LEE ENTERPRISES, Inc

References to "we", "our", "us" and the like throughout the Consolidated Financial Statements refer to Lee Enterprises, Incorporated and subsidiaries (the "Company"). Lee Enterprises, Incorporated is a leading provider of high quality, trusted, local news and information, and a major platform for advertising in the markets we serve. We operate 72 principally mid-sized media operations (including TNI Partners ("TNI") and Madison Newspapers, Inc. ("MNI")) across 25 states.

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). “Lee,” the “Company,” “we,” “us,” and “our” refer to Lee Enterprises, Incorporated and its consolidated subsidiaries.

We consolidate all entities that we control. All intercompany balances and transactions are eliminated in consolidation. Subsidiaries that are less than wholly owned are consolidated and the portion of equity and earnings (losses) attributable to noncontrolling interests is presented separately within equity and net income (loss).

We hold a 50% interest in TNI and a 50% interest in MNI; both are accounted for under the equity method and our share of their earnings is reported in “Equity in earnings of associated companies.” We hold an 82.5% interest in BLOX Digital, which is consolidated; the noncontrolling interest in BLOX Digital is presented in equity.

Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no effect on total operating revenue, net income (loss), accumulated deficit, or earnings (loss) per share for any period presented.

Unless otherwise indicated, amounts are presented in thousands of U.S. dollars and per-share data are shown on a diluted basis.

Fiscal Year

Our fiscal year ends on the last Sunday in September. References to “2025,” “2024,” and “2023” refer to the fiscal years then ended. Fiscal 2025 and 2023 each included 52 weeks of operations; fiscal 2024 included 53 weeks. The additional week occurred in the first fiscal quarter of 2024, which may affect year-over-year comparability of results.

Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingencies. Significant estimates include, among others, the allowance for credit losses, impairment and fair value of goodwill and indefinite-lived intangibles, useful lives and recoverability of long-lived assets and internal-use software, pension and other postretirement benefit obligations (e.g., discount rates, expected long-term rate of return, mortality), income taxes (valuation allowances and uncertain tax positions), self-insurance and litigation reserves, and lease-related judgments (including the incremental borrowing rate).

Estimates are based on historical experience and other factors believed to be reasonable under the circumstances and are reviewed on an ongoing basis; revisions are recognized in the period in which they are identified and in future periods, as applicable. Actual results could differ from these estimates.

See Note 4 Goodwill and Other Intangible Assets, Note 8 Pension Plans, Note 9 Postretirement and Postemployment Benefits, Note 13 Income Taxes, Note 2 Revenue, and Note 7 Leases for additional information on these estimates.

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 since acquisition less, for TNI, amortization of, and reductions in the value of, intangible assets.

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 cash equivalents.

Accounts Receivable

We evaluate our allowance for credit losses based on historical credit experience, payment trends and other economic factors. 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 28, 2025 and September 29, 2024 are less than replacement cost by $0.5 million and $0.8 million, respectively.

The components of inventory by cost method are as follows:

Investments

Investments in unconsolidated affiliates over which we exercise significant influence, but does not control, are accounted for by the equity method. Under this method, an investment account for each unconsolidated affiliate is increased by contributions made and by our share of net income of the unconsolidated affiliate, and decreased by the share of net losses of and distributions from the unconsolidated affiliate.

We have elected to account for distributions under the cumulative earnings approach.

Property and Equipment

Property and equipment are carried at cost. Equipment and all other assets are depreciated using the straight line method. The estimated useful lives are as follows:

Depreciation expense for 2025, 2024 and 2023 was $7.7 million, $10.4 million, and $11.6 million, respectively.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets are summarized in Note 4. Intangible assets include customer lists, newspaper subscriber lists and mastheads. Intangible assets subject to amortization are being amortized using the straight-line method except for intangible assets acquired with the acquisition of BH Media Group, Inc. and The Buffalo News, Inc. in 2020, which are being amortized in an accelerated manner consistent with the expected economic benefit.

We review goodwill and non-amortizing intangible assets, which include only newspaper mastheads, for impairment annually as of the first day of the fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that an asset may be impaired in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 350, Intangibles - Goodwill and Other. Under ASC Topic 350, the impairment test for goodwill and non-amortizing intangible assets must be based on estimated fair values. Impairment would occur when the carrying amount of the reporting unit is greater than its fair value.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right of use ("ROU") assets, current portion of long-term lease liabilities and operating lease liabilities on the Consolidated Balance Sheets. Finance leases would be included in property, plant and equipment, current portion of long-term debt and long-term debt on the Consolidated Balance Sheets. Amortization of operating lease ROU assets is included in other operating expenses. Amortization of finance leases would be included in depreciation expense.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The ROU asset is adjusted to include lease payments made to date and initial direct costs incurred and to deduct for lease incentives received and impairment recognized. As most of our leases do not provide an implicit rate, We determined the incremental borrowing rate based on a senior secured collateral adjusted yield curve. This yield curve reflects the estimated rate that would have been paid by us to borrow on a collateralized basis over a similar term in a similar economic environment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Certain lease agreements have lease and non-lease components, which are accounted for together. See Note 7 for additional information related to leases.

Revenue Recognition

Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods or services to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. See Note 2.

Restructuring Costs and Other

Restructuring costs and other primarily relate to severance expenses associated with involuntary terminations, litigation, business transformation efforts, and other expenses. These costs are expensed as incurred.

Pension, Postretirement and Postemployment Benefit Plans

We evaluate our liabilities for pension, postretirement and postemployment benefit plans based upon computations made by consulting actuaries, 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 plan assets, asset allocation assumptions of plan assets and other factors.

We apply a practical expedient under ASC Topic 715, Compensation – Retirement Benefits, which allows us to measure plan assets and benefit obligations using the month-end that is closest to our fiscal year-end. Accordingly, we measure our plan assets and benefit obligations as of September 30, or upon a remeasurement event. We use the alternative spot rate approach which utilizes a full yield curve to estimate the interest cost component of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

Multi-employer Pension Plans

We contribute to a number of multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of our union represented employees. The risks of participating in these multi-employer plans are different from single-employer plans in that assets contributed are pooled and may be used to provide benefits to employees of other participating employers. If a participating employer withdraws from or otherwise ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Alternatively, if we choose to stop participating in one of its multi-employer plans, it may incur a withdrawal liability based on its actuarially determined share of the unfunded status of the plan.

