LEE ENTERPRISES, Inc

1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited, interim, Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the “Company”) as of June 29, 2025, and our results of operations and cash flows for the periods presented. The Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2024 Annual Report on Form 10-K.

The Company's fiscal year ends on the last Sunday in September. Fiscal year 2025 ends September 28, 2025, and fiscal year 2024 ended September 29, 2024. Fiscal year 2025 includes 52 weeks of operations and 2024 included 53 weeks of operations. Because of seasonal and other factors, the results of operations for the three and nine months ended June 29, 2025, are not necessarily indicative of the results to be expected for the full year.

The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5% interest in INN Partners, L.C. (“BLOX Digital" formerly "TownNews”).

Our 50% interest in TNI Partners ("TNI") and our 50% interest in Madison Newspapers, Inc. ("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 intangible assets.

Cybersecurity Incident

On February 3, 2025, the Company experienced a systems outage caused by a cybersecurity attack by threat actors who unlawfully accessed the Company's network, encrypted critical applications, and exfiltrated certain files (the "Cyber Incident"). Upon discovery, the Company promptly activated its incident response plan, engaging both internal teams and third-party cybersecurity experts.

Following the containment of the initial threat and as a result of a subsequent, comprehensive review with a third-party vendor, the Company determined certain files may have been accessed or acquired on February 1, 2025, including customers' and subscribers personal information. The Company reported the Incident to relevant law enforcement and will cooperate with any resulting investigation or efforts to hold the perpetrators accountable. In addition, through a data breach and recovery services vendor, the Company is offering identity theft protection services to those customers and subscribers potentially involved in the data breach. See Footnote 9.

During the three months ended June 29, 2025, the Company incurred $1.2 million of expenses related to the Cyber Incident. During the nine months ended June 29, 2025, the Company incurred $3.1 million of expenses related to the Cyber Incident. These expenses are recognized in "Restructuring and Other" in the Consolidated Statements of Loss and Comprehensive Loss. The Cyber Incident remains under legal and forensic investigation, including evaluation of the extent and potential risk related to unauthorized access to sensitive data.

The incident continues to have a significant negative impact on the Company's 2025 operating results. Various revenue lines were impacted, certain operating expenses are trending higher than they were prior to the incident, and many projects underway were significantly delayed.

The Company maintains cyber insurance coverage to limit its exposure to losses such as those related to the Cyber Incident, subject to a $500,000 deductible. Coverage includes, among other things, the cost of recovery and restoration as well as business interruption. The Company has submitted claims to its insurers for reimbursement of certain costs, expenses, and losses stemming from the Cyber

Incident. To date, $707,000 reimbursements have been received, however the claims processing is ongoing as of the date of this filing.

2 REVENUE

The following table presents our revenue disaggregated by source:

Recognition principles: 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.

Contract Liabilities: The Company’s primary source of contract liabilities is unearned revenue from subscriptions paid in advance of the service provided. The Company expects 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. Revenue recognized in the nine months ended June 29, 2025, that was included in the contract liability as of September 29, 2024, was $28.2 million.

Accounts receivable, excluding allowance for credit losses was $62.1 million and $67.2 million as of June 29, 2025, and September 29, 2024, respectively. Allowance for credit losses was $5.0 million and $6.5 million as of June 29, 2025, and September 29, 2024, respectively.

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

Sales commissions are expensed as incurred as the associated contractual periods are one year or less. These costs are recorded within "Compensation" on the Consolidated Statements of Loss and

Comprehensive Loss. Most 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 Gannett Co., Inc.'s subsidiary Citizen Publishing Company (“Citizen”), is responsible for printing, delivery, advertising, and subscription activities of the Arizona Daily Staras well as the related digital platforms and specialty publications. TNI collects all receipts and 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 (before income taxes) is allocated equally to Star Publishing and Citizen.

Summarized results of TNI are as follows:

TNI makes periodic distributions of its earnings and for the three months ended June 29, 2025, and June 23, 2024, we received $0.7 million and $0.6 million in distributions, respectively. In the nine months ended June 29, 2025 and June 23, 2024, we received $2.4 million and $2.7 million in distributions, 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 operates their related digital platforms. 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 results of MNI are as follows:

MNI makes periodic distributions of its earnings and in the three months ended June 29, 2025 and June 23, 2024, we received zero and $0.4 million in distributions, respectively. In the nine months ended June 29, 2025 and June 23, 2024, we received distributions of $0.9 million and $1.0 million, respectively.

4 GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and identified intangible assets consist of the following:

The weighted average amortization period for amortizable assets is approximatelyten years.

During the nine months ended June 29, 2025, the Company sold non-core operations. Goodwill was allocated to these operations, which totaled $4.2 million.

5 DEBT

The Company has debt consisting of a single 25-year term loan with BH Finance LLC, with an aggregate principal balance of $455.9 million at a 9% annual fixed rate and maturing on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). On June 29, 2025, the fair value was $375.6 million, representing a Level 2 fair value measurement, which are fair values estimated using significant other observable inputs.

