TORSTAR - Management's Discussion and Analysis For the three and six months ended June 30, 2017 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, 2017 and updates the MD&A for the fiscal year ended December 31, 2016 (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, 2016 (the “2016 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 21, 2017. 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, 2017 (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 2016, we reclassified the manner in which certain items are categorized including the exclusion of share based compensation from our definition of adjusted EBITDA. The results for the second quarter of 2016 have been restated on a comparative basis to reflect these changes. This MD&A is dated August 1, 2017 and all amounts are denominated in Canadian dollars, unless otherwise noted. 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, 2016. Additional information relating to Torstar, including the 2016 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 relating to contingent liabilities in Section 3 of this MD&A, expected savings including savings from restructuring initiatives in Sections 3 and 4 of this MD&A, Torstar's outlook for 2017 including anticipated revenue trends, expected costs relating to the Toronto Star's new universal app and anticipated funding requirements in respect of our defined benefit pension plans in Section 4 of this MD&A, expectations regarding cash flows and forecasted cash requirements, and the impact of the Ontario Government's planned new pension funding framework 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 potential impact of the Ontario Government's planned new pension funding framework 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 the impact of 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 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; -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; -the Company’s ability to 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; TORSTAR CORPORATION 2017 SECOND QUARTER REPORT 1 TORSTAR - Management's Discussion and Analysis -the Company’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; -the Company’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; -reliance on printing operations; -newsprint costs; -litigation; -privacy, anti-spam, communications, e-commerce and environmental laws, health and safety regulations and other laws and regulations applicable generally to the Company’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; -dividend policy; -results of impairment tests and uncertainties associated with critical accounting estimates -holding company structure; and -control of the Company by the Voting Trust. 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 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 the Company and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company 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. TORSTAR CORPORATION 2017 SECOND QUARTER REPORT 2 TORSTAR - Management's Discussion and Analysis Management’s Discussion and Analysis – Contents Section Page Overview 4 1 A summary of our business Highlights 2 5 Highlights for the second quarter of 2017 compared to the second quarter of 2016 Operating Results 3 6 A discussion of our operating results for the three and six months ended June 30, 2017 Outlook 13 4 The outlook for our business