Torstar Corporation
TSX : TS.B

Torstar Corporation

February 26, 2009 06:30 ET

Torstar Corporation Reports Fourth Quarter and 2008 Full Year Results

TORONTO, ONTARIO--(Marketwire - Feb. 26, 2009) - Torstar Corporation (TSX:TS.B) today reported financial results for the fourth quarter and full year ended December 31, 2008.

Highlights for the year:

- Revenue of $1,536.0 million was down less than 1% from $1,546.5 million in 2007.

- EBITDA (operating profit before charges for interest, taxes, depreciation and amortization of intangible assets, and restructuring and other charges - see "non-gaap measures") was $210.1 million in 2008, down $15.3 million from $225.4 million last year.

- Torstar reported a net loss of $180.5 million in 2008, including $230.8 million of losses from associated businesses and investment write downs and loss. Excluding these items, net income was $50.3 million.

- Net loss was $2.29 per share, including $2.93 per share for the losses from associated businesses and investment write downs and loss. Excluding these items, net income was $0.64 per share.

- Net debt was $627.3 million at December 31, 2008, up $7.0 million from $620.3 million at December 31, 2007 including an increase of $26.3 million from the weakening of the Canadian dollar and changes in the fair value of interest rate hedges.

Highlights for the quarter:

- Fourth quarter revenue of $412.8 million was up $9.9 million from $402.9 million in the fourth quarter of 2007.

- EBITDA was $63.4 million in the quarter, down $7.6 million from $71.0 million last year.

- Torstar reported a net loss of $211.2 million in the fourth quarter, including $229.5 million of losses from associated businesses and investment write downs and loss. Excluding these items, net income was $18.3 million in the quarter.

- Net loss was $2.68 per share, including $2.91 per share for the losses from associated businesses and investment write downs and loss. Excluding these items, net income was $0.23 per share.

Dividend:

- Torstar has reduced its annual dividend by half from $0.74 to $0.37 per share.

"Our operating results in the fourth quarter were mixed" said Robert Prichard, President and CEO of Torstar Corporation. "Harlequin finished the year strongly with another good quarter that drove earnings for the year up 11 percent. This is the third year in a row of business growth for Harlequin which is making important gains in both print and digital products. We are very pleased with Harlequin's performance and prospects. Similarly, we maintained good revenue and profit growth in our newspapers and digital online businesses as online advertising revenues continued to grow and finished the year up 34 percent. In contrast, total revenue for our newspapers and digital businesses declined 3 percent in the fourth quarter and was down 2 percent for the year. The Southern Ontario economy began to experience a sharp contraction in the fall and this negatively affected most advertising categories including, in particular, careers and help wanted, real estate and automobiles. The revenue decline combined with higher year over year newsprint prices hurt EBITDA with Metroland Media Group down $5.8 million and Star Media Group down $7.8 million in the quarter. Overall for Torstar, EBITDA declined $7.6 million or 11 percent for the quarter. For the year as a whole, Torstar's revenue was down less than 1 percent while EBITDA was down $15.3 million or 7 percent for the year. In the increasingly difficult economic environment we faced as the year unfolded, our business leaders and their teams performed well through intense focus on execution and cost containment."

"With continued pressure on newspaper revenues through the first two months of 2009, we are aggressively addressing costs across our businesses. The difficult economic environment demands that we take all possible steps to rationalize our operations, improve efficiency and reduce costs. We have meaningful opportunities for improvement here and Ian Oliver at Metroland and John Cruickshank at the Star are acting aggressively to seize them. By the end of 2008, we had taken steps to reduce employment by approximately 500 positions and this work is continuing in early 2009. In addition, we have frozen executive salaries across Torstar and we are further reducing corporate costs."

"This quarter we wrote down the value of our investment in CTVglobemedia to $200 million, reflecting the tough environment for advertising-supported media in general and the current challenges in conventional television in particular. Like many media companies, CTVglobemedia is experiencing reduced profitability through the economic cycle and this negatively affects CTVglobemedia's results and our valuation. However, with our partners at Woodbridge, Teachers' and BCE, we remain fully committed to our investment and realizing its future success. CTVglobemedia remains Canada's premier company in its chosen fields. There are important opportunities for improving CTVglobemedia's performance and creating significant value over the next three years, particularly as the economy recovers and the regulatory regime adjusts to the contemporary realities of the television business. CTVglobemedia's management team led by Ivan Fecan will pursue these opportunities with the full support of the four shareholders."

"The outlook for 2009 is mixed and marked by uncertainty due to the economy. At Harlequin, we expect continuing stable results building on the success and growth of the last three years. Overall, we anticipate Harlequin will deliver a fourth good year in a row. Harlequin's results have held up well to date despite the recession. Subject to trends in employment advertising, we also expect continued good performance from our online businesses, but with lower rates of revenue growth than in previous years as overall advertising expenditures are constrained by the economy. Our print newspaper businesses face a difficult year in 2009 with lower advertising revenue and higher newsprint and pension costs. As a result, while we are reducing costs significantly in both Star Media Group and Metroland Media Group, in the short-term the cost reductions will likely be out-distanced by the revenue declines. At Torstar Corporate, we expect to report lower corporate costs again in 2009 as a result of restructuring, reducing incentive compensation, eliminating executive compensation increases and reducing directors' compensation."

"In the face of high uncertainty about the economy and the timing of the recovery, we have reduced Torstar's dividend by half. In doing this, we have taken a cautious approach, knowing our shareholders want us to keep a clear focus on creating long-term value including preserving our ability to strengthen our businesses. We have reduced our dividend before in difficult economic times and grown it again as the economy recovered and our businesses grew. This is the right approach for Torstar and enjoys the unanimous support of the Board."

"These are challenging times for media businesses but Torstar has market leading franchises with excellent business leaders, strong executive teams and committed employees. We are making changes throughout our businesses that will help weather the current storm and strengthen them for future performance as the economy recovers."



