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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

For the quarterly period ended June 30, 2002

Commission File Number: 1-9824

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.           Yes  X                No     

The number of shares of each class of common stock outstanding as of August 12, 2002:

PART 1 - FINANCIAL INFORMATION

The McClatchy Company (the Company) and its subsidiaries are engaged primarily in the publication of newspapers located in Minnesota, California, Washington State, Alaska and the Carolinas.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated. In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position, results of operations, and cash flows for the interim periods presented. The second quarter 2002 financial statements reflect the reclassification of $47.6 million of pension liabilities (which were primarily included in other long-term obligations) to other assets in order to net pre-paid pension accruals as a result of the merger of two company-sponsored defined benefit plans. Other adjustments reflect normal recurring accruals. The financial statements contained in this report are not necessarily indicative of the results to be expected for the full year.

For fiscal year beginning December 31, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" which addresses the financial accounting and reporting standards for the acquisition of intangible assets outside of a business combination and for goodwill and other intangible assets subsequent to their acquisition. This accounting standard requires that goodwill be (1) separately disclosed from other intangible assets in the statement of financial position, (2) no longer amortized and, (3) tested for impairment on a periodic basis. The provisions of this accounting standard also require the completion of a transitional impairment test within six months of adoption, with any impairments identified treated as a cumulative effect of a change in accounting principle. Management has performed this impairment test and determined that no material adjustments to the consolidated financial statements were necessary.

In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill effective in its fiscal year beginning December 31, 2001. A reconciliation of previously reported net income and earnings per share to the amounts adjusted for the exclusion of goodwill amortization net of related income tax follows (in thousands):

As required by SFAS No. 142, intangible assets that do not meet the criteria for recognition apart from goodwill must be reclassified to goodwill. As a result of management's analysis, no reclassifications to goodwill were required.

Information regarding the Company's identifiable intangible assets is as follows (in thousands):

Amortization expense for intangible assets during the second quarter of 2002 was $4,985,000 and was $9,902,000 for the six months ended June 30, 2002. Estimated amortization expense for the remainder of 2002 is $9,774,000. Estimated amortization expense for the five succeeding fiscal years is as follows (in thousands):

The Company also adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" in its fiscal year beginning December 31, 2001. The Company's adoption of SFAS No. 144 had no effect on the consolidated financial statements, or results of operations.

The Company's Credit Agreement includes term loans consisting of Tranche A of $334 million, bearing interest at the London Interbank Offered Rate (LIBOR) plus 62.5 basis points, payable in increasing quarterly installments through March 21, 2005, and Tranche B of $150 million, bearing interest at LIBOR plus 150 basis points and payable in semi-annual installments through September 19, 2007. A revolving credit line of up to $200 million bears interest at LIBOR plus 62.5 basis points and is payable by March 19, 2005. Interest rates applicable to debt drawn down at June 30, 2002, ranged from 2.5% to 3.4% (excluding the effect of the interest rate protection agreements described below).

The terms of the Credit Agreement include certain operating and financial restrictions, such as limits on the Company's ability to incur additional debt, create liens, sell assets, engage in mergers, make investments and pay dividends. The debt is unsecured and is pre-payable without penalty.

The Company had outstanding letters of credit totaling $14.1 million securing estimated obligations stemming from workers' compensation claims and other contingent claims. The Company had $119.9 million of available credit under its current credit agreement at June 30, 2002.

Long-term debt consisted of (in thousands):

The Company does not have, nor does it intend to enter into, derivative contracts for trading purposes. The Company has not attempted to hedge fluctuations in the normal purchases of goods and services used to conduct its business operations. Currently there is no intent to hedge or enter into contracts with embedded derivatives for the purchase of newsprint, ink and other inventories, leases of equipment and facilities, or its business insurance contracts.

