Annual Results for 52 weeks ended 29 December 2013

RNS Number : 1856C

Trinity Mirror PLC

13 March 2014

Trinity Mirror plc

13 March 2014

Annual Results Announcement

for the 52 weeks ended 29 December 2013

Key Highlights

· Profit before tax ⁽¹⁾ up 2.6% to £101.3 million

Tight cost management and reduced interest charges on lower debt supported profit growth despite revenue falling by 6.0% to £663.8 million. Clear improvement in revenue trends as the year progressed.

· EPS ⁽¹⁾ growth of 7.0% to 32.0 pence

Driven by increased profit before tax and a fall in the adjusted tax rate.

· Strong cash flows drive further reduction in net debt ⁽²⁾ of £45.8 million

Net debt reduced to £97.0 million after investing £14.2 million in Local World and bringing forward £9.1 million of pension funding payments due in 2014. On track to repay £44.2 million of maturing debt in June 2014 substantially from cash flow.

· Strong growth in digital audience and digital display advertising revenue

Average monthly unique users ⁽³⁾grew by 58.9% and average monthly page views ⁽³⁾ grew by 66.3% year on year across our publishing operations with digital display advertising revenue growing by 30.1%.

· A non cash impairment charge of £225.0 million (£180.7 million net of deferred tax) against the carrying value of goodwill and other intangible assets

As previously announced the non cash impairment of historic goodwill and publishing rights and titles has impacted the statutory results but does not affect adjusted results.

· Strategic initiatives delivering tangible benefits

Improving print revenue trends, strong digital audience growth and good momentum on digital revenues.

· Current trading

2014 has started in line with expectations, with year on year revenue declines in the first two months of 3% and continued strong growth in publishing digital revenues.

Results

	Adjusted results ⁽¹⁾		Statutory results ⁽⁴⁾
	2013	2012	2013	2012
	£m	£m	£m	£m
Revenue	663.8	706.5	663.8	706.5
Operating profit/(loss)	108.0	107.1	(134.8)	34.9
Profit/(loss) before tax	101.3	98.7	(160.8)	9.7
Earnings/(loss) per share	32.0p	29.9p	(39.0)p	6.8p

(1) Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge, the pension administrative expenses and the impact of tax legislation changes. Set out in note 19 is the reconciliation between the statutory results and the adjusted results.

(2) On a contracted basis assuming that the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to maturity.

(3) Average monthly unique users (ABCe) and average monthly page views (Omniture) for January to December 2013 versus January to December 2012.

(4) As set out in the half-yearly financial report, the amended pension accounting standard, IAS 19 (Amended), has been adopted for 2013 and applied retrospectively to 2012 for comparative purposes. This is further explained in note 2.

Commenting on the annual results for 2013, Simon Fox, Chief Executive, Trinity Mirror plc, said:

"Strong print and digital revenue trends at the end of 2013 enabled us to finish the year ahead of expectations.

It is clear to me that our strategy for growth, which I outlined in March last year, is gaining momentum. I am particularly pleased with our rapidly growing digital audience and with the benefits we are driving in harnessing the combined strength of our national and regional titles.

I look forward to making further progress with our strategic objectives during 2014."

Enquiries

Trinity Mirror

Simon Fox, Chief Executive and Vijay Vaghela, Group Finance Director 020 7293 3553

Brunswick

Mike Smith, Partner and Nick Cosgrove, Director 020 7404 5959

Investor presentation

A presentation for analysts will be held at 9.30am on Thursday 13 March 2014. The presentation will be live on our website: www.trinitymirror.com at 9.30am and a playback will be available from 2.00pm.

Forward looking statements

Statements contained in this Annual Results Announcement are based on the knowledge and information available to the Company's directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Annual Results Announcement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Annual Results Announcement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward-looking statements

Management Report

Introduction

We delivered a robust trading performance in 2013 and made further progress in the delivery of our strategy that was set out to the market in early 2013.

In the year to December 2013, profit before tax was up 2.6% and earnings per share was up 7.0% with strong cash flows enabling net debt to fall by £45.8 million to £97.0 million. The fall in net debt was achieved despite investing £14.2 million on the acquisition of a 20% interest in Local World and bringing forward £9.1 million of pension funding payments that were due in 2014.