Earnings per share continuity:

-------------------------------------------------------------------------
Fourth Quarter Year to Date
-------------------------------------------------------------------------
Net income per share 2007 $0.60 $1.29
Changes
- Operations (0.05) (0.08)
- Restructuring provisions (0.03) (0.28)
- Transit TV asset write down (0.02) (0.22)
- Impairment of intangible
assets (0.03) (0.03)
- Income (loss) from associated
businesses (1.87) (1.89)
- Investment write down and loss (1.24) (1.26)
- Gain on sale of land 0.10
- Non-cash foreign exchange 0.03 0.10
- Lower 2008 effective tax rate 0.05
- Change in statutory tax rates (0.07) (0.07)
-------------------------------------------------------------------------
Net income per share 2008 ($2.68) ($2.29)
-------------------------------------------------------------------------


OPERATING RESULTS - YEAR ENDED DECEMBER 31, 2008

Overall Performance

Total revenue was $1,536.0 million in 2008, down $10.5 million from $1,546.5 million in 2007. Newspapers and Digital revenue was $1,063.1 million in 2008, down $20.7 million from $1,083.8 million in 2007 as declines in print advertising revenue more than offset growth in digital revenues. Reported Book Publishing revenue was $472.9 million in 2008, up $10.2 million from $462.7 million in 2007 including a $0.6 million increase from the strengthening of the Canadian dollar during the year. North America Retail and Overseas revenues were up in the year, more than offsetting declines in North America Direct-To-Consumer.

Operating profit before restructuring and other charges was $154.6 million in 2008, down $15.7 million from $170.3 million in 2007. Including the $59.2 million of restructuring and other charges, operating profit was $95.3 million in 2008, down $67.5 million from $162.8 million in 2007 (which included $7.5 million of restructuring and other charges). Newspapers and Digital Segment operating profit was $104.0 million in 2008, down $24.7 million from $128.7 million in 2007 as higher newsprint prices and investment spending compounded the impact of lower revenues. Book Publishing reported operating profit was $67.5 million in 2008, up $6.9 million from $60.6 million in 2007. Underlying operating profit was up $9.2 million in the year offset by a $2.3 million decrease from the impact of foreign exchange. Underlying results were up in the North America Retail and Overseas divisions and down in North America Direct-To-Consumer. Corporate costs were $16.9 million in 2008, down $2.1 million from $19.0 million in 2007 primarily reflecting lower compensation costs.

EBITDA, excluding restructuring and other charges, was $210.1 million in 2008, down $15.3 million from $225.4 million in 2007.



----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------
Newspapers and Digital $ 154,556 $ 178,921
Book Publishing 72,411 65,473
Corporate (16,840) (18,973)
----------------------------------------------------------------------------
EBITDA, excluding restructuring and other charges $ 210,127 $ 225,421
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Restructuring and other charges

Restructuring and other charges of $59.2 million were recorded in 2008 compared with $7.5 million in 2007. The 2008 amount included restructuring provisions of $39.3 million, $17.5 million related to the write off of the Transit TV assets and a $2.4 million impairment loss on certain community newspapers mastheads and customer relationship intangible assets. In 2007, the full amount related to restructuring provisions.

The restructuring charges in both years were in the Newspapers and Digital segment as Star Media Group and Metroland Media Group made several changes to their operations to reduce operating costs. Total annual savings from the 2008 restructuring activities are expected to be approximately $30.0 million (with approximately $6.5 million realized during 2008) and a reduction of approximately 500 positions.

Other charges in 2008 included a $17.5 million write off of the net assets of Transit TV. In early 2009, Transit TV ceased operations and the two Transit TV subsidiaries filed a voluntary petition for relief under Chapter 7 of the United Sates Bankruptcy Code.

Interest

Interest expense was $28.2 million in 2008, down $6.2 million from $34.4 million in 2007. The lower expense reflects lower average levels of debt and lower effective interest rates. The average net debt (long-term debt and bank overdraft net of cash and cash equivalents) was $628.9 million in 2008, down $31.8 million from $660.7 million in 2007. Torstar's effective interest rate was 4.5% in 2008 and 5.2% in 2007. Net debt was $627.3 million at December 31, 2008, up $7.0 million from $620.3 million at December 31, 2007.

Foreign Exchange

Torstar reported a non-cash foreign exchange gain of $2.2 million in 2008. This gain arose from the translation of foreign-currency (primarily U.S. dollars) denominated assets and liabilities into Canadian dollars. The amount of the gain or loss in any year will vary depending on the movement in relative value of the Canadian dollar and on whether Torstar has a net asset or net liability position in the foreign currency. In 2007, a non-cash foreign exchange loss of $1.9 million was reported.

Income (loss) from associated businesses

Income (loss) from associated businesses was a loss of $137.0 million in 2008 compared with income of $20.4 million in 2007. Losses were incurred at both CTVgm and Black Press.

$110.6 million of the loss from associated businesses in 2008 was from CTVgm. During the fourth quarter of 2008, Torstar reported its share of impairment losses of intangible assets and goodwill related to the CTVgm businesses. The impairment losses were calculated based primarily on the income approach which used discounted cash flows to determine the fair value of an intangible asset or reporting unit and reflect the impact the economy is having on the media industry in Canada and the short-term outlook for CTVgm's businesses. The combination of these losses was $124.2 million. Excluding the impairment losses, CTVgm contributed income of $13.6 million in 2008 which included gains realized on transactions. CTVgm contributed income of $17.2 million in 2007 including a positive $5.2 million earnings impact as future tax liabilities related to intangible assets were reduced to reflect the reduction in future Canadian federal income tax rates. Excluding this adjustment, CTVgm contributed income of $12.0 million in 2007. CTVgm's underlying operating results were lower in 2008 from softness in the conventional television business and the impact of the slowing economy on advertising revenue across all Canadian media.

$26.3 million of the loss from associated businesses in 2008 was from Black Press. During Torstar's fourth quarter, Black Press determined that it would likely record an impairment loss related to certain of its intangible assets and reporting unit goodwill in its fiscal 2009 (year ended February 2009) financial statements. The impairment loss reflects the impact that the U.S. economy and the structural challenges facing U.S. daily newspapers is having on Black Press's U.S. newspapers. In particular, Black Press's Beacon Journal in Akron has suffered an impairment of its value. Torstar has recorded an estimate of $21.8 million in the fourth quarter of 2008 for the impairment loss and expects Black Press will finalize the determination of the impairment loss during Torstar's second quarter of 2009. Excluding this estimated impairment charge Black Press contributed a loss of $4.5 million in 2008 down from income of $3.1 million in 2007. The lower results in 2008 were a combination of reduced U.S. revenues as the newspapers were negatively impacted by the U.S. economy, increased newsprint costs, higher amortization expense, the mark to market of financial derivatives, higher effective tax rates and a $2.1 million second quarter adjustment related to Black Press's future tax assets.