Contributions made to multi-employer plans are based on collective-bargaining agreements and are accounted for under guidance related to multi-employer plans, which essentially provides that contributions to such plans are expensed when due. Any withdrawal liability would be recognized at the point withdrawal from the plan becomes probable. See Note 10 for additional information.

Deferred income tax assets are recognized for deductible temporary differences and loss carryforwards and deferred income tax liabilities are recognized 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 the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted 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 tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We record interest and penalties related to unrecognized tax benefits as a component of income tax expense.

We utilize ASC Topic 820 -Fair Value Measurements and Disclosures, to measure and report fair value. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC Topic 820 establishes a three-level hierarchy of fair value measurements based on whether the inputs to those measurements are observable or unobservable, 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 not active; 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.

Valuation methodologies measured at fair value are as follows:

Financial instruments consist of short term deposits valued based on quoted prices in active markets. Such investments are classified as Level 1.

Fixed income securities are valued based on the closing market price in an active market and are classified as Level 1. Certain investments in commingled funds are valued at the end of the period based upon the value of the underlying investments as determined by quoted market prices. Such investments are classified as Level 2. Certain fixed income securities are part of a collective investment fund for which there is no readily determinable fair value. This fund is valued at the net asset value of units held at the end of the period based upon the value of the underlying investments, which is determined using multiple approaches including by quoted market prices and by private market quotations. Such investments are excluded from the fair value hierarchy.

Equity securities are valued based on the closing market price in an active market and are classified as Level 1. Certain investments in commingled funds are valued at the end of the period based upon the value of the underlying investments as determined by quoted market prices. Such investments are classified as Level 2. Certain equity securities are part of a collective investment fund for which there is no readily determinable fair value. This fund is valued at the net asset value of units held at the end of the period based upon the value of the underlying investments, which is determined using multiple approaches including by quoted market prices and by private market quotations. Such investments are excluded from the fair value hierarchy.

Debt securities consist of government securities, corporate bonds, and mutual funds. Government securities and corporate bonds are valued based upon quoted market prices in an inactive market. Such investments are classified as Level 2. Mutual funds are valued based upon quoted market prices in an active market. Such investments are classified as Level 1.

Hedge funds consist of a long/short equity funds and a diversified fund of funds for which there is no readily determinable fair value. These funds are valued at the net asset value of units held at the end of the period based upon the value of the underlying investments, which is determined using multiple approaches including by quoted market prices and by private market quotations. Such investments are excluded from the fair value hierarchy.

Segments

We determined our operating segments under ASC 280 “Segment Reporting”. Our operations are organized into approximately 50 Strategic Business Units (“SBUs”) based on market. The SBUs generally include print and digital subscription products and the associated advertising and marketing services. Each SBU has comparable types of costs (e.g., compensation, newsprint/ink, and other operating costs) to generate similar sources of advertising and marketing services revenue and subscription revenue. Products are produced using similar processes; SBUs serve similar types of customers and use similar distribution processes. SBUs are internal, location-based operating components used for management purposes and do not represent separate operating or reportable segments.

Operating decisions are made by the Chief Executive Officer ("CEO"), who is the Chief Operating Decision Maker ("CODM"). The CODM reviews the Consolidated Statements of (Loss) Income and Consolidated Balance Sheets on a monthly basis, and the Consolidated Statement of Cash Flows on a quarterly basis. While selective revenue and expense details by SBU are reviewed by the CODM, these reviews focus on revenue composition (advertising and marketing services and subscription) and do not include full SBU operating results or profitability measures. Accordingly, complete operating results or other profitability measures by SBU are not reviewed by the CODM. Further, business decisions by the CODM, including the allocation of resources, are determined based on consolidated information. Accordingly, we operate asone operating segment, which is also ourone reportable segment. Goodwill is assessed for impairment at the same level, consistent with this determination.

Stock Compensation

We have several stock-based compensation plans. We account for grants under those plans under the fair value expense recognition provisions of ASC Topic 718 -Compensation-Stock Compensation. We determine the fair value of stock options using the Black-Scholes option pricing formula. We determine the fair value of the performance based restricted stock units with a market condition using the Black-Scholes framework for an asset-or-nothing call option. Key inputs to these formulas 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 historical experience of similar awards, giving consideration to contractual terms of the awards, vesting schedules and expectations of future employee behavior. The volatility factor is calculated using historical market data for our Common Stock. The time frame used is equal to the expected term. 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 bonds having a remaining term equal to the option's expected term. When estimating forfeitures, we consider voluntary termination behavior as well as actual option forfeitures.

We amortize as compensation expense the value of stock options and restricted Common Stock using the straight-line method over the requisite service period or restriction period, which is generallyone tofour years.

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. We have posted cash collateral totaling $6.7 million at both September 28, 2025 and September 29, 2024, respectively in support of our insurance programs recorded under Other on the Consolidated Balance Sheets.

Our accrued reserves for health care and workers compensation claims are based upon estimates of the remaining liability for retained losses made by consulting actuaries. The amount of workers compensation reserve has been determined based upon historical patterns of incurred and paid loss development factors from the insurance industry.

Recent accounting pronouncements adopted

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07 -Segment Reporting to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This pronouncement is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Our adoption of this guidance did not have an impact on the Consolidated financial statements except the disclosure in Note 5.

