Investments In Unconsolidated Companies And Miami Land

9 Months Ended

Sep. 25, 2011

Investments In Unconsolidated Companies And Miami Land [Abstract]

Investments In Unconsolidated Companies And Miami Land

NOTE 2. INVESTMENTS IN UNCONSOLIDATED COMPANIES AND MIAMI LAND

The following is the Company's ownership interest and investment in unconsolidated companies and joint ventures as of September 25, 2011, and December 26, 2010 (dollars in thousands):

Company	% Ownership Interest		September 25, 2011		December 26, 2010
CareerBuilder, LLC		15.0	$	225,995	$	220,777
Classified Ventures, LLC		25.6		80,372		66,976
HomeFinder, LLC		33.3		1,927		3,061
Seattle Times Company (C-Corporation)		49.5		—		—
Ponderay (general partnership)		27.0		15,393		13,320
Other		Various		3,122		2,747
			$	326,809	$	306,881

The Company uses the equity method of accounting for a majority of investments.

During the nine months ended September 25, 2011, McClatchy's proportionate share of net income from several investees listed in the table above was greater than 20% of McClatchy's consolidated net income before taxes. Summarized income statement information for these companies for the first nine months of 2011 and 2010 follows (in thousands):

	Nine Months Ended
	September 25, 2011		September 26, 2010
Revenues	$	844,355	$	246,321
Operating income		128,937		56,911
Net income		136,053		46,635

On January 31, 2011, the original contract to sell certain land in Miami terminated because the buyer did not consummate the transaction by the closing deadline in the contract. Under the terms of an agreement with the developer, McClatchy is entitled to receive a $7.0 million termination fee and has filed a claim against the developer to secure payment. However the Company has not recorded any amounts in its financial statements related to this fee pending the resolution of this claim. McClatchy previously received approximately $16.5 million in nonrefundable deposits, which it used to repay debt.

On May 27, 2011, the Company sold 14.0 acres of land in Miami, including the building holding the operations of one of its subsidiaries, The Miami Herald Media Company, and an adjacent parking lot for a purchase price of $236 million. Approximately 9.4 acres of the Miami land was previously subject to the original contract, which was terminated as discussed above. The Company received cash proceeds of $230 million, and an additional $6 million is being held in an escrow account, payable to McClatchy once expenses are incurred related to the relocation of its Miami operations.

The Miami Herald Media Company will continue to operate from its existing location for up to two years rent free while management pursues other sites for its operations. Because the Company will not pay rent for the two-year period, the Company is deemed to have continuing involvement in the property. As a result, under generally accepted accounting principles, the sale is treated as a financing transaction. Accordingly, the Company will continue to depreciate the carrying value of the building in its financial statements, and no gain or loss has been recognized on the transaction.

As a result of the accounting treatment described above, the Company has recorded a liability (in other long-term liabilities) equal to the sales proceeds received in the second quarter of 2011 ($230 million). The Company is required to impute rent based on market rates. The imputed rent will be reflected as interest expense as required by generally accepted accounting principles over the next two years or until the operations are moved, if sooner. The Company expects to recognize a gain of approximately $10 million (or less if the Miami Herald Media Company's facilities are moved sooner) at the time the operations are moved and there is no longer continuing involvement with the Miami property.