Gain on Sale of Land

In 2008, Torstar recognized a gain of $9.2 million from the sale of excess land in Vaughan. The proceeds from the sale included a $6.2 million mortgage which matures in December 2009.

Investment Write Down and Loss

During 2008, Torstar recognized an investment write down and loss of $99.8 million. This included a $95.7 million write down of its investment in CTVgm and a $1.7 million write down of its portfolio investment in Vocel Inc., representing an other than temporary decline in the carrying value of these investments. This reduces Torstar's carrying value in CTVgm to $200 million. Also during 2008, Torstar realized a loss of $2.4 million on the sale of its portfolio investment in U.S. based LiveDeal, Inc.

Income and other taxes

Torstar reported a 2008 tax provision of $22.2 million on a loss before taxes of $158.3 million. Torstar's effective tax rate was 35.3% in 2008 (excluding the impact of the loss from associated businesses and investment write down and loss, which were not fully tax affected). Torstar's effective tax rate was 31.0% in 2007 including a $5.9 million benefit from changes in statutory tax rates. During 2007, the Canadian federal government enacted corporate tax decreases for future years. Under Canadian generally accepted accounting principles the impact of these changes on Torstar's future income tax assets and liabilities is to be recorded during the period the tax changes are substantially enacted. Excluding the benefit from the statutory tax rate change, the 2007 effective tax rate was 35.0%. The effective tax rate was relatively flat year over year as lower Canadian statutory tax rates in 2008 were offset by the impact of permanent differences and higher foreign losses that were not tax affected.

Net income (loss)

Torstar reported a net loss of $180.5 million or $2.29 per share in 2008. Losses from associated businesses and investment write down and loss were $230.8 million or $2.93 per share net of tax in 2008. Excluding these items, Torstar had net income of $50.3 million or $0.64 per share in 2008. In 2007 net income was $101.4 million or $1.29 per share. The average number of Class A and Class B non-voting shares outstanding was 78.8 million in 2008 up slightly from 78.6 million in 2007.

Segment Operating Results - Newspapers and Digital

The following tables set out, in $000's, the results for the reporting units within the Newspapers and Digital Segment for the years ended December 31, 2008 and 2007.



----------------------------------------------------------------------------
Operating Revenue Operating Profit (Loss) Profit Margin
2008 2007 2008 2007 2008 2007
----------------------------------------------------------------------------
Metroland
Media $564,886 $577,425 $97,412 $ 109,996 17.2% 19.0%
Star Media 495,950 504,153 11,893 28,754 2.4% 5.7%
Transit TV 2,281 2,250 (5,298) (10,075) n/a n/a
----------------------------------------------------------------------------
Segment
Total $ 1,063,117 $ 1,083,828 $ 104,007 $ 128,675 9.8% 11.9%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Depreciation and
Amortization EBITDA EBITDA Margin
----------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007

Metroland Media $ 15,809 $ 14,717 $ 113,221 $ 124,713 20.0% 21.6%
Star Media 32,440 31,998 44,333 60,752 8.9% 12.1%
Transit TV 2,300 3,531 (2,998) (6,544) n/a n/a
----------------------------------------------------------------------------
Segment Total $ 50,549 $ 50,246 $ 154,556 $ 178,921 14.5% 16.5%
----------------------------------------------------------------------------


Total revenue of the Newspapers and Digital Segment was $1,063.1 million in 2008, down $20.7 million from $1,083.8 million in 2007. Digital revenues grew 34.3% in 2008 and were 6.1% of the total Newspapers and Digital revenue in 2008, up from 4.4% in 2007. EBITDA was down $24.3 million in the year as lower revenues, higher newsprint costs, higher pension costs and investment in the digital operations more than offset savings in labour costs from restructuring initiatives and lower losses at Transit TV. Operating profit was down $24.7 million in the year.

Metroland Media Group

Metroland Media Group revenues were $564.9 million in 2008 down $12.5 million from $577.4 million in 2007. The decline was a combination of lower advertising and commercial printing revenues offset partially by higher digital and Gold Book revenues. Advertising revenues were lower at both the community and daily newspapers in 2008 with weakness in the national and classified categories. The negative revenue trends occurred throughout the year as the Ontario economy slowed but became more pronounced in the last two quarters. Within the classified category employment advertising was particularly soft. Offsetting part of this revenue decline was a 2.7% increase in distribution revenues with over 3.5 billion pieces distributed by the community and daily newspapers.

Metroland Media Group incurred higher newsprint costs in 2008 as prices rose throughout the year, higher pension expense and investment spending in the creation of the Metroland Digital Media Group. These cost increases were more than offset by cost savings including labour cost savings realized in 2008 from the restructuring efforts undertaken in 2007 and in the first half of 2008.

Metroland Media Group's EBITDA was $113.2 million in 2008 down $11.5 million from $124.7 million in 2007. Depreciation and amortization expense was $1.1 million higher in 2008 reflecting the investment in press equipment and inserting machines that was made during 2007 and 2008. Metroland Media Group's operating profit was $97.4 million in 2008 down $12.6 million from $110.0 million in 2007.

Star Media Group

Star Media Group revenues were $496.0 million in 2008, down $8.2 million from $504.2 million in 2007. Strong revenue growth at the digital properties, the Metro newspapers (including the new markets) and Sing Tao was not sufficient to offset lower advertising revenue at the Toronto Star.

Revenues at Star Media Group's digital properties including thestar.com, toronto.com, eyeReturn Marketing and the jointly owned Workopolis and Olive Media were up a combined 28.8% in the year. This included growth in national advertising revenue, an expansion of the sites that Olive Media represents and the impact of the acquisitions of eyeReturn Marketing and the Brainhunter business (acquired by Workopolis).

Revenues for the jointly-owned Sing Tao and Metro newspapers were up 11.5% in the year primarily from revenue growth in the newer Metro markets of Vancouver, Ottawa, Calgary, Edmonton and Halifax. Sing Tao grew revenues through the introduction of new products despite a challenging Toronto market.

Toronto Star print advertising revenues were down 10.9% in 2008 with the most significant declines in the national, retail and classified categories. The Toronto Star continues to face advertising revenue challenges from the continuing slowdown in the economy in the Greater Toronto Area as well as the migration of advertising to the Internet (some of which, however, is realized by Star Media Group's digital properties).

