-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MJbRexxt9FdbwDhRnmUTvNQ61IHnI3v4PNyCkDa2tjo8t4ueLqEURY6HCsJv+rhQ 8o57Ow/FmjGs8Nov6e76hg== 0001056087-07-000009.txt : 20070206 0001056087-07-000009.hdr.sgml : 20070206 20070206102701 ACCESSION NUMBER: 0001056087-07-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070206 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070206 DATE AS OF CHANGE: 20070206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCCLATCHY CO CENTRAL INDEX KEY: 0001056087 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 522080478 STATE OF INCORPORATION: DE FISCAL YEAR END: 0705 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-46501 FILM NUMBER: 07582859 BUSINESS ADDRESS: STREET 1: LEGAL DEPARTMENT STREET 2: 2100 Q STREET CITY: SACRAMENTO STATE: CA ZIP: 95852 BUSINESS PHONE: 9163211846 MAIL ADDRESS: STREET 1: LEGAL DEPARTMENT STREET 2: 2100 Q STREET CITY: SACRAMENTO STATE: CA ZIP: 95816-6899 FORMER COMPANY: FORMER CONFORMED NAME: MNI NEWCO INC DATE OF NAME CHANGE: 19980218 8-K 1 mni4q068k.htm MCCLATCHY 4TH QUARTER 2006 RESULTS UNITED STATES

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: February 5, 2007 

The McClatchy Company

(Exact name of registrant as specified in its charter)

DELAWARE

1-9824

52-2080478

(state or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

 

2100 Q Street
Sacramento CA 95816
(Address of principal executive offices, zip code)

Registrant's telephone number, including area code (916) 321-1846

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (l7 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (l7 CFR 240-14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (l7 CFR 240.13e-4(c))

  

Item 9.01

Financial Statements and Exhibits

 

(c) Exhibits

 

 

99.1

Text of press release issued by The McClatchy Company dated July 13, 2006, "McClatchy Reports 2nd Quarter 2006 Earnings."

 

 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  

February 6, 2007

The McClatchy Company



By:  



/s/ Patrick J. Talamantes

Patrick J. Talamantes
Vice President and Chief Financial Officer

EX-99.1 CHARTER 2 mni4q06exhibit99.htm MCCLATCHY 4TH QUARTER 2006 RESULTS-EXH 99.1 Exhibit 99

Exhibit 99.1

 

Contact:

Investors Relations:

Elaine Lintecum

916-321-1846

elintecum@mcclatchy.com

McCLATCHY REPORTS FOURTH QUARTER 2006 RESULTS

SACRAMENTO, Calif., Feb 6, 2007 - The McClatchy Company (NYSE-MNI) today reported fourth quarter 2006 income from continuing operations of $75.5 million, or 92 cents per share. A loss from discontinued operations of $354.8 million, or $4.33 per share was recorded in the quarter relating to the results of the Star Tribune newspaper which the company is selling (see discussion below). The loss from discontinued operations includes a $363.0 million after tax write - down of the net assets of the Star Tribune to the agreed-upon selling price. The company's total net loss for the 2006 quarter was $279.3 million, or $3.41 per share, including discontinued operations.

The company's fiscal 2006 reporting period is a 53-week year versus a 52-week year in 2005, and as a result, the fiscal fourth quarter of 2006 includes 14 weeks compared to 13 weeks in the 2005 fiscal quarter. The company estimates that income from continuing operations is higher by approximately $5.3 million in 2006 because of the additional week being reported.

Results of the Star Tribune newspaper are shown as discontinued operations for all periods presented (including 2005) due to its impending sale. Income from continuing operations was $34.1 million, or 73 cents per share, in the fourth quarter of 2005. Net income in the fourth quarter of 2005 was $45.4 million, or 97 cents per share, including income from discontinued operations of $11.3 million, or 24 cents per share.

On June 27, 2006, the company completed the acquisition of Knight-Ridder, Inc. and its 32 daily newspapers (the Acquisition). The company sold 12 former Knight Ridder newspapers, four of which closed concurrently with the closing of the Acquisition, while eight of the newspapers were held by the company for a short time following the acquisition.

On December 26, 2006 the company announced that it had reached a definitive agreement to sell the Star Tribune newspaper of Minneapolis, MN to Avista Capital Partners for $530 million in cash proceeds and expects to receive an additional approximately $160 million in cash income tax benefits related to the sale in 2008. These after-tax proceeds represent a multiple of cash flows greater than the company paid for Knight Ridder. This transaction is expected to close in the first quarter of 2007.

