Torstar Corporation Reports Third Quarter Results

TORONTO, ON--(Marketwired - November 02, 2016) - Torstar Corporation (TSX: TS.B) today reported financial results for the third quarter ended September 30, 2016.

Highlights for the third quarter:

• During the third quarter of 2016, we sold the Vaughan Printing Facility and surrounding lands for net proceeds of $53.6 million recognizing a gain of $21.8 million on the sale.
• Ended the third quarter of 2016 with $69.8 million of cash and cash equivalents and $18.7 million of restricted cash; Torstar has no bank indebtedness.
• Our net income from continuing operations was $1.1 million ($0.01 per share) in the third quarter of 2016. This compares to a net loss of $164.8 million ($2.04 per share) in the third quarter of 2015.
• Our net income attributable to equity shareholders was $1.4 million ($0.02 per share) in the third quarter of 2016 compared to a net loss attributable to equity shareholders of $164.3 million ($2.05 per share) in the third quarter of 2015.
• Adjusted loss per share was $0.08 in the third quarter of 2016, an improvement of $0.05 from adjusted loss per share of $0.13 in the third quarter of 2015. Adjusted loss per share in 2016 and 2015 included $0.30 and $0.31 per share effects of amortization and depreciation.
• Our segmented operating loss was $15.2 million in the third quarter of 2016 which included $23.9 million of non-cash amortization and depreciation expense as well as $3.7 million of restructuring and other charges.
• Our segmented adjusted EBITDA was $13.1 million in the third quarter of 2016 up $2.7 million from the prior year benefiting from $3.2 million of higher contribution from our Digital Ventures segment which included 42% comparable period growth in adjusted EBITDA at VerticalScope. Segmented adjusted EBITDA in the third quarter in the newspaper operations was relatively stable with adjusted EBITDA at Star Media Group up $0.5 million and Metroland Media Group down $0.8 million in the third quarter.
• Segmented revenue was $181.7 million in the third quarter of 2016, down $19.7 million (9.8%) from $201.4 million in the third quarter of 2015.

"We were pleased, overall, with our progress in the quarter. Segmented adjusted EBITDA was up $2.7 million to $13.1 million and included $7.8 million from our Digital Ventures segment which continues to benefit from very strong year over year growth in adjusted EBITDA at VerticalScope. At Metroland and the Star Media Group, we benefitted from continuing efforts on costs which offset the impact of the continuing revenue challenges resulting in relatively stable earnings across the two operations." said David Holland, President and CEO of Torstar Corporation. "We were also very pleased with the outcome and timing of the sale of the Vaughan Printing Facility completed within three months of transitioning out of the facility for net proceeds of $53.6 million. The outsourcing of the printing of the Toronto Star has gone smoothly and we are tracking right in line with expectations.

"Looking forward, we expect earnings in the fourth quarter to benefit from growth at VerticalScope, efforts on reducing costs, and as anticipated, lower net investment in Toronto Star Touch compared to the 2015 launch. We remain very committed to a multi-platform evolution across our media operations, and led by VerticalScope, a meaningful transformation of our asset base towards a more digital orientation for Torstar as a whole."

The following chart provides a continuity of earnings per share from the third quarter and first nine months of 2015 to the third quarter and first nine months of 2016:

*Includes proportionately consolidated share of joint venture operations and 56% interest in VerticalScope. These include Non-IFRS or additional IFRS measures.
** Refer to discussion of "Non-IFRS measures" including definition of adjusted earnings (loss) per share.
During 2016, we reclassified the manner in which certain items are categorized including the exclusion of share based compensation from our definition of adjusted EBITDA. See the discussion of "Non-IFRS measures" for more detail.

OPERATING RESULTS -THIRD QUARTER 2016
The following tables sets out, in $000's the segmented results for the three months ended September 30, 2016 and 2015

¹Reflects eliminations of proportionate share of joint ventures and our 56% interest in VerticalScope.
*Includes proportionately consolidated share of joint venture operations and 56% interest in VerticalScope.
**These are non-IFRS or additional IFRS measures, see "Non-IFRS measures".

Revenue
Segmented revenue was down $19.7 million or 9.8% in the third quarter of 2016 with revenues negatively impacted by several factors including the absence of $3.6 million of net revenue associated with the closure of Olive Media at the end of 2015 and the absence of $2.1 million of commercial printing revenue at the Vaughan Printing Facility. These negative factors were partially offset by incremental revenue of $2.4 million from VerticalScope resulting from our investment on July 28, 2015. Adjusting for these factors, segmented revenue was down $16.4 million or 8.3% in the third quarter of 2016.