The Company utilizes interest rate protection agreements to help maintain the overall interest rate risk parameters set by management. None of these agreements was entered into for trading purposes. The Company has four interest rate swap agreements totaling $300 million designated as cash flow hedges and are specifically designed to hedge the variability in the expected cash flows that are attributable to interest rate fluctuations on $200 million of its variable rate bank debt through June 2003, and $100 million through June 2004. The effect of these agreements is to fix the LIBOR interest rate exposure at approximately 4.4% on that portion of the Company's term loans.

The four swap instruments provide for payments of interest at the fixed rates and receipt of interest at variable rates, which are reset to three-month LIBOR rates quarterly. Net payments or receipts under the agreements are recorded as adjustments to interest expense. The swaps were entered into to match the significant terms of the underlying debt to provide highly effective hedges.

No gain or loss has been recorded in net income as a result of ineffectiveness of these hedges. A loss, net of taxes, of $1,386,000 was recorded in the second quarter of 2002 in comprehensive income related to these hedges, and a net gain of $734,000 was recorded in the first half of 2002 - see the Company's Consolidated Statement of Stockholders' Equity.

The Company owns and publishes 24 newspapers in four regions of the country - Minnesota, California, the Carolinas and the Northwest (Alaska and Washington). The newspapers range from large dailies serving metropolitan areas to non-daily newspapers serving small communities. The Company also owns and operates Nando Media, a national on-line publishing operation, and The Newspaper Network, a national sales and marketing company.

In addition, the Company is a partner (13.5% interest) in Ponderay Newsprint Company (Ponderay), a general partnership that owns and operates a newsprint mill in Washington State.

While newspaper publishing remains the Company's core business, it is supplemented by an array of niche products and direct marketing initiatives, including direct mail. The Company also operates leading local websites and regional online portals in each of its 11 daily newspaper markets offering readers information, comprehensive news, advertising, e-commerce and other services.

In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant areas involving estimates and assumptions are depreciation of fixed assets, amortization of intangibles, allowance for receivables, pension and post-retirement expenses, incentive compensation, insurance reserves, environmental reserves, and the Company's tax provision.

In the second quarter of 2002, the Company reduced its assumed return on plan assets used in the calculation of its pension expense from 9.5% to 9.0% for all qualified defined benefit plans and reduced the assumed salary increase from 3.5% to 3.0% for two qualified defined benefit plans. All qualified plans now use the new assumptions. No changes were made related to the Company's unqualified pension plans (assumed salary increase of 5% which includes certain incentive compensation). The effect of these changes is to increase pension expense by $1.1 million in 2002 ($550,000 in the first half).

Please see the footnotes to the consolidated financial statements for December 30, 2001 in the Company's Form 10-K filed on March 29, 2002 for a more complete discussion of the Company's accounting policies.

Employment classified advertising revenues and, to a lesser extent, national revenues have seen significant declines over the last 18 months. However, these declines have been offset somewhat by growth in other advertising categories. Please see the revenue discussions in management's review of its results below.

Newsprint is the major component of the Company's cost of raw materials and represented 14.7% of the Company's overall operating cash expenses in the second quarter of 2002. Consequently, the Company's earnings are sensitive to changes in newsprint prices. All other things being equal, a hypothetical $10 per metric tonne change in newsprint prices affects earnings per share by $.03 cents. Newsprint prices have declined steadily from a peak in April 2001 through June 2002. The Company's newsprint suppliers have announced a $50 per metric tonne price increase for August 2002. At this time, it is uncertain whether this price increase will actually be effective in August or in the amount indicated by the announcement. The eventual timing and amount of any further changes in newsprint pricing is dependent on global demand and supply for newsprint. The impact of newsprint price trends on the Company's results of operations is discussed below.

Lower returns on pension assets over the last two years have led the Company to reduce its assumed return on plan assets (see critical accounting policies above) and make contributions to its pension funds (see liquidity and capital resources below). Continued lower returns could result in the recording of additional minimum pension liabilities and other comprehensive expenses (reduction to stockholders' equity) in future years.

