012 and it did not impact the Company’s consolidated financial statements.

3.Operating Leases

The company is obligated as lessee under certain non-cancelable operating leases for office space, and is also obligated to pay insurance, maintenance and other executory costs associated with the leases. Rental expense during 2012, 2011 and 2010 was approximately $6.3 million, $5.7 million and $5.2 million, respectively.

Future minimum operating lease payments at December 31, 2012 are as follows:

2013	$	7,500
2014	6,559
2015	5,227
2016	5,270
2017 and thereafter	3,810
Total	$	28,366

4.     Property and Equipment

Property and equipment at December 31, 2012 and 2011 consisted of the following:

	2012			2011
Computer software and hardware	$	41,788		$	33,411
Furniture and equipment	5,800			6,386
Leasehold improvements	6,113			5,877
	53,700			45,674
Less accumulated depreciation	(33,794		)	(28,422		)
Total	$	19,906		$	17,252

Depreciation expense was $9.0 million $8.6 million and $8.2 million for the years ended December 31, 2012, 2011 and 2010, respectively.

9

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

5.Goodwill

Management has determined the Company has three reporting units - Cars, Apartments and HomeGain. The goodwill is allocated as $12.4 million in the Cars reporting unit and $3.5 million in the Apartments reporting unit. The Company performs the required annual impairment assessment of its goodwill in the fourth quarter. Due to the continuing economic challenges in the real estate market and its effect on HomeGain’s financial results, the Company recognized an $11.5 million impairment charge to goodwill which was recorded as a result of the annual impairment test in 2010.  The accumulated impairment loss as of December 31, 2012 and December 31, 2011 is $85.6 million.  There is no goodwill remaining in the HomeGain reporting unit after the impairment.

Management determined that the fair value of the Cars and Apartments reporting units exceeded the respective carrying value significantly and accordingly, goodwill within these reporting units was not determined to be impaired.  Management will continue to evaluate for impairment of goodwill, if any, based on further declines in the real estate market or other impairment triggers.

6.Definite Lived Intangible Assets

The Company has definite lived intangible assets from recent acquisitions which consist primarily of unamortized assets that fully expire in the year 2020. The following table sets forth balance sheet information for intangible assets subject to amortization, excluding goodwill:

	URL/Domain						Vendor &
	and Trade			Customer			Affiliate			Overall
	Names			Relationships			Relationships			Technology			Patent			Total
At December 31, 2012
Gross intangible assets	$	2,136		$	1,590		$	360		$	4,200		$	510		$	8,796
Accumulated amortization	(2,135		)	(1,590		)	(360		)	(4,192		)	(176		)	(8,453		)
Intangible assets, net	$	1		$	—		$	—		$	8		$	334		$	343

	URL/Domain						Vendor &
	and Trade			Customer			Affiliate			Overall
	Names			Relationships			Relationships			Technology			Patent			Total
At December 31, 2011
Gross intangible assets	$	2,136		$	1,590		$	360		$	4,200		$	510		$	8,796
Accumulated amortization	(2,034		)	(1,590		)	(357		)	(4,092		)	(122		)	(8,195		)
Intangible assets, net	$	102		$	—		$	3		$	108		$	388		$	601

Amortization expense was $0.3 million, $0.5 million and $0.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. Based upon the current amount of intangibles subject to amortization, the estimated amortization expense for each of the succeeding five years is as follows:  2013: $0.1 million; 2014: $0.05 million; 2015: $0.05 million; 2016: $0.05 million; 2017: $0.05 million.  The useful lives range from 1- 9 years.

10

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

7.Business Investments

In November 2012, the Company invested $5.0 million for a 25% interest in RepairPal, an online marketplace offering consumers a price estimator for car repairs and an ability to research repair shop reviews, for preferred stock, initially convertible into an equal number of shares of common stock.  Each share of preferred stock carries a number of votes equal to the number of shares of common stock, has substantive liquidation preference and is not actively traded.

The Company accounts for its investment in RepairPal under the cost method. While the Company believes it has the ability to exercise significant influence, it has determined that its investment was not substantially similar to common stock on the acquisition date because it has a substantive liquidation preference over common stock.  This factor precludes the Company from accounting for the investment under the equity method.

The aggregate carrying amount of the investment at December 31, 2012 is $5.0 million.  The Company did not estimate the fair value of the investment because it did not identify any events or circumstances that may have had a significant adverse effect on the investment’s value.

8.Discontinued Operations

In the fourth quarter of 2012, the Company executed a letter of intent to sell its HomeGain subsidiary and exclusive negotiation rights were assigned to a buyer as of December 31, 2012.  The statement of operations for 2012, 2011 and 2010 includes results from HomeGain.  See Note 17 for subsequent event disclosures.

Results of the discontinued operations at December 31 are summarized as follows (in thousands):

	2012			2011			2010
Total revenue	$	8,312		$	11,795		$	13,023
Total expenses	9,061			12,111			25,145
(Loss) from discontinued operations (including goodwill impairment charges of $11,513 in 2010)	$	(749	)	$	(316	)	$	(12,122	)

Assets and liabilities of discontinued operations, excluding intercompany notes receivable, at December 31 are summarized as follows (in thousands):

	2012			2011
Current assets	$	2,803		$	3,685
Net property and equipment	327			598
Other assets	(1,338		)	(892		)
Assets of discontinued operations	$	1,792		$	3,391
Current liabilities	$	905		$	1,758
Other liabilities	250			247
Liabilities of discontinued operations	$	1,155		$	2,005

11

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

9.Related Party Transactions

Net sales to Investor Affiliates totaled $79.6 million, $70.9 million and $64.1 million for the years ended December 31, 2012, 2011 and 2010, respectively. Commissions to the Affiliates totaled $19.8 million, $15.2 million and $13.2 million for years ended December 31, 2012, 2011 and 2010, respectively.  Net accounts receivable from Investor Affiliates totaled $8.5 million and $8.2 million as of December 31, 2012 and 2011, respectively.

Pursuant to Affiliate Agreements between the Company and each of its Affiliates, Affiliates are assigned a sales territory to sell the Company’s products on a wholesale/retail basis. The Affiliate Agreements specify print and online promotion obligations of the Affiliate, bar the Affiliates from engaging in specified activities and identify performance obligations of the Company and the Affiliate. Each Investor owned Affiliate Agreement contains language requiring the Company to treat all similarly situated Investor Affiliates equally.

The Company also has a shared service agreement with HomeFinder.com as a result of the spin-off that occurred in March 2009. Under the agreement, the Company provides legal, facilities, technology, office space, accounting, and human resource services to HomeFinder.com at cost without any markup on the services. Total shared service revenue recognized for 2012, 2011 and 2010 was $2.1 million, $2.9 million and $3.2 million, respectively, to offset the $2.1 million, $2.9 million and $3.2 million of incurred expenses in 2012, 2011 and 2010. HF shared services revenue is included within the net revenue line item on the income statement.

10.Fair Value Measurements

The Company accounts for certain items using the fair market value method of accounting which establishes a fair value hierarchy for those items measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs).  The fair value hierarchy consists of the following three levels:

·Level 1- Quoted prices in active markets that the Company has the ability to access for identical assets or liabilities;

·Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market; and

·Level 3 - Valuations using significant inputs that are unobservable in the market and include the use of judgment by the Company’s management about the assumptions market participants would use in pricing the asset or liability.

The Company’s financial assets and liabilities that are carried at fair value on a recurring basis in the consolidated balance sheet include the Long Term Incentive Plan (“LTIP”) assets and liabilities and marketable securities.

12

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

The following table presents the LTIP investments carried at fair value as of December 31, 2012, by category on the consolidated balance sheet in accordance with the valuation hierarchy defined above:

	Level 1		Level 2		Level 3		Total
Cash	$	471	$	—	$	—	$	471
Mutual funds	8,589		—		—		8,589
Fixed income fund	—		2,039		—		2,039
	$	9,060	$	2,039	$	—	$	11,099

The following table presents the LTIP investments carried at fair value as of December 31, 2011, by category on the consolidated balance sheet in accordance with the valuation hierarchy defined above:

	Level 1		Level 2		Level 3		Total
Cash	$	148	$	—	$	—	$	148
Mutual funds	8,144		—		—		8,144
Fixed income fund	—		2,125		—		2,125
	$	8,292	$	2,125	$	—	$	10,417

The following is a description of the Company’s valuation methodologies for assets and liabilities measured at fair value.

Fair value for mutual funds is measured using quoted market prices at the reporting date multiplied by the quantity held.

The Company has an investment in a commingled fund for which quoted market prices are not available. The value of the investment represents the net asset value as provided by the trustee.  Management performs its own pricing diligence by reviewing the net asset value and by obtaining audited financial statements from the trustee.

11.Retirement Plan

The Company has a 401(k) Retirement Savings Plan, which is qualified under Section 401(k) of the Internal Revenue Code and for which all full-time Company employees are eligible. Participants are eligible on the first day of the quarter following the date of hire after one month of service and are allowed to make tax-deferred contributions up to 100% of annual compensation, subject to limitations specified by the Internal Revenue Code.

The Company match is 100% of the employee’s contribution up to 3% of the employee’s salary, and thereafter 50% of the employee’s contribution, until the employee’s contributions reach 5% of the employee’s salary. All employees are fully vested immediately. For the years ended December 31, 2012, 2011 and 2010, the Company expensed matching contributions in the amounts of $3.0 million, $2.7 million and $2.3 million, respectively.

13

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

12.Class A Common Units and Members’ Equity

As of December 31, 2012, 2011 and 2010, there were 184.9 million authorized, issued and outstanding Class A common units and 1.6 million authorized and issued Class B common units, none of which were outstanding. Class A common units have voting rights of one vote per unit.

In December 2012, 2011 and 2010, the Company declared a dividend of $74 million, $68 million and $95 million, respectively. The dividends were treated as a return of capital to Investors given the accumulated deficit balance. The entire $74 million dividend was declared and paid in December 2012.  Of the $68 million dividend declared in December 2011, $49 million was paid to Investors and $19 million was held in restricted cash at the request of one Investor. Of the $95 million dividend declared in December 2010, $69 million was paid to Investors and $26 million was held in restricted cash at the request of one Investor.  The 2011 and 2010 held dividends totaling $45 million were paid to the one Investor on February 9, 2012, and zero is remaining in restricted cash.

13.Long-Term Incentive Plan

In June 2001, the Company’s LTIP was established. The Company, at its discretion, may designate up to 60 key employees to participate in the LTIP and may make annual contributions to the participants’ account. The contributions are invested at the participant’s direction among investment options including mutual funds and money market funds. In 2012, 2011 and 2010 the Company contributed $2.4 million, $2.8 million and $2.2 million, respectively. The total amount contributed by the Company is marked to market quarterly and any unrealized gains (losses) are recognized through the income statement.

The amounts contributed to participants’ accounts vest over a three-year period. One-third of the amount contributed in a plan year (and any increases or decreases in the account as a result of income, gains, losses or costs allocated to the account) vests and is payable on February 15th of each of the three succeeding plan years after the plan year in which the contribution was made.  Once a portion of an award vests, it is either deferred for one year or paid to the participant. This initial deferral election is made by the participant prior to the plan year for which the award was issued. One year following the vesting date, that same portion of the deferred award is either deferred for five years or paid to the participant.  This subsequent deferral election is made not later than December 31st of the plan year prior to the plan year for which the award was issued. If a participant is involuntarily terminated other than for cause as defined by the plan, the participant’s account becomes 100% vested and distributed.  If a participant resigns, the vested portion of the participant’s account is distributed and the unvested portion is forfeited. The forfeited funds are retained within the Trust and used to offset future contributions. For the year ended December 31, 2012 the forfeitures were $0.5 million and immaterial for the years 2011 and 2010.

The Company applies accounting guidance for stock appreciation rights and other variable stock option or award plans for the cash awarded under this deferred compensation plan. Under this plan, deferred compensation expense was $1.5 million, $2.4 million and $2.2 million for the years ended December 31, 2012, 2011 and 2010, respectively. The deferred compensation liability was $9.7 million, and $9.9 million at December 31, 2012 and 2011, respectively.

14

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

14.Share Appreciation Rights Plan

Effective as of January 1, 2012, the Company established a Share Appreciation Rights (SAR) Plan. The Classified Ventures Share Appreciation Rights Plan is intended to motivate certain key employees of Classified Ventures, LLC to maximize their contributions to the long-term success of the Company and to encourage them to remain in the employ of the Company through awards of Share Appreciation Rights.  The Compensation Committee of the Company, at its discretion, may designate key employees to participate in the plan.  Eligible participants will receive a number of stock appreciation rights annually that  entitle the employee to receive the appreciation in the fair market value of a share from the date of grant up to a specified date or dates plus an amount equal to the distributions per share (adjusted using an assumed 40% corporate tax rate).  Benefits paid under this plan will be made in cash, not common stock, at the end of the three year vesting period from the original grant date.  Expenses related to the Share Appreciation Rights Plan have been recorded in accordance with the accounting standards for share based payments.  Due to the cash settlement at the end of the performance period, the awards are classified as a liability and are remeasured each reporting period at fair value.

Under the SARs Plan, deferred compensation is based upon award of share appreciation rights, the value of which is related to the appreciation in the value of the common units of the Company.  Awards granted in a given year vest to the participant over a three-year period and are settled in cash at the end of the three-year performance period.  In 2012, the Company awarded $3.3 million to participants with a base price of $4.19 per right.  The price was determined by a third party valuation analysis which based the company value on the combination of income and market approaches.  Upon the settlement of vested rights, the participant receives a lump sum cash payment in an amount equal to (i) the value of a common unit as of the date of settlement less (ii) the grant price value of a common unit on the grant date, plus dividend distributions per unit.

Appreciation rights outstanding and exercisable as of December 31, 2012 and changes during the year ended were as follows:

					Remaining
			Weighted		Avg.	Aggregate
	Rights /		Avg. Grant		Contract	Intrinsic
	Units		Price		Terms	Value
	(in thousands)		(per right)		(in years)	(in thousands)
Rights outstanding as of December 31, 2011	—		$	—
Granted	3,298		4.19
Exercised	—		—
Forfeited or terminated	(388	)	4.19
Rights outstanding as of December 31, 2012	2,910		$	4.19	2.0	$	1,710
Rights exercisable as of December 31, 2012	970		$	4.19	2.0	$	570

The Company measures the cost associated with awards issued under the SARs Plan using a graded vesting intrinsic value method, which includes a price increase in market value and a dividend component.  Under this method, the cost of services related to the SARs Plan reflects changes in the Company common unit price and the relative vesting period of the rights.

15

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

SARs expense was $0.6 million for the 2012.  No SARs Plan expense was capitalized as part of an asset and no significant plan modifications impacted the recorded expense in any of the reported years.  At December 31, 2012, there was $0.6 million of deferred compensation liability related to the SARs Plan.

The following table summarizes the aggregate intrinsic value, which includes a dividend component, related to nonvested SARs as of December 31, 2012:

		Increase in		Aggregate
	Rights /	Intrinsic		Intrinsic
	Units	Value		Value
	(in thousands)	(per right)		(in thousands)
Exercised rights	—	—		—
Vested rights outstanding	970	$	0.59	$	570

Total unrecognized compensation cost related to nonvested SARs, which includes a dividend component, is estimated to be $1.1 million at December 31, 2012.  This cost is expected to be recognized over a remaining weighted-average vesting period of 2.0 years.

15. Income Taxes

As a limited liability company, earnings are included in the income tax returns of the Investors with the exception of its HomeGain subsidiary, which is a C corporation acquired June 30, 2005.

HomeGain had deferred tax assets of approximately $19.8 million and $19.9 million as of December 31, 2012 and 2011, respectively, relating primarily to federal and state net operating loss carryforwards. Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain. Accordingly, the net deferred tax assets at December 31, 2012 and 2011 have been fully offset by a valuation allowance of $19.8 million and $19.9 million, respectively. HomeGain had federal net operating loss carryforwards of approximately $49.4 million and $48.4 million as of the year ended December 31, 2012 and 2011 respectively. The federal net operating loss carryforwards will begin to expire in 2019, if not utilized. No adjustments for uncertain tax positions, interest, or penalties were recorded at December 31, 2012, 2011 and 2010.

16. Commitments and Contingencies

The Company is party to lawsuits arising out of the normal course of business.  Management believes the final outcome of such litigation will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

16

Classified Ventures, LLC

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

17. Subsequent Events

The Company assessed events occurring subsequent to December 31, 2012 and through February 22, 2013, for potential recognition and disclosure in the consolidated financial statements. As of this date, no material subsequent events exist.

The Company determined, other than as disclosed below, that there were no subsequent events or transactions as of February 22, 2013 that required recognition or disclosure in the consolidated financial statements.

On February 4, 2013, the Company sold various assets and liabilities related to HomeGain for $4.0 million, of which $3.6 million consisted of immediate cash and the remaining $0.4 million to be paid in one-year, subject to working capital adjustments.  The sale resulted in a gain of approximately $3.4 million.

17

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MIAMI LAND AND BUILDING (Details) (USD $)	12 Months Ended				0 Months Ended	1 Months Ended		3 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Jan. 31, 2011 Terminated Miami land sale contract acre	May 27, 2011 Sale of land and building acre	Apr. 30, 2012 Sale of land and building	Dec. 30, 2012 Sale of land and building	Mar. 25, 2012 Acquisition of land in Doral, Florida acre
Miami Land and Building Disclosures
Contract Termination Fee				$ 7,000,000
Nonrefundable deposits				16,500,000
Company sold land				9.4	14.0			6.1
Purchase price					236,000,000
Escrow deposits related to property sales in noncash investing and financing activities					6,000,000
Sales proceeds received	1,925,000	9,201,000	2,952,000		230,000,000	6,000,000
Financing obligations	279,325,000	272,795,000					236,000,000
Company expects to recognize a gain							10,000,000
Payments To Land Purchased								$ 3,100,000

XML

EMPLOYEE BENEFITS (Details 4) (Pension plans)	12 Months Ended
	Dec. 30, 2012
Minimum
EMPLOYEE BENEFITS
Investment horizon of plan assets	10 years
Equity securities
EMPLOYEE BENEFITS
Target Allocation (as a percent)	60.00%
Debt securities
EMPLOYEE BENEFITS
Target Allocation (as a percent)	28.00%
Real Estate
EMPLOYEE BENEFITS
Target Allocation (as a percent)	7.00%
Commodities
EMPLOYEE BENEFITS
Target Allocation (as a percent)	5.00%

XML

INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Current:
Federal	$ 4,701,000	$ 28,913,000	$ 26,625,000
State	(16,535,000)	(1,553,000)	4,999,000
Deferred:
Federal	(4,701,000)	(3,316,000)	(16,672,000)
State	(4,847,000)	(15,648,000)	(9,351,000)
Income tax provision	(21,382,000)	8,396,000	5,601,000
Reconciliation of effective tax rate for continuing operations and the statutory federal income tax rate
Statutory rate (as a percent)	(35.00%)	35.00%	35.00%
State taxes, net of federal benefit (as a percent)	7.70%	0.30%	0.50%
Changes in estimates (as a percent)	0.20%	0.60%	2.90%
Changes in unrecognized tax benefits (as a percent)	(56.30%)	(13.60%)	(7.60%)
Settlements (as a percent)	(32.60%)	(10.40%)	(19.50%)
Other (as a percent)	4.00%	1.50%	3.20%
Stock compensation (as a percent)	12.70%
Effective tax rate (as a percent)	(99.30%)	13.40%	14.50%
Deferred tax assets:
Compensation benefits	308,392,000	228,367,000
State taxes	4,984,000	17,500,000
State loss carryovers	5,815,000	10,759,000
Other	5,280,000	6,065,000
Total deferred tax assets	324,471,000	262,691,000
Valuation allowance	(4,110,000)	(9,514,000)
Net deferred tax assets	320,361,000	253,177,000
Deferred tax liabilities:
Depreciation and amortization	233,214,000	258,957,000
Investments in unconsolidated subsidiaries	64,317,000	65,604,000
Debt discount	15,059,000	18,114,000
Deferred gain on debt	33,084,000	33,193,000
Total deferred tax liabilities	345,674,000	375,868,000
Net deferred tax liabilities	25,313,000	122,691,000
Valuation allowance
Increase (decrease) in valuation allowance	$ 5,400,000	$ 5,200,000