Segmented revenue in the third quarter reflected declines of 16.1% in print advertising revenues, with particular softness in national advertising revenues, a 7.2% decrease in subscriber revenue and a 1.3% increase in distribution revenues.

Operating revenue (excluding our proportionate share of revenues from our joint ventures and our 56% interest in VerticalScope) was down $23.3 million or 12.6% in the third quarter of 2016.

Excluding the impact of Olive Media, digital revenue across all segments increased 17.9% in the third quarter of 2016 which was primarily attributable to the investment in VerticalScope on July 28, 2015. Digital revenues for the third quarter of 2016 also reflected lower revenues at Workopolis and WagJag offset by revenues from Toronto Star Touch combined with continued growth in local digital advertising within the community websites at Metroland Media Group and growth at eyeReturn marketing. Digital revenues were 18.8% of total segment revenues in the third quarter of 2016 compared to 16.2% in the third quarter of 2015.

Salaries and benefits
Segmented salaries and benefits costs were down $13.9 million (15.5%) in the third quarter of 2016 including the absence of $1.1 million of digital media tax credits recorded in the third quarter of 2015. Segmented salaries and benefit costs in the third quarter of 2016 included the benefit of savings from restructuring initiatives, including the closure of the Vaughan Printing Facility, lower commission costs, and lower staffing costs associated with Toronto Star Touch, partially offset by the inclusion of our proportionate share of salaries and benefit costs of VerticalScope.

Other operating costs
Segmented other operating costs primarily include newspaper circulation and flyer distribution costs, production costs and newsprint costs which represented 41.7%, 10.9% and 13.7% respectively of segmented other operating costs for the third quarter.

Segmented other operating costs were down $8.5 million or 8.4% in the third quarter of 2016 as a result of lower print volumes and the impact of other cost reductions partially offset by fees associated with outsourcing the printing of the Toronto Star as well as increased costs related to our proportionate share of VerticalScope's other operating costs.

Adjusted EBITDA
Our segmented adjusted EBITDA was $13.1 million in the third quarter of 2016 up $2.7 million from the prior year benefiting from $3.2 million of higher contribution from our Digital Ventures segment which included 42% comparable period growth in adjusted EBITDA at VerticalScope. Segmented adjusted EBITDA in the third quarter in the newspaper operations was relatively stable with adjusted EBITDA at Star Media Group up $0.5 million and Metroland Media Group down $0.8 million in the third quarter.

Amortization and depreciation
Total segmented amortization and depreciation decreased $1.4 million in the third quarter of 2016 compared to the third quarter of 2015, primarily as a result of a decrease in amortization of intangible assets associated with our investment in VerticalScope and partially offset by increased amortization of software and other intangible assets at the Star Media Group. The third quarter of 2016 included $13.0 million of amortization of intangible assets associated with our investment in VerticalScope.

Operating earnings (loss)
Segmented operating loss was $11.4 million in the third quarter of 2016 compared to an operating loss of $15.4 million in the third quarter of 2015. The reduction in the operating loss in the third quarter of 2016 was due to a $2.7 million increase in adjusted EBITDA as well as lower amortization and depreciation expense.

Restructuring and other charges
Total segmented restructuring and other charges were $3.7 million in the third quarter of 2016 and $4.2 million in the comparable period of 2015. Restructuring charges in the third quarter of 2016 included $6.4 million of charges related to cost reduction initiatives, partially offset by a $2.7 million recovery in respect of revised estimates of non-avoidable facility related expenses related to the closure of the Vaughan Printing Facility.

Restructuring charges through the end of the third quarter of 2016 reflect a reduction of approximately 570 positions which are expected to result in annualized net savings of $34.0 million. Of the $34.0 million in expected savings, $19.2 million are expected to be realized in 2016 (including $10.6 million in the first nine months) and the remaining $14.8 million in 2017.

Operating profit (loss)
Segmented operating loss decreased $152.1 million in the third quarter of 2016. Operating loss for the third quarter of 2016 included $23.9 million of non-cash amortization and depreciation expense as well as $3.7 million of restructuring and other charges. The operating loss in the third quarter of 2015 included $25.3 million of amortization and depreciation expense as well as $147.8 million of non-cash impairment charges.

