CORPORATE OFFICEONE YONGE STREETTORONTO, ONTARIO M5E 1P9(416) 869-4010http:/www.torstar.com

SHARES LISTEDTORSTAR CLASS B SHARES ARE TRADED ONTHE TORONTO STOCK EXCHANGE UNDER THE SYMBOL TS.B

TRANSFER AGENT AND REGISTRARCIBC MELLON TRUST COMPANY

AUDITORSERNST & YOUNG LLP, TORONTO

June 30, 2003

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Certain statements in this report may constitute forward-looking statements. Such forward-

looking statements involve risks, uncertainties and other factors which may cause actual

results, performance or achievements of the company to be materially different from any

future results, performance or achievements expressed or implied by such forward-looking

statements

CONSOLIDATED OPERATING RESULTSNet income for the second quarter was $38.3 million, up $3.2 million from $35.1million in 2002. Earnings per share increased 9% in the quarter from $0.46 in2002 to $0.50 in 2003.

“We had a good quarter”, said Robert Prichard, Torstar’s President and ChiefExecutive Officer. “Harlequin produced excellent growth and is well on its way to arecord year. Metroland is on budget and on track for another record year. TheRegional newspaper group is ahead of plan with strong revenue and profit growth.Our only softness was at the Toronto Star as the impact of SARS on the Torontoeconomy hurt linage in key advertising categories. However, the Toronto Star ispositioned to benefit from its strong line rate strategy in the second half of theyear as the economy recovers from the impact of SARS.”

Consolidated revenues grew 3% in the quarter and 4% year to date. TheNewspaper segment’s revenues were up 4.5% in the quarter and year to date dueto strong revenue growth in the Community and Regional newspapers. In BookPublishing, unit sales were up but the strengthening of the Canadian dollar relativeto the U.S. dollar resulted in revenues being flat in the quarter and up 2% year todate.

Operating profit of $59.8 million was 4% or $2.4 million higher than the $57.4million reported in the second quarter of 2002. Book Publishing profits were up$4.1 million due to strong North American retail sales. Newspaper profits weredown $1.0 million due to higher newsprint, labour and pension costs.

Year to date, operating profit of $101.8 million was up $4.7 million from $97.1million in 2002. Book Publishing profits were up $6.1 million year to date.Newspaper profits were flat for the first six months year over year while corporateexpenses increased $1.0 million. Most of this increase arose from the expenserelated to new cash based compensation plans which replaced stock optionsgranted to directors and reduced the number of stock options granted to seniormanagement.

Torstar incurred a $2.8 million non-cash foreign exchange loss on the translation ofits net U.S. dollar asset position in the second quarter, bringing the year to dateloss to $4.0 million. This foreign exchange loss arose from the unprecedented17% strengthening of the Canadian dollar relative to the U.S. dollar during the firsthalf of 2003. Although Torstar has U.S. dollar denominated debt providing a hedgeagainst its U.S. dollar assets, the offset is not exact as the U.S. dollar assets areprimarily working capital and therefore fluctuate daily.

During the second quarter, Torstar reported unusual gains of $5.0 million. This wasthe net of a gain of $5.8 million realized on a sale of community newspapersincluding Napanee, Barry’s Bay and Kingston to Osprey Media Group Inc. and aprovision of $0.8 million for restructuring of existing newspaper operations. Year todate, Torstar has reported unusual gains of $7.1 million which also includes the

Interim Management Discussion & Analysis

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net gain of $6.3 million realized on the sale of an investment in Miles KimballCompany, $2.9 million of write-downs on the remaining interactive portfolio, and a$1.3 million provision for costs arising from a realignment of distribution andfinance functions in the daily newspaper group that was made in the first quarter.

On an earnings per share basis, the impact of the foreign exchange loss on thetranslation of the balance sheet offsets almost exactly the unusual gains for boththe quarter and year to date.

Year to date, net income was $63.4 million, up $5.0 million from $58.4 million in2002. Earnings per share, year to date, were up 6% from $0.77 in 2002 to $0.82in 2003.

