The following discussion includes comments and analysis relating to our results of operations and financial condition as of and for the 13 weeks and 39 weeks ended June 24, 2012. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes thereto, included herein, and our amended 2011 Annual Report on Form 10-K/A.

NON-GAAP FINANCIAL MEASURES

No non-GAAP financial measure should be considered as a substitute for any related financial measure under accounting principles generally accepted in the United States of America ("GAAP"). However, we believe the use of non-GAAP financial measures provides meaningful supplemental information with which to evaluate our financial performance, or assist in forecasting and analyzing future periods. We also believe such non-GAAP financial measures are alternative indicators of performance used by investors, lenders, rating agencies and financial analysts to estimate the value of a publishing business or its ability to meet debt service requirements.

Operating cash flow, which is defined as operating income (loss) before depreciation, amortization, impairment charges, curtailment gains and equity in earnings of associated companies, and operating cash flow margin (operating cash flow divided by operating revenue) represent non-GAAP financial measures that are used in the analysis below. We believe these measures provide meaningful supplemental information because of their focus on results from operations excluding such non-cash factors.

Reconciliations of operating cash flow and operating cash flow margin to operating income (loss) and operating income margin, the most directly comparable measures under GAAP, are included in the tables below:

                                                                       13 Weeks Ended
                                       June 24   Percent of      June 26   Percent of
(Thousands of Dollars)                    2012      Revenue         2011      Revenue

Operating cash flow                     37,427         20.9       40,161         21.4
Depreciation and amortization          (16,627 )       (9.3 )    (17,606 )       (9.4 )
Impairment of goodwill and other
assets                                       -            -     (187,325 )     (100.0 )
Curtailment gain                             -            -        3,974          2.1
Equity in earnings of associated
companies                                1,762          1.0        1,225          0.7
Reduction of investment in TNI               -            -      (12,000 )       (6.4 )
Operating income (loss)                 22,562         12.6     (171,571 )      (91.6 )



                                                                       39 Weeks Ended
                                       June 24   Percent of      June 26   Percent of
(Thousands of Dollars)                    2012      Revenue         2011      Revenue

Operating cash flow                    123,074         22.3      123,700         21.6
Depreciation and amortization          (50,833 )       (9.2 )    (53,907 )       (9.4 )
Impairment of goodwill and other
assets                                       -            -     (187,325 )      (32.7 )
Curtailment gains                            -            -       16,137          2.8
Equity in earnings of associated
companies                                6,003          1.1        5,078          0.9
Reduction of investment in TNI               -            -      (12,000 )       (2.1 )
Operating income (loss)                 78,244         14.2     (108,317 )      (18.9 )

Adjusted net income and adjusted earnings per common share, which are defined as loss attributable to Lee Enterprises, Incorporated and loss per common share adjusted to exclude both unusual matters and those of a substantially non-

recurring nature, are non-GAAP financial measures that are used in the analysis below. We believe these measures provide meaningful supplemental information by identifying matters that are not indicative of core business operating results or are of a substantially non-recurring nature.

Reconciliations of adjusted net income and adjusted earnings per common share to loss attributable to Lee Enterprises, Incorporated and loss per common share, respectively, the most directly comparable measures under GAAP, are set forth below under the caption "Overall Results".

SAME PROPERTY COMPARISONS

Certain information below, as noted, is presented on a same property basis, which is exclusive of acquisitions and divestitures, if any, consummated in the current or prior year. We believe such comparisons provide meaningful supplemental information for an understanding of changes in our revenue and operating expenses. Same property comparisons exclude TNI and MNI. We own 50% of TNI and also own 50% of the capital stock of MNI, both of which are reported using the equity method of accounting. Same property comparisons also exclude corporate office costs.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of results of operations and financial condition are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies include the following:

•Goodwill and other intangible assets;
•Pension, postretirement and postemployment benefit plans;
•Income taxes;
•Revenue recognition; and
•Uninsured risks.

Additional information regarding these critical accounting policies can be found under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our amended 2011 Annual Report on Form 10-K/A and the Notes to Consolidated Financial Statements, included herein.