New accounting pronouncements not yet adopted

In November 2023, the FASB issued guidance, ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which enhances annual income tax disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 will be effective for annual periods beginning after December 15, 2024. We are currently evaluating the provisions of the updated guidance and assessing the impact on the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses(“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the statement of operations as well as disclosures about specific types of expenses included in the expense captions presented in the statement of operations. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. We expect to enhance annual expense disclosures based on the new requirements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) - Amendments to SEC Paragraphs Pursuant to Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. This update is effective for the annual period beginning after December 15, 2026, as well as interim periods within that period. We are currently evaluating the provisions of the updated guidance and assessing the impact on the Consolidated Financial Statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides new optional guidance relating to the estimation of expected credit losses on current accounts receivable and current contract assets. This

ASU permits entities to apply a practical expedient when estimating credit losses and is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively. We are currently evaluating the provisions of the updated guidance and assessing the impact on the Consolidated Financial Statements.

2. REVENUE

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. Revenues are recognized as performance obligations are satisfied either at a point in time, such as when an advertisement is published, or over time, such as audience subscription revenue. No single customer represented 10% or more of our net revenue in any fiscal period presented.

Advertising and marketing services revenue

Print advertising revenue includes amounts charged to customers for retail, national, or classified advertising space purchased in our newspapers, advertising marketing services and other print advertising products such as preprint inserts and direct mail.

Digital advertising revenue includes amounts for advertisements placed on our digital platforms, amounts charged to customers for digital marketing services which include: audience extension, search engine optimization, search engine marketing, web and mobile production, social media services and reputation monitoring and management.

Payments for print and digital advertising revenue are due upon completion of our performance obligations at previously agreed upon rates. In instances where the timing of revenue recognition differs from the timing of invoicing, such timing differences are not large. As a result, we have determined that our contracts do not include a significant financing component. Depending on the product revenue is recognized over time or at the point in time in which performance obligations are met.

Subscription revenue

Print subscription revenue results from the sale of print editions of newspapers to individual subscribers and to sales outlets that resell the newspapers. Print subscriptions include full access to all forms of content provided. Single copy revenue is also included in subscription revenue. Subscription revenue from single copy and home delivery subscriptions are recognized at the point in time the publications are delivered.

Digital subscription revenue results from the sale of digital-only access to our content delivered via digital products purchased. Digital subscription revenue is recognized over time as performance obligations are met throughout the subscription period.

Payments for print and digital subscription revenue are typically collected in advance, or for contract periods of one year or less and result in an unearned revenue liability that is reduced when revenue is recognized.

Other revenue

Other revenue primarily consists of digital services, commercial printing and delivery of third party products. Digital services revenues, which are primarily delivered through BLOX Digital, are primarily comprised of contractual agreements to provide web hosting and content management services. As such, digital services revenue is recognized over the contract period. Prices for digital services are agreed upon in advance of the contract beginning and are typically billed in arrears on a monthly basis. Commercial printing and delivery revenue is recognized when the product is delivered to the customer.

The following table presents our revenue disaggregated by source:

Contract Liabilities: Our primary source of unearned revenue is from subscriptions paid in advance of the service provided. We expect to recognize the revenue related to unsatisfied performance obligations over the next twelve months in accordance with the terms of the subscriptions and other contracts with customers. The unearned revenue balances described herein are our only contract liability. Unearned revenue was $26.5 million as of September 28, 2025, $31.8 million as of September 29, 2024, and $40.8 million as of September 24, 2023. Revenue recognized in 2025, 2024 and 2023, that was included in the contract liability as of September 29, 2024, September 24, 2023 and, September 25, 2022 was $29.4 million, $38.5 million, and $47.2 million, respectively.

Accounts receivable, excluding allowance for credit losses and contract assets, was $59.4 million, $67.2 million, $74.8 million as of September 28, 2025, September 29, 2024, and September 24, 2023 respectively. See Note 16 for Allowance for credit losses.

Practical expedients: Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within compensation. The vast majority of our contracts have original expected lengths of one year or less and revenue is earned at a rate 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 records income and pays substantially all operating expenses incident to the partnership's operations and publication of the newspaper and other media. Income or loss of TNI is allocated equally to Star Publishing and Citizen.

Summarized financial information of TNI is as follows:

Summarized results of TNI are as follows:

TNI makes periodic distributions of its earnings. We received $3.5 million, $3.2 million, and $3.6 million in distributions in 2025, 2024 and 2023, respectively.

At September 28, 2025 and September 29, 2024, the carrying value of our 50% investment in TNI is $14.7 million and $15.1 million, respectively. The difference between our carrying value and our 50% share of the members' equity of TNI relates principally to goodwill of $12.4 million and other identified intangible assets of $2.3 million, certain of which have been amortized over their estimated useful lives. See Note 4.

TNI provides editorial services to the Company. Editorial service costs are included in other operating expenses in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income and totaled $3.7 million, $3.9 million, and $4.4 million in 2025, 2024 and 2023, respectively.

Madison Newspapers, Inc.

We have a 50% ownership interest in MNI, which publishes daily and Sunday newspapers, and other publications in Madison, Wisconsin, and other Wisconsin locations, and related digital sites. Net income or loss of MNI (after income taxes) is allocated equally to us and The Capital Times Company (“TCT”). MNI conducts its business under the trade name Capital Newspapers.

Summarized financial information of MNI is as follows:

Summarized results of MNI are as follows:

MNI makes periodic distributions of its earnings. We received $1.7 million, $1.2 million, and $2.2 million in distributions in 2025, 2024 and 2023, respectively.

We provide editorial services to MNI. Editorial service fees are included in other revenue in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income and totaled $5.3 million, $5.5 million, and $5.4 million in 2025, 2024 and 2023, respectively.

At September 28, 2025 and September 29, 2024, the carrying value of our 50% investment in MNI is $12.5 million and $12.8 million, respectively.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:

Identified intangible assets related to continuing operations consist of the following:

As discussed in Note 1, we review goodwill and non-amortized intangible assets for impairment annually on the first day of the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset may be impaired in accordance with ASC Topic 350.

All of our goodwill is attributed to the single reporting unit, which has a negative carrying value as of September 28, 2025. When evaluating these assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired, known as Step 0. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we would calculate the estimated fair value of the reporting unit using discounted cash flows or a combination of discounted cash flow and market approaches. We performed its annual assessment on the first day of our fourth fiscal quarter, and determined the fair value of our single reporting unit was in excess of carrying value and as such, there wasno impairment in 2025, 2024 and 2023. In 2025 and 2024 we sold certain non-core operations. Goodwill was allocated to these operations, which totaled $4.2 million and $1.3 million, respectively.