For fiscal year beginning December 31, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" which addresses the financial accounting and reporting standards for the acquisition of intangible assets outside of a business combination and for goodwill and other intangible assets subsequent to their acquisition. This accounting standard requires that goodwill be (1) separately disclosed from other intangible assets in the statement of financial position, (2) no longer amortized, and (3) tested for impairment on a periodic basis. The provisions of this accounting standard also require the completion of a transitional impairment test within six months of adoption, with any impairments identified treated as a cumulative effect of a change in accounting principle. Management has performed this impairment test and determined that no material adjustments to the consolidated financial statements were necessary.

The Company reported net income of $36.2 million, or 78 cents per share, for the second quarter 2002, compared to the 2001 quarterly earnings of $12.3 million, or 27 cents per share. The second quarter 2001 earnings would have been 46 cents per share with the application of SFAS No. 142. See the discussion under operating expenses and income tax provision below, and footnote 2 to the consolidated financial statements for a discussion of the impact of SFAS No. 142 on the Company's second quarter and year-to-date expenses and financial position. Earnings in the second quarter 2001 were also reduced by pre-tax charges of $10.6 million to write down certain Internet investments and $1.4 million to reserve for an environmental cleanup. Adjusting for these one-time items and the effect of SFAS No. 142, earnings would have been 61 cents per share in the second quarter of 2001.

Revenues:

Revenues in the second quarter of 2002 were $274.3 million, down 0.5% from the second quarter 2001, with advertising revenues up 0.2% to $223.1 million and circulation revenues down 1.5% to $42.1 million. A 12.4% decline in national advertising was offset by gains of 2.8% in retail and 0.9% in classified advertising. Within classified advertising, real estate and automotive were up 18.4% and 11.0% respectively. These gains were partially offset by a 17.0% decline in classified employment advertising. The decline in circulation revenue was largely due to the continued effect of a reclassification of circulation bad debt to a contra-revenue item beginning July 2001, and to a lesser extent, subscription discounts.

OPERATING REVENUES BY REGION (in thousands):

Minnesota - The Star Tribune generated 33.3% of the Company's second quarter revenues. Total revenues declined 1.4%. Advertising revenues declined 1.5% primarily due to a 17.5% decrease in national advertising and a 0.9% decrease in classified. These declines were partially offset by a 6.9% gain in retail advertising. Within the classified category, employment advertising declined 18.5%, which was partially offset by a 24.3% gain in real estate advertising and an 8.1% increase in automotive advertising.

California - California, which includes three daily newspapers and one non-daily newspaper, contributed 34.1% of the Company's second quarter revenues. Total revenues at the three Bee newspapers were up 1.6%. Advertising revenues increased 2.5%, with retail up 2.9%, classified up 2.8% and national down 10.0%. Within classified advertising, real estate rose 17.9% and automotive increased 13.5%. These gains were partially offset by a 13.8% decline in employment advertising.

Carolinas - The Carolinas, which includes four daily and ten non-daily newspapers, generated 16.5% of second quarter revenues. Total revenues declined 2.5% with advertising revenue down 3.3%. The decline in advertising revenue was attributable to a 10.4% decline in national advertising, a 2.2% decline in classified advertising and a 1.9% decline in retail advertising. Within classified advertising, real estate increased 16.5%, automotive was up 3.7% and employment declined 19.4%.

The Northwest - The Northwest, which includes three daily newspapers and two non-daily newspapers, generated 15.0% of the Company's second quarter revenues, with total revenues down 0.4%. Advertising revenues were up 3.0% with retail advertising flat, national up 3.2% and classified advertising up 3.7%. Within classified advertising, automotive was up 17.9%, real estate was up 12.5% and employment was down 18.7%.

Non-Newspaper Operations - Revenues declined by 7.7% primarily due to a 10.9% decline in revenues at The Newspaper Network, offset somewhat by a 29.6% increase in revenue at Nando Media.