XML

EMPLOYEE BENEFITS (Details 5) (Pension plans, USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
EMPLOYEE BENEFITS
Total	$ 1,352,711	$ 1,255,822
Pending trades	6,166	(22,516)
Fair value of plan assets	1,358,877	1,233,306	1,051,410
Cash and cash equivalents
EMPLOYEE BENEFITS
Total	1,161	30,816
Mutual funds
EMPLOYEE BENEFITS
Total	257,398	40,861
Corporate stock
EMPLOYEE BENEFITS
Total		211
Corporate debt instruments
EMPLOYEE BENEFITS
Total	98	86,776
U.S. Government securities
EMPLOYEE BENEFITS
Total	107,337	236,063
Common collective trusts
EMPLOYEE BENEFITS
Total	928,730	764,983
Mortgage and asset backed securities
EMPLOYEE BENEFITS
Total		22,265
Real Estate
EMPLOYEE BENEFITS
Total	51,579	50,530
Other
EMPLOYEE BENEFITS
Total	6,408	23,317
Level 1
EMPLOYEE BENEFITS
Total	258,559	71,888
Level 1 | Cash and cash equivalents
EMPLOYEE BENEFITS
Total	1,161	30,816
Level 1 | Mutual funds
EMPLOYEE BENEFITS
Total	257,398	40,861
Level 1 | Corporate stock
EMPLOYEE BENEFITS
Total		211
Level 2
EMPLOYEE BENEFITS
Total	1,036,165	1,124,505
Level 2 | Corporate debt instruments
EMPLOYEE BENEFITS
Total	98	86,776
Level 2 | U.S. Government securities
EMPLOYEE BENEFITS
Total	107,337	236,063
Level 2 | Common collective trusts
EMPLOYEE BENEFITS
Total	928,730	764,983
Level 2 | Mortgage and asset backed securities
EMPLOYEE BENEFITS
Total		22,265
Level 2 | Other
EMPLOYEE BENEFITS
Total		14,418
Level 3
EMPLOYEE BENEFITS
Total	57,987	59,429	36,728
Level 3 | Real Estate
EMPLOYEE BENEFITS
Total	51,579	50,530
Level 3 | Other
EMPLOYEE BENEFITS
Total	$ 6,408	$ 8,899

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LONG-TERM DEBT (Details 3) (USD $)	3 Months Ended	12 Months Ended						12 Months Ended								12 Months Ended					0 Months Ended	12 Months Ended	0 Months Ended		3 Months Ended		12 Months Ended
	Mar. 25, 2012	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Feb. 28, 2013 Subsequent event	Jun. 22, 2012 Revolving loan facility Previous Agreement	Jun. 21, 2012 Revolving loan facility January 26, 2010 Amendment	Dec. 30, 2012 Revolving credit facility	Dec. 30, 2012 Revolving credit facility Period from quarter ended March 2012 through the quarter ended December 2012	Dec. 30, 2012 Revolving credit facility Period from quarter ended March 2013 through the quarter ended December 2013	Dec. 30, 2012 Revolving credit facility Minimum	Dec. 30, 2012 Revolving credit facility Maximum	Dec. 30, 2012 Revolving credit facility LIBOR	Dec. 30, 2012 Revolving credit facility LIBOR Minimum	Dec. 30, 2012 Revolving credit facility LIBOR Maximum	Dec. 30, 2012 Revolving credit facility Base rate	Dec. 30, 2012 Revolving credit facility Base rate Minimum	Dec. 30, 2012 Revolving credit facility Base rate Maximum	Dec. 18, 2012 Revolving credit facility Amendment 18, December 2012	Dec. 18, 2012 Letter of credit Amendment 18, December 2012	Dec. 18, 2012 9.00% Notes	Dec. 30, 2012 9.00% Notes	Jan. 17, 2013 11.50% senior secured notes due in 2017	Dec. 18, 2012 11.50% senior secured notes due in 2017	Mar. 24, 2013 11.50% senior secured notes due in 2017	Dec. 30, 2012 11.50% senior secured notes due in 2017	Dec. 30, 2012 11.50% senior secured notes due in 2017 item	Dec. 30, 2012 4.625% notes due in 2014	Feb. 28, 2013 4.625% notes due in 2014 Subsequent event	Dec. 30, 2012 5.750% notes due in 2017	Feb. 28, 2013 5.750% notes due in 2017 Subsequent event
LONG-TERM DEBT
Maximum borrowing capacity						$ 36,100,000	$ 125,000,000												$ 75,000,000	$ 50,000,000
Outstanding letters of credit								36,100,000
Variable rate basis													London Interbank Offered Rate			base rate
Basis spread on variable rate (as a percent)														2.75%	4.25%		1.75%	3.25%
Commitment fees for the unused revolving credit (as a percent)											0.50%	0.625%
Maximum consolidated leverage ratio									6.25	6.00
Minimum consolidated interest coverage ratio								1.50
Dividends restricted if consolidated leverage ratio is exceeded								5.25
Dividends restricted if priority leverage ratio exceeds								2.75
New borrowings																					910,000,000
Interest rate (as a percent)	11.50%																					9.00%				11.50%	11.50%	4.625%	4.625%	5.75%	5.75%
Net proceeds from offering																						889,000,000
Loss on extinguishment of debt	(4,400,000)	88,430,000	1,203,000	10,661,000																				94,500,000	9,600,000	94,500,000
Aggregate principal amount of debt redeemed																							83,600,000	762,400,000
Ownership percentage in each of the guarantor subsidiaries		100.00%
Amount of debt repurchased					$ 48,500,000																					$ 846,000,000	$ 846,000,000		$ 37,500,000		$ 11,000,000
Number of transactions to repurchase debt																											2
Repurchase price pursuant to cash tender offer																								110.34%

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SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			24 Months Ended
	Dec. 30, 2012 item	Dec. 25, 2011	Dec. 26, 2010	Dec. 31, 2007 item
SIGNIFICANT ACCOUNTING POLICIES
Number of daily newspapers	30
Related Party Transaction
Length of a Fiscal Year	371 days	364 days
Discontinued operations
Number of newspapers divested				13
Allowance for doubtful accounts
Minimum period of accounts receivable outstanding which are reserved in allowance for doubtful accounts	90 days
Changes in allowance for doubtful accounts
Balance at beginning of year	$ 7,341	$ 7,836	$ 10,298
Charged to costs and expenses	6,089	8,309	7,479
Amounts written off	(7,510)	(8,804)	(9,941)
Balance at end of year	$ 5,920	$ 7,341	$ 7,836
Career Builder LLC
Related Party Transaction
Ownership Interest (as a percent)	15.00%
Classified Ventures LLC
Related Party Transaction
Ownership Interest (as a percent)	25.60%
Home Finder LLC
Related Party Transaction
Ownership Interest (as a percent)	33.30%
Wanderful Media
Related Party Transaction
Ownership Interest (as a percent)	11.40%

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CASH FLOW INFORMATION (Details) (USD $)	1 Months Ended	12 Months Ended
	Jan. 31, 2011	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Mar. 25, 2012
Cash paid for interest and income taxes
Interest paid (net of amount capitalized)		$ 173,742,000	$ 152,543,000	$ 123,402,000
Income taxes paid (net of refunds)		37,137,000	32,613,000	37,246,000
Interest rate (as a percent)					11.50%
Non-cash transactions
Financing obligation for contribution of real property to pension plan	49,700,000		49,710,000
Reduction of pension obligation			(49,710,000)
Non-refundable deposits offset against carrying value of land			(16,500,000)
Increase in PP&E for land transferred from other assets			116,000,000
Net cash from operating activities of discontinued operations
Income (loss) from discontinued operations				3,083,000
Reconciliation to net cash from discontinued operations:
Changes in assets and liabilities and other, net				(5,189,000)
Net cash provided by (used in) discontinued operations				(2,106,000)
Non-cash financing activities related to purchases of PP&E on credit		5,700,000	1,200,000	900,000
11.50% Notes
Cash paid for interest and income taxes
Accelerated interest paid as a result of refinance		30,000,000
Interest rate (as a percent)		11.50%
9.00% Notes
Cash paid for interest and income taxes
Interest rate (as a percent)		9.00%
Non-cash transactions
Non-cash financing activities related to financing costs of notes issuance		$ 1,000,000

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INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 30, 2012

INTANGIBLE ASSETS AND GOODWILL

Schedule of changes in identifiable intangible assets and goodwill

(in thousands)	December 25, 2011			Impairment Charges/ Adjustments		Amortization Expense			December 30, 2012
Intangible assets subject to amortization	$	834,961		$	–	$	–		$	834,961
Accumulated amortization		(452,388	)		–		(58,158	)		(510,546	)
		382,573			–		(58,158	)		324,415
Mastheads		203,587			–		–			203,587
Goodwill		1,012,011			–		–			1,012,011
Total	$	1,598,171		$	–	$	(58,158	)	$	1,540,013

(in thousands)	December 26, 2010			Impairment Charges/ Adjustments			Amortization Expense			December 25, 2011
Intangible assets subject to amortization	$	834,911		$	50		$	–		$	834,961
Accumulated amortization		(394,073	)		–			(58,315	)		(452,388	)
		440,838			50			(58,315	)		382,573
Mastheads		206,387			(2,800	)		–			203,587
Goodwill (1)		1,014,257			(2,246	)		–			1,012,011
Total	$	1,661,482		$	(4,996	)	$	(58,315	)	$	1,598,171

• ⁽¹⁾

  In 2011 we identified an error in the timing of the release of certain unrecognized tax benefits obtained in the 2006 acquisition of Knight Ridder. We corrected this error by decreasing goodwill by $2.5 million in 2011. We have determined that the impact of this error is not material to the previously issued consolidated financial statements.

Accumulated Changes in indefinite lived intangible assets and goodwill

	Original Gross Amount		Accumulated Impairment			Carrying Amount
(in thousands)
Mastheads	$	683,000	$	(479,413	)	$	203,587
Goodwill		3,587,007		(2,574,996	)		1,012,011
Total	$	4,270,007	$	(3,054,409	)	$	1,215,598

Amortization expense for the five succeeding fiscal years

Year	Amortization Expense (in thousands)
2013	$	57,004
2014		52,524
2015		48,030
2016		47,721
2017		48,552

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INCOME TAXES (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance at beginning of fiscal year	$ 30,463	$ 51,992	$ 53,359
Increases based on tax positions in prior year		1,409	7,529
Decreases based on tax positions in prior year	(9,933)	(13,475)	(1,148)
Increases based on tax positions in current year	745	2,213	1,811
Settlements	(643)		(784)
Lapse of statute of limitations	(11,983)	(11,676)	(8,775)
Balance at end of fiscal year	$ 8,649	$ 30,463	$ 51,992

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INTANGIBLE ASSETS AND GOODWILL (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Indefinite lived intangible assets and goodwill
Original Gross Amount, Goodwill	$ 3,587,007
Original Gross Amount	4,270,007
Accumulated Impairment, Goodwill	(2,574,996)
Accumulated Impairment, Amount	(3,054,409)
Carrying Amount, Mastheads	203,587	203,587	206,387
Carrying Amount, Goodwill	1,012,011	1,012,011	1,014,257
Carrying Amount, Total	1,215,598
Newspaper mastheads
Indefinite lived intangible assets and goodwill
Original Gross Amount, Mastheads	683,000
Accumulated Impairment, Mastheads	(479,413)
Carrying Amount, Mastheads	$ 203,587

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INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details) (USD $)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Investments in unconsolidated companies and joint ventures
Investments in unconsolidated companies	$ 299,603,000	$ 304,893,000
Dividends paid by the equity investees to the entity	19,550,000	17,375,000
Dividends paid by the equity investees to the entity	38,600,000	31,625,000
Career Builder LLC
Investments in unconsolidated companies and joint ventures
Ownership Interest (as a percent)	15.00%
Investments in unconsolidated companies	210,365,000	218,805,000
Dividends paid by the equity investees to the entity	15,000,000	7,500,000
Expenses incurred for products provided by the entity's less-than 50% owned companies	1,197,000	1,230,000	1,272,000
Amount payable to the entity's less-than 50% owned companies	1,500,000	3,600,000
Classified Ventures LLC
Investments in unconsolidated companies and joint ventures
Ownership Interest (as a percent)	25.60%
Investments in unconsolidated companies	69,907,000	66,886,000
Dividends paid by the equity investees to the entity	18,908,000	17,375,000
Expenses incurred for products provided by the entity's less-than 50% owned companies	14,390,000	12,552,000	11,073,000
Home Finder LLC
Investments in unconsolidated companies and joint ventures
Ownership Interest (as a percent)	33.30%
Investments in unconsolidated companies	2,573,000	1,628,000
Seattle Times Company (C-Corporation)
Investments in unconsolidated companies and joint ventures
Ownership Interest (as a percent)	49.50%
Ponderay (general partnership)
Investments in unconsolidated companies and joint ventures
Ownership Interest (as a percent)	27.00%
Investments in unconsolidated companies	11,375,000	11,800,000
Expenses incurred for products provided by the entity's less-than 50% owned companies	23,813,000	20,414,000	23,048,000
Amount payable to the entity's less-than 50% owned companies	1,500,000	3,600,000
Other
Investments in unconsolidated companies and joint ventures
Investments in unconsolidated companies	5,383,000	5,774,000
Dividends paid by the equity investees to the entity	$ 4,692,000	$ 6,750,000

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EMPLOYEE BENEFITS (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Retirement expense for continuing operations
Deferred compensation plan expense (credit)		$ (71)	$ 10,790
Total retirement expenses	1,384	745	16,358
Pension plan
Retirement expense for continuing operations
Service cost	5,540	5,600	5,885
Interest cost	91,898	92,961	93,796
Expected return on plan assets	(107,760)	(104,251)	(96,151)
Prior service cost amortization	14	14	14
Actuarial loss	12,687	6,726	2,229
Net pension expense	2,379	1,050	5,773
Post-retirement plans
Retirement expense for continuing operations
Interest cost	946	1,358
Net post-retirement benefit (credit) expense	$ (995)	$ (234)	$ (205)

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COMMON STOCK AND STOCK PLANS (Details 2) (USD $)	12 Months Ended
	Dec. 30, 2012 item	Dec. 25, 2011	Dec. 26, 2010	Dec. 27, 2009
Stock-based compensation plans
Number of stock-based compensation plans	5
Options/SARs
Outstanding at the beginning of the period (in shares)	6,194,500	6,723,250	6,632,200	7,039,850
Granted (in shares)	1,017,500	1,078,500	10,000
Exercised (in shares)	(27,250)	(152,750)	(119,250)
Forfeited (in shares)	(1,217,750)	(132,250)	(44,250)
Expired (in shares)	(301,250)	(702,450)	(254,150)
Outstanding at the end of the period (in shares)	6,194,500	6,723,250	6,632,200	7,039,850
Vested and Expected to Vest at the end of the period (in shares)	5,970,603
Options exercisable (in shares)	3,826,250	4,082,500	3,572,450
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 22.01	$ 26.82	$ 26.79
Granted (in dollars per share)	$ 2.76	$ 4.08	$ 4.96
Exercised (in dollars per share)	$ 1.70	$ 1.73	$ 1.70
Forfeited (in dollars per share)	$ 54.52	$ 3.99	$ 7.07
Expired (in dollars per share)	$ 48.33	$ 47.86	$ 40.53
Outstanding at the end of the period (in dollars per share)	$ 11.45	$ 22.01	$ 26.82	$ 26.79
Vested and Expected to Vest at the end of the period (in dollars per share)	$ 11.74
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)	$ 1,846,000	$ 874,000	$ 6,060,000	$ 3,086,000
Exercised (in dollars)	33,000	382,000	388,000
Vested and Expected to Vest at the end of the period (in dollars)	1,810,000
Options exercisable (in dollars)	1,335,000	397,000	869,000
Stock options and SARs
Unrecognized compensation costs
Unrecognized compensation costs for non-vested options & SARs (in dollars)	2,600,000
Weighted average period for unrecognized compensation cost expected to be recognized	2 years 6 months
Weighted Average Exercise Price
Granted (in dollars per share)	$ 2.76	$ 4.08	$ 4.96
RSUs
Stock-based compensation plans
Granted (in shares)	1,082,000	740,000
RSU's
Nonvested at the beginning of the period (in shares)	1,445,000	845,000
Granted (in shares)	1,082,000	740,000
Vested (in shares)	(765,000)
Forfeited (in shares)	(660,000)	(140,000)
Nonvested at the end of the period (in shares)	1,102,000	1,445,000		845,000
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 3.73	$ 3.42
Granted (in dollars per share)	$ 2.59	$ 4.08
Vested (in dollars per share)	$ 3.42
Forfeited (in dollars per share)	$ 3.48	$ 3.70
Outstanding at the end of the period (in dollars per share)	$ 2.98	$ 3.73		$ 3.42
Additional disclosures
Total fair value	2,000,000
Unrecognized compensation costs
Unrecognized compensation costs for non-vested RSUs (in dollars)	$ 1,500,000
Weighted average period for unrecognized compensation cost expected to be recognized	1 year 9 months 18 days
RSUs | Minimum
Stock-based compensation plans
Vesting period	2 years
RSUs | Maximum
Stock-based compensation plans
Vesting period	3 years
Employee Plans
Stock-based compensation plans
Vesting period	4 years
Outstanding grants (in shares)	122,500
Employee Plans | Maximum
Stock-based compensation plans
Terms of award	10 years
Employee Plans | Class A Common Stock
Stock-based compensation plans
Number of stock-based compensation plans	2
2001 Director Plan
Stock-based compensation plans
Outstanding grants (in shares)	21,000
2012 Plan | Stock options and SARs | Maximum
Stock-based compensation plans
Terms of award	10 years
2012 Plan | Class A Common Stock | Non-employee director
Stock-based compensation plans
Granted (in shares)	15,000
Issuance of shares under the plan	150,000
RSU's
Granted (in shares)	15,000
2004 Plan | Stock appreciation rights (SARs)
Stock-based compensation plans
Vesting period	4 years
Terms of award	10 years
2004 Plan | Class A Common Stock
Stock-based compensation plans
Shares reserved for issuance to employees	9,000,000
2004 Plan | Class A Common Stock | Non-employee director
Stock-based compensation plans
Granted (in shares)		15,000
Issuance of shares under the plan		150,000
RSU's
Granted (in shares)		15,000
Purchase Plan | Class A Common Stock
Stock-based compensation plans
Shares reserved for issuance to employees	4,625,000
Purchase price expressed as a percentage of fair market value of common stock	85.00%

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LONG-TERM DEBT (Details 4) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012
Annual maturities of debt for the next five years and thereafter
2013	$ 83,595
2014	66,438
2017	286,138
Thereafter	1,275,418
Debt principal	$ 1,711,589

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at Dec. 27, 2009	$ 166,686	$ 597	$ 248	$ 2,207,122	$ (1,786,604)	$ (254,524)	$ (153)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	36,183				36,183
Other comprehensive income (loss)	7,463					7,463
Issuance of 942,250, 587,118 and 573,347 Class A shares under stock plans for years ended 2012, 2011 and 2010, respectively	1,167	6		1,161
Stock compensation expense	4,626			4,626
Purchase of 454,860, 144,125 and 78,143 shares of treasury stock for years ended 2012, 2011 and 2010, respectively	(379)						(379)
Tax impact from stock plans	6			6
Balance at Dec. 26, 2010	215,752	603	248	2,212,915	(1,750,421)	(247,061)	(532)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	54,389				54,389
Other comprehensive income (loss)	(100,593)					(100,593)
Issuance of 942,250, 587,118 and 573,347 Class A shares under stock plans for years ended 2012, 2011 and 2010, respectively	979	6		973
Stock compensation expense	5,174			5,174
Purchase of 454,860, 144,125 and 78,143 shares of treasury stock for years ended 2012, 2011 and 2010, respectively	(613)						(613)
Tax impact from stock plans	99			99
Balance at Dec. 25, 2011	175,187	609	248	2,219,161	(1,696,032)	(347,654)	(1,145)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(144)				(144)
Other comprehensive income (loss)	(133,662)					(133,662)
Issuance of 942,250, 587,118 and 573,347 Class A shares under stock plans for years ended 2012, 2011 and 2010, respectively	47	9		38
Stock compensation expense	3,523			3,523
Purchase of 454,860, 144,125 and 78,143 shares of treasury stock for years ended 2012, 2011 and 2010, respectively	(1,171)						(1,171)
Retirement of 708,996 shares of treasury stock		(7)		(2,280)			2,287
Tax impact from stock plans	(1,279)			(1,279)
Balance at Dec. 30, 2012	$ 42,501	$ 611	$ 248	$ 2,219,163	$ (1,696,176)	$ (481,316)	$ (29)