Our operating loss excluding our proportionate share of operating profit (loss) from VerticalScope and our joint ventures decreased $132.8 million in the third quarter of 2016 compared to 2015.

Income (loss) from joint ventures
Our income from joint ventures was $0.4 million in the third quarter of 2016 compared to a loss of $11.6 million in the third quarter of 2015 the results of which are included in our discussions of segmented revenue and segmented adjusted EBITDA above. The loss from joint ventures in the third quarter of 2015 included impairment charges of $12.0 million.

Income (loss) from associated businesses
Our loss from associated businesses was $4.0 million in the third quarter of 2016 compared to a loss of $11.8 million in the third quarter of 2015.

The loss in the third quarter of 2016 included income of $1.0 million from Black Press, income of $0.3 million from Blue Ant and a loss of $5.3 million from VerticalScope. The loss from VerticalScope included $13.0 million of amortization expense. The loss in the third quarter of 2015 included income of $0.5 million from Black Press offset by a loss of $0.9 million from Blue Ant, a loss of $1.1 million from Shop.ca and a loss of $10.3 million from VerticalScope which included $17.3 million of amortization expense. We invested in VerticalScope on July 28, 2015.

Investment in VerticalScope
During the third quarter of 2015, we acquired a 56% interest in VerticalScope. Pursuant to certain terms in the shareholders agreement, the investment is accounted for as an associated business using the equity method, rather than a subsidiary or joint venture. The results of VerticalScope are reported as part of our Digital Ventures Segment in our segmented reporting.

In connection with the investment in VerticalScope, and consistent with the general methodology VerticalScope uses when making its acquisitions, we allocated the difference between the fair value of the purchase price paid and the book value of the net assets of VerticalScope to customer relationships, technology, domain names, acquired content and goodwill. The amortization periods for these intangible assets generally range from 5-10 years, with the exception of acquired content which, consistent with VerticalScope's accounting policy, is amortized over one year. Given the relatively large value allocated to acquired content (U.S. $60.6 million) and the one year amortization period associated with it, we have incurred large amortization charges related to these intangible assets through the end of July 2016.

Our 56% share of VerticalScope's third quarter 2016 net loss included $13.0 million in respect of amortization and depreciation expense. This included amortization of fair value differences of intangible assets identified when we made our investment in VerticalScope as well as the amortization of fair value differences which VerticalScope has identified on acquisitions it has made subsequent to July 28, 2015.

During the first nine months of 2016 VerticalScope made acquisitions totalling U.S. $11.0 million which were financed from VerticalScope's operating cash flow. VerticalScope's debt, net of cash on hand, was U.S. $77.0 million at September 30, 2016 down U.S. $4.7 million from U.S. $81.7 million at June 30, 2016.

Other income
Other income was $23.1 million in the third quarter of 2016 compared to $nil in the third quarter of 2015. Other income for the third quarter included a gain of $21.8 million on the sale of the Vaughan Printing Facility and surrounding lands and a gain of $1.3 million on the sale of a real estate property in Guelph.

Income and other taxes
We recorded tax expense of $7.5 million in the third quarter of 2016. This compares to income tax recoveries of $1.2 million in the third quarter of 2015. Excluding the impact of adjustments to deferred taxes for previous years and losses not recognized our effective tax rate was 24.5% in the third quarter of 2016.

Net income (loss) from continuing operations
Our net income from continuing operations was $1.1 million ($0.01 per share) in the third quarter of 2016. This compares to a net loss of $164.8 million ($2.04 per share) in the third quarter of 2015. The third quarter of 2016 included a gain of $23.1 million on the sale of two properties, partially offset by $13.0 million of non-cash amortization and depreciation expense associated with our investment in VerticalScope as well as $3.7 million of restructuring charges. The loss in the third quarter of 2015 included $147.8 million of non-cash impairment charges and $17.3 million of non-cash amortization and depreciation expense associated with our investment in VerticalScope.

Net income (loss) attributable to equity shareholders
Our net income attributable to equity shareholders was $1.4 million ($0.02 per share) in the third quarter of 2016 compared to net loss attributable to equity shareholders of $164.3 million ($2.05 per share) in the third quarter of 2015.

