REVENUE BY GEOGRAPHY NON-CANADIAN 34% CANADIAN 66% OPERATING EBITDA HARLEQUIN 37% DAILIES 35% COMMUNITY NEWSPAPERS 28% REVENUE BY BUSINESS HARLEQUIN 35% DAILIES 40% COMMUNITY  NEWSPAPERS 24% OTHER 1% governance, a heavily invested controlling shareholder group with a long-term perspective, and a long record of delivering superior returns for our shareholders. Our challenge is to build on this legacy.  Our strong businesses allowed us to further strengthen our balance sheet and increase our dividend for the third year in a row (with a cumulative increase of 28 per cent). We are very well positioned to take advantage of opportunities for growth whether by acquisition or investments in new opportunities. We have the financial strength necessary to launch new newspapers to expand our community newspaper franchise as we did in Niagara, and to expand our free daily franchise led by Metro into new regions of Canada. We will continue to invest to build long-term value: buying good properties when they are available at reasonable prices; building new properties when good opportunities arise; investing in our core businesses; innovating with new products and services and entering new geographic areas; and building new capabilities to adapt to the rapidly changing media environment. We will not limit ourselves to any one approach but will use all of them. And we will continue to operate all our businesses with the goal of outstanding performance. This has been our record for more than a century and we plan to extend it for many years to come. 2004 was also a year of transition for Torstar with three major personnel changes. Early in the year, Michael Goldbloom succeeded John Honderich as Publisher of the Toronto Star. After a seamless transition, Michael has provided outstanding leadership in his first year as Publisher, delivering strong financial results and recruiting Giles Gherson to lead the newsroom as Editor-in-Chief. Together they make a very strong team. Later in the year, our Executive Vice-President and Chief Financial Officer, Bob Steacy, announced his intention to retire at the Annual General Meeting. Bob has served Torstar with great distinction for over a quarter of a century, the last 17 years as CFO.  J. Robert S. Prichard President and Chief Executive Officer thank all of the nearly 7,000 employees at Torstar for the fine work they do. We all thank our Board of Directors for their leadership and counsel and we thank you, our shareholders, for vesting your confidence in us. We will continue to do all we can to vindicate it. To work at Torstar is to be part of a worthy company and an important cause. We began as a single great newspaper, the Toronto Star, and, from the beginning, we have always been more than just a good business. That tradition continues with our commitments: a commitment to the Atkinson Principles of the Toronto Star; a commitment to editorial excellence in all we publish; a commitment to serve and support our communities; and a commitment to make Torstar a great place to work. W e remain resolute in all these commitments. As is noted elsewhere in this report, Dr. John Evans is also retiring after 21 years on the Board of Directors including 11 years as Chairman. All of us at Torstar have felt privileged to serve with Dr. Evans as he has been a remarkably effective Chairman. Our sense of loss with his departure is mitigated by the prospect of welcoming The Hon. Frank Iacobucci as our new Chairman. Like Dr. Evans, he is a Canadian of the first rank who has led a life of accomplishment, service and leadership. He will continue Torstar’s commitment to exemplary corporate governance. It is testimony to Bob’s leadership of our financial functions that he had a superbly trained and experienced successor within the company . David Holland, who was most recently CFO at Harlequin and has previously been CFO of our newspaper group and Director of Finance at the corporate centre, will assume Bob’s position on May 4, 2005. He will continue our tradition of strong financial leadership focused on delivering superior long- term shareholder value and returns. REVENUE BY SOURCE BOOKS 35% CIRCULATION 8% ADVERTISING 51% COMMERCIAL  PRINTING AND OTHER 6% 5 TORSTAR 2004