SACRAMENTO, Calif. (Map) - SACRAMENTO, Calif., Nov. 8 /PRNewswire-FirstCall/ -- The McClatchy Company (NYSE: MNI) today reported that it filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (the Report) with the Securities Exchange Commission (SEC), which includes its final third quarter 2007 results. The company's third quarter 2007 after-tax loss from continuing operations was $1.35 billion, or $16.40 per share including the effect of non-cash after-tax impairment charges primarily related to goodwill and newspaper mastheads of $1.37 billion, or $16.68 per share. Earnings before the charges were unchanged from the $23.5 million, or 29 cents per share, previously reported on October 16, 2007.

The loss from continuing operations for the first nine months of 2007 was $1.30 billion or $15.81 per share including the effect of the non-cash impairment charges. The company's total net loss, including the results of discontinued operations, for the first nine months of 2007 was $1.30 billion, or $15.89 per share.

As the company noted in its press release on October 16, 2007, management performed impairment testing of goodwill and other long-lived assets as of September 30, 2007, in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets and due to the continuing challenging business conditions and the resulting weakness in the company's stock price as of the end of its third quarter. Upon completion of that testing, the company recorded pre-tax non-cash impairment charges of $1.18 billion to goodwill, $250.4 million to newspaper mastheads and $84.6 million to investments in unconsolidated subsidiaries and other items.

Gary Pruitt, McClatchy's chairman and chief executive officer, said "The challenging business environment, coupled with the drag on our stock price, has resulted in our taking an impairment charge to write down the value of goodwill, mastheads of certain newspapers, and other assets on the company's balance sheet in the third quarter. However, these are non-cash accounting charges, and nothing about them changes our operations or our ability to reduce debt.

"As I said last month when we released our preliminary earnings, we recognize that newspaper revenues have declined industry-wide and that values have dropped. We have been more affected than most by the real estate downturn because of our operations in California and Florida, the epicenters of the sub-prime lending practices. We do not know when this downturn will end, and do not have visibility beyond the fourth quarter. Nonetheless, we believe that cyclical factors represent a significant portion of the current advertising downturn as evidenced by our operations in the California and Florida regions. McClatchy is a solidly profitable company that is rapidly paying down debt and re-engineering its operations to navigate through a changing environment for all media companies. We are well positioned in markets with growth prospects better than the nation as whole, and while that clearly doesn't make us immune to national economic events, we believe it will serve us well when the economy begins to recover from the real-estate led slowdown. Looking longer term, we like the prospects for all of our growth markets. We are working hard to grow revenues and will continue to focus on cost controls to weather this downturn by remaining efficient and protecting cash flows as best we can."

About a third of the goodwill impairment charge resulted from the accounting treatment of the value of common stock issued in the Knight Ridder transaction, which resulted in additional goodwill being recorded. McClatchy announced the acquisition of Knight-Ridder, Inc. on March 10, 2006 and closed the transaction on June 27, 2006 (the "Acquisition"). Management has disclosed in the company's financial statements since the third quarter of 2006 (when the Acquisition was completed), that it was required to record the value of the 35.0 million shares of McClatchy common stock issued in the Acquisition at $1.821 billion, or $52.06 per share, which was included in the total Acquisition purchase price. The fair value of these shares was actually $1.398 billion as of the Acquisition closing date ($39.03 per share at June 27, 2006); however under the accounting rules the decline of approximately $423.0 million in valuation had no effect on the total Acquisition purchase price recorded. That additional $423.0 million was included in goodwill.

The unaudited consolidated statement of income which has been filed with the SEC is attached to this release.

About McClatchy

The McClatchy Company is the third largest newspaper company in the United States, with 31 daily newspapers, approximately 50 non-dailies and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which complement its newspapers and extend its audience reach in each market. Together with its newspapers and direct marketing products, these operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, The Fort Worth Star- Telegram, The Kansas City Star, The Charlotte Observer and The (Raleigh) News & Observer.

McClatchy also has a portfolio of premium digital assets. Its leading local websites offer users information, comprehensive news, advertising, e- commerce and other services. The company owns and operates McClatchy Interactive, an interactive operation that provides websites with content, publishing tools and software development. McClatchy operates Real Cities (www.RealCities.com), the largest national advertising network of local news websites and owns 14.4% 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 the nation's number two online auto website, cars.com, and the number one rental site, apartments.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI.