Star Media Group expenses were higher in 2008 including the continued growth of the digital properties, the Metro market expansions, Sing Tao's new products and the acquisition of eyeReturn Marketing. At the Toronto Star a 12.0% decrease in consumption (from a combination of the web-width reduction completed in the third quarter of 2007 and reduced copies and paging) more than offset the impact of a 7% newsprint price increase. Labour costs at the Toronto Star were down in the year due to reduced staffing levels from the various restructuring initiatives undertaken in 2007 and the first half of 2008 partially offset by general wage increases and higher pension costs.

Star Media Group EBITDA was $44.3 million in 2008, down $16.5 million from $60.8 million in 2007. Depreciation and amortization expense was up $0.4 million in the year. Star Media Group operating profit was $11.9 million in 2008 down $16.9 million from $28.8 million in 2007.

Segment Operating Results - Book Publishing

The following tables set out, in $000's, a summary of operating results for the Book Publishing Segment and a continuity of revenue and operating profit, including the impact of foreign currency movements, for the years ended December 31, 2008 and 2007.



----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------
Revenue $472,917 $ 462,709

EBITDA $72,411 $65,473
Depreciation & amortization 4,961 4,833
--------------------------
Operating profit $67,450 $60,640
--------------------------

EBITDA margin 15.3% 14.1%
Operating profit margin 14.3% 13.1%
----------------------------------------------------------------------------

----------------------------------------------------------------------------

----------------------------------------------------------------------------
Reported revenue, prior year $462,709
Impact of currency movements and foreign exchange contracts 639
Change in underlying revenue 9,569
----------------------------------------------------------------------------
Reported revenue, current year $472,917
----------------------------------------------------------------------------
Reported operating profit, prior year $60,640
Impact of currency movements and foreign exchange contracts (2,361)
Change in underlying operating profit 9,171
----------------------------------------------------------------------------
Reported operating profit, current year $67,450
----------------------------------------------------------------------------


Book Publishing revenues were up $9.6 million in 2008 excluding the impact of foreign exchange. North America Retail was up $13.3 million, North America Direct-To-Consumer was down $6.4 million and Overseas was up $2.7 million.

Book Publishing operating profits were up $9.2 million in 2008 excluding the impact of foreign exchange. North America Retail was up $8.6 million, North America Direct-To-Consumer was down $0.6 million and Overseas was up $1.2 million.

North America Retail operating profits were up $8.6 million in 2008. The increase was driven by higher revenues, including the effect of positive adjustments to prior period returns provisions, with more books sold in both series and single title formats. Significant progress has been made in improving the efficiency of the retail business resulting in a higher percentage of books sold relative to books distributed. Promotional spending was higher in 2008, supporting the higher revenues.

North America Direct-To-Consumer operating profits were down $0.6 million in 2008. The traditional direct-to-consumer business continued to face the challenge of a declining customer base which was reflected in the lower revenues. Offsetting the revenue decline from fewer direct mail customers were improved payment rates and lower promotional costs resulting from smaller, more effective, direct mail campaigns. Internet sales were higher in the year for both printed and digital books. Harlequin continues to expand its digital book sales releasing all new North American titles, more than 100 each month, in digital format.

Overseas operating profit was up $1.2 million in 2008 with growth in most markets. In 2008, the Japanese operation entered into an agreement with SoftBank Creative Corp., (a division of Softbank Corp., one of the largest providers of cell phone services in Japan) to distribute digital manga (comic) content on cell phones and Internet distribution sites. Contribution from this business more than offset lower book sales in Japan. The U.K. business faced the challenge of increased printing costs as the Pound Sterling depreciated in value relative to the Euro as well as higher provisions for bad debts due to the bankruptcy of one of their distributors. The Nordic group continued their trend of the past two years with growth in their markets. Investment spending in India was up slightly in 2008 as the business was launched in the first quarter of the year.

OPERATING RESULTS - THREE MONTHS ENDED DECEMBER 31, 2008

Overall Performance

Total revenue was $412.8 million in the fourth quarter, up $9.9 million from $402.9 million in the fourth quarter of 2007. Newspapers and Digital revenue was $286.6 million in the fourth quarter of 2008 down $9.7 million from $296.3 million in the same period last year as the weakening Ontario economy adversely affected advertising revenues. Reported Book Publishing revenues were $126.2 million in the fourth quarter of 2008, up $19.6 million from $106.6 million in the same period last year. This included an increase of $13.6 million from the impact of the weakening Canadian dollar. Underlying revenues were up $6.0 million in the quarter with increases in the North America Retail and Overseas divisions.

Operating profit before restructuring and other charges was $50.2 million in the fourth quarter of 2008, down $7.5 million from $57.7 million in the fourth quarter of 2007. Including the $14.6 million of restructuring and other charges, operating profit was $35.6 million in the fourth quarter of 2008, down $14.6 million from $50.2 million in the fourth quarter of 2007 (which included $7.5 million of restructuring and other charges). Newspapers and Digital Segment operating profit was $36.8 million in the fourth quarter of 2008, down $13.1 million from $49.9 million in the same period last year as higher newsprint prices compounded the impact of lower revenues. Book Publishing reported operating profits were $17.2 million in the fourth quarter, up $4.4 million from $12.8 million in the same period last year including an increase of $1.4 million from the impact of the weakening Canadian dollar. Underlying operating profit was up $3.0 million in the fourth quarter with increases in the North America Retail and Overseas divisions. Corporate costs were $3.8 million in the fourth quarter of 2008, down $1.1 million from $4.9 million in the fourth quarter of 2007 reflecting lower compensation costs.

EBITDA, excluding restructuring and other charges, was $63.4 million in the fourth quarter, down $7.6 million from $71.0 million in the same period last year.



----------------------------------------------------------------------------
Fourth Quarter Fourth Quarter
2008 2007
----------------------------------------------------------------------------
Newspapers and Digital $48,712 $61,924
Book Publishing 18,418 13,951
Corporate (3,754) (4,905)
----------------------------------------------------------------------------
EBITDA, excluding restructuring and other
charges $63,376 $70,970
----------------------------------------------------------------------------


Restructuring and other charges

Restructuring and other charges of $14.6 million were recorded in the fourth quarter 2008 compared with $7.5 million in 2007. The 2008 amount included $10.7 million of restructuring provisions, $1.5 million related to the write off of the Transit TV assets and a $2.4 million impairment loss on certain community newspapers mastheads and customer relationship intangible assets. In 2007, the full amount related to restructuring provisions.

Restructuring charges of $10.7 million were recorded in the fourth quarter of 2008 compared with $7.5 million in 2007. In both years the restructuring charges were in the Newspapers and Digital segment as both the Star Media Group and Metroland Media Group made changes to their operations to reduce operating costs. The 2008 charges will result in the reduction of approximately 230 positions with annual savings expected to be $12.5 million.

Interest

Interest expense was $6.6 million in the fourth quarter of 2008, down $1.7 million from $8.3 million in the fourth quarter of 2007. This decrease was from lower effective interest rates and a slightly lower level of debt outstanding during the fourth quarter of 2008. The average net debt (long-term debt and bank overdraft net of cash and cash equivalents) was $624.3 million in the fourth quarter of 2008, down $3.1 million from $627.4 million in 2007. Torstar's effective interest rate was 4.2% in the fourth quarter of 2008 and 5.3% in the fourth quarter of 2007.

Foreign Exchange

Torstar reported a non-cash foreign exchange gain of $1.6 million in the fourth quarter of 2008. This gain arose from the translation of foreign-currency (primarily U.S. dollars) denominated assets and liabilities into Canadian dollars. The amount of the gain or loss in any year will vary depending on the movement in relative value of the Canadian dollar and on whether Torstar has a net asset or net liability position in the foreign currency. In 2007, a non-cash foreign exchange gain of $0.5 million was reported.

Income (loss) from associated businesses

Income (loss) from associated businesses was a loss of $137.7 million in the fourth quarter of 2008 compared with income of $17.6 million in 2007. Losses were incurred at both CTVgm and Black Press.

$114.2 million of the loss from associated businesses in the fourth quarter of 2008 was from CTVgm. During the fourth quarter of 2008, Torstar reported its share of impairment losses of intangible assets and goodwill related to the CTVgm businesses. The impairment losses were calculated based primarily on the income approach which used discounted cash flows to determine the fair value of an intangible asset or reporting unit and reflect the impact the economy is having on the media industry in Canada and the short-term outlook for CTVgm's businesses. The combination of these losses was $124.2 million. Excluding these adjustments, CTVgm contributed income of $10.0 million in the fourth quarter of 2008. CTVgm contributed income of $17.1 million in 2007 including a positive earnings impact as future tax liabilities related to intangible assets were reduced to reflect the reduction in future Canadian federal income tax rates that was partially offset by a write down related to CTVgm's interest in TQS (a French-language conventional television broadcaster). Excluding these adjustments, CTVgm contributed $13.9 million in 2007. CTVgm's lower fourth quarter 2008 operating results reflected the softness in the conventional television business and the impact of the slowing economy on advertising revenue across all Canadian media.

$23.2 million of the loss from associated businesses in the fourth quarter of 2008 was from Black Press. During Torstar's fourth quarter, Black Press determined that it would likely record an impairment loss related to certain of its intangible assets and reporting unit goodwill in its fiscal 2009 (year ended February 2009) financial statements. The impairment loss reflects the impact that the U.S. economy and the structural challenges facing U.S. daily newspapers is having on Black Press's U.S. newspapers. In particular, Black Press's Beacon Journal in Akron has suffered impairment of its value. Torstar has recorded an estimate of $21.8 million in the fourth quarter of 2008 for the impairment loss and expects Black Press will finalize the determination of the impairment loss during Torstar's second quarter of 2009. Excluding this estimated impairment charge Black Press contributed a loss of $1.4 million in 2008 down from income of $0.6 million in 2007. The lower results in 2008 were a combination of reduced U.S. revenues as the newspapers were negatively impacted by the U.S. economy, increased newsprint costs, higher amortization expense, the mark to market of financial derivatives and higher effective tax rates.

Investment Write Down and Loss

During the fourth quarter of 2008, Torstar recognized an investment write down of $97.4 million. This included a $95.7 million write down of its investment in CTVgm and a $1.7 million write down of its portfolio investment in Vocel Inc., representing an other than temporary decline in the carrying value of these investments. This reduces Torstar's carrying value in CTVgm to $200 million.

Income and other taxes

Torstar reported a fourth quarter tax provision of $6.7 million on a loss before taxes of $204.5 million. Torstar's effective tax rate was 39.5% in the fourth quarter of 2008 (excluding the impact of the loss from associated businesses and investment write down and loss, which were not fully tax affected). Torstar's effective tax rate was 21.3% in the fourth quarter of 2007 including a $5.5 million benefit from changes in statutory tax rates. During the fourth quarter of 2007, the Canadian federal government enacted corporate tax decreases for future years. Under Canadian generally accepted accounting principles the impact of these changes on Torstar's future income tax assets and liabilities is to be recorded during the period the tax changes are substantially enacted. Excluding the benefit from the statutory tax rate change, the fourth quarter 2007 effective tax rate was 30.3%. The higher effective tax rate in 2008 was primarily the result of the mix of income in the quarter.

Net income

Torstar reported a net loss of $211.2 million or $2.68 per share in the fourth quarter of 2008. Losses from associated businesses and investment write down and loss were $229.5 million or $2.91 per share net of tax in the fourth quarter of 2008. Excluding these items, Torstar had net income of $18.3 million or $0.23 per share in the fourth quarter of 2008. In the fourth quarter of 2007 net income was $47.2 million or $0.60 per share. The average number of Class A and Class B non-voting shares outstanding was 78.9 million in the fourth quarter of 2008 up slightly from 78.7 million in 2007.

Segment Results - Newspapers and Digital

The following tables set out, in $000's, the results for the reporting units within the Newspapers and Digital Segment for the fourth quarters ended December 31, 2008 and 2007.



----------------------------------------------------------------------------
Operating Revenue Operating Profit (Loss) Profit Margin
2008 2007 2008 2007 2008 2007
----------------------------------------------------------------------------
Metroland
Media $149,850 $156,464 $28,689 $35,366 19.1% 22.6%
Star Media 136,295 139,406 8,906 16,519 6.5% 11.8%
Transit TV 412 462 (802) (2,024) n/a n/a
----------------------------------------------------------------------------
Segment Total $286,557 $296,332 $36,793 $49,861 12.8% 16.8%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Depreciation and
Amortization EBITDA EBITDA Margin
2008 2007 2008 2007 2008 2007
----------------------------------------------------------------------------
Metroland
Media $4,079 $3,270 $32,768 $38,636 21.9% 24.7%
Star Media 7,840 8,014 16,746 24,533 12.3% 17.6%
Transit TV 0 779 (802) (1,245) n/a n/a
----------------------------------------------------------------------------
Segment Total $11,919 $12,063 $48,712 $61,924 17.0% 20.9%
----------------------------------------------------------------------------


Newspapers and Digital revenues were down $9.8 million in the fourth quarter of 2008 as the weakening Ontario economy continued to have a negative impact. Digital revenues were 6.4% of the total in the fourth quarter of 2008, up from 4.3% in the fourth quarter of 2007.