The company's results from continuing operations since the close of the Knight Ridder acquisition (and all pro forma amounts for prior periods discussed) include the operations of the 20 retained former Knight Ridder newspapers and all of the company's previously owned newspaper operations except for the Star Tribune newspaper (continuing operations of the "newly combined company").

Revenues from continuing operations of the newly combined company in the fourth quarter of 2006 were $673.6 million, up $463.3 million from fourth quarter 2005 revenues of $210.3 million, primarily due to the Knight Ridder acquisition. On a 13-week basis, fourth quarter total revenues were $630.7 million, down 3.4% compared to pro forma fourth quarter 2005 revenues of the newly combined company, with advertising revenues of $539.5 million, down 3.1% and circulation revenues of $71.7 million, down 3.1%.

Income from continuing operations for the full year of 2006 was $179.9 million or $2.78 per share. Income from continuing operations included a pre-tax gain of $9.0 million related to the sale of land in the third quarter of 2006. Income from continuing operations was $174.5 million or $2.70 per share excluding the gain on the land sale. The loss from discontinued operations for the full-year 2006 was $335.5 million, or $5.19 per share, and the company's total net loss was $155.6 million or $2.41 per share.

Income from continuing operations was $119.5 million or $2.54 per share in 2005. Income from discontinued operations was $41.0 million, or 87 cents per share, and total net income in 2005 was $160.5 million, or $3.42 per share.

Revenues from continuing operations of the newly combined company in 2006 were $1.68 billion, up $867.7 million from 2005 revenues from continuing operations of $807.5 million, due primarily to the addition of the 20 former Knight Ridder newspapers beginning in the third quarter. Advertising revenues totaled $1.43 billion and circulation revenues were $194.9 million.

On a pro forma basis, including all continuing operations of the newly combined company for the full years of both 2006 and 2005, and stating 2006 on a comparable 52-week basis to 2005, total revenues in 2006 would have been $2.45 billion, down 0.4%, with advertising revenues of $2.09 billion, up 0.5%, and circulation revenues of $290.0 million, down 4.0%.

Commenting on fourth quarter results, Gary Pruitt, chairman and chief executive officer, said, "The overall advertising environment grew more difficult in the fourth quarter. Retail advertising softened and national and classified continued to decline. The increases we had been reporting in real estate advertising, which had helped offset the declines in employment and automotive classified advertising, declined along with the slowdown in the real estate market. However, online and direct marketing revenues continued to show strength, and their growth helped offset some of the weakness in classified and national advertising.

"This environment calls for strong cost controls and we have delivered. We reduced cash operating expenses 5.8% compared to the 2005 proforma quarter. When factoring out the stock-related compensation which was not recorded in 2005, this expense saving grows to 6.2%.

"For all of 2006, our pro forma advertising revenues were up 0.5%, and we expect to be one of the few companies to report revenue growth in newspaper advertising on a 52-week basis. Indeed, we believe that once all the results are in that McClatchy will have outperformed the industry in advertising revenue growth for the sixth consecutive year," said Mr. Pruitt. "We are committed to our three-pronged strategy: We acquire and operate high-quality newspapers in growth markets. Second, we extend these franchises by supplementing the mass reach of the newspaper with direct marketing and direct mail products so that advertisers can capture broad appeal and targeted audiences with one-stop shopping. And finally, we operate the leading local internet business in each of our daily newspaper markets.

"As we look to 2007, we continue to anticipate, as we said at our Media Week investor presentation, that advertising revenues on a pro forma basis will be down in the first half. We don't have enough visibility right now to project revenue trends in the second half of 2007 with any confidence, but we do have confidence in our proven ability to adapt and innovate to meet challenging conditions and be an industry leader in performance.

"We continue our focus on reducing employee head count by attrition and are reviewing all costs on a line-by-line basis as we look to 2007. We expect to continue to reap benefits from synergies as we further integrate the former Knight Ridder papers, and we expect cost savings from lower newsprint prices and retirement benefits costs.