OUTLOOK
Through the third quarter and first nine months of 2016, Metroland Media Group and Star Media Group continued to face a challenging print advertising market resulting from continued shifts in spending by advertisers. Indications are that the revenue trends experienced at Star Media Group and Metroland Media Group in the third quarter of 2016 have continued early into the fourth quarter. However, it is difficult to predict if these trends will continue in the balance of 2016. We currently expect that flyer distribution revenues will experience moderate declines in the fourth quarter of 2016. Subscriber revenues declined moderately in the first nine months of 2016 and this trend is expected to continue in the balance of the year. Excluding the impact of the closure of Olive Media, Metroland Media Group and Star Media Group digital revenue is expected to grow in the balance of 2016 as a result of revenues from Toronto Star Touch, growth at thestar.com as well as growth in local digital advertising at Metroland Media Group.

Within the Digital Ventures segment, the trend in revenue and adjusted EBITDA growth from a combination of acquisitions and organic growth at VerticalScope experienced in the first nine months of 2016 is expected to continue in the balance of the year.

Cost reduction remains an important area of focus for us in the balance of 2016. Net savings related to restructuring initiatives undertaken through the end of the third quarter of 2016 are expected to be $9.9 million in the balance of 2016 ($3.5 million in Metroland Media Group, $6.2 million in the Star Media Group and $0.2 million in Digital Ventures), including an expected $3 million of cost savings relative to 2015 (in the range of approximately $10 million on an annual basis) associated with the transition of printing the Toronto Star to Transcontinental Printing. While newsprint pricing has increased in 2016, we expect that any impact of price increases will continue to be more than offset by lower consumption in the balance of the year. Our net investment in Toronto Star Touch was $10.1 million in the first nine months of 2016 and included significant marketing costs. We currently anticipate that the net investment in the fourth quarter of 2016 will be $1.5 million, down from $9.6 million in the fourth quarter of 2015 and including the benefit of an additional $0.8 million of savings from restructuring initiatives undertaken to date and not included above.

In addition, in the fourth quarter of 2016, we anticipate our 56% share of VerticalScope's non-cash amortization charges, including those related to intangible assets identified at the time of our investment to drop to approximately U.S. $5 million.

Looking forward, in 2017, we expect the cost base to benefit $15.2 million from restructuring initiatives undertaken to date, including a full year impact of outsourced printing of the Toronto Star. We expect the net investment in Toronto Star Touch to be between $2 million and $4 million for the full year in 2017, including the benefit of an additional $2.2 million of savings from restructuring initiatives undertaken to date and not included above. Expenses related to our registered defined benefit pension plans are currently expected to decrease by approximately $3 million to approximately $11 million in 2017. However, from a cash flow perspective, in 2017, Torstar anticipates required funding of its registered defined benefit pension plans to remain at approximately $18 million. Capital expenditures in 2017 are currently anticipated to be between $12 million and $13 million.

DIVIDEND
On November 1, 2016, Torstar declared a quarterly dividend of 2.5 cents per share on its Class A shares and Class B non-voting shares, payable on December 30, 2016, to shareholders of record at the close of business on December 9, 2016. 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 condensed consolidated financial statements for the period ended September 30, 2016 (the "Condensed Consolidated Financial Statements") and the Interim Management's Discussion and Analysis ("MD&A"). Both documents will be filed today on SEDAR and are available on Torstar's corporate website www.torstar.com.

CONFERENCE CALL
Torstar has scheduled a conference call for November 2, 2016 at 8:15 a.m. to discuss its third quarter results. The dial-in number is (416) 340-2218 or 1-866-223-7781. A live broadcast of the conference call will be available over the internet on the Presentations, Events and Conference Calls page (Investor Relations) on Torstar's website www.torstar.com. A recording of the conference call will be available for 9 days at (905) 694-9451 or 1-800-408-3053 reservation number 1604395. An online archive of the broadcast will be available shortly after the completion of the call and will be accessible by visiting the Presentations, Events and Conference Calls (Investor Relations) 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 Free Daily News Group Inc., which publishes the English-language Metro newspapers in several Canadian cities; Metroland Media Group, publisher of community and daily newspapers in Ontario; and also include digital properties including thestar.com, Toronto Star Touch, Workopolis, wagjag.com, toronto.com, save.ca and eyeReturn Marketing Inc. It also holds a majority interest in VerticalScope, a North American vertically-focused digital media company.