Due to the continued declining print revenues, we regularly assess mastheads for impairment. The calculated masthead fair value includes Level 3 inputs that were determined using the relief from royalty method. The key assumptions used in the fair value estimates under the relief from royalty method are revenue and market growth, royalty rates for newspaper mastheads (the royalty rates utilized a range from 0.0% to 1.0%), estimated tax rates, and appropriate risk-adjusted weighted-average cost of capital (for 2025, 2024 and 2023, the weighted-average cost of capital used was 13.00%,12.50% and 13.00%, respectively). These assumptions reflect our best estimates, but these items involve inherent uncertainties based on market conditions generally outside of our control. A 50-basis point decrease in royalty rates would result in an additional $1.5 million of impairment. Increasing the discount rate by 100 basis points would result in an additional $0.1 million of impairment. In 2025, 2024, and 2023, we recorded impairment charges to reduce the carrying value of mastheads. Such charges are recorded in assets loss on sales, impairments and other in the Consolidated Statements of Loss and Comprehensive Loss. We recorded deferred income tax benefits related to these charges. Changes in market conditions and declines in revenue lead to the impairment charges noted above.

A summary of the pretax impairment charges is included in the table below:

Amortization expense for 2025, 2024, and 2023 was $11.2 million, $17.2 million, and $19.0 million, respectively.

Annual amortization of intangible assets for the years ending September 2026 to September 2030 is estimated to be $7.1 million, $6.5 million, $5.8 million, $5.4 million, and $4.7 million, respectively.

5. SEGMENT REPORTING

We operate as a single operating and reportable segment. The Chief Executive Officer (“CEO”) serves as our Chief Operating Decision Maker (“CODM”) and is responsible for evaluating financial performance and allocating resources. The CODM reviews financial information and makes operating decisions on a consolidated basis.

Our operations are organized into Strategic Business Units (“SBUs”) based on market. The SBU’s generally include one or more daily newspapers, several nondaily publications as well as the related digital operations. SBUs are internal, location-based operating components used for management purposes and do not represent separate operating or reportable segments. Separate operating results for each SBU are not reviewed by the CODM when assessing performance or making operating decisions. The CODM reviews our consolidated statements of (loss) income and balance sheets on a monthly basis and makes key decisions regarding resource allocation, including operating expenses and capital expenditures, primarily focusing on consolidated net (loss) income and consolidated total assets. These consolidated statements are used by the CODM to monitor budget versus actual results and evaluate the return on assets.

Significant segment expenses are separately disclosed and presented in the Consolidated Statements of Loss (Income) and Comprehensive Loss (Income). The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The accounting policies of our operating segment are the same as those described in Note 1.

6. DEBT

On March 16, 2020 concurrent with closing the acquisition of BH Media Group, Inc. and The Buffalo News, Inc., we completed a comprehensive refinancing of our debt (the "2020 Refinancing"). The 2020 Refinancing consists of the Credit Agreement and Term Loan. The proceeds of the Term Loan were used, along with cash on hand, to refinance our outstanding debt at the time of $431.5 million as well as to fund the acquisition of BH Media Newspaper Business assets and the stock of Buffalo News for $140.0 million in cash. With the closing of this transaction, BH Finance became our sole lender. Proceeds of the Term Loan were used to finance the acquisition of BH Media Group, Inc. and The Buffalo News, Inc., and refinance all of our outstanding debt at par. The Term Loan matures in March 2045. Our debt is collateralized by all Company assets.

As of September 28, 2025 and September 29, 2024, we have $455.5 million and $445.9 million, respectively in aggregate principal debt outstanding under the Term Loan. The debt has a fixed interest rate of 9.0%.

During the year ended September 28, 2025, Net Cash Proceeds, as defined in our Credit Agreement, from non-core asset sales totaled $6.5 million of which we remitted $1.8 million as principal debt payments and the remaining net cash proceeds remain payable to BH Finance. Future payments are contingent on our ability to generate future excess cashflow, as defined in the Credit Agreement.

In February 2025, in an effort to provide short-term liquidity to fund the Cyber Incident's remediation efforts and other operations as described in Note 18, BH Finance LLC waived the interest expense payment and BH Media Group, Inc. waived the lease payment due March 1, 2025, April 1, 2025 and May 1, 2025. As of September 28, 2025, the waivers increased the outstanding debt balance by $11.3 million and is treated as non-cash activity within the statement of cash flows. These waivers were treated as modifications to the existing credit agreement. In addition, the May 2025 waiver was accompanied by an amendment to the Credit Agreement which includes provisions requiring us to prepay the loan in an aggregate amount equal to 100% of net cash proceeds received by us or our subsidiaries within three days following the receipt of net cash proceeds from asset sales and allowing BH Finance to assign its rights and obligations under the Credit Agreement to any person other than a natural person. Future payments are contingent on our ability to generate future Excess Cash Flow, as defined in the Credit Agreement.

The Credit Agreement contains certain customary representations and warranties, certain affirmative and negative covenants and certain conditions, including restrictions on incurring additional indebtedness, creating certain liens, making certain investments or acquisitions, issuing dividends, repurchasing shares of our stock and certain other capital transactions. Certain existing and future direct and indirect material domestic subsidiaries of the Company are guarantors of our obligations under the Credit Agreement.

The Credit Agreement restricts us from paying dividends on our Common Stock. This restriction does not apply to dividends issued with our Equity Interests or from the proceeds of a sale of our Equity Interests. Further, the Credit Agreement restricts or limits, among other things, subject to certain exceptions, our ability and our subsidiaries to: (i) incur additional indebtedness, (ii) make certain investments, (iii) enter into mergers, acquisitions and asset sales, (iv) incur or create liens and (v) enter into transactions with certain affiliates. The Credit Agreement contains various representations and warranties by us and may be terminated upon the occurrence of certain events of default, including non-payment. The Credit Agreement also contains cross-default provisions tied to other agreements with BH Finance entered into by us and our subsidiaries in connection with the 2020 Refinancing.