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COMMON STOCK AND STOCK PLANS (Details 3) (Stock options and SARs, USD $)	12 Months Ended
	Dec. 30, 2012
Options/SARs Outstanding
Number of Options/SARs (in shares)	6,158,750
Average Remaining Contractual Life	5 years 9 months 25 days
Weighted Average Exercise Price (in dollars per share)	$ 11.45
Options/SARs Exercisable
Number of Options/SARs (in shares)	3,826,250
Weighted Average Exercise Price (in dollars per share)	$ 16.10
Weighted average remaining contractual life	4 years 5 months 16 days
Weighted average remaining contractual term for fully vested and expected to vest	5 years 8 months 23 days
$1.50-$9.07
Stock options and SARs outstanding
Exercise price, low end of range (in dollars per share)	$ 1.50
Exercise price, high end of range (in dollars per share)	$ 9.07
Options/SARs Outstanding
Number of Options/SARs (in shares)	4,273,500
Average Remaining Contractual Life	6 years 10 months 6 days
Weighted Average Exercise Price (in dollars per share)	$ 2.94
Options/SARs Exercisable
Number of Options/SARs (in shares)	1,941,000
Weighted Average Exercise Price (in dollars per share)	$ 2.65
$9.73-$35.94
Stock options and SARs outstanding
Exercise price, low end of range (in dollars per share)	$ 9.73
Exercise price, high end of range (in dollars per share)	$ 35.94
Options/SARs Outstanding
Number of Options/SARs (in shares)	1,128,750
Average Remaining Contractual Life	4 years 2 months 1 day
Weighted Average Exercise Price (in dollars per share)	$ 13.20
Options/SARs Exercisable
Number of Options/SARs (in shares)	1,128,750
Weighted Average Exercise Price (in dollars per share)	$ 13.20
$40.95-$73.36
Stock options and SARs outstanding
Exercise price, low end of range (in dollars per share)	$ 40.95
Exercise price, high end of range (in dollars per share)	$ 73.36
Options/SARs Outstanding
Number of Options/SARs (in shares)	756,500
Average Remaining Contractual Life	2 years 7 months 17 days
Weighted Average Exercise Price (in dollars per share)	$ 54.93
Options/SARs Exercisable
Number of Options/SARs (in shares)	756,500
Weighted Average Exercise Price (in dollars per share)	$ 54.93

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INTANGIBLE ASSETS AND GOODWILL (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Amortization expense with respect to intangible assets
Amortization expense	$ 58,158	$ 58,315	$ 58,700
Estimated amortization expense
2013	57,004
2014	52,524
2015	48,030
2016	47,721
2017	$ 48,552

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CASH FLOW INFORMATION (Tables)

12 Months Ended

Dec. 30, 2012

CASH FLOW INFORMATION

Schedule of cash paid for interest and income taxes

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Interest paid (net of amount capitalized) (1)	$	173,742	$	152,543	$	123,402
Income taxes paid (net of refunds)		37,137		32,613		37,246

• ⁽¹⁾

  The fiscal year 2012 interest paid includes $30.0 million of interest accelerated as a result of the refinance of the 11.50% Notes as discussed in Note 5.

Summary of non-cash transactions

	Year Ended
(in thousands)	December 25, 2011
Financing obligation for contribution of real property to pension plan	$	49,710
Reduction of pension obligation		(49,710	)
Non-refundable deposits offset against carrying value of land		(16,500	)
Increase in PP&E for land transferred from other assets		116,000

Summary of net cash from operating activities of discontinued operations

(in thousands)	December 26, 2010
Income (loss) from discontinued operations	$	3,083
Reconciliation to net cash from discontinued operations:
Changes in assets and liabilities and other, net		(5,189	)
Net cash from operating activities of discontinued operations	$	(2,106	)

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EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 30, 2012

EMPLOYEE BENEFITS

Schedule of reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status

The following tables provide reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status as of December 30, 2012, and December 25, 2011:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Benefit Obligation
Benefit obligation, beginning of year	$	1,763,859		$	1,634,124		$	27,474		$	30,585
Service cost		5,540			5,600			–			–
Interest cost		91,898			92,961			946			1,358
Plan participants' contributions		–			–			817			1,044
Actuarial (gain)/loss		305,952			120,283			(2,400	)		(1,796	)
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Plan amendment		–			–			(7,620	)		–
Administrative expenses		(4,818	)		(5,449	)		–			–
Benefit obligation, end of year	$	2,073,218		$	1,763,859		$	15,932		$	27,474

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Plan Assets
Fair value of plan assets, beginning of year	$	1,233,305		$	1,051,410		$	–		$	–
Actual return on plan assets		171,481			50,778			–			–
Employer contribution		48,122			220,227			2,468			2,673
Plan participants' contributions		–			–			817			1,044
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Administrative expenses		(4,818	)		(5,449	)		–			–
Fair value of plan assets, end of year	$	1,358,877		$	1,233,306		$	–		$	–

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Funded Status
Fair value of plan assets	$	1,358,877		$	1,233,306		$	–		$	–
Benefit obligations		(2,073,218	)		(1,763,859	)		(15,932	)		(27,474	)
Funded status and amount recognized, end of year	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

Schedule of amounts recognized in the consolidated balance sheet

Amounts recognized in the consolidated balance sheets at December 30, 2012 and December 25, 2011 consists of:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Current liability	$	(15,830	)	$	(37,462	)	$	(1,859	)	$	(3,897	)
Noncurrent liability		(698,511	)		(493,091	)		(14,073	)		(23,577	)
	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

Schedule of amounts recognized in accumulated other comprehensive income

Amounts recognized in accumulated other comprehensive income for the years ended December 30, 2012 and December 25, 2011 consist of:

	Pension Benefits				Post-retirement Benefits
(in thousands)	2012		2011		2012			2011
Net actuarial loss/(gain)	$	815,385	$	585,839	$	(11,380	)	$	(9,634	)
Prior service cost/(credit)		26		41		(14,952	)		(8,618	)
	$	815,411	$	585,880	$	(26,332	)	$	(18,252	)

Schedule of retirement and post-retirement cost for continuing operations

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Pension plans:
Service Cost	$	5,540		$	5,600		$	5,885
Interest Cost		91,898			92,961			93,796
Expected return on plan assets		(107,760	)		(104,251	)		(96,151	)
Prior service cost amortization		14			14			14
Actuarial loss		12,687			6,726			2,229
Net pension expense		2,379			1,050			5,773
Net post-retirement benefit (credit) expense		(995	)		(234	)		(205	)
Deferred compensation plan expense (credit)		–			(71	)		10,790
Net retirement expenses	$	1,384		$	745		$	16,358

Schedule of weighted average assumptions used for valuing benefit obligations

	Pension Benefit Obligations				Post-retirement Obligations
	2012		2011		2012		2011
Discount rate		4.17%		5.32%		3.39%		4.26%

Schedule of weighted average assumptions used in calculating expense

	Pension Benefit Expense						Post-retirement Expense
	December 30, 2012		December 25, 2011		December 26, 2010		December 30, 2012	December 25, 2011		December 26, 2010
Expected long-term return on plan assets		8.25%		8.25%		8.25%	N/A		N/A		N/A
Discount rate		5.31%		5.90%		6.05%	4.26%/3.31% (1)		4.84%		5.09%

• ⁽¹⁾

  4.26% for January 2012 to September 2012; 3.31% for October 2012 to December 2012 due to plan change.

Summary of expected benefit payments to retirees under the Company's retirement and post-retirement plans

(in thousands)	Retirement Plans (1)		Post-retirement Plans
2013	$	91,119	$	1,859
2014		93,630		1,681
2015		97,071		1,532
2016		100,499		1,427
2017		105,278		1,340
2018-2022		582,046		5,448
Total	$	1,069,643	$	13,287

• ⁽¹⁾

  Largely to be paid from the qualified defined benefit pension plan

Summary of plan's financial instruments that are carried at fair value on a recurring basis by the fair value hierarchy levels

	2012
	Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1,161	$	–	$	–	$	1,161
Mutual fund		257,398		–		–		257,398
Corporate debt instruments		–		98		–		98
U.S. Government securities		–		107,337		–		107,337
Common collective trusts		–		928,730		–		928,730
Real estate		–		–		51,579		51,579
Other		–		–		6,408		6,408
Total	$	258,559	$	1,036,165	$	57,987		1,352,711
Pending trades								6,166
							$	1,358,877

	2011 Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	30,816	$	–	$	–	$	30,816
Mutual funds		40,861		–		–		40,861
Corporate stock		211		–		–		211
Corporate debt instruments		–		86,776		–		86,776
U.S. Government securities		–		236,063		–		236,063
Common collective trusts		–		764,983		–		764,983
Mortgage and asset backed securities		–		22,265		–		22,265
Real estate		–		–		50,530		50,530
Other		–		14,418		8,899		23,317
Total	$	71,888	$	1,124,505	$	59,429		1,255,822
Pending trades								(22,516	)
							$	1,233,306

Summary of changes in the fair value of the plan's Level 3 investment assets

(in thousands)	Real Estate			Private Equity			Total
Beginning Balance, December 25, 2011	$	50,530		$	8,899		$	59,429
Purchases, issuances, sales, settlements		–			–			–
Realized gains		3,747			27			3,774
Transfer in or out of level 3		(3,747	)		(3,820	)		(7,567	)
Unrealized gains		1,049			1,302			2,351
Ending Balance, December 30, 2012	$	51,579		$	6,408		$	57,987

(in thousands)	Real Estate			Private Equity		Receivable			Total
Beginning Balance, December 26, 2010	$	–		$	7,792	$	28,936		$	36,728
Purchases, issuances, sales, settlements		49,710			–		(28,936	)		20,774
Realized gains		3,472			–		–			3,472
Transfer in or out of level 3		(3,472	)		–		–			(3,472	)
Unrealized gains		820			1,107		–			1,927
Ending Balance, December 25, 2011	$	50,530		$	8,899	$	–		$	59,429

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EMPLOYEE BENEFITS (Details 6) (Pension plans, USD $) In Thousands, unless otherwise specified			0 Months Ended			12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Jan. 14, 2011 Real Estate item	Dec. 30, 2012 Real Estate	Dec. 25, 2011 Real Estate	Dec. 30, 2012 Level 3	Dec. 25, 2011 Level 3	Dec. 30, 2012 Level 3 Real Estate	Dec. 25, 2011 Level 3 Real Estate	Dec. 30, 2012 Level 3 Private Equity	Dec. 25, 2011 Level 3 Private Equity	Dec. 25, 2011 Level 3 Receivable
Summary of changes in the fair value of the plan's Level 3 investment assets
Fair value of plan assets, beginning of year	$ 1,352,711	$ 1,255,822		$ 51,579	$ 50,530	$ 59,429	$ 36,728	$ 50,530		$ 8,899	$ 7,792	$ 28,936
Purchases, issuances, sales, settlements							20,774		49,710			(28,936)
Realized gains						3,774	3,472	3,747	3,472	27
Transfer in or out of level 3						(7,567)	(3,472)	(3,747)	(3,472)	(3,820)
Unrealized gains						2,351	1,927	1,049	820	1,302	1,107
Fair value of plan assets, end of year	$ 1,352,711	$ 1,255,822		$ 51,579	$ 50,530	$ 57,987	$ 59,429	$ 51,579	$ 50,530	$ 6,408	$ 8,899
Additional disclosures on plan assets
Number of locations from which properties were contributed			7

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LONG-TERM DEBT (Details) (USD $)	Dec. 30, 2012	Mar. 25, 2012	Dec. 25, 2011
Long-term debt disclosures
Unamortized discounts	$ 41,200,000		$ 57,000,000
Interest rate (as a percent)		11.50%
Face Value	1,711,589,000
Carrying Value	1,670,346,000		1,577,476,000
Less current portion	83,016,000
Total long-term debt, net of current	1,587,330,000		1,577,476,000
9.00% senior secured notes due in 2022
Long-term debt disclosures
Interest rate (as a percent)	9.00%
Face Value	910,000,000
Carrying Value	910,000,000
11.50% senior secured notes due in 2017
Long-term debt disclosures
Interest rate (as a percent)	11.50%
Face Value	83,595,000
Carrying Value	83,016,000		843,652,000
4.625% notes due in 2014
Long-term debt disclosures
Interest rate (as a percent)	4.625%
Face Value	66,438,000
Carrying Value	64,326,000		77,406,000
5.750% notes due in 2017
Long-term debt disclosures
Interest rate (as a percent)	5.75%
Face Value	286,138,000
Carrying Value	273,559,000		318,624,000
7.150% debentures due in 2027
Long-term debt disclosures
Interest rate (as a percent)	7.15%
Face Value	89,188,000
Carrying Value	83,291,000		82,891,000
6.875% debentures due in 2029
Long-term debt disclosures
Interest rate (as a percent)	6.875%
Face Value	276,230,000
Carrying Value	$ 256,154,000		$ 254,903,000

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 30, 2012

COMMITMENTS AND CONTINGENCIES

Summary of purchase obligations

The following table summarizes our purchase obligations as of December 30, 2012 and the estimated timing and effect the obligations will have on our liquidity and cash flows in future periods:

Year	(in thousands)
2013	$	39,250
2014		18,039
2015		15,846
2016		14,966
2017		14,353
Thereafter		36,760
Total	$	139,214

Schedule of minimum rental commitments under operating leases with non-cancelable term in excess of one year and sublease income from leased space

(in thousands)
	Lease Obligation		Sublease Income
Year						Net Amount
2013	$	12,276	$	(2,968	)	$	9,308
2014		10,798		(1,899	)		8,899
2015		8,891		(1,412	)		7,479
2016		7,419		(733	)		6,686
2017		6,962		(310	)		6,652
Thereafter		34,069		(441	)		33,628
Total	$	80,415	$	(7,763	)	$	72,652

Schedule of expected payments of undiscounted ultimate losses of all the Company's self-insurance reserves

Year	Net Amount (in thousands)
2013	$	4,827
2014		3,377
2015		2,478
2016		1,889
2017		1,481
Thereafter		5,717
Total	$	19,769

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COMMON STOCK AND STOCK PLANS (Tables)

12 Months Ended

Dec. 30, 2012

COMMON STOCK AND STOCK PLANS

Summary the RSUs stock activity

	RSUs			Weighted Average Grant Date Fair Value
Nonvested – December 27, 2009		845,000		$	3.42
Nonvested – December 26, 2010		845,000		$	3.42
Granted		740,000		$	4.08
Forfeited		(140,000	)	$	3.70
Nonvested – December 26, 2011		1,445,000		$	3.73
Granted		1,082,000		$	2.59
Vested		(765,000	)	$	3.42
Forfeited		(660,000	)	$	3.48
Nonvested – December 30, 2012		1,102,000		$	2.98

Summary of outstanding options and SARs

	Options/ SARs			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding December 26, 2009		7,039,850		$	26.79	$	3,086
Granted		10,000		$	4.96
Exercised		(119,250	)	$	1.70	$	388
Forfeited		(44,250	)	$	7.07
Expired		(254,150	)	$	40.53
Outstanding December 26, 2010		6,632,200		$	26.82	$	6,060
Granted		1,078,500		$	4.08
Exercised		(152,750	)	$	1.73	$	382
Forfeited		(132,250	)	$	3.99
Expired		(702,450	)	$	47.86
Outstanding December 25, 2011		6,723,250		$	22.01	$	874
Granted		1,017,500		$	2.76
Exercised		(27,250	)	$	1.70	$	33
Forfeited		(1,217,750	)	$	54.52
Expired		(301,250	)	$	48.33
Outstanding December 30, 2012		6,194,500		$	11.45	$	1,846
Vested and Expected to Vest December 30, 2012		5,970,603		$	11.74	$	1,810
Options exercisable:
December 26, 2010		3,572,450				$	869
December 25, 2011		4,082,500				$	397
December 30, 2012		3,826,250				$	1,335

Summary of information about stock options and SARs outstanding in the stock plans

Range of Exercise Prices	Options/SARs Outstanding		Average Remaining Contractual Life		Weighted Average Exercise Price		Options/SARs Exercisable		Weighted Average Exercise Price
$1.50 – $9.07		4,273,500		6.85	$	2.94		1,941,000	$	2.65
$9.73 – $35.94		1,128,750		4.17	$	13.20		1,128,750	$	13.20
$40.95 – $73.36		756,500		2.63	$	54.93		756,500	$	54.93
Total		6,158,750		5.82	$	11.45		3,826,250	$	16.10

Schedule of assumptions used to estimate the grant date fair value of options and SARs

	2012		2011		2010
Expected life in years		6.52		6.16		6.10
Dividend yield		NIL		NIL		NIL
Volatility		0.90		0.87		0.83
Risk-free interest rate		1.22%		2.53%		2.77%
Weighted average exercise price of options/SARs granted	$	2.76	$	4.08	$	4.96
Weighted average fair value of options/SARs granted	$	2.09	$	3.03	$	3.57

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	Dec. 25, 2011 Privately held 15.75% notes due 2014
Debt Instrument
Debt instrument, interest rate (as a percent)	15.75%

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QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables)

12 Months Ended

Dec. 30, 2012

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Schedule of the Company's quarterly results

	Quarters Ended
(in thousands, except per share amounts)	March 25, 2012			June 24, 2012		September 23, 2012		December 30, 2012
Net Revenues	$	288,301		$	299,294	$	287,465	$	355,664
Operating income	$	27,975		$	42,935	$	32,479	$	82,747
Net income (loss)	$	(2,087	)	$	26,865	$	5,093	$	(30,015	)
Net income (loss) per share	$	(0.02	)	$	0.31	$	0.06	$	(0.35	)

	Quarters Ended
(in thousands, except per share amounts)	March 27, 2011			June 26, 2011		September 25, 2011		December 25, 2011
Net Revenues	$	303,734		$	314,250	$	300,219	$	351,437
Operating income	$	20,455		$	45,133	$	45,443	$	90,284
Net income (loss)	$	(1,962	)	$	4,947	$	9,399	$	42,005
Net income (loss) per share	$	(0.02	)	$	0.06	$	0.11	$	0.49

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MIAMI LAND AND BUILDING (Details 2) (USD $)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Relocation disclosures
Initial annual base operating lease payments	$ 10,798,000
Capital expenditures related to the new facilities incurred	34,788,000	16,984,000	15,628,000
Miami | Facility Relocation
Relocation disclosures
Cash expenses to relocate the Miami newspapers	12,000,000
Cash expenses incurred to relocate the Miami newspapers	4,500,000	900,000
Accelerated depreciation	13,000,000
Accelerated depreciation incurred	8,300,000
Office building | Miami
Relocation disclosures
Initial annual base operating lease payments	1,800,000
Estimated capital expenditures related to the new facilities	32,000,000
Capital expenditures related to the new facilities incurred	$ 17,500,000	$ 400,000

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EMPLOYEE BENEFITS (Details 3) (USD $)	1 Months Ended	12 Months Ended	1 Months Ended			12 Months Ended			1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Jan. 31, 2011	Dec. 25, 2011	Jan. 31, 2012 Pension plan	May 31, 2011 Pension plan	Jan. 31, 2011 Pension plan item	Dec. 30, 2012 Pension plan	Dec. 25, 2011 Pension plan	Dec. 26, 2010 Pension plan	Jan. 30, 2013 Pension plan Subsequent event	Dec. 30, 2012 Post-retirement plans	Sep. 30, 2012 Post-retirement plans	Dec. 30, 2012 Post-retirement plans	Dec. 25, 2011 Post-retirement plans	Dec. 26, 2010 Post-retirement plans	Dec. 30, 2012 Supplemental retirement plans	Dec. 25, 2011 Supplemental retirement plans	Dec. 26, 2010 Supplemental retirement plans
Weighted average assumptions used for valuing benefit obligations
Discount rate (as a percent)						4.17%	5.32%			3.39%		3.39%	4.26%
Weighted average assumptions used in calculating expense
Expected long-term return on plan assets (as a percent)						8.25%	8.25%	8.25%
Discount rate (as a percent)						5.31%	5.90%	6.05%		3.31%	4.26%		4.84%	5.09%
Medical cost trend rates
Assumed health care cost trend rate (as a percent)												7.50%
Ultimate health care cost trend rate (as a percent)												5.00%
Effect of 1% increase in the assumed health care cost trend rate on benefit obligation												$ 600,000	$ 1,100,000
Effect of 1% decrease in the assumed health care cost trend rate on benefit obligation												600,000	1,000,000
Contributions and Cash Flows
Real property locations contributed, number					7
Contribution	49,700,000	49,710,000			49,710,000
Term of leases entered into for property contributed to pension plan					10 years
Reduction in pension obligation		49,710,000			49,710,000
Financing obligation from contribution of real property						46,300,000
Value of contributions to plan			40,000,000	163,000,000		48,122,000	220,227,000		7,500,000			2,468,000	2,673,000		8,200,000	7,400,000	7,500,000
Expected benefit payments
2013						91,119,000				1,859,000		1,859,000
2014						93,630,000				1,681,000		1,681,000
2015						97,071,000				1,532,000		1,532,000
2016						100,499,000				1,427,000		1,427,000
2017						105,278,000				1,340,000		1,340,000
2018-2022						582,046,000				5,448,000		5,448,000
Total						$ 1,069,643,000				$ 13,287,000		$ 13,287,000

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
REVENUES - NET:
Advertising	$ 914,738	$ 956,305	$ 1,049,964
Circulation	263,286	262,335	272,776
Other	52,700	51,000	52,492
Revenues, total	1,230,724	1,269,640	1,375,232
OPERATING EXPENSES:
Compensation	443,401	457,707	519,179
Newsprint, supplements and printing expenses	140,932	145,874	136,642
Depreciation and amortization	125,275	121,528	133,404
Other operating expenses	334,980	343,216	347,124
Operating expenses, total	1,044,588	1,068,325	1,136,349
OPERATING INCOME	186,136	201,315	238,883
NON-OPERATING (EXPENSE) INCOME:
Interest expense	(151,334)	(165,434)	(177,641)
Interest income	88	97	550
Equity income in unconsolidated companies, net	31,935	27,762	11,752
Loss on extinguishment of debt, net	(88,430)	(1,203)	(10,661)
Write-down of investments and land			(24,447)
Other - net	79	248	265
Non-operating (expense) income, total	(207,662)	(138,530)	(200,182)
Income (loss) from continuing operations before income tax provision (benefit)	(21,526)	62,785	38,701
Income tax provision (benefit)	(21,382)	8,396	5,601
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(144)	54,389	33,100
Income from discontinued operations, net of tax			3,083
NET INCOME (LOSS)	$ (144)	$ 54,389	$ 36,183
Basic earnings per common share:
Income (loss) from continuing operations (in dollars per share)		$ 0.64	$ 0.39
Discontinued operations, net of tax (in dollars per share)			$ 0.04
Net income (loss) per basic common share (in dollars per share)		$ 0.64	$ 0.43
Diluted earnings per common share:
Income (loss) from continuing operations (in dollars per share)		$ 0.63	$ 0.39
Discontinued operations, net of tax (in dollars per share)			$ 0.04
Net income (loss) per diluted common share (in dollars per share)		$ 0.63	$ 0.43
Weighted average number of common shares used to calculate basic and diluted earnings per share:
Basic (in shares)	85,744	85,211	84,760
Diluted (in shares)	85,744	86,044	85,539

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LONG-TERM DEBT (Details 2) (USD $)	3 Months Ended	12 Months Ended			0 Months Ended	3 Months Ended		12 Months Ended
	Mar. 25, 2012	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Dec. 18, 2012 11.50% senior secured notes due in 2017	Mar. 24, 2013 11.50% senior secured notes due in 2017	Dec. 30, 2012 11.50% senior secured notes due in 2017	Dec. 30, 2012 11.50% senior secured notes due in 2017	Dec. 30, 2012 4.625% notes due in 2014	Dec. 30, 2012 5.750% notes due in 2017
Extinguishment of debt
Face value of notes repurchased		$ 832,905,000						$ 767,405,000	$ 15,000,000	$ 50,500,000
Loss on extinguishment of debt	(4,400,000)	88,430,000	1,203,000	10,661,000	94,500,000	9,600,000	94,500,000
Face value of outstanding notes repurchased in the open market		70,500,000
Face value of notes repurchased in conjunction with the refinancing of 11.50% Notes		$ 762,400,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 30, 2012	Dec. 25, 2011
Trade receivables, allowance	$ 5,920	$ 7,341
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Treasury stock, shares	6,034	260,170
Common Class A
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	61,098,820	60,865,566
Common Class B
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	24,800,962	24,800,962

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COMMITMENTS AND CONTINGENCIES (Details 2) (USD $)			12 Months Ended
	Dec. 30, 2012 Self-Insurance	Dec. 25, 2011 Self-Insurance	Dec. 26, 2010 Indemnification obligations	Dec. 30, 2012 Revolving credit facility
Contingencies
Estimated insurance recoveries	$ 9,100,000
Expected payments of undiscounted ultimate losses
2013	4,827,000
2014	3,377,000
2015	2,478,000
2016	1,889,000
2017	1,481,000
Thereafter	5,717,000
Total	19,769,000	20,500,000
Additional disclosures
Discount rate of ultimate losses (as a percent)	1.10%	1.40%
Present value of self-insurance reserves	19,800,000	20,400,000
Outstanding letters of credit	2,200,000			36,100,000
Asset Pledged as Collateral	2,200,000
Amount reversed and recorded as income			$ 6,500,000

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SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Dec. 25, 2011
Changes to Comprehensive income (loss)
Minimum pension and post-retirement liability	$ (473,448)	$ (340,577)
Other comprehensive loss related to equity investments	(7,868)	(7,077)
Accumulated other comprehensive loss, net of tax	$ (481,316)	$ (347,654)

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QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details 2) (USD $)	3 Months Ended						12 Months Ended			3 Months Ended		0 Months Ended	3 Months Ended
	Dec. 30, 2012	Jun. 24, 2012	Mar. 25, 2012	Dec. 25, 2011	Jun. 26, 2011	Mar. 27, 2011	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Jun. 24, 2012 Favorable tax settlement	Mar. 27, 2011 Favorable tax settlement	Dec. 18, 2012 11.50% Notes	Mar. 24, 2013 11.50% Notes	Dec. 30, 2012 11.50% Notes
Debt Instrument
Gain (loss) on extinguishment of debt			$ 4,400,000				$ (88,430,000)	$ (1,203,000)	$ (10,661,000)			$ (94,500,000)	$ (9,600,000)	$ (94,500,000)
Interest rate (as a percent)			11.50%											11.50%
Length of a Fiscal Year							371 days	364 days
Number of days in a fiscal quarter	98 days			91 days
Impairment charges						10,300,000
Severance charges					7,600,000	4,500,000
Income Taxes
Reversal of non-cash interest expense related to the release of tax reserves		7,800,000
Favorable tax settlement related to state tax positions previously taken										7,000,000	9,900,000
Tax benefit recognized							21,382,000	(8,396,000)	(5,601,000)		7,600,000
Interest expense reduced due to tax benefit recognition											$ 3,700,000

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

Discontinued operations

Discontinued operations

We divested of 13 newspapers from 2006 through 2007. The sales contracts for several of the disposed newspapers include indemnification obligations. Expenses and credits related to disposed newspaper operations have been recorded as discontinued operations (see Note 8). There were no discontinued operations in fiscal years 2012 or 2011.

Revenue recognition

Revenue recognition

We recognize revenues from advertising placed in a newspaper, a website and/or a mobile service over the advertising contract period or as services are delivered, as appropriate, and recognize circulation revenues as newspapers are delivered over the applicable subscription term. Circulation revenues are recorded net of direct delivery costs.

We enter into certain revenue transactions, primarily related to advertising contracts and circulation subscriptions that are considered multiple element arrangements (arrangements with more than one deliverable). As such we must: (1) determine whether and when each element has been delivered; (2) determine fair value of each element using the selling price hierarchy of vendor-specific objective evidence of fair value, third party evidence or best estimated selling price, as applicable and (3) allocate the total price among the various elements based on the relative selling price method.

Other revenues are recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentives, including special pricing agreements, promotions and other volume-based incentives and net of sales tax collected from the customer. Revisions to these estimates are charged to revenues in the period in which the facts that give rise to the revision become known.

Concentrations of credit risks

Concentrations of credit risks

Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 30, 2012, we had no cash balances at financial institutions in excess of federal insurance limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable.

Allowance for doubtful accounts

Allowance for doubtful accounts

We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. Generally, we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable. However, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided.

We provide an allowance for doubtful accounts as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of year	$	7,341		$	7,836		$	10,298
Charged to costs and expenses		6,089			8,309			7,479
Amounts written off		(7,510	)		(8,804	)		(9,941	)
Balance at end of year	$	5,920		$	7,341		$	7,836

Newsprint, ink and other inventories

Newsprint, ink and other inventories

Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first-in, first-out method) or current market value.

Property, plant and equipment

Property, plant and equipment

Property, plant and equipment ("PP&E") are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in fiscal year 2012, 2011 or 2010. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized.

Property, plant and equipment consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011			Estimated Useful Lives
Land	$	311,959		$	308,489
Building and improvements		364,951			362,091			5-60 years
Equipment		775,397			784,592			2-25 years	(1)
Construction in process		24,014			4,463
		1,476,321			1,459,635
Less accumulated depreciation		(742,592	)		(698,658	)
Property, plant and equipment, net	$	733,729		$	760,977

• ⁽¹⁾

  Presses are 9-25 years and other equipment is 2-15 years

We record depreciation using the straight-line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $67.1 million, $63.2 million and $74.8 million in fiscal years 2012, 2011 and 2010, respectively.

Investments in unconsolidated companies

Investments in unconsolidated companies

We use the equity method of accounting for our investments in, and earnings or losses of, companies that we do not control but over which we do exert significant influence. We consider whether the fair values of any of our equity method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If we consider any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 2 for discussion of investments in unconsolidated companies.

Segment reporting

Segment reporting

Our primary business is the publication of newspapers and related digital and direct marketing products. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Each operating segment consists primarily of a group of newspapers reporting to segment managers. One operating segment consists primarily of our newspaper operations in California, the Northwest and Texas, while the other operating segment consists primarily of newspaper operations in the Southeast, the Gulf Coast and the Midwest.

Goodwill and intangible impairment

Goodwill and intangible impairment

We test for impairment of goodwill annually, at year-end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required two-step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered reporting units. An impairment loss generally is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate and private and public market trading multiples for newspaper assets for the market based approach. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. See Note 4 for additional discussion.

Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year-end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief from royalty approach which utilizes a discounted cash flow model, as discussed above, to determine the fair value of each newspaper masthead. See Note 4 for additional discussion.

Long-lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We have had no impairment of long-lived assets during fiscal years 2012, 2011 or 2010. See Note 4 for additional discussion.

Stock-based compensation

Stock-based compensation

All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their fair values. At December 30, 2012, we had five stock-based compensation plans. See an expanded discussion of our stock plans in Note 10.

Total stock-based compensation expense consisted of the following:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Stock-based compensation expense	$	3,523	$	5,174	$	4,626

Income taxes

Income taxes

We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

Current accounting standards in the United States prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise's tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense.

Fair value of financial instruments

Fair value of financial instruments

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1	–	Unadjusted quoted prices available in active markets for identical investments as of the reporting date.
Level 2	–	Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies.
Level 3	–	Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

• • • Cash and cash equivalents, accounts receivable, certificate of deposits (in other assets) and accounts payable.    The carrying amount of these items approximates fair value.

      Long-term debt.    The fair value of long-term debt is determined using quoted market prices and other inputs that were derived from available market information including the current market activity of our publicly-traded notes and bank debt, trends in investor demand and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual. At December 30, 2012, the estimated fair value and carrying value of long-term debt was $1.6 billion and $1.7 billion, respectively.

Accumulated Comprehensive income (loss)

Accumulated Comprehensive income (loss)

We record changes in our net assets from non-owner sources in our Consolidated Statements of Stockholders' Equity. Such changes relate primarily to valuing our pension liabilities, net of tax effects.

Our accumulated other comprehensive loss, net of tax, consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011
Minimum pension and post-retirement liability	$	(473,448	)	$	(340,577	)
Other comprehensive loss related to equity investments		(7,868	)		(7,077	)
	$	(481,316	)	$	(347,654	)

Earnings per share (EPS)

Earnings per share (EPS)

Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock options, restricted stock units and restricted stock and are computed using the treasury stock method. The weighted average anti-dilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation consisted of the following:

	Years Ended
(shares in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Anti-dilutive stock options		6,814		5,772		4,283

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012. We will adopt this standards update and revise our disclosure, as required, beginning with the first quarter of fiscal year 2013.

In July 2012, the FASB issued an accounting standards update with new guidance on annual impairment testing of indefinite-lived intangible assets. The standards update allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If based on its qualitative assessment an entity concludes it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. The standards update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this standard will not have an impact on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In the first quarter of fiscal year 2012, we adopted the amended accounting guidance related to goodwill impairment testing. The new guidance provides the option to perform a qualitative assessment by applying a more likely than not scenario to determine whether the fair value of a reporting unit is less than its carrying amount, which may then allow a company to skip the annual two-step quantitative goodwill impairment test depending on the determination. The adoption of this standard did not have a material impact on our consolidated financial results or disclosures.

In the first quarter of fiscal year 2012, we adopted the single authoritative guidance on a framework on how to measure fair value and on what disclosures to provide about fair value measurements. The standard also clarified existing fair value measurement disclosures and made other amendments to current guidance. The adoption of these amended standards did not have a material impact on our consolidated financial results or disclosures.

In the first quarter of fiscal year 2012, we adopted the guidance that revised the manner in which entities present comprehensive income in their financial statements. The new guidance removed the presentation options in previous guidance and required entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The new guidance did not change the items that must be reported in other comprehensive income. Accordingly, we have presented net income (loss) and other comprehensive income (loss) in two consecutive statements.

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SIGNIFICANT ACCOUNTING POLICIES (Details 4) (Anti-dilutive stock options, restricted stock units and restricted stock) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Anti-dilutive stock options, restricted stock units and restricted stock
Weighted average anti-dilutive stock options
Anti-dilutive stock options (in shares)	6,814	5,772	4,283

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INVESTMENTS IN UNCONSOLIDATED COMPANIES (Tables)

12 Months Ended

Dec. 30, 2012

INVESTMENTS IN UNCONSOLIDATED COMPANIES

Summary of company's ownership interest and investment in unconsolidated companies and joint ventures

(in thousands) Company	% Ownership Interest		December 30, 2012		December 25, 2011
CareerBuilder, LLC		15.0	$	210,365	$	218,805
Classified Ventures, LLC		25.6		69,907		66,886
HomeFinder, LLC		33.3		2,573		1,628
Seattle Times Company (C-Corporation)		49.5		–		–
Ponderay (general partnership)		27.0		11,375		11,800
Other		Various		5,383		5,774
			$	299,603	$	304,893

Schedule of dividend received and other equity distributions

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011
CareerBuilder, LLC	$	15,000	$	7,500
Classified Ventures, LLC		18,908		17,375
Other		4,692		6,750
	$	38,600	$	31,625

Summary of expenses incurred for products provided by unconsolidated companies and recorded in operating expenses

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
CareerBuilder, LLC	$	1,197	$	1,230	$	1,272
Classified Ventures, LLC		14,390		12,552		11,073
Ponderay (general partnership)		23,813		20,414		23,048

Summary of financial information for Company's investments in unconsolidated companies on a combined Basis

(in thousands)	December 30, 2012		December 25, 2011
Current assets	$	412,959	$	480,050
Noncurrent assets		584,773		563,286
Current liabilities		304,317		359,891
Noncurrent liabilities		246,543		228,713
Equity		446,872		454,732

Summary of income statement information from the entities accounted for under the equity method

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Net revenues	$	1,427,657	$	1,332,394	$	1,195,755
Operating income		169,236		154,257		102,863
Net income		141,387		171,305		95,855

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (144)	$ 54,389	$ 36,183
Less income from discontinued operations, net of tax			(3,083)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	(144)	54,389	33,100
Reconciliation to net cash from continuing operations:
Depreciation and amortization	125,275	121,528	133,404
(Gain) loss on disposal of equipment (including impairments)	(988)	9,397	(254)
Contribution to qualified defined benefit pension plan	(40,000)	(163,000)	(8,235)
Retirement benefit expense	1,384	816	5,568
Stock-based compensation expense	3,523	5,174	4,626
Deferred income taxes	(9,548)	(18,964)	(26,023)
Equity income in unconsolidated companies	(31,935)	(27,762)	(11,752)
Distributions of income from equity investments	19,550	17,375
Loss on extinguishment of debt	88,430	1,203	10,661
Write-off of deferred financing cost			2,148
Write-down of investments and land			24,447
Other	(133)	5,717	2,896
Changes in certain assets and liabilities:
Trade receivables	1,821	4,695	22,099
Inventories	(1,303)	4,480	3,052
Other assets	(4,406)	2,694	(11,299)
Accounts payable	(1,799)	(4,256)	523
Accrued compensation	4,564	(24,583)	8,264
Income taxes	(58,229)	(16,443)	(6,568)
Other liabilities	(43,137)	(3,233)	40,644
Net cash provided by (used in) continuing operations	52,925	(30,773)	227,301
Net cash used in discontinued operations			(2,106)
Net cash provided by (used in) operating activities	52,925	(30,773)	225,195
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(34,788)	(16,984)	(15,628)
Proceeds from sale of property, plant and equipment and other	1,925	9,201	2,952
Proceeds from sale of investments		2,893
Proceeds from deposit for land			6,000
Purchase of certificate of deposits	(2,222)
Distributions from equity investments	19,050	14,250	24,274
Equity investments and other-net	(2,606)	(2,986)	(120)
Net cash provided by (used in) investing activities	(18,641)	6,374	17,478
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes	910,000		864,710
Repayment of term bank debt			(546,800)
Repayment of revolving bank debt, net			(330,700)
Repurchase of public notes and related expenses	(900,481)	(134,555)	(155,410)
Purchase of privately held 15.75% notes due 2014		(447)	(31,929)
Payment of financing costs	(20,990)	(2,552)	(31,986)
Proceeds from financing obligation related to Miami transaction	6,000	230,000
Other	(1,745)	465	793
Net cash provided by (used in) financing activities	(7,216)	92,911	(231,322)
Increase in cash and cash equivalents	27,068	68,512	11,351
Cash and cash equivalents at beginning of period	86,020	17,508	6,157
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 113,088	$ 86,020	$ 17,508

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
NET INCOME (LOSS)	$ (144)	$ 54,389	$ 36,183
Pension and post retirement plans:
Unrealized net gain (loss) and other components of benefit plans, net of taxes of $88,622, $66,725 and $(4,940)	(132,871)	(100,087)	7,410
Investment in unconsolidated companies:
Other comprehensive income (loss), net of taxes of $528, $336 and $(35)	(791)	(506)	53
Other comprehensive income (loss)	(133,662)	(100,593)	7,463
Comprehensive income (loss)	$ (133,806)	$ (46,204)	$ 43,646

XML

EMPLOYEE BENEFITS

12 Months Ended

Dec. 30, 2012

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

7.    EMPLOYEE BENEFITS

We have a qualified defined benefit pension plan ("Plan") covering substantially all of our employees who began their employment prior to March 31, 2009. Effective March 31, 2009, the Plan was frozen such that no new participants may enter the Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned.