Non-IFRS measures
In addition to operating profit (loss), an additional IFRS measure, as presented in the consolidated statement of income (loss), management uses segmented revenue, adjusted EBITDA (and where applicable segmented adjusted EBITDA), operating earnings (loss) (and where applicable segmented operating earnings (loss)), and adjusted earnings (loss) per share as measures to assess the consolidated performance and the performance of the reporting units and business segments. Please refer to Section 11 of Torstar's MD&A for the three and nine months ended September 30, 2016 for a reconciliation of adjusted EBITDA and operating earnings (loss) (and segmented adjusted EBITDA/segmented operating earnings (loss) - as applicable) with operating profit(loss) (segmented operating profit (loss) - as applicable) and adjusted earnings (loss) per share to earnings (loss) per share.

Segmented revenue
Segmented revenue is calculated in the same manner as operating revenue in the Consolidated Financial Statements, except that it is calculated using total segment results which includes our proportionately consolidated share of revenues from joint ventures and our 56% interest in VerticalScope. Management of each segment is accountable for the revenues, including the proportionately consolidated share of revenues from joint venture operations. Management believes that segmented revenue is a useful measure for investors as it is a measure of the revenues for which management of each segment is accountable. The intent of segmented revenue is to provide additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies.

Adjusted EBITDA (Segmented Adjusted EBITDA)
As a result of the increasing significance of segmented financial results from our investment in VerticalScope relative to our total segmented financial results, effective the third quarter of 2016 we have revised our definition of adjusted EBITDA to exclude share based compensation. We made this change because of the relative significance and variability of this non-cash expense in our proportionate share of VerticalScope's financial results. We believe that the exclusion of this non-cash expense from adjusted EBITDA provides greater insight for investors, analysts and readers, in regards to our segmented earnings excluding non-cash expenses. We have accordingly restated prior period comparative figures.

Management believes that adjusted EBITDA is an important proxy for the amount of cash generated by our ongoing operations (or by a reporting unit or business segment) to generate liquidity to fund future capital needs and management uses this metric for this purpose. Adjusted EBITDA is not the actual cash provided by operating activities and is not a recognized measure of financial performance under IFRS. We calculate adjusted EBITDA as operating revenue, less salaries and benefits and other operating costs, as presented on the consolidated statement of income, and exclude restructuring and other charges, share based compensation and impairment of assets. Share based compensation is eliminated as it is a non-cash expense that fluctuates significantly from period to period, in particular for VerticalScope as a result of industry compensation practices.

Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. The exclusion of impairment of assets also eliminates the non-cash impact. Adjusted EBITDA is also used by investors and analysts for valuation purposes. The intent of adjusted EBITDA is to provide additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies (including calculating EBITDA on an adjusted basis to exclude restructuring and other charges, share based compensation and impairment of assets). Segmented adjusted EBITDA is calculated in the same manner described above, except that it is calculated using total segment results including our proportionately consolidated results for joint ventures and our 56% interest in VerticalScope for which management is accountable.

Operating earnings (loss)/Segmented operating earnings (loss)
Operating earnings (loss) is used by management to represent the results of ongoing operations inclusive of amortization and depreciation. Management uses operating earnings (loss) as a measure of the amount of income generated by our ongoing operations (or by a reporting unit or business segment) after giving effect to amortization and depreciation. Management believes this metric is also useful for investors for this purpose. We calculate operating earnings (loss) as operating revenue less salaries and benefits, other operating costs, share based compensation and amortization and depreciation. Operating earnings (loss) excludes restructuring and other charges and impairment of assets. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. Our method of calculating operating earnings (including calculating operating earnings (loss) on an adjusted basis to exclude restructuring and other charges and impairment of assets) may differ from other companies and accordingly may not be comparable to measures used by other companies. The intent of operating earnings (loss) is to provide additional useful information to investors, analysts and readers of Torstar's financial statements. The measure does not have any standardized meaning under IFRS, is not a recognized measure of financial performance under IFRS, and accordingly may not be comparable to measures used by other companies. Segmented operating earnings (loss) is calculated in the same manner described above, except that it is calculated using total segment results including proportionately consolidated operating earnings (loss) for our joint ventures and our 56% interest in VerticalScope for which management is accountable.

Adjusted earnings (loss) per share
Adjusted earnings (loss) per share is used by management to represent the per share earnings (loss) of results of our ongoing operations (or by a reporting unit or business segment) and is not a recognized measure of financial performance under IFRS. Management believes this metric is also useful for investors for this purpose. We calculate adjusted earnings (loss) per share as earnings (loss) per share from continuing operations less the per share effect of restructuring and other charges, impairment of assets, non-cash foreign exchange, other income (expense) and change in deferred taxes. Restructuring and other charges and impairment of assets are eliminated as these activities are not related to ongoing operations as of the end of the period. Non-cash foreign exchange, other income (expense) and changes in deferred taxes are eliminated as these are not related to ongoing operating activities. The intent of presenting adjusted earnings (loss) per share is to provide additional useful information to investors, analysts and readers of our financial statements. Our method of calculating adjusted earnings (loss) per share may differ from other companies and accordingly may not be comparable to measures used by other companies. The measure does not have any standardized meaning under IFRS, is not a recognized measure of financial performance under IFRS, and accordingly may not be comparable to measures used by other companies.

