2004 2003 Operating revenue Newspapers $1,003,473 $903,385 Book publishing 538,376 584,924 $1,541,849 $1,488,309 Operating profit Newspapers $127,601 $110,116 Book publishing 97,182 124,121 Corporate (15,555) (14,166) 209,228 220,071 Interest (note 6(f)) (10,916) (12,806) Foreign exchange (1,723) (4,011) Unusual items (note 14) (12,282) (673) Income before taxes 184,307 202,581 Income and other taxes (note 10) (72,100) (79,200) Income before income of associated businesses 112,207 123,381 Income of associated businesses 496 134 Net income $112,703 $123,515 Earnings per Class A and Class B share (note 8(d)) Net income – Basic $1.42 $1.59 Net income – Diluted $1.41 $1.57 2004 2003 Retained earnings, beginning of year $395,758 $321,992 Net income 112,703 123,515 Dividends (55,387) (49,749) Premium paid on repurchase of shares for cancellation (note 8(d)) (27,287) Retained earnings, end of year $425,787 $395,758 (See accompanying notes) (See accompanying notes) CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF RETAINED EARNINGS 45 TORSTAR 2004 MANAGEMENT’S TORSTAR CORPORATION YEARS ENDED DECEMBER 31, 2004 AND 2003 (thousands of dollars) YEARS ENDED DECEMBER 31, 2004 AND 2003 (thousands of dollars)