Event Brief of Q4 2005 The McClatchy Company Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

PARTICIPANTS

. Elaine Lintecum, The McClatchy Company, Treasurer . Gary Pruitt, The McClatchy Company, Chairman, President, and CEO . John Janedis, Banc of America Securities, Analyst . Frank Whittaker, The McClatchy Company, VP Operations . Peter Appert, Goldman Sachs, Analyst . Debra Schwartz, Credit Suisse First Boston, Analyst . Chris Hendricks, The McClatchy Company, VP Interactive Media . Pat Talamantes, The McClatchy Company, VP Finance and CFO . Lauren Fine, Merrill Lynch, Analyst . Bob Weil, The McClatchy Company, VP Operations . Steven Barlow, Prudential Equity Group, Analyst . Craig Huber, Lehman Brothers, Analyst . David Clark, Deutsche Bank, Analyst . Douglas Arthur, Morgan Stanley, Analyst . Christa Quarles, Thomas Weisel Partners, Analyst . Karl Choi, Merrill Lynch, Analyst . William Bird, Citigroup, Analyst . Mario Gabelli, Gabelli & Company, Analyst . Gene Chen, [Fenton Brook], Analyst

OVERVIEW

Management announced 4Q05 revenue of $309.8m and 4Q05 earnings of $45.4. 4Q05 EPS was $0.97 per share and 2005 EPS was $3.42 per share.

FINANCIAL DATA

A. Key Data From Call 1. 4Q05 earnings = $45.4m 2. 4Q05 revenue = $309.8m 3. 4Q05 EPS = $0.97 per share 4. 2005 EPS = $3.42 per share 5. 2005 debt = $154.2m

PRESENTATION SUMMARY

S1. Financial Review (G.P.) 1. Earnings: 1. 4Q05 earnings were $45.4m. 1. $0.97 per share. 2. 4Q04 earnings were $47.8m or $1.02 per share. 2. 4Q05 revenue was $309.8m. 1. Up 0.5% from 4Q04. 3. Ad revenues up 1.1%. 4. Circulation revenues down 3.8%. 5. Ad Revenues: 1. Consolidated retail advertising down 2.2%. 2. National up 1.4%. 3. Classified increased 3.9%. 1. Employment up 11.2%. 2. Automotive declined 17.9%. 3. Real estate grew 22.3%. 6. December advertising down 1.0%. 1. 4Q05 results below expectations. 2. Christmas on Sunday in 2005 had greater-than-expected negative impact on retail and classified advertising during the last weekend of FY05. 3. California papers had held up well at automotive ads. 4. Industry-wide declined.

5. This category reached (indiscernible) in 4Q05. 2. 2005 Performance:

1. Solid year. 2. Record revenues and earnings. 3. Advertising revenues topped $1b for first time. 4. Earnings were record $3.42 a share. 5. Continued to outperform industry in circulation and

advertising. 6. Fifth consecutive year co. outperformed industry in ad revenue growth. 3. 4Q05 California Ad Results:

1. Newspapers generated 38% of revenues. 2. Ad revenues increased 4.7%. 3. Total revenues increased 3.6%. 4. Retail advertising declined 3.8%. 5. National rose 4.2%. 6. Classified grew 14.1%.

7. Employment up 15.8%. 8. Automotive declined 12.1%, first quarterly decline in category for California newspapers. 9. Real estate continued to do well, up 49.4%. 10. 2005 California ad revenues up 5.4%. 4. 4Q05 Minneapolis Ad Results: 1. Largest newspaper contributed 32% of 4Q05 revenues. 2. Ad revenues declined 2.0%. 3. Total revenues down 1.8% at Star Tribune. 4. Retail decreased 1.7%. 5. National up 1.1%. 6. Classified down 2.1%.