We also have a limited number of supplemental retirement plans to provide key employees hired prior to March 31, 2009, with additional retirement benefits. These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations. We paid $8.2 million in fiscal year 2012, $7.4 million in fiscal year 2011 and $7.5 million in fiscal year 2010 for these plans.

The following tables provide reconciliations of the pension and post-retirement benefit plans' benefit obligations, fair value of assets and funded status as of December 30, 2012, and December 25, 2011:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Benefit Obligation
Benefit obligation, beginning of year	$	1,763,859		$	1,634,124		$	27,474		$	30,585
Service cost		5,540			5,600			–			–
Interest cost		91,898			92,961			946			1,358
Plan participants' contributions		–			–			817			1,044
Actuarial (gain)/loss		305,952			120,283			(2,400	)		(1,796	)
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Plan amendment		–			–			(7,620	)		–
Administrative expenses		(4,818	)		(5,449	)		–			–
Benefit obligation, end of year	$	2,073,218		$	1,763,859		$	15,932		$	27,474

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Change in Plan Assets
Fair value of plan assets, beginning of year	$	1,233,305		$	1,051,410		$	–		$	–
Actual return on plan assets		171,481			50,778			–			–
Employer contribution		48,122			220,227			2,468			2,673
Plan participants' contributions		–			–			817			1,044
Gross benefits paid		(89,213	)		(83,660	)		(3,285	)		(3,717	)
Administrative expenses		(4,818	)		(5,449	)		–			–
Fair value of plan assets, end of year	$	1,358,877		$	1,233,306		$	–		$	–

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Funded Status
Fair value of plan assets	$	1,358,877		$	1,233,306		$	–		$	–
Benefit obligations		(2,073,218	)		(1,763,859	)		(15,932	)		(27,474	)
Funded status and amount recognized, end of year	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

Amounts recognized in the consolidated balance sheets at December 30, 2012 and December 25, 2011 consists of:

	Pension Benefits						Post-retirement Benefits
(in thousands)	2012			2011			2012			2011
Current liability	$	(15,830	)	$	(37,462	)	$	(1,859	)	$	(3,897	)
Noncurrent liability		(698,511	)		(493,091	)		(14,073	)		(23,577	)
	$	(714,341	)	$	(530,553	)	$	(15,932	)	$	(27,474	)

Amounts recognized in accumulated other comprehensive income for the years ended December 30, 2012 and December 25, 2011 consist of:

	Pension Benefits				Post-retirement Benefits
(in thousands)	2012		2011		2012			2011
Net actuarial loss/(gain)	$	815,385	$	585,839	$	(11,380	)	$	(9,634	)
Prior service cost/(credit)		26		41		(14,952	)		(8,618	)
	$	815,411	$	585,880	$	(26,332	)	$	(18,252	)

The elements of retirement and post-retirement costs for continuing operations are as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Pension plans:
Service Cost	$	5,540		$	5,600		$	5,885
Interest Cost		91,898			92,961			93,796
Expected return on plan assets		(107,760	)		(104,251	)		(96,151	)
Prior service cost amortization		14			14			14
Actuarial loss		12,687			6,726			2,229
Net pension expense		2,379			1,050			5,773
Net post-retirement benefit (credit) expense		(995	)		(234	)		(205	)
Deferred compensation plan expense (credit)		–			(71	)		10,790
Net retirement expenses	$	1,384		$	745		$	16,358

Our discount rate was determined by matching a portfolio of long-term, non-callable, high quality bonds to the plans' projected cash flows.

Weighted average assumptions used for valuing benefit obligations were:

	Pension Benefit Obligations				Post-retirement Obligations
	2012		2011		2012		2011
Discount rate		4.17%		5.32%		3.39%		4.26%

Weighted average assumptions used in calculating expense:

	Pension Benefit Expense						Post-retirement Expense
	December 30, 2012		December 25, 2011		December 26, 2010		December 30, 2012	December 25, 2011		December 26, 2010
Expected long-term return on plan assets		8.25%		8.25%		8.25%	N/A		N/A		N/A
Discount rate		5.31%		5.90%		6.05%	4.26%/3.31% (1)		4.84%		5.09%

• ⁽¹⁾

  4.26% for January 2012 to September 2012; 3.31% for October 2012 to December 2012 due to plan change.

For the post-retirement plans, the medical cost trend rates are expected to decline from 7.5% in 2012 to 5.0% by the year 2018. As of December 30, 2012, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $0.6 million and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $0.6 million. As of December 25, 2011, a 1% increase in the assumed health care cost trend rate would increase the benefit obligation by $1.1 million, and a 1% decrease in the assumed health care cost trend rate would decrease the benefit obligation by $1.0 million.

Contributions and Cash Flows

In January 2011, we contributed owned real property from seven locations to our Plan. The Plan obtained independent appraisals of the property and, based on these appraisals, recorded the contribution at the fair value of $49.7 million. We entered into leases for the seven contributed properties for 10 years and expect to continue to use the seven properties in our newspaper operations. The properties are managed on behalf of the Plan by an independent fiduciary.

The contribution and leaseback of the properties was treated as a financing transaction and, accordingly, we continue to depreciate the carrying value of the properties in our financial statements. No gain or loss has been recognized on the contribution. Our pension obligation was reduced by $49.7 million and a long-term and short-term financing obligation was recorded on the date of the contribution. The financing obligation is reduced by a portion of the lease payments made to the Plan each month. The balance of this obligation at December 30, 2012, was $46.3 million.

In May 2011, we used proceeds from the sale of property in Miami (see Note 3) to contribute $163.0 million to the Plan.

In January 2012, we contributed $40.0 million of cash to the Plan. In January 2013, we contributed $7.5 million of cash to the Plan, which we expect will satisfy all of our required contributions in fiscal year 2013. We do not expect to make any additional contributions to the Plan during fiscal year 2013.

Expected benefit payments to retirees under our retirement and post-retirement plans over the next 10 years are summarized below:

(in thousands)	Retirement Plans (1)		Post-retirement Plans
2013	$	91,119	$	1,859
2014		93,630		1,681
2015		97,071		1,532
2016		100,499		1,427
2017		105,278		1,340
2018-2022		582,046		5,448
Total	$	1,069,643	$	13,287

• ⁽¹⁾

  Largely to be paid from the qualified defined benefit pension plan

Plan Assets

Our investment policies are designed to maximize Plan returns within reasonable and prudent levels of risk, with an investment horizon of greater than 10 years so that interim investment returns and fluctuations are viewed with appropriate perspective. The policy also aims to maintain sufficient liquid assets to provide for the payment of retirement benefits and plan expenses, hence, small portions of the equity and debt investments are held in marketable mutual funds.

Our policy seeks to provide an appropriate level of diversification of assets, as reflected in its target allocations, as well as limits placed on concentrations of equities in specific sectors or industries. It uses a mix of active managers and passive index funds and a mix of separate accounts, mutual funds, common collective trusts and other investment vehicles.

Our assumed long-term return on assets was developed using a weighted average return based upon the Plan's portfolio of assets and expected returns for each asset class, taking into account projected inflation, interest rates and market returns. The assumed return was also reviewed in light of historical and recent returns in total and by asset class.

As of December 30, 2012 and December 25, 2012, the target allocations for the plan assets were 60% equity securities, 28% debt securities, 7% real estate securities and 5% commodities.

The table below summarizes the plan's financial instruments for fiscal year 2012 that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above:

	2012
	Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1,161	$	–	$	–	$	1,161
Mutual fund		257,398		–		–		257,398
Corporate debt instruments		–		98		–		98
U.S. Government securities		–		107,337		–		107,337
Common collective trusts		–		928,730		–		928,730
Real estate		–		–		51,579		51,579
Other		–		–		6,408		6,408
Total	$	258,559	$	1,036,165	$	57,987		1,352,711
Pending trades								6,166
							$	1,358,877

The table below summarizes changes in the fair value of the plan's Level 3 investment assets held for the year ended December 30, 2012:

(in thousands)	Real Estate			Private Equity			Total
Beginning Balance, December 25, 2011	$	50,530		$	8,899		$	59,429
Purchases, issuances, sales, settlements		–			–			–
Realized gains		3,747			27			3,774
Transfer in or out of level 3		(3,747	)		(3,820	)		(7,567	)
Unrealized gains		1,049			1,302			2,351
Ending Balance, December 30, 2012	$	51,579		$	6,408		$	57,987

The table below summarizes the plan's financial instruments for fiscal year 2011 that are carried at fair value on a recurring basis by the fair value hierarchy levels discussed above:

	2011 Plan Assets
(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	30,816	$	–	$	–	$	30,816
Mutual funds		40,861		–		–		40,861
Corporate stock		211		–		–		211
Corporate debt instruments		–		86,776		–		86,776
U.S. Government securities		–		236,063		–		236,063
Common collective trusts		–		764,983		–		764,983
Mortgage and asset backed securities		–		22,265		–		22,265
Real estate		–		–		50,530		50,530
Other		–		14,418		8,899		23,317
Total	$	71,888	$	1,124,505	$	59,429		1,255,822
Pending trades								(22,516	)
							$	1,233,306

The table below summarizes changes in the fair value of the plan's Level 3 investment assets held for the year ended December 25, 2011:

(in thousands)	Real Estate			Private Equity		Receivable			Total
Beginning Balance, December 26, 2010	$	–		$	7,792	$	28,936		$	36,728
Purchases, issuances, sales, settlements		49,710			–		(28,936	)		20,774
Realized gains		3,472			–		–			3,472
Transfer in or out of level 3		(3,472	)		–		–			(3,472	)
Unrealized gains		820			1,107		–			1,927
Ending Balance, December 25, 2011	$	50,530		$	8,899	$	–		$	59,429

Cash and cash equivalents.    The carrying value of these items approximates fair value.

Mutual funds.    These investments are publicly traded investments, which are valued using the Net Asset Value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis.

Corporate stock.    The fair value of corporate stock is based on the exchange quoted market prices. When quoted prices are not available for identical stock, an industry standard valuation model is used which maximizes observable inputs.

Corporate debt instruments.    The fair value of corporate debt instruments is based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar debt instruments, the fair value is based upon an industry valuation model, which maximizes observable inputs.

U.S. Government securities.    U.S. government securities primarily consist of investments in U.S. Treasury Bonds, Indexed Linked Bonds and Treasury Inflation Protected Securities. The fair value of U.S. government securities is based on quoted market prices when available or is based on yields currently available on comparable securities or on an industry valuation model, which maximizes observable inputs.

Common collective trusts.    These investments are valued based on the NAV of the underlying investments and are provided by the fund issuers. NAV for these funds represent the quoted price in a non-market environment. There are no restrictions on participants' ability to withdraw funds from the common collective trusts.

Mortgage and asset backed securities.    Mortgage and asset backed securities are valued using quotes from independent pricing vendors based on recent trading activity and other relevant information, including market interest rate curves, referenced credit spreads, and estimated prepayment rates, where applicable.

Real estate.    On January 14, 2011, we contributed Company-owned real property from seven locations to our Plan. The Plan obtained independent appraisals of the property, and based on these appraisals, the Plan recorded the contribution at fair value on January 14, 2011. The properties are leased by us for our newspaper operations. The properties are managed on behalf of the Plan by an independent fiduciary, and the terms of the leases between us and the Plan were negotiated with the fiduciary. The property is valued by independent appraisals conducted under the direction of the independent fiduciary.

Other.    Other includes:

• • Private equity fund.    Private equity funds represent investments in limited partnerships, which invest in start-up or other private companies. Fair value is estimated based on valuations of comparable public companies, recent sales of comparable private and public companies, and discounted cash flow analysis of portfolio companies and is included as a Level 3 investment in the table above.

401(k) Plan

We provide or subsidize certain life insurance benefits for employees. In addition we have separate deferred compensation plans ("401(k) plan") for employees, which enable qualified employees to voluntarily defer compensation. On March 31, 2009, we temporarily suspended our matching contribution to the 401(k) plan. The 401(k) plan, as amended, includes a Company match (once reinstated) and a supplemental contribution that is tied to our performance (as defined in the plan).

XML

Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Jun. 22, 2012	Feb. 22, 2013 Common Class A	Feb. 22, 2013 Common Class B
Entity Registrant Name	MCCLATCHY CO
Entity Central Index Key	0001056087
Document Type	10-K
Document Period End Date	Dec. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float		$ 135.3
Entity Common Stock, Shares Outstanding			61,170,502	24,800,962
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

XML

CASH FLOW INFORMATION

12 Months Ended

Dec. 30, 2012

CASH FLOW INFORMATION

CASH FLOW INFORMATION

8.    CASH FLOW INFORMATION

Cash paid during the fiscal year 2012, 2011 and 2010 for interest and income taxes were:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Interest paid (net of amount capitalized) (1)	$	173,742	$	152,543	$	123,402
Income taxes paid (net of refunds)		37,137		32,613		37,246

• ⁽¹⁾

  The fiscal year 2012 interest paid includes $30.0 million of interest accelerated as a result of the refinance of the 11.50% Notes as discussed in Note 5.

In January 2011, we contributed real property valued at $49.7 million to our defined benefit pension plan and have recorded a financing obligation equal to the same amount for leases entered into with the defined benefit pension plan for our operations. In addition, in 2011 we sold property in Miami but retained use of the property rent free through May 2013. As a result the transaction was treated as a financing transaction (see Note 3 for a description of this transaction and the related accounting treatment) and land was transferred to PP&E.

These non-cash transactions are summarized below:

	Year Ended
(in thousands)	December 25, 2011
Financing obligation for contribution of real property to pension plan	$	49,710
Reduction of pension obligation		(49,710	)
Non-refundable deposits offset against carrying value of land		(16,500	)
Increase in PP&E for land transferred from other assets		116,000

We had $5.7 million, $1.2 million and $0.9 million of non-cash financing activities related to purchases of PP&E on credit as of the end of fiscal years 2012, 2011 and 2010, respectively. We had $1.0 million of non-cash financing activities related to financing costs for our 9.00% Notes issuance as of the end of fiscal year 2012.

Net cash from operating activities of discontinued operations are summarized below:

(in thousands)	December 26, 2010
Income (loss) from discontinued operations	$	3,083
Reconciliation to net cash from discontinued operations:
Changes in assets and liabilities and other, net		(5,189	)
Net cash from operating activities of discontinued operations	$	(2,106	)

We had no discontinued operations in fiscal years 2012 or 2011.

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Unrealized net gain (loss) and other components of benefit plans, taxes	$ 88,622	$ 66,725	$ (4,940)
Other comprehensive income (loss), taxes	$ 528	$ 336	$ (35)

XML

INVESTMENTS IN UNCONSOLIDATED COMPANIES

12 Months Ended

Dec. 30, 2012

INVESTMENTS IN UNCONSOLIDATED COMPANIES

INVESTMENTS IN UNCONSOLIDATED COMPANIES

2.    INVESTMENTS IN UNCONSOLIDATED COMPANIES

Our ownership interest and investment in unconsolidated companies consisted of the following:

(in thousands) Company	% Ownership Interest		December 30, 2012		December 25, 2011
CareerBuilder, LLC		15.0	$	210,365	$	218,805
Classified Ventures, LLC		25.6		69,907		66,886
HomeFinder, LLC		33.3		2,573		1,628
Seattle Times Company (C-Corporation)		49.5		–		–
Ponderay (general partnership)		27.0		11,375		11,800
Other		Various		5,383		5,774
			$	299,603	$	304,893

We received dividends and other equity distributions from our investments in unconsolidated companies as follows:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011
CareerBuilder, LLC	$	15,000	$	7,500
Classified Ventures, LLC		18,908		17,375
Other		4,692		6,750
	$	38,600	$	31,625

We purchased some of our newsprint supply from Ponderay Newsprint Company ("Ponderay") during fiscal years 2012, 2011 and 2010.

Our investment in The Seattle Times Company ("STC") is zero as a result of accumulative losses in previous years exceeding our carrying value. No future income or losses from STC will be recorded until our carrying value on our balance sheet is restored through future earnings by STC.

We also incurred expenses related to the purchase of products and services provided by these companies, for the uploading and hosting of online advertising on behalf of our newspapers' advertisers.

The following table summarizes expenses incurred for products provided by unconsolidated companies, which are recorded in operating expenses as follows:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
CareerBuilder, LLC	$	1,197	$	1,230	$	1,272
Classified Ventures, LLC		14,390		12,552		11,073
Ponderay (general partnership)		23,813		20,414		23,048

As of December 30, 2012, and December 25, 2011, we had approximately $1.5 million and $3.6 million, respectively, payable collectively to CareerBuilder, LLC and Ponderay.

The tables below present the summarized financial information for our investments in unconsolidated companies on a combined basis:

(in thousands)	December 30, 2012		December 25, 2011
Current assets	$	412,959	$	480,050
Noncurrent assets		584,773		563,286
Current liabilities		304,317		359,891
Noncurrent liabilities		246,543		228,713
Equity		446,872		454,732

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Net revenues	$	1,427,657	$	1,332,394	$	1,195,755
Operating income		169,236		154,257		102,863
Net income		141,387		171,305		95,855

XML

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

1.    SIGNIFICANT ACCOUNTING POLICIES

The McClatchy Company (the "Company," "we," "us" or "our") is a leading news, advertising and information provider, offering a wide array of print and digital products in each of the markets it serves. As the third largest newspaper company in the United States based on daily circulation, our operations include 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. Our largest newspapers include the Fort Worth Star-Telegram, The Sacramento Bee, The Kansas City Star, The Miami Herald, The Charlotte Observer and The (Raleigh) News & Observer.

We also own a portfolio of premium digital assets, including 15.0% of CareerBuilder, LLC, which operates the nation's largest online job website, CareerBuilder.com; 25.6% of Classified Ventures, LLC, a company that offers classified websites such as the auto website Cars.com and the rental website Apartments.com; 33.3% of HomeFinder, LLC, which operates the online real estate website HomeFinder.com; and 11.4% of Wanderful Media (formerly ShopCo, LLC), owner of Find n Save®, a digital shopping portal that provides advertisers with a common platform to reach online audiences with digital circulars, coupons and display advertising.

Our fiscal year ends on the last Sunday in December. Due to our fiscal calendar, the year ended on December 30, 2012 ("fiscal year 2012") encompassed a 53-week period. The year ended December 25, 2011 ("fiscal year 2011") and the year ended December 26, 2010 ("fiscal year 2010") both consist of 52-week periods.

We are listed on the New York Stock Exchange under the symbol MNI.

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulation of the Securities and Exchange Commission requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Discontinued operations

We divested of 13 newspapers from 2006 through 2007. The sales contracts for several of the disposed newspapers include indemnification obligations. Expenses and credits related to disposed newspaper operations have been recorded as discontinued operations (see Note 8). There were no discontinued operations in fiscal years 2012 or 2011.

Revenue recognition

We recognize revenues from advertising placed in a newspaper, a website and/or a mobile service over the advertising contract period or as services are delivered, as appropriate, and recognize circulation revenues as newspapers are delivered over the applicable subscription term. Circulation revenues are recorded net of direct delivery costs.

We enter into certain revenue transactions, primarily related to advertising contracts and circulation subscriptions that are considered multiple element arrangements (arrangements with more than one deliverable). As such we must: (1) determine whether and when each element has been delivered; (2) determine fair value of each element using the selling price hierarchy of vendor-specific objective evidence of fair value, third party evidence or best estimated selling price, as applicable and (3) allocate the total price among the various elements based on the relative selling price method.

Other revenues are recognized when the related product or service has been delivered. Revenues are recorded net of estimated incentives, including special pricing agreements, promotions and other volume-based incentives and net of sales tax collected from the customer. Revisions to these estimates are charged to revenues in the period in which the facts that give rise to the revision become known.

