TORSTAR - Management's Discussion and Analysis For the three and six months ended June 30, 2018 The following management’s discussion and analysis (“MD&A”) comments on the financial condition and results of operations of Torstar Corporation (“Torstar”, "we", "our" or the “Company") for the three and six months ended June 30, 2018 and updates the MD&A for the fiscal year ended December 31, 2017 (the "Annual MD&A"). The information contained herein should be read in conjunction with the annual audited consolidated financial statements of Torstar for the year ended December 31, 2017 (the “2017 Consolidated Financial Statements”) and the Annual MD&A which are set forth in the Company's Annual Report for such fiscal year and incorporated by reference in the Company's renewal Annual Information Form dated March 20, 2018. We report our financial results under International Financial Reporting Standards (“IFRS”) as set out in the CPA Canada Standards and Guidance Collection. All financial information contained in this MD&A and in the condensed consolidated financial statements for the three and six months ended June 30, 2018 (the "Condensed Consolidated Financial Statements") has been prepared in accordance with IFRS, except for certain “Non-IFRS Measures” as described in Section 11 of this MD&A. Per share amounts are calculated using the weighted average number of shares outstanding for the applicable period. In addition, during 2017, Torstar realigned its management structure and operating segments in order to better align its operations by type of publication. The Company now has three reportable operating segments: Community Brands ("Communities"), Daily Brands ("Dailies") and Digital Ventures. The comparative results for 2017 have been restated to reflect these and other classification changes. This MD&A is dated July 31, 2018 and all amounts are denominated in Canadian dollars, unless otherwise noted. Other than new accounting standards adopted effective January 1, 2018 and disclosed in Section 7 of the MD&A, the accounting policies applied in this interim MD&A are consistent with those disclosed in Note 2 to the annual consolidated financial statements for the year ended December 31, 2017. Additional information relating to Torstar, including the 2017 Consolidated Financial Statements, Annual Report and Annual Information Form, are available on Torstar’s website at www.torstar.com and on SEDAR at www.sedar.com. Forward-looking statements Certain statements in this MD&A 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, financial performance and business prospects and opportunities as of the date of this MD&A. 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 MD&A includes, among others, forward-looking statements regarding estimates and expectations regarding the expected net proceeds from the recent Workopolis transaction in Sections 1 and 2 of this MD&A, expectations regarding our transformation efforts in Section 2 of this MD&A, expectations relating to contingent liabilities in Section 3 of this MD&A, expected savings including savings from restructuring initiatives and other cost reductions in Sections 3, 4 and 5 of this MD&A, Torstar's outlook for 2018 including anticipated revenue trends within the Daily and Community Brands segments, the expected effects of the Postmedia transaction on Torstar’s earnings and revenue, anticipated revenue trends within the Digital Ventures segment, expected operating expenses and capital expenditures, expectations related to our transformation efforts, including efforts to obtain digital subscription revenues, and the proposed merger of our defined benefit pension plans with the CAAT jointly sponsored defined benefit pension plan (including the expected timing and benefits of the transaction, obtaining member and regulatory approvals and the satisfaction of other closing conditions) in Section 4 of this MD&A, expectations regarding cash flows and forecasted cash requirements and potential measures to increase liquidity in Section 5 of this MD&A, expectations regarding the costs, obligations, contributions, return on plan assets, discount rates, required funding, solvency liabilities and other expectations related to employee future benefit obligations and the impact of interim solvency relief measures in Section 6 of this MD&A, estimates and judgements in connection with critical accounting policies as described in Section 7 of this MD&A, expectations regarding recent accounting pronouncements in Section 8 of this MD&A, and expectations regarding risks and uncertainties in Section 12 of this MD&A. 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 MD&A. 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 MD&A 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: -the Company’s ability to operate in highly competitive changing industries; -the Company’s ability to compete with digital media, other newspapers and other forms of media; -the Company’s ability to respond to the shift to digital media and the shift by advertisers to other digital platforms; TORSTAR CORPORATION 2018 SECOND QUARTER REPORT 1 TORSTAR - Management's Discussion and Analysis -the Company’s ability to attract, grow and retain its digital audience and profitably develop its digital platforms; -the Company’s ability to attract and retain advertisers and customers; -the Company’s ability to build and maintain adequate circulation/subscription levels; -the Company’s ability to attract and retain readers and traffic; -the Company’s ability to integrate the technology associated with new digital platforms; -general economic conditions and customer prospects in the principal markets in which the Company operates; -the Company’s ability to reduce costs; -loss of reputation; -dependence on third party suppliers and service providers; -reliance on technology and information systems; -cybersecurity and risks of security breaches; -the Company’s ability to execute appropriate strategic growth initiatives including acquisitions; -changes in employee future benefit obligations; -unexpected costs or liabilities related to acquisitions and dispositions; -investments in other businesses; -reliance on printing operations; -labour disruptions; -newsprint costs; -privacy, anti-spam, communications, competition, e-commerce, data use and environmental laws, health and safety regulations and other laws and regulations applicable generally to the Company’s businesses; -litigation; -foreign exchange fluctuations and foreign operations; -dependence on key personnel; -availability of insurance; -intellectual property rights and other content risks; -credit risk; -availability of capital and restrictions imposed by credit facilities; -income tax and other taxes; -dividend policy; -controls over financial reporting, results of impairment tests and uncertainties associated with critical accounting estimates -holding company structure; -control of the Company by the Voting Trust; and -the ultimate outcome of the proposed transaction with CAAT, including the risk that the transaction may not close, and the ability to obtain member consents and regulatory approvals on a timely basis. Torstar cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect Torstar’s results. In addition, a number of assumptions, including those assumptions specifically identified throughout this MD&A, were applied in making the forward-looking statements set forth in this MD&A which the Company believes are reasonable as of the date of this MD&A. 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 conditions and competition; rates of return and discount rates relating to pension expense and pension plan obligations; discount rates and trends in healthcare costs relating