Metroland Media Group

Metroland Media Group revenues were $149.9 million in the fourth quarter of 2008 down $6.6 million from $156.5 million in the fourth quarter of 2007. The decline was from lower advertising revenues partially offset by higher digital revenues. The community newspapers saw weakness in the classified and local retail categories during the fourth quarter as the Ontario economy worsened. Within the classified category, employment, rentals and automotive advertising were particularly soft. The daily newspapers had a similar experience in the classified category during the fourth quarter and also continued to see softness from national advertisers.

Metroland Media Group's operating expenses in the quarter were down slightly with higher newsprint costs and investment in Metroland's Digital Media Group more than offset by labour cost savings realized from the restructuring efforts undertaken in 2007 and in the first half of 2008.

Metroland Media Group's EBITDA was $32.8 million in the fourth quarter of 2008 down $5.9 million from $38.6 million in the fourth quarter of 2007. Depreciation and amortization expense was $0.8 million higher in 2008 reflecting the investment in press equipment and inserting machines that was made during 2007 and 2008. Metroland Media Group's operating profit was $28.7 million in the fourth quarter of 2008 down $6.7 million from $35.4 million in 2007.

Star Media Group

Star Media Group revenues were $136.3 million in the fourth quarter of 2008, down $3.1 million from $139.4 million in the fourth quarter of 2007. Strong revenue growth at the digital properties and the Metro newspapers (including the new markets) was not sufficient to offset lower advertising revenue at the Toronto Star.

Revenues at Star Media Group's digital properties including thestar.com, toronto.com, eyeReturn Marketing and the jointly owned Workopolis and Olive Media were up a combined 26.6% in the quarter. This included growth in national advertising revenue, an expansion of the sites that Olive Media represents and the impact of the acquisitions of eyeReturn Marketing and the Brainhunter business (acquired by Workopolis). Workopolis' revenue growth slowed in the fourth quarter as employment advertising was negatively impacted by the Ontario economy.

Revenues for the jointly-owned Sing Tao and Metro newspapers were up 12.2% in the fourth quarter primarily from revenue growth in the newer Metro markets of Vancouver, Ottawa, Calgary, Edmonton and Halifax.

Toronto Star print advertising revenues were down 11.9% in the fourth quarter of 2008 with declines across most categories. National automotive was lower in the fourth quarter 2008 reflecting the uncertainty in the automotive market in the quarter and the comparison to a stronger fourth quarter in 2007 when the automotive manufacturers had undertaken a significant promotion in response to the Cdn/U.S. exchange rate issue.

Star Media Group expenses were higher in the fourth quarter of 2008 primarily due to higher newsprint costs. Newsprint prices were 26.8% higher in the fourth quarter of 2008 compared with the fourth quarter of 2007. Newsprint prices increased throughout 2008 whereas they had decreased throughout 2007. This contributed to cost increases at the Toronto Star, Metro and Sing Tao. Labour costs at the Toronto Star were down in the quarter due to reduced staffing levels from the various restructuring initiatives undertaken in 2007 and the first half of 2008 partially offset by general wage increases and higher pension costs.

Star Media Group EBITDA was $16.7 million in the fourth quarter of 2008, down $7.8 million from $24.5 million in the fourth quarter of 2007. Star Media Group operating profit was $8.9 million in the fourth quarter of 2008 down $7.6 million from $16.5 million in the fourth quarter of 2007.

Segment Results - Book Publishing

The following tables set out, in $000's, a summary of operating results for the Book Publishing Segment and a continuity of revenue and operating profit, including the impact of foreign currency movements, for the three months ended December 31, 2008 and 2007.



----------------------------------------------------------------------------
Fourth Quarter
--------------------------
2008 2007
----------------------------------------------------------------------------
Revenue $126,206 $106,598

EBITDA $18,418 $13,951
Depreciation & amortization 1,264 1,189
--------------------------
Operating profit $17,154 $12,762
--------------------------
EBITDA margin 14.6% 13.1%
Operating profit margin 13.6% 12.0%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Fourth Quarter
----------------------------------------------------------------------------
Reported revenue, prior year $106,598
Impact of currency movements and foreign exchange contracts 13,656
Change in underlying revenue 5,952
----------------------------------------------------------------------------
Reported revenue, current year $126,206
----------------------------------------------------------------------------
Reported operating profit, prior year $12,762
Impact of currency movements and foreign exchange contracts 1,426
Change in underlying operating profit 2,966
----------------------------------------------------------------------------
Reported operating profit, current year $17,154
----------------------------------------------------------------------------


Book Publishing revenues were up $6.0 million in the fourth quarter of 2008 excluding the impact of foreign exchange. North America Retail was up $5.5 million, North America Direct-To-Consumer was down $1.6 million and Overseas was up $2.1 million.

Book Publishing operating profits were up $3.0 million in the fourth quarter of 2008 excluding the impact of foreign exchange. North America Retail was up $3.0 million, North America Direct-To-Consumer was down $0.6 million and Overseas was up $0.6 million.

North America Retail operating profit was up $3.0 million in the fourth quarter as a result of higher revenues with relatively flat year over year costs. North American Direct-To-Consumer operating profit was down $0.6 million as higher sales of books through the Internet and increased digital revenues were not sufficient to offset lower results in the traditional direct mail business.

Overseas results were up $0.6 million in the fourth quarter. In the U.K. higher sales for both series and single title books more than offset higher overhead costs including a provision for bad debts due to the bankruptcy of one of their distributors. The Japanese operations continued to benefit from higher digital sales in the quarter but this increase was offset by lower book sales.

OUTLOOK

Torstar anticipates that 2009 will be a challenging year. Economic conditions are expected to be difficult for the Newspapers and Digital segment. However, stable results are expected for Harlequin.

In the Newspapers and Digital segment, Torstar expects advertising revenues to continue to decline in our print newspaper products as consumers and businesses react to the sharply slowing Ontario economy. As unemployment levels increase and fewer employers are looking to hire, help wanted and careers advertising revenues, both in print and online, are expected to decline. In addition to increased pension costs, newsprint pricing is expected to be higher in 2009, in particular in the first half of the year, which will add cost pressures to the newspaper businesses. Offsetting some of the declines in revenues and increased costs will be the labour savings realized from the restructuring activities undertaken in 2008 and from further reductions expected in 2009.