Concentrations of credit risks

Financial instruments, which potentially subject us to concentrations of credit risks, are principally cash and cash equivalents and trade accounts receivables. Cash and cash equivalents are placed with major financial institutions. As of December 30, 2012, we had no cash balances at financial institutions in excess of federal insurance limits. We routinely assess the financial strength of significant customers and this assessment, combined with the large number and geographic diversity of our customers, limits our concentration of risk with respect to trade accounts receivable.

Allowance for doubtful accounts

We maintain an allowance account for estimated losses resulting from the risk that our customers will not make required payments. Generally, we use the aging of accounts receivable, reserving for all accounts due 90 days or longer, to establish allowances for losses on accounts receivable. However, if we become aware that the financial condition of specific customers has deteriorated, additional allowances are provided.

We provide an allowance for doubtful accounts as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of year	$	7,341		$	7,836		$	10,298
Charged to costs and expenses		6,089			8,309			7,479
Amounts written off		(7,510	)		(8,804	)		(9,941	)
Balance at end of year	$	5,920		$	7,341		$	7,836

Newsprint, ink and other inventories

Newsprint, ink and other inventories are stated at the lower of cost (based principally on the first-in, first-out method) or current market value.

Property, plant and equipment

Property, plant and equipment ("PP&E") are recorded at cost. Additions and substantial improvements, as well as interest expense incurred during construction, are capitalized. Capitalized interest was not material in fiscal year 2012, 2011 or 2010. Expenditures for maintenance and repairs are charged to expense as incurred. When PP&E is sold or retired, the asset and related accumulated depreciation are removed from the accounts and the associated gain or loss is recognized.

Property, plant and equipment consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011			Estimated Useful Lives
Land	$	311,959		$	308,489
Building and improvements		364,951			362,091			5-60 years
Equipment		775,397			784,592			2-25 years	(1)
Construction in process		24,014			4,463
		1,476,321			1,459,635
Less accumulated depreciation		(742,592	)		(698,658	)
Property, plant and equipment, net	$	733,729		$	760,977

• ⁽¹⁾

  Presses are 9-25 years and other equipment is 2-15 years

We record depreciation using the straight-line method over estimated useful lives. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets and anticipated technological changes. Our depreciation expense was $67.1 million, $63.2 million and $74.8 million in fiscal years 2012, 2011 and 2010, respectively.

Investments in unconsolidated companies

We use the equity method of accounting for our investments in, and earnings or losses of, companies that we do not control but over which we do exert significant influence. We consider whether the fair values of any of our equity method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If we consider any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 2 for discussion of investments in unconsolidated companies.

Segment reporting

Our primary business is the publication of newspapers and related digital and direct marketing products. We have two operating segments that we aggregate into a single reportable segment because each has similar economic characteristics, products, customers and distribution methods. Each operating segment consists primarily of a group of newspapers reporting to segment managers. One operating segment consists primarily of our newspaper operations in California, the Northwest and Texas, while the other operating segment consists primarily of newspaper operations in the Southeast, the Gulf Coast and the Midwest.

Goodwill and intangible impairment

We test for impairment of goodwill annually, at year-end, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The required two-step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. Impairment testing is done at a reporting unit level. We perform this testing on operating segments, which are also considered reporting units. An impairment loss generally is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. The fair value of our reporting units is determined using a combination of a discounted cash flow model and market based approaches. The estimates and judgments that most significantly affect the fair value calculation are assumptions related to revenue growth, newsprint prices, compensation levels, discount rate and private and public market trading multiples for newspaper assets for the market based approach. We consider current market capitalization, based upon the recent stock market prices, plus an estimated control premium in determining the reasonableness of the aggregate fair value of the reporting units. See Note 4 for additional discussion.

Newspaper mastheads (newspaper titles and website domain names) are not subject to amortization and are tested for impairment annually, at year-end, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of each newspaper masthead with its carrying amount. We use a relief from royalty approach which utilizes a discounted cash flow model, as discussed above, to determine the fair value of each newspaper masthead. See Note 4 for additional discussion.

Long-lived assets such as intangible assets (primarily advertiser and subscriber lists) are amortized and tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. We have had no impairment of long-lived assets during fiscal years 2012, 2011 or 2010. See Note 4 for additional discussion.

Stock-based compensation

All stock-based payments, including grants of stock appreciation rights, restricted stock units and common stock under equity incentive plans, are recognized in the financial statements based on their fair values. At December 30, 2012, we had five stock-based compensation plans. See an expanded discussion of our stock plans in Note 10.

Total stock-based compensation expense consisted of the following:

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Stock-based compensation expense	$	3,523	$	5,174	$	4,626

Income taxes

We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

Current accounting standards in the United States prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise's tax returns. We recognize accrued interest related to unrecognized tax benefits in interest expense. Accrued penalties are recognized as a component of income tax expense.

Fair value of financial instruments

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1	–	Unadjusted quoted prices available in active markets for identical investments as of the reporting date.
Level 2	–	Observable inputs to the valuation methodology are other than Level 1 inputs and are either directly or indirectly observable as of the reporting date and fair value can be determined through the use of models or other valuation methodologies.
Level 3	–	Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

Our policy is to recognize significant transfers between levels at the actual date of the event or circumstance that caused the transfer. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

• • • Cash and cash equivalents, accounts receivable, certificate of deposits (in other assets) and accounts payable.    The carrying amount of these items approximates fair value.

      Long-term debt.    The fair value of long-term debt is determined using quoted market prices and other inputs that were derived from available market information including the current market activity of our publicly-traded notes and bank debt, trends in investor demand and market values of comparable publicly-traded debt. These are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual. At December 30, 2012, the estimated fair value and carrying value of long-term debt was $1.6 billion and $1.7 billion, respectively.

Accumulated Comprehensive income (loss)

We record changes in our net assets from non-owner sources in our Consolidated Statements of Stockholders' Equity. Such changes relate primarily to valuing our pension liabilities, net of tax effects.

Our accumulated other comprehensive loss, net of tax, consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011
Minimum pension and post-retirement liability	$	(473,448	)	$	(340,577	)
Other comprehensive loss related to equity investments		(7,868	)		(7,077	)
	$	(481,316	)	$	(347,654	)

Earnings per share (EPS)

Basic EPS excludes dilution from common stock equivalents and reflects income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock options, restricted stock units and restricted stock and are computed using the treasury stock method. The weighted average anti-dilutive stock options that could potentially dilute basic EPS in the future, but were not included in the weighted average share calculation consisted of the following:

	Years Ended
(shares in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Anti-dilutive stock options		6,814		5,772		4,283

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standards update requiring new disclosures about reclassifications from accumulated other comprehensive loss to net income. These disclosures may be presented on the face of the statements or in the notes to the consolidated financial statements. The standards update is effective for fiscal years beginning after December 15, 2012. We will adopt this standards update and revise our disclosure, as required, beginning with the first quarter of fiscal year 2013.

In July 2012, the FASB issued an accounting standards update with new guidance on annual impairment testing of indefinite-lived intangible assets. The standards update allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If based on its qualitative assessment an entity concludes it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. The standards update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this standard will not have an impact on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In the first quarter of fiscal year 2012, we adopted the amended accounting guidance related to goodwill impairment testing. The new guidance provides the option to perform a qualitative assessment by applying a more likely than not scenario to determine whether the fair value of a reporting unit is less than its carrying amount, which may then allow a company to skip the annual two-step quantitative goodwill impairment test depending on the determination. The adoption of this standard did not have a material impact on our consolidated financial results or disclosures.

In the first quarter of fiscal year 2012, we adopted the single authoritative guidance on a framework on how to measure fair value and on what disclosures to provide about fair value measurements. The standard also clarified existing fair value measurement disclosures and made other amendments to current guidance. The adoption of these amended standards did not have a material impact on our consolidated financial results or disclosures.

In the first quarter of fiscal year 2012, we adopted the guidance that revised the manner in which entities present comprehensive income in their financial statements. The new guidance removed the presentation options in previous guidance and required entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The new guidance did not change the items that must be reported in other comprehensive income. Accordingly, we have presented net income (loss) and other comprehensive income (loss) in two consecutive statements.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

Schedule of allowance for doubtful accounts

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of year	$	7,341		$	7,836		$	10,298
Charged to costs and expenses		6,089			8,309			7,479
Amounts written off		(7,510	)		(8,804	)		(9,941	)
Balance at end of year	$	5,920		$	7,341		$	7,836

Schedule of components of property, plant and equipment

(in thousands)	December 30, 2012			December 25, 2011			Estimated Useful Lives
Land	$	311,959		$	308,489
Building and improvements		364,951			362,091			5-60 years
Equipment		775,397			784,592			2-25 years	(1)
Construction in process		24,014			4,463
		1,476,321			1,459,635
Less accumulated depreciation		(742,592	)		(698,658	)
Property, plant and equipment, net	$	733,729		$	760,977

• ⁽¹⁾

  Presses are 9-25 years and other equipment is 2-15 years

Schedule of stock-based compensation expense

	Years Ended
(in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Stock-based compensation expense	$	3,523	$	5,174	$	4,626

Schedule of components of accumulated other comprehensive loss, net of tax

(in thousands)	December 30, 2012			December 25, 2011
Minimum pension and post-retirement liability	$	(473,448	)	$	(340,577	)
Other comprehensive loss related to equity investments		(7,868	)		(7,077	)
	$	(481,316	)	$	(347,654	)

Summary of anti-dilutive stock options

	Years Ended
(shares in thousands)	December 30, 2012		December 25, 2011		December 26, 2010
Anti-dilutive stock options		6,814		5,772		4,283

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 30, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

9.    COMMITMENTS AND CONTINGENCIES

As of December 30, 2012, we had purchase obligations primarily related to printing outsource agreements and capital expenditures for property, plant and equipment expiring at various dates through 2028, totaling $139.2 million. The following table summarizes our purchase obligations as of December 30, 2012 and the estimated timing and effect the obligations will have on our liquidity and cash flows in future periods:

Year	(in thousands)
2013	$	39,250
2014		18,039
2015		15,846
2016		14,966
2017		14,353
Thereafter		36,760
Total	$	139,214

As of December 30, 2012, we had a fiscal year 2013 purchase commitment of 81,648 metric tons of newsprint from SP Fiber Technologies.

Lease commitments

We rent certain facilities and equipment under operating leases expiring at various dates through 2028. Total rental expense, included in other operating expenses, from continuing operations amounted to $12.5 million in fiscal year 2012, $13.3 million in fiscal year 2011 and $14.5 million in fiscal year 2010. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses.

We sublease office space to other companies under noncancellable agreements that expire at various dates through 2019. Sublease income from operating leases totaled $3.8 million, $4.4 million and $3.0 million in fiscal year 2012, 2011 and fiscal year 2010, respectively.

Minimum rental commitments under operating leases with non-cancelable terms in excess of one year and sublease income from leased space are:

(in thousands)
	Lease Obligation		Sublease Income
Year						Net Amount
2013	$	12,276	$	(2,968	)	$	9,308
2014		10,798		(1,899	)		8,899
2015		8,891		(1,412	)		7,479
2016		7,419		(733	)		6,686
2017		6,962		(310	)		6,652
Thereafter		34,069		(441	)		33,628
Total	$	80,415	$	(7,763	)	$	72,652

Self-Insurance

We retain the risk for workers' compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 30, 2012, we compiled our historical data pertaining to the self-insurance experiences and actuarially developed the ultimate loss associated with our self-insurance programs for workers' compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs.

The undiscounted ultimate losses of all our self-insurance reserve related to our workers' compensation liabilities, net of insurance recoveries at December 30, 2012 and December 25, 2011, were $19.8 million and $20.5 million, respectively. Based on historical payment patterns, we expect payments of undiscounted ultimate losses, net of estimated insurance recoveries of approximately $9.1 million, to be as follows:

Year	Net Amount (in thousands)
2013	$	4,827
2014		3,377
2015		2,478
2016		1,889
2017		1,481
Thereafter		5,717
Total	$	19,769

We discount the net amount above to present value using an approximate risk-free rate over the average life of our insurance claims. For the years ended December 30, 2012 and December 25, 2011, the discount rate used was 1.1% and 1.4%, respectively. The present value of all self-insurance reserves, net of estimated insurance recoveries, for our workers' compensation liability recorded at December 30, 2012 and December 25, 2011, was $19.8 million and $20.4 million, respectively.

Legal Proceedings and other contingent claims

We are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our condensed consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the consolidated financial statements as we believe that any such losses are not probable.

We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows. In fiscal year 2010, we reversed a reserve, and recorded income, of $6.5 million related to certain of the indemnification obligations as the related newspapers paid current amounts and showed us their ability to continue to meet their obligations.

In addition to the $36.1 million of standby letters of credit secured under the Credit Agreement (see Note 5 for further discussion), we have $2.2 million in letters of credit arising from insurance and other potential claims. These letters of credit are collateralized with $2.2 million in certificates of deposit and are recorded as other long-term assets in our consolidated balance sheet.

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LONG-TERM DEBT

12 Months Ended

Dec. 30, 2012

LONG-TERM DEBT

LONG-TERM DEBT

5.    LONG-TERM DEBT

All of our long-term debt is in fixed rate obligations. As of December 30, 2012 and December 25, 2011, our outstanding long-term debt consisted of senior secured notes and unsecured notes. If applicable, they are stated net of unamortized discounts totaling $41.2 million and $57.0 million as of December 30, 2012 and December 25, 2011, respectfully. The unamortized discounts resulted from recording assumed liabilities at fair value during a 2006 acquisition or from the issuance of the 11.50% Senior Secured Notes due in 2017 ("11.50% Notes") at an original issue discount.

The face values of the notes, as well as the carrying values are as follows:

			Carrying Value
(in thousands)	Face Value at December 30, 2012		December 30, 2012		December 25, 2011
Notes:
9.00% senior secured notes due in 2022	$	910,000	$	910,000	$	–
11.50% senior secured notes due in 2017		83,595		83,016		843,652
4.625% notes due in 2014		66,438		64,326		77,406
5.750% notes due in 2017		286,138		273,559		318,624
7.150% debentures due in 2027		89,188		83,291		82,891
6.875% debentures due in 2029		276,230		256,154		254,903
Long-term debt	$	1,711,589	$	1,670,346	$	1,577,476
Less current portion				83,016		–
Total long-term debt, net of current			$	1,587,330	$	1,577,476

During the year ended December 30, 2012, we repurchased $832.9 million of notes in privately negotiated transactions or through the tender offer, discussed below, as follows:

(in thousands)	Face Value
11.50% senior secured notes due in 2017	$	767,405
4.625% notes due in 2014		15,000
5.750% notes due in 2017		50,500
Total notes repurchased	$	832,905

Loss on Extinguishment of Debt

During fiscal year 2012, we recorded a net loss on the extinguishment of debt of $88.4 million compared to $1.2 million in fiscal year 2011. During fiscal year 2012, we repurchased $70.5 million aggregate principal of outstanding notes in the open market and $762.4 million in conjunction with the refinancing of our 11.50% Notes. We repurchased most of the $70.5 million notes at a price lower than par value and wrote off historical discounts related to the notes we purchased, which resulted in a gain on extinguishment of debt. This gain was offset by the write-off of fees related to the refinancing of our revolving credit facility in the second quarter of fiscal year 2012 and the refinancing of our 11.50% Notes in the fourth quarter of fiscal year 2012.

Credit Agreement

In connection with the issuance of the 9.00% Senior Secured Notes due in 2022 ("9.00% Notes"), discussed below, we entered into the Third Amended and Restated Credit Agreement ("Credit Agreement"), dated as of December 18, 2012. The Credit Agreement amended and restated in its entirety the Second Amended and Restated Credit Agreement dated June 22, 2012. The Credit Agreement provides for $75.0 million in revolving credit commitments, with a $50.0 million letter of credit subfacility, and has a maturity date of December 18, 2017. Our obligations under the Credit Agreement are secured by a first-priority security interest in certain of our assets. As of December 30, 2012, there were no draws and $36.1 million face amount of letters of credit outstanding under the Credit Agreement. In February 2013, we purchased $48.5 million aggregate principal amount of our outstanding debt, in the open market, which consisted of $37.5 million aggregate principal amount of our 4.625% notes due in 2014 and $11.0 million aggregate principal amount of our 5.750% notes due in 2017.

Loans under the Credit Agreement bear interest, at our option, at either the London Interbank Offered Rate plus a spread ranging from 275 basis points to 425 basis points, or at a base rate plus a spread ranging from 175 basis points to 325 basis points, in each case based upon our consolidated total leverage ratio. The Credit Agreement provides for a commitment fee payable on the unused revolving credit ranging from 50 basis points to 62.5 basis points, based upon our consolidated total leverage ratio.

The financial covenants under the Credit Agreement require us to comply with a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio, each measured quarterly. We are required to maintain a consolidated total leverage ratio of not more than 6.25 to 1.00, which ratio will decrease at the end of our first fiscal quarter of 2013 to 6.00 to 1.00 for the remainder of the term of the Credit Agreement. We are also required to maintain a consolidated interest coverage ratio of at least 1.50 to 1.00.

The Credit Agreement also prohibits the payment of a dividend if a payment would not be permitted under the indenture for the senior secured notes (discussed below). Dividends under the indenture for the senior secured notes are allowed if the consolidated leverage ratio (as defined in the indenture) is less than 5.25 to 1.00 and the priority leverage ratio (as defined in the indenture) is less than 2.75 to 1.00. As of December 30, 2012, we were in compliance with all financial debt covenants.

On June 22, 2012, we entered into a Second Amended and Restated Credit Agreement ("Previous Agreement") to amend and replace our Amended and Restated Credit Agreement from January 26, 2010. The Previous Agreement terms, among other things, (i) reduced the size of the revolving loan facility from $125.0 million to $36.1 million to cover our issuances of standby letters of credit and (ii) extended the maturity of the Previous Agreement to January 31, 2015. The new committed amount was only available for the issuance of standby letters of credit.

Senior Secured Notes and Indenture

On December 18, 2012, we issued $910 million aggregate principal amount of 9.00% Notes. We received approximately $889 million net of financing costs in the offering and used the net proceeds, as well as cash on hand, to repurchase all of our outstanding $846 million in aggregate principal amount of the 11.50% Notes, in two separate transactions. On December 18, 2012, we repurchased $762.4 million of the 11.50% Notes pursuant to a cash tender offer at a repurchase price of $1,103.40 for each $1,000 principal amount of 11.50% Notes tendered plus accrued and unpaid interest. In connection with the tender offer of the 11.50% Notes, we recorded a loss on the extinguishment of debt of approximately $94.5 million. By January 17, 2013, we redeemed the remaining $83.6 million aggregate principal amount of 11.50% Notes not tendered in the tender offer and will record a loss on the extinguishment of debt of approximately $9.6 million during the quarter ended March 24, 2013.

The indenture for the 9.00% Notes includes a number of restrictive covenants that are applicable to us and our restricted subsidiaries. The covenants are subject to a number of important exceptions and qualifications set forth in the indenture for the 9.00% Notes. These covenants include, among other things, restrictions on our ability to incur additional debt; make investments and other restricted payments; pay dividends on capital stock or redeem or repurchase capital stock or certain of our outstanding notes or debentures prior to stated maturity; sell assets or enter into sale/leaseback transactions; create specified liens; create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions; engage in certain transactions with affiliates; and consolidate or merge with or into other companies or sell all or substantially all of the Company's and our subsidiaries' assets, taken as a whole.

Substantially all of our subsidiaries guarantee the obligations under the 9.00% Notes and the Credit Agreement, (collectively, "senior secured debt"). We own 100% of each of the guarantor subsidiaries. Following the sale of land in Miami (see Note 3) on May 27, 2011, we have no significant independent assets or operations separate from the subsidiaries that guarantee our senior secured debt. The guarantees provided by the guarantor subsidiaries are full and unconditional and joint and several, and any of our subsidiaries, other than the subsidiary guarantors, are minor.

In addition, we have granted a security interest to the banks that are a party to the Credit Agreement and the trustee under the indenture governing the 9.00% Notes that include, but are not limited to, intangible assets, inventory, receivables and certain minority investments as collateral for the debt. The security interest does not include any PP&E; leasehold interests and improvements with respect to such PP&E, which would be reflected on our consolidated balance sheet; and shares of stock and indebtedness of our subsidiaries.