Operating Expenses:

Total operating expenses decreased 9.0% for the second quarter 2002, helped by lower newsprint prices. Newsprint and supplements expense declined 25.9% with newsprint prices down 24.2% and newsprint consumption down 2.1% as the Company continued to benefit from web width reductions. Compensation costs were up 3.0% reflecting merit increases, incentive compensation increases, and higher fringe benefit costs. All other non-newsprint related cash expenses were down 6.6% reflecting company-wide cost controls. Depreciation and amortization decreased $9.1 million due in a large part to the adoption of SFAS No. 142 eliminating the amortization of goodwill.

Non-Operating (Expenses) Income - Net:

Interest expense was $7.3 million for the second quarter 2002. This is a 37.4% decrease from the second quarter 2001 as the Company continued to benefit from lower interest rates and debt repayment from free cash flow. The Company also recorded $460,000 as its share of Ponderay's loss in the second quarter 2002 compared to $270,000 of income in the second quarter of 2001. Non-operating expenses in the second quarter 2001 included a pre-tax charge of $10.6 million to write down certain Internet investments.

Income Taxes:

The Company's effective income tax rate is 39.5% versus 53.9% in 2001. This decrease results primarily from the Company's adoption of SFAS No. 142. See note 2 to the consolidated financial statements.

Earnings in the first half of 2002 were $59.5 million or $1.29 per share, up substantially from 2001 earnings of $22.9 million, or 50 cents per share. Adjusted for SFAS No. 142, earnings were 85 cents per share in the first half of 2001. The 2001 earnings were also reduced by pre-tax charges of $10.6 million to write down certain Internet investments and $1.4 million to reserve for an environmental cleanup. Adjusting for these one-time charges and the effect of SFAS No. 142, earnings would have been $1.00 per share for the first half of 2001. Revenues and expenses in the six-month period were generally affected by the trends discussed in the quarterly comparison above, with the exceptions noted below.

Revenues:

Total revenues were $526.9 million in the first six months of 2002, down 2.3% from the first half of 2001. Advertising revenues declined 2.0% to $425.3 million and circulation revenues declined 2.4% to $83.2 million. The Minnesota and Carolina regions were particularly hard hit by the declines in employment classified advertising in the first six months compared to the Company's two other regions.

OPERATING REVENUES BY REGION (in thousands):

Minnesota - The Star Tribune generated 33.1% of the Company's total revenues. Advertising revenues declined 6.3% primarily due to a 10.4% decline in classified advertising. Retail advertising grew 3.0% at the Star Tribune, but national declined 14.7%. Within classified advertising, employment was down 32.5% but was partially offset by gains of 24.5% in classified real estate and gains of 8.0% in classified automotive.

California - The Company's California newspapers generated 34.1% of total revenues. Advertising revenues increased 1.8% in California as these newspapers reported a 1.6% increase in classified advertising and a 1.8% increase in retail. However, national advertising declined 9.4%. Within classified advertising, employment declined 14.5% but was offset by gains of 26.0% in classified real estate and 8.9% in classified automotive.

Carolinas - The Carolinas generated 16.7% of the Company's total revenues. Advertising revenues declined 3.6% with classified down 7.0% and national advertising down 3.0%. Retail advertising increased 2.1% in the Carolina newspapers. Within classified advertising, employment was down 28.2%, real estate increased 15.3% and classified automotive increased 1.4%.

The Northwest - The Northwest newspapers generated 14.9% of the Company's total revenues. Advertising revenues increased 1.2% with classified up 2.6%. However, retail advertising declined 2.1% and national advertising declined 6.6%. Within classified advertising, employment declined 17.7% but was offset by gains of 9.2% and 14.7% in classified real estate and classified automotive, respectively.

Non-Newspaper Operations - Revenues decreased 2.7%, primarily due to a 4.2% decline in revenue at The Newspaper Network, which was partially offset by a 13.6% increase in revenue at Nando Media.

