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This excerpt taken from the MNI 10-Q filed Nov 7, 2008. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Debt
under the Credit Agreement bears interest at the LIBOR plus a spread ranging
from 200.0 basis points to 425.0 basis points. Applicable rates are
based upon the Company's total leverage ratio. A hypothetical 25
basis point change in LIBOR for a fiscal year would increase or decrease the
Company’s annual net income by $1.0 million to $1.25 million based on expected
debt balances in 2008.
See the
discussion at “Recent Events and Trends - Operating Expenses” in Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
impact of market changes on the Company's newsprint and pension
costs.
ITEM 4. CONTROLS AND
PROCEDURES
Evaluation
of disclosure controls and procedures. Our management
evaluated, with the participation of our Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a - 15(e) or
15d - 15(e) under the Securities Exchange Act of 1934, as amended) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based on this
evaluation, the Company's management, including the CEO and CFO, concluded that
the Company's disclosure controls and procedures were effective as of the end of
the period covered by this Quarterly Report on Form 10-Q to ensure that
information we are required to disclose in reports that we file or submit under
the Securities Exchange Act of 1934 is accumulated and communicated to our
management, including our principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure and that
such information is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission Rules and
Forms.
Changes
in internal control over financial reporting. There was no
change in our internal control over financial reporting that occurred during the
third fiscal quarter of 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1A. RISK FACTORS
Forward-Looking
Information:
Statements
in this quarterly report on Form 10-Q regarding future financial and operating
results, including revenues, operating expenses, cash flows, 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: anticipated
savings from cost restructuring efforts may not materialize in the amount or
timing anticipated by management; the duration and depth of an
economic recession in markets where McClatchy operates its newspapers may reduce
its income and cash flow more than expected; McClatchy may not consummate
contemplated transactions, including but not limited to the pending sale of the
real estate in Miami, which may prevent debt reduction on anticipated terms or
at all; McClatchy may harm to its operations in attempting to achieve its cost
reduction 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 30, 2007, 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 quarterly
report.
Declines
in general economic and business conditions subject the Company to risks of
declines in advertising revenues.
Classified
advertising revenues have continued to decline since late 2006 and advertising
revenues in all categories have declined across the board in fiscal year
2008. Advertising revenues were down 17.0% in the first nine
months of fiscal year 2008. The deterioration of general
economic and business conditions may continue to have an adverse effect on the
Company’s business and financial results, including negatively impacting
revenues and margins.
This excerpt taken from the MNI 10-Q filed Nov 3, 2006. Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Based upon the Company’s expected debt balance at December 31, 2006 (see Debt and Related Matters above), and all other things being equal, a hypothetical 25 basis point change in LIBOR for a fiscal year would increase or decrease the Company’s annual net income by $2.5 million to $3.0 million. See the discussion at “Recent Trends and Events – Operating Expenses” for the impact of market changes on the Company’s newsprint and pension costs. This excerpt taken from the MNI 10-Q filed Jul 27, 2006. Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Based upon the Company’s debt balance at July 26, 2006, and all other things being equal, a hypothetical 25 basis point change in LIBOR for a fiscal year would increase or decrease the Company’s annual net income by $3.5 million to $4.0 million. See the discussion at “Recent Trends and Events – Operating Expenses” for the impact of market changes on the Company’s newsprint and pension costs. This excerpt taken from the MNI 10-Q filed May 10, 2006. Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK All things being equal, a hypothetical 25 basis point change in LIBOR for a fiscal year would increase or decrease the Company’s annual results of operations by $200,000 to $400,000, less than one cent per share. See the discussion at “Recent Trends and Events – Operating Expenses” for the impact of market changes on the Company’s newsprint and pension costs. This excerpt taken from the MNI 10-K filed Feb 24, 2005. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
All things being equal, a hypothetical 25 basis point change in LIBOR for a fiscal year would increase or decrease in the Company’s annual net income by $300,000 to $400,000, less than one cent per share.
See the discussion at “Recent Events and Trends - Operating Expenses” for the impact of market changes on the Company’s newsprint and pension costs.
30
Table of ContentsMANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of The McClatchy Company (“Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America.
An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management of the Company assessed the effectiveness of the Company’s internal control over financial reporting as of December 26, 2004. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on management’s assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 26, 2004.
The McClatchy Company’s independent auditors have issued an attestation report on management’s assessment of the Company’s internal control over financial reporting. This report appears on page 33.
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