REVISED DB Hi Yield Conf October 03 2007

8/14/2019 REVISED DB Hi Yield Conf October 03 2007

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Deutsche Bank

2007 Global High Yield Conference

October 3, 2007


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Safe Harbor ActSafe Harbor ActThis presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities ExchangeThis presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange

Act of 1934. Forward-looking statements contained herein and elsewhere in this presentation are based on current expectations. Such statements are made pursuant toAct of 1934. Forward-looking statements contained herein and elsewhere in this presentation are based on current expectations. Such statements are made pursuant to

the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms expect, anticipate, intend, believe, and project and similar wordsthe safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms expect, anticipate, intend, believe, and project and similar words

or expressions are intended to identify forward-looking statements. These statements speak only as of the date of this presentation. These forward-looking statementsor expressions are intended to identify forward-looking statements. These statements speak only as of the date of this presentation. These forward-looking statements

are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated and should be viewed with caution.are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated and should be viewed with caution.

Potential risks and uncertainties that could adversely affect our ability to obtain these results, and in most instances are beyond our control, include, without limitation,Potential risks and uncertainties that could adversely affect our ability to obtain these results, and in most instances are beyond our control, include, without limitation,

the following factors: (a) increased consolidation among major retailers, bankruptcy or other events that may adversely affect business operations of major customers andthe following factors: (a) increased consolidation among major retailers, bankruptcy or other events that may adversely affect business operations of major customers and

depress the level of local and national advertising, (b) an economic downturn in some or all of our principal newspaper markets that may lead to decreased circulation ordepress the level of local and national advertising, (b) an economic downturn in some or all of our principal newspaper markets that may lead to decreased circulation or

decreased local or national advertising, (c) a decline in general newspaper readership patterns as a result of competitive alternative media or other factors, (d) increases indecreased local or national advertising, (c) a decline in general newspaper readership patterns as a result of competitive alternative media or other factors, (d) increases in

newsprint costs over the level anticipated, (e) labor disputes which may cause revenue declines or increased labor costs, (f) acquisitions of new businesses or dispositionsnewsprint costs over the level anticipated, (e) labor disputes which may cause revenue declines or increased labor costs, (f) acquisitions of new businesses or dispositions

of existing businesses, (g) costs or difficulties related to the integration of businesses acquired by us may be greater than expected, (h) increases in interest or financingof existing businesses, (g) costs or difficulties related to the integration of businesses acquired by us may be greater than expected, (h) increases in interest or financing

costs, (i) rapid technological changes and frequent new product introductions prevalent in electronic publishing, including the ongoing evolution of the Internet, and (j)costs, (i) rapid technological changes and frequent new product introductions prevalent in electronic publishing, including the ongoing evolution of the Internet, and (j)other unanticipated events and conditions. It is not possible to foresee or identify all such factors. We make no commitment to update any forward-looking statement orother unanticipated events and conditions. It is not possible to foresee or identify all such factors. We make no commitment to update any forward-looking statement or

to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statements.to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statements.


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Company BriefCompany Brief

4th largest newspaper company in US in daily

circulation Paid circulation of 2.5 million daily and 3.6 million Sunday

57 dailies in 12 states

Geographically diversified markets

Newspapers, Online and Niche products in each market

FY 2007 Results

Revenue: $1.6 Billion Pro rata basis

Adjusted EBITDA: $247.1 Million

Adjusted EBITDA Available to Company: $169 Million


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Geographically Diverse MarketsGeographically Diverse Markets

Northern CaliforniaEast Bay Newspaper Group

San JoseSanta CruzMontereyEurekaMarin

Chico/OrovilleRed Bluff

UkiahLakeportVallejo

WoodlandVacavilleOntario

Daily Newspaper

Television Station

Radio Station

Anchorage, AKKTVA

(CBS Affiliate)

Texas-New MexicoPartnership

York

Lebanon

Hanover

Chambersburg

Bridgeport, CTDanbury, CT

Denver, CO

The Denver Post(JOA-50%)