Maturities

The following table presents the approximate annual maturities of outstanding long-term debt as of December 30, 2012, based upon our required payments, for the next five years and thereafter:

Year	Payments (in thousands)
2013 (1)	$	83,595
2014		66,438
2015		–
2016		–
2017		286,138
Thereafter		1,275,418
Debt principal	$	1,711,589

• ⁽¹⁾

  As of December 30, 2012, we had committed to redeem our 11.50% Notes with a maturity date in 2017 in January 2013 (as discussed above). Therefore, we have included them in the "2013" column.

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COMMON STOCK AND STOCK PLANS (Details)	12 Months Ended
	Dec. 30, 2012 item
Common stock
Number of classes of common stock	2
Minimum number of "Permitted Transferees"	1
Minimum number of lineal descendants of Charles K. McClatchy who owns the beneficial interests of "Permitted Transferees"	1
Class A Common Stock
Common stock
Number of votes per share	0.1
Percentage of Board of Directors selected from voting	25.00%
Class B Common Stock
Common stock
Number of votes per share	1
Percentage of Board of Directors selected from voting	75.00%
Minimum percentage of common stock outstanding before conversion	25.00%
Vote of the holders as a percentage of outstanding shares required for termination of the agreement	80.00%

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MIAMI LAND AND BUILDING

12 Months Ended

Dec. 30, 2012

MIAMI LAND AND BUILDING

MIAMI LAND AND BUILDING

3.    MIAMI LAND AND BUILDING

On January 31, 2011, our contract to sell certain land in Miami terminated pursuant to its terms because the buyer ("developer") did not consummate the transaction by the closing deadline in the contract ("Miami Contract"). Under the terms of the Miami Contract, we are entitled to receive a $7.0 million termination fee and we have filed a claim against the developer to obtain the payment. As of December 30, 2012, we have not received the payment, nor have we recorded any amounts in our financial statements related to this fee pending the resolution of this claim. We previously received approximately $16.5 million in nonrefundable deposits, which we used to repay debt.

On May 27, 2011, we sold 14.0 acres of land in Miami, including a building, which holds the operations of one of our subsidiaries, The Miami Herald Media Company, and adjacent parking lots, for a purchase price of $236.0 million. Approximately 9.4 acres of this Miami land was previously subject to the terminated Miami Contract discussed above. We received cash proceeds of $230.0 million. The additional $6.0 million was held in an escrow account for our expenses incurred in connection with the relocation of our Miami operations. In April 2012, we received these funds, which were released for payment of costs associated with the relocation of the Miami operations.

As part of the sale transaction, The Miami Herald Media Company will continue to operate from its existing location through May 2013 rent-free. As a result of our continuing involvement in the property and given the fact that we will not pay rent during this period, the sale was treated as a financing transaction. Accordingly, we will continue to depreciate the carrying value of the building until our operations are moved. In addition, we have recorded a $236.0 million liability (in financing obligations) equal to the sales proceeds received of $230.0 million plus the $6.0 million received from the escrow account for reimbursement of moving expenses. We are imputing rent based on comparable market rates, which will be reflected as interest expense until the operations are moved. As of December 30, 2012, no gain or loss has been recognized on the transaction. We expect to recognize a gain of approximately $10 million at the time the operations are moved since there will no longer be a continuing involvement with the Miami property.

In the first quarter of 2012, we purchased approximately 6.1 acres of land located in Doral, Florida, for approximately $3.1 million. We are building a new production facility on this site for our Miami newspaper operations. In January 2012, we also entered into an operating lease for a two-story office building adjacent to the new production facility. The operating lease on the office building has initial annual base lease payments of $1.8 million beginning in May 2013, when the building is expected to be occupied. Total costs related to relocating the Miami newspaper operations and for constructing the new production facility, including the purchase of the property, construction costs, accelerated depreciation and moving expenses, are estimated to be as follows:

• •

  Net cash outlays for capital expenditures related to the new facilities are estimated to be $32 million. We began incurring these costs in the first quarter of 2012. During fiscal years 2012 and 2011, we incurred approximately $17.5 million and $0.4 million of net cash outlays, respectively.

  •

  Cash expenses to relocate the Miami newspapers' operations are expected to be $12 million. During fiscal years 2012 and 2011, our cash expenses were approximately $4.5 million and $0.9 million, respectively.

  •

  Accelerated depreciation of $13 million is expected to be incurred on existing assets expected to be retired or decommissioned in connection with the relocation. During fiscal year 2012, we accelerated depreciation on retired or decommissioned assets totaling approximately $8.3 million.

The relocation of the Miami newspaper operations is expected to be completed in May 2013 and related costs and expenses are expected to be incurred through the third quarter of fiscal year 2013.

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INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 30, 2012

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

4.    INTANGIBLE ASSETS AND GOODWILL

Changes in identifiable intangible assets and goodwill consisted of the following:

(in thousands)	December 25, 2011			Impairment Charges/ Adjustments		Amortization Expense			December 30, 2012
Intangible assets subject to amortization	$	834,961		$	–	$	–		$	834,961
Accumulated amortization		(452,388	)		–		(58,158	)		(510,546	)
		382,573			–		(58,158	)		324,415
Mastheads		203,587			–		–			203,587
Goodwill		1,012,011			–		–			1,012,011
Total	$	1,598,171		$	–	$	(58,158	)	$	1,540,013

(in thousands)	December 26, 2010			Impairment Charges/ Adjustments			Amortization Expense			December 25, 2011
Intangible assets subject to amortization	$	834,911		$	50		$	–		$	834,961
Accumulated amortization		(394,073	)		–			(58,315	)		(452,388	)
		440,838			50			(58,315	)		382,573
Mastheads		206,387			(2,800	)		–			203,587
Goodwill (1)		1,014,257			(2,246	)		–			1,012,011
Total	$	1,661,482		$	(4,996	)	$	(58,315	)	$	1,598,171

• ⁽¹⁾

  In 2011 we identified an error in the timing of the release of certain unrecognized tax benefits obtained in the 2006 acquisition of Knight Ridder. We corrected this error by decreasing goodwill by $2.5 million in 2011. We have determined that the impact of this error is not material to the previously issued consolidated financial statements.

Accumulated changes in indefinite lived intangible assets and goodwill as of December 30, 2012, consisted of the following:

	Original Gross Amount		Accumulated Impairment			Carrying Amount
(in thousands)
Mastheads	$	683,000	$	(479,413	)	$	203,587
Goodwill		3,587,007		(2,574,996	)		1,012,011
Total	$	4,270,007	$	(3,054,409	)	$	1,215,598

Amortization expense was $58.2 million, $58.3 million and $58.7 million in fiscal year 2012, 2011 and 2010, respectively. The estimated amortization expense for the five succeeding fiscal years is as follows:

Year	Amortization Expense (in thousands)
2013	$	57,004
2014		52,524
2015		48,030
2016		47,721
2017		48,552

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INCOME TAXES

12 Months Ended

Dec. 30, 2012

INCOME TAXES

INCOME TAXES

6.    INCOME TAXES

Income tax provision (benefit) related to continuing operations consist of:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Current:
Federal	$	4,701		$	28,913		$	26,625
State		(16,535	)		(1,553	)		4,999
Deferred:
Federal		(4,701	)		(3,316	)		(16,672	)
State		(4,847	)		(15,648	)		(9,351	)
Income tax provision	$	(21,382	)	$	8,396		$	5,601

The effective tax rate expense (benefit) for continuing operations and the statutory federal income tax rate are reconciled as follows:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Statutory rate		(35.0	)%		35.0%			35.0%
State taxes, net of federal benefit		7.7			0.3			0.5
Changes in estimates		0.2			0.6			2.9
Changes in unrecognized tax benefits		(56.3	)		(13.6	)		(7.6	)
Settlements		(32.6	)		(10.4	)		(19.5	)
Other		4.0			1.5			3.2
Stock compensation		12.7			–			–
Effective tax rate		(99.3	)%		13.4%			14.5%

The components of deferred tax assets and liabilities consisted of the following:

(in thousands)	December 30, 2012			December 25, 2011
Deferred tax assets:
Compensation benefits	$	308,392		$	228,367
State taxes		4,984			17,500
State loss carryovers		5,815			10,759
Other		5,280			6,065
Total deferred tax assets		324,471			262,691
Valuation allowance		(4,110	)		(9,514	)
Net deferred tax assets		320,361			253,177
Deferred tax liabilities:
Depreciation and amortization		233,214			258,957
Investments in unconsolidated subsidiaries		64,317			65,604
Debt discount		15,059			18,114
Deferred gain on debt		33,084			33,193
Total deferred tax liabilities		345,674			375,868
Net deferred tax liabilities	$	25,313		$	122,691

The valuation allowance relates to state net operating loss and capital carryovers. It decreased by $5.4 million in fiscal year 2012 and decreased by $5.2 million during 2011.

We have varying amounts of net operating loss totaling approximately $264.2 million and capital loss carryovers totaling approximately $1.7 million in several states. The net operating losses expire in various years between 2020 and 2032 if not used. The capital loss carryovers will expire in 2013 if not used prior to that time. We have approximately $1.3 million of state tax credit carryovers which do not expire.

As of December 30, 2012, we had approximately $12.1 million of long-term liabilities relating to uncertain tax positions consisting of approximately $8.6 million in gross unrecognized tax benefits (primarily state tax positions before the offsetting effect of federal income tax) and $3.5 million in gross accrued interest and penalties. If recognized, substantially all of the net unrecognized tax benefits would impact the effective tax rate. It is reasonably possible that a reduction of up to $5.8 million of unrecognized tax benefits and related interest may occur within the next 12 months as a result of the closure of certain audits and the expiration of statutes of limitations. Net accrued interest and penalties at December 30, 2012, December 25, 2011, and December 26, 2010, were approximately $2.5 million, $15.5 million and $21.0 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits consists of the following:

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of fiscal year	$	30,463		$	51,992		$	53,359
Increases based on tax positions in prior year		–			1,409			7,529
Decreases based on tax positions in prior year		(9,933	)		(13,475	)		(1,148	)
Increases based on tax positions in current year		745			2,213			1,811
Settlements		(643	)		–			(784	)
Lapse of statute of limitations		(11,983	)		(11,676	)		(8,775	)
Balance at end of fiscal year	$	8,649		$	30,463		$	51,992

As of December 30, 2012, the following tax years and related taxing jurisdictions were open:

Taxing Jurisdiction	Open Tax Year	Years Under Exam
Federal	2009-2012
Oregon	2006-2012	2006-2008
Florida	2009-2012	2009-2010
Washington, D.C.	2006, 2009-2012	2006
New York	2008-2012	2008-2011
Illinois	2008-2012	2008-2009
California	2008-2012	2009-2010
Other States	2006-2012

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QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 30, 2012	Sep. 23, 2012	Jun. 24, 2012	Mar. 25, 2012	Dec. 25, 2011	Sep. 25, 2011	Jun. 26, 2011	Mar. 27, 2011	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Net revenues	$ 355,664	$ 287,465	$ 299,294	$ 288,301	$ 351,437	$ 300,219	$ 314,250	$ 303,734	$ 1,230,724	$ 1,269,640	$ 1,375,232
Operating income	82,747	32,479	42,935	27,975	90,284	45,443	45,133	20,455	186,136	201,315	238,883
Net income (loss)	$ (30,015)	$ 5,093	$ 26,865	$ (2,087)	$ 42,005	$ 9,399	$ 4,947	$ (1,962)	$ (144)	$ 54,389	$ 36,183
Net income (loss) (in dollars per share)	$ (0.35)	$ 0.06	$ 0.31	$ (0.02)	$ 0.49	$ 0.11	$ 0.06	$ (0.02)		$ 0.64	$ 0.43

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COMMON STOCK AND STOCK PLANS (Details 4) (USD $)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Stock Plans
Weighted average exercise price of options/SARs granted (in dollars per share)	$ 2.76	$ 4.08	$ 4.96
Stock options and SARs
Stock Plans
Expected life	6 years 6 months 7 days	6 years 1 month 28 days	6 years 1 month 6 days
Volatility (as a percent)	0.90%	0.87%	0.83%
Risk-free interest rate (as a percent)	1.22%	2.53%	2.77%
Weighted average exercise price of options/SARs granted (in dollars per share)	$ 2.76	$ 4.08	$ 4.96
Weighted average fair value of options/SARs granted (in dollars per share)	$ 2.09	$ 3.03	$ 3.57
Options
Stock Plans
Volatility look back period	1 year

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	12 Months Ended
	Dec. 30, 2012 item	Dec. 25, 2011	Dec. 26, 2010
Depreciation
Property, plant and equipment, gross	$ 1,476,321,000	$ 1,459,635,000
Less accumulated depreciation	(742,592,000)	(698,658,000)
Property, plant and equipment, net	733,729,000	760,977,000
Depreciation expense	67,100,000	63,200,000	74,800,000
Segment reporting
Number of reportable segments	1
Stock-based compensation
Stock-based compensation expense	3,523,000	5,174,000	4,626,000
Number of stock-based compensation plans	5
Long-term debt fair value disclosure
Estimated fair value of long-term debt	1,600,000,000
Carrying value of long-term debt	1,670,346,000	1,577,476,000
Land
Depreciation
Property, plant and equipment, gross	311,959,000	308,489,000
Buildings and improvements
Depreciation
Property, plant and equipment, gross	364,951,000	362,091,000
Buildings and improvements | Minimum
Depreciation
Estimated Useful Lives	5 years
Buildings and improvements | Maximum
Depreciation
Estimated Useful Lives	60 years
Equipment
Depreciation
Property, plant and equipment, gross	775,397,000	784,592,000
Equipment | Minimum
Depreciation
Estimated Useful Lives	2 years
Equipment | Maximum
Depreciation
Estimated Useful Lives	25 years
Construction in process
Depreciation
Property, plant and equipment, gross	$ 24,014,000	$ 4,463,000
Presses | Minimum
Depreciation
Estimated Useful Lives	9 years
Presses | Maximum
Depreciation
Estimated Useful Lives	25 years
Other equipment | Minimum
Depreciation
Estimated Useful Lives	2 years
Other equipment | Maximum
Depreciation
Estimated Useful Lives	15 years

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EMPLOYEE BENEFITS (Details ) (USD $) In Thousands, unless otherwise specified	1 Months Ended		12 Months Ended
	Jan. 31, 2012	May 31, 2011	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Amounts recognized in the statement of financial position consist of:
Noncurrent liability			$ (712,584)	$ (516,668)
Pension plan
EMPLOYEE BENEFITS
Value of contributions to plan	40,000	163,000	48,122	220,227
Change in Benefit Obligation
Benefit obligation, beginning of year			1,763,859	1,634,124
Service cost			5,540	5,600	5,885
Interest cost			91,898	92,961	93,796
Actuarial (gain)/loss			305,952	120,283
Gross benefits paid			(89,213)	(83,660)
Administrative expenses			(4,818)	(5,449)
Benefit obligation, end of year			2,073,218	1,763,859	1,634,124
Changes in the fair value of the plan's Level 3 investment assets
Fair value of plan assets, beginning of year			1,233,306	1,051,410
Actual return on plan assets			171,481	50,778
Employer contribution	40,000	163,000	48,122	220,227
Gross benefits paid			(89,213)	(83,660)
Administrative expenses			(4,818)	(5,449)
Fair value of plan assets, end of year			1,358,877	1,233,306	1,051,410
Funded Status
Plan assets			1,358,877	1,233,306	1,051,410
Benefit obligations			(2,073,218)	(1,763,859)	(1,634,124)
Funded status and amount recognized, end of year			(714,341)	(530,553)
Amounts recognized in the statement of financial position consist of:
Current liability			(15,830)	(37,462)
Noncurrent liability			(698,511)	(493,091)
Amounts recognized in the statement of financial position			(714,341)	(530,553)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial loss/(gain)			815,385	585,839
Prior service cost/(credit)			26	41
Amounts recognized in accumulated other comprehensive income			815,411	585,880
Post-retirement plans
EMPLOYEE BENEFITS
Value of contributions to plan			2,468	2,673
Change in Benefit Obligation
Benefit obligation, beginning of year			27,474	30,585
Interest cost			946	1,358
Plan participants' contributions			817	1,044
Actuarial (gain)/loss			(2,400)	(1,796)
Gross benefits paid			(3,285)	(3,717)
Plan amendment			(7,620)
Benefit obligation, end of year			15,932	27,474
Changes in the fair value of the plan's Level 3 investment assets
Employer contribution			2,468	2,673
Plan participants' contributions			817	1,044
Gross benefits paid			(3,285)	(3,717)
Funded Status
Benefit obligations			(15,932)	(27,474)
Funded status and amount recognized, end of year			(15,932)	(27,474)
Amounts recognized in the statement of financial position consist of:
Current liability			(1,859)	(3,897)
Noncurrent liability			(14,073)	(23,577)
Amounts recognized in the statement of financial position			(15,932)	(27,474)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial loss/(gain)			(11,380)	(9,634)
Prior service cost/(credit)			(14,952)	(8,618)
Amounts recognized in accumulated other comprehensive income			(26,332)	(18,252)
Supplemental retirement plans
EMPLOYEE BENEFITS
Value of contributions to plan			8,200	7,400	7,500
Changes in the fair value of the plan's Level 3 investment assets
Employer contribution			$ 8,200	$ 7,400	$ 7,500

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QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

12 Months Ended

Dec. 30, 2012

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

11.    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Our business is somewhat seasonal with peak revenues and profits generally occurring in the second and fourth quarters of each year as a result of increased advertising activity during the holiday seasons. The first and third quarters are historically the slowest quarters for revenues and profits. Our quarterly results are summarized as follows:

	Quarters Ended
(in thousands, except per share amounts)	March 25, 2012			June 24, 2012		September 23, 2012		December 30, 2012
Net Revenues	$	288,301		$	299,294	$	287,465	$	355,664
Operating income	$	27,975		$	42,935	$	32,479	$	82,747
Net income (loss)	$	(2,087	)	$	26,865	$	5,093	$	(30,015	)
Net income (loss) per share	$	(0.02	)	$	0.31	$	0.06	$	(0.35	)

	Quarters Ended
(in thousands, except per share amounts)	March 27, 2011			June 26, 2011		September 25, 2011		December 25, 2011
Net Revenues	$	303,734		$	314,250	$	300,219	$	351,437
Operating income	$	20,455		$	45,133	$	45,443	$	90,284
Net income (loss)	$	(1,962	)	$	4,947	$	9,399	$	42,005
Net income (loss) per share	$	(0.02	)	$	0.06	$	0.11	$	0.49

The following are significant activities in fiscal year 2012:

• •

  During the quarter ended March 25, 2012, we incurred a gain on extinguishment of debt totaling $4.4 million related to bonds that were repurchased in the open market.

  •

  During the quarter ended June 24, 2012, we had a reversal of non-cash interest expense totaling $7.8 million related to the release of tax reserves. In addition, we had a favorable adjustment to net income totaling $7.0 million for a tax settlement related to state tax positions previously taken.

  •

  As discussed in Note 1, our fiscal year 2012 reporting period is a 53-week year versus a 52-week year in 2011, and as a result, the quarter ended December 30, 2012 includes 14 weeks compared to 13 weeks in the quarter ended December 25, 2011. Also, during the quarter ended December 31, 2012, in connection with our refinance of our 11.50% Notes, as described in Note 5, we recognized $94.5 million as a loss on extinguishment of debt.

The following are significant activities in fiscal year 2011:

• •

  In the quarter ended March 27, 2011, we incurred impairment charges of approximately $10.3 million, which were recorded to other operating expenses related to the value of the real estate assets sold for less than carrying value. We also incurred severance charges totaling $4.5 million related to restructuring of our newspaper operations. These amounts were partially offset by a favorable tax settlement for $9.9 million related to state tax positions previously taken. A tax benefit of $7.6 million was recognized and the related interest expense was reduced by $3.7 million.