EXECUTIVE OVERVIEW

We are a leading provider of local news and information, and a major platform for advertising, in the markets we serve, which are located primarily in the Midwest, Mountain West and West regions of the United States. With the exception of St. Louis, MO, our 52 markets, across 23 states, are principally midsize or small. Through our print and digital platforms, we reach an overwhelming majority of adults in our markets.

Our platforms include:

•            52 daily and 40 Sunday newspapers with average total circulation of
             1.3 million and 1.6 million, respectively, for the 39 weeks ended
             June 24, 2012, read by nearly 4 million people in print;



•            Websites in all of our markets that complement our newspapers and
             attracted over 22 million unique visitors in June 2012, a 3.1%
             increase from June 2011;

• Mobile sites in all of our markets that attracted almost 46 million views in June 2012, a 156% increase from June 2011;

• Smart-phone applications in all markets;

• Tablet applications in operation and in development; and

• Nearly 300 weekly newspapers and classified and niche publications.

Our markets have established retail bases, and most are regional shopping hubs. We are located in four state capitals. Six of our top ten markets by revenue include major universities, and seven are home to major corporate headquarters. Based on data from the Bureau of Labor Statistics as of June 2012, the unemployment rate in eight of our top ten markets by revenue was lower than the national average. We believe that all of these factors have had a positive impact on advertising revenue.

Unlike many other newspaper publishers, we do not face significant competition from other local daily newspapers in most of our markets, although there is significant competition for readers and viewers in those markets from other media. In our top ten markets by revenue, only two have significant local daily print competition. In the balance of our markets, we have little or no local daily print competition.

ECONOMIC CONDITIONS

According to the National Bureau of Economic Research, the United States economy was in a recession from December 2007 until June 2009. It is widely believed that certain elements of the economy, such as housing, auto sales and employment, were in decline before December 2007, and have still not recovered to pre-recession levels. Revenue, operating results and cash flows from 2008-2011 were significantly impacted by the recession and its aftermath. The duration and depth of an economic recession, and pace of economic recovery, in markets in which we operate may influence our future results.

IMPAIRMENT OF GOODWILL AND OTHER ASSETS

Due primarily to the difference between our stock price and the per share carrying value of our net assets, we analyzed the carrying value of our net assets in 2008, 2009 and 2011. Continued deterioration in our revenue and the weak economic environment were also factors in the timing of the analyses. We concluded the fair value of our business did not exceed the carrying value of our net assets.

As a result, we recorded pretax, non-cash charges to reduce the carrying value of goodwill and nonamortized and amortizable intangible assets in 2008, 2009, and 2011. Additional pretax, non-cash charges were recorded to reduce the carrying value of TNI. We also recorded pretax, non-cash charges to reduce the carrying value of property and equipment in 2008, 2009, 2010 and 2011. We recorded deferred income tax benefits related to these charges.

DEBT AND LIQUIDITY

We have a substantial amount of debt, as discussed more fully (and certain capitalized terms used below defined) in Item 2, "Debt and Liquidity" and Note 4 of the Notes to Consolidated Financial Statements, included herein. In February 2009, we completed a comprehensive restructuring of our then-existing credit agreement and a refinancing of our Pulitzer Notes debt, substantially enhancing our liquidity and operating flexibility.

Substantially all of our debt was scheduled to mature in April 2012. We used the Chapter 11 Proceedings to accomplish a comprehensive refinancing that extends the maturities to December 2015 and April 2017. Interest expense will increase as a result of the refinancing and mandatory principal payments will be reduced. Our ability to make payments on our indebtedness will depend on our ability to generate future cash flows. This ability, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to refinance or amend our debt agreements as they become due, or earlier if available liquidity is consumed. We are in compliance with our debt covenants at June 24, 2012. Since February 2009, we have satisfied all interest payments and substantially all principal payments due under our debt facilities with our cash flows.

EQUITY CAPITAL

As of July 1, 2011, our Common Stock traded at an average 30-day closing market price of less than $1 per share.

Under the NYSE listing standards, if our Common Stock fails to maintain an adequate per share price and total market capitalization of less than $50,000,000, our Common Stock could be removed from the NYSE and traded in the over the counter market. In July 2011, the NYSE first notified us that our Common Stock did not meet the NYSE continued listing standards due to the failure to maintain an adequate share price. Under the NYSE rules, our Common Stock is allowed to continue to be listed during a cure period. In February 2012, the NYSE notified the Company that it was again in compliance with the minimum closing price standard. At June 24, 2012, our average market capitalization also exceeds the $50,000,000 minimum required by the NYSE. However, the NYSE has not yet notified us that the Company has returned to compliance with the market capitalization standard. Continued listing is subject to ongoing reassessment by the NYSE. We are currently operating under an NYSE-approved plan and expect any issues to be successfully addressed within the time frames required under the NYSE rules.

13 WEEKS ENDED JUNE 24, 2012

Operating results, as reported in the Consolidated Financial Statements, are
summarized below. Certain prior period amounts have been reclassified to conform
with the current year presentation.
                                                                   13 Weeks Ended
                                                     June 24    June 26   Percent
(Thousands of Dollars, Except Per Share Data)           2012       2011    Change

Advertising revenue:
Retail                                                77,212     80,301      (3.8 )
Classified:
Employment                                            10,135      9,994       1.4
Automotive                                             9,873     10,367      (4.8 )
Real estate                                            5,201      6,202     (16.1 )
All other                                             14,192     15,753      (9.9 )
Total classified                                      39,401     42,316      (6.9 )
National                                               6,038      7,291     (17.2 )
Niche publications                                     2,634      3,088     (14.7 )
Total advertising revenue                            125,285    132,996      (5.8 )
Circulation                                           44,403     44,875      (1.1 )
Commercial printing                                    3,455      3,055      13.1
Other                                                  6,165      6,380      (3.4 )
Total operating revenue                              179,308    187,306      (4.3 )
Compensation                                          71,838     74,458      (3.5 )
Newsprint and ink                                     13,175     14,632     (10.0 )
Other operating expenses                              54,045     55,969      (3.4 )
Workforce adjustments                                  2,823      2,086      35.3
                                                     141,881    147,145      (3.6 )
Operating cash flow                                   37,427     40,161      (6.8 )
Depreciation and amortization                         16,627     17,606      (5.6 )
Impairment of goodwill and other assets                    -    187,325        NM
Curtailment gain                                           -      3,974        NM
Equity in earnings of associated companies             1,762      1,225      43.8
Reduction of investment in TNI Partners                    -     12,000        NM
Operating income (loss)                               22,562   (171,571 )      NM
Non-operating expense, net                           (24,507 )  (18,506 )    32.4
Loss before reorganization costs and income taxes     (1,945 ) (190,077 )   (99.0 )
Reorganization costs                                    (250 )        -        NM
Loss before income taxes                              (1,695 ) (190,077 )   (99.1 )
Income tax benefit                                      (341 )  (34,637 )   (99.0 )
Net loss                                              (1,354 ) (155,440 )   (99.1 )
Net income attributable to non-controlling interests    (119 )      (77 )    54.5
Loss attributable to Lee Enterprises, Incorporated    (1,473 ) (155,517 )   (99.1 )
Other comprehensive income, net                          152      1,725     (91.2 )
Comprehensive loss                                    (1,321 ) (153,792 )   (99.1 )

Loss per common share:
Basic                                                  (0.03 )    (3.46 )   (99.1 )
Diluted                                                (0.03 )    (3.46 )   (99.1 )

References to the "2012 Quarter" refer to the 13 weeks ended June 24, 2012. Similarly, references to the "2011 Quarter" refer to the 13 weeks ended June 26, 2011.

For the 2012 Quarter, total operating revenue decreased $7,998,000, or 4.3%, compared to the 2011 Quarter and same property revenue decreased 4.3%. We expect year-over-year revenue comparisons to improve as economic conditions in our markets also improve. Revenue in May 2012 was flat year-over-year, our best month for revenue performance since December 2006.