Harlequin continues to perform well and 2009 results are expected to be stable despite anticipated cost increases for pensions and paper. Harlequin's revenues, to date, have not been significantly affected by the global, and in particular, U.S. economic situation. This could change during 2009 either as a result of decreased consumer spending or from disruptions to the U.S. retail distribution system. Harlequin's 2009 results will likely benefit from the weaker Canadian dollar relative to the U.S. dollar. In 2008, including the impact of the U.S. dollar contracts, Harlequin's U.S. dollar earnings were translated at a rate of approximately $1.07. For 2009, Torstar has U.S. dollar contracts for $50.1 million U.S. at an average exchange rate of $1.12. The balance of Harlequin's U.S. earnings in 2009 will be translated at the average exchange rates realized during the year.

On a consolidated basis, Torstar's pension expense in 2009 is expected to be $33.1 million, up $20.3 million from $12.8 million in 2008. Due to the timing of actuarial valuations for the most significant group of Torstar's pension plans (required as of December 31, 2009), an increase in pension funding is not anticipated until 2010. Unless capital market conditions improve significantly, Torstar anticipates that its required funding for these plans would increase significantly in 2010 and beyond.

CTVgm's 2009 results are also expected to be negatively impacted by the reduction in advertising revenues in their television, radio and newspaper businesses.

RECENT DEVELOPMENTS

On February 26, 2009, Torstar announced that as part of a planned transition, Robert Prichard will step down as President and Chief Executive Officer effective May 6, 2009 and that David Holland, the current Executive Vice President and Chief Financial Officer will become Interim Chief Executive Officer on the same date. Torstar expects to record an accounting provision of approximately $8.0 million, net of tax, in the first quarter in connection with this transition followed by lower corporate costs in subsequent quarters.

In addition to other changes to the Board of Directors, Torstar also announced on February 26, 2009 that the Honourable Frank Iacobucci, who has served as Chair of the Board of Torstar since 2005, has decided not to stand for re-election to the Board. John A. Honderich, a Torstar Director for 11 years, Chair of the Voting Trust and former Publisher of the Toronto Star, will become Chair of the Board.

OTHER

On February 25, 2009, Torstar declared a quarterly dividend of 9.25 cents per share on its Class A share and Class B non-voting shares, payable on March 31, 2009, to shareholders of record at the close of business on March 13, 2009. Torstar advises that, for the purposes of the Income Tax Act, Canada and for any relevant provincial tax legislation, this dividend is designated as an eligible dividend.

ADDITIONAL INFORMATION

For additional information, please refer to Torstar's audited consolidated financial statements for the year ended December 31, 2008 and the 2008 Management's Discussion and Analysis. Both documents were filed today with SEDAR and are available on Torstar's corporate website www.torstar.com.

CONFERENCE CALL

Torstar has scheduled a conference call for February 26, 2009 at 8:15 a.m. to discuss its fourth quarter results. The dial-in number is 1-800-897-8505. A live broadcast of the conference call will be available over the Internet on the Investor Relations (Conference Calls) page on Torstar's website www.torstar.com. A recording of the conference call will be available for 9 days by calling 416-626-4100 or 1-800-558-5253 and entering reservation number 21411853. An online archive of the broadcast will be available shortly after the completion of the call and will be accessible by visiting the Investor Relations (Conference Calls) page on Torstar's website www.torstar.com.

About Torstar Corporation

Torstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TS.B). Its businesses include the Star Media Group led by the Toronto Star, Canada's largest daily newspaper and digital properties including thestar.com, toronto.com, Wheels.ca, Workopolis, Olive Media, and eyeReturn; Metroland Media Group, publishers of community and daily newspapers in Ontario; and Harlequin Enterprises, a leading global publisher of books for women.

Non-GAAP Measures

Management uses both operating profit, as presented in the consolidated statements of income, and EBITDA as measures to assess the performance of the reporting units and business segments. EBITDA is a measure that is also used by many of Torstar's shareholders, creditors, other stakeholders and analysts as a proxy for the amount of cash generated by Torstar or by a reporting unit or segment. EBITDA is not the actual cash provided by operating activities and is not a recognized measure of financial performance under GAAP. Torstar calculates EBITDA as the consolidated, segment or reporting unit operating profit before charges for interest, taxes, depreciation and amortization of intangible assets. Torstar also excludes restructuring and other charges from its calculation of EBITDA. Torstar's method of calculating EBITDA may differ from other companies and accordingly may not be comparable to measures used by other companies.

Forward-looking statements

Certain statements in this press release and in the Company's oral and written public communications may constitute forward-looking statements that reflect management's expectations regarding the Company's future growth, results of operations, performance and business prospects and opportunities as of the date of this report. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "intend", "would", "could", "if", "may" and similar expressions. All such statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this report. The Company does not intend, and disclaims any obligation to, update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as required by law.

By their very nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management's assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers to not place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements. In addition, forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

These factors include, but are not limited to: general economic conditions in the principal markets in which the Company operates, the Company's ability to operate in highly competitive industries, the Company's ability to compete with other forms of media, the Company's ability to attract advertisers, cyclical and seasonal variations in the Company's revenues, labour disruptions, newsprint costs, foreign exchange fluctuations, investments, restrictions imposed by existing credit facilities and availability of capital, pension fund obligations, reliance on its printing operations, reliance on technology and information systems, interest rates, availability of insurance, litigation, environmental regulations, dependence on key personnel, control of Torstar by the voting trust, loss of reputation, intellectual property rights and uncertainties associated with critical accounting estimates.

We caution that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results. For more information, please see the discussion of risks affecting Torstar and its businesses in Torstar's 2008 Management's Discussion & Analysis which is available at www.sedar.com and on Torstar's corporate website www.torstar.com.

In addition, a number of assumptions, including those assumptions specifically identified throughout this press release, were applied in making the forward-looking statements set forth in this press release. Some of the key assumptions include, without limitation, assumptions regarding the performance of the North American economy; tax laws in the countries in which we operate; continued availability of printing operations; continued availability of financing on appropriate terms; exchange rates; market competition; and successful development of new products. There is a risk that some or all of these assumptions may prove to be incorrect.

Torstar's new releases are available on the Internet at www.torstar.com.





