Welcome to the Lee Enterprises 2020 Second Quarter Webcast and Conference Call. The call is being recorded and will be available for replay beginning later this morning at lee.net. At the close of the prepared remarks, there will be an opportunity for questions. [Operator Instructions] A link to the live webcast can be found at www.lee.net. Now, I will turn the call over to your host, Jamie Seratt, Corporate Controller. Please go ahead.

Good morning. Thank you for joining us. Speaking on this morning's call will be Kevin Mowbray, President and Chief Executive Officer; and Tim Millage, Vice President and Chief Financial Officer. Also with us today and available for questions are Nathan Bekke, Vice President, Consumer Sales and Marketing; and James Green, Vice President, Digital. Earlier today, we issued a news release with preliminary results for our second fiscal quarter of 2020. It is available at lee.net as well as at major financial websites. One housekeeping item to start, we closed on the acquisition of BH Media Group, and the Buffalo News on March 16, 2020, and our second quarter results include approximately two weeks of operations from the acquisitions. Certain results and trends are presented on a pro forma basis, which assumes ownership of these acquisitions as of October 1, 2018, and include operating results from the acquisition for all periods presented. As a reminder, this morning's discussion will include forward-looking statements that are based on our current expectations. These statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially. Such factors are described in this morning's news release and also in our SEC filings. During the call, we make reference to certain non-GAAP financial measures, which are defined in our news release reconciliations to the relevant GAAP measures are included in tables accompanying the release. And now to open the discussion is our President and Chief Executive Officer, Kevin Mowbray

Thank you, Jamie. Good morning, and thank you all for joining the call. It's truly remarkable to think about what's transpired since the last time we spoke to you all. In just a few short months, we've experienced a global pandemic, government restrictions in our local markets, and economic meltdown and several unwellness, truly these are unprecedented times. Before we discuss our operating results, I wanted to take a moment to recognize our nearly 6,000 employees across Lee who are working tirelessly to ensure our long-term success, especially during this difficult time. Besides an engagement of our audience during this time, underscores a vital role we play in the communities where we operate. We are focusing on continued to deliver outstanding local news coverage that our readers trust and maintaining strong partnerships with our advertisers, keeping our community informed and engaged. We are grateful to our dedicated employees for being there when it matters the most and reacting with incredible resiliency and creativity to deliver robust work under difficult circumstances. The March quarter was a transitional quarter for Lee, as we closed on a transformative transaction with Berkshire Hathaway. The acquisition and financing nearly doubled the size of our operations and provided us with extended long-term financing at highly attractive terms. The significance of this transaction cannot be overstated as the acquisition unlocks significant value through synergies and the financing reduces our cost of capital and extends our runway for 25 years. Throughout the second quarter until the last two weeks of March, we demonstrated continuous improvement in revenue and adjusted EBITDA trends each month. For the first two weeks of March, we saw favorable revenue trends at levels we haven't seen in more than a year. In the last two weeks of March, the decline in demand for advertising…

Thank you, Kevin, and good morning, everyone. Total operating revenue on a GAAP basis was $121.4 million in the quarter and included $14.6 million of acquired revenue. On a pro forma basis, total operating revenue was $207.3 million, or down 10% compared to the same quarter a year ago, largely consistent with historical trend and include a significant and immediate negative impact from the COVID-19. Operating expenses were down 2.6% in the quarter and cash cost on a pro forma basis were down 9.8% in the current year quarter as a result of continued business transformation initiatives and acquisition integration already underway. On a pro forma basis, compensation decreased 10.7%, newsprint and ink decreased 35.2%, and other cash costs were down 4.7%. Kevin mentioned a number of points that give us optimism, and I'll take a few minutes to go into more detail in a couple of them. We are thrilled with completing our comprehensive refinancing in the second quarter. We cannot overstate the benefit of this transaction, so let me take a minute to go through some of the details of our credit agreement. On March 16, 2020, we closed on a comprehensive refinancing of our debt with a single lender in Berkshire Hathaway, borrowing totaled $576 million and has a fixed interest rate of 9%, reducing our weighted average cost of capital by 100 basis points. The reduction in interest expense saves us nearly $5 million annually on our refinanced debt. Also, the refinancing repaid all of our outstanding debt, which had maturities in calendar year 2022 and replaced it with a term loan that matures in 25 years on March 16, 2045. The reduction in interest rate and the significant runway allows the Company to deleverage more quickly and over a long period of time before we…

Thank you. At this time, we will be conducting a question-and-answer session. I will now turn the call back over to your host, Jamie Seratt to discuss questions from the webcast.

Thank you. Our first question from the web, how much of the $17.7 million received from asset sales came from the sale of the Oregon and California newspaper publications?

I can take that question. We sold four business operations out West. The total for that was less than $4 million, so the majority of the $17.7 million came from real estate sales, but we did sale like I mentioned the four properties for less than $4 million.

We have no more questions from our web participants. I'll now turn the call back to Kevin for closing remarks.

Well, thank you for joining the call with us today. We appreciate your time and your understanding. Thank you again. Have a great week.

Thank you, ladies and gentlemen, at this time, we have reached the end of our question-and-answer session. This concludes our call.