Lee Enterprises Reports Preliminary Earnings for Q4

As discussed more fully below, the preliminary amounts do not include the possible impact of additional impairment charges. Such charges would not impact cash flows, but would reduce reported earnings per common share. An estimate of such charges, if any are determined to be necessary, will be included in financial statements to be filed with the Securities and Exchange Commission in the company's Form 10-K on or before Dec. 12, 2008.

Mary Junck, chairman and chief executive officer, said: "Like many other businesses and media companies, Lee has been battered by the unprecedented economic turmoil. Consumers have been buying less, which means advertisers have been spending less, resulting in reduced revenue and earnings for Lee. Although downward trends leveled off in October, we are taking steps to protect our financial footing. As we announced two weeks ago, we have made changes to our bank credit agreement to improve our flexibility in meeting debt obligations, and we have suspended our dividend. Also, we expect to reduce 2009 operating expenses by 6-7 percent. Despite the currently weak outlook, we have continued to lead the industry in revenue performance, and our audiences continue to grow. We remain confident that Lee will emerge strong when the economy improves."

PRELIMINARY SEPTEMBER QUARTER PRO FORMA(2) OPERATING RESULTS

Two calendar changes affected results for the quarter and year. Because of period accounting, the 2007 quarter included 14 weeks at the former Pulitzer operations, compared with 13 weeks in 2008. Also, because of the switch from calendar month to period accounting at the remainder of Lee's enterprises, which account for about 60 percent of total revenue, the 2008 quarter contained one fewer publishing day, a Sunday. Sundays normally generate more print advertising than any other day of the week. In September 2008, the company cycled through its change to period accounting, which will make future results significantly more comparable.

On a pro forma basis, excluding the 14th week at the former Pulitzer properties in 2007, total operating revenue from continuing operations for the quarter decreased 10.7 percent from a year ago to $244.9 million. Combined print and online advertising revenue decreased 12.9 percent to $184.5 million. On a same property(3) basis, combined print and online retail advertising revenue declined 5.0 percent, and classified decreased 23.1 percent. Combined same property print and online employment advertising revenue decreased 34.5 percent, automotive decreased 18.8 percent and real estate decreased 30.6 percent. Same property online advertising revenue decreased 15.7 percent, with online retail advertising up 16.0 percent and online employment advertising down 31.5 percent. National advertising revenue decreased 13.2 percent. Circulation revenue decreased 4.1 percent. Total same property revenue declined 10.7 percent.

Operating expenses, excluding depreciation and amortization and unusual items, decreased 1.9 percent to $205.8 million, with compensation down 4.1 percent, newsprint and ink up 6.3 percent and other cash costs down 1.6 percent. Same property operating expenses, excluding depreciation and amortization and unusual items, decreased 2.8 percent. Same property compensation declined 5.1 percent, with full-time equivalent employees down 7.4 percent. Same property newsprint and ink expense increased 1.0 percent and other cash costs decreased 0.9 percent.

Operating cash flow(4) decreased 35.1 percent compared with a year ago to $36.7 million. Operating income, which includes equity in earnings of associated companies, depreciation and amortization, and non-cash charges for impairment of goodwill and other assets, decreased 57.4 percent to $15.8 million.

Also on a pro forma basis, non-operating expense, which consists primarily of financial expense, net of financial income, decreased 32.6 percent to $13.4 million. Income from continuing operations before income taxes decreased 86.0 percent to $2.4 million. Income from continuing operations decreased 66.7 percent to $6.1 million. Net income available to common stockholders decreased 70.7 percent to $5.4 million.

Free cash flow(5) totaled $20.3 million for the quarter, compared with $24.9 million a year ago. Net debt was reduced $57.6 million.