----------------------------------------------------------------------------
Torstar Corporation
Consolidated Balance Sheets
(Dollars in Thousands)
(Audited)
December 31 December 31
2008 2007
----------------------------------------------------------------------------
Assets
Current:
Cash and cash equivalents $45,787 $34,096
Receivables 273,658 263,779
Inventories 39,141 31,807
Prepaid expenses 71,922 61,325
Prepaid and recoverable income taxes 13,719 3,097
Future income tax assets 24,416 19,010
----------------------------------------------------------------------------
Total current assets 468,643 413,114
----------------------------------------------------------------------------

Property, plant and equipment (net) 298,475 330,391
----------------------------------------------------------------------------
Investment in associated businesses 201,571 434,294
----------------------------------------------------------------------------
Intangible assets 34,667 28,773
----------------------------------------------------------------------------
Goodwill (net) 577,116 562,120
----------------------------------------------------------------------------
Other assets 156,543 154,175
----------------------------------------------------------------------------
Future income tax assets 50,592 37,970
----------------------------------------------------------------------------
Total assets $ 1,787,607 $ 1,960,837
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current:
Bank overdraft $4,425 $3,616
Accounts payable and accrued liabilities 237,431 208,217
Income taxes payable 12,557 17,065
----------------------------------------------------------------------------
Total current liabilities 254,413 228,898
----------------------------------------------------------------------------

Long-term debt 668,700 650,798
----------------------------------------------------------------------------
Other liabilities 119,827 89,678
----------------------------------------------------------------------------
Future income tax liabilities 72,090 73,702
----------------------------------------------------------------------------

Shareholders' equity:
Share capital 390,978 388,036
Contributed surplus 11,018 9,929
Retained earnings 296,477 535,242
Accumulated other comprehensive loss (25,896) (15,446)
----------------------------------------------------------------------------
Total shareholders' equity 672,577 917,761
----------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,787,607 $ 1,960,837
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Torstar Corporation
Consolidated Statements of Income
(Dollars in Thousands)

(Unaudited) (Audited)
Three months ended Twelve months ended
December 31 December 31
2008 2007 2008 2007
----------------------------------------------------------------------------
Operating revenue
Newspapers and digital $ 286,557 $ 296,332 $ 1,063,117 $ 1,083,828
Book publishing 126,206 106,598 472,917 462,709
----------------------------------------------------------------------------
$ 412,763 $ 402,930 $ 1,536,034 $ 1,546,537
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating profit
Newspapers and digital $36,793 $49,861 $104,007 $128,675
Book publishing 17,154 12,762 67,450 60,640
Corporate (3,768) (4,917) (16,903) (19,028)
Restructuring and other
charges (14,577) (7,507) (59,214) (7,507)
----------------------------------------------------------------------------
35,602 50,199 95,340 162,780
Interest (6,572) (8,341) (28,225) (34,432)
Foreign exchange 1,581 478 2,205 (1,873)
Income (loss) of
associated
businesses (137,744) 17,646 (136,948) 20,416
Gain on sale of land 9,170
Investment write-down
and loss (97,399) (99,797)
----------------------------------------------------------------------------
Income (loss) before
taxes (204,532) 59,982 (158,255) 146,891
Income and other taxes (6,700) (12,800) (22,200) (45,500)
----------------------------------------------------------------------------
Net income (loss) ($211,232) $47,182 ($180,455) $101,391
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Earnings (loss) per
Class A and
Class B share:
Net income (loss) -
Basic ($2.68) $0.60 ($2.29) $1.29
Net income (loss) -
Diluted ($2.68) $0.60 ($2.29) $1.29
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Torstar Corporation
Consolidated Statements of Cash Flows
(Dollars in Thousands)

(Unaudited) (Audited)
Three months ended Twelve months ended
December 31 December 31
2008 2007 2008 2007
----------------------------------------------------------------------------

Cash was provided by
(used in)
Operating activities $37,036 $ 41,304 $ 122,217 $ 136,152
Investing activities (11,165) (13,820) (46,086) (41,225)
Financing activities (18,889) (36,677) (68,671) (105,464)
----------------------------------------------------------------------------
Increase (decrease) in cash 6,982 (9,193) 7,460 (10,537)
Effect of exchange rate
changes 2,245 632 3,422 (2,847)
Cash, beginning of period 32,135 39,041 30,480 43,864
----------------------------------------------------------------------------
Cash, end of period $41,362 $ 30,480 $41,362 $30,480
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating activities:
Net income (loss) ($211,232) $ 47,182 ($180,455) $ 101,391
Depreciation and
amortization 13,197 13,265 55,573 55,134
Future income taxes (1,151) (2,786) 1,552 885
Loss (income) of
associated
businesses 137,744 (17,646) 136,948 (20,416)
Dividend received from
associated business 1,161
Investment write-down
and loss 97,399 99,797
Other (1,098) (5,342) 1,536 (10,331)
----------------------------------------------------------------------------
34,859 34,673 116,112 126,663
Decrease in non-cash
working capital 2,177 6,631 6,105 9,489
----------------------------------------------------------------------------
Cash provided by operating
activities $37,036 $ 41,304 $ 122,217 $ 136,152
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Investing activities:
Additions to property,
plant and equipment ($10,320) ($13,768) ($26,129) ($38,139)
Acquisitions and
investments (1,032) (1,545) (24,651) (4,693)
Proceeds on sale of land 3,095
Other 187 1,493 1,599 1,607
----------------------------------------------------------------------------
Cash used in investing
activities ($11,165) ($13,820) ($46,086) ($41,225)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financing activities:
Issuance of bankers'
acceptance $14,479 $13,541
Repayment of bankers'
acceptance ($4,762) ($22,720) (26,291) (65,350)
Dividends paid (14,516) (14,437) (57,871) (57,658)
Exercise of stock options 2,586
Other 389 480 1,012 1,417
----------------------------------------------------------------------------
Cash used in financing
activities ($18,889) ($36,677) ($68,671) ($105,464)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Cash represented by:
Cash and cash equivalents $45,787 $ 34,096 $45,787 $34,096
Bank overdraft (4,425) (3,616) (4,425) (3,616)
----------------------------------------------------------------------------
$41,362 $ 30,480 $41,362 $30,480
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Contact Information

  • Torstar Corporation
    D. Holland
    Executive Vice-President and Chief Financial Officer
    (416) 869-4031
    Website: www.torstar.com