Blog Post

10-K Watch: Lee Posts $879 Million Net Income Loss For ’08; Online Ad Revs Fall 1.7 Percent

Although newspaper publisher Lee Enterprises (NYSE: LEE) missed its self-imposed Dec. 29 deadline to release its annual report, the company did get it in before the year was out. Lee, the struggling parent of the St. Louis Post-Dispatch, had good reason to wait until the last minute, posting a $879 million net income loss and over $1 million in impairment charges. Also, operating revenues were down 9.1 percent to $1 billion from $1.2 billion in 2007.

Earlier this month, Lee said that it faced several potential default triggers on its debt. The company notified the SEC that it would delay filing its annual report until on or before Dec. 29, because it needed more time to sort out the amount of non-cash charges it is taking to reduce the carrying value of goodwill and “other intangible assets.” Like many of its newspaper publisher rivals, Lee is carrying a large amount of debt related to acquisitions over the past few years. Lee borrowed roughly $1.5 billion to purchase Pulitzer Inc. three years ago. And so, to keep itself from defaulting on its debt, Lee is trying to get its creditors to waive potential violations of its lending terms. It also wants to extend or refinance $306 million of senior Pulitzer notes that are due next year. Without the waivers, Lee would face default, as the repayment schedule could be accelerated. The portion of Lee