PRELIMINARY FISCAL YEAR PRO FORMA OPERATING RESULTS

Excluding the 53rd week in 2007 at the former Pulitzer properties, total pro forma revenue from continuing operations for the 52 weeks decreased 7.5 percent from a year ago to $1.03 billion. Total advertising revenue decreased 8.8 percent. Combined same property print and online retail advertising declined 2.8 percent. Combined print and online classified advertising revenue decreased 15.7 percent, with employment down 21.8 percent, automotive down 13.1 percent and real estate down 24.3 percent. Same property online advertising revenue decreased 0.8 percent, with online retail advertising up 19.9 percent and online employment advertising down 9.1 percent. National advertising revenue decreased 18.7 percent. Circulation revenue declined 3.2 percent. Total same property revenue for the 52 weeks decreased 7.5 percent.

Total operating expenses, excluding depreciation and amortization, for the 52 weeks decreased 2.6 percent. Same property operating expenses, excluding unusual items, depreciation and amortization, decreased 3.0 percent.

Operating cash flow for the 52 weeks decreased 22.6 percent to $207.0 million. Excluding unusual items in both years, operating cash flow declined 22.6 percent to $210.4 million.

Free cash flow totaled $112.4 million for the 52 weeks, compared with $126.2 million a year ago. Net debt was reduced $102.2 million. An additional $17.9 million of cash flow was used to liquidate an unfunded retirement plan, and $19.0 million of Lee common stock was repurchased.

IMPAIRMENT CHARGES

For the quarters ended March 30, 2008, and June 29, 2008, Lee recorded non-cash charges totaling $717.2 million after tax to reduce the carrying value of goodwill, other intangible assets and the company's investment in TNI Partners.

The charges have no effect on cash flows but reduced reported earnings per common share, resulting in a loss for the quarter ended March 30, 2008, and full year ended Sept. 28, 2008. Many public companies also have been required to reduce the carrying value of their intangible assets as a result of significant declines in equity market value.

Impairment testing is performed in accordance with generally accepted accounting principles, which, among other factors, requires consideration of differences between current book value and the estimated fair value of the company's net assets, and comparison of the estimated fair value of the company's net assets to its current market capitalization. The preliminary amounts do not include the possible impact of additional impairment charges. An estimate of such charges, if any are determined to be necessary, will be included in financial statements to be filed with the Securities and Exchange Commission in the company's Form 10-K on or before Dec. 12, 2008.

ADJUSTED EARNINGS AND EPS FOR SEPTEMBER QUARTER(1)

Unusual items affecting year-over-year comparisons for the quarter included, in 2008, workforce adjustments at several locations, transition costs at Madison Newspapers, Inc. related to publication frequency changes at The Capital Times, benefit of federal and state tax adjustments, and adjustment for the current value of the company's future liability related to acquisition of the 5 percent minority share in its St. Louis partnership. Unusual items in 2007 included an early retirement program in St. Louis and benefit of federal and state tax adjustments. The following table summarizes the impact from unusual items on income (loss) available to common stockholders and earnings (loss) per diluted common share. Per share amounts may not add due to rounding.

13 Weeks 3 Months Ended Sept. 28 Ended Sept. 30 2008 2007 (Thousands, except EPS) Amount Per Share Amount Per Share Income (loss) available to common stockholders, as reported $ 5,365 $ 0.12 $ 19,966 $ 0.44 Adjustments: Workforce adjustments and transition costs 2,820 7,962 Income tax benefit of adjustments, net, and impact on minority interest (996 ) (3,209 ) 1,824 0.04 4,753 0.10 Benefit of other federal and state tax adjustments (2,811 ) (0.06 ) (6,880 ) (0.15 ) Net income available to common shareholders, as adjusted 4,378 0.10 17,839 0.39 Change in redeemable minority interest liability 700 0.02 - Net income, as adjusted $ 5,078 $ 0.11 $ 17,839 $ 0.39

ADJUSTED EARNINGS AND EPS FOR FISCAL YEAR (1)

For the year ended Sept. 28, 2008, Lee reported a loss per common share of $15.23, compared with earnings of $1.77 in 2007. Excluding non-cash charges for impairment of goodwill and other intangible assets, and also excluding other unusual items(1), earnings were $0.97 per share, compared with $1.66 cents a year ago.

Unusual items affecting year-over-year comparisons for the fiscal year included, in 2008, impairment of goodwill, other assets and reduction in the carrying value of the company's investment in TNI Partners, workforce adjustments, transition costs at Madison Newspapers, Inc. related to publication frequency changes at The Capital Times, benefit of federal and state tax adjustments, and adjusting of the current value of the company's future liability related to acquisition of the 5 percent minority share in its St. Louis partnership. Unusual items in 2007 included an early retirement program, curtailment gains and benefit of federal and state tax adjustments.

The following table summarizes the impact from unusual items on income (loss) available to common stockholders and earnings (loss) per diluted common share. Per share amounts may not add due to rounding.

52 Weeks 12 Months Ended Sept. 28 Ended Sept. 30 2008 2007 (Thousands, except EPS) Amount Per Share Amount Per Share Income (loss) available to common stockholders, as reported $ (682,714 ) $ (15.23 ) $ 80,999 $ 1.77 Adjustments: Impairment of goodwill and other intangible assets 851,365 - Reduction of investment in TNI Partners 93,384 - Workforce adjustments and transition costs 4,463 7,962 Curtailment gains - (3,731 ) Curtailment gains, TNI Partners - (1,037 ) 949,212 3,194 Income tax benefit of adjustments, net, and impact on minority interest (229,006 ) (1,406 ) 720,206 16.07 1,788 0.04 Benefit of other federal and state tax adjustments (2,811 ) (0.06 ) (6,880 ) (0.15 ) Net income available to common shareholders, as adjusted 34,681 0.77 75,907 1.66 Change in redeemable minority interest liability 8,838 0.20 - Net income, as adjusted $ 43,519 $ 0.97 $ 75,907 $ 1.66

PRINT AND ONLINE AUDIENCES

According to January-June market studies conducted by Wilkerson & Associates, the combined reach of Lee newspapers and online sites among adults over the course of a week in Lee's 10 largest markets grew from 66 percent in 2007 to 71 percent in 2008.

Among other findings, the printed newspapers alone reach 65 percent of all adults in 2008, compared with 61 percent a year earlier. The reach of Lee newspapers among young adults in the markets grew from 54 to 65 percent, and use of the printed newspaper among young adults grew from 48 to 55 percent. The research involved 7,200 interviews in both years and carries an overall error margin of 1.2 percentage points.

While market studies have shown increased reach of Lee's printed newspapers, paid circulation declined. Factors include reduced distribution in less-profitable geographic areas, reductions in sponsored copies and selective price increases. In the six-month Audit Bureau of Circulations Fas-Fax period ended Sept. 30, 2008, Lee newspapers posted declines of 3.7 percent daily and 1.5 percent Sunday, compared with industry average declines of 4.6 percent daily and 4.8 percent Sunday.

Lee's newspapers have circulation of 1.5 million daily and 1.9 million Sunday, reaching more than four million readers daily. Lee's online sites reach more than 12 million unique visitors monthly, and Lee's weekly publications have distribution of more than 4.5 million households.

ABOUT LEE

Lee Enterprises is a premier publisher of local news, information and advertising in primarily midsize markets, with 49 daily newspapers and a joint interest in four others, rapidly growing online sites and more than 300 weekly newspapers and specialty publications in 23 states. Lee's markets include St. Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa; Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee stock is traded on the New York Stock Exchange under the symbol LEE. For more information about Lee, please visit www.lee.net.

LEE ENTERPRISES, INCORPORATED PRELIMINARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Thousands, Except EPS Data) As reported, Pro forma (2), including 14 weeks excluding 14th week in 2007 at former in 2007 at Pulitzer properties Pulitzer properties 13 Weeks 3 Months 3 Months Ended Ended Ended Sept 28 Sept 30 Sept 30 2008 2007 % 2007 % Advertising revenue: Retail $ 100,625 $ 111,765 (10.0 )% $ 108,528 (7.3 )% National 9,953 12,071 (17.5 ) 11,464 (13.2 ) Classified: Daily newspapers: Employment 13,291 21,189 (37.3 ) 20,728 (35.9 ) Automotive 10,967 14,221 (22.9 ) 13,773 (20.4 ) Real estate 10,200 15,050 (32.2 ) 14,676 (30.5 ) All other 11,286 10,639 6.1 10,349 9.1 Other publications 10,780 12,636 (14.7 ) 12,202 (11.7 ) Total classified 56,524 73,735 (23.3 ) 71,728 (21.2 ) Online 13,515 16,528 (18.2 ) 16,040 (15.7 ) Niche publications 3,877 4,075 (4.9 ) 4,040 (4.0 ) Total advertising revenue 184,494 218,174 (15.4 ) 211,800 (12.9 ) Circulation 48,221 51,835 (7.0 ) 50,286 (4.1 ) Commercial printing 3,580 4,155 (13.8 ) 4,080 (12.3 ) Online services & other 8,598 8,075 6.5 8,019 7.2 Total operating revenue 244,893 282,239 (13.2 ) 274,185 (10.7 ) Operating expenses: Compensation 103,899 111,137 (6.5 ) 108,294 (4.1 ) Newsprint and ink 27,615 26,910 2.6 25,979 6.3 Other operating expenses 74,253 76,813 (3.3 ) 75,491 (1.6 ) Workforce adjustments 2,474 7,962 NM 7,962 NM Operating expenses, excluding depreciation and amortization 208,241 222,822 (6.5 ) 217,726 (4.4 ) Operating cash flow(4) 36,652 59,417 (38.3 ) 56,459 (35.1 ) Depreciation 8,866 8,220 7.9 8,221 7.8 Amortization 13,530 14,916 (9.3 ) 14,916 (9.3 ) Equity in earnings of associated companies: TNI Partners 696 1,492 (53.4 ) 1,492 (53.4 ) Madison Newspapers 857 2,305 (62.8 ) 2,305 (62.8 ) Operating income 15,809 40,078 (60.6 ) 37,119 (57.4 ) Non-operating income (expense): Financial income 1,155 2,091 (44.8 ) 1,986 (41.8 ) Financial expense (15,810 ) (22,335 ) (29.2 ) (21,861 ) (27.7 ) Other, net 1,254 - - (13,401 ) (20,244 ) (33.8 ) (19,875 ) (32.6 ) Income from continuing operations before income taxes 2,408 19,834 (87.9 ) 17,244 (86.0 ) Income tax expense (3,483 ) 121 NM (793 ) NM Minority interest (174 ) (106 ) NM (164 ) NM Income from continuing operations 6,065 19,819 (69.4 ) 18,201 (66.7 ) Discontinued operations - 147 112 Net income 6,065 19,966 (69.6 ) 18,313 (66.9 ) Change in redeemable minority interest 700 - - Net income available to common stockholders $ 5,365 $ 19,966 (73.1 )% $ 18,313 (70.7 )% Earnings per common share: Basic: Continuing operations $ 0.12 $ 0.43 (72.1 )% $ 0.40 (70.0 )% Discontinued operations - - - $ 0.12 $ 0.44 (72.7 )% $ 0.40 (70.0 )% Diluted: Continuing operations $ 0.12 $ 0.43 (72.1 )% $ 0.40 (70.0 )% Discontinued operations - - - $ 0.12 $ 0.44 (72.7 )% $ 0.40 (70.0 )% Average common shares: Basic 44,344 45,772 45,772 Diluted 44,891 45,887 45,887

LEE ENTERPRISES, INCORPORATED PRELIMINARYCONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Thousands,Except EPS Data) As reported, Pro forma(2), including 53 weeks excluding 53rd week in 2007 at former in 2007 at Pulitzer properties Pulitzer properties 52 Weeks 12 Months 12 Months Ended Ended Ended Sept 28 Sept 30 Sept 30 2008 2007 % 2007 % Advertising revenue: Retail $ 434,069 $ 455,802 (4.8 )% $ 452,565 (4.1 )% National 44,143 54,901 (19.6 ) 54,294 (18.7 ) Classified: Daily newspapers: Employment 59,457 81,683 (27.2 ) 81,222 (26.8 ) Automotive 45,388 55,308 (17.9 ) 54,860 (17.3 ) Real estate 43,282 58,529 (26.1 ) 58,155 (25.6 ) All other 43,006 39,284 9.5 38,994 10.3 Other publications 43,361 47,737 (9.2 ) 47,303 (8.3 ) Total classified 234,494 282,541 (17.0 ) 280,534 (16.4 ) Online 55,119 56,074 (1.7 ) 55,586 (0.8 ) Niche publications 15,874 16,094 (1.4 ) 16,059 (1.2 ) Total advertising revenue 783,699 865,412 (9.4 ) 859,038 (8.8 ) Circulation 195,457 203,481 (3.9 ) 201,932 (3.2 ) Commercial printing 15,993 16,541 (3.3 ) 16,466 (2.9 ) Online services & other 33,719 34,760 (3.0 ) 34,704 (2.8 ) Total operating revenue 1,028,868 1,120,194 (8.2 ) 1,112,140 (7.5 ) Operating expenses: Compensation 421,652 439,426 (4.0 ) 436,583 (3.4 ) Newsprint and ink 103,926 111,842 (7.1 ) 110,911 (6.3 ) Other operating expenses 292,840 294,145 (0.4 ) 292,823 - Workforce adjustments 3,428 7,962 NM 7,962 NM Curtailment gains - (3,731 ) NM (3,731 ) NM Operating expenses, excluding depreciation and amortization 821,846 849,644 (3.3 ) 844,548 (2.7 ) Operating cash flow(4) 207,022 270,550 (23.5 ) 267,592 (22.6 ) Depreciation 34,670 32,955 5.2 32,956 5.2 Amortization 56,408 59,745 (5.6 ) 59,745 (5.6 ) Impairment of goodwill and other intangible assets 851,365 - NM - NM Equity in earnings of associated companies: TNI Partners 6,171 11,957 (48.4 ) 11,957 (48.4 ) Madison Newspapers 4,040 8,167 (50.5 ) 8,167 (50.5 ) Reduction in investment in TNI Partners 93,384 - NM - NM Operating income (loss) (818,594 ) 197,974 NM 195,015 NM Non-operating income (expense): Financial income 5,857 7,613 (23.1 ) 7,508 (22.0 ) Financial expense (71,472 ) (90,341 ) (20.9 ) (89,867 ) (20.5 ) Other, net 885 (21 ) NM (21 ) NM (64,730 ) (82,749 ) (21.8 ) (82,380 ) (21.4 ) Income (loss) from continuing operations before income taxes (883,324 ) 115,225 NM 112,635 NM Income tax expense (benefit) (209,698 ) 33,828 NM 32,914 NM Minority interest 535 1,069 (50.0 ) 1,011 (47.1 ) Income (loss) from continuing operations (674,161 ) 80,328 NM 78,710 NM Discontinued operations 285 671 NM 636 NM Net income (loss) (673,876 ) 80,999 NM 79,346 NM Change in redeemable minority interest 8,838 - NM - NM Net income (loss) available to common shareholders $ (682,714 ) $ 80,999 NM $ 79,346 NM Earnings (loss) per common share: Basic: Continuing operations $ (15.24 ) $ 1.76 NM $ 1.72 NM Discontinued operations 0.01 0.01 0.01 $ (15.23 ) $ 1.77 NM $ 1.74 NM Diluted: Continuing operations $ (15.24 ) $ 1.75 NM $ 1.72 NM Discontinued operations 0.01 0.01 0.01 $ (15.23 ) $ 1.77 NM $ 1.73 NM Average common shares: Basic 44,813 45,671 45,671 Diluted 44,813 45,804 45,804

SELECTED COMBINED PRINT AND ONLINE ADVERTISING REVENUE (Thousands, Same Property) Pro forma(2) Pro forma(2) 13 Weeks 3 Months 52 Weeks 12 Months Ended Ended Ended Ended Sept 28 Sept 30 Sept 28 Sept 30 2008 2007 % 2008 2007 % Retail $ 102,854 $ 108,307 (5.0 )% $ 439,477 $ 451,969 (2.8 )% Classified: Employment 20,450 31,244 (34.5 ) 90,822 116,099 (21.8 ) Automotive 14,962 18,416 (18.8 ) 62,918 72,405 (13.1 ) Real estate 13,524 19,486 (30.6 ) 57,294 75,642 (24.3 ) Other 18,546 18,615 (0.4 ) 72,175 71,771 0.6 Total classified $ 67,482 $ 87,761 (23.1 )% $ 283,209 $ 335,917 (15.7 )% REVENUE BY REGION (Thousands, Same Property) Pro forma(2) Pro forma(2) 13 Weeks 3 Months 52 Weeks 12 Months Ended Ended Ended Ended Sept 28 Sept 30 Sept 28 Sept 30 2008 2007 % 2008 2007 % Midwest $ 146,520 $ 164,742 (11.1 )% $ 620,349 $ 675,305 (8.1 )% Mountain West 46,120 51,836 (11.0 ) 190,525 201,568 (5.5 ) West 30,213 35,759 (15.5 ) 129,312 146,610 (11.8 ) East/Other 21,844 21,613 1.1 88,018 87,838 0.2 Total $ 244,697 $ 273,950 (10.7 )% $ 1,028,204 $ 1,111,321 (7.5 )% DAILY NEWSPAPER ADVERTISING VOLUME (Thousands of inches, Same Property) Pro forma(2) Pro forma(2) 13 Weeks 3 Months 52 Weeks 12 Months Ended Ended Ended Ended Sept 28 Sept 30 Sept 28 Sept 30 2008 2007 % 2008 2007 % Retail 2,969 3,237 (8.3 )% 12,639 13,212 (4.3 )% National 128 143 (10.5 ) 612 671 (8.8 ) Classified 3,632 4,102 (11.5 ) 14,317 15,716 (8.9 ) Total 6,729 7,482 (10.1 )% 27,568 29,599 (6.9 )%

SELECTED BALANCE SHEET INFORMATION Sept 28 Sept 30 (Thousands) 2008 2007 Cash $ 23,459 $ - Restricted cash and investments 126,060 111,060 Debt (principal amount) 1,332,375 1,395,625

SELECTED STATISTICAL INFORMATION Pro forma(2) Pro forma(2) 13 Weeks 3 Months 52 Weeks 12 Months Ended Ended Ended Ended Sept 28 Sept 30 Sept 28 Sept 30 (Dollars in Thousands) 2008 2007 % 2008 2007 % Capital expenditures $ 4,585 $ 13,819 (66.8 )% $ 18,381 $ 34,381 (46.5 )% Same property newsprint volume (tonnes) 35,172 41,251 (14.7 ) 149,944 167,275 (10.4 ) Same property full-time equivalent employees 7,417 8,006 (7.4 ) 7,699 8,046 (4.3 )

FREE CASH FLOW(5) 13 Weeks 3 Months 52 Weeks 12 Months Ended Ended Ended Ended Sept 28 Sept 30 Sept 28 Sept 30 (Thousands) 2008 2007 2008 2007 Operating income (loss) $ 15,809 $ 40,078 $ (818,594 ) $ 197,974 Depreciation and amortization 22,982 24,721 95,497 99,040 Impairment of goodwill and other intangible assets - - 851,365 - Reduction in investment in TNI - - 93,384 - Stock compensation 1,615 1,521 5,905 7,188 Cash interest expense (16,970 ) (23,396 ) (75,956 ) (94,431 ) Financial income 1,155 2,091 5,857 7,613 Cash income taxes 122 (6,413 ) (26,173 ) (55,693 ) Minority interest 174 106 (535 ) (1,069 ) Capital expenditures (4,585 ) (13,819 ) (18,381 ) (34,381 ) $ 20,302 $ 24,889 $ 112,369 $ 126,241

