News Release Details

DAVENPORT, Iowa--(BUSINESS WIRE)--Nov. 11, 2002--Lee Enterprises, Incorporated (NYSE:LEE), reported today that diluted earnings per common share from continuing operations were 43 cents for its fourth quarter ended Sept. 30, 2002, nearly doubling earnings of 22 cents a year ago.

The growth reflects major acquisition activity earlier this year, strong operating results from both newly acquired and existing newspapers, and non-recurring items in the prior year.

Adoption of new accounting rules for intangible assets increased this year's earnings by 3 cents. Losses from sales of assets, combined with other non-recurring items, reduced prior year results by 12 cents per share. Adjusted for these factors, diluted earnings per common share from continuing operations increased 16 percent from the 2001 adjusted level of 37 cents.

EBITDA (earnings before interest, taxes, depreciation and amortization) increased 73.7 percent to $44.7 million. EBITDA margin improved to 27.5 percent, compared with 24.4 percent a year ago. Revenue increased 53.8 percent to $162.5 million, as acquisitions contributed $59.4 million this year. Operating expenses, excluding depreciation and amortization, increased 47.4 percent to $117.7 million, a result of the acquisitions, offset by savings from lower newsprint prices and other cost controls. Operating income, which includes equity in net income of associated companies, increased 75.5 percent.

On a same-property operating basis (1), which excludes the impact of acquisitions and divestitures, total revenue for the quarter ended Sept. 30, 2002, decreased 0.5 percent from a year ago. The same quarter a year ago included an additional Sunday. Without the Sunday loss, the Company estimates revenue would have increased more than 1 percent against a strong prior year performance. Retail revenue this year increased 2.6 percent, to $48.5 million. Classified advertising decreased 4.6 percent, to $32.9 million, with employment advertising in the daily newspapers down 15.0 percent. National advertising, a small category for Lee, increased 9.2 percent. Total advertising revenue decreased 0.1 percent. Circulation revenue decreased 2.1 percent, with comparisons affected primarily by the loss of a Sunday. Online revenue increased 23.4 percent.

Circulation volume continued to rise for the third six-month ABC audit period in a row. Sept. 30, 2002, Audit Bureau of Circulations statistics reported same-property daily circulation up 1.0 percent with Sunday circulation flat.

As previously announced, Lee completed the sale of its Medford, Oregon, shopper in September 2002. Results of this business are classified as continuing operations for all periods presented. Proceeds of the transaction were used to reduce debt.

YEAR TO DATE

For the year ended Sept. 30, 2002, diluted earnings per common share from continuing operations totaled $1.83, compared with $1.36 in 2001. Several factors influenced earnings in the reported periods. Adjusted for these factors, diluted earnings per common share from continuing operations this year were $1.60, an increase of 10 percent from the 2001 adjusted level of $1.45.

The following table reconciles reported results to adjusted results:

                                  3 Months Ended      12 Months Ended
                                   September 30,        September 30,
----------------------------------------------------------------------
                                  2002      2001       2002      2001
----------------------------------------------------------------------
Diluted earnings per share
  from continuing operations,
  as reported................    $0.43     $0.22      $1.83     $1.36
Favorable resolution of tax
  issues.....................      --        --       (0.23)      --
Higher interest rates and
  higher invested balances
  in prior year, exclusive
  of the effect of funds
  used for acquisitions......      --        --         --      (0.18)
New accounting rules for
  amortization of intangible
  assets adopted in October
  2001.......................      --       0.03        --       0.13
Losses on sales of assets and
  other non-recurring items..      --       0.12        --       0.14
----------------------------------------------------------------------
Diluted earnings per share
  from continuing operations,
  as adjusted................    $0.43     $0.37      $1.60     $1.45

For the year ended Sept. 30, 2002, total revenue on a same-property basis decreased 1.9 percent compared with 2001. This year included one fewer Sunday than a year ago. On a reported basis, revenue increased 23.2 percent, with significant impact from acquisitions in the last six months. Operating expenses, excluding depreciation and amortization, increased 19.4 percent and EBITDA increased 34.0 percent. EBITDA margin improved to 28.1 percent, compared with 25.8 percent a year ago. Operating income, which includes equity in net income of associated companies increased 40.6 percent.

Mary Junck, chairman and chief executive officer, said: "Lee had an outstanding year. We completed the largest acquisition in our history, and, despite the slow ad environment, delivered excellent operating results. We continued to drive revenue, increase circulation and improve our news products and online sites. At the same time, we carefully controlled our expenses. We've continued to focus on our top priorities, and it's paying off. Also, we're ahead of schedule with our acquisition of Howard Publications, as our new newspapers have already made a positive contribution to 2002 operating results."

Looking ahead, she said: "With our growth strategies under way at our new newspapers, we believe we're in a strong position entering 2003. We'll need to remain careful with costs, however, as we're facing higher newsprint prices, health care costs and insurance premiums. In addition, some of our expense reduction in 2002 represents one-time savings."

She added: "We have undertaken a comprehensive review of our financial safeguards and management practices in light of new, or proposed, requirements of the New York Stock Exchange, the SEC and the Sarbanes-Oxley Act. In order to assure our full compliance, as well as to remain in the forefront of corporate responsibility and demonstrate the high standards already in place throughout our company, we have updated our procedures. In our case, the revisions are relatively minor, as Lee has a century-long history of sound accounting policies, along with strong corporate governance by independent directors. Our updated Code of Business Conduct and Ethics, as well as other corporate governance documents, is available at www.lee.net."