Additional Information:

Statements in this press release regarding future financial and operating results, including revenues, operating expenses, cash flows and debt levels, as well as 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 risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: McClatchy may not consummate contemplated transactions which may enable debt reduction on anticipated terms or at all; McClatchy may not achieve its expense reduction targets or may do harm to its operations in attempting to achieve such targets; McClatchy's operations have been, and will likely continue to be, adversely affected by competition, including competition from internet publishing and advertising platforms; McClatchy's expense and income levels could be adversely affected by changes in the cost of newsprint and McClatchy's operations could be negatively affected by any deterioration in its labor relations, as well as the other risks detailed from time to time in the Company's publicly filed documents, including the Company's Annual Report on Form 10-K for the year ended December 31, 2006, filed with the U.S. Securities and Exchange Commission. McClatchy disclaims any intention and assumes no obligation to update the forward-looking information contained in this release.

                              THE McCLATCHY COMPANY
                   CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                     (In thousands, except per share amounts)
                                   Three Months Ended      Nine Months Ended
                                 September   September   September   September
                                     30,         24,         30,         24,
                                    2007       2006         2007        2006
    REVENUES - NET:
       Advertising               $457,017   $506,774   $1,422,317    $856,791
       Circulation                 67,995     70,637      209,582     117,905
       Other                       15,332     17,717       55,030      26,895
                                  540,344    595,128    1,686,929   1,001,591
    OPERATING EXPENSES:
       Compensation               224,309    232,611      689,592     402,453
       Newsprint and
        supplements                63,600     83,171      211,203     136,702
       Depreciation and
        amortization               36,250     36,662      112,440      56,522
       Other operating expenses   118,440    129,001      371,180     204,691
       Goodwill and newspaper
        masthead impairment     1,434,590        -      1,434,590         -
                                1,877,189    481,445    2,819,005     800,368
    OPERATING INCOME (LOSS)    (1,336,845)   113,683   (1,132,076)    201,223
    NON-OPERATING (EXPENSES)
     INCOME:
       Interest expense           (48,264)   (46,689)    (151,605)    (46,679)
       Interest income                 23      2,007          129       2,035
       Equity income(losses)
        in unconsolidated
        companies, net             (7,652)      (811)     (28,599)         81
       Write-down of
        investments and land
        held for sale             (84,568)       -        (84,568)        -
       Other - net                    700      8,445        1,443       8,390
                                 (139,761)   (37,048)    (263,200)    (36,173)
    INCOME (LOSS) FROM
     CONTINUING OPERATIONS
       BEFORE INCOME TAX
        PROVISION (BENEFIT)    (1,476,606)    76,635   (1,395,276)    165,050
    INCOME TAX PROVISION
     (BENEFIT)                   (131,419)    24,025      (99,133)     58,470
    INCOME (LOSS) FROM
     CONTINUING OPERATIONS     (1,345,187)    52,610   (1,296,143)    106,580
    INCOME (LOSS) FROM
     DISCONTINUED OPERATIONS -
       NET OF INCOME TAXES         (1,546)      (779)      (6,324)     17,114
    NET INCOME (LOSS)         $(1,346,733)   $51,831  $(1,302,467)   $123,694
    NET INCOME (LOSS) PER
     COMMON SHARE:
       Basic:
         Income (loss) from
          continuing operations   $(16.40)     $0.65      $(15.81)      $1.83
         Income (loss) from
          discontinued
          operations                (0.02)     (0.01)       (0.08)       0.30
         Net income (loss) per
          share                   $(16.42)     $0.64      $(15.89)      $2.13
       Diluted:
         Income (loss) from
          continuing operations   $(16.40)     $0.65      $(15.81)      $1.82
         Income (loss) from
          discontinued
          operations                (0.02)     (0.01)       (0.08)       0.30
         Net income (loss) per
          share                   $(16.42)     $0.64      $(15.89)      $2.12
    WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES:
       Basic                       82,040     81,013       81,967      58,173
       Diluted                     82,040     81,191       81,967      58,416