On June 6, 2003, Torstar announced that it had purchased the Brabant andFairway weekly newspaper groups, the Orangeville Banner and the printingoperations of the Hamilton Printing Group from Osprey Media Group Inc. TheBrabant and Fairway groups include nine weekly papers and three otherpublications located in the Hamilton and Kitchener areas. These publications andthe Hamilton Printing Group will be managed by the Regional newspaper group andreported with the daily newspaper results. The Orangeville Banner will be managedby and reported with Metroland’s community newspapers.

Also in the second quarter, Torstar acquired the remaining 49% of Transit TelevisionNetwork.

Subsequent to the end of the quarter, Torstar announced that it had signed a letterof intent to purchase the outdoor advertising business assets of Olifas MarketingGroup Inc. (“OMG Media”).

NEWSPAPERSNewspaper revenues were $234.1 million in the second quarter, up $10.0 millionfrom $224.1 million in 2002. Year to date revenues were $437.4 million, up$18.6 million from $418.7 million in 2002. This 4.5% increase in the quarter andyear to date came from strong advertising and distribution results in theCommunity and Regional newspapers along with increased commercial printingrevenues at all of the newspapers.

Metroland’s community newspapers’ ROP linage was up 5.6% over the secondquarter of 2002 and up 5.5% year to date. Local advertising continued to growduring the second quarter with real estate linage up almost 19%. The commuternewspaper, Metro continued to show significant revenue growth with revenues up62% for the quarter and 54% year to date from the same periods in 2002.Distribution revenues were up 8% in the quarter and 9% year to date fromincreased volumes.

The Daily newspapers showed revenue gains of 2% in the quarter from strongadvertising and commercial printing performance by the Regional newspapers,including the recently acquired Brabant newspapers. The Toronto Star’s advertisingrevenues were flat year over year in the second quarter as the SARS outbreakcontinued to impact key advertising categories. In total, the Toronto Star’s linagewas off 4.6% in the second quarter with travel and employment linage down 24and 26 percent respectively. Year to date, the Toronto Star’s linage was down3.6% with travel and employment linage both down 21%. Offsetting the linage

Interim Management Discussion & Analysis

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declines was the impact of the Toronto Star’s strong line rate strategy (up 5.6% inthe quarter and 4.3% year to date). The Hamilton Spectator’s advertising linagewas up 5.3% in the quarter and 4.4% year to date. At the Grand River Valley,newspapers advertising revenues increased 9% over the second quarter and firstsix months of 2002 with both The Record and The Guelph Mercury showingimprovement. Circulation revenues were constant in the second quarter and yearto date across the daily newspaper group.

Newsprint costs were up $4.3 million in the quarter for the newspaper segment.Increases in newsprint prices of 11% in the second quarter were only partiallyoffset by reduced consumption. Labour costs were up $1.6 million in the quarterfor the Daily newspapers as higher pension costs offset savings from lower staffcounts. At the Community newspapers, labour costs were up $2.4 million due toincreased wages and higher sales commissions, both related to the growth inrevenue. Other costs, including those related to the startup of Transit TelevisionNetwork, were up $2.8 million in the second quarter.

The newspaper segment’s operating profit before depreciation and amortization(“EBITDA” – see note 9) was $46.6 million in the quarter, down $1.2 million fromthe second quarter in 2002. The Community newspapers had EBITDA of $21.4million, up $0.4 million from $21.0 million in 2002. The Daily newspapers’ EBITDAwas down $1.3 million in the second quarter. The Regional Dailies were up $1.6million, while the Toronto Star was down $2.9 million. Other newspaper operations’EBITDA, including ShopTV and Transit Television Network, was down $0.3 million inthe quarter, reflecting the increased ownership of Transit Television Network.

Year to date, the newspaper segment’s EBITDA was $73.8 million, down $1.3million from $75.1 million in the first six months of 2002.