  •

  In the quarter ended June 26, 2011, we incurred severance charges totaling $7.6 million related to restructuring of newspaper operations.

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LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 30, 2012

LONG-TERM DEBT

Summary of company's long-term debt

			Carrying Value
(in thousands)	Face Value at December 30, 2012		December 30, 2012		December 25, 2011
Notes:
9.00% senior secured notes due in 2022	$	910,000	$	910,000	$	–
11.50% senior secured notes due in 2017		83,595		83,016		843,652
4.625% notes due in 2014		66,438		64,326		77,406
5.750% notes due in 2017		286,138		273,559		318,624
7.150% debentures due in 2027		89,188		83,291		82,891
6.875% debentures due in 2029		276,230		256,154		254,903
Long-term debt	$	1,711,589	$	1,670,346	$	1,577,476
Less current portion				83,016		–
Total long-term debt, net of current			$	1,587,330	$	1,577,476

Repurchase of notes

During the year ended December 30, 2012, we repurchased $832.9 million of notes in privately negotiated transactions or through the tender offer, discussed below, as follows:

(in thousands)	Face Value
11.50% senior secured notes due in 2017	$	767,405
4.625% notes due in 2014		15,000
5.750% notes due in 2017		50,500
Total notes repurchased	$	832,905

Annual maturities of debt

The following table presents the approximate annual maturities of outstanding long-term debt as of December 30, 2012, based upon our required payments, for the next five years and thereafter:

Year	Payments (in thousands)
2013 (1)	$	83,595
2014		66,438
2015		–
2016		–
2017		286,138
Thereafter		1,275,418
Debt principal	$	1,711,589

• ⁽¹⁾

  As of December 30, 2012, we had committed to redeem our 11.50% Notes with a maturity date in 2017 in January 2013 (as discussed above). Therefore, we have included them in the "2013" column.

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INCOME TAXES (Details 2) (USD $)	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010	Dec. 27, 2009
INCOME TAXES
Net operating loss	$ 264,200,000
Tax credit carryovers
Long-term liabilities relating to uncertain tax positions	12,100,000
Unrecognized tax benefits	8,649,000	30,463,000	51,992,000	53,359,000
Gross accrued interest and penalties	3,500,000
Decreases in unrecognized tax benefits	5,800,000
Net accrued interest and penalties	2,500,000	15,500,000	21,000,000
State
Tax credit carryovers
Amount of tax credit carryovers	1,300,000
Capital loss carryover
Tax credit carryovers
Amount of tax credit carryovers	$ 1,700,000

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INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Intangible assets subject to amortization, gross
Balance at the beginning of the period	$ 834,961	$ 834,911
Impairment Charges/Adjustments		50
Balance at the end of the period	834,961	834,961	834,911
Accumulated amortization
Balance at the beginning of the period	(452,388)	(394,073)
Amortization Expense	(58,158)	(58,315)	(58,700)
Balance at the end of the period	(510,546)	(452,388)	(394,073)
Intangible assets subject to amortization, net
Balance at the beginning of the period	382,573	440,838
Impairment Charges/Adjustments		50
Amortization Expense	(58,158)	(58,315)	(58,700)
Balance at the end of the period	324,415	382,573	440,838
Mastheads
Balance at the beginning of the period	203,587	206,387
Impairment Charges/Adjustments		(2,800)
Balance at the end of the period	203,587	203,587	206,387
Goodwill
Balance at the beginning of the period	1,012,011	1,014,257
Impairment Charges/Adjustments		(2,246)
Balance at the end of the period	1,012,011	1,012,011	1,014,257
Total
Balance at the beginning of the period	1,598,171	1,661,482
Impairment Charges/Adjustments		(4,996)
Amortization Expense	(58,158)	(58,315)	(58,700)
Balance at the end of the period	1,540,013	1,598,171	1,661,482
Error correction not material to the previously issued consolidated financial statements
Increase (decrease) in goodwill		(2,246)
Error in the timing of the release of certain unrecognized tax benefits
Goodwill
Impairment Charges/Adjustments		(2,500)
Error correction not material to the previously issued consolidated financial statements
Increase (decrease) in goodwill		$ (2,500)

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Dec. 25, 2011
Current assets:
Cash and cash equivalents	$ 113,088	$ 86,020
Trade receivables (net of allowances of $5,920 in 2012 and $7,341 in 2011)	177,225	179,046
Other receivables	9,555	13,990
Newsprint, ink and other inventories	30,145	28,842
Deferred income taxes	14,406	16,605
Other current assets	31,558	20,473
Total current assets	375,977	344,976
Property, plant and equipment, net	733,729	760,977
Intangible assets:
Identifiable intangibles - net	528,002	586,160
Goodwill	1,012,011	1,012,011
Total intangible assets	1,540,013	1,598,171
Investments and other assets:
Investments in unconsolidated companies	299,603	304,893
Other assets	55,809	31,042
Total investments and other assets	355,412	335,935
TOTAL ASSETS	3,005,131	3,040,059
Current liabilities:
Current portion of long-term debt	83,016
Accounts payable	48,588	44,727
Accrued pension liabilities	15,830	37,462
Accrued compensation	39,124	42,928
Income taxes payable	2,327	13,063
Unearned revenue	69,492	73,352
Accrued interest	18,675	49,686
Other accrued liabilities	14,273	15,676
Total current liabilities	291,325	276,894
Non-current liabilities:
Long-term debt	1,587,330	1,577,476
Deferred income taxes	39,719	139,296
Pension and postretirement obligations	712,584	516,668
Financing obligations	279,325	272,795
Other long-term obligations	52,347	81,743
Total non-current liabilities	2,671,305	2,587,978
Commitments and contingencies
Stockholders' equity:
Additional paid-in capital	2,219,163	2,219,161
Accumulated deficit	(1,696,176)	(1,696,032)
Treasury stock at cost, 6,034 shares in 2012 and 260,170 shares in 2011	(29)	(1,145)
Accumulated other comprehensive loss	(481,316)	(347,654)
Total stockholders' equity	42,501	175,187
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	3,005,131	3,040,059
Common Class A
Stockholders' equity:
Common stock	611	609
Common Class B
Stockholders' equity:
Common stock	$ 248	$ 248

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Treasury stock, purchased	454,860	144,125	78,143
Treasury stock, retired	708,996
Common Class A
Class A shares issued	942,250	587,118	573,347

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Purchase obligations
2013	$ 39,250,000
2014	18,039,000
2015	15,846,000
2016	14,966,000
2017	14,353,000
Thereafter	36,760,000
Total	139,214,000
Purchase obligations
Purchase obligations related to printing outsource agreements and capital expenditures for property, plant and equipment	139,200,000
Lease commitments
Total rental expense, included in other operating expenses, from continuing operations	12,500,000	13,300,000	14,500,000
Sublease income from operating leases	3,800,000	4,400,000	3,000,000
Lease Obligation
2013	12,276,000
2014	10,798,000
2015	8,891,000
2016	7,419,000
2017	6,962,000
Thereafter	34,069,000
Total	80,415,000
Sublease Income
2013	(2,968,000)
2014	(1,899,000)
2015	(1,412,000)
2016	(733,000)
2017	(310,000)
Thereafter	(441,000)
Total	(7,763,000)
Net Amount
2013	9,308,000
2014	8,899,000
2015	7,479,000
2016	6,686,000
2017	6,652,000
Thereafter	33,628,000
Total	$ 72,652,000
Newsprint purchase commitment | SP Fiber Technologies
Purchase commitment
Quantity committed in next fiscal year	81,648

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INCOME TAXES (Tables)

12 Months Ended

Dec. 30, 2012

INCOME TAXES

Schedule of income tax provision (benefit) related to continuing operations

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Current:
Federal	$	4,701		$	28,913		$	26,625
State		(16,535	)		(1,553	)		4,999
Deferred:
Federal		(4,701	)		(3,316	)		(16,672	)
State		(4,847	)		(15,648	)		(9,351	)
Income tax provision	$	(21,382	)	$	8,396		$	5,601

Schedule of reconciliation of effective tax rate expense (benefit) for continuing operations and the statutory federal income tax rate

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Statutory rate		(35.0	)%		35.0%			35.0%
State taxes, net of federal benefit		7.7			0.3			0.5
Changes in estimates		0.2			0.6			2.9
Changes in unrecognized tax benefits		(56.3	)		(13.6	)		(7.6	)
Settlements		(32.6	)		(10.4	)		(19.5	)
Other		4.0			1.5			3.2
Stock compensation		12.7			–			–
Effective tax rate		(99.3	)%		13.4%			14.5%

Schedule of components of deferred tax assets and liabilities

(in thousands)	December 30, 2012			December 25, 2011
Deferred tax assets:
Compensation benefits	$	308,392		$	228,367
State taxes		4,984			17,500
State loss carryovers		5,815			10,759
Other		5,280			6,065
Total deferred tax assets		324,471			262,691
Valuation allowance		(4,110	)		(9,514	)
Net deferred tax assets		320,361			253,177
Deferred tax liabilities:
Depreciation and amortization		233,214			258,957
Investments in unconsolidated subsidiaries		64,317			65,604
Debt discount		15,059			18,114
Deferred gain on debt		33,084			33,193
Total deferred tax liabilities		345,674			375,868
Net deferred tax liabilities	$	25,313		$	122,691

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits

	Years Ended
(in thousands)	December 30, 2012			December 25, 2011			December 26, 2010
Balance at beginning of fiscal year	$	30,463		$	51,992		$	53,359
Increases based on tax positions in prior year		–			1,409			7,529
Decreases based on tax positions in prior year		(9,933	)		(13,475	)		(1,148	)
Increases based on tax positions in current year		745			2,213			1,811
Settlements		(643	)		–			(784	)
Lapse of statute of limitations		(11,983	)		(11,676	)		(8,775	)
Balance at end of fiscal year	$	8,649		$	30,463		$	51,992

Schedule of tax years and related taxing jurisdictions that were open for audit

Taxing Jurisdiction	Open Tax Year	Years Under Exam
Federal	2009-2012
Oregon	2006-2012	2006-2008
Florida	2009-2012	2009-2010
Washington, D.C.	2006, 2009-2012	2006
New York	2008-2012	2008-2011
Illinois	2008-2012	2008-2009
California	2008-2012	2009-2010
Other States	2006-2012

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INVESTMENTS IN UNCONSOLIDATED COMPANIES (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 30, 2012	Dec. 25, 2011	Dec. 26, 2010
Summary of financial information for the company's investments in unconsolidated companies
Current assets	$ 412,959	$ 480,050
Noncurrent assets	584,773	563,286
Current liabilities	304,317	359,891
Noncurrent liabilities	246,543	228,713
Equity	446,872	454,732
Income statement information
Net revenues	1,427,657	1,332,394	1,195,755
Operating income	169,236	154,257	102,863
Net income	$ 141,387	$ 171,305	$ 95,855

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COMMON STOCK AND STOCK PLANS

12 Months Ended

Dec. 30, 2012

COMMON STOCK AND STOCK PLANS

COMMON STOCK AND STOCK PLANS

10.    COMMON STOCK AND STOCK PLANS

Common Stock

We have two classes of stock; Class A and Class B Common Stock. Both classes of stock participate equally in dividends. Holders of Class B are entitled to one vote per share and to elect as a class 75% of the Board of Directors, rounded down to the nearest whole number. Holders of Class A Common Stock are entitled to one-tenth of a vote per share and to elect as a class 25% of the Board of Directors, rounded up to the nearest whole number.

Class B Common Stock is convertible at the option of the holder into Class A Common Stock on a share-for-share basis.

The holders of shares of Class B Common Stock are parties to an agreement, the intent of which is to preserve control of the Company by the McClatchy family. Under the terms of the agreement, the Class B shareholders have agreed to restrict the transfer of any shares of Class B Common Stock to one or more "Permitted Transferees," subject to certain exceptions. A "Permitted Transferee" is any of our current holders of shares of Class B Common Stock; any lineal descendant of Charles K. McClatchy (1858 to 1936); or a trust for the exclusive benefit of, or in which all of the remainder beneficial interests are owned by, one or more lineal descendants of Charles K. McClatchy.

Generally, Class B shares can be converted into shares of Class A Common Stock and then transferred freely (unless, following conversion, the outstanding shares of Class B Common Stock would constitute less than 25% of the total number of all our outstanding shares of common stock). In the event that a Class B shareholder attempts to transfer any shares of Class B Common Stock in violation of the agreement, or upon the happening of certain other events enumerated in the agreement as "Option Events," each of the remaining Class B shareholders has an option to purchase a percentage of the total number of shares of Class B Common Stock proposed to be transferred equal to such remaining Class B shareholder's ownership percentage of the total number of outstanding shares of Class B Common Stock. If all the shares proposed to be transferred are not purchased by the remaining Class B shareholders, we have the option of purchasing the remaining shares. The agreement can be terminated by the vote of the holders of 80% of the outstanding shares of Class B Common Stock who are subject to the agreement. The agreement will terminate on September 17, 2047, unless terminated earlier in accordance with its terms.

Stock Plans

During fiscal year 2012, we had five stock-based compensation plans, which are described below.

We have two stock option plans which reserved Class A Common shares for issuance to key employees – the 1994 and 1997 plans ("Employee Plans"). Terms of each of the Employee Plans are substantially the same. Options are granted at the market price of the Class A Common Stock on the date of grant. The options vest in installments over four years, and once vested are exercisable up to 10 years from the date of grant. Although the plans permit us, at our sole discretion, to settle unexercised options by granting stock appreciation rights, we do not intend to avail ourselves of this alternative for option grants made under these plans. Both of these plans (which had 122,500 outstanding grants at December 30, 2012) have expired and have been replaced by the 2004 stock incentive plan.

Our amended and restated stock option plan for outside directors (the "2001 Director Plan") provided for the issuance of shares of Class A Common Stock. Generally, under this plan each non-employee director was granted, at the conclusion of each regular annual meeting of stockholders, an option to purchase shares of Class A Common Stock at fair market value on the date of the grant. Terms of the 2001 Director Plan are similar to the terms of the Employee Plans. This plan (which had 21,000 outstanding grants at December 30, 2012) expired and was replaced by the 2004 stock incentive plan (see the discussion below).

We have a stock incentive plan (the "2004 Plan") that reserves 9,000,000 Class A Common shares for issuance to key employees and outside directors. Terms of the 2004 Plan are similar to the Employee Plans and 2001 Director Plan, except that the 2004 Plan permits the following type of incentive awards in addition to common stock, stock options and stock appreciation rights ("SARs"): restricted stock, unrestricted stock, stock units and dividend equivalent rights.

We award stock-settled SARs in lieu of stock options. The SARs were granted at fair market value, have a 10-year term and generally vest in four equal annual installments beginning on March 1 following the year for which the award was made.

In May 2012 the shareholders approved The McClatchy Company 2012 Omnibus Incentive Plan ("2012 Plan"). The 2012 Plan generally provides for granting of stock options or SARs only at an exercise price at least equal to fair market value on the grant date; a 10-year maximum term for stock options and SARs; no repricing of stock options or SARs without prior shareholder approval; and no reload or "evergreen" share replenishment features.

Prior to fiscal year 2012, we also had an Amended Employee Stock Purchase Plan (the "Purchase Plan"), which reserved 4,625,000 shares of Class A Common Stock for issuance to employees. Eligible employees were able to purchase shares at 85% of "fair market value" (as defined by the Purchase Plan) through payroll deductions. In the third quarter of fiscal year 2011, we issued shares from our Purchase Plan that exhausted substantially all of the shares reserved under the plan for issuance and we suspended the plan at that time.

Stock Plans Activity

In fiscal year 2012, we granted 15,000 shares of Class A Common Stock to each non-employee director, resulting in the issuance of 150,000 shares from the 2012 Plan. In fiscal year 2011, we granted 15,000 shares of Class A Common Stock to each non-employee director, resulting in the issuance of 150,000 shares from the 2004 Plan.

We granted restricted stock units ("RSUs") at fair market value on the date of grant to certain key employees from the 2004 Plan and 2012 Plan as summarized below. The RSUs generally vest two to three years after grant date but terms of each grant is at the discretion of the compensation committee of the board of directors.

The following table summarizes the RSUs stock activity:

	RSUs			Weighted Average Grant Date Fair Value
Nonvested – December 27, 2009		845,000		$	3.42
Nonvested – December 26, 2010		845,000		$	3.42
Granted		740,000		$	4.08
Forfeited		(140,000	)	$	3.70
Nonvested – December 26, 2011		1,445,000		$	3.73
Granted		1,082,000		$	2.59
Vested		(765,000	)	$	3.42
Forfeited		(660,000	)	$	3.48
Nonvested – December 30, 2012		1,102,000		$	2.98

As of December 30, 2012, the total fair value of the RSUs that vested during the period was $2.0 million. As of December 30, 2012, there were $1.5 million of unrecognized compensation costs for nonvested RSUs, which are expected to be recognized over 1.8 years.

Outstanding options and SARs are summarized as follows:

	Options/ SARs			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding December 26, 2009		7,039,850		$	26.79	$	3,086
Granted		10,000		$	4.96
Exercised		(119,250	)	$	1.70	$	388
Forfeited		(44,250	)	$	7.07
Expired		(254,150	)	$	40.53
Outstanding December 26, 2010		6,632,200		$	26.82	$	6,060
Granted		1,078,500		$	4.08
Exercised		(152,750	)	$	1.73	$	382
Forfeited		(132,250	)	$	3.99
Expired		(702,450	)	$	47.86
Outstanding December 25, 2011		6,723,250		$	22.01	$	874
Granted		1,017,500		$	2.76
Exercised		(27,250	)	$	1.70	$	33
Forfeited		(1,217,750	)	$	54.52
Expired		(301,250	)	$	48.33
Outstanding December 30, 2012		6,194,500		$	11.45	$	1,846
Vested and Expected to Vest December 30, 2012		5,970,603		$	11.74	$	1,810
Options exercisable:
December 26, 2010		3,572,450				$	869
December 25, 2011		4,082,500				$	397
December 30, 2012		3,826,250				$	1,335

As of December 30, 2012, there were $2.6 million of unrecognized compensation costs related to options and SARs granted under our plans. The cost is expected to be recognized over a weighted average period of 2.5 years.

The following tables summarize information about stock options and SARs outstanding in the stock plans at December 30, 2012:

Range of Exercise Prices	Options/SARs Outstanding		Average Remaining Contractual Life		Weighted Average Exercise Price		Options/SARs Exercisable		Weighted Average Exercise Price
$1.50 – $9.07		4,273,500		6.85	$	2.94		1,941,000	$	2.65
$9.73 – $35.94		1,128,750		4.17	$	13.20		1,128,750	$	13.20
$40.95 – $73.36		756,500		2.63	$	54.93		756,500	$	54.93
Total		6,158,750		5.82	$	11.45		3,826,250	$	16.10

The weighted average remaining contractual life on options exercisable at December 30, 2012, was 4.46 years. The weighted average remaining contractual life of options vested and expected to vest at December 30, 2012, was 5.73 years. The fair value of the stock options and SARs granted was estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected life of the options represents the period of time that options granted are expected to be outstanding using the historical exercise behavior of employees. The expected dividend yield is based on historical dividends declared per year, giving consideration for any anticipated change and the estimated stock price over the expected life of the options based on historical experience. Expected volatility was based on historical volatility for a period equal to the stock option's expected life for shares granted. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	2012		2011		2010
Expected life in years		6.52		6.16		6.10
Dividend yield		NIL		NIL		NIL
Volatility		0.90		0.87		0.83
Risk-free interest rate		1.22%		2.53%		2.77%
Weighted average exercise price of options/SARs granted	$	2.76	$	4.08	$	4.96
Weighted average fair value of options/SARs granted	$	2.09	$	3.03	$	3.57

Through the third quarter of fiscal year 2011, we also offered eligible employees the option to purchase Class A Common Stock under the Purchase Plan. The expense associated with the plan was computed using a Black-Scholes option valuation model with similar assumptions to those described for stock options, except that volatility is computed using a one-year look back given the short-term nature of this option. Expense associated with the Purchase Plan is included in the stock-related compensation. There was no such plan or expense during fiscal year 2012.