NOTES:

(1) Adjusted net income and adjusted earnings per common share, which are defined as income (loss) available to common stockholders and earnings (loss) per common share adjusted to exclude unusual matters and those of a substantially non-recurring nature, are non-GAAP (Generally Accepted Accounting Principles) financial measures. Reconciliations of adjusted net income and adjusted earnings per common share to income (loss) available to common stockholders and earnings (loss) per common share are included in tables accompanying this release. No non-GAAP financial measure should be considered as a substitute for any related GAAP financial measure. However, the company believes the use of non-GAAP financial measures provides meaningful supplemental information with which to evaluate its financial performance, or assist in forecasting and analyzing future periods. The company also believes such non-GAAP financial measures are alternative indicators of performance used by investors, lenders, rating agencies and financial analysts to estimate the value of a publishing business and its ability to meet debt service requirements. (2) Pro forma information excluding the 53rd week in 2007 at the former Pulitzer properties is a non-GAAP financial measure. See (1) above. The Company believes the pro forma information provides meaningful supplemental information by excluding revenue and expenses related to the business period that is not comparable to the prior year. Results for the 53rd week are equal to the differences between the as-reported, GAAP amounts and the pro forma amounts. Reconciliation of the pro forma presentation to the most directly comparable GAAP measures are included in tables accompanying this release. (3) Same property comparisons exclude acquisitions and divestitures made in the current and prior year. Same property revenue also excludes Lee's 50% ownership in Madison Newspapers, Inc. and TNI Partners, which are reported using the equity method of accounting. Same property comparisons also exclude corporate office costs. (4) Operating cash flow, which is defined as operating income before depreciation, amortization, impairment charges and equity in earnings of associated companies, is a non-GAAP financial measure. See (1) above. The company believes operating cash flow provides meaningful supplemental information because of its focus on results from operations before depreciation and amortization and earnings from equity investments. Reconciliations of operating cash flow to operating income (loss), the most directly comparable GAAP measure, are included in tables accompanying this release. (5) Free cash flow, which is defined as operating income, plus depreciation and amortization, impairment charges, stock compensation and financial income, minus financial expense (exclusive of non-cash amortization and accretion), cash income taxes, capital expenditures and minority interest, is a non-GAAP financial measure. See (1) above. The company believes free cash flow provides meaningful supplemental information because of its focus on results from operations after inclusion or exclusion of the several factors noted above. Reconciliations of free cash flow to operating income (loss), the most directly comparable GAAP measure, are included in a table accompanying this release. (6) For the legacy Lee properties, there was one fewer publishing day, a Sunday, in the 2008 quarter and year compared with 2007. For the former Pulitzer properties, 2007 included a 53rd week of publishing days. (7) Certain amounts as previously reported have been reclassified to conform with the current period presentation. The prior period has been restated for comparative purposes, and the reclassifications have no impact on earnings. (8) The company disclaims responsibility for updating information beyond the release date.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This release contains information that may be deemed forward-looking and that is based largely on the Company's current expectations and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties are changes in general economic conditions, advertising demand, newsprint and other commodity prices, energy costs, interest rates and availability of credit, labor costs, legislative and regulatory rulings and other results of operations or financial conditions, difficulties in integration of acquired businesses or maintaining employee and customer relationships, increased capital and other costs, competition and other risks detailed from time to time in the Company's publicly filed documents, including the Company Annual Report on Form 10-K for the year ended September 30, 2007. The words "may," "will," "would," "could," "believes," "expects," "anticipates," "intends," "plans," "projects," "considers" and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of this release. The Company does not publicly undertake to update or revise its forward-looking statements.

SOURCE: Lee Enterprises

Lee Enterprises Dan Hayes, 563-383-2100 dan.hayes@lee.net