In the 2012 Quarter, combined print and digital advertising revenue decreased $7,711,000, or 5.8% compared to the 2011 Quarter. Retail advertising decreased 3.8%. Retail preprint insertion revenue decreased 2.8%. Digital retail advertising increased 13.7%, partially offsetting print declines.

On a combined basis, print and digital classified revenue decreased 6.9% in the 2012 Quarter. Employment revenue increased 1.4% while automotive advertising decreased 4.8%, real estate decreased 16.1% and other classified decreased 9.9%. Digital classified revenue increased 7.1%, partially offsetting print declines.

National advertising decreased $1,253,000, or 17.2%. Advertising in niche publications decreased 14.7%.

On a stand-alone basis, digital advertising revenue increased 10.0% in the 2012 Quarter, representing 13.8% of total advertising revenue. Year-over-year total digital advertising turned positive in the month of December 2009 and has been rising steadily since that time. Print advertising revenue on a stand-alone basis decreased 7.9%.

Despite declines in advertising revenue, our total advertising results have benchmarked favorably to industry averages reported by the Newspaper Association of America each quarter since June 2003.

Circulation revenue decreased $472,000, or 1.1%, in the 2012 Quarter.

Our unaudited, average daily newspaper circulation units, including TNI and MNI, decreased 6.4% and Sunday circulation decreased 6.3% in the 2012 Quarter compared to the 2011 Quarter.

Our digital sites attracted 22.2 million unique visitors in the month of June 2012, an increase of 3.1% from a year ago, with 196.4 million page views. The number of mobile page views grew 156.2% to 45.5 million in June 2012. Research in our larger markets indicates we are reaching an increasingly larger audience through the combination of rapid digital audience growth and stable newspaper readership.

Commercial printing revenue increased $400,000, or 13.1%, in the 2012 Quarter. Other revenue decreased $215,000, or 3.4%, in the 2012 Quarter.

Costs other than depreciation, amortization and unusual matters decreased $6,001,000, or 4.1%, in the 2012 Quarter.

Compensation expense decreased $2,620,000, or 3.5%, in the 2012 Quarter, driven by a decline in average full-time equivalent employees of 7.5%.

Newsprint and ink costs decreased $1,457,000, or 10.0%, in the 2012 Quarter as a result of a reduction in newsprint volume of 6.7%. See Item 3, "Commodities", included herein, for further discussion and analysis of the impact of newsprint on our business.

Other operating expenses, which are comprised of all operating costs not considered to be compensation, newsprint, depreciation, amortization, or unusual matters, decreased $1,924,000, or 3.4%, in the 2012 Quarter.

Reductions in staffing resulted in workforce adjustment costs totaling $2,823,000 and $2,086,000 in the 2012 Quarter and 2011 Quarter, respectively.

We are engaged in various efforts to continue to contain future growth in operating expenses. Excluding a 53rd week of business activity, we expect 2012 operating expenses, excluding depreciation, amortization and unusual matters,

to decrease 3.5-4.5% from the comparable 2011 level.

As a result of the factors noted above, operating cash flow decreased 6.8%, to $37,427,000, in the 2012 Quarter compared to $40,161,000 in the 2011 Quarter. Operating cash flow margin decreased to 20.9% from 21.4% a year ago reflecting a smaller percentage decrease in operating expenses than the decrease in operating revenue.

Depreciation expense decreased $520,000, or 7.9%, in the 2012 Quarter and amortization expense decreased $459,000, or 4.2%, in the 2012 Quarter.

Due primarily to the difference between our stock price and the per share carrying value of our net assets, we analyzed the carrying value of our net assets in 2011. Continued deterioration in our revenue and the weak economic environment were also factors in the timing of the analysis. We concluded the fair value of our business did not exceed the carrying value of our net assets.

As a result, we recorded pretax, non-cash charges to reduce the carrying value of goodwill and nonamortized and amortizable intangible assets in 2011. Additional pretax, non-cash charges were recorded to reduce the carrying value of TNI. We also recorded pretax, non-cash charges to reduce the carrying value of property and equipment. We recorded deferred income tax benefits related to these charges.