Principal Payments

Voluntary prepayments under the Credit Agreement are not subject to call premiums and are payable at par, with the exception of the change-of-control provisions discussed below.

Excluding the Excess Cash Flow payments described below, there are no scheduled mandatory principal payments required under the Credit Agreement. We are required to make mandatory prepayments of the Term Loan as follows:

•We must prepay the Term Loan in an aggregate amount equal to 100% of any Net Cash Proceeds received by the Company or any Subsidiary from a sale, transfer, license, or other disposition of any property of us or any of our subsidiaries in excess of $0.5 million in any ninety (90) day period.

•We are required to prepay the Term Loan with excess cash flow, defined as cash on the balance sheet at quarter-end in excess of $20.0 million ("Excess Cash Flow"). Excess Cash Flow is used to prepay the Term Loan, at par, and is due within 50-days of quarter-end.

•If there is a Change of Control (as defined in the Credit Agreement), BH Finance has the option to require us to prepay the Term Loan in cash equal to 105% of the unpaid principal balance, plus accrued and unpaid interest.

We may, upon notice to BH Finance, at any time or from time to time, voluntarily prepay the Term Loan in whole or in part, at par, provided that any voluntary prepayment of the Term Loan shall be accompanied by payment of all accrued interest on the amount of principal prepaid to the date of prepayment.

Liquidity

Pursuant to the terms of the Credit Agreement, our debt does not include a revolver.

Our liquidity, consisting of cash on the balance sheet, totals $10.0 million at September 28, 2025. This liquidity amount excludes any future cash flows. We expect all interest and principal payments due in the next twelve months will be satisfied by existing cash and our cash flows, which will allow us to maintain an adequate level of liquidity.

There are numerous potential consequences under the 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 give rise to the right of BH Finance to exercise their remedies under the Credit Agreement including, without limitation, the right to accelerate all outstanding debt and take actions authorized 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 repay, refinance or amend our debt agreements as they become due. The Credit Agreement (as defined above) has only limited affirmative covenants with which we are required to maintain compliance and there are no leverage or financial performance covenants. We are in compliance with our debt covenants at September 28, 2025.

We continue to take proactive steps to reduce our cost structure and preserve liquidity. Recent actions include targeted cost-reduction and cash-management initiatives such as lowering discretionary and capital spending, tightening control of print-related operating costs, and enhancing collection efforts to improve working capital. We also received temporary lease and interest payment waivers during the second quarter as part of our cyber- recovery plan. Management is actively evaluating additional strategic initiatives designed to ensure adequate cash flow and capital resources to support ongoing operations and meet debt obligations. While there can be no assurance that all initiatives will be implemented as planned, delays or unforeseen challenges in executing these measures could adversely affect our financial position and results of operations.

7. LEASES

We lease certain real estate, vehicles, and equipment. Our leases have remaining lease terms of 1 to 40 years, some of which may include options to extend the leases, and some of which may include options to terminate the leases. The exercise of lease renewal options and terminations are at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

We entered into a lease agreement between BH Media, as Landlord, and we, as Tenant, provide for the leasing of approximately 70 properties and related fixtures (including production equipment) used in the BH Media Newspaper Business ("BH Lease"). The BH Lease commenced on March 16, 2020. The BH Lease requires us to pay annual rent of $8.0 million, payable in equal payments, as well as all operating costs relating to the properties (including maintenance, repairs, property taxes and insurance). Rent payments are subject to a Rent Credit (as defined in the Lease) equal to 8.00% of the net consideration for any leased real estate sold by BH Media during the term of the lease. As of September 28, 2025, we have earned monthly rent credits of $0.3 million, making current annual rent of $4.7 million.

Total lease expense consists of the following:

Supplemental cash flow information related to our operating leases is as follows:

As of September 28, 2025, maturities of lease liabilities were as follows:

Our lease contracts are discounted using the incremental borrowing rate for us. We determined the incremental borrowing rate based on our senior secured collateral adjusted yield curve. This yield curve reflects the estimated rate that would have been paid by us to borrow on a collateralized basis over a similar term in a similar economic environment. The weighted average revolving lease terms and discount rates for all of our operating leases were as follows.

8. DEFINED BENEFIT PENSION PLAN

We are the sponsor ofone single-employer defined benefit plan, which provide benefits to our certain current and former employees. On October 22, 2025, we notified plan participants that we intend to terminate the Lee Enterprises, Incorporated Pension Plan ("the Plan") on December 28, 2025. Terminating the plan creates an opportunity for plan participants to receive a one-time lump sum payout. It also eliminates pension cost uncertainty for us and allows us to focus on our core business.The termination is planned to be accomplished through a combination of lump-sum payouts to eligible participants and the purchase of a group annuity contract from an insurance company, which irrevocably transferred the pension obligation for the remaining participants.

During the year ended September 29, 2024, we offered a voluntary lump sum payment of future benefits to terminated vested participants in the defined benefit pension plan. The offer was accepted by 522 participants, representing a $22.6 million settlement of related pension plan liability. In 2024, we recognized a non-cash settlement gain of $2.4 million, which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income. Pension plan assets and liabilities were reduced by $22.6 million.

The net periodic (benefit) cost components of our pension plan is as follows:

Changes in projected benefit obligations (which approximates the accumulated benefit obligation at each period end) and plan assets are as follows:

Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows:

Amounts recognized in accumulated other comprehensive (loss) income are as follows:

We expect to recognize $0.8 million of unrecognized prior service cost in net periodic pension costs in 2025.

Assumptions

Weighted-average assumptions used to determine benefit obligations are as follows:

For 2025, the expected long-term return on Plan assets is 5.5%. The assumptions related to the expected long-term return on Plan assets are developed through an analysis of historical market returns, current market conditions and composition of Plan assets.

