Exhibit 12
The McClatchy Company
COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO
(in thousands of dollars, except ratio data)
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| Year Ended |
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| December 31, |
| December 25, |
| December 27, |
| December 28, |
| December 29, |
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| 2017 |
| 2016 |
| 2015 |
| 2014 |
| 2013 |
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Fixed Charge Computation |
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Interest expenses: |
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Net interest expense | $ | 81,501 |
| $ | 83,168 |
| $ | 85,973 |
| $ | 127,503 |
| $ | 135,381 |
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Plus: capitalized interest |
| 5 |
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| 323 |
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| 100 |
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| 434 |
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| 798 |
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Gross interest |
| 81,506 |
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| 83,491 |
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| 86,073 |
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| 127,937 |
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| 136,179 |
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Interest on unrecognized tax benefits |
| (1,064) |
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| (470) |
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| 293 |
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| (131) |
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| 735 |
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Amortization of debt discount |
| (2,772) |
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| (3,024) |
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| (3,550) |
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| (6,063) |
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| (6,673) |
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Interest component of rent expense |
| 5,630 |
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| 5,528 |
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| 4,319 |
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| 4,859 |
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| 4,585 |
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Total fixed charges |
| 83,300 |
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| 85,525 |
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| 87,135 |
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| 126,602 |
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| 134,826 |
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Earnings Computation |
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Income (loss) from continuing operations |
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before income taxes (1) |
| (226,899) |
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| (47,258) |
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| (311,959) |
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| 607,207 |
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| 28,103 |
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Earnings of equity investments |
| 1,698 |
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| (12,492) |
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| (10,086) |
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| (19,084) |
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| (42,651) |
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Impairment related charge recorded by equity investee (2) |
| — |
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| — |
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| 7,500 |
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| — |
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| — |
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Interest on unrecognized tax benefits |
| 1,064 |
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| 470 |
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| (293) |
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| 131 |
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| (735) |
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Distributed income of equity investees (3) |
| 7,318 |
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| 6,000 |
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| 14,960 |
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| 162,329 |
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| 42,436 |
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Add: fixed charges |
| 83,300 |
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| 85,525 |
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| 87,135 |
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| 126,602 |
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| 134,826 |
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Less: capitalized interest |
| (5) |
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| (323) |
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| (100) |
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| (434) |
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| (798) |
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Total earnings (loss) as adjusted | $ | (133,524) |
| $ | 31,922 |
| $ | (212,843) |
| $ | 876,751 |
| $ | 161,181 |
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Ratio Of Earnings to Fixed Charges (4) |
| — |
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| 0.37 |
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| — |
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| 6.93 |
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| 1.20 |
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(1) | The income from continuing operations before taxes in 2017 includes non-cash impairment charges of $23.4 million for intangibles and inventory and non-cash impairment charges for equity investees for $170.0 million; 2016 includes non-cash impairment charges of $9.2 million for intangibles; 2015 includes non-cash impairment charges of $304.8 million for goodwill and intangibles; 2014 includes a gain on sale of our equity investments of $561.0 million; and 2013 includes non-cash impairment charges of $17.2 million for intangibles and property, plant and equipment. |
(2) | Reflects the Company's portion of loss related to an impairment and it is recorded in "Equity income in unconsolidated companies, net" in the Consolidated Statements of Operations. |
(3) | The distributed income of equity investees in 2014 includes the Company's portion (approximately $147 million) of Classified Ventures LLP's sale of the Apartments.com business. |
(4) | Earnings were inadequate to cover fixed charges by $134 million for the year ended December 31, 2017, as a result of non-cash charges of $193.4 million. Earnings were inadequate to cover fixed charges by $214 million for the year ended December 27, 2015, as a result of non-cash charges of $304.8 million. |