This summary is based on the second quarter fiscal 2008 earnings call conducted by The McClatchy Co. (MNI: chart) on July 24, 2008.

Management:

- Chairman of the Board, President, Chief Executive Officer: Gary B. Pruitt
- Vice President of Operations: G. Lynn Dickerson
- Vice President of Operations - Midwest and Northwest: Robert J. Weil
- Vice President of Interactive Media: Chris Hendricks
- Chief Financial Officer, Vice President – Finance: Patrick J. Talamantes
- Treasurer: Elaine Lintecum

Key Investors Issues

- The firm reported income of $20 million or 24 cents per share, down 43.2% from $35.2 million or 42 cents a share in the prior year.
- Revenues were $489.7 million down 16% from $580 million in 2007.
- Unique visitors to the firm’s websites were up 24.7%.

Half Year Highlights:

- Revenues fell 15% to $978 million from $1.15 billion in 2007.
- Net income dropped by 58% to $18.8 million or 23 cents a share.

Second Quarter Highlights

Total revenues were $489.7 million down 15.6% from $580 million in the prior year as advertising revenues were down 16.8% and circulation revenues were down 5.2%.

- Revenues continued to be hurt by the weak economy and the secular shift of advertising to the Internet.
- Retail advertising was down 7.9% and much of the decline continues to come in the furniture and home furnishings area, reflecting the real estate downturn, and in department store advertising.

The declines in the newspaper advertising were partially offset by strong growth in online retail advertising, and online retail was up 80.7%, driven by banner and display advertisement.

- Classified advertising revenues declined 28.1%, with employment advertising declining 39% as hiring continued to be lackluster across the nation.
- Print employment revenues were down 45.3% while online revenues were down 27.3%.

Automotive and print advertising was down 17.8% and 27%, respectively, while online auto advertising was up 39.7%, reflecting dealers'' shifting spending to the successful Cars.com product in light of extremely challenging auto sales.

- Real estate advertising was down 37.1%, with more than half of this decline coming from California and Florida.
- National advertising declined 20.4% as the print performance continued to be hurt mainly by losses in telecommunications, and to a lesser extent by declines in the national automotive category.
- Print losses were partially offset by strong growth in online national advertising.

Unique visitors to the firm’s websites were up 24.7% following 41.4% growth in the first quarter.

- Online advertising revenue grew 12.5%, and revenues accounted for 11.8%
- Excluding employment advertising, which has declined nationally both in print and online, online advertising revenues grew 58.5% with nearly 50% of online advertising came from ads placed directly online.
- Online advertising continues to remain the fastest-growing segment of the business, and it remains among the top of the industry in terms of growth and online advertising revenues as a percentage of total advertising.
- Daily circulation declined 3.5% and Sunday was down 3.8% as the firm pursuits its strategy of expanding total audiences in print and online.

The firm reported income of $20 million or 24 cents per share, down 43.2% from $35.2 million or 42 cents a share in the prior year, reflecting the continuing tough revenue environment.

- The company responded by intensifying both its pursuit of new revenue streams and cost control initiatives.
- Total cash expenses decreased $15.2 million or 3.6% and, excluding the impact of severance and other charges related to the recently announced restructuring, these cash expenses were down 9.1%.
- Compensation costs were flat and include $23 million in severance costs related to the restructuring.
- Newsprint and supplement costs were down 11.1% due to lower usage and the shift to lighter-weight paper at the newspapers and [web] width reductions are paying dividends in the cost-reduction efforts here.

Net interest costs were $36.7 million, down 26% and debt was down more than $370 million from the end of 2007 to $2.1 billion.

- In addition to lower debt balances, the firm is also benefiting from lower interest rates, reflecting earlier Fed rate reductions and the reduction in high-coupon bonds resulting from the tender offer.
- The effective borrowing rate on bank debt was about 4.8% and when coupled with the cost of bonds, was 5.8%.

Strategic Outlook: