Lee Enterprises
Annual Report 2019

Plain-text annual report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934For The Fiscal Year Ended September 29, 2019 OR[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6227LEE ENTERPRISES, INCORPORATED(Exact name of Registrant as specified in its Charter)Delaware42-0823980(State of incorporation)(I.R.S. Employer Identification No.)4600 E 53rd Street, Davenport, Iowa 52807(Address of principal executive offices) (563) 383-2100Registrant's telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Title of Each ClassTrading Symbol(s)Name of Each Exchange On Which RegisteredCommon Stock - $0.01 par valueLEENew York Stock Exchange Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Actof 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or such shorter period that the Registrant was required tosubmit). Yes [X] No [ ] Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See the definitions of “large accelerated filer," "accelerated filer," "smaller reporting company,” and"emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] Smaller Reporting Company [ ] Emerging growth company [ ] If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying withany new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] As of March 31, 2019, the aggregate market value of the registrant's common stock held by non-affiliates of the registrantwas $174,880,560 based on the closing sale price as reported on the New York Stock Exchange. As of November 30, 2019, Common Stock$0.01 par value were 57,609,582 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Lee Enterprises, Incorporated Definitive Proxy Statement to be filed in January 2020 are incorporated by reference in Part III ofthis Form 10-K. Except as expressly incorporated by reference, the Registrant's Definitive Proxy Statement shall not be deemed to be a part ofthis report.  TABLE OF CONTENTSPAGE Part I Item 1Business1 Item 1ARisk Factors10 Item 1BUnresolved Staff Comments16 Item 2Properties16 Item 3Legal Proceedings16 Item 4Mine Safety Disclosures16 Part II Item 5Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities17 Item 6Selected Financial Data19 Item 7Management's Discussion and Analysis of Financial Condition and Results of Operations20 Item 7AQuantitative and Qualitative Disclosures about Market Risk31 Item 8Financial Statements and Supplementary Data32 Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure32 Item 9AControls and Procedures32 Item 9BOther Information34 Part III Item 10Directors, Executive Officers and Corporate Governance34 Item 11Executive Compensation34 Item 12Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters34 Item 13Certain Relationships and Related Transactions, and Director Independence34 Item 14Principal Accounting Fees and Services34 Part IV Item 15Exhibits and Financial Statement Schedules35 Consolidated Financial Statements36 Signatures74 Exhibit Index75  References to “we”, “our”, “us” and the like throughout this document refer to Lee Enterprises, Incorporated and subsidiaries (the "Company").References to "2019", "2018", "2017" and the like refer to the fiscal years ended the last Sunday in September. PART I ITEM 1. BUSINESS Lee Enterprises, Incorporated ("Company", "we" or "our") is a leading provider of high quality, trusted, local news and information, and a majorplatform for advertising in the markets we serve. We operate 50 principally mid-sized local media operations (including TNI Partners ("TNI") andMadison Newspapers, Inc. ("MNI")) across 20 states. Our products include print and digital editions of daily, weekly and monthly newspapers and niche publications. All of our products offer print anddigital editions, and our content and advertising is available in real time through our websites and mobile apps. We provide marketing services,predominately through our digital marketing agency, Amplified Agency, and through one of our subsidiaries, TownNews, we provide web hostingand content management services for our media operations and 2,000 other content producers who rely on TownNews for their web, Over-the-top display ("OTT"), mobile, video and social media products. Our local media operations range from large daily newspapers and the associated digital products, such as the St. Louis Post-Dispatch, to non-daily newspapers with news websites and digital platforms serving smaller communities. As the leading provider of local news, information and a major source of advertising in our markets we aim to grow our business through threemain categories: subscriptions with consumers, local retail accounts and digital services. •We are committed to a business strategy that drives audience growth and engagement by delivering valuable, intensely local, originalnews and information to consumers. •Local, controllable retail accounts - those in which our local sales teams have direct contact with the advertising decision makers - are thecore of our business. This segment represents more than 50% of advertising revenue and we believe we can improve revenue trends inthis category as we have unmatched audience reach through our print and digital product offerings. •TownNews represents a powerful opportunity for us to drive additional digital revenue by providing state-of-the-art web hosting and contentmanagement services to nearly 2,000 other media organizations including broadcast. Our local media operations generate revenue primarily through print and digital advertising, digital marketing services, subscriptions to ourpublications and digital services, primarily through TownNews. Our operations also provide commercial printing, distribution of third partypublications and management services to other local media operations. Advertising and Marketing Services - Approximately 52% of our 2019 revenue was derived from advertising and marketing services. Thefollowing broadly define major categories of advertising and marketing services revenue: Local retail advertising is revenue earned from top local accounts and Small to Medium Businesses (SMBs) in our markets and takes theform of display advertising in daily and non-daily publications, from preprinted advertising inserted in the publication, and displayadvertising delivered on our owned and operated websites. Classified advertising includes major categories of employment, real estate, automotive, obituaries and legal notices. Advertising forclassifieds is published in both the print and digital editions of our products and is also posted on our websites and mobile applications. National advertising is revenue earned from the sale of print or digital display advertising space, or from preprinted advertising inserted inthe publication, from national accounts that do not have a local retailer representing the account in the market. Niche publications are specialty publications, such as lifestyle, business, health or home improvement publications that containadvertising. Marketing services represents a complete suite of services including events, contests and digital promotions offered in our local marketsthrough Amplified Agency. 1 Our sales force uses a multi-platform sales approach that maximizes audience reach for our advertisers by tailoring advertising and marketingservices packages based on the size and scale of the advertiser. Through Amplified Agency we create sophisticated digital campaigns on ourowned and operated sites and on third party inventory that give advertisers the ability to target their message. We partner with Google toprovide key metrics and analytics to measure campaign effectiveness. Our advertising revenues are subject to seasonality due primarily to fluctuations in advertising spend. Advertising revenue is typically highest inour first quarter due to holiday and seasonal advertising and lowest in the second quarter following the holiday season. The volume ofadvertising sales in any period is also impacted by other external factors such as competitors' pricing, advertisers' decisions to increase ordecrease their advertising expenditures in response to anticipated consumer demand, and general economic conditions. Subscription Revenue - Approximately 37% of our 2019 revenue was derived from subscriptions to our print and digital products. Subscriptionrevenue is earned primarily from our News+ membership platform, which offers different rewards, benefits and access to content through fivedifferent membership levels. Three levels include full access, where members receive print and digital access to our leading local news,information and advertising content, and two levels include digital-only access. We also earn subscription revenue from the sale of single copyeditions. We reach 77% of all adults in our larger markets through a combination of our print and digital content offerings. •Our printed newspapers reach almost 700,000 households daily and more than 1 million on Sunday, and more than 265,000 usersaccess our digital e-edition. •Our web and mobile sites are the number one digital source of local news in most of our markets, reaching more than 29.3 millionunique visitors each month with a monthly average of 286.9 million page views. Page views per session, one metric we use tomonitor engagement, increased 10.2% in 2019. •As of September 29, 2019, we have 91,000 digital only subscribers, a 79.1% increase over 2018. News+ full access members alsohave access to, and use, our digital content. Digital Services Revenue – Approximately 4% of our revenue is derived from digital services, most of which is revenue from TownNews.TownNews, operated through our 82.5% owned subsidiary INN Partners, L.C., is a leading provider of integrated digital publishing and contentmanagement solutions, and offers a state-of-the-art platform for creating, distributing and monetizing multimedia content. •TownNews is the engine that powers our digital products. In addition to us, TownNews services nearly 2,000 daily and weeklynewspapers as well as universities, television stations and niche publications. •Including revenue generated from our markets, total revenue at TownNews grew almost 20% in 2019 and totaled $22.6 million. •With strong product offerings, investments in video and streaming technology and a diversifying customer base into broadcast,TownNews is positioned to continue to be a key component to our growth strategy. Other Revenue - Other revenue, excluding digital services revenue, is comprised mainly of revenue from our management agreement with BHMedia Group, Inc (“BHMG”), commercial printing and delivery of third party products. Other revenue represents 7% of our business. Our operating costs are primarily compensation, newsprint, delivery and digital costs. Over the past several years we have adjusted ourbusiness model to create operational efficiencies and significantly reduce our cost structure. We have centralized, or regionalized, most back office functions including the design of our newspapers. The regional design centers ("RDCs")have enabled us to more cost effectively design and layout the newspaper. The RDCs - combined with a common content management systemacross all of our daily newspaper markets - have created additional operating efficiencies and cost savings. We have templated designs for ourprinted and digital editions, and we have created a national news desk that shares high quality content across all of our markets, includingnational news, regional news and other special sections content. The national news desk allows our newsrooms to focus on high quality localcontent. We believe we will continue to create additional operational efficiencies and continue to transform our business model. 2 Several of our businesses operate in geographic groups of publications, or “clusters,” which provide operational efficiencies, extend salespenetration and provide broader audiences for advertisers. A table under the caption “Daily Newspapers and Markets” in Item 1, includedherein, identifies those groups of our newspapers operating in clusters. Our local media operations compete with other media and digital companies for advertising and marketing spend as well as other news andinformation outlets for subscription spend. While very few of our local media operations have similar daily print competitors that are published inthe same city, our local media operations compete with the following types of businesses: •Other media including magazines, radio, television, outdoor/billboard advertising, other classified and specialty publications, other printpublications both free and paid, direct mail, directories, and national, regional and local advertising websites and content providers. The number of competitors in any given market varies, however all of the forms of competition noted above exist to some degree in all of ourmarkets. Lee Enterprises, Incorporated was founded in 1890, incorporated in 1950, and listed on the New York Stock Exchange ("NYSE") in 1978. Our ability to operate as a going concern is dependent on our ability to repay, refinance or amend our debt agreements as they become due,and remain in compliance with debt covenants. We are in compliance with our debt covenants as of September 29, 2019. The informationincluded herein should be evaluated in that context. See Item 1A, “Risk Factors”, and Notes 4 and 5 of the Notes to Consolidated FinancialStatements, included herein, for additional information. STRATEGIC INITIATIVES Key elements of our strategy are as follows: Comprehensive Local News That Drives Frequency and Engagement. We drive frequency and engagement with our products by deliveringvaluable, intensely local, original news and information that we believe in many cases our audiences cannot otherwise readily obtain. Ourtalented news and editorial staff provide constant, real-time local news with significant breadth, depth and reliability. We believe the strength ofour local brands is the result of the quality of our news gathering staff. This allows us to provide the most comprehensive coverage of local newsin our markets. In most of our markets, we are the leading source of print and digital news and information. We are focused on continually improving the functionality and design of all our news platforms, allowing us to provide greater depth of coverageand increasing reader engagement. Our local news teams leverage many centralized resources including teams that are responsible for design,national news, syndicated content, digital content, video and data analytics. We are providing our journalists with tools to give them real-timeinformation about audience engagement on our digital platforms. This helps inform their decisions on both presentation and coverage. Drivingefficiencies within all of these areas allows for more robust local news content. We believe our journalists are at the forefront of gathering and producing news and information about their local community. We seek to growour digital audience by engaging our readers with news and information that we believe stirs public awareness, advances ideas, inspires vision,creates debate and provokes action. Through our news leadership we strive to contribute to community betterment, promote education, fostercommerce and help improve the quality of life in our markets. Become Predominately Digital Revenue Driven. Our digital businesses have experienced rapid growth, and since 2011 total digital revenue,which includes digital advertising, digital only subscription revenue and digital services revenue, increased at a compound annual growth rate of10.9%. In 2019, total digital revenue grew 4.0% and totaled $144,646,000 or 28.4% of our total operating revenue. The increase was fueled bygrowing our digital audiences, increases in our rates, 79.1% growth in digital only subscribers and rapid growth at TownNews. We are growing digital revenue by offering an expansive array of digital products including: video, behavioral targeting, audience retargeting,banner ads, social networking, and digital couponing. Through Amplified Agency, we provide digital marketing services to SMBs, includingSearch Engine Marketing (SEM), social media, audience extension, business profiles, and website hosting and design. 3 We believe that these innovative solutions will continue to drive meaningful new opportunities for us to grow our digital marketing revenue. Wealso continue to expand our array of digital products to address advertisers' evolving needs and contend with competition while seeking toincrease our share of advertising and marketing services spending from existing customers. Growing digital subscribers is another key to becoming predominately digital revenue driven. Our digital audiences are comprised of full accessmembers, digital only members and non-members who access our site subject to our paywall limits. More than 60% of our full access membershave activated their digital access, and the number of digital only members increased 79.1% in 2019. In 2019, we averaged29,334,000 monthly unique visitors across all of our digital products and as of September 29, 2019, we had 91,000 digital only members. In 2020, we expect to increase our investment in growing our audiences by using data and analytics to drive our acquisition strategy. Ourprimary acquisition tactics include sophisticated data-mining techniques leveraging both online and offline consumer behaviors to target fullaccess and digital-only subscription offers. These targeted offers are presented to consumers via integrated marketing campaigns includingemail, on-site messaging, direct mail, social media and other sales channels designed to maximize exposure and increase response rate. We believe TownNews represents a powerful opportunity for us to drive additional digital revenue. In 2019, revenue at TownNews totaledalmost $23,000,000 and since 2011 the compounded annual growth rate of TownNews revenue has been 10.9%. In 2018, TownNews expanded its broadcast and video capabilities by acquiring an acclaimed video management and streaming solution formedia operations. The investment allows TownNews’ customers to have broadcast quality video available for desktop, mobile and OTTapplications. TownNews leveraged these investments to diversify its customer base to include broadcast customers. In 2019, TownNews acquired a wordpress-based content management system ("CMS") business, which helped broaden product offerings andgain additional broadcast customers. In 2020, we believe TownNews is poised for continued growth. Accelerate Local Retail Performance. Local, controllable retail accounts - those in which our local sales teams have direct contact with theadvertising decision makers - are the core of our business. This revenue category represents more than 50% of advertising revenue and iscomprised of top local accounts and SMBs. Our historical financial results for this revenue category are better than our overall results. Webelieve we can accelerate financial performance in this revenue category as we have unmatched audience reach in our local markets throughour print and digital product offerings. •Our local sales forces are larger than any local competitor, and we believe they are the most highly trained and proficient sales force in ourmarkets. •We have strong relationships with businesses in our markets and offer a wide array of products to deliver our advertisers' message. •Our sales executives pitch the power of our audiences directly to local decision makers. In 2020, our tactics to drive digital advertising revenue are focused on: •Top local account management. Top local accounts are a subset of local retail and this category represented 20.7% of our total advertisingrevenue in 2019. In 2020 we expect to better align sales management talent and resources towards these higher value local retailaccounts in an effort to drive revenue. • Drive advertiser retention among SMBs through tracking KPIs focused on customer frequency and engagement. •Expand on the success of Amplified Agency. Launched company-wide in 2019, the Amplified Agency is a sophisticated data-drivendigital marketing agency. Revenue generated from the agency increased 29% in 2019 and we believe the Amplified Agency will continueto drive revenue growth in 2020. 4 Generate Strong Adjusted EBITDA(1) With A Commitment To Reduce Our Debt. We expect to continue to drive strong Adjusted EBITDA throughsteadfast focus on driving revenue and continued rationalization of our legacy cost base. In 2019, on a same property basis we reduced cashcosts(1) 5.9%. With a substantial portion of our cost base tied to printing and distributing our printed products, we expect to continue to implementcost efficiencies while investing in revenue drivers. We anticipate modest capital expenditures and pension contributions, and we expect to continue to use substantially all of our available cash flowto reduce debt. The principal amount of debt was reduced by $41.2 million in 2019 with a total debt balance of $443.6 million as of September 29, 2019. Since2005, we have reduced debt by more than $1 billion and we expect to continue to significantly reduce our debt in 2020. As a result of our debtreductions, interest expense was reduced by $5.4 million in 2019 compared to 2018, providing additional free cash flow for debt service andother corporate uses. (1) See "Non-GAAP Financial Measures: in Item 7, included herein, for additional information. PULITZER In 2005, we acquired Pulitzer Inc. (“Pulitzer”). We currently publish 9 daily newspapers that were acquired from Pulitzer and more than 60 weeklynewspapers and specialty publications. Pulitzer also includes our 50% interest in TNI, as discussed more fully below. Pulitzer newspapers' largest operations include Bloomington, Illinois and St. Louis, Missouri, where its subsidiary, St. Louis Post-Dispatch LLC(“PD LLC”), publishes the St. Louis Post-Dispatch, our only major daily newspaper, which serves the greater St. Louis metropolitan area. St.Louis newspaper operations also include a variety of specialty publications, and supports its related digital products as well as the SuburbanJournals of Greater St. Louis, a group of weekly newspapers and niche publications that focus on separate communities within the metropolitanarea. The 2005 acquisition was financed primarily with debt. The second lien term loan lenders have a first lien on Pulitzer assets. Excess cash flowfrom Pulitzer, as defined in the Second Lien Loan Agreement, and cash flow from Pulitzer asset sales are used to pay down the second lienterm loan, at par. TNI Partners In conjunction with the Pulitzer acquisition we obtained a 50% interest in TNI, the Tucson, Arizona newspaper partnership. TNI, acting as agentfor our subsidiary, Star Publishing Company (“Star Publishing”) and Citizen Publishing Company (“Citizen”), the owner of the remaining 50%, asubsidiary of Gannett Co., Inc., (“Gannett”), is responsible for printing, delivery, advertising and subscription activities of the Arizona Daily Starand the Tucson Citizen. In May 2009, Citizen discontinued print publication of the Tucson Citizen and in 2014 stopped publishing its digitalproduct. TNI collects all receipts and income and pays substantially all operating expenses incident to the partnership's operations and publication of thenewspaper and other media. Under the amended and restated operating agreement between Star Publishing and Citizen, the Arizona Daily Starremains the separate property of Star Publishing. Results of TNI are accounted for using the equity method. Income or loss of TNI (beforeincome taxes) is allocated equally to Star Publishing and Citizen. TNI makes weekly distributions to Star Publishing and Citizen of all availablecash. The TNI agency agreement (“Agency Agreement”), has governed the operation since 1940. The Agency Agreement expires in 2040, butcontains an option, which may be exercised by either party, to renew the agreement for successive periods of 25 years each. Star Publishing andCitizen also have a reciprocal right of first refusal to acquire the 50% interest in TNI owned by Citizen and Star Publishing, respectively, undercertain circumstances. Both the Company and Citizen incur certain administrative costs and capital expenditures that are reported by theirindividual companies. MADISON NEWSPAPERS We own 50% of the capital stock of Madison Newspapers, Inc. (MNI) and 8.7% of the total stock of The Capital Times Company (“TCT”). TCTowns 50% of the capital stock of MNI. MNI publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and otherWisconsin locations, and supports their related digital products. MNI conducts business under the trade name Capital Newspapers. We have acontract to furnish the editorial and news content for the Wisconsin State Journal, which is published by MNI, and periodically provide otherservices to MNI for a fee. Results of MNI are accounted for using the equity method. Net income or loss of MNI (after income taxes) is allocatedequally to the Company and TCT. MNI makes quarterly dividend payments to the Company and TCT. 5 DAILY NEWSPAPERS AND MARKETS The Company, TNI and MNI publish the following daily newspapers and maintain the following primary digital sites: Average Units (1) 2019 Monthly Average('000s) (7) NewspaperPrimary WebsiteLocation Daily (2) Sunday UniqueVisitors PageViews St. Louis Post-Dispatch (3)stltoday.comSt. Louis, MO 84,657 336,636 6,234 66,170 Arizona Daily Star (5) (3)azstarnet.comTucson, AZ 40,593 83,454 1,603 13,310 Capital Newspapers (4) Wisconsin State Journalmadison.comMadison, WI 51,401 60,789 2,147 13,127 Daily Citizenwiscnews.com/bdcBeaver Dam, WI 3,968 — 93 731 Portage Daily Registerwiscnews.com/pdrPortage, WI 2,211 — 246 1,307 Baraboo News Republicwiscnews.com/bnrBaraboo, WI 2,203 — 128 681 The Timesnwitimes.comMunster, Valparaiso, andCrown Point, IN 40,328 52,276 1,772 30,054 Quad Cities Group Quad-City Timesqctimes.comDavenport, IA 26,836 28,372 782 6,837 Dispatch-Argusqconline.comMoline, IL 50,145 17,939 357 3,353 Muscatine Journalmuscatinejournal.comMuscatine, IA 3,659 — 80 636 Lincoln Group Lincoln Journal Starjournalstar.comLincoln, NE 34,462 40,930 1,872 21,995 Columbus Telegram (6)columbustelegram.comColumbus, NE 3,869 — 164 1,198 Fremont Tribune (6)fremonttribune.comFremont, NE 3,334 — 148 1,129 Beatrice Daily Sun (6)beatricedailysun.comBeatrice, NE 2,479 — 84 577 Central Illinois Newspaper Group The Pantagraph (3)pantagraph.comBloomington, IL 17,848 21,336 624 8,270 Herald & Reviewherald-review.comDecatur, IL 11,787 18,033 518 4,751 Journal Gazette & Times-Courierjg-tc.comMattoon/Charleston, IL 6,236 — 165 1,534 Racine/Kenosha Group The Journal Timesjournaltimes.comRacine, WI 14,163 15,482 512 6,594 Kenosha Newskenoshanews.comKenosha, WI 14,165 16,486 204 1,984 Billings Gazettebillingsgazette.comBillings, MT 21,847 23,123 1,232 11,257 The Courierwcfcourier.comWaterloo and Cedar Falls, IA 29,016 22,443 595 5,799 River Valley Newspaper Group La Crosse Tribunelacrossetribune.comLa Crosse, WI 13,737 16,144 569 6,874 Winona Daily Newswinonadailynews.comWinona, MN 3,796 3,935 169 1,905 The Chippewa Herald (6)chippewa.comChippewa Falls, WI 1,617 — 160 1,445 The Bismarck Tribunebismarcktribune.comBismarck, ND 17,177 18,627 552 6,271 Helena/Butte Group Independent Record (6)helenair.comHelena, MT 8,800 10,192 392 3,927 Montana Standard (6)mtstandard.comButte, MT 7,424 8,310 287 2,879 Missoula Group Missoulian (6)missoulian.comMissoula, MT 13,979 16,195 650 4,765 Ravalli Republic (6)ravallinews.comHamilton, MT 1,796 1,343 94 455 Sioux City Journalsiouxcityjournal.comSioux City, IA 16,871 17,427 550 4,010 6 Average Units (1) 2019 Monthly Average('000s) (7) NewspaperPrimary WebsiteLocation Daily (2) Sunday UniqueVisitors PageViews Casper Star-Tribunetrib.comCasper, WY 16,575 17,011 519 3,562 Rapid City Journalrapidcityjournal.comRapid City, SD 13,817 16,853 533 4,757 The Post-Starpoststar.comGlens Falls, NY 13,721 15,733 663 7,703 Mid-Valley News Group Albany Democrat-Heralddemocratherald.comAlbany, OR 7,743 8,020 224 2,079 Corvallis Gazette-Timesgazettetimes.comCorvallis, OR 7,170 7,174 244 1,993 The Southern Illinoisanthesouthern.comCarbondale, IL 8,654 13,719 400 2,404 Magic Valley Group The Times-Newsmagicvalley.comTwin Falls, ID 17,492 10,978 364 2,820 Elko Daily Free Press (6)elkodaily.comElko, NV 2,933 — 185 1,651 The Daily Newstdn.comLongview, WA 13,587 10,608 257 1,944 Globe Gazetteglobegazette.comMason City, IA 7,267 8,521 317 4,531 Napa Valley Register (3)napavalleyregister.comNapa, CA 7,965 7,903 428 3,634 Arizona Daily Sun (3) (6)azdailysun.comFlagstaff, AZ 7,011 7,072 329 1,868 The Times and Democrat (6)thetandd.comOrangeburg, SC 6,084 6,218 328 2,751 The Citizen (6)auburnpub.comAuburn, NY 5,210 5,867 298 2,925 Santa Maria Times (3) (6)santamariatimes.comSanta Maria, CA 5,206 4,460 388 2,569 The Sentinel (6)cumberlink.comCarlisle, PA 6,086 — 264 1,968 The World (3)theworldlink.comCoos Bay, OR 3,705 — 120 705 Daily Journal (3) (6)dailyjournalonline.comPark Hills, MO 2,803 — 226 1,901 The Sentinel (3)hanfordsentinel.comHanford, CA 2,651 — 169 970 706,084 969,609 29,239 286,560 (1) Source: AAM: September 2019 Quarterly Executive Summary Data Report, unless otherwise noted. (2) Not all newspapers are published Monday through Saturday. (3) Owned by Pulitzer Inc. (4) Owned by MNI. (5) Owned by Star Publishing and published through TNI. (6) Source: Company statistics. (7) Excludes Agri-Media sites NEWSPRINT The raw material of newspapers, and our other print publications, is newsprint. We purchase newsprint from U.S. and Canadian producers. Webelieve we will continue to receive a supply of newsprint adequate for our needs and consider our relationships with newsprint producers to begood. Newsprint purchase prices can be volatile and fluctuate based upon factors that include foreign currency exchange rates, tariffs and bothforeign and domestic production capacity and consumption. Price fluctuations can affect our results of operations. We have not entered intoderivative contracts for newsprint. For the quantitative impacts of these fluctuations, see Item 7A, “Quantitative and Qualitative Disclosures aboutMarket Risk”, included herein. 7 EXECUTIVE TEAM The following table lists our current executive team members: ServiceNamed With TheTo Current Name Age CompanyPositionCurrent Position Kevin D. Mowbray 57 September1986February 2016President and Chief Executive OfficerJoseph J. Battistoni 36 March 2014November2019Vice President - Local AdvertisingNathan E. Bekke 50 January 1992February 2015Vice President - Consumer Sales and MarketingRay G. Farris 63 October 2006December2018Vice President - Group PublisherSuzanna M. Frank 49 December2003March 2008Vice President - AudienceAstrid J. Garcia 69 December2006December2013Vice President - Human Resources and LegalJames A. Green 53 March 2013March 2013Vice President - DigitalJohn M. Humenik 56 December1998February 2015Vice President - NewsTimothy R. Millage 38 March 2010August 2018Vice President - Chief Financial Officer and TreasurerDouglas L. Ranes 69 February 2005November2019Vice President - Production OperationsMichele FennellyWhite 57 June 1994June 2011Vice President - Information Technology and Chief Information Officer Kevin D. Mowbray was elected President and Chief Executive Officer in February 2016. From April 2015 - February 2016 he was Executive VicePresident and Chief Operating Officer. From May 2013 to April 2015 he served as Vice President and Chief Operating Officer. From 2004 to May2013 he served as a Vice President - Publishing and was Publisher of the St. Louis Post-Dispatch from 2006 until May 2013. He was elected tothe Board of Directors of the Company in February 2016. Joseph J. Battistoni was appointed Vice President - Local Advertising in November 2019. From February 2018 to November 2019, he served asGeneral Manager and Vice President - Sales and Marketing for The Times Media Company. From October 2015 to February 2018, he served asVice President of Sales and Marketing. From March 2014 to October 2015, he served as Digital Advertising Director. Nathan E. Bekke was appointed Vice President - Consumer Sales and Marketing in February 2015. From 2003 to February 2015, he served asPublisher of the Casper Star-Tribune. Ray G. Farris was appointed Vice President - Group Publisher in December 2018. From May 2013 to December 2018, he served as Presidentand Publisher of the St. Louis Post-Dispatch. From August 2010 to May 2013, he served as General Manager and Vice President of Sales of theSt. Louis Post-Dispatch. From October 2006 to August 2010, he served as Vice President of Classified Advertising of the St. Louis Post-Dispatch. 8 Suzanna M. Frank was appointed Vice President - Research and Metrics in November 2018. From March 2008 to November 2018 she servedas Vice President - Audience. From 2003 to 2008 she served as Director of Research and Marketing of the Company. Astrid J. Garcia was appointed Vice President - Human Resources and Legal in December 2013. From 2006 to November 2013 she served asVice President of Human Resources, Labor Relations and Operations of the St. Louis Post-Dispatch. James A. Green was appointed Vice President - Digital in March 2013. From June 2011 to March 2013, he served as Executive Vice Presidentand General Manager of Travidia, Inc., a developer of newspaper digital shopping media and marketing programs. From 2004 to June 2011 heserved as Chief Marketing Officer of Travidia, Inc. John M. Humenik was appointed Vice President - News in February 2015. He was also president and publisher of the Wisconsin State Journaland president of Madison Newspapers Inc., a position he has held since 2013. He was publisher and editor of the Arizona Daily Star from 2005to 2010 and additionally served as president of Tucson Newspapers Inc. until 2013. Timothy R. Millage was elected Vice President, Chief Financial Officer and Treasurer in August 2018. From 2012 to 2018 he served as thecorporate controller. Michele Fennelly White was appointed Vice President - Information Technology and Chief Information Officer in June 2011. From 1999 to June2011, she served as Director of Technical Support. Douglas L. Ranes was appointed Vice President - Production Operations in November 2019. From June 2014 to November 2019, he served asDirector of Production. From February 2005 to June 2012 he serve as Director of Operations for The North County Times and The NorthwestIndiana Times. Messrs. Mowbray, Bekke, Farris, Green, Humenik and Millage have been designated by the Board of Directors as executive officers for USSecurities and Exchange Commission ("SEC") reporting purposes. EMPLOYEES At September 29, 2019, we had approximately 2,954 employees, including approximately 622 part-time employees, exclusive of TNI and MNI.Full-time equivalent employees in 2019 totaled approximately 2,786. We consider our relationships with our employees to be good. Bargaining units represent 283, or 69%, of the total employees of the St. Louis Post-Dispatch, which has six contracts with bargaining units withexpiration dates from March 2020 through September 2021. Approximately 55 employees in four additional locations are represented by collective bargaining units. CORPORATE GOVERNANCE AND PUBLIC INFORMATION We have a long history of sound corporate governance practices. Our Board of Directors has a lead independent director, and has had one formany years. Currently, our Board of Directors has affirmatively determined that seven of its ten members are independent, including allmembers of the Board's Audit, Executive Compensation and Nominating and Corporate Governance committees. The Audit Committeeapproves all services to be provided by our independent registered public accounting firm and its affiliates. In 2019, the Company enhanced corporate governance practices to further increase the Board’s effectiveness and accountability toshareholders, by: •Adopting a majority voting standard for the election of directors in uncontested elections; •Allowing proxy access, providing shareholders who satisfy the requirements specified in the amended bylaws the ability to includetheir own nominees in the Company’s proxy statement; •Allowing substantially more time for shareholders to submit proposals and director nominations for consideration at annual meetings;and •Demonstrating a commitment to board refreshment through the nomination of three new independent board members. 9 At www.lee.net, one may access a wide variety of information, including news releases, SEC filings, financial statistics, annual reports, investorpresentations, governance documents, newspaper profiles and digital links. We make available via our website all filings made by the Companyunder the Securities Exchange Act of 1934 (the "Exchange Act"), including Forms 10-K, 10-Q and 8-K, and related amendments, as soon asreasonably practicable after they are filed with, or furnished to, the SEC. All such filings are available free of charge. The content of any websitereferred to in this Annual Report is not incorporated by reference unless expressly noted. FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This annual report ("AnnualReport") contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certainrisks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and otheruncertainties, which in some instances are beyond our control, are: •Our ability to generate cash flows and maintain liquidity sufficient to service our debt; •Our ability to comply with the financial covenants in our credit facilities; •Our ability to refinance our debt as it comes due; •Our ability to manage declining print revenue; •That the warrants issued in our refinancing will not be exercised; •The impact and duration of adverse conditions in certain aspects of the economy affecting our business; •Change in advertising and subscription demand; •Changes in technology that impact our ability to deliver digital advertising; •Potential changes in newsprint, other commodities and energy costs; •Interest rates; •Labor costs; •Legislative and regulatory rulings; •Our ability to achieve planned expense reductions; •Our ability to maintain employee and customer relationships; •Our ability to manage increased capital costs; •Our ability to maintain our listing status on the NYSE; •Competition; and •Other risks detailed from time to time in our publicly filed documents, including this Annual Report and particularly in "Risk Factors",Part I, Item 1A herein. Any statements that are not statements of historical fact (including statements containing the words “may”, “will”, “would”, “could”, “believes”,“expects”, “anticipates”, “intends”, “plans”, “projects”, “considers” and similar expressions) generally should be considered forward-lookingstatements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of thisAnnual Report. We do not undertake to publicly update or revise our forward-looking statements, except as required by law. ITEM 1A. RISK FACTORS The following material risk factors pertain to matters to which there is a substantial likelihood that a potential investor would attach importance indetermining whether to purchase the Company’s stock. Our advertising revenues may decline due to weakness in the brick and mortar retail sector. A significant portion of our revenue is derived from advertising. The demand for advertising is sensitive to the overall level of economic strength,both in the markets in which we operate and nationally. Additionally, the decline in the financial or economic conditions of our advertisers couldalter discretionary spending by advertisers. Certain segments of the economy have been challenged in recent years, particularly in the brick andmortar retail sector, and total advertising revenues have declined as a result. Advertising revenues may worsen if advertisers reduce theirbudgets, shift their spending priorities, are forced to consolidate or cease operations. 10 Our operating revenue may be materially adversely affected if we do not successfully respond to the shift in newspaper readershipand advertising expenditures away from traditional print media and towards digital media. Significant capital investments may beneeded to respond to this shift. Currently, our primary source of revenue is from advertising and marketing services, which accounts for 52% of our revenue. Subscriptionrevenue accounts for more than 36% of our revenue. The media publishing industry has experienced rapid evolution in consumer demands andexpectations due to advances in technology, which have led to a proliferation of delivery methods for news and information. The number ofconsumers who access online services through devices other than personal computers, such as tablets and mobile devices, has increaseddramatically in recent years and likely will continue to increase. The media publishing industry also continues to be affected by demographicshifts, with older generations preferring more traditional print newspaper delivery and younger generations developing the habit of consumingnews through digital media. In addition, the revenues generated by media publishing companies have been affected significantly by the shift inadvertising expenditures towards digital media. The future revenue performance of our digital business depends to a significant degree upon the growth development and management of oursubscriber and advertising audiences. The growth of our digital business over the long term depends on various factors, including, among otherthings, the ability to: •Continue to increase digital audiences; •Attract advertisers to our digital platforms; •Tailor our products to efficiently and effectively deliver content and advertising on mobile devices; •Maintain or increase the advertising rates on our digital platforms; •Exploit new and existing technologies to distinguish our products and services from those of competitors and develop new content,products and services; •Invest funds and resources in digital opportunities; •Partner with, or use services from, providers that can assist us in effectively growing our digital business; and •Create digital content and platforms that attracts and engages audiences in our markets. If we are unable to grow our digital audience, distinguish our products and services from those of our competitors or develop compelling newproducts and services that engage users across multiple platforms, then our business, financial condition, and results of operations may beadversely affected. Responding to the changes described above may require us to make significant capital investments and incur significantresearch and development costs related to building, maintaining, and evolving our technology infrastructure, and our ability to make the level ofinvestments required may be limited. See "Audiences” in Item 1, included herein, for additional information on about our print and digital audiences. We are subject to significant financial risk as a result of our $444 million in total consolidated debt. We have $443.6 million of debt outstanding as of September 29, 2019, as discussed more fully below (and certain capitalized terms used belowdefined) in Item 7,"Liquidity" and Note 5 of the Notes to Consolidated Financial Statements, included herein. As of September 29, 2019, our debt consists of the following: •$400,000,000 aggregate principal amount of 9.5% Senior Secured Notes (the "Notes") due March 2022, pursuant to an Indenturedated as of March 31, 2014 (the "Indenture"), of which $363,420,000 is outstanding; •$23,120,000 revolving credit facility (the "Revolving Facility") under a First Lien Credit Agreement dated as of March 31, 2014 (asamended November 1, 2019, the “1st Lien Credit Facility”), which is undrawn; and •$150,000,000 12.0% second lien term loan under a Second Lien Loan Agreement dated as of March 31, 2014 (the “2nd Lien TermLoan”) due December 2022, of which $80,207,000 is outstanding. 11 We have reduced debt by $41.2 million in 2019 and $173.5 million over the last three fiscal years. Despite the significant reduction, our debt, netof cash, is 3.6 times adjusted EBITDA of $121.5 million in 2019. This level of debt increases our vulnerability to general adverse economic andindustry conditions. Higher leverage ratios, our economic performance, our credit ratings, adverse financial markets or other factors couldadversely affect our future ability to refinance our maturing debt on commercially acceptable terms, or at all. We may have insufficient earnings or liquidity to meet our future debt obligations. At September 29, 2019, after consideration of letters of credit, we had approximately $17,644,000 available for future use under our RevolvingFacility. Including cash, our liquidity at September 29, 2019 totaled $26,289,000. This liquidity amount excludes any future cash flows. OurAdjusted EBITDA has been strong and has exceeded $121 million in each year from 2011 through 2019, but there can be no assurance thatsuch results will continue. At September 29, 2019, the principal amount of our outstanding debt totaled $443,627,000. At September 29, 2019 and September 30, 2018 ourdebt, net of cash, was 3.6 times our Adjusted EBITDA in both years. Our 1st Lien Term Loan, entered into on March 31, 2014, was paid in full in November 2018 ahead of the original due date of March 2019. Finalmaturities of our other debt range from March 2022 through December 2022. The Revolving Facility matures on December 28, 2020. We expectto amend and extend our Revolving Facility prior to its maturity. There are numerous potential consequences under the Notes, 1st Lien Credit Facility and 2nd Lien Term Loan if an event of default, as defined inthe respective debt agreements, occurs and is not remedied. Many of those consequences are beyond our control. The occurrence of one ormore events of default would give rise to the right of the applicable lenders to exercise their remedies under the Notes, 1st Lien Credit Facilityand 2nd Lien Term Loan, respectively, including, without limitation, the right to accelerate the repayment of all outstanding debt and take actionsauthorized in such circumstances under applicable collateral security documents. Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to refinance or amend ourdebt agreements as they become due, if necessary. The Notes, 1st Lien Credit Facility and 2nd Lien Term Loan have only limited affirmativecovenants with which we are required to maintain compliance. We are in compliance with our debt covenants as of September 29, 2019. Theability to make payments on our indebtedness or refinance our indebtedness prior to when it comes due may be affected by events beyond ourcontrol, including prevailing economic, financial, competitive, business, legislative, regulatory and industry conditions. The Notes, 1st Lien Credit Facility and 2nd Lien Term Loan each contain restrictive covenants that limit our ability to grow ourbusiness or return capital to our stockholders. The Notes, 1st Lien Credit Facility and 2nd Lien Term Loan each contain various restrictions, covenants and representations and warranties. Ifwe fail to comply with any of these covenants or breach these representations or warranties in any material respect, such noncompliance wouldconstitute a default, and the lenders could elect to declare all amounts outstanding under the agreements related thereto to be immediately dueand payable and enforce their respective interests against collateral pledged under such agreements. Subject to certain exceptions, these covenants limit and/or restrict our ability to, among other things: •incur or guarantee additional debt; •make certain investments, loans or acquisitions; •transfer or sell assets; and •make certain restricted payments, including repurchases of outstanding common stock and dividends. The restrictions described above may interfere with our ability to obtain new or additional financing or engage in other business activities, whichmay significantly limit or harm our results of operations, financial condition and liquidity. 12 The Company may face risk associated with the discontinuation of and transition from London Interbank Offered Rate (LIBOR) as abenchmark interest rate. It is anticipated that LIBOR will be discontinued as of the year ending 2021. The expected discontinuation of LIBOR will require lenders and theirborrowers to transition from LIBOR to an alternative benchmark interest rate, which could have an impact on and risk to the Company if notcompleted in a timely manner. The Company has already begun to address this risk by amending its loan documents to include an alternativebenchmark interest rate. We compete with a large number of companies in the local media industry; if we are unable to compete effectively, our advertising andsubscription revenues may decline. We compete for audiences and advertising revenue with newspapers and other media such as the internet, magazines, broadcast, cable andsatellite television, radio, direct mail, outdoor billboards and yellow pages. For example, as the use of the internet and mobile devices hasincreased, we have lost some classified advertising and subscribers to online advertising businesses and our free Internet sites that containabbreviated versions of our publications. Some of our current and potential competitors have greater financial and other resources than we do. Ifwe fail to compete effectively with competing newspapers and other media, our results of operations may be materially adversely affected. As digital revenues increase as a proportion of our total revenues, we will become increasingly subject to risks associated with digitalmedia operations. The central component to our business strategy involves transitioning from traditional print businesses to digital media businesses and,accordingly, we expect our digital revenues to increase as a percentage of our total revenues in future periods. That transition comes withadditional risk of operating mainly as a digital media company, including: •Rates we achieve in the marketplace for the advertising inventory on our digital platforms may be adversely affected by: •Customized news feeds and news aggregation websites, which are often free to users, may reduce our traffic levels by creatinga disincentive for users to visit our websites or use our digital products; •Our inability to increase our digital presence and visibility, which also may reduce our traffic levels; •Our inability to maintain and improve the performance of our customers' advertising on our digital properties; and •Technology developed to block the display of advertising on websites could proliferate, impairing our ability to generate digitalrevenues; •Mobile devices, including smartphones and tablets, may present challenges for traditional display advertising; •Our use of subscription models (which may require users to pay for content after accessing a limited number of pages or news articlesfor free on our websites each month) may cause consumers to opt out of subscription offers in greater numbers than anticipated orresult in fewer page views or unique visitors to our websites than projected; •New delivery platforms may lead to pricing restrictions, loss of distribution control, or loss of direct relationships with consumers; •Technical or other problems could prevent us from delivering our products in a rapid and reliable manner or otherwise affect the userexperience, and users could develop negative views about the quality or usefulness of our products; and •Our inability to respond successfully to these or similar challenges could materially adversely impact our ability to maintain and growour digital revenues. Our business, reputation and results of operations could be negatively affected if we become subject to significant data securitybreaches or if our information technology systems fail to perform adequately. In the 13-weeks ended September 29, 2019, 29.3% of our revenue was obtained from digital sources, including advertising and one of ourbusinesses, TownNews, that provides digital infrastructure and digital publishing services for us and other companies. 13 We use technology in substantially all aspects of our business operations. Such uses give rise to cybersecurity risks, including themisappropriation of personally identifiable information that we store and manage and disabling or taking over our websites, which contain ourbreaking news stories. The techniques used to obtain unauthorized access and to disable systems and websites change frequently and may bedifficult to detect for long periods of time. There can be no assurance that we, or the security systems we implement, will protect against all ofthese rapidly changing risks. In addition, attempts to compromise information technology systems occur regularly across many industries and sectors, and the techniquesused to perpetrate such compromises are constantly changing. Maintaining the security of our systems is critically important both due to ourreliance on those systems and because they store and process confidential subscriber, employee, and other sensitive personal data. Althoughwe and our third-party service providers have implemented security measures and other controls designed to prevent breaches, theseprecautions might fail to defend against future cyber-attacks or prevent breaches or other disruptions to our systems or those of our third-partyproviders. Because cyber-attacks evolve quickly and often are not recognized until after they are launched, we may be unable to anticipate themor implement adequate measures to prevent a breach. A significant breach could result in, among other things: •Taking down our websites, as media companies have been a target of their websites being disabled; •Improper disclosures of personal data or confidential information; •Expenditures of significant resources to remedy the breach and defend against further attacks; •Diversion of management's attention and resources; •Liability under laws that protect personal data; and •Loss of customer trust and, as a result, revenues. Consequences of these actions could result in harm to our reputation, loss of revenue, increased operating costs, lead to legal exposure tocustomers and employees as well as subject us to liability under laws and regulations that protect our customers and employees personal data.We maintain insurance coverage against certain of such risks, but cannot guarantee that such coverage will be applicable or sufficient withrespect to any given incident. We rely on revenue from printing and distribution of third-party publications and digital services that may be subject to many of thesame business and industry risks facing us. We generate a portion of our revenue from printing and distributing third-party publications, and our relationships with these third parties aregenerally through short-term contracts. Typically, these third parties are operating in the same industry and a similar geographical location as us.In addition, digital services revenue is derived primarily from third-party businesses in the same industry as us. As a result, revenue from thesethird parties is subject to the same macroeconomic and industry trends affecting our operations. If their businesses are adversely affected bythese trends, our associated revenue would be adversely affected. We may not be able to reduce future expenses to offset potential revenue declines. As a result of adverse general business conditions in our industry and our operating results, we have reduced cash costs of our operationssignificantly since 2011 by reducing workforce, centralizing or regionalizing operations and implementing cost-control measures. If we do notachieve expected savings from these initiatives, or if our operating costs increase, our total operating costs may be greater than anticipated andour profitability may be lower than anticipated. We may incur additional non-cash impairment charges. We have significant amounts of goodwill and identified intangible assets. Since 2007 we have recorded impairment charges totaling almost $1.3billion to reflect the reduced value of these assets. Should general economic, market or business conditions decline, and cause a negativeimpact on our stock price or projected future cash flows, we may need to record additional impairment charges in the future. Such charges wouldnot impact our cash flows or debt covenant compliance. See “Critical Accounting Policies” in Item 7, included herein, for additional information onthe risks associated with such assets. 14 A decrease in our stock price may limit the ability to trade our stock or for the Company to raise equity capital. Under the NYSE listing standards, if our common stock fails to maintain an adequate per share price and our total market capitalization fallsbelow $50.0 million, our common stock could be removed from the NYSE and traded in the over-the-counter market. In July 2011, the NYSEnotified us that our common stock did not meet the NYSE continued listing standards due to the failure to maintain an adequate share price.Under the NYSE rules, our common stock was allowed to continue to be listed during a cure period. In February 2012, after completing our debtrefinancing, the NYSE notified us that we were again in compliance with the minimum closing price standard. In January 2013, the NYSE notifiedus that we had returned to full compliance with all continued listing standards. However, there can be no assurance that we will continue to beable to meet these listing standards, and the removal of our common stock from the NYSE could adversely affect our ability to raise equitycapital. Sustained increases in funding requirements of our pension and postretirement obligations may reduce the cash available for ourbusiness. Pension liabilities, net of plan assets, totaled $47 million at September 29, 2019, an increase of $20.3 million from September 30, 2018 primarilydue to unfavorable changes to discount rates used to determine our pension obligations and an increase in pension contributions. Our pension and postretirement plans invest in a variety of equity and debt securities. Future volatility and disruption in the securities marketscould cause declines in the asset values of our pension and postretirement plans. In addition, a decrease in the discount rates or changes tomortality estimates and other assumptions used to determine the liability could increase the benefit obligation of the plans. Unfavorable changesto the plan assets and/or the benefit obligations could increase the level of required contributions above what is currently estimated, which couldreduce the cash available for our business and debt service. Over the last several years, federal legislation has provided for pension funding relief, temporarily reducing our pension contributions. Even withfunding relief, we expect to have to make additional contributions to our plans in the future. We expect to be subject to withdrawal liability in connection with one multiemployer pension plan and may be subject to additionalwithdrawal liabilities in connection with other multiemployer pension plans, which may reduce the cash available for our business. We contributed to three multiemployer defined benefit pension plans during the year under the terms of collective-bargaining agreements("CBAs"). Based on the most recent communications from the plans’ administrators, two of these plans are currently in “critical” status, as thatterm is used in relation to such plans under the Pension Protection Act of 2006. For plans that are in critical status, benefit reductions mayapply and/or we could be required to make additional contributions. In 2019, we effectuated a total withdrawal from our CWA/ITU multiemployer pension plan and as a result we are subject to a claim from themultiemployer pension plan for a withdrawal liability. The amount of such liability will be dependent on actions taken, or not taken, by thepension plan, as well as the future investment performance and funding status of the pension plan. The withdrawal liability is expected to befunded over a 20 year period. In 2019, we received the final assessment for the partial withdrawal liability associated with our GCIU plan. The withdrawal liability is expectedto be funded over a 20 year period. A portion of our employees are members of unions, and if we experience labor unrest, our ability to produce and deliver newspaperscould be impaired. Our ability to produce and deliver newspapers could be impaired in some markets, if we experience labor unrest. In addition, the results offuture labor negotiations could harm our operating results as a result of higher overall compensation costs. While we have not had a history oflabor strikes, we cannot ensure that a strike will not occur in one or more of our markets in the future. As of September 30, 2019, approximately11.0% of full-time and part-time employees were represented by unions. Most of our union-represented employees are currently working underlabor agreements, with expiration dates through September 2021. We are dependent upon newsprint for our products and we may experience additional price increases which could affect ourearnings. The raw material of newspapers, and our other print publications, is newsprint. We purchase newsprint from U.S. and Canadian producers. Webelieve we will continue to receive a supply of newsprint adequate for our needs and consider our relationships with newsprint producers to begood. Newsprint purchase prices can be volatile and fluctuate based upon factors that include foreign currency exchange rates, tariffs and bothforeign and domestic production capacity and consumption. Price fluctuations can affect our results of operations. We have not entered intoderivative contracts for newsprint. For the quantitative impacts of these fluctuations, see Item 7A, “Quantitative and Qualitative Disclosuresabout Market Risk”, included herein. 15 ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES Our executive offices are located in leased facilities at 4600 E. 53rd Street, Davenport, Iowa. The initial lease term expires August 1, 2029. All of our principal printing facilities are owned, except for leased land for the Helena, Montana plant. Additionally, property is leased for Madison,Wisconsin (which is owned by MNI) and Tucson, Arizona (which is jointly owned by Star Publishing and Citizen). All facilities are well maintained,in good condition, suitable for existing office and publishing operations, as applicable, and adequately equipped. More than 67% of our daily newspapers, as well as many of our nearly 180 other publications, are printed at either another one of our printlocations or outsourced to a third party, to enhance operating efficiency. We are continuing to evaluate additional insourcing and outsourcingopportunities in order to more effectively manage our operating and capital costs and monetize real estate. Our newspapers and other publications have formal or informal backup arrangements for printing in the event of a disruption in productioncapability. ITEM 3. LEGAL PROCEEDINGS We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain ofthese matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matterswill not have a material adverse effect on our Consolidated Financial Statements, taken as a whole. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 16 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is listed on the NYSE. In March 2011, in accordance with sunset provisions established in 1986, we effected conversion ofall outstanding shares of Class B Common Stock to Common Stock. The table below includes the high and low prices of Common Stock for eachcalendar quarter during the past three years and the closing price at the end of each quarter. QuarterEnded (Dollars) December March June September 2019 High 3.05 3.68 3.49 2.33 Low 1.84 2.02 2.12 1.77 Closing 2.13 3.30 2.24 2.01 2018 High 2.50 2.70 3.30 3.30 Low 2.15 1.95 2.00 2.60 Closing 2.35 1.95 2.85 2.65 2017 High 3.76 3.30 3.10 2.40 Low 2.40 2.40 1.75 1.80 Closing 2.90 2.60 1.90 2.20 At September 29, 2019, we had 5,777 registered holders of record of our Common Stock. Our debt agreements generally limit our ability to pay dividends and repurchase Common Stock unless in each case no default has occurred andwe have satisfied certain financial measurements. See Note 5 of the Notes to Consolidated Financial Statements, included herein. 17 PERFORMANCE PRESENTATION The following graph compares the percentage change in the cumulative total return of the Company, the Standard & Poor's ("S&P") 500 StockIndex, and a peer group index, in each case for the five years ended September 29, 2019 (with September 30, 2014 as the measurement point).Total return is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period, assumingdividend reinvestment and (ii) the difference between the issuer's share price at the end and the beginning of the measurement period, by (b) theshare price at the beginning of the measurement period. Copyright© 2019 Standard & Poor's, a division of S&P Global. All rights reserved. The value of $100 invested on September 30, 2014 in stock of the Company, the Peer Group Index and in the S&P 500 Stock Index, includingreinvestment of dividends, is summarized in the table below. September 29 (Dollars) 2015 2016 2017 2018 2019 Lee Enterprises, Incorporated 61.54 110.95 65.09 78.40 60.36 Peer Group Index 94.68 98.78 116.93 137.73 148.49 S&P 500 Stock Index 99.39 114.72 136.07 160.44 167.27 The S&P 500 Stock Index includes 500 U.S. companies in the industrial, transportation, utilities and financial sectors and is weighted by marketcapitalization. The Peer Group Index is comprised of six U.S. publicly traded companies with significant newspaper publishing operations(excluding the Company) and is weighted by market capitalization. The Peer Group Index includes A.H. Belo Corp., Gannett Co. Inc, TheMcClatchy Company, New Media Investment Group Inc., The New York Times Company and Tribune Publishing Co. 18 ITEM 6. SELECTED FINANCIAL DATA Selected financial data is as follows: (Thousands of Dollars and Shares, Except Per Share Data) 2019 2018 2017 2016 2015 OPERATING RESULTS Operating revenue 509,854 543,955 566,943 614,364 648,543 Cash Costs (1) (3) 398,815 423,766 437,767 477,857 501,629 Depreciation and amortization 29,332 31,766 41,282 43,441 45,563 Assets loss (gain) on sales, impairments and other 2,464 6,429 (1,150) (954) 106 Restructuring costs and other 11,635 5,550 7,523 1,825 3,304 Equity in earnings of associated companies 7,121 9,249 7,609 8,533 8,254 Operating income (3) 74,729 85,693 89,130 100,728 106,195 Interest expense (47,488) (52,842) (57,573) (64,233) (72,409)Debt financing and administration costs (7,214) (5,311) (4,818) (5,947) (5,433)Gain on insurance settlement — — — 30,646 — Other, net (3) 3,813 3,280 13,477 (9,537) 3,213 Net income 15,909 47,048 28,605 36,019 24,318 Income attributable to Lee Enterprises, Incorporated 14,268 45,766 27,481 34,961 23,316 Earnings per common share: Basic 0.26 0.84 0.51 0.66 0.44 Diluted 0.25 0.82 0.50 0.64 0.43 Weighted average common shares: Basic 55,565 54,702 53,990 53,198 52,640 Diluted 56,884 55,948 55,392 54,224 53,931 Total assets 555,202 575,411 620,850 662,855 747,825 Debt, including current maturities (2) 443,627 484,859 548,385 617,167 725,872 Debt, net of cash and restricted cash (2) 434,982 479,479 537,764 600,183 714,738 Stockholders' deficit (38,484) (37,354) (92,235) (128,485) (159,393) (1) Cash costs is a non GAAP financial measure. See Item 7. (2) Principal amount of debt. See Note 5 of the Notes to Consolidated Financial Statements, included herein. (3) In 2019 we reclassified all components of pension expense, except services costs, from compensation to other non-operating income. See Note 1 of theConsolidated Financial Statements, included herein. 19 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion includes comments and analysis relating to our results of operations and financial condition as of September 29,2019 and for 2018 and 2017. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notesthereto, included herein. NON-GAAP FINANCIAL MEASURES We use non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAPfinancial measures should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunctionwith information presented on a GAAP basis. In this report, we present Adjusted EBITDA, adjusted income (loss), adjusted earnings (loss) per common share (EPS), and cash costs, whichare non-GAAP financial performance measures that exclude from our reported GAAP results the impact of certain items consisting primarily ofrestructuring charges and non-cash charges. We believe such expenses, charges, and gains are not indicative of normal, ongoing operations,and their inclusion in results makes for more difficult comparisons between years and with peer group companies. In the future, however, we arelikely to incur expenses, charges, and gains similar to the items for which the applicable GAAP financial measures have been adjusted and toreport non-GAAP financial measures excluding such items. Accordingly, exclusion of those or similar items in our non-GAAP presentationsshould not be interpreted as implying the items are non-recurring, infrequent, or unusual. We define our non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, as follows: Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users overall understanding of theoperating performance of the Company. The measure isolates unusual, infrequent or non-cash transactions from the operatingperformance of the business. This allows users to easily compare operating performance among various fiscal periods and howmanagement measures the performance of the business. This measure also provides users with a benchmark that can be used whenforecasting future operating performance of the Company that excludes unusual, nonrecurring or one time transactions. Adjusted EBITDAis also a component of the calculation used by stockholders and analysts to determine the value of our business when using the marketapproach, which applies a market multiple to financial metrics. It is also a measure used to calculate the leverage ratio of the Company,which is a key financial ratio monitored and used by the Company and its investors. Adjusted EBITDA is defined as net income (loss), plusnon-operating expenses, income tax expense (benefit), depreciation and amortization, assets loss (gain) on sales, impairments and other,restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI andMNI and curtailment gains. Adjusted Income (Loss) and Adjusted Earnings (Loss) Per Common Share are non-GAAP financial performance measures that we believeoffer a useful metric to evaluate overall performance of the Company by providing financial statement users the operating performance ofthe Company excluding the impact of changes in the warrant valuation, which are non-cash transactions, and the impact of the Tax Cutsand Jobs Act (the "2017 Tax Act"). It is defined as income (loss) attributable to Lee Enterprises, Incorporated and diluted earnings (loss)per common share adjusted to exclude the impact of the warrant valuation, the impact of the 2017 Tax Act, and the gain on insurancesettlement. Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis andsettled in cash. This measure is useful to investors in understanding the components of the Company’s cash-settled operating costs.Generally, the Company provides forward-looking guidance of Cash Costs, which can be used by financial statement users to assess theCompany's ability to manage and control its operating cost structure. Cash Costs are defined as compensation, newsprint and ink andother operating expenses. Depreciation and amortization, assets loss (gain) on sales, impairments and other, other non-cash operatingexpenses and other expenses are excluded. Cash Costs also exclude restructuring costs and other, which are typically settled in cash. Total Operating Revenue Less Cash Costs, or “margin”, represents a non-GAAP financial performance measure of revenue less totalcash costs, also a non-GAAP financial measure. This measure is useful to investors in understanding the profitability of the Companyafter direct cash costs related to the production and delivery of products are paid. Margin is also useful in developing opinions andexpectations about the Company’s ability to manage and control its operating cost structure in relation to its peers. 20 A table reconciling Adjusted EBITDA to net income, the most directly comparable measure under GAAP, is set forth below under the caption"Reconciliation of Non-GAAP Financial Measures". Reconciliations of adjusted income (loss) and adjusted earnings (loss) per diluted commonshare to income (loss) attributable to Lee Enterprises, Incorporated and earnings (loss) per diluted common share, respectively, the most directlycomparable measures under GAAP, are set forth in Item 7, included herein, under the caption “Net Income and Earnings Per Share”. The subtotals of operating expenses representing cash costs and total operating revenue less cash costs can be found in tables in Item 7,included herein, under the caption “Continuing Operations”. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(UNAUDITED) The table below reconciles the non-GAAP financial performance measure of Adjusted EBITDA to net income, the most directly comparableGAAP measure: (Thousands of Dollars) 2019 2018 2017 Net Income 15,909 47,048 28,605 Adjusted to exclude Income tax expense (benefit) 7,931 (16,228) 11,611 Non-operating expenses, net 50,889 54,873 48,914 Equity in earnings of TNI and MNI (7,121) (9,249) (7,609)Assets loss (gain) on sales, impairments and other 2,464 6,429 (1,150)Depreciation and amortization 29,332 31,766 41,282 Restructuring costs and other 11,635 5,550 7,523 Stock compensation 1,638 1,857 2,088 Add: Ownership share of TNI and MNI EBITDA (50%) 8,811 9,883 9,927 Adjusted EBITDA 121,488 131,929 141,191 CRITICAL ACCOUNTING POLICIES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates andassumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differsignificantly from those estimates. We believe the following discussion addresses our most critical accounting policies, which are those that areimportant to the presentation of our financial condition and results of operations and require management's most subjective and complexjudgments. Intangible Assets, Other Than Goodwill Local mastheads (e.g., publishing periodical titles and web site domain names) are not subject to amortization. Non-amortized intangible assetsare tested for impairment annually on the first day of the fourth fiscal quarter or more frequently if events or changes in circumstances suggestthe asset might be impaired. The quantitative impairment test consists of comparing the fair value of each masthead or domain name with its carrying amount. We use arelief from royalty approach which utilizes a discounted cash flow model to determine the fair value of each masthead, domain name, or tradename. Management's judgments and estimates of future operating results in determining the intangibles fair values are consistently applied toeach underlying business in determining the fair value of each intangible asset. No impairment was recorded in 2019 or 2018. In 2017, werecognized impairment charges of $2.0 million. These charges were to bring the recorded indefinite lived intangibles equal to their implied fairvalues based on future projections. Our amortizable intangible assets consist mainly of customer relationships including subscriber lists and advertiser relationships. These assetvalues are amortized systematically over their estimated useful lives. Intangible assets subject to amortization are tested for recoverabilitywhenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The carrying amount of each assetgroup is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of such asset group. There were noindicators of impairment on intangible assets subject to amortization in 2019, 2018 or 2017. Future decreases in our market value, or significant differences in revenue, expenses or cash flows from estimates used to determine fair value,could result in additional impairment charges in the future. 21 Pension, Postretirement and Postemployment Benefit Plans We, along with our subsidiaries, have various defined benefit retirement plans, postretirement plans and postemployment plans, under whichsubstantially all of the benefits have been frozen in previous years. We account for our pension, postretirement and postemployment plans in accordance with the applicable accounting guidance, which requiresus to include the funded status of our pension plans in our balance sheets and to recognize, as a component of other comprehensive income(loss), the gains or losses that arise during the period but are not recognized in pension expense. The service cost component of net periodbenefit cost is reported on the Consolidated Statements of Income and Comprehensive Income and included in Compensation while all othercomponents are included in other non-operating income/expense. The determination of pension and postretirement plan obligations and expense is based on a number of actuarial assumptions. Two criticalassumptions are the discount rates applied to pension and postretirement plan obligations and the expected long-term rate of return on planassets. The discount rate assumption is based on investment yields available at year-end on corporate bonds rated AA and above with a maturity tomatch the expected benefit payment stream. To determine the expected long-term rate of return on pension plan assets, we consider the currentand expected asset allocations, as well as historical and expected returns on various categories of plan assets, input from the actuaries andinvestment consultants and long- term inflation assumptions. We used an assumption of 5.5% for 2019 for our expected return on pension planassets and a 4.5% for 2019 for our postretirement and postemployment benefits. The following table illustrates the sensitivity to a 50 basis point change in: Effect on 2019 Pension Effect on September 29,2019 Expense Liability Pension discount rate(1) $— $11,200,000 Postretirement and postemployment benefits discount rate(1) $— $500,000 Pension expected rate of return on assets $710,000 $— Postretirement and postemployment benefits expected rate of return on assets $118,000 $— (1)The Company's Pension and Other Postretirement Plans have been frozen as of September 29, 2019. As a result, changes in discount rates do notmeaningfully impact net periodic pension expense. Income Taxes We are subject to income taxes in the U.S. and record our tax provision for the anticipated tax consequences in our reported results ofoperations. Tax laws are complex and subject to different interpretations by the taxpayer and respective government taxing authorities.Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities, and the valuationallowance recorded against our net deferred tax assets, if any. Our current and deferred income tax provisions are calculated based on estimates and assumptions that could differ from the actual resultsreflected in income tax returns filed during the subsequent year. These estimates are reviewed and adjusted, if needed, throughout the year.Adjustments between our estimates and the actual results of filed returns are recorded when identified. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilitiesusing currently enacted tax rates. Deferred income tax assets are recognized for deductible temporary differences and loss carryforwards anddeferred income tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reportedamounts of assets and liabilities and their tax basis. Deferred income tax assets are reduced by a valuation allowance when, in our opinion, it ismore likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities areadjusted for the effects of changes in tax laws and rates on the date of enactment. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income taxpositions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement arereflected in the period in which the change in judgment occurs. We record interest and penalties related to unrecognized tax benefits as acomponent of income tax expense. 22 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS In February 2016, the FASB issued a new standard for the accounting treatment of leases. The new standard is based on the principle thatentities should recognize assets and liabilities arising from leases. The new standard's primary change is the requirement for entities torecognize a lease liability for payments and a right of use asset representing the right to use the leased asset during the term on most operatinglease arrangements. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term oftwelve months or less. In addition, the new standard expands the disclosure requirements of lease arrangements. Lessees have the option touse a modified retrospective transition approach, which includes a number of practical expedients. As a result of utilizing the modifiedretrospective transition approach, we will not restate prior year financial statements to conform to the new guidance. We expect to elect thepackage of practical expedients, which permits the Company to not reassess under the new standard the prior conclusions about leaseidentification, lease classification, or initial direct costs. In addition, we will not reassess whether existing land easements which were previouslynot accounted for as leases are or contain leases under the new guidance. To date, we reviewed all existing leases and contracts, completed data entry for in-scope leases into our selected software solution which iscompatible with our current financial reporting and control environment and quantified a range of expected financial impacts. We are required toand will adopt the new standard effective September 30, 2019, the first day of fiscal year 2020. We expect to recognize upon adoption, leaseliabilities and right of use assets ranging from $9,600,000 to $12,600,000. Right-of-use assets have been adjusted for lease incentives and initialdirect costs. We are still evaluating for potential embedded leases relating to our outsourced printing contracts, which could result in materialadditional lease obligations and right-of-use assets. We do not expect the adoption of the new standard will have a material impact on ourConsolidated Statements of Income or Consolidated Statement of Cash Flows. In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodologythat reflects expected credit losses and requires consideration of a wider array of reasonable and supportable information to inform and developcredit loss estimates. We will be required to use a forward-looking expected credit loss model for both accounts receivables and other financialinstruments. The new standard will be adopted beginning September 29, 2020 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currentlyevaluating the impact of this standard on our consolidated financial statements. 23 CONTINUING OPERATIONS Operating results, as reported in the Consolidated Financial Statements, are summarized below: (Thousands of Dollars and Shares, Except Per Share Data) 2019 2018 PercentChange 2017 PercentChange Advertising and marketing services revenue 265,933 303,446 (12.4) 331,360 (8.4)Subscription 186,691 195,108 (4.3) 191,922 1.7 Other 57,230 45,401 26.1 43,661 4.0 Total operating revenue 509,854 543,955 (6.3) 566,943 (4.1)Operating expenses: Compensation 182,869 199,164 (8.2) 213,109 (6.5)Newsprint and ink 22,237 24,949 (10.9) 24,904 0.2 Other operating expenses 193,709 199,653 (3.0) 199,754 (0.1)Cash costs 398,815 423,766 (5.9) 437,767 (3.2)Total operating revenue less cash costs 111,039 120,189 (7.6) 129,176 (7.0)Depreciation and amortization 29,332 31,766 (7.7) 41,282 (23.1)Assets loss (gain) on sales, impairments and other 2,464 6,429 (61.7) (1,150) NM Restructuring costs and other 11,635 5,550 NM 7,523 (26.2)Operating expenses 442,246 467,511 (5.4) 485,422 (3.7)Equity in earnings of associated companies 7,121 9,249 (23.0) 7,609 21.6 Operating income 74,729 85,693 (12.8) 89,130 (3.9)Non-operating income (expense): Interest expense (47,488) (52,842) (10.1) (57,573) (8.2)Debt financing and administrative cost (7,214) (5,311) 35.8 (4,818) 10.2 Other, net 3,813 3,280 16.3 13,477 (75.7)Non-operating expenses, net (50,889) (54,873) (7.3) (48,914) 12.2 Income before income taxes 23,840 30,820 (22.6) 40,216 (23.4)Income tax expense (benefit) 7,931 (16,228) NM 11,611 NM Net income 15,909 47,048 (66.2) 28,605 64.5 Net income attributable to non-controlling interests (1,641) (1,282) 28.0 (1,124) 14.1 Income attributable to Lee Enterprises, Incorporated 14,268 45,766 (68.8) 27,481 66.5 Other comprehensive (loss) income, net of income taxes (17,368) 4,322 NM 6,710 (35.6)Comprehensive (loss) income attributable to LeeEnterprises, Incorporated (3,100) 50,088 NM 34,191 46.5 Earnings per common share: Basic 0.26 0.84 (69.3) 0.51 64.7 Diluted 0.25 0.82 (69.5) 0.50 64.0 Due to our fiscal calendar, 2019 was comprised of 52 weeks, 2018 was comprised of 53 weeks and 2017 was comprised of 52 weeks.Additionally, we acquired or disposed of certain properties in each of 2019, 2018 and 2017. To facilitate a comparison of our results to prior periods, certain revenue and expense trends, as described below, are presented on a sameproperty basis and exclude the impact of acquisitions, dispositions and the 53rd week of revenues and expenses in the computation of thetrends. 24 OPERATING REVENUE Revenue Comparison 2019-2018 Total operating revenue totaled $509,854,000 in 2019, down $34,101,000, or 6.3%, attributed to a decline in same property operating revenueof 6.1% due to continued softness in the demand for print advertising, reductions in print subscription volumes reflecting general industrytrends, and $7,954,000 of operating revenue from the 53rd week of operations in 2018. Increases in digital revenue, especially fromTownNews, revenue from acquisitions and incremental revenue from our management agreement with BHMG helped offset the declines. Advertising and marketing services revenue was $265,933,000 in 2019, down 12.4%, due to a same property basis decrease of 12.0% due tocontinued decline in print advertising demand, specifically among national retailers, big box stores and classifieds. Digital advertising andmarketing services totaled $100,007,000 in 2019 and represented 37.6% of 2019 total advertising and marketing services revenue, partiallyoffsetting print declines. Subscription revenue totaled $186,691,000 in 2019, or down 4.3%, due to same property basis decrease of 4.3%, in 2019. The decrease isattributed to volume declines in full access subscriptions reflecting general industry trends, partially offset by strategic pricing initiatives due toour premium content and a 79.1% increase in digital only subscribers. As of September 2019, we now have 91,000 digital only subscribers. Other revenue increased $11,829,000, or 26.1%, in 2019. Management agreement revenue totaled $12,589,000 in 2019 compared to$1,331,000 in 2018 due to a full year under the agreement with BHMG. Digital services revenue, which is predominately TownNews, increased20.3% in 2019 due to product expansion and market share gains. The increases were partially offset by revenue declines in commercial printingand third party delivery due to a reduction in print volume. On a stand-alone basis, revenue at TownNews totaled $22,627,000, an increase of 20.1%, excluding the 53rd week of operations in 2018.Investments in video and streaming technology increased product offerings that helped gain market share in publishing and broadcast.Excluding intercompany activity, revenue at TownNews increased 24.0% in 2019. Total digital revenue including digital advertising revenue, digital subscription revenue and digital services revenue totaled $144,646,000in 2019, an increase of 4.0% over 2018, and represented 28.4% of our total operating revenue in 2019. Equity in earnings of TNI and MNI decreased $2,128,000 in 2019. Revenue Comparison 2018-2017 Total operating revenue was $543,955,000 in 2018 and was down $22,988,000, or 4.1%, attributed to a decline in same property operatingrevenue of 7.0% due to continued softness in the demand for print advertising. Increases in digital revenue, especially TownNews, and$7,954,000 of operating revenue from the 53rd week of operations in 2018 helped offset the declines. Advertising and marketing services revenue was down $27,914,000, or 8.4%, attributed to an 11.4% decline in same property revenue due tocontinued decline in print advertising demand, specifically among national retailers, big box stores and classifieds. Digital advertising andmarketing services totaled $96,498,000 in 2018, an increase of 4.7% compared to 2017, partially offsetting print declines. Subscription revenue increased $3,186,000, or 1.7%, in 2018. On a same property basis, subscription revenue decreased 1.7% as strategicpricing initiatives helped partially offset volume declines in full access subscriptions, reflecting general industry trends. Other revenue increased $1,740,000, or 4.0%, in 2018 and increased 2.7% on a same property basis. Digital services revenue, which ispredominately TownNews, increased $2,320,000, or 16.6%, in 2018 due to an increase in customers, including broadcast, and monetizingdigital audience with programmatic digital advertising. On a stand-alone basis, revenue at TownNews increased 16.0% to $18,900,000 andexcluding intercompany activity, revenue at TownNews increased 19.8% in 2018. We entered into a management agreement with BHMG inJuly of 2018 and earned $1,331,000 in revenue from this agreement in 2018. Increases in digital services and management agreementrevenue were partially offset by revenue declines in commercial printing and third party delivery due to a reduction in print volume. Equity in earnings of TNI and MNI increased $1,640,000 in 2018. 25 OPERATING EXPENSES Operating Expense Comparison 2019-2018 Operating expenses decreased $25,265,000, or 5.4%, in 2019 due to business transformation projects, outsourcing of certain productionoperations and reductions in legacy print expenses. The 53rd week of operations added $6,875,000 of operating expenses in 2018. Partiallyoffsetting these declines were operating expenses related to acquisitions in 2019. Cash Costs on a same property basis decreased of5.9% compared to 2018. Compensation expense was down $16,295,000, or 8.2%, due to a 7.8% decline on a same property basis due to a 10.9% reduction in FTE'swith compensation increases offsetting the declines in headcount. Business transformation projects and outsourcing helped drive efficienciesand reduced headcount and compensation expense. Newsprint and ink costs were down $2,712,000, or 10.9%, attributed to a same property basis decrease of 8.9% due to a 12.3% reduction innewsprint volume from print volume declines partially offset by higher average prices. Average newsprint prices increased the first half of 2019and declined the second half ending the year with prices ending 2019 at their lowest levels. See Item 7A, “Commodities”, included herein, forfurther discussion and analysis of the impact of newsprint on our business. Other operating expenses were down $5,944,000, or 3.0%, due to a 3.7% decline on same property basis. Other operating expenses includeall operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and other. The largestcomponents are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses. Costreductions were primarily related to lower delivery and other print-related costs due to lower volumes of our print editions, offset in part by highercosts associated with growing digital revenue. Restructuring costs and other totaled $11,635,000 and $5,550,000 in 2019 and 2018, respectively. In 2019, restructuring costs and otherinclude an estimate of costs related to withdrawals from certain of our multiemployer pension plans totaling $3,836,010. The remainingrestructuring costs in 2019 and 2018 are predominately severance. Depreciation expense decreased $2,049,000, or 14.1%, in 2019. Amortization expense decreased $385,000, or 2.2%, in 2019. Assets loss (gain) on sales, impairments and other was a net expense of $2,464,000 in 2019 compared to $6,429,000 in 2018. We recognizeda $2,464,000 loss on sale of assets in 2019 compared to an $8,193,000 loss in 2018. We recorded $267,000 of non-cash impairment chargesin 2018, and also in 2018, we recognized curtailment gains of $2,031,000 from the elimination of an unfunded employee benefit plan. The factors noted above resulted in operating income of $74,729,000 in 2019 compared to $85,693,000 in 2018. In 2020, we expect Cash Costs to decline between 5.5% and 6.5% due to the flow through impact of actions taken throughout 2019, additionalbusiness transformation projects, lower production and distribution costs of our printed editions due to volume declines, and lower newsprintprices. Operating Expense Comparison 2018-2017 Operating expenses decreased $17,911,000, or 3.7%, in 2018 due to business transformation projects, outsourcing of certain productionoperations and our consumer sales call center and reductions in legacy print expenses. Partially offsetting these declines were $6,875,000 ofoperating expenses related to the 53rd week of operations. Cash Costs were down 6.2% on a same property basis compared to 2017. Compensation expense was down 13,945,000, or 6.5%, attributed to a same property decrease of 9.5% due to a 12.0% reduction in full timeequivalents partially offset by higher costs associated with our self-insured medial plan. Business transformation projects and outsourcinghelped drive efficiencies and reduce headcount. Newsprint and ink costs were flat for 2018 and down 1.8% on a same property basis, due to a 17.9% reduction in newsprint volume from printvolume declines and using a lower basis weight newsprint partially offset by significantly higher average prices. Average newsprint pricesincreased throughout 2018 due to significant reductions in supply by North American newsprint producers. See Item 7A, “Commodities”,included herein, for further discussion and analysis of the impact of newsprint on our business. 26 Other operating expenses for 2018 decreased $101,000, or 0.1%, due to a same property basis decrease of 3.3%. Other operating expensesinclude all operating costs not considered to be compensation, newsprint, depreciation and amortization, or restructuring costs and other. Thelargest components are costs associated with printing and distribution of our printed products, digital cost of goods sold and facility expenses.Cost reductions were primarily related to lower delivery and other print-related costs due to lower volumes of our print editions, offset in part bycosts associated with outsourcing. Restructuring costs and other totaled $5,550,000 and $7,523,000 in 2018 and 2017, respectively. 2017 restructuring costs and other includes$2,600,000 related to the withdrawal from one of our multiemployer plans. The remaining restructuring costs in 2018 and 2017 arepredominately severance. Depreciation expense decreased $1,482,000, or 9.2%. Amortization expense decreased $8,034,000, or 31.8%, in 2018 as certain intangibleassets became fully amortized. Assets loss (gain) on sales, impairments and other was a net expense of $6,429,000 in 2018 compared to a net benefit of $1,150,000 in 2017.We recognized an $8,193,000 loss on sale of assets in 2018 compared to a $74,000 loss in 2017. We recorded $267,000 of non-cashimpairment charges in 2018 compared to $2,517,000 in 2017. Curtailment gains totaled $2,031,000 and $3,741,000 in 2018 and 2017,respectively, from the elimination of an unfunded employee benefit plan. The factors noted above resulted in operating income of $85,693,000 in 2018 compared to $89,130,000 in 2017. NON-OPERATING INCOME AND EXPENSES Non-operating Income and Expense Comparison 2019-2018 Interest expense decreased $5,354,000, or 10.1%, to $47,488,000 in 2019 due to lower debt balances. Our weighted average cost of debt,excluding amortization of debt financing cost, was 10.0% in 2019 and 2018. We recognized $7,214,000 of debt financing and administrativecosts in 2019 compared to $5,311,000 in 2018. The majority of costs represent amortization of refinancing costs paid in 2014, as well as anadjustment of $1,309,000 as discussed in Note 5 of the Notes to the Consolidated Financial Statements, included herein. Included in other non-operating income and expense is income related to our defined benefit pension plans and other post-employment benefitplans, which totaled $2,847,000 and $2,830,000 in 2019 and 2018, respectively. Other non-operating income/expense also includes a fair value adjustment related to the Warrants. As more fully discussed in Note 5 of theNotes to the Consolidated Financial Statements, included herein, we recorded a liability for the Warrants, issued in connection with the WarrantAgreement. We measure the liability to fair value each reporting period, with changes reported in other non-operating income (expenses). Dueto the fluctuation in the price of our Common Stock and changes in interest rates, the estimated fair value of the warrant liability can changeeach period. We recorded non-operating income of $612,000 in 2019 and non-operating expense of $226,000 in 2018 due to the change in fairvalue of the Warrants. Non-operating Income and Expense Comparison 2018-2017 Interest expense decreased $4,731,000, or 8.2%, to $52,842,000 in 2018 due to lower debt balances. Our weighted average cost of debt,excluding amortization of debt financing cost, increased to 10.0% in 2018 compared to 9.9% in 2017, as the majority of our debt repaymentswere made on our lowest cost debt. We recognized $5,311,000 of debt financing and administrative costs in 2018 compared to $4,818,000 in 2017. The majority of costs representamortization of refinancing costs paid in 2014. Included in other non-operating income and expense is income related to our defined benefit pension plans and other post-retirement benefitplans, which totaled $2,830,000 and $3,417,000 in 2018 and 2017, respectively. As more fully discussed in Note 5 of the Notes to the Consolidated Financial Statements, included herein, we recorded a liability for theWarrants, issued in connection with the Warrant Agreement. We re-measure the liability to fair value each reporting period, with changesreported in other non-operating income (expenses). Due to the fluctuation in the price of our Common Stock, and changes in interest rates, theestimated fair value of the warrant liability can change each period. We recorded non-operating expense of $226,000 in 2018 and non-operating income of $10,181,000, in 2017, due to the change in fair value of the Warrants. 27 INCOME TAX EXPENSES On December 22, 2017, comprehensive tax legislation commonly referred to as the 2017 Tax Act was signed into law. Among other provisions,the 2017 Tax Act reduces the federal statutory corporate income tax rate from 35% to 21%. The reduction of the corporate tax rate caused us tore-measure our deferred tax assets and liabilities to the lower federal base rate of 21%. We reported a discrete adjustment from revaluing ourdeferred tax assets and liabilities resulting in a net decrease in income tax expense of $24,872,000 for the 53 weeks ended September 30, 2018. In 2019, we recorded income tax expense of $7,931,000, or 33.3% of pretax income and in 2018, we recorded an income tax benefit of$16,228,000, or 52.7% of pretax income. Excluding the impact from the 2017 Tax Act, the effective income tax rate for 2018 was 28.0%. In 2017,we recognized income tax expense of $11,611,000, resulting in an effective tax rate of 28.9%. See Note 10 of the Notes to the ConsolidatedFinancial Statements, included herein, for a discussion of the difference between the expected federal income tax rate and the actual tax rates. NET INCOME AND EARNINGS PER SHARE The following table summarizes the impact from the warrant fair value adjustments and the 2017 Tax Act on income attributable to LeeEnterprises, Incorporated and earnings per diluted common share. Per share amounts may not add due to rounding. 2019 2018 2017 (Thousands of Dollars, Except Per ShareData) Amount Per Share Amount Per Share Amount Per Share Income attributable to Lee Enterprises,Incorporated, as reported 14,268 0.25 45,766 0.82 27,481 0.50 Adjustments: Warrants fair value adjustment (612) 0.01 226 — (10,181) (0.19)Adjusted income before income taximpacts 13,656 0.24 45,992 0.82 17,300 0.31 Income tax effect of 2017 Tax Act — — (24,872) (0.44) — Income attributable to Lee Enterprises,Incorporated, as adjusted 13,656 0.24 21,120 0.38 17,300 0.31 LIQUIDITY AND CAPITAL RESOURCES Operating Activities Cash provided by operating activities totaled $57,676,000 in 2019 compared to $59,296,000 in 2018 due to a decline in net income to$15,909,000 in 2019 from $22,176,000 in 2018, after adjusting 2018 for the 2017 Tax Act impact of $24,872,000. The decline in net income isprimarily the result of continued softening of the print advertising environment. Cash provided by operating activities totaled $59,296,000 in 2018 compared to $72,281,000 in 2017 due to a decline in net income to$22,176,000 in 2018 from $28,605,000 in 2017, after adjusting for the 2017 Tax Act impact of $24,872,000. The decline in net income isprimarily a result of the continued softening of the print advertising environment. Operating cash flows were also impacted by pensioncontributions. Pension liabilities, net of plan assets, totaled $47,037,000 as of September 29, 2019. Contributions to pension plans are expected to total$6,718,000 in 2020. Investing Activities Cash required for investing activities totaled $10,933,000 in 2019 and $72,000 in 2018. Capital spending totaled $5,901,000 and $6,025,000 in2019 and 2018, respectively. Proceeds from sales of assets totaled $1,501,000 and $6,623,000 in 2019 and 2018, respectively. 2019 included$6,543,000 in spending related to acquisitions. 28 Cash required for investing activities totaled $72,000 in 2018 and $9,455,000 in 2017. Capital spending totaled $6,025,000 and $4,078,000 in2018 and 2017, respectively. Proceeds from sales of assets totaled $6,623,000 in 2018 and $2,582,000 in 2017, respectively. 2017 included$7,450,000 in spending related to the acquisition of local media operations. We anticipate that funds necessary for capital expenditures, which are expected to be $7,800,000 in 2020, and other requirements, will beavailable from internally generated funds, or available under our Revolving Facility. Financing Activities Cash required for financing activities totaled $43,478,000 in 2019, $64,465,000 in 2018 and $69,189,000 in 2017. Debt reduction accounted forthe majority of the usage of funds in all years. Debt is summarized as follows: Interest Rates (%) September 29 September 30 September 29 (Thousands of Dollars) 2019 2018 2019 Revolving Facility — — 6.1 1st Lien Term Loan — 6,303 8.3 Notes 363,420 385,000 9.5 2nd Lien Term Loan 80,207 93,556 12.0 443,627 484,859 Unamortized debt issue costs (11,282) (17,055) Less current maturities of long-term debt 2,954 7,027 Total long-term debt 429,391 460,777 At September 29, 2019, our weighted average cost of debt, excluding amortization of debt financing costs, is 10.0%. At September 29, 2019, aggregate minimum required maturities of debt excluding amounts required to be paid from future excess cash flowcomputations total $2,954,000 in 2020, zero in 2021, $363,420,000 in 2022 and $77,253,000 in 2023. The 2nd lien term loan requires excess cash flow payments based on calculations defined in the credit agreements. See Note 5 of the Notes tothe Consolidated Financial Statements. Liquidity We maintain a Revolving Facility pursuant to which we may borrow up to $23,120,000. At September 29, 2019, after consideration of letters ofcredit, we have approximately $17,644,000 available for future use under our Revolving Facility. The Revolving Facility contains a maintenancecovenant in order to borrow on the Revolving Facility. At September 29, 2019, we are in compliance with this covenant. The Revolving Facilitymatures on December 28, 2020. We expect to amend and extend our Revolving Facility prior to its maturity. Including cash, our liquidity at September 29, 2019 totals $26,289,000. This liquidity amount excludes any future cash flows. We expect allinterest and principal payments due in the next twelve months will be satisfied by our cash flows, which will allow us to maintain an adequatelevel of liquidity. The Warrants, if and when exercised, would provide additional liquidity in an amount up to $25,140,000. At September 29, 2019, the principal amount of our outstanding debt totals $443,627,000. For the last twelve months ending September 29,2019, the principal amount of our debt, net of cash, is 3.58 times our Adjusted EBITDA. The 2014 Refinancing significantly extended our debt maturity profile with final maturity of the majority of our debt in 2022. We expect torefinance our debt prior to maturity. 29 There are numerous potential consequences under the Notes, 1st Lien Credit Facility, 2nd Lien Term Loan, if an event of default, as defined inthe respective debt agreements, occurs and is not remedied. Many of those consequences are beyond our control. The occurrence of one ormore events of default would give rise to the right of the applicable lender(s) to exercise their remedies under the Notes, 1st Lien Credit Facility,2nd Lien Term Loan, respectively, including, without limitation, the right to accelerate all outstanding debt and take actions authorized in suchcircumstances under applicable collateral security documents. Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and repay, refinance or amendour debt agreements as they become due, or earlier if liquidity is available. The Notes, 1st Lien Credit Facility and 2nd Lien Term Loan have onlylimited affirmative covenants with which we are required to maintain compliance. We are in compliance with our debt covenants at September29, 2019. In February 2017 our filing of a replacement Form S-3 registration statement ("Shelf") with the SEC was declared effective and expires February2020. Maintaining an effective shelf is required under our credit agreements. The Shelf registration gives us the flexibility to issue and publiclydistribute various types of securities, including preferred stock, common stock, warrants, secured or unsecured debt securities, purchasecontracts and units consisting of any combination of such securities, from time to time, in one or more offerings, up to an aggregate amount of$750,000,000. SEC issuer eligibility rules require us to have a public float of at least $75,000,000 in order to use the Shelf. Subject tomaintenance of the minimum level of equity market float and the conditions of our existing debt agreements, the Shelf may enable us to sellsecurities quickly and efficiently when market conditions are favorable or financing needs arise. Under our existing debt agreements, netproceeds from the sale of any securities may be used generally to reduce debt. Other Matters Cash and cash equivalents increased $3,265,000 in 2019, decreased $5,241,000 in 2018 and decreased $6,363,000 in 2017. SEASONALITY Our largest source of publishing revenue, retail advertising, is seasonal and tends to fluctuate with retail sales in markets served. Historically,retail advertising is higher in the December and June quarters. Advertising and marketing services revenue is lowest in the March quarter. Quarterly results of operations are summarized in Note 17 of the Notes to Consolidated Financial Statements, included herein. INFLATION Price increases (or decreases) for our products are implemented when deemed appropriate by us. We continuously evaluate price increases,productivity improvements, sourcing efficiencies and other cost reductions to mitigate the impact of inflation. 30 CONTRACTUAL OBLIGATIONS The following table summarizes our significant contractual obligations at September 29, 2019: (Thousands of Dollars) Payments (or Commitments) Due (Years) Less More Nature of Obligation Total Than 1 1-3 3-5 Than 5 Debt (Principal Amount) (1) 443,627 2,954 440,673 — — Interest expense (2)(3) 111,093 43,840 67,253 — — Operating lease obligations 15,925 3,402 4,528 3,003 4,992 Capital expenditure commitments 1,642 1,642 — — — 572,287 51,838 512,454 3,003 4,992 (1)Maturities of long-term debt are limited to mandatory payments and, accordingly, exclude excess cash flow, asset sale and other payments underthe Notes and the 2nd Lien Term Loan. While excess cash flow payments are based on actual performance, we expect to make voluntary andexcess cash flow payments on the 2nd lien term loan currently outstanding, in the next four years. See Note 5 of the Notes to the ConsolidatedFinancial Statements, included herein. (2)Interest expense includes an estimate of interest expense for the Notes, 1st Lien Credit Facility, and 2nd Lien Term Loan until their maturities inMarch 2022, March 2019, and December 2022, respectively. Interest expense under the Notes is estimated using the 9.5% contractual rate appliedto the outstanding balance as reduced by future contractual maturities of such debt. Interest expense under the Revolving Facility is estimatedbased on the one month LIBOR at September 29, 2019 of 1.82% as increased by our applicable margin of 5.5% applied to the outstanding balance,as reduced by future contractual maturities of such debt. Interest expense under the 2nd Lien Term Loan is estimated using the 12.0% contractualrate applied to the outstanding balance during each period. Changes in interest rates in excess of current LIBOR levels, use of borrowing rates notbased on LIBOR, use of interest rate hedging instruments, and/or principal payments in excess of contractual maturities or based on otherrequirements of the Notes, 1st Lien Credit Facility or 2nd Lien Term Loan could significantly change this estimate. See Note 5 of the Notes toConsolidated Financial Statements, included herein. (3)Interest expense excludes non-cash present value adjustments and amortization of debt financing costs previously paid. See Note 5 of the Notes toConsolidated Financial Statements, included herein. The table above excludes future cash requirements for pension, postretirement and postemployment obligations. The periods in which theseobligations will be settled in cash are not readily determinable and are subject to numerous future events and assumptions. See Notes 6 and 7 ofthe Notes to the Consolidated Financial Statements, included herein. The contractual obligations above exclude unrecognized tax benefits to be recorded in accordance with FASB ASC Topic 740, Income Taxes.We are unable to reasonably estimate the ultimate amount or timing of cash settlements with the respective taxing authorities for such matters. Asubstantial amount of our deferred income tax liabilities will not result in future cash payments. See Note 11 of the Notes to the ConsolidatedFinancial Statements, included herein. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk stemming from changes in interest rates and commodity prices. Changes in these factors could causefluctuations in earnings and cash flows. In the normal course of business, exposure to certain of these market risks is managed as describedbelow. INTEREST RATES ON DEBT Our debt structure is entirely fixed rate as of September 29, 2019. We regularly evaluate alternatives to hedge our interest rate risk, but have no hedging instruments in place. COMMODITIES After experiencing a peak in the second half of 2018, newsprint prices began to decline during the 13 weeks ended March 31, 2019 andcontinued throughout the balance of the year. As a reaction to the 2018 North American producers’ significant capacity reduction and tight supplyconditions of newsprint, consumers maintained aggressive ordering patterns despite accelerated declines in demand. High inventories combinedwith conservation efforts to reduce paper usage and costs caused most newsprint users to start 2019 with excess inventories leading to reducedreplacement supply orders and declining supply prices. Favorable exchange rates between the U.S. dollar and the Canadian dollar likelyprevented additional production capacity reduction in North American, particularly at Canadian sources, further aggravating oversupply andaccelerating price declines. 31 Our long term supply strategy continues to align and concentrate the Company purchases with those cost effective suppliers most likely tocontinue producing and supplying newsprint to the North American market. Where possible the Company will align supply with the lowest costmaterial. A $10 per tonne price increase for 27.7 pound newsprint would result in an annualized reduction in income before taxes of approximately$213,000 based on anticipated consumption in 2020, excluding consumption of TNI and MNI and the impact of LIFO accounting. SENSITIVITY TO CHANGES IN VALUE Our fixed rate debt consists of $363,420,000 principal amount of the Notes and $80,207,000 principal amount under the 2nd Lien Term Loan. AtSeptember 29, 2019, based on an average of private market price quotations, the fair values were $364,328,550 and $80,207,214 for the Notesand 2nd Lien Term Loan, respectively. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Information with respect to this Item is included herein under the caption “Consolidated Financial Statements”. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTSON ACCOUNTING AND FINANCIAL DISCLOSURE Information with respect to this Item is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference,under the caption “Relationship with Independent Registered Public Accounting Firm”. ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, weconducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 29, 2019, the end of the period covered by this Annual Report (the “EvaluationDate”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosurecontrols and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to bedisclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and(ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allowtimely decisions regarding required disclosure. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as such term isdefined in Rule 13a-15(f) of the Exchange Act. Any internal control system, no matter how well designed, has inherent limitations and may notprevent or detect misstatements. Accordingly, even those systems determined to be effective can provide only reasonable assurance withrespect to financial statement preparation and presentation. Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, weassessed the effectiveness of our internal control over financial reporting as of the Evaluation Date, using the criteria set forth in the InternalControl-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on thisassessment, management has concluded that our internal control over financial reporting is effective as of the Evaluation Date. Our independent registered public accounting firm, KPMG LLP, has issued a report on the Company's internal control over financial reporting.KPMG’s report on the audit of internal control over financial reporting appears in this Annual Report. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have been no changes in our internal control over financial reporting that occurred during the 13 weeks ended September 29, 2019 thathave materially affected or are reasonably likely to materially affect our internal control over financial reporting. 32 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of DirectorsLee Enterprises, Incorporated: Opinion on Internal Control Over Financial Reporting We have audited Lee Enterprises, Incorporated and subsidiaries (the Company) internal control over financial reporting as of September 29,2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizationsof the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financialreporting as of September 29, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committeeof Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theconsolidated balance sheets of the Company as of September 29, 2019 and September 30, 2018, the related consolidated statements ofincome, comprehensive income, stockholders’ equity (deficit), and cash flows for the 52-week period ended September 29, 2019, the 53-weekperiod ended September 30, 2018 and the 52-week period ended September 24, 2017 and the related notes (collectively, the consolidatedfinancial statements), and our report dated December 13, 2019 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control OverFinancial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordancewith the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Ouraudit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing therisk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on theassessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe thatour audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Chicago, IllinoisDecember 13, 2019 33 ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information with respect to this Item, except for certain information related to our executive officers included under the caption “Executive Team”in Part I of this Annual Report, is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference, underthe captions “Proposal 1 - Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance”. Our executive officers arethose elected officers whose names and certain information are set forth under the caption “Executive Team” in Part 1 of this Annual Report. We have a Code of Business Conduct and Ethics ("Code") that applies to all of our employees, including our principal executive officer, andprincipal financial and accounting officer. The Code is monitored by the Audit Committee of our Board of Directors and is annually affirmed by ourdirectors and executive officers. We maintain a corporate governance page on our website which includes the Code. The corporate governancepage can be found at www.lee.net by clicking on “Governance” under the "About" tab. A copy of the Code will also be provided without charge toany stockholder who requests it. Any future amendment to, or waiver granted by us from, a provision of the Code will be posted on our website. ITEM 11. EXECUTIVE COMPENSATION Information with respect to this Item is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference,under the captions, “Compensation of Non-Employee Directors”, “Executive Compensation” and “Compensation Discussion and Analysis”;provided, however, that the subsection entitled “Executive Compensation - Executive Compensation Committee Report” shall not be deemed tobe incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS Information with respect to this Item is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference,under the captions “Voting Securities and Principal Holders Thereof” and “Equity Compensation Plan Information”. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSAND DIRECTOR INDEPENDENCE Information with respect to this Item is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference,under the caption “Directors' Meetings and Committees of the Board of Directors”. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information with respect to this Item is included in our Proxy Statement to be filed in January 2020, which is incorporated herein by reference,under the caption “Relationship with Independent Registered Public Accounting Firm”. PART IV 34 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed as part of this Annual Report: FINANCIAL STATEMENTS Consolidated Statements of Income and Comprehensive Income (Loss) - 52 weeks ended September 29, 2019, 53 weeks ended September 30,2018 and 52 weeks ended September 24, 2017Consolidated Balance Sheets - September 29, 2019 and September 30, 2018Consolidated Statements of Stockholders' Equity (Deficit) - 52 weeks ended September 29, 2019, 53 weeks ended September 30, 2018 and 52weeks ended September 24, 2017Consolidated Statements of Cash Flows - 52 weeks ended September 29, 2019, 53 weeks ended September 30, 2018 and 52 weeks endedSeptember 24, 2017Notes to Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm FINANCIAL STATEMENT SCHEDULES All schedules have been omitted as they are not required, not applicable, not deemed material or because the information is included in theNotes to Consolidated Financial Statements, included herein. EXHIBITS See Exhibit Index, included herein. 35 CONSOLIDATED FINANCIAL STATEMENTSPAGE Consolidated Statements of Income and Comprehensive Income (Loss)37 Consolidated Balance Sheets38 Consolidated Statements of Stockholders' Equity (Deficit)40 Consolidated Statements of Cash Flows41 Notes to Consolidated Financial Statements42 Report of Independent Registered Public Accounting Firm73 36 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Thousands of Dollars, Except Per Common Share Data) 2019 2018 2017 Operating revenue: Advertising and marketing services 265,933 303,446 331,360 Subscription 186,691 195,108 191,922 Other 57,230 45,401 43,661 Total operating revenue 509,854 543,955 566,943 Operating expenses: Compensation 182,869 199,164 213,109 Newsprint and ink 22,237 24,949 24,904 Other operating expenses 193,709 199,653 199,754 Depreciation and amortization 29,332 31,766 41,282 Assets loss (gain) on sales, impairments and other 2,464 6,429 (1,150)Restructuring costs and other 11,635 5,550 7,523 Total operating expenses 442,246 467,511 485,422 Equity in earnings of associated companies 7,121 9,249 7,609 Operating income 74,729 85,693 89,130 Non-operating income (expense): Interest expense (47,488) (52,842) (57,573)Debt financing and administrative costs (7,214) (5,311) (4,818)Other, net 3,813 3,280 13,477 Total non-operating expense, net (50,889) (54,873) (48,914)Income before income taxes 23,840 30,820 40,216 Income tax expense (benefit) 7,931 (16,228) 11,611 Net income 15,909 47,048 28,605 Net income attributable to non-controlling interests (1,641) (1,282) (1,124)Income attributable to Lee Enterprises, Incorporated 14,268 45,766 27,481 Other comprehensive income (loss), net of income taxes (17,368) 4,322 6,710 Comprehensive (loss) income attributable to Lee Enterprises, Incorporated (3,100) 50,088 34,191 Earnings per common share: Basic: 0.26 0.84 0.51 Diluted: 0.25 0.82 0.50 The accompanying Notes are an integral part of the Consolidated Financial Statements. 37 CONSOLIDATED BALANCE SHEETS September 29 September 30 (Thousands of Dollars) 2019 2018 ASSETS Current assets: Cash and cash equivalents 8,645 5,380 Accounts receivable, less allowance for doubtful accounts: 2019 $6,434; 2018 $4,806 42,536 43,711 Inventories 3,769 5,684 Prepaids and other 5,353 4,567 Total current assets 60,303 59,342 Investments: Associated companies 28,742 29,216 Other 10,684 10,958 Total investments 39,426 40,174 Property and equipment: Land and improvements 16,979 17,432 Buildings and improvements 148,514 150,376 Equipment 237,289 276,332 Construction in process 1,980 1,710 404,762 445,850 Less accumulated depreciation 322,723 353,522 Property and equipment, net 82,039 92,328 Goodwill 250,309 246,176 Other intangible assets, net 107,393 119,819 Medical plan assets, net 14,338 16,157 Other 1,394 1,415 Total assets 555,202 575,411 The accompanying Notes are an integral part of the Consolidated Financial Statements. 38 September 29 September 30 (Thousands of Dollars and Shares, Except Per Share Data) 2019 2018 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt 2,954 7,027 Accounts payable 16,750 12,747 Compensation and other accrued liabilities 17,711 19,641 Accrued interest 1,903 2,031 Unearned revenue 21,720 23,895 Total current liabilities 61,038 65,341 Long-term debt, net of current maturities 429,391 460,777 Pension obligations 47,037 26,745 Postretirement and postemployment benefit obligations 2,550 2,580 Deferred income taxes 29,806 39,108 Income taxes payable 8,742 6,559 Warrants and other 13,469 10,561 Total liabilities 592,033 611,671 Equity (deficit): Stockholders' equity (deficit): Serial convertible preferred stock, no par value; authorized 500 shares; none issued — — Common Stock, authorized 120,000 shares; issued and outstanding: 577 572 September 29, 2019; 57,646 shares; $0.01 par value September 30, 2018; 57,141 shares; $0.01 par value Class B Common Stock, $2 par value; authorized 30,000 shares; none issued — — Additional paid-in capital 255,476 253,511 Accumulated deficit (265,423) (279,691)Accumulated other comprehensive loss (29,114) (11,746)Total stockholders' deficit (38,484) (37,354)Non-controlling interests 1,653 1,094 Total deficit (36,831) (36,260)Total liabilities and deficit 555,202 575,411 The accompanying Notes are an integral part of the Consolidated Financial Statements. 39 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) Amount Shares (Thousands of Dollars and Shares) 2019 2018 2017 2019 2018 2017 Common Stock: Balance, beginning of year 572 567 558 57,141 56,712 55,771 Shares issued 5 5 9 505 429 941 Balance, end of year 577 572 567 57,646 57,141 56,712 Additional paid-in capital: Balance, beginning of year 253,511 251,790 249,740 Stock compensation 2,040 2,039 2,088 Shares issued (redeemed) (75) (318) (38) Balance, end of year 255,476 253,511 251,790 Accumulated deficit: Balance, beginning of year (279,691) (328,524) (356,005) Net income 15,909 47,048 28,605 Net income attributable to non-controlling interests (1,641) (1,282) (1,124) Cumulative effect of accounting change — 3,067 — Balance, end of year (265,423) (279,691) (328,524) Accumulated other comprehensiveincome (loss): Balance, beginning of year (11,746) (16,068) (22,778) Change in pension and postretirementbenefits (24,667) 10,477 11,439 Deferred income taxes, net 7,299 (3,088) (4,729) Cumulative effect of accounting change — (3,067) — Balance, end of year (29,114) (11,746) (16,068) Total stockholders' deficit (38,484) (37,354) (92,235) 57,646 57,141 56,712 The accompanying Notes are an integral part of the Consolidated Financial Statements. 40 CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands of Dollars) 2019 2018 2017 Cash provided by operating activities: Net income 15,909 47,048 28,605 Adjustments to reconcile income to net cash provided by operating activities: Depreciation and amortization 29,332 31,766 41,282 Non-operating losses 7,213 3,547 3,594 Stock compensation expense 1,638 1,857 2,088 Distributions greater (less) than earnings of MNI 465 (1,229) 546 Deferred income taxes (2,003) (17,378) 10,360 Pension contributions (650) (4,990) — Other, net 1,968 6,907 (967)Changes in operating assets and liabilities: Decrease in receivables and contract sales 1,697 4,418 2,854 Decrease (increase) in inventories and other 2,759 (1,926) 687 Decrease in accounts payable and other accrued liabilities (3,676) (8,587) (6,393) Increase (decrease) in pension, postretirement and postemploymentbenefit obligations 1,900 (2,482) (3,473) Change in income taxes payable 1,495 687 (1) Other, including warrants (371) (342) (6,901)Net cash provided by operating activities 57,676 59,296 72,281 Cash provided by (required for) investing activities: Purchases of property and equipment (5,901) (6,025) (4,078) Proceeds from sales of assets 1,502 6,623 2,582 Acquisitions (6,543) — (7,450) Distributions greater (less) than earnings of TNI 9 1,194 (11) Other, net — (1,864) (498)Net cash required for investing activities (10,933) (72) (9,455)Cash provided by (required for) financing activities: Proceeds from long-term debt 600 10,000 5,000 Payments on long-term debt (41,832) (73,526) (73,782) Debt financing and administrative costs paid (1,773) (437) (373) Common stock transactions, net (473) (502) (34)Net cash required for financing activities (43,478) (64,465) (69,189)Net increase (decrease) in cash and cash equivalents 3,265 (5,241) (6,363)Cash and cash equivalents: Beginning of year 5,380 10,621 16,984 End of year 8,645 5,380 10,621 The accompanying Notes are an integral part of the Consolidated Financial Statements. 41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS References to "we", "our", "us" and the like throughout the Consolidated Financial Statements refer to Lee Enterprises, Incorporated andsubsidiaries (the "Company"). References to "2019", "2018", "2017" and the like refer to the fiscal years ended the last Sunday inSeptember. Fiscal years 2019 and 2017 include 52 weeks and 2018 includes 53 weeks of operations. Lee Enterprises, Incorporated is a leading provider of high quality, trusted, local news and information, and a major platform for advertising in themarkets we serve. We operate 50 principally mid-sized local media operations (including TNI Partners ("TNI") and Madison Newspapers, Inc.("MNI")) across 20 states. 1. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Consolidated Financial Statements include our accounts and those of our subsidiaries, all of which are wholly-owned, except for our 50%interest in TNI, 50% interest in MNI and 82.5% interest in TownNews, TNI and MNI are accounted for under the equity method. Results ofTownNews are consolidated. In February 2018, the Financial Accounting Standards Board (“FASB”) issued new guidance to allow a reclassification from accumulated othercomprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from what is commonly referred to as the Tax Cuts andJobs Act (the "2017 Tax Act"). In the first quarter of fiscal year 2018, we re-measured our deferred taxes related to unrealized gains on ourinvestment balances using the reduced tax rate. As required by GAAP, we recognized the net tax benefit in the provision for income taxes in ourconsolidated income statements, and we reclassified a $3,067,000 net tax benefit from AOCI to retained earnings in our consolidated balancesheets. Adoption of the standard had no impact to our consolidated income statements or cash flows statements. In March 2016, the FASB issued a new standard that makes improvements to the accounting for employee share-based payments. The newstandard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxesand statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted this standard in 2018 and theimpact from the adoption of this standard did not have a material impact on the Consolidated Financial Statements. Fiscal Year All of our enterprises use period accounting with the fiscal year ending on the last Sunday in September. Subsequent Events We have evaluated subsequent events through December 13, 2019. No events have occurred subsequent to September 29, 2019 that requiredisclosure or recognition in these financial statements. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP")requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosureof contingent assets and liabilities. We evaluate our estimates on an on-going basis. We base our estimates on historical experience and onvarious other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgmentsabout the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimatesunder different assumptions or conditions. Principles of Consolidation All significant intercompany transactions and balances have been eliminated. Investments in TNI and MNI are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings sinceacquisition less, for TNI, amortization of, and reductions in the value of, intangible assets. 42 Cash and Cash Equivalents We consider all highly liquid debt instruments purchased with an original maturity of three months or less at date of acquisition to be cashequivalents. Accounts Receivable We evaluate our allowance for doubtful accounts receivable based on historical credit experience, payment trends and other economic factors.Delinquency is determined based on timing of payments in relation to billing dates. Accounts considered to be uncollectible are written off. Inventories Newsprint inventories and other inventories are priced at the lower of cost or net realizable value. LIFO newsprint inventories at September 29,2019 and September 30, 2018 are less than replacement cost by $1,661,000 and $2,333,000, respectively. The components of inventory by cost method are as follows: (Thousands of Dollars) September 29,2019 September 30,2018 Newsprint - FIFO method 1,498 2,079 Newsprint - LIFO method 1,296 2,071 Other inventory - FIFO method 975 1,534 3,769 5,684 Other Investments Other investments primarily consist of marketable securities held in trust under a deferred compensation arrangement and investments for whichno established market exists. Marketable securities are classified as trading securities and carried at fair value with gains and losses reported inearnings. Non-marketable securities are carried at cost. Property and Equipment Property and equipment are carried at cost. Equipment, except for printing presses and preprint insertion equipment, is depreciated primarily bydeclining-balance methods. The straight-line method is used for all other assets. The estimated useful lives are as follows: Years Buildings and improvements 4 - 54 Printing presses and insertion equipment 5 - 28 Other 3 - 17 We recognize the fair value of a liability for a legal obligation to perform an asset retirement activity when such activity is a condition of a futureevent and the fair value of the liability can be estimated. The cost of asset retirements and related accruals was not material in 2019, 2018 or2017. 43 Goodwill and Other Intangible Assets Intangible assets include covenants not to compete, consulting agreements, customer lists, newspaper subscriber lists and mastheads.Intangible assets subject to amortization are being amortized using the straight-line method as follows: Years Customer lists 15 - 23 Newspaper subscriber lists 10 - 33 We review goodwill for impairment on an annual basis by performing a qualitative and quantitative assessment. Companies with reporting unitswith zero or negative carrying value are required to disclose the amount of goodwill for those reporting units. The Company's goodwill is all attributable to single reporting unit entity with negative carrying value. In 2019 and 2018, the Company had$250,309,000 and $246,176,000 of goodwill in the Consolidated Balance Sheets, respectively. The annual assessment is made on the first dayof our fourth fiscal quarter, or more frequently if impairment triggers are noted. We review non-amortizing intangibles for impairment on an annual basis. Should we determine that a non-amortized intangible asset impairmentis more likely than not, we make a determination of the individual asset's fair value. Fair value is determined using the relief from royalty method,which estimates fair value based upon appropriate royalties of future revenue discounted to their present value. The impairment amount, if any,is calculated based on the excess of the carrying amount over the fair value of such asset. We analyze goodwill and other non-amortized intangible assets for impairment more frequently if impairment indicators are present. Suchindicators of impairment include, but are not limited to, changes in business climate and operating or cash flow losses related to such assets. We review our amortizable intangible assets for impairment when indicators of impairment are present. We assess recoverability of these assetsby comparing the estimated undiscounted cash flows associated with the asset group with their carrying amount. The impairment amount, if any,is calculated based on the excess of the carrying amount over the fair value of those asset groups. The required valuation methodology and underlying financial information that are used to determine fair value require significant judgments to bemade by us and represent a Level 3 fair value measurement. These judgments include, but are not limited to, long term projections of futurefinancial performance and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in suchestimates or the application of alternative assumptions could produce significantly different results. We also periodically evaluate the useful lives of amortizable intangible assets. Any resulting changes in the useful lives of such intangible assetswill not impact our cash flows. However, a decrease in the useful lives of such intangible assets would increase future amortization expense anddecrease future reported operating results and earnings per common share. Future decreases in our market value, or significant differences in revenue, expenses or cash flows from estimates used to determine fair value,could result in impairment charges in the future. See Note 4. Non-controlling Interest Non-controlling interest in earnings of TownNews is recognized in the Consolidated Financial Statements. Revenue Recognition On October 1, 2018, we adopted the New Revenue Standard, using the modified retrospective method applied to those contracts which were notcompleted as of that date. Results for reporting periods beginning after October 1, 2018 are presented under the new guidance while prior periodamounts are not adjusted and continue to be reported in accordance with legacy accounting under the old guidance. We did not record anyadjustments to beginning retained earnings at October 1, 2018 as a result of adopting the new guidance. 44 Recognition principles: Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods orservices to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. Advertising and marketing services revenue: Advertising and marketing services revenue includes amounts charged to customers for retail,national, or classified advertising space purchased in our newspapers, advertisements placed on our digital platforms, and other print advertisingproducts such as preprint inserts and direct mail. Advertising and marketing services revenue also include amounts charged to customers fordigital marketing services which include: audience extension, Search Engine Optimization ("SEO"), Search Engine Marketing ("SEM"), web andmobile production, social media services and reputation monitoring and management. The following define the timing of revenue recognition foreach general revenue category: •Print advertising revenue is recognized at the point in time the associated publication has been delivered. •Digital advertising revenue is recognized at the point in time that impressions are delivered. •Digital marketing services revenue is recognized over the period of time which the service is performed. Advertising and marketing services contract transaction prices consist of fixed consideration. We recognize revenue when control of the relatedperformance obligation transfers to the customer. Payments for advertising revenue is due upon completion of our performance obligations at previously agreed upon rates. In instances where thetiming of revenue recognition differs from the timing of invoicing, such timing differences are not large. As a result, we have determined that ourcontracts do not include a significant financing component. Subscription revenue: Subscription revenue includes revenue for content delivered to consumers via print and digital products purchased byreaders or distributors. Single copy revenue is also included in subscription revenue. Subscription revenue from single-copy and home deliverysubscriptions is recognized at the point in time the publications are delivered. Digital subscription revenue is recognized over time asperformance obligations are met via on-demand availability of online content made available to customers throughout the contract term.Payments for subscription revenue is typically collected in advance, are for contract periods of one year or less and result in an unearnedrevenue liability that is reduced when revenue is recognized. Other revenue: Other revenue primarily consists of digital services, Management Agreement revenue, commercial printing and delivery of thirdparty products. Management Agreement revenue consists of fixed and variable fees collected from our Management Agreement. Fixed feerevenue from the Management Agreement is recognized over time and paid quarterly and variable fees are paid annually. Variable fees arerecognized when the fees are deemed earned and it is probable that a significant reversal in the amount of cumulative revenue recognized willnot occur when the uncertainty associated with the variable consideration is subsequently resolved. Commercial printing and delivery revenueis recognized when the product is delivered to the customer. Digital services revenues, which are primarily delivered through TownNews, are primarily comprised of contractual agreements to providewebhosting and content management services. As such, digital services revenue is recognized over the contract period. Prices for digitalservices are agreed upon in advance of the contract beginning and are typically billed in arrears on a monthly basis, with the exception ofimplementation fees which are recognized as deferred revenue and amortized over the contract period. Arrangements with multiple performance obligations: We have various advertising and subscription agreements which include both print anddigital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligationbased on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers. Seefootnote 2. Advertising Costs A substantial amount of our advertising and promotion consists of advertising placed in our own publications and digital platforms, using availablespace. The incremental cost of such advertising is not significant and is not measured separately by us. External advertising costs are notsignificant and are expensed as incurred. 45 Restructuring Costs and Other We incur severance related costs on an ongoing basis in response to overall industry trends. We accrue for severance related items generally aspart of planned business transformation efforts when the impacted employees can be identified and the amounts are estimable. We did not havea significant severance liability as of September 29, 2019 or September 30, 2019. Other costs included in Restructuring Costs and Other include estimated impacts of withdrawals from our multiemployer plans. Multiemployerplans are discussed in Note 8. Pension, Postretirement and Postemployment Benefit Plans We evaluate our liabilities for pension, postretirement and postemployment benefit plans based upon computations made by consultingactuaries, incorporating estimates and actuarial assumptions of future plan service costs, future interest costs on projected benefit obligations,rates of compensation increases, when applicable, employee turnover rates, anticipated mortality rates, expected investment returns on planassets, asset allocation assumptions of plan assets and other factors. We use a fiscal year end measurement date for all our pension and postretirement obligations in accordance with Financial AccountingStandards Board ("FASB") Accounting Standards Codification ("ASC") Topic 715, Retirement Plans. We use the alternative spot rate approachwhich utilizes a full yield curve to estimate the interest cost component of benefit cost by applying the specific spot rates along the yield curveused in the determination of the benefit obligation to the relevant projected cash flows. Income Taxes Deferred income tax assets are recognized for deductible temporary differences and loss carryforwards and deferred income tax liabilities arerecognized for taxable temporary differences which are the difference between the reported amounts of assets and liabilities and their tax basis.Deferred income tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of thedeferred income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws andrates on the date of enactment. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income taxpositions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement arereflected in the period in which the change in judgment occurs. We record interest and penalties related to unrecognized tax benefits as acomponent of income tax expense. Fair Value of Financial Instruments We utilize FASB ASC Topic 820, Fair Value Measurements and Disclosures, to measure and report fair value. FASB ASC Topic 820 defines fairvalue, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC Topic 820establishes a three-level hierarchy of fair value measurements based on whether the inputs to those measurements are observable orunobservable, which consists of the following levels: Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are notactive; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Investments measured at net asset value, as a practical expedient for fair value, are excluded from the fair value hierarchy. 46 Valuation methodologies used for pension and postretirement assets measured at fair value are as follows: Cash and cash equivalents consist of short term deposits valued based on quoted prices in active markets. Such investments areclassified as Level 1. Treasury Inflation-Protected Securities ("TIPS") consist of low yield mutual funds and are valued by quoted market prices. Suchinvestments are classified as Level 1. Equity securities are valued based on the closing market price in an active market and are classified as Level 1. Certain investments incommingled funds are valued at the end of the period based upon the value of the underlying investments as determined by quoted marketprices. Such investments are classified as Level 2. Debt securities consist of government securities that are valued based upon quoted market prices in an active market. Such investmentsare classified as Level 1. Corporate bonds that are valued based on quoted market prices in an inactive market are classified as Level 2.Certain investments in commingled funds are valued at the net asset value of units held at the end of the period based upon the value ofthe underlying investments as determined by quoted market prices. Such investments are excluded from the fair value hierarchy. Hedge funds consist of a long/short equity funds and a diversified fund of funds. These funds are valued at the net asset value of units heldat the end of the period based upon the value of the underlying investments, which is determined using multiple approaches including byquoted market prices and by private market quotations. Such investments are excluded from the fair value hierarchy. Stock Compensation and Warrants We have several active stock-based compensation plans. We account for grants under those plans under the fair value expense recognitionprovisions of FASB ASC Topic 718, Compensation-Stock Compensation. We determine the fair value of stock options using the Black-Scholesoption pricing formula. Key inputs to this formula include expected term, expected volatility and the risk-free interest rate. The expected term represents the period that our stock-based awards are expected to be outstanding, and is determined based on historicalexperience of similar awards, giving consideration to contractual terms of the awards, vesting schedules and expectations of future employeebehavior. The volatility factor is calculated using historical market data for our Common Stock. The time frame used is equal to the expectedterm. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bondshaving a remaining term equal to the option's expected term. When estimating forfeitures, we consider voluntary termination behavior as well asactual option forfeitures. We amortize as compensation expense the value of stock options and restricted Common Stock using the straight-line method over the vestingor restriction period, which is generally one to four years. We also have 6,000,000 warrants outstanding to purchase shares of our Common Stock. Warrants are recorded at fair value determined usingthe Black-Scholes option pricing formula. See Notes 5, 9 and 12. Uninsured Risks We are self-insured for health care, workers compensation and certain long-term disability costs of our employees, subject to stop loss insurance,which limits our losses in the event of large claims. We accrue our estimated health care costs in the period in which such costs are incurred,including an estimate of incurred but not reported claims. Other risks are insured and carry deductible losses of varying amounts. Letters of creditand performance bonds totaling $3,901,000 at September 29, 2019 are outstanding in support of our insurance program. Our accrued reserves for health care and workers compensation claims are based upon estimates of the remaining liability for retained lossesmade by consulting actuaries. The amount of workers compensation reserve has been determined based upon historical patterns of incurred andpaid loss development factors from the insurance industry. 47 Recently Issued Accounting Standards - Standards Adopted in 2019 In March 2017, the Financial Accounting Standards Board ("FASB") issued a new standard to improve the presentation of pension andpostretirement benefit expense. The new standard requires that the service cost component of pension and postretirement benefits expense isrecognized as compensation expense, while the remaining components of the expense are presented outside of operating income. Theprior presentation included all components of the expense as Compensation in our Consolidated Statements of Income and ComprehensiveIncome. As a result of the adoption of this standard, we recorded other non-operating income of $2,847,000, $2,830,000 and $3,417,000 in2019, 2018 and 2017, respectively. These amounts were previously recognized as compensation. In August 2016, the FASB issued a new standard to conform the presentation in the statement of cash flows for certain transactions, includingcash distributions from equity method investments, among others. The new standard was adopted in 2019 and did not result in a change to ourstatement of cash flows. In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers” and in 2015, 2016, and 2017 the FASB issuedseveral clarifying updates to this new standard (ASU No. 2015-14, 2016-08, 2016-10, 2016-11, 2016-12, 2016-20 and 2017-05), whichcollectively comprises ASC Topic 606 “Revenue from Contracts with Customers”. Topic 606 supersedes the revenue recognition requirementsin Topic 605 “Revenue Recognition” and is effective fiscal years beginning after December 15, 2017. Topic 606 provides a five-step model indetermining when and how revenue is recognized and requires revenue recognition to depict the transfer of promised goods or services tocustomers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The newstandard was adopted in 2019 using the modified retrospective method and did not result in a material change to our Consolidated FinancialStatements. See to Note 2 for disclosures as a result of this adoption. Recently Issued Accounting Standards - Standards Not Yet Adopted In February 2016, the FASB issued a new standard for the accounting treatment of leases. The new standard is based on the principle thatentities should recognize assets and liabilities arising from leases. The new standard's primary change is the requirement for entities torecognize a lease liability for payments and a right of use asset representing the right to use the leased asset during the term on most operatinglease arrangements. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term oftwelve months or less. In addition, the new standard expands the disclosure requirements of lease arrangements. Lessees have the option touse a modified retrospective transition approach, which includes a number of practical expedients. As a result of utilizing the modifiedretrospective transition approach, we will not restate prior year financial statements to conform to the new guidance. We expect to elect thepackage of practical expedients, which permits the Company to not reassess under the new standard the prior conclusions about leaseidentification, lease classification, or initial direct costs. In addition, we will not reassess whether existing land easements which were previouslynot accounted for as leases are or contain leases under the new guidance. To date, we reviewed all existing leases and contracts, completed data entry for in-scope leases into our selected software solution which iscompatible with our current financial reporting and control environment and quantified a range of expected financial impacts. We will adopt thenew standard effective September 30, 2019, the first day of fiscal year 2020. We expect to recognize upon adoption, lease liabilities and right ofuse assets ranging from $9,600,000 to $12,600,000. Right-of-use assets have been adjusted for lease incentives and initial direct costs. We arestill evaluating for potential embedded leases relating to our outsourced printing contracts, which could result in material additional leaseobligations and right-of-use assets. We do not expect the adoption of the new standard will have a material impact on our ConsolidatedStatements of Income or Consolidated Statement of Cash Flows. In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodologythat reflects expected credit losses and requires consideration of a wider array of reasonable and supportable information to inform and developcredit loss estimates. We will be required to use a forward-looking expected credit loss model for both accounts receivables and other financialinstruments. The new standard will be adopted beginning September 29, 2020 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currentlyevaluating the impact of this standard on our consolidated financial statements. 48 2 REVENUE On October 1, 2018, we adopted the New Revenue Standard, using the modified retrospective method applied to those contracts which were notcompleted as of that date. Results for reporting periods beginning after October 1, 2018 are presented under the new guidance while prior periodamounts are not adjusted and continue to be reported in accordance with legacy accounting under the old guidance. We did not record anyadjustments to beginning retained earnings at October 1, 2018 as a result of adopting the new guidance. The following table presents our revenue disaggregated by source: (Thousands of Dollars) September 29,2019 September 30,2018 September 24,2017 Advertising and marketing services revenue 265,933 303,446 331,360 Subscription Revenue 186,691 195,108 191,922 TownNews and other digital services revenue 19,637 16,328 14,008 Other revenue 37,593 29,073 29,653 Total operating revenue 509,854 543,955 566,943 Recognition principles: Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods orservices to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. Arrangements with multiple performance obligations: We have various advertising and subscription agreements which include both print anddigital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligationbased on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers. Contract Assets and Liabilities: The Company’s primary source of unearned revenue is from subscriptions paid in advance of the serviceprovided. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next twelve months inaccordance with the terms of the subscriptions and other contracts with customers. The unearned revenue balances described herein are theCompany's only contract liability. Unearned revenue was $21,720,000 as of September 29, 2019 and $23,895,000 as of September 30, 2018.Revenue recognized in the 52 weeks ended September 29, 2019 that was included in the contract liability as of September 30,2018 was $23,130,000. Contract asset balances relate to our Management Agreement revenue and were $1,107,000 as of September 29, 2019 and $0 as of September30, 2018 and consisted solely of the variable portion of the contract. These contract asset balances are included in accounts receivable andcontract assets, net. There are no other contract assets recorded. Accounts receivable, excluding allowance for doubtful accounts and contractassets, was $47,863,000 and $48,517,000 as of September 29, 2019 and September 30, 2018 respectively. Allowance for doubtful accountswas $6,434,000 and $4,806,000 as of September 29, 2019 and September 30, 2018, respectively. Practical expedients: Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs arerecorded within compensation. The vast majority of our contracts have original expected lengths of one year or less and revenue is earned at arate and amount that corresponds directly with the value to the customer. 3 INVESTMENTS IN ASSOCIATED COMPANIES TNI Partners In Tucson, Arizona, TNI, acting as agent for our subsidiary, Star Publishing Company (“Star Publishing”) and Citizen Publishing Company(“Citizen”), a subsidiary of Gannett Co. Inc., is responsible for printing, delivery, advertising and subscription activities of the Arizona Daily Star,as well as the related digital platforms and specialty publications. TNI collects all receipts and income and pays substantially all operatingexpenses incident to the partnership's operations and publication of the newspaper and other media. Income or loss of TNI is allocated equally toStar Publishing and Citizen. 49 Summarized financial information of TNI is as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 ASSETS Current assets 3,484 3,615 Investments and other assets 1,350 — Total assets 4,834 3,615 LIABILITIES AND MEMBERS' EQUITY Current liabilities 5,924 5,213 Members' equity (1,090) (1,598)Total liabilities and members' equity 4,834 3,615 Summarized results of TNI are as follows: (Thousands of Dollars) 2019 2018 2017 Operating revenue 43,532 47,165 48,297 Operating expenses 34,224 37,090 38,150 Net income 9,308 10,075 10,147 Company's 50% share 4,654 5,038 5,073 Less amortization of intangible assets 418 418 418 Equity in earnings of TNI 4,236 4,620 4,655 TNI makes weekly distributions of its earnings. We received $4,245,000, $5,814,000 and $4,644,000 in distributions in 2019, 2018 and 2017,respectively. At September 29, 2019, the carrying value of the Company's 50% investment in TNI is $14,741,000. The difference between our carrying valueand our 50% share of the members' equity of TNI relates principally to goodwill of $12,366,000 and other identified intangible assets of$3,299,000, certain of which are being amortized over their estimated useful lives through 2020. See Note 4. 50 Madison Newspapers, Inc. We have a 50% ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, andother Wisconsin locations, and related digital sites. Net income or loss of MNI (after income taxes) is allocated equally to us and The CapitalTimes Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers. Summarized financial information of MNI is as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 ASSETS Current assets 8,796 10,173 Investments and other assets 31,134 33,295 Total assets 39,930 43,468 LIABILITIES AND MEMBERS' EQUITY Current liabilities 5,912 7,274 Other liabilities 6,064 7,261 Stockholders' equity 27,954 28,933 Total liabilities and stockholders' equity 39,930 43,468 Summarized results of MNI are as follows: (Thousands of Dollars) 2019 2018 2017 Operating revenue 56,790 59,670 61,396 Operating expenses, excluding restructuring costs, depreciation andamortization 48,121 49,598 51,392 Restructuring costs 355 383 296 Depreciation and amortization 1,018 1,149 1,295 Operating income 7,296 8,540 8,413 Net income 5,770 9,257 5,908 Equity in earnings of MNI 2,885 4,629 2,954 MNI makes quarterly distributions of its earnings. We received $3,350,000, $3,400,000 and $3,500,000 in distributions in 2019, 2018 and 2017,respectively. We provide editorial services to MNI. Editorial service fees are included in other revenue in the Consolidated Statements of Income andComprehensive Income and totaled $6,636,000, $6,718,000 and $7,021,000, in 2019, 2018 and 2017, respectively. At September 29, 2019, the carrying value of the Company's 50% investment in MNI is $14,001,000. 51 4 GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill related to continuing operations are as follows: (Thousands of Dollars) 2019 2018 Goodwill, gross amount 1,534,905 1,535,155 Accumulated impairment losses (1,288,729) (1,288,729)Goodwill, beginning of year 246,176 246,426 Goodwill acquired in business combinations 4,133 — Goodwill allocated to disposed businesses — (250)Goodwill, end of year 250,309 246,176 Identified intangible assets related to continuing operations consist of the following: September 29 September 30 (Thousands of Dollars) 2019 2018 Non-amortized intangible assets: Mastheads 21,883 21,883 Amortizable intangible assets: Customer and newspaper subscriber lists 697,145 692,886 Less accumulated amortization 611,786 594,950 85,359 97,936 Non-compete and consulting agreements 28,675 28,524 Less accumulated amortization 28,524 28,524 151 — 107,393 119,819 In January 2017, the FASB issued a new standard simplifying the assessment of a goodwill impairment. The new standard maintains aqualitative and quantitative assessment but eliminates the Step 2 of the quantitative assessment. The new standard also changes the way agoodwill impairment is calculated. For companies that have reporting units with zero or negative carrying value, the new standard requiresdisclosure of the amount of goodwill for those reporting units. All of the Company’s goodwill is attributed to the single reporting unit with negative carrying value. The Company performed its annualassessment on the first day of our fourth fiscal quarter, and determined the fair value of our single reporting unit was significantly in excess ofcarrying value and as such, there was no impairment in 2019 or 2018. In 2017, due to continuing revenue declines, we recorded non-cash charges to reduce the carrying value of non-amortized intangible assets. Wealso recorded pretax charges to reduce the carrying value of other assets in 2019, 2018 and 2017. Such charges are recorded in assets loss(gain) on sales, impairments and other in the Consolidated Statements of Income and Comprehensive Income (Loss). We recorded deferredincome tax benefits related to these charges. A summary of the pretax impairment charges is included in the table below: (Thousands of Dollars) 2019 2018 2017 Continuing operations: Non-amortized intangible assets — — 2,035 Property, equipment and other assets — 267 482 — 267 2,517 52 In January 2019, we purchased the businesses of Kenosha News and Lake Geneva Regional News. In February 2019, TownNews purchasedthe content management system ("CMS") business from GTxcel. The transactions were funded with cash on the balance sheet. As part of initialestimates $3,433,000 was recorded in goodwill and $3,650,000 was recorded in other intangible assets, net. The $3,650,000 of other intangibleassets, net relate to acquired customer lists, which will be amortized over a 10 year period. These initial estimates will be reviewed insubsequent quarters as more information becomes available and finalized in the 13 weeks ended March 29, 2020. Annual amortization of intangible assets for the years ending September 2020 to September 2024 is estimated to be $16,016,000, $14,853,000,$12,673,000, $12,052,000, and $10,325,000, respectively. 5 DEBT On March 31, 2014, we completed a comprehensive refinancing of our debt (the "2014 Refinancing"), which included the following: •$400,000,000 aggregate principal amount of 9.5% Senior Secured Notes (the “Notes”), pursuant to an Indenture dated as of March 31,2014 (the “Indenture”). •$250,000,000 first lien term loan (the "1st Lien Term Loan") and $40,000,000 revolving facility (the "Revolving Facility") under a FirstLien Credit Agreement dated as of March 31, 2014 (together the “1st Lien Credit Facility”). •$150,000,000 second lien term loan under a Second Lien Loan Agreement dated as of March 31, 2014 (the “2nd Lien Term Loan”). In November 2018, we repaid, in full, the remaining balance of the 1st Lien Term Loan. In November 2019, we amended our 1st Lien Credit Facility to amend and extend our $23,120,000 Revolving Facility (the "Amendment") throughDecember 28, 2020. Our Revolving Facility was undrawn at the time of the amendment. Debt is summarized as follows: Interest Rates (%) September 29 September 30 September 29 (Thousands of Dollars) 2019 2018 2019 Revolving Facility — — 6.13 1st Lien Term Loan — 6,303 8.54 Notes 363,420 385,000 9.50 2nd Lien Term Loan 80,207 93,556 12.00 443,627 484,859 Unamortized debt issue costs (11,282) (17,055) Less current maturities of long-term debt 2,954 7,027 Total long-term debt 429,391 460,777 Our weighted average cost of debt, excluding amortization of debt financing costs at September 29, 2019, is 10.0%. At September 29, 2019, aggregate minimum required maturities of debt excluding amounts required to be paid from future excess cash flowcomputations total $2,954,000 in 2020, zero in 2021, $363,420,000 in 2022 and $77,253,000 in 2023. 53 Notes The Notes are senior secured obligations of the Company and mature on March 15, 2022. At September 29, 2019, the principal balance of theNotes totaled $363,420,000. Interest The Notes require payment of interest semiannually on March 15 and September 15 of each year, at a fixed annual rate of 9.5%. Redemption We may redeem some, or all, of the principal amount of the Notes at any time. Period Beginning Percentage ofPrincipal Amount March 15, 2019 102.38 March 15, 2020 100.00 If we sell certain of our assets or experience specific kinds of changes of control, we must, subject to certain exceptions, offer to purchase theNotes at 101% of the principal amount. Any redemption of the Notes must also satisfy any accrued and unpaid interest thereon. We may repurchase Notes in the open market at any time. In the 52 weeks ended September 29, 2019 we purchased $21,580,000 principalamount of Notes in privately negotiated transactions. The transactions resulted in a loss on extinguishment of debt totaling $333,000 in the52 weeks ended September 29, 2019 which is recorded in Other, net in the Consolidated Statements of Income and Comprehensive Income. Covenants and Other Matters The Indenture and the 1st Lien Credit Facility contain restrictive covenants as discussed more fully below. However, certain of these covenantswill cease to apply if the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Group andthere is no default or event of default under the Indenture. 1st Lien Credit Facility The 1st Lien Term Loan was paid in full in November 2018 and has no outstanding balance as of September 29, 2019. The 1st Lien Credit Facility documents the primary terms of the 1st Lien Term Loan and the Revolving Facility. The $23,120,000 RevolvingFacility matures on December 28, 2020 and may be used for working capital and general corporate purposes (including letters of credit). AtSeptember 29, 2019, after consideration of letters of credit, we have approximately $17,644,000 available for future use under the RevolvingFacility. Interest Interest on the Revolving Facility, which is undrawn at September 29, 2019, accrues, at our option, at either (A) LIBOR plus 5.5%, or (B) 4.5%plus the higher of (i) the prime rate at the time, (ii) the federal funds rate plus 0.5%, or (iii) one month LIBOR plus 1.0%. Covenants and Other Matters The 1st Lien Credit Facility requires that we comply with certain affirmative and negative covenants customary for financing of this nature,including a maximum total leverage ratio, which is only applicable to the Revolving Facility. 54 The 1st Lien Credit Facility restricts us from paying dividends on our Common Stock. This restriction no longer applies if Lee Legacy Leverage isbelow 3.25x before and after such payments. Lee Legacy Leverage as defined is 4.19x at September 29, 2019. Further, the 1st Lien CreditFacility restricts or limits, among other things, subject to certain exceptions, the ability of the Company and its subsidiaries to: (i) incurindebtedness, (ii) enter into mergers, acquisitions and asset sales, (iii) incur or create liens and (iv) enter into transactions with certainaffiliates. The 1st Lien Credit Facility contains various representations and warranties and may be terminated upon occurrence of certain eventsof default. The 1st Lien Credit Facility also contains cross-default provisions tied to the terms of each of the Indenture and 2nd Lien Term Loan. 2nd Lien Term Loan The 2nd Lien Term Loan, which has a balance of $80,207,000 at September 29, 2019, bears interest at a fixed annual rate of 12.0%, payablequarterly, and matures in December 2022. Principal Payments Excluding excess cash flow payments, there are no scheduled mandatory amortization payments required under the 2nd Lien Term Loan. Quarterly, we are required to prepare a calculation of excess cash flow of the Pulitzer Subsidiaries ("Pulitzer Excess Cash Flow"). Pulitzer ExcessCash Flow is generally determined as the cash earnings of the Pulitzer Subsidiaries including adjustments for changes in working capital, capitalspending, pension contributions, debt principal payments and income tax payments. Pulitzer Excess Cash Flow also includes a deduction forinterest costs incurred under the 2nd Lien Term Loan. Pulitzer Excess Cash Flow is used to prepay the 2nd Lien Term Loan, at par, and is required to be paid 45 days after the end of the quarter. Payments will also be made on the 2nd Lien Term Loan, at par, with proceeds from asset sales by the Pulitzer Subsidiaries that are notreinvested subject to certain other conditions. For September 29, 2019 there were no principal payments, and for the year ended, September 30,2018 we repaid $4,000,000, on the 2nd Lien Term Loan, at par, with net proceeds from the sale of Pulitzer assets. During the 13 and 52 weeks ended September 29, 2019, payments on the 2nd Lien Term Loan totaled $3,931,000 and$13,349,000 respectively. For the 13 weeks ended September 29, 2019, Pulitzer Excess Cash Flow totaled $2,954,000, which was used tomake a payment on the 2nd Lien Term Loan in November 2019, at par. Voluntary payments under the 2nd Lien Term Loan are no longer subject to call premiums and are payable at par. The Indenture includes certainrestrictions on voluntary payments on the 2nd Lien Term Loan. Prior to March 31, 2017, we were required to offer the Pulitzer Excess Cash Flow to the 2nd Lien Lenders to prepay the 2nd Lien Term Loan atpar, which payment the 2nd Lien Lenders could accept or reject. After March 31, 2017, the 2nd Lien Lenders can not reject, and Pulitzer ExcessCash Flow is used to prepay the 2nd Lien Term Loan, at par. Pulitzer Excess Cash Flow payments are required to be paid 45 days after the endof the quarter. Pulitzer Excess Cash Flow and the related payments on the 2nd Lien Term Loan for the previous four quarters are as follows: For the Period Ending (Thousands of Dollars) Pulitzer Excess CashFlow Payment Payment Date September 30, 2018 724 Q1 2019December 30, 2018 1,377 Q2 2019March 31, 2019 7,317 Q3 2019June 30, 2019 3,931 Q4 2019 55 Covenants and Other Matters The 2nd Lien Term Loan requires that we comply with certain affirmative and negative covenants customary for financing of this nature, includingthe negative covenants under the 1st Lien Credit Facility discussed above. The 2nd Lien Term Loan contains various representations andwarranties and may be terminated upon occurrence of certain events of default. The 2nd Lien Term Loan also contains cross-default provisionstied to the terms of the Indenture and 1st Lien Credit Facility. In connection with the 2nd Lien Term Loan, we entered into a Warrant Agreement dated as of March 31, 2014 (the “Warrant Agreement”). Underthe Warrant Agreement, certain affiliates or designees of the 2nd Lien Lenders received on March 31, 2014 their pro rata share of warrants topurchase, in cash, an initial aggregate of 6,000,000 shares of Common Stock, subject to adjustment pursuant to anti-dilution provisions (the“Warrants”). The Warrants represent, when fully exercised, approximately 10.1% of shares of Common Stock outstanding at March 30, 2014 ona fully diluted basis. The exercise price of the Warrants is $4.19 per share. The Warrant Agreement contains provisions requiring the Warrants to be measured at fair value and included in warrants and other liabilities inour Consolidated Balance Sheets. We re-measure the fair value of the liability each reporting period, with changes reported in other, net non-operating income (expense). The initial fair value of the Warrants was $16,930,000. See Note 9 and Note 12. In connection with the issuance of the Warrants, we entered into a Registration Rights Agreement dated as of March 31, 2014 (the “RegistrationRights Agreement”). The Registration Rights Agreement requires, among other matters, that we use our commercially reasonable efforts tomaintain the effectiveness for certain specified periods of a shelf registration statement related to the shares of Common Stock to be issued uponexercise of the Warrants. Security The Notes and the 1st Lien Credit Facility are fully and unconditionally guaranteed on a joint and several first-priority basis by each of theCompany's material domestic subsidiaries, excluding MNI, the Pulitzer Subsidiaries and TNI (the "Lee Legacy Assignors"), pursuant to a first lienguarantee and collateral agreement dated as of March 31, 2014 (the "1st Lien Guarantee and Collateral Agreement"). The Notes, the 1st Lien Credit Facility and the subsidiary guarantees are secured, subject to certain exceptions, priorities and limitations, byperfected security interests in all property and assets, including certain real estate, of the Lee Legacy Assignors, other than the capital stock ofMNI and any property and assets of MNI (the “Lee Legacy Collateral”), on a first-priority basis, equally and ratably with all of the Lee LegacyAssignors' existing and future obligations. The Lee Legacy Collateral includes, among other things, equipment, inventory, accounts receivables,depository accounts, intellectual property and certain of their other tangible and intangible assets. Also, the Notes and the 1st Lien Credit Facility are secured, subject to certain exceptions, priorities and limitations in the various agreements, byfirst-priority security interests in the capital stock of, and other equity interests owned by the Lee Legacy Assignors (excluding the capital stock ofMNI). The Notes and 1st Lien Credit Facility are subject to a Pari Passu Intercreditor Agreement dated March 31, 2014. The Notes, the 1st Lien Credit Facility and the subsidiary guarantees are also secured, subject to permitted liens, by a second-priority securityinterest in the property and assets of the Pulitzer Subsidiaries that become subsidiary guarantors (the "Pulitzer Assignors") other than assets ofor used in the operations or business of TNI (collectively, the “Pulitzer Collateral”). In June 2015 the Pulitzer Assignors became a party to the 1stLien Guarantee and Collateral Agreement on a second lien basis. Also, the Notes and the 1st Lien Credit Facility are secured, subject to certain exceptions, priorities, and limitations in the various agreements, bysecond-priority security interests in the capital stock of, and other equity interests in, the Pulitzer Assignors and Star Publishing’s interest in TNI. The 2nd Lien Term Loan is fully and unconditionally guaranteed on a joint and several first-priority basis by the Pulitzer Assignors, pursuant to aSecond Lien Guarantee and Collateral Agreement dated as of March 31, 2014 (the “2nd Lien Guarantee and Collateral Agreement”) among thePulitzer Assignors and the 2nd Lien collateral agent. 56 Under the 2nd Lien Guarantee and Collateral Agreement, the Pulitzer Assignors have granted (i) first-priority security interests, subject to certainpriorities and limitations in the various agreements, in the Pulitzer Collateral and (ii) have granted first-priority lien mortgages or deeds of trustcovering certain real estate, as collateral for the payment and performance of their obligations under the 2nd Lien Term Loan. Also, under the 2nd Lien Guarantee and Collateral Agreement, the Lee Legacy Assignors have granted (i) second-priority security interests,subject to certain priorities and limitations in the various agreements, in the Lee Legacy Collateral, and (ii) have granted second-priority lienmortgages or deeds of trust covering certain real estate, as collateral for the payment and performance of their obligations under the 2nd LienTerm Loan. Assets of, or used in the operations or business of, MNI are excluded. The rights of each of the collateral agents with respect to the Lee Legacy Collateral and the Pulitzer Collateral are subject to customaryintercreditor and intercompany agreements. Other In connection with the 2014 Refinancing, we capitalized $37,819,000 of debt financing costs. Amortization of debt financing costs totaled$5,773,103, $4,769,000 and $4,447,000 in 2019, 2018 and 2017, respectively. Amortization of such costs is estimated to total $4,105,000 in2020, $4,275,000 in 2021, $2,675,000 in 2022 and $227,000 in 2023. At September 29, 2019, we have $11,282,000 of unamortized debtfinancing costs recorded as a reduction of Long-term debt in our Consolidated Balance Sheets. During the 52 weeks ended September 29, 2019, we identified an adjustment of $1,309,000 related to debt financing costs that should havebeen recorded in prior periods. The impact of recording this out of period adjustment was an increase to Debt financing and administrative costsof $1,309,000 in the Consolidated Statements of Operations and Comprehensive Income for the 52 weeks ended September 29, 2019 and anincrease to debt of $1,309,000 on the Consolidated Balance Sheet. We do not believe the impact of the adjustment is material to ourconsolidated financial statements for any previously issued financial statements taken as a whole, or to our net income for the 52 weeksended September 29, 2019. Further, the impact of the corrections was not material to any of our Consolidated Balance Sheets nor ourConsolidated Statements of Cash Flows. Liquidity At September 29, 2019, after consideration of letters of credit, we have approximately $17,644,000 available for future use under our RevolvingFacility. Including cash, our liquidity at September 29, 2019 totals $26,289,000. This liquidity amount excludes any future cash flows. We expectall interest and principal payments due in the next twelve months will be satisfied by existing cash and our cash flows, which will allow us tomaintain an adequate level of liquidity. The Warrants, if and when exercised, would provide additional liquidity in an amount up to $25,140,000subject to a reduction for any amounts the Company may elect to use to repay our 1st Lien Term Loan and/or the Notes. There are numerous potential consequences under the Notes, 1st Lien Credit Facility and 2nd Lien Term Loan, if an event of default, as defined,occurs and is not remedied. Many of those consequences are beyond our control. The occurrence of one or more events of default would giverise to the right of the applicable lender(s) to exercise their remedies under the Notes, 1st Lien Credit Facility and 2nd Lien Term Loan,respectively, including, without limitation, the right to accelerate all outstanding debt and take actions authorized in such circumstances underapplicable collateral security documents. Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to repay, refinance oramend our debt agreements as they become due. The Notes, 1st Lien Credit Facility and 2nd Lien Term Loan have only limited affirmativecovenants with which we are required to maintain compliance. We are in compliance with our debt covenants at September 29, 2019. 57 6 PENSION PLANS We have several non-contributory defined benefit pension plans that together cover selected employees. Benefits under the plans weregenerally based on salary and years of service. Effective in 2012, substantially all benefits are frozen and only a small amount of additionalbenefits are being accrued. Our liability and related expense for benefits under the plans are recorded over the service period of employeesbased upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily ofdomestic and foreign corporate equity securities, government and corporate bonds, hedge fund investments and cash. The net periodic cost (benefit) components of our pension plans are as follows: (Thousands of Dollars) 2019 2018 2017 Service cost for benefits earned during the year 36 48 84 Interest cost on projected benefit obligation 6,563 5,754 5,394 Expected return on plan assets (8,073) (7,933) (7,878)Amortization of net loss 1,135 2,025 2,947 Amortization of prior service benefit (100) (136) (136)Net periodic pension cost (benefit) (439) (242) 411 Changes in benefit obligations and plan assets are as follows: (Thousands of Dollars) 2019 2018 Benefit obligation, beginning of year 176,531 191,645 Service cost 36 48 Interest cost 6,563 5,754 Actuarial loss (gain) 20,687 (9,464)Benefits paid (11,448) (11,452)Benefit obligation, end of year 192,369 176,531 Fair value of plan assets, beginning of year: 151,255 149,762 Actual return on plan assets 8,705 10,576 Benefits paid (11,448) (11,452)Administrative expenses paid (2,163) (2,571)Employer contributions 650 4,940 Fair value of plan assets, end of year 146,999 151,255 Funded status (45,370) (25,276) Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 Pension obligations (45,370) (25,276)Accumulated other comprehensive loss (before income taxes) (53,066) (31,882) Amounts recognized in accumulated other comprehensive income (loss) are as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 Unrecognized net actuarial loss (53,072) (31,988)Unrecognized prior service benefit 6 106 (53,066) (31,882) 58 We expect to recognize $3,166,000 and $6,000 of unrecognized net actuarial loss and unrecognized prior service benefit, respectively, in netperiodic pension cost in 2020. The accumulated benefit obligation for the plans total $192,369,000 at September 29, 2019 and $176,531,000 at September 30, 2018. Theprojected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefitobligations in excess of plan assets are $192,369,000, $192,369,000 and $146,999,000, respectively, at September 29, 2019. Assumptions Weighted-average assumptions used to determine benefit obligations are as follows: September 29 September 30 (Percent) 2019 2018 Discount rate 3.1 4.2 Weighted-average assumptions used to determine net periodic benefit cost are as follows: (Percent) 2019 2018 2017 Discount rate - service cost 4.2 3.7 3.5 Discount rate - interest cost 3.9 3.1 2.8 Expected long-term return on plan assets 5.5 5.5 5.5 For 2020, the expected long-term return on plan assets is 5.5%. The assumptions related to the expected long-term return on plan assets aredeveloped through an analysis of historical market returns, current market conditions and composition of plan assets. Plan Assets The primary objective of our investment strategy is to satisfy our pension obligations at a reasonable cost. Assets are actively invested to balancereal growth of capital through appreciation and reinvestment of dividend and interest income and safety of invested funds. Our investment policy outlines the governance structure for decision making, sets investment objectives and restrictions and establishes criteriafor selecting and evaluating investment managers. The use of derivatives is prohibited, except on a case-by-case basis where the manager hasa proven capability, and only to hedge quantifiable risks such as exposure to foreign currencies. An investment committee, consisting of certain ofour executives and supported by independent consultants, is responsible for monitoring compliance with the investment policy. Assets areperiodically redistributed to maintain the appropriate policy allocation. The weighted-average asset allocation of our pension assets is as follows: (Percent) Policy Allocation Actual Allocation September 29 September 29 September 30 Asset Class 2019 2019 2018 Equity securities 50 49 50 Debt securities 35 34 32 TIPS 5 5 4 Hedge fund investments 10 10 10 Cash and cash equivalents — 2 4 Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need toreallocate assets within policy guidelines. 59 Fair Value Measurements The fair value hierarchy of pension assets at September 29, 2019 is as follows: (Thousands of Dollars) NAV Level 1 Level 2 Level 3 Cash and cash equivalents — 2,970 — — Domestic equity securities 9,524 8,971 40,593 — International equity securities — 6,525 7,283 — TIPS — 6,918 — — Debt securities — 26,392 24,190 — Hedge fund investments 15,733 — — — The fair value hierarchy of pension assets at September 30, 2018 is as follows: (Thousands of Dollars) NAV Level 1 Level 2 Level 3 Cash and cash equivalents — 5,537 — — Domestic equity securities 10,045 12,573 40,083 — International equity securities — 7,070 7,560 — TIPS — 6,535 — — Debt securities — 25,673 22,523 — Hedge fund investments 15,767 — — — There were no purchases, sales or transfers of assets classified as Level 3 in 2019 or 2018. Pension assets included in the fair value hierarchyat net asset value, or "NAV", include three investments: • U.S. small cap value equity common/collective fund for which fund prices are not publicly available. The balance of this investment is$9,524,000 and $10,045,000 as of 9/29/2019 and 9/30/2018, respectively. We can redeem this fund on a monthly basis. • Global equity long/short common/collective hedge fund-of-funds for which fund prices are established on a monthly basis. The balance ofthis investment is $7,923,000 and $8,116,000 as of 9/29/2019 and 9/30/2019, respectively. We can redeem up to 90% of our investment inthis fund within 90-120 days of notice with the remaining distributed following completion of the audit of the Fund's financial statements forthe year. • Global equity long/short common/collective hedge fund-of-funds for which fund prices are established on a monthly basis. The balance ofthis investment is $7,810,000 and $7,651,000 as of 9/29/2019 and 9/30/2018, respectively. We can redeem up to 50% of our investment inthis fund twice per year. Cash Flows Based on our forecast at September 29, 2019, we expect to make contributions of $6,718,000 to our pension trust in 2020. We anticipate future benefit payments to be paid from the pension trust as follows: (Thousands of Dollars) 2020 12,452 2021 11,770 2022 11,711 2023 11,725 2024 11,679 2025-2029 56,172 Other Plans We are obligated under an unfunded plan to provide fixed retirement payments to certain former employees. The plan is frozen and no additionalbenefits are being accrued. The accrued liability under the plan is $1,667,000 and $1,469,000 at September 29, 2019 and September 30, 2018,respectively. 7 POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS We provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. The level and adjustmentof participant contributions vary depending on the specific plan. In addition, St. Louis Post Dispatch LLC provides postemployment disabilitybenefits to certain employee groups prior to retirement. Our liability and related expense for benefits under the postretirement plans are recordedover the service period of active employees based upon annual actuarial calculations. We accrue postemployment disability benefits when itbecomes probable that such benefits will be paid and when sufficient information exists to make reasonable estimates of the amounts to be paid. 60 The net periodic postretirement benefit cost (benefit) components for our postretirement plans are as follows: (Thousands of Dollars) 2019 2018 2017 Service cost for benefits earned during the year — — 13 Interest cost on projected benefit obligation 412 365 412 Expected return on plan assets (1,082) (1,080) (1,056)Amortization of net actuarial gain (976) (984) (987)Amortization of prior service benefit (723) (785) (1,459)Curtailment gains 0 (2,031) (3,741)Net periodic postretirement benefit (2,369) (4,515) (6,818) In March 2017, we notified certain participants in one of our postemployment medical plans of changes to their plan, which included notice thatthe plan will terminate on December 31, 2017. These changes resulted in a non-cash curtailment gain of $2,031,000 and $3,741,000 in2018 and 2017, respectively. The curtailment gain is recorded in assets loss (gain) on sales, impairments and other in the ConsolidatedStatements of Income and Comprehensive Income. These charges also reduced the postemployment benefit obligation by $7,036,000 andreduced accumulated other comprehensive loss by $106,000 and $1,417,000 in 2018 and 2017, respectively. Changes in benefit obligations and plan assets are as follows: (Thousands of Dollars) 2019 2018 Benefit obligation, beginning of year 11,756 15,667 Service cost — — Interest cost 412 365 Actuarial loss (gain) 1,033 (1,054)Benefits paid, net of premiums received (1,507) (1,399)Curtailment — (1,924)Medicare Part D subsidies 58 101 Benefit obligation, end of year 11,752 11,756 Fair value of plan assets, beginning of year 24,647 24,626 Actual return on plan assets 2,097 2,106 Employer contributions 222 422 Benefits paid, net of premiums and Medicare Part D subsidies received (1,449) (1,298)Benefits paid for active employees (1,382) (1,209)Fair value of plan assets at measurement date 24,135 24,647 Funded status 12,383 12,891 Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 Non-current assets 12,383 12,891 Postretirement benefit obligations — — Accumulated other comprehensive income (before income tax benefit) 14,818 17,917 61 Amounts recognized in accumulated other comprehensive income are as follows: September 29 September 30 (Thousands of Dollars) 2019 2018 Unrecognized net actuarial gain 4,970 12,224 Unrecognized prior service benefit 9,848 5,693 14,818 17,917 We expect to recognize $743,000 and $647,000 of unrecognized net actuarial gain and unrecognized prior service benefit, respectively, in netperiodic postretirement benefit in 2020. Assumptions Weighted-average assumptions used to determine postretirement benefit obligations are as follows: September 29 September 30 (Percent) 2019 2018 Discount rate 2.8 4.0 Expected long-term return on plan assets 4.5 4.5 The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns, currentmarket conditions and composition of plan assets. Weighted-average assumptions used to determine net periodic benefit cost are as follows: (Percent) 2019 2018 2017 Discount rate - service cost 4.0 3.4 3.1 Discount rate - interest cost 3.7 2.8 2.4 Expected long-term return on plan assets 4.5 4.5 4.5 For 2019, the expected long-term return on plan assets is 4.5%. The assumptions related to the expected long-term return on plan assets aredeveloped through an analysis of historical market returns, current market conditions and composition of plan assets. Assumed health care cost trend rates are as follows: September 29 September 30 (Percent) 2019 2018 Health care cost trend rates 8.5 9.0 Rate to which the cost trend rate is assumed to decline (the “Ultimate Trend Rate”) 4.5 4.5 Year in which the rate reaches the Ultimate Trend Rate 2027 2026 Administrative costs related to indemnity plans are assumed to increase at the health care cost trend rates noted above. 62 Assumed health care cost trend rates have an effect on the amounts reported for the postretirement plans. A one percentage point change inassumed health care cost trend rates would have the following annualized effects on reported amounts for 2019: One Percentage Point (Thousands of Dollars) Increase Decrease Effect on net periodic postretirement benefit 11 (10)Effect on postretirement benefit obligation 425 (389) Plan Assets Assets of the retiree medical plan are invested in a master trust. The master trust also pays benefits of active employee medical plans for thesame union employees. The fair value of master trust assets allocated to the active employee medical plans at September 29, 2019 andSeptember 30, 2018 is $1,955,000 and $3,266,000, respectively, which are included within the tables below. The primary objective of our investment strategy is to satisfy our postretirement obligations at a reasonable cost. Assets are actively invested tobalance real growth of capital through appreciation and reinvestment of dividend and interest income and safety of invested funds. Our investment policy outlines the governance structure for decision making, sets investment objectives and restrictions, and establishes criteriafor selecting and evaluating investment managers. The use of derivatives is strictly prohibited, except on a case-by-case basis where themanager has a proven capability, and only to hedge quantifiable risks such as exposure to foreign currencies. An investment committee,consisting of certain of our executives and supported by independent consultants, is responsible for monitoring compliance with the investmentpolicy. Assets are periodically redistributed to maintain the appropriate policy allocation. The weighted-average asset allocation of our postretirement assets is as follows: (Percent) Policy Allocation Actual Allocation September 29 September 30 Asset Class September 292019 2019 2018 Equity securities 20 18 18 Debt securities 70 68 69 Hedge fund investment 10 14 13 Cash and cash equivalents — — — Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need toreallocate assets within policy guidelines. Fair Value Measurements The fair value hierarchy of postretirement assets at September 29, 2019 is as follows: (Thousands of Dollars) NAV Level 1 Level 2 Level 3 Cash and cash equivalents — — — — Domestic equity securities 778 2,640 — — International equity securities — 628 750 — Debt securities — 17,707 — — Hedge fund investment 3,587 — — — 63 The fair value hierarchy of postretirement assets at September 30, 2018 is as follows: (Thousands of Dollars) NAV Level 1 Level 2 Level 3 Cash and cash equivalents — 242 — — Domestic equity securities 820 2,589 — — International equity securities — 681 780 — Debt securities — 19,185 — — Hedge fund investment 3,616 — — — There were no purchases, sales or transfers of assets classified as Level 3 in 2019 or 2018. Postretirement assets included in the fair valuehierarchy at net asset value, or "NAV", include two investments: • U.S. small cap value equity common/collective fund for which fund prices are not publicly available. The balance of this investment is$778,000 and $820,000 as of 9/29/2019 and 9/30/2018, respectively. We can redeem this fund on a monthly basis. • Global equity long/short common/collective hedge fund-of-funds for which fund prices are established on a monthly basis. The balance ofthis investment is $3,587,000 and $3,616,000 as of 9/29/2019 and 9/30/20018, respectively. We can redeem up to 90% of our investment inthis fund within 90-120 days of notice with the remaining distributed following completion of the audit of the Fund's financial statements forthe year. Cash Flows Based on our forecast at September 29, 2019, we do not expect to contribute to our postretirement plans in 2019. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Modernization Act”) introduced a prescription drug benefitunder Medicare (“Medicare Part D”) and a federal subsidy to sponsors of retiree health care benefit plans (“Subsidy”) that provide a benefit atleast actuarially equivalent (as that term is defined in the Modernization Act) to Medicare Part D. We concluded we qualify for the Subsidy underthe Modernization Act since the prescription drug benefits provided under our postretirement health care plans generally require lower premiumsfrom covered retirees and have lower deductibles than the benefits provided in Medicare Part D and, accordingly, are actuarially equivalent to orbetter than, the benefits provided under the Modernization Act. We anticipate future benefit payments to be paid either with future contributions to the plan or directly from plan assets, as follows: Less Medicare Gross Part D Net (Thousands of Dollars) Payments Subsidy Payments 2020 1,241 (66) 1,175 2021 1,201 (65) 1,136 2022 1,154 (63) 1,091 2023 1,099 (60) 1,039 2024 1,039 (57) 982 2025-2029 4,185 (221) 3964 Postemployment Plan Our postemployment benefit obligation, which represents certain disability benefits, is $2,550,000 at September 29, 2019 and $2,580,000 atSeptember 30, 2018. 8 OTHER RETIREMENT PLANS Substantially all of our employees are eligible to participate in a qualified defined contribution retirement plan. We also have a non-qualified planfor employees whose incomes exceed qualified plan limits. Retirement and compensation plan costs, including costs related to stock based compensation and the defined contribution retirement plan,charged to continuing operations are $3,849,000 in 2019, $4,430,000 in 2018 and $4,396,000 in 2017. 64 Multiemployer Pension Plans We contributed to three multiemployer defined benefit pension plans under the terms of collective-bargaining agreements ("CBAs"). The risks ofparticipating in these multiemployer plans are different from our company-sponsored plans in the following aspects: •We do not manage the plan investments or any other aspect of plan administration; •Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participatingemployers; •If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remainingparticipating employers; and •If we choose to stop participating in one or more multiemployer plans, we may be required to fund over time an amount based on theunfunded status of the plan at the time of withdrawal, referred to as "withdrawal liability". Information related to these plans is outlined in the table below: (Thousands of Dollars)Zone StatusSeptember 30 FundingImprovementPlan/RehabilitationPlan Status Contributions ExpirationDates ofPension Plan20192018 Status 2019 2018 2017 SurchargeImposed CBAs GCIU- Employer RetirementFund 91-6024903/001CriticalRed Implemented 98 107 123 No 3/24/2020 District No. 9, InternationalAssociation of Machinists andAerospace Workers PensionTrust 43-0736847/001EndangeredGreen N/A 30 29 31 N/A 2/28/2021 The GCIU unit at one of our bargaining units withdrew representation and, as a result, precipitated a partial withdrawal from the GCIU EmployerRetirement Fund. The Company had previously accrued $2,600,000 in 2017 pending the final assessment from the fund. We received the finalassessment in 2019 and increased the accrual to the final assessed amount of $3,181,000. The District 9 IAM plan notified the Company in April 2019 that it is in endangered status. The plan could be either declared red status ormodified. The plan has not indicated what action will be taken. The Company has effectuated a total withdrawal from the CWA/ITU Pension plan in 2019 which was in critical status as of September 30, 2019.This action was precipitated by a disclaimer of interest by one of our bargaining units, which forced a partial withdrawal from the fund. TheCompany has elected to precipitate withdrawals from the other units to accomplish a full withdrawal. The full withdrawal will be accomplished bytriggering sections of those contracts which allowed for withdrawal from the fund in exchange for benefits and outsourcing of work. TheCompany has accrued a liability of $3,255,000 in Warrants and other in 2019 to estimate the impact of the full withdrawal. 9 COMMON STOCK AND CLASS B COMMON STOCK Common Stock The par value of our Common Stock was changed from $2.00 per share to $0.01 per share effective January 30, 2012. Holders of our previous2nd lien agreement shared in the issuance of 6,743,640 shares of our Common Stock, an amount equal to 13% of outstanding shares on a proforma basis as of January 30, 2012. 65 In connection with the currently outstanding 2nd Lien Term Loan, we entered into the Warrant Agreement. Under the Warrant Agreement,certain affiliates or designees of the 2nd Lien Lenders received on March 31, 2014 their pro rata share of Warrants to purchase, in cash,6,000,000 shares of Common Stock, subject to adjustment pursuant to anti-dilution provisions. The Warrants represent, when fully exercised,approximately 10.1% of shares of Common Stock outstanding at March 30, 2014 on a fully diluted basis. The exercise price of the Warrants is$4.19 per share. The Warrant Agreement contains a cash settlement provision in the event of a change of control prior to March 31, 2018, as well as otherprovisions requiring the Warrants be measured at fair value and classified as warrants and other liabilities in our Consolidated Balance Sheets.We re-measure the liability to fair value each reporting period, with changes reported in other non-operating income (expense). The initial fairvalue of the Warrants was $16,930,000. At September 29, 2019, the fair value of the Warrants is $1,195,000. In connection with the issuance of the Warrants, we entered into the Registration Rights Agreement. The Registration Rights Agreementrequires, among other matters, that we use our commercially reasonable efforts to file and maintain the effectiveness for certain specifiedperiods of a shelf registration statement covering the shares of Common Stock upon exercise of the Warrants. Class B Common Stock In 1986, one share of Class B Common Stock was issued as a dividend for each share of Common Stock held by stockholders of record at thetime. The transfer of Class B Common Stock was restricted. As originally anticipated, the number of outstanding Class B shares decreased overtime through trading and reached the sunset level of 5,600,000 shares in March 2011. In March 2011, in accordance with the sunset provisionsestablished in 1986, we effected conversion of all outstanding shares of Class B Common Stock to Common Stock. As a result, all stockholdershave one vote per share on all future matters. Class B shares formerly had ten votes per share. 10 STOCK OWNERSHIP PLANS Total non-cash stock compensation expense is $1,638,000, $1,857,000 and $2,088,000, in 2019, 2018 and 2017, respectively. At September 29, 2019, we have reserved 2,805,000 shares of Common Stock for issuance to employees under an incentive and nonstatutorystock option and restricted stock plan approved by stockholders of which 1,600,000 shares are available for granting of non-qualified stockoptions or issuance of restricted Common Stock. Stock Options Options are granted at a price equal to the fair market value on the date of the grant and are exercisable, upon vesting, over a ten-year period. A summary of stock option activity is as follows: (Thousands of Shares) 2019 2018 2017 Under option, beginning of year 1,100 1,271 1,698 Exercised (93) (131) (339)Canceled (198) (40) (88)Under option, end of year 809 1,100 1,271 Exercisable, end of year 809 1,100 1,271 Weighted average prices of stock options are as follows: (Dollars) 2019 2018 2017 Exercised 2.06 1.42 1.53 Cancelled 2.08 2.49 14.02 Under option, end of year 1.82 1.88 1.86 66 A summary of stock options outstanding at September 29, 2019 is as follows: (Dollars) Options Outstanding Options Exercisable Range of NumberOutstanding(Thousands) Weighted AverageRemainingContractual Life(Years) Weighted AverageExercise Price Number Exercisable(Thousands) Weighted AverageExercise Price 1 - 2 425 2.7 1.14 425 1.14 2 - 3 384 1.0 2.57 384 2.57 809 1.9 1.82 809 1.82 There is no unrecognized compensation expense for unvested stock options at September 29, 2019. The aggregate intrinsic value of stock options outstanding at September 29, 2019 is $179,000 Restricted Common Stock A summary of restricted Common Stock activity follows: (Thousands of Shares) 2019 2018 2017 Outstanding, beginning of year 2,059 2,478 2,462 Granted 788 587 837 Vested (1,337) (936) (751)Forfeited (33) (70) (70)Outstanding, end of year 1,477 2,059 2,478 Weighted average grant date fair values of restricted Common Stock are as follows: (Dollars) 2019 2018 2017 Outstanding, beginning of year 2.31 2.69 2.74 Granted 2.18 2.33 3.34 Vested 2.03 3.31 3.59 Forfeited 2.13 2.85 2.98 Outstanding, end of year 2.49 2.31 2.69 Total unrecognized compensation expense for unvested restricted Common Stock at September 29, 2019 is $1,350,000, which will berecognized over a weighted average period of 1.2 years. In December 2019, we expect to issue shares of 724,300 restricted Common Stock to employees. All restrictions with respect to these shareslapse in December 2022. Stock Purchase Plans We have 270,000 shares of Common Stock available for issuance pursuant to our Employee Stock Purchase Plan. We also have 8,700 sharesof Common Stock available for issuance under our Supplemental Employee Stock Purchase Plan. There has been no activity under these plansin 2019, 2018 or 2017. 11 INCOME TAXES On December 22, 2017, the 2017 Tax Act was signed into law. Among other provisions, the 2017 Tax Act reduces the federal statutory corporateincome tax rate from 35% to 21%. The reduction of the corporate tax rate caused us to re-measure our deferred tax assets and liabilities to thelower federal base rate of 21%. We reported a discrete adjustment from revaluing our deferred tax assets and liabilities which resulted in aprovisional net decrease in income tax expense of $24,872,000 for the 13 weeks ended December 24, 2017. The Securities Exchange Commission issued rules that allow for a measurement period of up to one year after the enactment date of the 2017Tax Act to finalize the recording of the related transitional impact. Apart from any future changes in interpretations, legislative action or changesin accounting standards, we have finalized and recorded the resulting adjustments as of September 29, 2019. The impact of the re-measurementdid not change materially for the 52 weeks ended September 29, 2019. 67 Income tax expense (benefit) consists of the following: (Thousands of Dollars) 2019 2018 2017 Current: Federal 8,763 275 394 State 1,171 875 819 Deferred (2,003) (17,378) 10,398 7,931 (16,228) 11,611 Income tax expense (benefit) related to continuing operations differs from the amounts computed by applying the U.S. federal income tax rate toincome (loss) before income taxes. The reasons for these differences are as follows: (Percent of Income (Loss) Before Income Taxes) 2019 2018 2017 Computed “expected” income tax expense (benefit) 21.0 24.7 35.0 State income tax expense (benefit), net of federal tax impact 1.3 2.6 2.3 Net income of associated companies taxed at dividend rates (3.9) (5.1) (3.7)Resolution of tax matters 1.7 (8.4) 2.2 Non-deductible expenses 3.4 2.9 1.5 Valuation allowance 10.8 9.9 2.6 Warrant valuation (0.6) 0.2 (10.2)Revaluation of deferred income taxes due to law charges — (79.1) — Other (0.4) (0.4) (0.8) 33.3 (52.7) 28.9 Net deferred income tax liabilities consist of the following components: September 29 September 30 (Thousands of Dollars) 2019 2018 Deferred income tax liabilities: Property and equipment (14,424) (16,506)Identified intangible assets (15,358) (18,486)Long-term debt (6,647) (11,074)Accrued compensation (189) 2,402 Investments (3,164) (6,472) (39,782) (50,136)Deferred income tax assets: Allowance for doubtful accounts and losses on loans 1,279 910 Pension and postretirement benefits 4,048 2,305 Operating loss carryforwards 41,610 41,663 Accrued expenses 426 424 Other 2,526 3,075 49,889 48,377 Valuation allowance (39,913) (37,349)Net deferred income tax liabilities (29,806) (39,108) All deferred taxes are categorized as non-current. 68 A reconciliation of 2019 and 2018 changes in gross unrecognized tax benefits is as follows: (Thousands of Dollars) 2019 2018 Balance, beginning of year 16,104 13,915 Increases (decreases) in tax positions for prior years 33 132 Increases in tax positions for the current year 2,472 2,567 Lapse in statute of limitations (357) (510)Balance, end of year 18,252 16,104 Approximately $10,665,000 and $10,312,000 of the gross unrecognized tax benefit balances for 2019 and 2018, respectively, relate to state netoperating losses which are netted against deferred taxes on our balance sheet. The total amount of unrecognized tax benefits that, if recognized,would impact the effective tax rate was $14,019,000 at September 29, 2019. We recognize interest and penalties related to unrecognized taxbenefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was, net of tax, $848,000 atSeptember 29, 2019 and $563,000 at September 30, 2018. There were no amounts provided for penalties at September 29, 2019 or September30, 2018. At September 29, 2019, we had a deferred tax asset of $4,255,000 related to disallowed interest expense. No significant income tax audits are currently in progress and the Company has not received any notices of intent to audit. Certain of theCompany's state income tax returns for the year ended September 29, 2013 are open for examination. The Federal and remaining state returnsare open beginning with the September 29, 2014 year. At September 29, 2019, we have state tax benefits of approximately $63,338,000 in net operating loss ("NOL") carryforwards that expirebetween 2020 and 2039. These NOL carryforwards result in a deferred income tax asset of $50,037,000 at September 29, 2019, a portion ofwhich is offset by a valuation allowance. As expected, we reported a taxable income in 2018 in excess of our remaining NOL, so that no Federal NOL is available in fiscal year 2019. 