SaltLakeCity,UT

SaltLakeCityTribune

(JOA-58%)

ParkCity

Texas-New MexicoPartnership

El PasoLas CrucesFarmington

AlamogordoCarlsbadDeming

New EnglandBennington, VT

Brattleboro, VT

Fitchburg, MA

Lowell, MA

North Adams, MA

Pittsfield, MA

Prairie Mountain Publishing (50%)Boulder

Fort Morgan

SterlingLamar

Graham, TX

Weekly Newspaper Group

and 4 Radio Stations

Southern CaliforniaSan Gabriel Newspaper Group

Inland ValleyRedlands

San BernardinoSan Fernando Valley

Long BeachTorrance

Detroit, MIThe Detroit News

(JOA-nominal interest)

St. Paul, MN

Charleston, WV

Daily Mail(JOA-editorial only)


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Industry UpdateIndustry Update


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Industry EnvironmentIndustry Environment Evolving landscape with continued media fragmentation

Major retail advertisers and auto dealers facing challenges

Increased demand for information

More choices

Less time to consume

Industry players are

More open minded

More collaborative

MediaNews is leading change

Niche publications and online products offer solutions

Non traditional advertisers

New revenue streams

Yahoo! partnership

Newsprint cost reduction

Continued web width reduction

Lighter weight paper migration

Lower rices


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Advertising OutlookAdvertising Outlook

Environment continues to be challengingEnvironment continues to be challenging

National and Retail continue negative trendsNational and Retail continue negative trends ClassifiedClassified

Employment recent softeningEmployment recent softening Real Estate worst comps of the verticalsReal Estate worst comps of the verticals Auto continued softeningAuto continued softening

Internet growth remains strongInternet growth remains strong

National Retail lassified Online Total

Q1 2006 -4.8% -1.0% 4.7% 34.9% 1.8%

Q2 2006 -4.3% 1.0% 0.0% 33.2% 1.1%

Q3 2006 -8.3% -0.3% -3.0% 23.0% -1.5%

Q4 2006 -3.8% -0.9% -7.1% 35.0% -2.2%

Q1 2007 -2.8% -2.2% -13.2% 22.3% -4.8%

Q2 2007 -7.9% -6.4% -16.4% 19.3% -8.6%

2006-2007 Trends

$100.2 Billion projected in 2007 for

Local Advertising Expenditures

Source: Universal McCanns Robert J. Coen

Newspapers39%

TV Stations15%

Yellow Pages12%

Other18%

Radio Stations16%


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NewsprintNewsprint

440

460

480

500

520

540

560

580

600

620

1/06

4/06

7/06

10/06

1/07

4/07

7/07

Consumption

700

720

740

760

780

800

820

840

860

Inventories

U.S. Consumption*

U.S. Inventories*

Index P r ici

$425

$475

$525

$575

$625

$675

3 /0 1 6 /0 2 9 /0 3 1 2 /04 3/0 6 6 /0 7

RISI

Steady decline in North American consumption continues

North America offshore exports tracking lower as well

Newspapers continuing web width reduction

August RISI for 30# newsprint $566

RISI Average

1yr $623

3 yr $609

5 yr $563


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Company ResultsCompany Results

Pro-rata consolidation

Gross on apro ratabasis

Available toCompany

Pro-rata consolidation

2.4%

3.0%

4.7%

42.4%

* Pro forma for the McClatchy acquisition revenue declined 1.6% in FY 07


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FY 2007 SummaryFY 2007 Summary

Transforming acquisition vaults MNG to 4Transforming acquisition vaults MNG to 4thth largest newspaper companylargest newspaper company

First half on plan with revenue slightly downFirst half on plan with revenue slightly downSecond half revenue challengeSecond half revenue challenge Most categories softened furtherMost categories softened further Collapse in real estateCollapse in real estate