ACCOUNTING ESTIMATES

In July Lee reported that it had not yet completed the required determination of fair value of assets and liabilities of Howard Publications and the related allocation of the purchase price. That process has now been completed. As a result, depreciation and amortization expense for the quarter ended Sept. 30, 2002, totaled $11.7 million, compared to $12.3 million for the quarter ended June 30, 2002. Looking forward to 2003, depreciation and amortization should approximate $12-13 million per quarter.

DISCONTINUED OPERATIONS

As previously announced, Lee completed the sale of its Ashland, Oregon, daily newspaper in October 2002. Results of this business are classified as discontinued operations for all periods presented. The transaction resulted in a loss on sale of $0.3 million after tax, which is recorded in discontinued operations in the quarter ended Sept. 30, 2002. This enterprise accounted for revenue of $2.9 million and EBITDA of $0.3 million in the year ended Sept. 30, 2002. Proceeds of the transaction were used to reduce debt. Overall, discontinued operations resulted in a loss of 1 cent per diluted common share for the September quarter. For the full year, discontinued operations contributed 2 cents per share to earnings, as previously announced reductions in tax estimates more than offset losses on sales of businesses.

Tables follow.

Lee Enterprises is based in Davenport, Iowa. It owns 38 daily newspapers and a joint interest in six others, along with associated online services. Lee also owns more than 175 weekly newspapers, shoppers and classified and specialty publications. Its stock is traded on the New York Stock Exchange under the symbol LEE. More information about Lee Enterprises, including revenue statistics for September, is available at www.lee.net.

                   LEE ENTERPRISES, INCORPORATED
                 CONSOLIDATED STATEMENTS OF INCOME
        Unaudited. (Thousands, Except Per Common Share Data)

                                 3 Months Ended     12 Months Ended
                                  September 30,      September 30,
----------------------------------------------------------------------
                                 2002      2001      2002      2001
----------------------------------------------------------------------
Operating revenue:                          (3)                 (3)
  Advertising................. $111,110  $ 69,237  $354,327  $279,954
  Circulation ................   33,692    20,836   105,711    81,441
  Other.......................   17,680    15,554    65,858    65,571
----------------------------------------------------------------------
                                162,482   105,627   525,896   426,966
----------------------------------------------------------------------
Operating expenses:
  Compensation................   64,135    42,143   206,454   167,177
  Newsprint and ink...........   12,539    10,419    43,727    42,009
  Depreciation and
   amortization (2)...........   11,678     7,760    35,050    31,357
  Other.......................   41,063    27,300   127,885   107,448
----------------------------------------------------------------------
                                129,415    87,622   413,116   347,991
----------------------------------------------------------------------
Operating income, before
 equity in net income of
 associated companies.........   33,067    18,005   112,780    78,975
Equity in net income of
 associated companies.........    2,261     2,120     9,057     7,651
----------------------------------------------------------------------
Operating income..............   35,328    20,125   121,837    86,626
----------------------------------------------------------------------
Non-operating income
 (expense), net:
  Financial income  ..........      302     4,136     6,007    28,548
  Financial expense...........   (4,778)   (2,339)  (15,777)  (11,963)
  Loss on sales of assets ....     (513)   (5,149)     (544)   (6,622)
  Other, net..................     (197)   (2,671)     (464)   (3,545)
----------------------------------------------------------------------
                                 (5,186)   (6,023)  (10,778)    6,418
----------------------------------------------------------------------
Income from continuing
 operations before income
 taxes .......................   30,142    14,102   111,059    93,044
Income tax expense............   11,134     4,403    30,030    33,215
----------------------------------------------------------------------
Income from continuing
 operations...................   19,008     9,699    81,029    59,829
Discontinued operations.......     (247)    3,869       946   254,399
----------------------------------------------------------------------
Net income.................... $ 18,761  $ 13,568  $ 81,975  $314,228
----------------------------------------------------------------------
Earnings per common share:
  Basic:
   Continuing operations......    $0.43     $0.22     $1.84     $1.37
   Discontinued operations....    (0.01)     0.09      0.02      5.81
----------------------------------------------------------------------
Net income....................    $0.42     $0.31     $1.86     $7.18
----------------------------------------------------------------------
  Diluted:
   Continuing operations......    $0.43     $0.22     $1.83     $1.36
   Discontinued operations....    (0.01)     0.09      0.02      5.77
----------------------------------------------------------------------
Net income....................    $0.42     $0.31     $1.85     $7.13
----------------------------------------------------------------------
Average outstanding shares:
  Basic.......................   44,187    43,974    44,087    43,784
  Diluted.....................   44,357    44,234    44,351    44,089
----------------------------------------------------------------------

SELECTED BALANCE SHEET INFORMATION
                                                     September 30,
----------------------------------------------------------------------
                                                  2002         2001
----------------------------------------------------------------------
Cash and temporary cash investments......    $   14,381  $  483,390
Total assets.............................     1,469,910   1,000,397
Debt, including current maturities.......       409,300     173,400
Stockholders' equity.....................       741,252     681,944


(1) Operating basis includes 100% of the revenue of Madison
    Newspapers, Inc. (MNI), which for financial reporting purposes is
    reported using the equity method of accounting. Lee owns 50% of
    the capital stock of MNI.

(2) Amortization of goodwill for the quarter and year ended September
    30, 2001, was $1,981 and $7,954, respectively, including
    approximately $700 and $2,800, respectively, that is nondeductible
    for income tax purposes.

(3) Certain amounts as previously reported have been reclassified to
    conform with the current period presentation. The presentation of
    equity in net income of associated companies has been revised to
    exclude those amounts from revenue.

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

--30--ATR/se*