Goodwill and Other Intangible Assets

12 Months Ended

Sep. 24, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:


(Thousands of Dollars)	2023	2022

Goodwill, gross amount	1,618,233	1,618,933
Accumulated impairment losses	(1,288,729)	(1,288,729)
Goodwill, beginning of year	329,504	330,204
Disposal	—	(700)
Goodwill, end of year	329,504	329,504

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


(Thousands of Dollars)	September 24 2023	September 25 2022

Non-amortized intangible assets:
Mastheads	18,675	26,346
Amortizable intangible assets:
Customer and newspaper subscriber lists	306,766	323,568
Less accumulated amortization	(230,453)	(228,541)
	76,313	95,027
Identified intangible assets	94,988	121,373

As discussed in Note 1, the Company reviews 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 the Company’s goodwill is attributed to the single reporting unit. 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. The Company 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 was no impairment in 2023, 2022, and 2021.. In 2022, the Company disposed of a non-core operation with $0.7 million of attributable goodwill.

For mastheads, the calculated 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 range from 0.0% to 1.0%), estimated tax rates, and appropriate risk-adjusted weighted-average cost of capital (for 2023, 2022 and 2021, the weighted-average cost of capital used was 13.00%, 11.00% and 10.50%, respectively). These assumptions reflect Lee's best estimates, but these items involve inherent uncertainties based on market conditions generally outside of the Company's control. A 50-basis point decrease in royalty rates would result in an additional $9.3 million of impairment. Increasing the discount rate by 100 basis points would result in an additional $1.2 million of impairment. In 2023, 2022, and 2021, we recorded non-cash charges to reduce the carrying value of non-amortized intangible assets. Such charges are recorded in assets loss (gain) on sales, impairments and other in the Consolidated Statements of Income (Loss) and Comprehensive Income (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:


(Thousands of Dollars)	2023	2022	2021

Non-amortized intangible assets	7,671	14,203	787
Property, equipment and other assets	—	—	190
	7,671	14,203	977

Amortization expense for 2023, 2022, and 2021 was $19.0 million, $22.2 million, and $24.9 million, respectively.

Annual amortization of intangible assets for the years ending September 2024 to September 2028 is estimated to be $18.4 million, $12.8 million, $7.3 million, $7.1 million, and $5.5 million, respectively. The weighted average amortization period for amortizable assets is 11.5 years.