The newspaper segment will face increased newsprint and higher labour costs,particularly pension costs, in the second half of 2003. The impact of these costincreases on operating profit will depend on the level of revenue growth that canbe attained. The Toronto advertising market continues to be challenging and whilethe Toronto Star continues to hold its position in the market, any significantincrease in results is dependent on an improvement in the Toronto economy. TheCommunity and Regional newspapers are dependent on the Southern Ontarioeconomy, but not as closely tied to Toronto. As such, their revenue growth shouldbe maintained in the second half of the year.

BOOK PUBLISHINGHarlequin’s Women’s Fiction revenue, excluding the impact of foreign exchange,rose 5.5% in the second quarter and year to date. Net unit sales were up 2% inthe quarter and 1.3% for the first six months of 2003. However, lower Creativitydivision sales and a strong Canadian dollar offset these revenue increases. TotalBook Publishing revenues were flat in the quarter at $145 million and up 2.3% to$295 million year to date.

EBITDA grew 16% to $31.1 million in the quarter, up $4.3 million from $26.8million in 2002. North American results were up $4.1 million while Overseas wasdown $1.2 million. A strong Euro and the gain from the U.S. dollar earnings hedgecontributed $1.4 million to the second quarter EBITDA gain.

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Interim Management Discussion & Analysis

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The North America Retail single title business continued its strong performancethrough the second quarter of 2003. More single titles were published in thesecond quarter of 2003, contributing to higher gross and net units. The NorthAmerica Direct-To-Consumer division continues to be challenged by lower volumes.In the second quarter of 2003 operating profit was flat to 2002 as lower volumeswere offset by higher revenues from a price increase in mid 2002 and lowerInternet costs.

Overseas operations produced mixed results in the second quarter of 2003 asseveral of these markets continue to face challenges. The U.K. and Japan continueto experience declining unit sales, while the Latin American economy is having anegative impact on the Spanish market results.

Year to date, EBITDA was $62.8 million, up $6.5 million or 12%, from $56.3million in the first six months of 2002. North American results were up $6.1million, Overseas was down $2.4 million and positive foreign exchange contributed$2.8 million

ASSOCIATED BUSINESSIn the second quarter of 2003, Torstar reported income from associated businessof $0.2 million from its equity investment in Black Press Ltd. Torstar made a19.35% equity investment in Black Press Ltd. in the fourth quarter of 2002.

INTEREST EXPENSEInterest expense was $3.3 million in the second quarter, consistent with thesecond quarter of 2002. Year to date, interest expense was $6.3 million, $0.4million lower than the $6.7 million in the first six months of 2002. Net debt at theend of the second quarter was $396 million compared with $456 million at June30, 2002.

LIQUIDITY AND CAPITAL RESOURCESCash and cash equivalents, net of bank overdraft, increased by $1.2 million duringthe second quarter to $36.2 million compared with a decrease of $6.0 million inthe second quarter of 2002.

Operating activities Cash provided by operating activities in the second quarter of2003 was $32.4 million compared with $55.1 million in 2002. This decreasereflected an increase in non-cash working capital in 2003 of $21.3 million relatedto higher receivables from increased revenues and the timing of payments,including author royalties. For the six months year to date, cash of $67.4 millionwas provided by operating activities, compared with $62.6 million for the sameperiod last year.

Investing activities Cash of $44.0 million was used by investing activities during thesecond quarter of 2003. $41.3 million was used for acquisitions during thequarter, primarily for the acquisition of the newspaper and printing operations fromOsprey Media Group Inc. Additions to property, plant and equipment were $18.3million of which, $10.3 million related to Metroland’s new printing press. Cash of$15.6 million was received during the quarter from the sale of communitynewspapers and the collection of the proceeds from the sale of Miles KimballCompany that occurred in the first quarter. In the second quarter of 2002, $9.9million was used for additions to property, plant and equipment.