Market HighlightsMarket Highlights

LA and Bay Area hit hard by real estateLA and Bay Area hit hard by real estate Denver continued to struggle but progress in fiscal Q4Denver continued to struggle but progress in fiscal Q4 Salt Lake showed revenue growth for the yearSalt Lake showed revenue growth for the year Texas New Mexico newspapers performed better in fiscal 2007Texas New Mexico newspapers performed better in fiscal 2007

Reaction to challenging environmentReaction to challenging environment Operating Task ForceOperating Task Force

Streamline operationsStreamline operations Move toward centralizationMove toward centralization Focus on three segmentsFocus on three segments

CoreCore NicheNiche InternetInternet


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Recent AcquisitionsRecent Acquisitions

Santa CruzSanta Cruz

California Newspapers Partnership purchased for $45.0California Newspapers Partnership purchased for $45.0millionmillion

MNG funded $25.0 million share with revolverMNG funded $25.0 million share with revolver

TorranceTorrance

Purchased by Hearst for $25.0 millionPurchased by Hearst for $25.0 million MNG manages newspaperMNG manages newspaper

Hearst will contribute upon consummation of equityHearst will contribute upon consummation of equity

investmentinvestment

DanburyDanbury Hearst purchased for $80.0 millionHearst purchased for $80.0 million

Management agreement with HearstManagement agreement with Hearst

MNG operatesMNG operates

MNG/Hearst split is 73%/27%MNG/Hearst split is 73%/27%

Opportunity for expansionOpportunity for expansion Possible restructuringPossible restructuring


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Other Items of InterestOther Items of Interest

MNG led newspaper consortium forming partnership with Yahoo!MNG led newspaper consortium forming partnership with Yahoo!

Extends relationship started with Yahoo! HotjobsExtends relationship started with Yahoo! Hotjobs

Enhances newspapers online revenueEnhances newspapers online revenue

SearchSearch

Graphic ad servicingGraphic ad servicing

Leverages leading online sales forceLeverages leading online sales force Completed new Denver press facility Q2Completed new Denver press facility Q2

Strategic OpportunitiesStrategic Opportunities

Possible small technology/internet investmentsPossible small technology/internet investments

Possible niche magazine investmentPossible niche magazine investment

Successfully settled litigationSuccessfully settled litigation

Salt LakeSalt Lake

Bay AreaBay Area

St. PaulSt. Paul


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Front Page upgrade to Local News 1.5enables more granular geo-targeting

Front Page Local newstargeted at the DMAlevel

So, users in San Joseand San Franciscosaw the same newsresults across the SFDMA

Before 10/1 Now

Front Page LocalNews targets at thecity/town level

So, those same SanJose users now seeSan Jose MercuryNews as their leadnews source


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Update on Hearst InvestmentUpdate on Hearst Investment

BackgroundBackground

Hearst investment of approximately $300 millionHearst investment of approximately $300 million

Held up by Department of JusticeHeld up by Department of Justice

MNG management of newspapersMNG management of newspapers

Certified substantial compliance with 2Certified substantial compliance with 2ndnd requestrequest

Thirty day waiting period ends October 18Thirty day waiting period ends October 18 thth

Expect to close investment absent DOJ action, in Q2Expect to close investment absent DOJ action, in Q2


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Recent FinancialRecent FinancialPerformancePerformance


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Reconciliation of Non-GAAP Financial MeasuresReconciliation of Non-GAAP Financial Measures

Please see Summary Supplemental Non-GAAP Financial DataPlease see Summary Supplemental Non-GAAP Financial Dataand Reconciliation of GAAP and Non-GAAP Financialand Reconciliation of GAAP and Non-GAAP FinancialInformation in our Annual Report on Form 10-K for our fiscalInformation in our Annual Report on Form 10-K for our fiscal

year ended June 30, 2007 for a reconciliation of non-GAAPyear ended June 30, 2007 for a reconciliation of non-GAAP

financial measures included in this presentation and the mostfinancial measures included in this presentation and the most

directly comparable financial measures calculated and presenteddirectly comparable financial measures calculated and presented

in accordance with GAAP. Our Annual Report on Form 10-K isin accordance with GAAP. Our Annual Report on Form 10-K is

available on our website at www.medianewsgroup.comavailable on our website at www.medianewsgroup.com


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Leverage/Coverage TrendsLeverage/Coverage Trends

(1) Leverage ratio is calculated based on the Companys indentures.

