This conference call will contain forward-looking statements that are subject to risks and uncertainties that are described in our SEC filings. Actual results may differ materially from those described during the call. Also, non-GAAP amounts discussed this morning are reconciled for the most directly comparable GAAP measures and schedules posted on our website.Now, I’d like to turn the call over to Pat Talamantes. Patrick Talamantes Thanks, Ryan, and thank you all for joining the conference call today. In addition to discussing the primary drivers behind our quarterly results, we’d also like to update you on some of our digital strategies. Chris Hendricks will provide an overview of our digital subscription and mobile performance, and Mark Zieman will discuss our digital revenue strategies and plans going forward. For the quarter, we reported net income of $16.1 million, excluding unusual items, compared to income of $9.0 million, excluding similar items, in the 2011 quarter. Revenues in the second quarter of 2012 were $299.3 million, down 4.8% from the second quarter of 2011. Advertising revenues were $222.6 million, down 5.7% from 2011, and by month revenues were down 8.2% in April, 0.5% in May and 7.9% in June. Not only did we experience calendar switches for certain holidays, but we also continued to see advertisers consolidating their spending around specific holidays like Easter, Mother’s Day and the Fourth of July, impacting our month-to-month results in Q2. For example, Mother’s Day fell a week later this year, which boosted the performance in May and weakened April in comparison to last year. We had very strong advertiser response around Memorial Day, and we also saw a calendar shift between June and July due to the way Fourth of July fell on our fiscal calendar. Still, despite economic headwinds in the calendar changes, our advertising results showed an improving trend more than a point better than Q1.
Revenues from digital initiatives continued to grow at a very healthy rate. Digital-only advertising revenues increased 16.8%. Total digital advertising, which includes digital advertising both bundled with print and sold on the stand-alone basis, increased 4.9% compared to the 2011 quarter. Total digital advertising now represents 22.5% of McClatchy’s total advertising revenues, compared to 20.2% last year.Across advertising categories, retail showed improvement, down 5% compared to down 6.4% in the first quarter, despite tougher comps, driven largely by improving print ROP and continued strong growth in digital retail advertising. Digital retail advertising was up 8.5%, with digital-only retail ads up 26.5% in the quarter. Our classified advertising trend also improved, finishing down 7.1% compared to down 8.3% in Q1, marking the third straight quarter of improvement. Automotive continues to be the bright spot within classified, while, no surprise, real estate and employment remain challenged. Direct marketing advertising continues to perform well, up 1.8%, our ninth consecutive quarter of steady growth, and now represents 14.1% of total advertising. Finally, national advertising remains disappointing, down 18.1% on tougher comps in Q1. While it’s only about 7% of our ad revenues, the volatility in national advertising continues to hurt our visibility. Telecom advertising, most notably AT&T, has been down all year, and food and drug, national automotive and the transportation sectors also experienced weakness in the period. While total advertising revenues did decline in the quarter, we think it is important to note that this doesn’t mean that all of our advertisers have been pulling back. Looking at our top 50 advertisers on a year-to-date basis, we find that, excluding the seven largest decliners, the remaining 43 of the group have actually increased their spending in aggregate compared to 2011. And with those seven advertisers who have cut the most, the issues have more to do with their business than with ours. Read the rest of this transcript for free on seekingalpha.com