Interim Management Discussion & Analysis

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Financing activities Cash of $13.7 million was provided by financing activitiesduring the second quarter, compared with a use of cash of $51.3 million in 2002.This change reflected net borrowing of $13.3 million in the second quarter of2003 versus the repayment of $48.4 million of long-term debt in the secondquarter of 2002. Dividends of $12.4 million were paid in the quarter, up $1.4million from 2002 reflecting the increased dividend rate. Cash of $12.0 millionwas provided from the exercise of stock options during the second quarter. Year todate, financing activities have used $6.4 million of cash compared with $87.9million in the same period in 2002. This difference reflects the significantrepayments of long-term debt that were made in 2002.

At June 30, 2003, the company had cash and cash equivalents net of bankoverdraft of $36.2 million and unused credit facilities of $200 million. Cashbalances, operating cash flow, existing credit facilities and the borrowing capacityof the company are considered to be adequate to cover forecasted financingrequirements.

On behalf of the Board

John R. Evans J. Robert S. PrichardChairman President & Chief Executive OfficerToronto, Canada, July 30, 2003.

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Interim Management Discussion & Analysis

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(thousands of dollars) 2003 2002 2003 2002

Operating revenue

Newspapers $234,083 $224,053 $437,365 $418,747

Book publishing 145,173 144,879 295,064 288,431

$379,256 $368,932 $732,429 $707,178

Operating profit (loss)

Newspapers $34,549 $35,472 $50,020 $50,484

Book publishing 29,159 25,066 59,056 52,928

Corporate (3,863) (3,168) (7,264) (6,274)

59,845 57,370 101,812 97,138

Interest (3,286) (3,445) (6,284) (6,737)

Exchange (loss) gain (2,752) 869 (3,974) 823

Unusual items (note 8) 5,049 7,115

Income before taxes 58,856 54,794 98,669 91,224

Income and other taxes (20,700) (19,700) (35,000) (32,800)

Income before income (loss) of associated business 38,156 35,094 63,669 58,424

Income (loss) of associated business 174 (224)

Net income $38,330 $35,094 $63,445 $58,424

Earnings per Class A and Class B share (note 3(b)):

Net income - Basic $0.50 $0.46 $0.82 $0.77

Net income - Diluted $0.49 $0.45 $0.81 $0.76

For additional business segment information see note 9.

(See accompanying notes)

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Torstar Corporation Consolidated Statements of Income

(unaudited)

Six months ended

June 30

(unaudited)

Three months ended

June 30

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Torstar Corporation Consolidated Balance Sheets

(unaudited) (audited)

June 30 December 31

(thousands of dollars) 2003 2002AssetsCurrent:

Cash and cash equivalents $38,764 $39,966Receivables 232,836 251,374Inventories 38,592 43,607 Prepaid expenses 74,339 77,537Prepaid and recoverable income taxes 6,022 5,474 Future income tax assets 22,897 26,210

Total current assets 413,450 444,168

Property, plant and equipment (net) 402,054 391,521 Investment in associated business 21,009 21,233 Goodwill (net) 444,265 446,903 Other assets (note 7) 119,577 91,118 Future income tax assets 71,778 85,778

Total assets $1,472,133 $1,480,721

Liabilities and Shareholders’ EquityCurrent:

Bank overdraft $2,577 $2,432 Accounts payable and accrued liabilities 187,930 224,046 Income taxes payable 23,729 30,081

Total current liabilities 214,236 256,559

Long-term debt (note 2) 432,192 448,390

Other liabilities 83,696 81,277

Future income tax liabilities 49,489 50,989

Shareholders’ equity:Share capital (note 3) 335,301 317,690 Retained earnings 360,710 321,992 Foreign currency translation adjustment (3,491) 3,824

Total shareholders’ equity 692,520 643,506

Total liabilities and shareholders’ equity $1,472,133 $1,480,721

(See accompanying notes)

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(thousands of dollars) 2003 2002 2003 2002

Cash was provided by (used in)Operating activities $32,350 $55,078 $67,386 $62,621

