This summary is based on the fourth quarter fiscal 2007 earnings call conducted by The McClatchy Company (MNI: chart) on February 6, 2008.

Management:

Chairman, President and Chief Executive Officer: Gary B. Pruitt
Vice President, Finance and Chief Financial Officer: Patrick J. Talamantes
Vice President, Operations: Frank Whittaker
Vice President, Operations: Lynn Dickerson
Vice President, Operations: Robert Weil
Vice President, Interactive Media: Christian A. Hendricks
Treasurer: Elaine Lintecum

Key Investors Issues

- EPS continuing operations were 40 cents per share compared to 94 cents per share last year.
- Income from continuing operations was $33.2 million compared to $76.9 million a year ago.
- Revenues from continuing operations were $573.4 million, down 14.9% from $673.6 million in 2006.

Fourth Quarter Highlights

Preliminary income from continuing operations was $33.2 million, or 40 cents per share compared to fourth quarter 2006 income from continuing operations of $76.9 million, or 94 cents per share.

- The company''s preliminary 2007 fourth quarter results include income tax expense of $7.5 million, or nine cents per share, related to changes in prior period estimates.
- Total preliminary net income in the 2007 fourth quarter was $30.1 million or 37 cents per share. Preliminary results do not include an anticipated non-cash charge for impairment of goodwill and long-lived assets.

The company''s fiscal 2007 reporting period is a 52-week year compared to a 53-week year in 2006, and as a result, the fiscal fourth quarter of 2007 includes 13 weeks compared to 14 weeks in the 2006 fiscal quarter.

- The company estimates that income from continuing operations was higher by approximately $5.3 million in 2006 because of the additional week reported in that quarter.

Revenues from continuing operations were $573.4 million, down 14.9% from revenues from continuing operations of $673.6 million in 2006.

- The company estimates that on a comparable 13-week basis, revenues from continuing operations in the fourth quarter of 2007 were down 9.1% from 2006.
- Advertising revenues were $489.4 million, down 9.3% from 2006 on a comparable 13-week basis, and circulation revenues were $66.1 million, down 7.8% on a comparable basis. The decline in circulation revenue in the 2007 quarter reflects, in part, a reclassification of $2 million in delivery expenses which reduced both revenues and expenses. Excluding the impact of this adjustment, circulation revenue was down 5.0%.

The company benefited from continued strong cost reduction efforts in the 2007 fourth quarter.

- On a comparable 13-week basis cash expenses were down 9.1% (8.6% excluding the circulation related reclassification) as the result of reduction in staffing levels, lower newsprint expense and continued vigilance in all other expenses.
- The company recorded a loss from unconsolidated equity investments of $8.3 million (primarily reflecting losses from its investments in newsprint companies), compared to income from investments of $4.9 million in the 2006 quarter. The internet companies in which the company has investments were profitable.

McClatchy and its partners, affiliates of Cox Enterprises, Inc. and Media General, Inc., announced an agreement to sell SP Newsprint Company, of which McClatchy is a one-third owner.

- The transaction is expected to close by the end of April 2008, subject to regulatory approval. McClatchy expects to record a gain on the transaction when it closes, and the sale is expected to provide McClatchy approximately $40 million in after-tax cash proceeds.
- In the 2006 fourth quarter the company recorded a loss from discontinued operations of $356.2 million, or $4.34 per share related to the results of the (Minneapolis) Star Tribune newspaper, which the company sold on March 5, 2007. The 2006 loss from discontinued operations included 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 $3.40 per share, including discontinued operations.

Fiscal 2007 Highlights

- The company reported a preliminary loss from continuing operations in 2007 of $1.26 billion or $15.40 per share, including the third quarter non-cash after-tax impairment charges of $1.37 billion, or $16.66 per share, but not including the impairment charge expected to be taken in the company''s fourth quarter. Preliminary income from continuing operations prior to any impairment charges was $103.5 million. The company''s total preliminary net loss, including the results of discontinued operations, in 2007 was $1.27 billion, or $15.52 per share. Discontinued operations reflect the results of the Star Tribune newspaper which was sold on March 5, 2007.

- Income from continuing operations for the full year of 2006 was $183.5 million, or $2.84 per share. Income from continuing operations included a pre-tax gain of $9 million related to the sale of land in the third quarter of 2006. The loss from discontinued operations for the full-year 2006 was $339.1 million, or $5.25 per share, and the company''s total net loss was $155.6 million or $2.41 per share.
- Discontinued operations in 2006 reflect the results of eight former Knight Ridder newspapers which were sold in the third quarter of 2006, and the results of the Star Tribune newspaper. The company''s 2006 results from continuing operations include the operations of the Knight Ridder newspapers it retained after the acquisition.
- Revenues from continuing operations in 2007 were $2.3 billion compared to $1.7 billion in 2006. The greater revenues primarily reflect the addition of the retained Knight Ridder newspapers acquired in the third quarter of 2006. Revenues in 2006 also reflect the additional 53rd week. Advertising revenues in 2007 totaled $1.9 billion and circulation revenues were $275.7 million.

- On a pro forma basis, including the retained Knight Ridder newspapers acquired in the third quarter of 2006 and excluding the Star Tribune newspaper in both years, and including a comparable 52 weeks in each year, total revenues in 2007 would have been down 7.9%, with advertising revenues down 8.6%, and circulation revenues down 4.9%.
- Interest expense from continuing operations in 2007 includes $5.7 million related to $530.0 million in debt repaid from the proceeds of the sale of the Star Tribune on March 5, 2007. However, the operations of the Star Tribune were included in discontinued operations during the first two months of 2007. Total losses recorded from unconsolidated equity investments were $36.9 million in 2007, primarily reflecting losses from its investments in newsprint companies and The Seattle Times Company, compared to income from unconsolidated investments in 2006 of $5.0 million. The internet companies in which the company has equity investments were profitable in 2007.