Operating profit (loss)/Segmented operating profit (loss)
Operating profit (loss) is an additional IFRS measure. Management uses operating profit (loss) to measure the results of operations inclusive of impairments and restructuring and other charges. Operating profit (loss) appears in our consolidated statement of income (loss). Management believes that operating profit (loss) provides additional useful information to investors, analysts and readers of our financial statements. The measure does not have any standardized meaning under IFRS and accordingly may not be comparable to measures used by other companies. Our method of calculating operating profit (loss) may differ from other companies and accordingly may not be comparable to measures used by other companies. Segmented operating profit (loss) is calculated in the same manner described above, except that it is calculated using total segment results including proportionately consolidated results for our joint ventures and our 56% interest in VerticalScope for which management is accountable.

Forward-looking statements
Certain statements in this press release and in Torstar's oral and written public communications may constitute forward-looking statements that reflect management's expectations regarding Torstar's future growth, financial performance and business prospects and opportunities as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "estimate", "intend", "would", "could", "if", "may" and similar expressions.

This press release includes, among others, forward-looking statements regarding expected earnings, growth at VerticalScope, cost reductions and net investment in Toronto Star Touch in the balance of 2016, expectations regarding estimated expenses related to the closure of the Vaughan printing facility, expectations regarding expected savings including savings from restructuring initiatives, Torstar's outlook for the balance of 2016, anticipated revenue trends and operating costs (including newsprint costs), expectations regarding expected savings including savings from restructuring initiatives, expected non-cash amortization charges, expectations regarding expenses and funding requirements related to Torstar's defined benefit pension plans, and anticipated capital expenditures in 2017. 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 press release. 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.

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 not to 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.

These factors include, but are not limited to: Torstar's ability to operate in highly competitive industries; Torstar's ability to compete with digital media, other newspapers and other forms of media; Torstar's ability to respond to the shift to digital media and the shift by advertisers to other digital platforms; Torstar's ability to attract, grow and retain its digital audience and profitably develop its digital platforms; Torstar's ability to attract and retain advertisers; Torstar's ability to maintain adequate circulation/subscription levels; Torstar's ability to attract and retain readers and traffic; Torstar's ability to integrate the technology associated with new digital platforms; general economic conditions and customer prospects in the principal markets in which Torstar operates; Torstar's ability to reduce costs; loss of reputation; dependence on third party suppliers and service providers; reliance on technology and information systems and risks of security breaches; changes in employee future benefit obligations; Torstar's ability to execute appropriate strategic growth initiatives including acquisitions; unexpected costs or liabilities related to acquisitions and dispositions; investments in other businesses; labour disruptions; newsprint costs; reliance on printing operations; litigation; privacy, anti-spam, communications, e-commerce and environmental laws, health and safety regulations and other laws and regulations applicable generally to Torstar's businesses; foreign exchange fluctuations and foreign operations; availability of insurance; dependence on key personnel; intellectual property rights; credit risk; availability of capital and restrictions imposed by credit facilities; income tax and other taxes; results of impairment tests and uncertainties associated with critical accounting estimates; holding company structure; dividend policy; and control of Torstar by the Voting Trust.

Torstar cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results.

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 economies; tax laws; continued availability of printing operations; availability of financing on appropriate terms; exchange rates; market competition; rates of return and discount rates relating to pension expense and pension plan obligations; expected future revenues; expected future liabilities; expected future cash flows and discount rates relating to valuation of goodwill and intangible assets; and successful development and launch of new products. There is a risk that some or all of these assumptions may prove to be incorrect. There is no assurance regarding the amount and timing of future dividends.

When relying on our forward-looking statements to make decisions with respect to Torstar and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Torstar 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 may be required by law.

For more information, please see the discussion of risks affecting Torstar and its businesses in Torstar's 2015 Management's Discussion & Analysis which has been filed on www.sedar.com and is available on Torstar's corporate website www.torstar.com.

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