Investing activities (44,039) (9,926) (60,192) (17,277)

Financing activities 13,747 (51,315) (6,437) (87,936)

Increase (decrease) in cash 2,058 (6,163) 757 (42,592)

Effect of exchange rate changes (885) 180 (2,104) (88)

Cash, beginning of period 35,014 26,157 37,534 62,854

Cash, end of period $36,187 $20,174 $36,187 $20,174

Operating activities:

Net income $38,330 $35,094 $63,445 $58,424

Depreciation 13,447 13,580 26,425 27,050

Amortization 579 532 1,142 1,063

Future income taxes 1,600 3,200 3,400 7,100

(Income) loss of associated business (174) 224

Other (147) (468) (1,054) 838

Operating cash flow 53,635 51,938 93,582 94,475

(Increase) decrease in non-cash working capital (21,285) 3,140 (26,196) (31,854)

Cash provided by operating activities $32,350 $55,078 $67,386 $62,621

Investing activities:

Acquisitions (note 7) ($41,285) ($2) ($41,285) ($382)

Additions to property, plant and equipment (18,321) (9,931) (34,073) (16,853)

Proceeds on sale of businesses (note 8) 15,602 15,602

Other (35) 7 (436) (42)

Cash used in investing activities ($44,039) ($9,926) ($60,192) ($17,277)

Financing activities:

Repayment of long-term debt ($53,716) ($10,976) ($88,150)

Issuance of long-term debt $13,260 5,261 13,260 5,261

Dividends paid (12,380) (10,978) (24,626) (21,451)

Exercise of stock options (note 3) 12,028 7,361 14,235 14,909

Other 839 757 1,670 1,495

Cash provided by (used in) financing activities $13,747 ($51,315) ($6,437) ($87,936)

Cash represented by:

Cash and cash equivalents $38,764 $32,686 $38,764 $32,686

Bank overdraft (2,577) (12,512) (2,577) (12,512)

$36,187 $20,174 $36,187 $20,174

(See accompanying notes)

Torstar Corporation Consolidated Statements of Cash Flows

(unaudited)

Six months ended

June 30

(unaudited)

Three months ended

June 30

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Torstar CorporationConsolidated Statements Of Retained Earnings(unaudited)

(thousands of dollars) 2003 2002Retained earnings, beginning of period $321,992 $240,975Net income 63,445 58,424Dividends (24,727) (22,068)

Retained earnings, end of period $360,710 $277,331

(See accompanying notes)

1. Accounting policiesThe accounting policies used in the preparation of these unaudited interim consolidatedfinancial statements conform with those presented in Torstar Corporation’s December 31,2002 audited annual consolidated financial statements. These interim financial statementsdo not include all of the disclosures included in the annual consolidated financial statementsand accordingly should be read in conjunction with the annual consolidated financialstatements.

2. Long-term debtAs at December 31

2003 2002Commercial paper:

Cdn. Dollar denominated $151,935 $133,481U.S. Dollar denominated 60,204 48,178

212,139 181,659Medium Term Notes:

Cdn. dollar denominated 150,000 185,000U.S. dollar denominated 70,053 81,731

220,053 266,731$432,192 $448,390

All commercial paper and medium term notes with a term of less than one year have beenclassified as long-term debt as the company has the ability to refinance these amounts underits existing credit facilities.

The fair values of the various long-term debt instruments exceed their related carrying valuesby $3.5 million at June 30, 2003. The fair value of the interest rate component in thecompany’s swap agreements was $1.7 million favourable at June 30, 2003.

In the quarter, the company has entered into a U.S. interest rate swap arrangement that willfix the interest rate on U.S. $80 million of borrowings at 3.5% for four years beginningDecember 2003.

Torstar Corporation Notes to the InterimConsolidated Financial Statements(Dollar amounts in thousands unless otherwise stated)

Six months ended June 30

As at June 30

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s

1

er

3. Share Capitala) A summary of changes to the company’s share capital is as follows:Class A shares (voting)At June 30, 2003 there were 9,930,145 Class A shares outstanding with a stated value of$2,698. The only changes in the Class A shares since December 31, 2002 were theconversion to Class B shares of 18,690 shares with a stated value of $5.