Weighted-average assumptions used to determine net periodic benefit cost are as follows:

For the year ended September 28, 2025, the decrease in benefit obligation is primarily driven by an increase in bond yields which increased the discount rate. For the year ended September 29, 2024, the primary driver of the decrease in benefit obligation was the payout of lump sums to certain terminated vested participants during December 2023. This was partially offset by an increase in the benefit obligation due to the decrease in discount rate.

Plan Assets

The primary objective of our investment strategy is to satisfy our pension obligations at a reasonable cost. Assets are actively invested to achieve a 100% liability hedge (which includes fixed income investments and cash).

Our investment policy outlines the governance structure for decision-making, sets investment objectives and restrictions and establishes criteria for selecting and evaluating investment managers. The use of derivatives is prohibited, except on a case-by-case basis where the manager 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 investment policy. Assets are periodically redistributed to maintain the appropriate policy allocation.

The weighted-average asset allocation of our pension assets, is as follows:

Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need to reallocate assets within policy guidelines.

The fair value hierarchy of pension assets at September 28, 2025 is as follows:

The fair value hierarchy of pension assets at September 29, 2024 was as follows:

There were no purchases, sales or transfers of assets classified as Level 3 in 2025 or 2024. Pension assets that are excluded from the fair value hierarchy and are measured at net asset value or "NAV", include eleven investments:

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of, and the changes in, accumulated other comprehensive income (loss), net of tax:

(a)Accumulated other comprehensive income (loss) component represents amortization of actuarial loss and is included in the computation of net periodic benefit cost. See Note 8 - Defined Benefit Pension Plan and Note 9 - Postretirement and Postemployment Benefits.

(b)Amounts reclassified from accumulated other comprehensive income (loss) are recorded net of tax impacts of $1.1 million $0.2 million, $0.2 million for the years ended September 28, 2025, September 29, 2024, and September 24, 2023, respectively.

(c)Amounts reclassified from accumulated other comprehensive income (loss) include a pension settlement gain of $2.4 million for the year ended September 29, 2024.

Cash Flows

Based on our forecast and the planned termination of the pension plan later in 2025, we expect to makeno contributions to our pension trust in 2026.

We anticipate future benefit payments to be paid from the pension trust as follows:

Other Plans

We are the plan sponsor for other funded and unfunded defined benefit pension plans that are not considered material. The net benefit obligation for these plans are $0.5 million and $0.6 million at September 28, 2025 and September 29, 2024, respectively.

9. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

We provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. The level and adjustment of participant contributions vary depending on the specific plan. Our liability and related expense for benefits under the postretirement plans are recorded over the service period of active employees based upon annual actuarial calculations. We accrue postemployment disability benefits when it becomes probable that such benefits will be paid and when sufficient information exists to make reasonable estimates of the amounts to be paid.

During the year ended September 29, 2024, we completed the outsourcing of certain printing operations, which ceased postretirement medical benefits for a group of employees. We recognized a non-cash curtailment gain of $1.2 million which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

The net periodic postretirement benefit cost (benefit) components for our postretirement plans are as follows:

Changes in projected benefit obligations (which approximates the accumulated benefit obligation at each period end) and plan assets are as follows:

Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows:

Amounts recognized in accumulated other comprehensive income (loss) before income tax benefit are as follows:

We expect to recognize $1.0 million and $0.3 million of unrecognized net actuarial gain and unrecognized prior service benefit, respectively, in net periodic postretirement benefit in 2026.

Assumptions

Weighted-average assumptions used to determine postretirement benefit obligations are as follows:

The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns, current market conditions, and composition of plan assets.

Weighted-average assumptions used to determine net periodic benefit cost are as follows:

For 2025, the expected long-term return on plan assets is 6.0%. The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns, current market conditions and composition of plan assets.

Assumed health care cost trend rates are as follows:

Administrative costs related to indemnity plans are assumed to increase at the health care cost trend rates noted above.

For the year ended September 28, 2025, the decrease in benefit obligation is primarily driven by an increase in bond yields which increased the discount rate. For the year ended September 29, 2024, the most significant driver of the decrease in benefit obligations for the plans was a curtailment disclosed in the prior year.

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 the same union employees. The fair value of master trust assets allocated to the active employee medical plans at September 28, 2025 and September 29, 2024 is $0.6 million and $0.5 million, 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 to balance 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 criteria for selecting and evaluating investment managers. The use of derivatives is strictly prohibited, except on a case-by-case basis where the manager 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 investment policy. Assets are periodically redistributed to maintain the appropriate policy allocation.

The weighted-average asset allocation of our postretirement assets is as follows:

Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need to reallocate assets within policy guidelines.

The fair value hierarchy of postretirement assets at September 28, 2025 is as follows:

The fair value hierarchy of postretirement assets at September 29, 2024 is as follows:

There were no purchases, sales or transfers of assets classified as Level 3 in 2025 or 2024. Postretirement assets that are excluded from the fair value hierarchy and are measured at net asset value or "NAV", include one investment in global equity long/short common/collective hedge fund-of-funds for which prices are provided on a monthly basis and is valued at approximately $0.2 million, as of September 28, 2025 and September 29, 2024.

Cash Flows

Based on our forecast at September 28, 2025, we donot expect to contribute to our postretirement plans in 2025.

We anticipate future benefit payments to be paid either with future contributions to the plan or directly from plan assets, as follows:

Postemployment Plan

Our postemployment benefit obligation, which represents certain disability benefits, was $1.6 million at September 28, 2025 and $1.6 million at September 29, 2024.

10. 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 plan for employees whose incomes exceed qualified plan limits.

The defined contribution retirement plan costs were $2.7 million in 2025, $3.1 million in 2024, and $3.5 million in 2023.

Multiemployer Pension Plans

We contributed to various multiemployer defined benefit pension plans under the terms of collective bargaining agreements ("CBAs"). The risks of participating 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 participating employers;

•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating 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 the unfunded status of the plan at the time of withdrawal, referred to as a "withdrawal liability".

