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## MANAGEMENT’S DISCUSSION & ANALYSIS DISCUSSION AND ANALYSIS 

Selected financial information for the Newspaper Segment for the fourth quarter (in $000’s): 

<img src='content_image/14432.jpg'>

Advertising revenues at the Toronto Star were up slightly in the fourth quarter as a 10.2% increase in the effective line rate offset a 9.2% decrease in linage. National advertising rose 3.6% but declines were experienced in each of retail, travel and classified, down 9.9%, 7.4% and 13.5% respectively Automotive advertising was down 12.8% (mostly classified) and employment advertising declined 6.4%. On-line advertising revenues at thestar .com and workopolis.com were up $0.6 million in the fourth quarter Circulation revenues were up slightly in the quarter excluding the $8.1 million impact from the change in accounting. 

Lower newsprint consumption offset partially by higher pricing reduced the Toronto Star’s paper costs by $1 .2 million in the fourth quarter Labour costs were down $1.0 million as lower pension and long-term disability costs more than offset general wage increases. Other costs were down $1.6 million due primarily to reduced promotional activities in the fourth quarter. 

Metroland’s revenues were up $21.8 million in the fourth quarter including $2.5 million from acquisitions. Advertising linage at the community newspapers was up 13.2% in the quarter, slightly offset by a 1.3% decrease in the effective line rate. Distribution revenue was up $4.8 million or 22.3% in the fourth quarter as over 700 million pieces were delivered. A portion of the increase is timing resulting from an extra Friday (which is the largest distribution day) in December 2004. This impact will reverse in the first quarter of 2005. Sing Tao and Metro had strong fourth quarters and contributed a combined $1.5 million of additional advertising revenue. 

Metroland’s costs were up in the quarter, reflecting the increased costs related to the revenue growth from product and geographic expansion. Depreciation expense was $0.4 million higher in the fourth quarter of 2004 due to the new press that came on-line during the second quarter of 2004. 