Class B shares (non-voting) Shares Amount

December 31, 2002 66,827,434 $314,987Converted from Class A 18,690 5Issued under Employee Share Purchase Plan 176,579 3,262Share options exercised 828,092 14,235Stock dividends issued 4,063 101Other 552 13June 30, 2003 67,855,410 $332,603

Total Class A and Class B shares 77,785,555 $335,301

b) Earnings per shareBasic per share amounts have been determined by dividing net income by the weightedaverage number of shares outstanding during the period. Diluted per share amounts havetaken into consideration the dilutive effect of stock options and the employee share purchaseplan. The weighted average number of Class A and Class B shares outstanding (inthousands) were:

Three months ended June 30 Six months ended June 30

2003 2002 2003 2002Basic 77,401 75,364 77,123 75,958Diluted 78,649 77,696 78,267 77,070

During the six months ended June 30, 2003, no Class B shares were issued to or sold bycontrolling shareholders.

4. Stock-based compensationThe company has two stock-based compensation plans for employees: an executive shareoption plan and an employee share purchase plan. A summary of changes in the executive share option plan is as follows:

Shares Weighted average exercise price

December 31, 2002 6,446,817 $19.91Granted 620,625 25.50Exercised (828,092) (17.19)Cancelled (41,375) (21.49)June 30, 2003 6,197,975 $20.82

Options exercisable at June 30, 2003 are as follows: Range of exercise price Number exercisable Weighted average exercise price$10.19-11.50 27,900 $11.03$15.75-18.05 1,397,500 $17.10$18.50-22.20 1,185,781 $20.80$25.00-26.75 683,000 $25.05$10.19-26.75 3,294,181 $20.03

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Had compensation cost for the company’s stock-based compensation plans been determinedbased on the fair value method of accounting for stock-based compensation, the company’snet income and earnings per share would have been reduced to the pro forma amountsindicated below:

Three months Six months

ended June 30 ended June 30

2003 2002 2003 2002Net income - As reported $38,330 $35,094 $63,445 $58,424

- Pro forma $37,465 $34,648 $61,916 $57,534Earnings per share – Basic - As reported $0.50 $0.46 $0.82 $0.77

- Pro forma $0.48 $0.45 $0.80 $0.76Earnings per share – Diluted - As reported $0.49 $0.45 $0.81 $0.76

- Pro forma $0.48 $0.45 $0.79 $0.75

The fair value of the executive stock options granted in 2003 and 2002 was $5.28 and$4.98 respectively and was estimated at the date of grant using the Black Scholes optionpricing model with the following assumptions:

2003 2002Risk free interest rate 4.1% 4.7%Expected dividend yield 2.5% 2.6%Expected volatility 23.2% 24.7%Expected time until exercise 5 yrs. 5 yrs.

With respect to the Employee Share Purchase Plan, the fair value of the plan is estimatedeach period based on the excess of the current stock price over the opening price, inaccordance with the terms that would apply if the plan had currently matured. The fair valueestimate is adjusted to actual in the year the specific plan matures.

5. Deferred Share Unit PlanIn the second quarter of 2003 the company received approval from the Canada Customs andRevenue Agency for the company to adopt a Deferred Share Unit (DSU) Plan for executiveswhereby an executive may elect to receive certain cash incentive compensation in the form ofDSUs. A DSU is equal in value to one Class B non-voting share of the company. The unitsare issued on the basis of the closing sale price per share of Torstar Class B non-votingshares on the Toronto Stock Exchange on the date of issue. The units also accrue dividendequivalents payable in additional units in an amount equal to dividends paid on Torstar ClassB non-voting shares. DSUs mature upon termination of employment, whereupon anexecutive is entitled to receive the fair market value of the equivalent number of Class B non-voting shares, net of withholdings, in cash.

The company has also adopted a DSU Plan for non-employee directors. Each non-employeedirector receives an award of DSUs as part of his or her annual Board retainer. In addition, anon-employee director holding less than 8,000 Class B non-voting shares, Class A votingshares, DSUs, or a combination thereof of the company receives the cash portion of his orher annual Board retainer in the form of DSUs. Any non-employee director may elect toparticipate in the DSU Plan in respect of part or all of his or her retainer and attendancefees. The terms of the director DSU Plan are substantially the same as the executive DSUPlan.

The company records the cost of the DSU Plans as compensation expense. As at June 30,2003, 9,987 units were outstanding at a value of $0.3 million.

6. Forward Foreign Exchange Contracts and OptionsAs described in Note 13 of the company’s December 31, 2002 annual financial statements,the company has entered into various forward foreign exchange contracts and optioncontracts.

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During the second quarter of 2003, the company has entered into forward foreign exchangecontracts which will establish a rate of exchange of Canadian Dollar per Euro of $1.65 for 6 million Euro for 2004, $1.67 for 6 million Euro for 2005 and $1.68 for 4 million Euro for2006.

7. AcquisitionsOn June 6, 2003 the company acquired, for $40.5 million, the assets of the Brabant andFairway weekly newspaper groups, the printing operations of the Hamilton Printing Group andthe Orangeville Banner. The final allocation of the purchase price was not completed as atthe end of the second quarter and $35.5 million related to intangible assets has beenincluded in Other Assets.

Also in the second quarter, the company acquired the remaining 49% of Transit TelevisionNetwork for $0.8 million plus a contingent purchase price based on future operating results.

The purchases are accounted for by the purchase method.

8. Unusual itemsFor the six months ended June 30, 2003, the company has recognized an unusual gain of$7.1 million. This includes a gain of $5.8 million from the second quarter sale of eight ofMetroland’s weekly newspapers and a gain of $6.3 million realized on the sale of aninvestment in Miles Kimball Company. The company also recorded a $2.9 million write-downof its remaining investment portfolio and a $2.1 million provision ($0.8 million in the secondquarter) for restructuring charges in the Newspaper group.

The consolidated statement of Cash Flows reflects in investing activities for the secondquarter of 2003, $15.6 million of proceeds from the sale of Metroland’s newspapers and theMiles Kimball investment noted above ($9.3 million and $6.3 million, respectively). Theproceeds from the first quarter sale of Miles Kimball were received early in the secondquarter. Operating cash flow and non-cash working capital for the first quarter have beenrestated to be consistent with the presentation for the six month period ended June 30,2003.

9. Additional business segment informationThe company reports its financial results under Canadian generally accepted accountingprinciples (“GAAP”). However, management believes that many of the company’sshareholders, creditors, other stakeholders and analysts prefer to assess the company’sperformance using earnings before interest, taxes, depreciation and amortization (“EBITDA”)in addition to the GAAP measures. The company’s method of calculating EBITDA may differfrom other companies and accordingly, may not be comparable to measures used by othercompanies. Business segment EBITDA, calculated as operating profit before depreciationand amortization, is as follows:

Three months ended June 30 Six months ended June 30

2003 2002 2003 2002Newspapers $ 46,622 $ 47,864 $ 73,829 $75,137Book publishing 31,082 26,760 62,755 56,336Corporate (3,833) (3,142) (7,205) (6,222)

$73,871 $71,482 $129,379 $125,251

f

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CORPORATE OFFICEONE YONGE STREETTORONTO, ONTARIO M5E 1P9(416) 869-4010http:/www.torstar.com

SHARES LISTEDTORSTAR CLASS B SHARES ARE TRADED ONTHE TORONTO STOCK EXCHANGE UNDER THE SYMBOL TS.B

TRANSFER AGENT AND REGISTRARCIBC MELLON TRUST COMPANY

AUDITORSERNST & YOUNG LLP, TORONTO

June 30, 2003

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