During the nine months ended June 29, 2025, Net Cash Proceeds, as defined in our Credit Agreement, from asset sales totaled $6.5 million. The Company made $1.4 million principal debt payments as a result of non-core asset sales, and the remaining net cash proceeds remain payable to BH Finance. Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement. As of June 29, 2025, there was no excess cash flow payment due.

In an effort to provide short-term liquidity to fund the Cyber Incident's remediation efforts and other operations, in February 2025, BH Finance LLC waived the current payment of the interest and BH Media Group, Inc. waived the lease payment due March 1, 2025. A similar waiver was provided for payments due in April and May 2025. As of June 29, 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 the Company to prepay the loan in an aggregate amount equal to 100% of net cash proceeds received by the Company or its subsidiaries within three days following the receipt of such net cash proceeds and allowing BH Finance to assign its rights and obligations under the Credit Agreement to any person other than a natural person.

6 PENSION, POSTRETIREMENT AND POSTEMPLOYMENT DEFINED BENEFIT PLANS

We haveone defined benefit pension plan that covers certain employees, including plans established under collective bargaining agreements. Additionally, we provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. Through June 29, 2025, our liability and related expense for benefits under the plans are recorded over the service period of employees based upon annual actuarial calculations.

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

In the nine months ended June 29, 2025 and June 23, 2024, we madeno contributions to our pension plans. We haveno required contributions to our pension plans for 2025.

During the nine months ended June 23, 2024, the Company 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. The Company recognized a non-cash settlement gain of $2.4 million, which is reflected within "Curtailment/Settlement gains" on the Consolidated Statements of Loss and Comprehensive Loss. Pension plan assets and liabilities were reduced by $22.6 million.

Multiemployer Pension Plans

In prior periods, the Company effectuated withdrawals from several multiemployer plans. As of June 29, 2025 and September 29, 2024, we had $22.7 million and $23.6 million of accrued withdrawal liabilities. The liabilities reflect the estimated value of payments to the fund, payable over 20-years.

7 INCOME TAXES

We recorded an income tax benefit of $2.7 million related to loss before taxes of $4.4 million for the three months ended June 29, 2025, and an income tax benefit of $1.3 million related to loss before income taxes of $31.2 million for the nine months ended June 29, 2025. We recorded an income tax benefit of $0.8 million related to loss before taxes of $4.5 million for the three months ended June 23, 2024, and an income tax benefit of $3.4 million related to a loss before income taxes of $17.5 million for the nine months ended June 23, 2024. The effective income tax rate for the three and nine months ended June 29, 2025, was 61.4% and 4.2%, respectively. The effective income tax rate for the three and nine months ended June 23, 2024, were 18.7% and 19.6%, respectively.

The primary differences between these rates and the U.S. federal statutory rate of 21% are because of state taxes, non-deductible expenses, increase in valuation allowance, and adjustments to reserves for uncertain tax positions, including any related interest.

We file a consolidated federal tax return, as well as combined and separate tax returns in approximately 27 state and local jurisdictions. We do not currently have any federal or material state income tax examinations in progress. Our income tax returns have generally been audited or closed to audit through 2016.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are currently evaluating the impact of the OBBBA and expect the results of such evaluation to be reflected in our Annual Report on Form 10K for the year ended September 28, 2025.

8 LOSS PER COMMON SHARE

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

For the three months ended June 29, 2025 and June 23, 2024, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses. For the nine months ended June 29, 2025 and June 23, 2024, no shares were considered in the computation of diluted earnings per common share because the Company recorded net losses.

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.

9 COMMITMENTS AND CONTINGENT LIABILITIES

Legal Proceedings

We are involved in a variety of legal actions that arise in the normal course of business. Insurance coverage mitigates potential loss for certain 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 willnot have a material adverse effect on our Consolidated Financial Statements, taken as a whole.

Video Privacy Protection Act Litigation and Settlement. Company was named as a defendant by a group of Plaintiffs acting on behalf of a proposed class of digital subscribers in a lawsuit in 2022. The lawsuit alleged that the Company violated the Video Privacy Protection Act (“VPPA”) by using pixels to track subscribers’ video viewing activity on Company websites and sharing it with Meta without consent.

The Company has agreed to a preliminary settlement with the Plaintiffs for $9.5 million, subject to required court approval. The entire 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 June 29, 2025 and September 29, 2024, respectively.

Cybersecurity Incident Litigation. As previously disclosed, the Company experienced a cybersecurity incident during the second quarter of 2025, which involved unauthorized access to certain systems and data. Following public disclosure of the incident, the Company was named as a defendant in several putative class action lawsuits filed in or around June 2025, in the United States District Court for the Southern District of Iowa on behalf of all individuals affected by the cybersecurity incident, including those who received notice of the incident. These lawsuits generally allege, among other things, that the Company failed to adequately protect personal or sensitive information and seek unspecified damages and other relief.

The Company is vigorously defending against these claims. Given the early stage of these proceedings, the outcome of these matters is uncertain, and the Company is unable to estimate a possible loss or range of loss at this time.

The Company maintains cyber liability and other applicable insurance coverage and believes that any potential losses associated with these claims, if adverse outcomes were to occur, would be covered, subject to applicable deductibles and policy limits.