 

"The operating environment for media companies certainly is challenging - requiring sure leadership in these turbulent times. We have made the tough decisions to re-align our operating portfolio, retaining the assets that will best allow us to build a 24/7 multi-media enterprise that's responsive to all our audiences and advertisers, resulting in a preeminent news company for our shareholders." said Mr. Pruitt. "Newspapers are profitable brands, and they provide the foundation of the integrated multiplatform news company we have become. We believe this integrated approach will pay handsome dividends in both audience growth and profitability."

Pat Talamantes, McClatchy's vice president of finance and CFO, said, "Debt at the end of the year was approximately $3.3 billion including public bonds we assumed in the Knight Ridder acquisition, which are valued at approximately $1.5 billion. We have used the proceeds from the sales of the former Knight Ridder newspapers, certain internet investments and land in the Sacramento area to pay down a portion of the bank debt used to buy Knight Ridder; but as planned we increased debt in December to pay taxes on these sales.

"We plan to use the $530 million in pre-tax proceeds from the sale of the Star Tribune, which is expected to close in the first quarter of 2007, to further reduce debt. Our commitment to repaying debt has never been stronger and we firmly believe that as we continue to do so we will build leveraged equity returns for our shareholders."

The company noted the following items related to the Knight Ridder acquisition and other matters that impacted its 2006 results:

    • The company issued 35.0 million Class A shares in connection with the Acquisition. As a result, the weighted average diluted shares used to calculate earnings per share in 2006 increased. Weighted average shares in 2007 are expected to be in line with fourth quarter 2006 amounts.
    • The company sold the 12 Knight Ridder newspapers identified as not fitting with its operating strategy. Eight of the 12 were held for periods ranging from two to 36 days following the closing of the Knight Ridder acquisition, and their results, including the interest expense and debt financing costs related to the debt incurred until their sale, were recorded as discontinued operations in its financial results. The $2.1 billion in pre-tax cash proceeds from their sales were used to repay the debt used to purchase these newspapers. No gain or loss was recorded related to the disposition of the newspapers.
    • In December 2006 the company entered into a definitive agreement to sell the (Minneapolis) Star Tribune newspaper for $530 million in cash proceeds and is expected to receive an additional approximately $160 million in cash income tax benefits related to the sale in 2008. The sale is expected to close in the first quarter of 2007. The company recorded a write down in the fourth quarter of 2006 of the Star Tribune's net assets to fair market value based on the expected sale proceeds and included this charge in discontinued operations. Additionally, the results of Star Tribune's operations, including interest allocated to debt related to its acquisition, have been recorded as discontinued operations in all periods presented.
    • The company implemented Financial Accounting Standard No. 123 (revised 2004), "Share-Based Payments" (FAS 123R), at the beginning of fiscal 2006 and recorded share based compensation of $2.0 million in the fourth quarter and $7.8 million in the year ended December 31, 2006.
    • As a result of the anticipated Star Tribune disposition, the company's mix of state tax jurisdictions has resulted in a lower overall state tax rate. Accordingly, the company has recalculated its deferred tax liabilities and assets in the fourth quarter of 2006 at its new lower effective state tax rate. The company's effective tax rate was affected by similar calculations related to the Acquisition in both the third and the fourth quarters of 2006. This resulted in a reduction to the fourth quarter income tax provision of $12.3 million, and the full year tax provision was lower by $18.1 million, bringing the company's annual effective tax rate on continuing operations to 33.6%. The company's effective tax rate on continuing operations is expected to be between 39.0% and 39.5% in 2007.
    • The purchase price for the Knight Ridder acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of June 27, 2006, the date of the Acquisition. The purchase price allocation, while substantially completed, is subject to further adjustments based upon completion of analyses of deferred income tax assets and liabilities and other items.

The company's pro forma statistical report, which summarizes its revenue performance for the month of December, the fourth quarter and the full year 2006, follows. This report includes advertising revenues for the 20 Knight Ridder newspapers the company has retained, but did not own in the first half of its fiscal 2006 or any part of fiscal 2005, and excludes the revenues of the Star Tribune newspaper which is being sold. The pro forma information is meant to provide investors a sense of what the advertising results of the continuing operations would have been in each interim period. In addition, the company has reclassified Real Cities' advertising revenues from a gross basis to net of amounts remitted to the third party newspaper websites for which Real Cities acts as a broker for national advertising. This reclassification has the effect of reducing both revenues and expenses with no impact on earnings. Due to a lack of historical detail from 2005, the 2005 pro forma amounts do not include rec lassifications necessary to compare online revenues on the same basis. Hence, comparisons to online only and national online advertising are not meaningful. A reconciliation of pro forma 2006 revenues to GAAP reported revenues can be found on the company's website at the Investor Relations page.