Total operating expenses decreased by 9.8% largely due to a 24.5% decline in newsprint and supplement expense, with newsprint prices down 20.8% and newsprint consumption down 5.6% (resulting primarily from lower advertising volumes and web width reductions). Compensation expenses increased 1.3%, but were lower than second quarter compensation expenses due to the greater impact from headcount reductions in the first quarter of 2002 and lower increases in fringe benefit costs. All other operating cash expenses decreased by 8.8% due to ongoing cost control measures. Depreciation and amortization expense decreased 32.4% reflecting the $17.2 million decrease in amortization expense, resulting primarily from the adoption of SFAS No. 142.

Total non-operating expenses declined by $18.2 million or 52.2% from the prior year 2001. Interest expenses decreased 40.1% to $15.1 million compared to $25.1 million in 2001, as the Company continued to benefit from lower interest rates and debt repayment from free cash flow. Non-operating expenses for 2001 included a pre-tax charge of $10.6 million to write down certain Internet investments. The Company also recorded $900,000 as its share of Ponderay's loss in 2002 versus $270,000 of income in 2001.

The Company's effective income tax rate is 39.5% versus 52.2% primarily as a result of its adoption of SFAS No. 142. See note 2 to the consolidated financial statements.

Operations generated $94.3 million in cash and equivalents during the first half of 2002. The Company also received $1.4 million in proceeds from employee purchases of stock under its IRC Section 423 stock purchase plan, and $5.0 million of proceeds from the exercise of stock options under employee and director option plans. Cash was primarily used to repay debt, pay for capital expenditures and pay dividends. The Company repaid $88 million in long-term debt. Capital expenditures were $12.6 million and dividends were $9.1 million for the six-month period. Capital expenditures are projected to be approximately $35 million at existing facilities for the fiscal year 2002.

See footnote 3 to the consolidated financial statements and Item 3 below for a description of the Company's $550.0 million of bank debt and derivative instruments. The Company has outstanding letters of credit totaling $14.1 million securing estimated obligations stemming from workers' compensation claims, and other contingent claims. The Company had $119.9 million of available credit under its Credit Agreement at June 30, 2002.

On July 1, 2002 the Company made a voluntary contribution of $10 million to its defined benefit pension plans. Returns on pension assets have declined over the last two years and, if returns do not improve, the Company may be required to, or may voluntarily opt to, make additional contributions to its pension plans.

Management is of the opinion that operating cash flow and its present credit lines are adequate to meet the liquidity needs of the Company, including currently planned capital expenditures and investments, working capital needs, debt service requirements, and other liabilities arising in the ordinary course of business. Although the Company has no present plan in place for early repayment of its debt, the Company expects to continue to accelerate payments on this debt as cash generation allows.

The Company may, from time to time, pursue acquisitions of media businesses that may require the use of cash. However, no such acquisitions are currently pending.

The Company's independent auditors, Deloitte & Touche, LLP, provide tax services to the Company from time to time. These services have been approved by the Audit Committee of the Company's Board of Directors.

Forward-Looking Information - This quarterly report on Form 10-Q contains forward-looking statements regarding the Company's actual and expected financial performance and operations. These statements are based upon our current expectations and knowledge of factors impacting our business, including, without limitation, statements about amortization expense, use of derivative instruments, prepayment of debt, capital expenditures and possible acquisitions. Such statements are subject to risks, trends and uncertainties. Forward-looking statements are generally preceded by, followed by or are a part of sentences that include the words "believes," "expects," "anticipates," "estimates," or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should understand that the following important factors, in addition to those discussed elsewhere in this document and in the doc uments which we incorporate by reference, could affect the future results of McClatchy, and could cause those future results to differ materially from those expressed in our forward-looking statements: general economic, market or business conditions, especially in any of the markets where we operate newspapers; changes in newsprint prices and/or printing and distribution costs from anticipated levels; changes in interest rates; changes in pension assets and liabilities; increased competition from other forms of media in our principal markets; increased consolidation amo