($ in millions)

$1,124.6

$867.9$877.6

3.2x

2.0x

6.3x

5.4x5.8x

2.6x

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900$1,000

FY 2005 FY 2006 FY 2007

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

Long-TermDebt and Capital Leases Leverage Ratio (1) Interest Coverage


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GAAP Statement of OperationsGAAP Statement of OperationsYear Ended June 30Year Ended June 30

(in thousands)(in thousands)Revenues 2007 2006

Advertising 1,063,681 660,389Circulation 210,702 130,829

Other 55,457 44,658

Total Revenues 1,329,840 835,876

Income from Unconsolidated JOAs (10,418) (23,298)

Costs and Expenses

Cost of Sales 421,343 260,939

Selling, General and Administative 687,875 417,602

Depreciation and Amortization 68,670 44,067

Interest Expense 82,388 55,564

Other (net) 11,223 1,440

Total Costs and Expenses 1,271,499 779,612

Equity Investment Income (734) 5,898

Gain on Sale of Newspaper Properties 66,156 1,129

Minority Interest (59,557) (35,033)

Income Before Taxes 53,788 4,960

Income Tax Expense (18,146) (3,883)

Net Income 35,642 1,077


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EBITDA Available to Company ReconciliationEBITDA Available to Company Reconciliation

Fiscal Year 2007Fiscal Year 2007

GAAP

As

Reported

Revenues $1,329,840

Cost of Sales 421,343

Selling, General, & Administrative 687,875

EBITDA $220,622


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EBITDA Available to Company ReconciliationEBITDA Available to Company Reconciliation

Fiscal Year 2007Fiscal Year 2007

GAAP Pro-rata

As JOA

Reported Adjustments Pro f orma

Revenues $1,329,840 $283,148 $1,612,988

Cost of Sales 421,343 $111,965 533,308

Selling, General, & Administrative 687,875 144,674 832,549

EBITDA $220,622 $26,509 $247,131


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EBITDA Available to Company ReconciliationEBITDA Available to Company ReconciliationFiscal Year 2007Fiscal Year 2007

GAAP Pro-rata

As JOA

Reported Adjustments Pro forma

Revenues $1,329,840 $283,148 $1,612,988

Cost of Sales 421,343 111,965 533,308Selling, General, & Administrative 687,875 144,674 832,549

EBITDA $220,622 $26,509 $247,131

Minority Interest (80,004)

1,891

Adjusted EBITDA Available to Company $169,018

EBITDA of Praire Mountain Publishing Company


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Historical Financial Data

(1) Leverage ratio is calculated based on the Companys indentures

(2) Calculations are based on definitions contained in our amended and restated credit agreement


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SummarySummary

Substantial savings in FY08 and FY09 from Bay Area synergies,Substantial savings in FY08 and FY09 from Bay Area synergies,Denver plant, OTF initiatives, and lower newsprint consumption andDenver plant, OTF initiatives, and lower newsprint consumption and

pricesprices

Strategic partnerships with major media players Hearst, Yahoo!,Strategic partnerships with major media players Hearst, Yahoo!,and other members of the Yahoo! Consortiumand other members of the Yahoo! Consortium

New and expanded Web and niche revenue initiativesNew and expanded Web and niche revenue initiatives

Steady free cash flow generationSteady free cash flow generation

Management is committed to reducing debt and improving the creditManagement is committed to reducing debt and improving the creditprofileprofile

Experienced and stable senior management teamExperienced and stable senior management team

Documents

REVISED DB Hi Yield Conf October 03 2007