12 FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable toestimate value. The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity ofthose instruments. Investments totaling $6,068,000, including our 16.7% ownership of the non-voting common stock and 0.7% of the votingcommon stock of TCT, which represents 8.7% of total TCT stock, and a private equity investment, are carried at cost. As of September 29, 2019,the approximate fair value of the private equity investment is $10,268,000 which is a level 3 fair value measurement. At September 29, 2019 we had no floating rate debt. Our fixed rate debt consists of $363,420,000 principal amount of the Notes and,$80,207,000 principal amount under the 2nd Lien Term Loan. At September 29, 2019, based on an average of private market price quotations,the fair values were $364,328,550 and $80,207,214 for the Notes and 2nd Lien Term Loan, respectively. These represent Level 2 fair valuemeasurements. As discussed more fully in Notes 5 and 9, we recorded a liability for the Warrants issued in connection with the Warrant Agreement. The liabilitywas initially measured at its fair value and we will re-measure the liability to fair value each reporting period, with changes reported in other non-operating income (expense). The initial fair value of the Warrants was $16,930,000. The fair value of the Warrants at September 29, 2019,September 30, 2018 and September 24, 2017 are $1,195,000, $1,807,000 and $1,580,000, respectively. In other, net non-operating income(expense) in the Consolidated Statements of Income and Comprehensive Income, we recognized income of $612,000 in 2019, expense of$226,000 in 2018 and income of $10,181,000 in 2017, for adjustments in the fair value of the Warrants. 69 The following assumptions were used to estimate the fair value of the Warrants: 2019 2018 2017 Volatility (Percent) 48 31 37 Risk-free interest rate (Percent) 1.58 2.91 1.81 Expected term (Years) 2.5 3.5 4.5 Estimated fair value (Dollars) 0.20 0.30 0.26 13 EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share: (Thousands of Dollars and Shares, Except Per Common Share Data) 2019 2018 2017 Income attributable to Lee Enterprises, Incorporated: 14,268 45,766 27,481 Weighted average Common Stock 57,648 57,009 56,481 Less non-vested restricted Common Stock (2,083) (2,307) (2,491)Basic average Common Stock 55,565 54,702 53,990 Dilutive stock options and restricted Common Stock 1,319 1,246 1,402 Diluted average Common Stock 56,884 55,948 55,392 Earnings per common share: Basic: 0.26 0.84 0.51 Diluted 0.25 0.82 0.50 For 2019, 2018 and 2017, we had 6,384,000, 7,206,000 and 7,577,000 weighted average shares, respectively, not considered in thecomputation of diluted earnings per common share because the exercise prices of the related stock options and Warrants were in excess of thefair market value of our Common Stock. 14 ALLOWANCE FOR DOUBTFUL ACCOUNTS Valuation and qualifying account information related to the allowance for doubtful accounts receivable related to continuing operations is asfollows: (Thousands of Dollars) 2019 2018 2017 Balance, beginning of year 4,806 4,796 4,327 Additions charged to expense 2,751 1,952 1,696 Deductions from reserves (1,123) (1,942) (1,227)Balance, end of year 6,434 4,806 4,796 15 OTHER INFORMATION Compensation and other accrued liabilities consist of the following: September 29 September 30 (Thousands of Dollars) 2019 2018 Compensation 9,170 10,363 Retirement plans 2,637 2,673 Other 5,904 6,605 17,711 19,641 70 Supplemental cash flow information includes the following cash payments: (Thousands of Dollars) 2019 2018 2017 Interest 47,555 52,180 58,844 Debt financing and reorganization costs 1,773 437 373 Income tax payments, net 8,439 464 1,214 Accumulated other comprehensive income (loss), net of deferred income taxes at September 29, 2019 and September 30, 2018, is related topension and postretirement benefits. 16 COMMITMENTS AND CONTINGENT LIABILITIES Operating Leases We have operating lease commitments for certain of our office, production and distribution facilities. Management expects that in the normalcourse of business, existing leases will be renewed or replaced. Minimum lease payments during the five years ending September 2024 andthereafter are $3,403,000, $2,290,000, $2,238,000, $1,637,000, $1,367,000 and $4,991,000, respectively. In 2019, 2018 and 2017 totaloperating lease expense was $4,993,000, $4,064,000 and $3,866,000, respectively. Capital Expenditures At September 29, 2019, we had construction and equipment purchase commitments totaling approximately $1,642,000. Income Taxes Commitments exclude unrecognized tax benefits to be recorded in accordance with FASB ASC Topic 740, Income Taxes. We are unable toreasonably estimate the ultimate amount or timing of cash settlements with the respective taxing authorities for such matters. See Note 11. We file income tax returns with the Internal Revenue Service ("IRS") and various state tax jurisdictions. From time to time, we are subject toroutine audits by those agencies, and those audits may result in proposed adjustments. We have considered the alternative interpretations thatmay be assumed by the various taxing agencies, believe our positions taken regarding our filings are valid, and that adequate tax liabilities havebeen recorded to resolve such matters. However, the actual outcome cannot be determined with certainty and the difference could be material,either positively or negatively, to the Consolidated Statements of Income and Comprehensive Income (Loss) in the periods in which such mattersare ultimately determined. We do not believe the final resolution of such matters will be material to our consolidated financial position or cashflows. We have various income tax examinations ongoing and at various stages of completion, but generally our income tax returns have been auditedor closed to audit through 2013. Legal Proceedings We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain ofthese matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matterswill not have a material adverse effect on our Consolidated Financial Statements, taken as a whole. Multiemployer Pension Plans We effectuated a total withdrawal from the CWA/ITU plan in 2019 as discussed in Note 8. As a result, we are subject to a claim from themultiemployer pension plan for a withdrawal liability. The amount and timing of such liability will be dependent on actions taken, or not taken, bythe Company and the pension plan, as well as the future investment performance and funding status of the plan. In 2019, we accrued a liability of$3,255,000 related to this withdrawal. The withdrawal liability determined to be due under this plan will be funded over a period of 20 years. 71 17 QUARTERLY FINANCIAL DATA (UNAUDITED) Per share amounts may not add due to rounding. Quarter Ended (Thousands of Dollars, Except Per Common Share Data) December March June September 2019 Operating revenue 136,201 122,704 127,284 123,665 Net income 10,719 (2,327) 6,172 1,345 Income attributable to Lee Enterprises, Incorporated 10,361 (2,678) 5,766 819 Earnings per common share: Basic 0.19 (0.05) 0.10 0.01 Diluted 0.18 (0.05) 0.10 0.01 2018 Operating revenue 143,786 127,805 132,618 139,746 Net income 35,327 2,533 4,750 4,438 Income attributable to Lee Enterprises, Incorporated 35,003 2,239 4,458 4,066 Earnings (loss) per common share: Basic 0.64 0.04 0.08 0.07 Diluted 0.63 0.04 0.08 0.07 72 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Lee Enterprises, Incorporated: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Lee Enterprises, Incorporated and subsidiaries (the Company) as ofSeptember 29, 2019 and September 30, 2018, the related consolidated statements of income, comprehensive income, stockholders’ equity(deficit), and cash flows for the 52-week period ended September 29, 2019, the 53-week period ended September 30, 2018 and the 52-weekperiod ended September 24, 2017 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidatedfinancial statements present fairly, in all material respects, the financial position of the Company as of September 29, 2019 and September30, 2018, and the results of its operations and its cash flows for the 52-week period ended September 29, 2019, the 53-week period endedSeptember 30, 2018 and the 52-week period ended September 24, 2017, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCompany’s internal control over financial reporting as of September 29, 2019, based on criteria established in Internal Control – IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated December 13,2019 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion onthese consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required tobe independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error orfraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements,whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accountingprinciples used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financialstatements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company's auditor since 2008. Chicago, IllinoisDecember 13, 2019 73 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Reporton Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on the 13th day of December 2019. LEE ENTERPRISES, INCORPORATED /s/ Kevin D. Mowbray /s/ Timothy R. MillageKevin D. Mowbray Timothy R. MillagePresident and Chief Executive Officer Vice President, Chief Financial Officer and Treasurer(Principal Executive Officer) (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theRegistrant and in their respective capacities on the 13th day of December 2019. Signature /s/ Richard R. Cole DirectorRichard R. Cole /s/ Nancy S. Donovan DirectorNancy S. Donovan /s/ Leonard J. Elmore DirectorLeonard J. Elmore /s/ Margaret R. Liberman DirectorMargaret R. Liberman /s/ Mary E. Junck DirectorMary E. Junck /s/ Brent M. Magid DirectorBrent Magid /s/ William E. Mayer DirectorWilliam E. Mayer /s/ Herbert W. Moloney III DirectorHerbert W. Moloney III /s/ Kevin D. Mowbray President and Chief Executive Officer, and DirectorKevin D. Mowbray /s/ Gregory P. Schermer DirectorGregory P. Schermer /s/ Timothy R. Millage Vice President, Chief Financial Officer and TreasurerTimothy R. Millage 74 EXHIBIT INDEX Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by us with the SEC, as indicated. Exhibitsmarked with a plus (+) are management contracts or compensatory plan contracts or arrangements filed pursuant to Item 601(b)(10)(iii)(A) ofRegulation S-K. All other documents listed are filed with this Annual Report on Form 10-K. NumberDescription 3.1 *Amended and Restated Certificate of Incorporation of Lee Enterprises, Incorporated effective as of January 30, 2012 (Exhibit 3.1to Form 8-K filed on February 3, 2012) 3.2 *Second Amended and Restated By-Laws of Lee Enterprises, Incorporated effective as of June 26, 2019 (Exhibit 3.1 to Form 8-Kfiled June 27, 2019) 4.1 *Indenture dated as of March 31, 2014 among Lee Enterprises, Incorporated, certain subsidiaries from time to time partiesthereto, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Collateral Agent (Exhibit4.1 to Form 8-K filed on April 4, 2014) 4.2 *Warrant Agreement dated as of March 31, 2014 between Lee Enterprises, Incorporated and Wells Fargo Bank, NationalAssociation (Exhibit 4.2 to Form 8-K filed on April 4, 2014) 4.3 *Registration Rights Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, Mudrick Capital Management,LP, Hawkeye Capital Management, LLC, Cohanzick Management, LLC, Aristeia Capital, L.L.C., CVC Credit Partners, LLC,Franklin Mutual Advisors, LLC and Wingspan Master Fund, LP (Exhibit 4.3 to Form 8-K filed on April 4, 2014) 10.1 *Purchase Agreement dated March 21, 2014 among Lee Enterprises, Incorporated, certain subsidiaries party thereto from time totime, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Collateral Agent, involving a$400,000,000 aggregate principal amount of 9.5% Senior Secured Notes, pursuant to an Indenture dated as of March 31, 2014(Exhibit 10.1 to Form 8-K filed on March 27, 2014) 10.2 *Joinder Agreement dated as of June 25, 2015, made by each Subsidiary Guarantor a party thereto in favor of U.S. Bank NationalAssociation, as Trustee and Deutsche Bank Trust Company Americas, as collateral agent (Exhibit 10.1 to Form 8-K filed on July1, 2015) 10.3 *First Lien Credit Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the Lenders from time to timeparties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and JPMorgan Securities LLC andDeutsche Bank Securities Inc., as Joint Lead Arrangers and as Joint Bookrunners (Exhibit 10.1 to Form 8-K filed on April 4,2014) 10.4 *Second Lien Loan Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the Lenders from time to timeparties thereto, Wilmington Trust, National Association, as Administrative Agent and Collateral Agent, and JPMorgan SecuritiesLLC and Deutsche Bank Securities Inc., as Joint Lead Arrangers and as Joint Bookrunners (Exhibit 10.2 to Form 8-K filed onApril 4, 2014) 10.5 *Security Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the Subsidiary Guarantors and DeutscheBank Trust Company Americas, as Collateral Agent (Exhibit 10.3 to Form 8-K filed on April 4, 2014) 10.6 *Pari Passu Intercreditor Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the other Grantors fromtime to time parties thereto, JPMorgan Chase Bank, N.A., U.S. Bank National Association and Deutsche Bank Trust CompanyAmericas (Exhibit 10.4 to Form 8-K filed on April 4, 2014) 10.7 *Joinder Agreement dated as of June 25, 2015, made by each Subsidiary Guarantor a party thereto in favor of JPMorgan ChaseBank, N.A., as collateral agent for the benefit of the Secured Creditors referred to in the First Lien Guarantee and CollateralAgreement dated as of March 31, 2014 referred to therein (Exhibit 10.2 to Form 8-K filed on July 1, 2015) 10.8 *Pulitzer Pari Passu Intercreditor Agreement dated as of June 25, 2015 among Lee Enterprises, Incorporated, the other Grantorsparty thereto, JPMorgan Chase Bank, N.A., U.S. Bank National Association and Deutsche Bank Trust Company Americas(Exhibit 10.3 to Form 8-K filed on July 1, 2015) 10.9 *Junior Intercreditor Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the other Grantors from time totime parties thereto, JPMorgan Chase Bank, N.A., U.S. Bank National Association, Deutsche Bank Trust Company Americasand Wilmington Trust, National Association (Exhibit 10.5 to Form 8-K filed on April 4, 2014) 75 NumberDescription 10.10 *Pulitzer Junior Intercreditor Agreement dated as of June 25, 2015 among Lee Enterprises, Incorporated, the other Grantors partyhereto, JPMorgan Chase Bank, N.A., U.S. Bank National Association, Deutsche Bank Trust Company Americas and WilmingtonTrust, National Association (Exhibit 10.4 to Form 8-K filed on July 1, 2015) 10.11 *First Lien Guarantee and Collateral Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the SubsidiaryGuarantors and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (Exhibit 10.6 to Form 8-K filed onApril 4, 2014) 10.12 *Amendment Agreement dated as of November 1, 2019 among Lee Enterprises, Incorporated, the Lenders party thereto andJPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (Exhibit 10.1 to Form 8-K filed on November 5, 2019) 10.13 *Intercompany Subordination Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the SubsidiaryGuarantors, Pulitzer, Pulitzer Subsidiaries and JPMorgan Chase Bank, N.A. (Exhibit 10.7 to Form 8-K filed on April 4, 2014) 10.14*Second Lien Guarantee and Collateral Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, theSubsidiary Guarantors, Pulitzer, Pulitzer Subsidiaries and Wilmington Trust, National Association, as Administrative Agent andCollateral Agent (Exhibit 10.8 to Form 8-K filed on April 4, 2014) 10.15 *Second Amendment to Intercreditor Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, The Bank ofNew York Mellon Trust Company, N.A., Wilmington Trust, National Association, Pulitzer and the Pulitzer Subsidiaries (Exhibit10.9 to Form 8-K filed on April 4, 2014) 10.16 *Intercompany Subordination Agreement dated as of March 31, 2014 among Lee Enterprises, Incorporated, the SubsidiaryGuarantors, Pulitzer, Pulitzer Subsidiaries and Wilmington Trust, National Association (Exhibit 10.10 to Form 8-K filed on April 4,2014) 10.17 *Management Agreement dated as of June 26, 2018 between BH Media Group, Inc. and Lee Enterprises, Incorporated (Exhibit10.1 to Form 8-K filed on June 26, 2018) 10.18 *Operating Agreement of St. Louis Post-Dispatch LLC, dated as of May 1, 2000, as amended by Amendment No. 1 to OperatingAgreement of St. Louis Post-Dispatch LLC, dated as of June 1, 2001 (Exhibit 10.5 to Form 10-Q for the Fiscal Quarter EndedJune 30, 2005) 10.19*Amendment Number Two to Operating Agreement of St. Louis Post-Dispatch LLC, effective February 18, 2009, between PulitzerInc. and Pulitzer Technologies, Inc. (Exhibit 10.13 to Form 10-Q for the Fiscal Quarter Ended March 29, 2009) 10.20*Amended and Restated Joint Operating Agreement, dated December 22, 1988, between Star Publishing Company and CitizenPublishing Company (Exhibit 10.2 to Form 10-Q for the Fiscal Quarter Ended June 30, 2005) 10.21*Amended and Restated Partnership Agreement, dated as of November 30, 2009, between Star Publishing Company and CitizenPublishing Company (Exhibit 10.2 to Form 10-Q for the Fiscal Quarter Ended December 27, 2009) 10.22*Amended and Restated Management Agreement, dated as of November 30, 2009, between Star Publishing Company andCitizen Publishing Company (Exhibit 10.1 to Form 10-Q for the Fiscal Quarter Ended December 27, 2009) 10.23*License Agreement (Star), as amended and restated November 30, 2009, between Star Publishing Company and TNI Partners(Exhibit 10.3 to Form 10-Q for the Fiscal Quarter Ended December 27, 2009) 10.24*License Agreement (Citizen), as amended and restated November 30, 2009, between Citizen Publishing Company and TNIPartners (Exhibit 10.4 to Form 10-Q for the Fiscal Quarter Ended December 27, 2009) 10.25 *License Agreement, dated as of May 1, 2000, by and between Pulitzer Inc. and St. Louis Post-Dispatch LLC (Exhibit 10.7 toForm 10-Q for the Fiscal Quarter Ended June 30, 2005) 10.26*Non-Confidentiality Agreement, dated as of May 1, 2000 (Exhibit 10.10 to Form 10-Q for the Fiscal Quarter Ended June 30,2005) 10.27.1 +*Amended and Restated Lee Enterprises, Incorporated 1990 Long-Term Incentive Plan (effective October 1, 1999, as amendedeffective February 17, 2016) (Exhibit 10.1 to Form 8-K filed on February 23, 2016) 10.27.2 +*Form of Restricted Stock Agreement related to Lee Enterprises, Incorporated 1990 Long-Term Incentive Plan (Effective October1, 1999, as amended effective February 17, 2016) (Exhibit 10.2 to Form 8-K filed on February 23, 2016) 76 NumberDescription 10.27.3 +*Form of Incentive Stock Option Agreement related to Lee Enterprises, Incorporated 1990 Long-Term Incentive Plan (EffectiveOctober 1, 1999, as amended effective February 17, 2016) (Exhibit 10.3 to Form 8-K filed on February 23, 2016) 10.27.4 +*Form of Non-Qualified Stock Option Agreement related to Lee Enterprises, Incorporated 1990 Long-Term Incentive Plan(Effective October 1, 1999, as amended effective February 17, 2016) (Exhibit 10.4 to Form 8-K filed on February 23, 2016) 10.28 +*Amended and Restated Lee Enterprises, Incorporated 1996 Stock Plan for Non-Employee Directors Effective February 22, 2017(Appendix A to Schedule 14A Definitive Proxy Statement for 2017) 10.29 +*Lee Enterprises, Incorporated Supplementary Benefit Plan, Amended and Restated as of January 1, 2008 (Exhibit 10.25 to Form10-K for the Fiscal Year Ended September 28, 2008) 10.30 +*Lee Enterprises, Incorporated Outside Directors Deferral Plan, Amended and Restated as of January 1, 2008 (Exhibit 10.26 toForm 10-K for the Fiscal Year Ended September 28, 2008) 10.31.1 +*Form of Amended and Restated Employment Agreement between Lee Enterprises, Incorporated and its President and ChiefExecutive Officer (Exhibit 10.31.2 to Form 10-K for the Fiscal Year Ended September 30, 2018) 10.31.2 +*Form of Employment Agreement between Lee Enterprises, Incorporated and Certain of its Senior Executive Officers (Exhibit10.31.3 to Form 10-K for the Fiscal Year Ended September 30, 2018) 10.32 +*Form of Indemnification Agreement for Lee Enterprises, Incorporated Directors and Executive Officers Group (Exhibit 10.32 toForm 10-K for the Fiscal Year Ended September 30, 2018) 10.33 +*Lee Enterprises, Incorporated Amended and Restated Incentive Compensation Program (Effective February 22, 2017)(Appendix B to Schedule 14A Definitive Proxy Statement for 2017) 21Subsidiaries and associated companies 23Consent of KPMG LLP, Independent Registered Public Accounting Firm 24Power of Attorney 31.1Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 78 EXHIBIT 21 LEE ENTERPRISES, INCORPORATEDAND SUBSIDIARIES SUBSIDIARIES AND ASSOCIATED COMPANIES State ofOrganizationPercentage of VotingSecurities Owned Lee Enterprises, IncorporatedDelaware Parent Lee Publications, Inc.Delaware100%Lee Procurement Solutions Co.Iowa100%Lee Consolidated Holdings Co.South Dakota100%Lee FoundationIowa100%Accudata, Inc.Iowa100%Amplified Digital, LLCDelaware100%Fairgrove LLCDelaware100%Flagstaff Publishing Co.Washington100%Hanford Sentinel, Inc.Washington100%Journal-Star Printing Co.Nebraska100%Napa Valley Publishing Co.Washington100%Pantagraph Publishing Co.Delaware100%Pulitzer Inc.Delaware100%Pulitzer Missouri Newspapers, Inc.Delaware100%Pulitzer Newspapers, Inc.Delaware100%Pulitzer Network Systems LLCDelaware100%Pulitzer Technologies, Inc.Delaware100%Santa Maria Times, Inc.Nevada100%Sioux City Newspapers, Inc.Iowa100%Southwestern Oregon Publishing Co.Oregon100%St. Louis Post-Dispatch LLCDelaware100%Star Publishing CompanyArizona100%Suburban Journals of Greater St. Louis LLCDelaware100%Ynez CorporationCalifornia100%INN Partners, L.C. d/b/a TownNews.comIowa82.5%Madison Newspapers, Inc. d/b/a Capital NewspapersWisconsin50%TNI PartnersArizona50% EXHIBIT 23 Consent of Independent Registered Public Accounting Firm The Board of DirectorsLee Enterprises, Incorporated: We consent to the incorporation by reference in the registration statements (No. 333-06435, No. 333-132768, No. 333-218355 and No. 333-204985) on Form S-8 and (No. 333-215651, Amendment No. 1 to No. 333-21561, No. 333-197450, and Amendment No. 1 to No. 333-197450)on Form S-3 of Lee Enterprises, Incorporated and subsidiaries of our reports dated December 13, 2019, with respect to the consolidatedbalance sheets of Lee Enterprises, Incorporated as of September 29, 2019 and September 30, 2018, and the related consolidated statementsof income, comprehensive income, stockholders’ equity (deficit), and cash flows for the 52-week period ended September 29, 2019, the 53-week period ended September 30, 2018 and the 52-week period ended September 24, 2017, and the related notes, and the effectiveness ofinternal control over financial reporting as of September 29, 2019, which reports appear in the September 29, 2019 annual report on Form 10-Kof Lee Enterprises, Incorporated. /s/ KPMG LLPChicago, IllinoisDecember 13, 2019 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned directors of Lee Enterprises, Incorporated, a Delaware corporation (the“Company”), hereby severally constitute and appoint each of Kevin D. Mowbray and Timothy R. Millage, and each of them, to be our true andlawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, inany and all capacities, to sign the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2019 (and any amendmentsthereto); granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite andnecessary to be done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that suchattorneys-in-fact and agents, or his or her substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. Dated: December 13, 2019 /s/ Kevin D. Mowbray /s/ Timothy R. MillageKevin D. Mowbray Timothy R. MillagePresident and Chief Executive Officer Vice President, Chief Financial Officer and(Principal Executive Officer) TreasurerDirector (Principal Financial and Accounting Officer) /s/ Richard R. Cole /s/ Nancy S. Donovan Richard R. Cole Nancy S. DonovanDirector Director /s/ Leonard J. Elmore /s/ Mary E. JunckLeonard J. Elmore Mary E. JunckDirector Director /s/ Margaret R. Liberman /s/ Brent M. MagidMargaret R. Liberman Brent M. MagidDirector Director /s/ William E. Mayer /s/ Herbert W. Moloney IIIWilliam E. Mayer Herbert W. Moloney IIIDirector Director /s/ Gregory P. Schermer Gregory P. Schermer Director Exhibit 31.1 CERTIFICATION I, Kevin D. Mowbray, certify that: 1I have reviewed this Annual report on Form 10-K ("Annual Report") of Lee Enterprises, Incorporated ("Registrant"); 2Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this Annual Report; 3Based on my knowledge, the Consolidated Financial Statements, and other financial information included in this AnnualReport, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant asof, and for, the periods presented in this Annual Report; 4The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the Registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this Annual Report is being prepared; b)designed such internal control over financial reporting, or caused such internal control over financial reporting tobe designed under our supervision, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles; c)evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this AnnualReport our conclusions about the effectiveness of the disclosure controls and procedures as of the end of theperiod covered by this Annual Report based on such evaluation; and d)disclosed in this Annual Report any change in the Registrant's internal control over financial reporting thatoccurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case ofan Annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internalcontrol over financial reporting; and 5The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the Registrant's auditors and the Audit Committee of Registrant's Board of Directors (or personsperforming the equivalent functions): a)all significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarizeand report financial information; and b)any fraud, whether or not material, that involves management or other employees who have a significant role inthe Registrant's internal control over financial reporting. Date: December 13, 2019 /s/ Kevin D. Mowbray Kevin D. Mowbray President and Chief Executive Officer Exhibit 31.2 CERTIFICATION I, Timothy R. Millage, certify that: 1I have reviewed this Annual report on Form 10-K ("Annual Report") of Lee Enterprises, Incorporated ("Registrant"); 2Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this Annual Report; 3Based on my knowledge, the Consolidated Financial Statements, and other financial information included in this AnnualReport, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrantas of, and for, the periods presented in this Annual Report; 4The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the Registrant, includingits consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this Annual Report is being prepared; b)designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles; c)evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in thisAnnual Report our conclusions about the effectiveness of the disclosure controls and procedures as of theend of the period covered by this Annual Report based on such evaluation; and d)disclosed in this Annual Report any change in the Registrant's internal control over financial reporting thatoccurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in thecase of an Annual report) that has materially affected, or is reasonably likely to materially affect, theRegistrant's internal control over financial reporting; and 5The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the Registrant's auditors and the Audit Committee of Registrant's Board of Directors (or personsperforming the equivalent functions): a)all significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the Registrant's ability to record,process, summarize and report financial information; and b)any fraud, whether or not material, that involves management or other employees who have a significantrole in the Registrant's internal control over financial reporting. Date: December 13, 2019 /s/ Timothy R. Millage Timothy R. Millage Vice President, Chief Financial Officer and Treasurer Exhibit 32 The following statement is being furnished to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-OxleyAct of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation. Securities and Exchange Commission450 Fifth Street, NWWashington, DC 20549 Re: Lee Enterprises, Incorporated Ladies and Gentlemen: In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), each of the undersigned herebycertifies that to our knowledge: (i) this Annual report on Form 10-K for the period ended September 29, 2019 ("Annual Report"), fully complies with the requirements ofsection 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (ii) the information contained in this Annual Report fairly presents, in all material respects, the financial condition and results ofoperations of Lee Enterprises, Incorporated for the periods presented in the Annual Report. Date: December 13, 2019 /s/ Kevin D. Mowbray /s/ Timothy R. MillageKevin D. Mowbray Timothy R. MillagePresident and Chief Executive Officer Vice President, Chief Financial Officer and Treasurer A signed original of this written statement required by Section 906 has been provided to Lee Enterprises, Incorporated and will be retained byLee Enterprises, Incorporated and furnished to the Securities and Exchange Commission upon request. 

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