At noon Eastern Time today, McClatchy will review its results in a conference call (877-278-1205 pass code 6828794) and webcast (www.mcclatchy.com). The webcast will be archived at McClatchy's website.

The McClatchy Company is the third largest newspaper company in the United States (after the sale of the Star Tribune newspaper), with 31 daily newspapers and approximately 50 non-dailies. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, The Kansas City Star, the (Fort Worth) Star-Telegram, The Charlotte Observer, and The (Raleigh) News & Observer. In addition, McClatchy has a robust network of internet assets, including leading local websites in each of its daily newspaper markets, offering users information, comprehensive news, advertising, e-commerce and other services. The company also owns and operates McClatchy Interactive, an interactive operation that provides websites with content, publishing tools and software development; Real Cities (http://www.RealCities.com), the largest national advertising network of local news websites, including more than 130 newspaper websites; and 15. 0% of CareerBuilder, the nation's largest online job site. McClatchy also owns 25.6% of Classified Ventures, a newspaper industry partnership that offers classified websites such as cars.com and apartments.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI.

ADDITIONAL INFORMATION

Statements in this press release regarding the proposed transaction between McClatchy and Avista Capital Partners, the expected timetable for completing the transaction, future financial and operating results, benefits of the transaction (including but not limited to tax benefits), future opportunities for the company and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate th e transaction; to realize the benefits from the transaction and to realize future opportunities; and the other factors described in McClatchy's Quarterly Report on Form 10-Q for the quarter ended September 24, 2006 and the final Prospectus/Proxy Statement/Information Statement contained in McClatchy's Registration Statement on Form S-4 (Registration No. 333-133321. McClatchy disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

###

***THE McCLATCHY COMPANY***

SUMMARY OF UNAUDITED RESULTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended

Year Ended

Dec 31,

Dec. 25,

Dec 31,

Dec. 25,

2006

2005

2006

2005

Revenues - net

$ 673,599

$ 210,300

$1,675,190

$ 807,480

Operating expenses:

Compensation

250,129

78,819

652,582

321,312

Newsprint and supplements

94,366

27,548

231,068

103,292

Depreciation and amortization

42,343

9,947

98,865

39,311

Other operating expenses

141,076

40,264

345,767

152,262

Total operating expenses

527,914

156,578

1,328,282

616,177

Operating income

145,685

53,722

346,908

191,303

Interest expense

(46,985)

-

(93,664)

-

Interest income

1,527

7

3,562

47

Equity (losses) income in unconsolidated companies, net

4,870

262

4,951

635

Gain on land sale and other - net

738

14

9,128

231

Income from continuing operations before income tax

provision

105,835

54,005

270,885

192,216

Income tax provision

30,330

19,894

91,000

72,701

Income from continuing operations

75,505

34,111

179,885

119,515

Income (loss) from discontinued operations, net of income taxes

(354,776)

11,270

(335,462)

41,004

Net income (loss)

$ (279,271)

$ 45,381

$ (155,577)

$ 160,519

Net income (loss) per common share:

Basic:

Income from continuing operations

$ 0.92

$ 0.73

$ 2.79

$ 2.56

Income (loss) from discontinued operations

(4.34)

0.24

(5.21)

0.88

Net income (loss) per share

$ (3.41)

$ 0.97

$ (2.42)

$ 3.44

Diluted:

Income from continuing operations

$ 0.92

$ 0.73

$ 2.78

$ 2.54

Income (loss) from discontinued operations

(4.33)

0.24

(5.19)

0.87

Net income (loss) per share

$ (3.41)

$ 0.97

$ (2.41)

$ 3.42

Weighted average number of common shares:

Basic

81,803

46,680

64,415

46,606

Diluted

81,995

46,996

64,645

46,996

 

***The McClatchy Company***

Consolidated Statistical Report

(In thousands, except for preprints)

December

Combined

Print Only

Revenues - Net:

As Reported
5-week 2006

*Pro Forma
4-week 2006

*Pro Forma 2005

% Change

As Reported
5-week 2006

*Pro Forma
4-week 2006

*Pro Forma 2005

% Change

Advertising

Retail

$99,112

$81,222

$83,763

-3.0%

$97,230

$79,613

$82,732

-3.8%

National

19,691

15,349

18,378

-16.5%

21,682

17,473

17,603

-0.7%

Classified Total

58,516

46,735

52,254

-10.6%

47,891

38,090

43,406

-12.2%

Automotive

16,582

12,410

13,153

-5.6%

14,766

10,873

11,714

-7.2%

Real Estate

15,649

13,117

15,049

-12.8%

14,404

12,062

14,004

-13.9%

Employment

19,167

15,578

17,713

-12.1%

12,134

9,929

11,790

-15.8%

Other Class

7,119

5,631

6,340

-11.2%

6,588

5,226

5,898

-11.4%

Direct Marketing

18,362

15,828

13,690

15.6%

18,362

15,828

13,690

15.6%

Other Adv Rev

115

77

88

-12.5%

115

77

88

-12.5%

Total Advertising

$195,796

$159,211

$168,173

-5.3%

$185,280

$151,081

$157,519

-4.1%

Circulation

26,729

21,343

22,383

-4.6%

Other

5,339

4,361

7,175

-39.2%

Total Revenues

$227,864

$184,915

$197,731

-6.5%

Advertising Revenues by Market:

California

$38,546

$31,089

$32,815

-5.3%

$36,541

$29,440

$31,482

-6.5%

Southeast

46,749

37,630

38,944

-3.4%

43,081

34,695

36,386

-4.6%

Florida

33,553

28,325

29,103

-2.7%

31,655

26,639

27,723

-3.9%

Midwest

27,444

22,223

23,565

-5.7%

25,488

20,664

21,908

-5.7%

Northwest

21,329

17,370

17,562

-1.1%

19,730

15,988

16,519

-3.2%

Texas

20,500

16,449

17,195

-4.3%

19,449

15,608

16,369

-4.6%

Other

7,675

6,125

8,989

-31.9%

9,336

8,047

7,132

12.8%

Total Advertising

$195,796

$159,211

$168,173

-5.3%

$185,280

$151,081

$157,519

-4.1%

Advertising Statistics for Dailies:

Full Run ROP Linage

3,131.3

2,453.3

2,748.6

-10.7%

Millions of Preprints Distributed

823.7

700.7

706.6

-0.8%

Average Paid Circulation:**

Daily

2,806.2

2,879.8

-2.6%

Sunday

3,475.8

3,553.4

-2.2%

* Pro Forma includes Knight Ridder acquisitions and excludes Star Tribune newspaper.

** Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.

Online only revenues are not shown as the amounts are not comparable.

***The McClatchy Company***

Consolidated Statistical Report

(In thousands, except for preprints)

Quarter 4

Combined

Print Only

Revenues - Net:

As Reported
14-week 2006

*Pro Forma
13-week 2006

*Pro Forma 2005

% Change

As Reported
14-week 2006

*Pro Forma
13-week 2006

*Pro Forma 2005

% Change

Advertising

Retail

$273,979

$256,089

$257,930

-0.7%

$268,449

$250,832

$254,790

-1.6%

National

57,064

52,723

60,600

-13.0%

55,210

51,001

57,606

-11.5%

Classified Total

193,495

181,713

192,330

-5.5%

161,954

152,153

162,755

-6.5%

Automotive

49,866

45,694

47,633

-4.1%

44,349

40,456

43,083

-6.1%

Real Estate

58,871

56,339

56,277

0.1%

54,896

52,554

52,797

-0.5%

Employment

62,849

59,260

66,184

-10.5%

42,270

40,066

46,172

-13.2%

Other Class

21,908

20,420

22,236

-8.2%

20,439

19,077

20,703

-7.9%

Direct Marketing

51,308

48,774

45,323

7.6%

51,308

48,774

45,323

7.6%

Other Adv Rev

277

239

511

-53.2%

277

239

511

-53.2%

Total Advertising

$576,123

$539,538

$556,694

-3.1%

$537,198

$502,999

$520,985

-3.5%

Circulation

77,037

71,651

73,957

-3.1%

Other

20,439

19,464

22,027

-11.6%

Total Revenues

$673,599

$630,653

$652,678

-3.4%

Advertising Revenues by Market:

California

$114,646

$107,189

$110,638

-3.1%

$108,444

$101,342

$105,683

-4.1%

Southeast

140,756

131,637

132,419

-0.6%

129,198

120,811

123,402

-2.1%

Florida

95,656

90,428

94,815

-4.6%

89,654

84,637

90,336

-6.3%

Midwest

80,085

74,863

77,785

-3.8%

73,672

68,847

72,137

-4.6%

Northwest

63,698

59,739

58,350

2.4%

58,824

55,082

54,680

0.7%

Texas

59,185

55,135

57,109

-3.5%

55,773

51,933

54,406

-4.5%

Other

22,097

20,547

25,578

-19.7%

21,633

20,347

20,341

0.0%

Total Advertising

$576,123

$539,538

$556,694

-3.1%

$537,198

$502,999

$520,985

-3.5%

Advertising Statistics for Dailies:

Full Run ROP Linage

9,468.2

8,790.2

9,198.8

-4.4%

Millions of Preprints Distributed

2,229.7

2,106.7

2,111.0

-0.2%

Average Paid Circulation:**

Daily

2,859.7

2,930.8

-2.4%

Sunday

3,494.3

3,603.2

-3.0%

* Pro Forma includes Knight Ridder acquisitions and excludes Star Tribune newspaper.

** Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.

Online only revenues are not shown as the amounts are not comparable.

***The McClatchy Company***

Consolidated Statistical Report

(In thousands, except for preprints)

December Year-to-Date

Combined

Print Only

Revenues - Net:

As Reported
53-week 2006

*Pro Forma
52-week 2006

*Pro Forma 2005

% Change

As Reported
53-week 2006

*Pro Forma
52-week 2006

*Pro Forma 2005

% Change

Advertising

Retail

$623,675

$891,378

$893,462

-0.2%

$610,093

$874,555

$883,130

-1.0%

National

133,779

201,578

219,719

-8.3%

126,864

190,303

209,954

-9.4%

Classified Total

555,919

819,499

809,619

1.2%

474,396

687,254

698,563

-1.6%

Automotive

136,372

196,971

217,244

-9.3%

122,063

176,100

200,201

-12.0%

Real Estate

179,237

252,360

223,335

13.0%

168,166

236,625

209,925

12.7%

Employment

183,649

283,054

279,700

1.2%

131,364

193,280

205,499

-5.9%

Other Class

56,661

87,114

89,341

-2.5%

52,803

81,248

82,939

-2.0%

Direct Marketing

118,003

177,486

156,546

13.4%

118,003

177,486

156,546

13.4%

Other Adv

Revenue

1,536

1,511

2,083

-27.5%

1,536

1,511

2,083

-27.5%

Total Advertising

$1,432,912

$2,091,452

$2,081,429

0.5%

$1,330,892

$1,931,109

$1,950,276

-1.0%

Circulation

194,940

289,959

302,138

-4.0%

Other

47,337

73,095

79,565

-8.1%

Total Revenues

$1,675,189

$2,454,506

$2,463,132

-0.4%

Advertising Revenues by Market:

California

$421,993

$427,984

$417,951

2.4%

$398,053

$403,588

$398,233

1.3%

Southeast

344,187

504,097

503,433

0.1%

315,950

458,957

470,281

-2.4%

Florida

176,229

356,411

349,870

1.9%

164,624

332,046

333,113

-0.3%

Midwest

147,986

283,604

291,058

-2.6%

135,514

258,232

269,262

-4.1%

Northwest

189,546

227,255

221,038

2.8%

174,997

209,015

207,230

0.9%

Texas

109,989

213,089

211,327

0.8%

103,203

199,157

201,271

-1.1%

Other

42,982

79,012

86,752

-8.9%

38,551

70,114

70,886

-1.1%

Total Advertising

$1,432,912

$2,091,452

$2,081,429

0.5%

$1,330,892

$1,931,109

$1,950,276

-1.0%

Advertising Statistics for Dailies:

Full Run ROP Linage

24,286.4

34,741.4

35,691.2

-2.7%

Millions of Preprints Distributed

5,071.3

7,234.2

6,840.1

5.8%

Average Paid Circulation:**

Daily

2,842.5

2,928.7

-2.9%

Sunday

3,523.2

3,655.6

-3.6%

* Pro Forma includes Knight Ridder acquisitions and excludes Star Tribune newspaper.

** Reflects average paid circulation based upon number of days in period. Does not reflect ABC reported figures.

Online only revenues are not shown as the amounts are not comparable.

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