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

                                      13 Weeks Ended
                               June 26  September 25
(Thousands of Dollars)            2011          2011     Total

Goodwill                       174,125        12,156   186,281
Nonamortized intangible assets  13,200           759    13,959
Amortizable intangible assets        -         4,199     4,199
Property and equipment               -           700       700
                               187,325        17,814   205,139
Investment in TNI               12,000          (100 )  11,900
                               199,325        17,714   217,039

In May 2011, a new bargaining unit contract eliminated postretirement medical coverage for affected active employees and froze defined pension benefits. The elimination of postretirement medical coverage resulted in a non-cash curtailment gain of $3,974,000 which was recognized in the 13 weeks ended June 26, 2011, reduced 2011 net periodic postretirement medical expense by $82,000 beginning in the 13 weeks ended June 26, 2011 and reduced the benefit obligation liability at June 26, 2011 by $3,371,000. The freeze of defined pension benefits reduced 2011 net periodic pension expenses by $188,000 beginning in the 13 weeks ended June 26, 2011 and reduced the benefit obligation liability at June 26, 2011 by $592,000.

In March 2011, we notified certain participants in our postretirement medical plans of changes to be made to the plans, including increases in participant premium cost-sharing and elimination of coverage for certain participants. The changes resulted in a non-cash curtailment gain of $1,991,000 which was recognized in the 13 weeks ended March 27, 2011 and reduced the benefit obligation liability at March 27, 2011 by $3,030,000.

In November 2010, we notified certain participants in our postretirement medical plans of changes to be made to the plans, including increases in participant premium cost-sharing and elimination of coverage for certain participants. The changes resulted in a non-cash curtailment gain of $10,172,000 which was recognized in the 13 weeks ended December 26, 2010, reduced 2011 net periodic postretirement medical cost by $769,000 beginning in the 13 weeks ended December 26, 2010, and reduced the benefit obligation liability at December 26, 2010 by $15,065,000.

Increases in participant premium cost-sharing discussed more fully above were treated as negative plan amendments. Curtailment treatment was utilized in situations in which coverage was eliminated. Curtailment gains were calculated by revaluation of plan liabilities after consideration of other plan changes.

Equity in earnings in associated companies increased $537,000 in the 2012 Quarter.

The factors noted above resulted in operating income of $22,562,000 in the 2012 Quarter compared to an operating loss of $171,571,000 in the 2011 Quarter.

Financial expense increased $5,234,000, or 27.2%, to $24,510,000 in the 2012 Quarter due primarily to higher interest rates. Our weighted average cost of debt was 9.2% at the end of the 2012 Quarter, compared to 5.1% at the end of the 2011 Quarter. Financial expense in the 2012 Quarter includes $1,387,000 of non-cash amortization of a present value adjustment of debt.

We recognized a $250,000 reduction of reorganization costs in the 2012 Quarter. We recognized income tax benefit of 20.1% of loss before income taxes in the 2012 Quarter and income tax benefit of 18.2% of loss before income taxes in the 2011 Quarter. See Note 6 of the Notes to Consolidated Financial Statements, included herein, for a reconciliation of the expected federal income tax rate to the actual tax rates.

As a result of the factors noted above, loss attributable to Lee Enterprises, Incorporated totaled $1,473,000 in the 2012 Quarter compared to a loss of $155,517,000 in the 2011 Quarter. We recorded loss per diluted common share of $0.03 in the 2012 Quarter and $3.46 in the 2011 Quarter. Excluding unusual matters, as detailed in the table below, diluted earnings per common share, as adjusted, were $0.02 in the 2012 Quarter, compared to $0.21 in the 2011 Quarter. Per share amounts may not add due to rounding.

                                                                       13 Weeks Ended
                                                       June 24                June 26
                                                          2012                   2011
(Thousands of Dollars, Except Per Share
Data)                                       Amount   Per Share     Amount   Per Share

Loss attributable to Lee Enterprises,
Incorporated, as reported                   (1,473 )     (0.03 ) (155,517 )     (3.46 )
Adjustments:
Curtailment gain                                 -                 (3,974 )
Impairment of goodwill and other assets,
including TNI Partners                           -                199,325
. . .