1. Employment increased 7.4% at Star Tribune. 2. Automotive declined 24.1%. 3. Real estate up 11.1% over 4Q04. 7. 2005 Minneapolis ad revenues down 0.3%. 5. 4Q05 Carolinas Ad Results:

1. Carolina newspapers contributed 16% of 4Q05 ad revenues. 2. Ad revenues down 0.3%. 3. Total revenues declined 0.7%. 4. Retail down 2.6%. 5. National declined 3.9%. 6. Classified down 2.7%. 1. Employment increased 6.4%. 2. Automotive decreased 20.6%. 3. Real estate grew 6.5%. 7. Direct marketing continued strong run with 67.7% gain. 8. 2005 Carolinas ad revenues up 2.8%. 6. 4Q05 Northwest Ad Results: 1. Northwest papers contributed 14% of 4Q05 revenues. 2. Ad revenues up 0.1%. 3. Total revenues declined 0.8%. 4. Retail increased 0.6%. 5. National increased 2.2%. 6. Classified declined 2.3%. 1. Employment grew 15.5%.

2. Automotive down 18.7%. 3. Real estate declined 3.0%.

7. 2005 Northwest ad revenues up 3.1%. 7. Direct Marketing and Interactive Revenues: 1. 4Q05 total direct marketing revenues grew 12.3% to $15.9m. 1. Up 9.4% to $57.6m for 2005. 2. On stand-alone basis 4Q05 Internet ad revenues increased 36.8% to $14.0m.

1. 2005 growth was 38.3% to $55.7m. 3. Strongest area in Internet business is classified ads. 1. Retail ads gaining traction.

2. Up 54.2% in 4Q05 and 18.4% in 2005. 8. Circulation: 1. 2005 daily circulation down 1.2%. 2. Sunday declined 3.2%. 3. Continued to outperform industry in 2005 as in the past despite the end of 20-year run of daily circulation growth. 1. Beating industry average is not co.'s goal. 2. Expect to continue to hold audiences better than industry peers. 3. Want to hold audience better than other media competitors in local markets. 9. Expenses: 1. 4Q05 opex increased 2.8%. 1. Compensation costs up 0.7%. 2. Payroll up 0.2%. 3. Fringe costs up 2.5%.

4. FTEs down 0.9%. 5. Newsprint costs rose 2.8%. 1. Newsprint price increases largely offset by lower usage. 2. 4Q05 other opex increased 8.6%. 1. Higher postage costs related to expansion of direct-mail business. 2. Legal fees. 3. Energy-related costs. 3. 4Q05 D&A costs declined 0.7%. 4. 4Q05 interest expense was $1.8m. 1. Up 11.2% from 4Q04. 2. Reflects higher short-term interest rates. 5. 4Q05 all-in effective interest rate was 4.6%.

6. 2005 debt was $154.2m. 1. $113m below year-end 2004.

2. Voluntarily contributed $40m to pension plans at beginning

2006. 3. Do not expect to make any additional contributions this year. 4. Continue to reduce debt. 5. Do not expect significant reductions from year-end debt level during 1Q06.

S2. Guidance (G.P.) 1. Revenues: 1. 1Q06 ad revenues continue to be somewhat choppy in markets. 2. Do not view December's results as indicative of a trend in ad performance going forward.

3. Believe advertising will remain strong: 1. In real estate and employment classified categories. 2. On Internet sites.

3. In direct marketing. 4. Expect 1Q06 overall ad revenue growth in low to mid-single digits despite toughest comparisons in 2006. 5. Will continue to be tight-fisted on expenses. 2. Costs: 1. Significant change in costs in 2006 is expensing of stock

options beginning in 1Q06. 2. Anticipate full-year option expense to reduce earnings by about $0.12 per share. 3. Will no longer provide quarterly earnings forecasts. 1. Most shareholders have long-term outlook. 2. Will focus on strategies that provide value over the long run. 3. Star Tribune Suit: 1. Suit against Star Tribune related to alleged circulation misstatements dropped by plaintiffs.

QUESTION AND ANSWER SUMMARY

OPERATOR: (OPERATOR INSTRUCTIONS) John Janedis from Banc of America Securities.

JOHN JANEDIS: Thanks for taking my call. A couple of questions for you, Gary. First, just on the circulation revenue side, trends seem to be weakening a bit over the past couple of months. Is there anything market specific there, or maybe have you changed some of your circulation practices and how are you looking at that for '06? Also, what do single-copy sales look like?

GARY PRUITT, CHAIRMAN, PRESIDENT, AND CEO, THE MCCLATCHY COMPANY: Okay. Well, I will turn questions concerning circulation revenue over to …