Information related to these plans is outlined in the table below:

(1)We have withdrawn from the multiemployer plan

We have effectuated withdrawals from all multiemployer plans. We record estimates of withdrawal liabilities as of the time the contracts agreeing to withdraw from those plans are ratified. As of September 28, 2025 and September 29, 2024, we had $22.4 million and $23.6 million of accrued withdrawal liabilities. The liabilities reflect the estimated net present value of payments to the fund, payable over 20 years.

11. COMMON STOCK

Rights Agreement

On March 28, 2024, our Board of Directors adopted a stockholder rights plan (the “Rights Agreement”). Pursuant to the Rights Agreement, on March 28, 2024, our Board of Directors declared a dividend ofone preferred share purchase right (a “Right”), payable on April 8, 2024, for each share of our Common Stock outstanding to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series C Participating Convertible Preferred Stock, without par value (the “Preferred Shares”), of the Company at a price of $90.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

The Rights will initially trade with our Common Stock and will generally become exercisable only if any person or group, other than certain exempt persons, acquires beneficial ownership of 15% or more of our Common Stock outstanding. In the event the Rights become exercisable, each holder of a Right, other than the triggering person(s), will be entitled to purchase additional shares of our Common Stock at a 50% discount or the Company may exchange each Right held by such holders forone share of our Common Stock. The Rights Agreement was to continue in effect until March 27, 2025, or unless earlier redeemed or terminated by the Company, as provided in the Rights Agreement. On March 27, 2025, the Board of Directors extended the termination date of the Rights Agreement to March 27, 2026. The Rights have no voting or dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the Company.

The Rights Agreement applies equally to all current and future stockholders and is not intended to deter offers or preclude our Board of Directors from considering acquisition proposals that are fair and otherwise in the best interest of our stockholders. However, the overall effect of the Rights Agreement may render it more difficult or discourage a merger, tender offer, or other business combination involving us that is not supported by our Board of Directors.

12. STOCK OWNERSHIP PLANS

Total non-cash stock compensation expense is $1.8 million, $1.8 million. and $1.8 million, in 2025, 2024, and 2023, respectively.

At September 28, 2025, we have reserved 496,136 shares of Common Stock for issuance to employees under an incentive and non-statutory stock option and restricted stock plan approved by stockholders.

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 aten-year period.

A summary of stock option activity is as follows:

Options were valued using the Black Scholes valuation model and the following assumptions:

The weighted average grant date fair value of options granted during the year was $2.18 and the unrecognized compensation is $0.1 million.

Restricted Common Stock

A summary of restricted Common Stock activity is as follows:

Weighted average grant date fair values of restricted Common Stock are as follows:

Total unrecognized compensation expense for unvested restricted Common Stock at September 28, 2025 is $0.5 million, which will be recognized over a weighted average period of 0.9 years.

The total fair value of shares that vested during 2025, 2024 and 2023 were $0.5 million, $0.4 million, and $1.1 million, respectively.

Performance Share Units

During the year, we awarded performance stock units to reward executives that vest based on our performance against predetermined total shareholder return market based targets. A performance share unit represents the right to receive a defined number of ordinary shares after the end of athree-year performance period if the specified performance goals are achieved. The units were valued using the Black-Scholes framework for an asset-or-nothing call option with the following assumptions:

The weighted average grant date fair value of options granted during the year was $12.22.

A summary of performance share unit activity is as follows:

Total unrecognized compensation expense for Performance shares at September 28, 2025 is $0.7 million.

Employee Stock Purchase Plans

We have 27,000 shares of Common Stock available for issuance pursuant to our Employee Stock Purchase Plan. We also have 870 shares of Common Stock available for issuance under our Supplemental Employee Stock Purchase Plan. There has been no activity under these plans in 2025, 2024, or 2023.

13. INCOME TAXES

Income tax benefit consists of the following:

Income tax benefit related to operations differs from the amounts computed by applying the U.S. federal income tax rate to loss before income taxes. The reasons for these differences are as follows:

Net deferred income tax liabilities consist of the following components:

Certain prior-period deferred income tax assets and liabilities have been reclassified to conform to the current-period presentation. These reclassifications did not impact the previously reported net deferred income tax liabilities or any financial statement balances.

A reconciliation of 2025 and 2024 changes in gross unrecognized tax benefits is as follows:

Approximately $11.6 million and $11.4 million of the gross unrecognized tax benefit balances for 2025 and 2024, respectively, relate to state net operating losses which are netted against deferred taxes on our Consolidated Balance Sheet. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $2.1 million at September 28, 2025. We do not expect that unrecognized tax benefits will fluctuate significantly in the next twelve months. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was, net of tax, $0.4 million at September 28, 2025 and $0.5 million at September 29, 2024. There wereno amounts provided for penalties at September 28, 2025 or September 29, 2024.

At September 28, 2025 and September 29, 2024, we had a deferred tax asset of $22.9 million and $16.1 million, respectively, related to disallowed interest expense. A portion of this deferred tax asset is subject to a valuation allowance as we do not expect to fully realize a future tax benefit.

The valuation allowance totaled $29.7 million and $26.5 million in 2025 and 2024, respectively. The valuation allowance is on certain state net operating losses and disallowed interest expense carryforwards.

We are currently undergoing a New York Franchise Tax audit that includes fiscal year periods 2019 through 2021. Certain of our state income tax returns for the year ended September 24, 2017 are open for examination. The Federal and remaining state returns are open beginning with the September 29, 2019 year.

At September 28, 2025, we have state tax benefits of approximately $41.6 million in net operating loss ("NOL") carryforwards. Of the NOL balance, $40.6 million expire between 2024 and 2044 and $1.0 million have an indefinite carryforward period. These NOL carryforwards result in a deferred income tax asset of $32.9 million at September 28, 2025, a portion of which is offset by a valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law, introducing significant changes to corporate income tax deductions. For fiscal year 2025, OBBBA did not have a material impact on our financial statements. We continue to evaluate the future impact of the OBBBA for those provision that were effective after fiscal year 2025.

14. 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 to estimate value.

The carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate fair value because of the short maturity of those instruments. Certain other investments totaling $4.4 million, including our 16.7% ownership of the non-voting common stock and 0.7% of the voting common stock of TCT, which represents 8.7% of total TCT stock, are carried at cost. Certain other investments totaling $1.7 million, which include securities held in trust under a deferred compensation arrangement, are carried at fair value with gains and losses reported in earnings. These represent Level 2 fair value measurements.

At September 28, 2025, we had no floating rate debt. Our fixed rate debt consists of $455.5 million principal amount of the Term Note. At September 28, 2025 the fair value is $387.9 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs for similar instruments. The inputs used in this measurement include the 20 year treasury rate as the risk free interest rate and a US high yield index option-adjusted spread. There has been no changes in the valuation approach and technique from prior periods.

15. LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted (losses) earnings per common share:

For 2025, 2024, and 2023 we had 152,189,192,737, and 48,955 weighted average shares, respectively, not considered in the computation of diluted earnings per share because we recorded net losses.

16. ALLOWANCE FOR CREDIT LOSSES

Valuation and qualifying account information related to the allowance for credit losses related to continuing operations is as follows:

17. OTHER INFORMATION

Compensation and other accrued liabilities consist of the following:

Supplemental cash flow information includes the following cash payments:

Accumulated other comprehensive loss, net of deferred income taxes at September 28, 2025, and September 29, 2024, is related to pension and postretirement benefits.

18. CYBERSECURITY INCIDENT

On February 3, 2025, the Company experienced a cybersecurity incident that disrupted certain IT systems and resulted in unauthorized access to certain files (the “Cyber Incident”). We activated our incident-response plan, engaged third-party cybersecurity experts, notified law enforcement, and offered identity-protection services to affected customers and subscribers.

For the year ended September 28, 2025, we incurred $10.5 million loss of cash flows related to the Cyber Incident. Approximately $3.7 million of this was incurred expenses that are recognized in "Restructuring and Other" in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income. We have filed insurance claims for the remaining $6.8 million to cover business interruption related and other expenses.

We maintain cyber insurance with a $0.5 million deductible. As of year-end, we had submitted $10.0 million of claims (excluding business-interruption claims) and received $2.0 million of reimbursements, which are presented as a reduction of related costs within “Restructuring and other.” Additional recoveries were not yet probable at September 28, 2025; accordingly, no insurance receivable has been recognized. Business-interruption claims remain under review; no related recoveries have been recorded.

The Cyber Incident adversely affected fiscal 2025 operating results; however, the incremental impact on revenues and certain operating expenses is not reasonably separable from other business factors. The incident remains under legal and forensic review, and we continue to implement security enhancements.

19. COMMITMENTS AND CONTINGENT LIABILITIES

Capital Expenditures

At September 28, 2025, we had construction and equipment purchase commitments totaling approximately $1.7 million.

Commitments exclude unrecognized tax benefits to be recorded in accordance with 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. See Note 13.

We file income tax returns with the Internal Revenue Service and various state tax jurisdictions. From time to time, we are subject to routine audits by those agencies, and those audits may result in proposed adjustments. We have considered the alternative interpretations that may be assumed by the various taxing agencies, believe our positions taken regarding our filings are valid, and that adequate tax liabilities have been 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 (Loss) Income and Comprehensive Income (Loss) in the periods in which such matters are ultimately determined. We do not believe the final resolution of such matters will be material to our consolidated financial position or cash flows.

We have various income tax examinations ongoing and at various stages of completion, but generally our income tax returns have been audited or closed to audit through 2014.

We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain of these matters. While we are unable to predict the ultimate outcome of these legal actions, it is our opinion that the disposition of these matters will not have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

Stoudemire et al. v. Lee Enterprises, Incorporated (Video Privacy Claim). On December 19, 2022, named Plaintiffs filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging Company news websites violate the Video Privacy Protection Act by disclosing to third parties certain data about users’ video-watching habits. In particular, the Complaint alleges the websites use Facebook Pixel, a technology that allegedly links a user’s Facebook profile to videos the user watches on the Company’s website. The claimants are asserting class action claims and allege statutory damages of $2,500 per class member, punitive damages, and attorneys’ fees. In July 2023, the Court denied the Company’s Motion to Dismiss. This claim has been submitted for coverage under the Company’s media insurance policy. The parties successfully mediated the case on November 5, 2024, and the court granted final approval of the class action settlement on August 14, 2025. The entire $9.5 million settlement amount will be paid by the Company's insurance carriers. The settlement liability and insurance receivable are recorded within “Compensation and other accrued liabilities” and “Prepaids and other” on the Consolidated Balance Sheets as of September 28, 2025 and September 29, 2024, respectively.

Fetes et al. v. Lee Enterprises. Incorporated (Cyber Incident). On June 12, 2025, Sarah Fetes filed a Complaint in the U.S. District Court for the Southern District of Iowa alleging claims arising out of a February 2025 cybersecurity incident, during which a third-party threat actor potentially accessed personal information of past and present Company employees existing on Company systems. Fetes andfive additional named Plaintiffs filed a Consolidated Complaint on August 11, 2025. Plaintiffs allege the Company failed to properly secure and safeguard personally identifiable information collected as part of Company's regular business practices. Plaintiffs seek damages for invasion of privacy and misuse of the compromised data, on behalf of themselves and a class consisting of approximately 39,700 individuals who received data breach notifications. This claim has been submitted for coverage under the Company's media insurance policy. The parties have reached a tentative settlement, all of which will be paid by the Company's insurance carriers, in an amount that will be publicly disclosed through the court process. The settlement is subject to required court approval and open to objection by class members. The Company anticipates final approval of the settlement by August 2026.

Lineup Systems Corporation v. Lee Enterprises, Incorporated. In July 2025, Lineup filed suit against the Company for breach of contract, breach of the covenant of good faith and fair dealing, and quantum meruit arising from the contract between the two people for an accounting software program. The suit claims $7 million in damages for failure to pay owed amounts, attorneys fees and interest. The Company filed a counter claim alleging breach of contract and fraudulent inducement. Trial has been set for October 18, 2027. Currently, losses or possible losses are not reasonably estimable.