Although, as expected, revenues were under pressure, falling 6.0% for the full year, we have seen a clear improvement in trends as we progressed through the year with a strong end to the year with revenue only declining by 0.9% in the last two months compared to a decline of 7.1% for the first ten months. Most encouraging has been the turnaround in digital revenue trends in our Publishing division as we progressed through the year. From a decline of 10.0% in the first half, second half publishing digital revenues improved to growth of 16.8% with growth of 32.0% in the last two months of the year.

Also encouragingly, our average monthly unique users and average monthly page views across our publishing business have grown year on year by 58.9% to 41.1 million and by 66.3% to 221.8 million respectively. We are already seeing signs of how we can drive revenues from the growth in our digital audience with digital display advertising growing year on year by 30.1%.

We undertake an annual review of the carrying value of the Group's consolidated assets for impairment. As a result of a change in assumptions, particularly around the discount rate, a non cash impairment charge of £225.0 million (£180.7 million net of deferred tax) has been made against the carrying value of the Group's goodwill and other intangible assets in respect of the Publishing division. Whilst this charge does not impact the Group's adjusted results, the measure which best reflects the Group's financial performance, it has resulted in a statutory loss.

The change in assumptions has also led to a separate non cash impairment charge as part of the annual review in the Company balance sheet of £700.0 million in relation to investments in subsidiary companies held by the Company. This charge results in a negative profit and loss account reserve in the Company's balance sheet of £514.8 million. Therefore in order to maintain financial flexibility, the Board has posted to shareholders a circular containing a notice of a General Meeting to be held on 28 March 2014 to gain shareholder approval for a reduction of capital to eliminate the negative balance in the profit and loss account reserve in the Company's balance sheet. Following this General Meeting, the Company will apply to the court to approve the capital reduction. The Board anticipates that the capital reduction process will be completed during the first half of 2014 and that thereafter profits generated from the date the court approves the capital reduction will replenish distributable reserves.

Following the capital reduction and after the repayment of £44.2 million of maturing debt in June 2014, we will have increased financial flexibility to consider a potential return of capital to shareholders and investments alongside appropriately funding our pension schemes.

The increased financial flexibility, together with continued momentum and good progress made towards delivery of our strategy for growth, provides the Board with confidence that performance for 2014 will be in line with expectations.

Operational Performance

Although the trading environment remained volatile, revenue trends improved as we progressed through the year with tangible benefits from initiatives we have put in place to drive revenues. Revenues fell by 6.0% to £663.8 million during the year with declines of 8.5% in the first half (which was distorted by tougher comparatives for the first two months of the year due to the launch of a new UK national Sunday title in February 2012) followed by a decline of 3.5% in the second half with a decline of only 0.9% in the last two months of the year.

The continued tight management of costs and delivery of £12 million of structural cost savings, £2 million ahead of the £10 million target set at the beginning of the year, coupled with an increase of £5.1 million in our share of results of associates contributed to operating profit increasing year on year by £0.9 million, an increase of 0.8% even though revenues fell by £42.7 million. The increase in our share of results of associates includes £5.1 million from the 20% interest in Local World which was completed on 7 January 2013. The performance for the year is after increased investment of £4 million in digital initiatives and £4 million in print initiatives.

The Publishing division limited the decline in operating profit to £6.6 million or 5.3% even though revenue fell by £39.2 million or 6.4% due to cost savings and a fall in newsprint prices partially offset by investment.

The Printing division achieved a 4.6% growth in third party contract print revenue to £38.4 million. Including newsprint supplied to contract print customers and other revenues, total revenues fell marginally by 0.9% to £65.7 million due to a fall in newsprint prices and volumes.

Management Report continued

Operational Performance continued

Within the Specialist Digital division, the digital classified property business was sold during the year and the digital classified recruitment business was rationalised with focus now on the key four brands: GAAPweb, totallylegal, SecsintheCity and Fish4. The division delivered revenues and operating profit, excluding the digital classified property business, of £16.8 million and £0.2 million respectively.

Group operating profit of £108.0 million coupled with falling interest costs resulted in profit before tax increasing by 2.6% to £101.3 million.

We continued to deliver strong cash flows with net debt falling by £45.8 million to £97.0 million. The fall in net debt was achieved despite investing £14.2 million on the acquisition of a 20% interest in Local World and bringing forward £9.1 million of pension funding payments which were due in 2014. We had a cash balance of £15.5 million at the year end and we are on track to repay £44.2 million of maturing debt in June 2014 substantially from cash flow.

Strategic Update

We have made good progress during the year on delivering on our vision "to be a dynamic and growing media business that is an essential part of our customers' daily lives". As outlined with our 2012 annual results, our strategic objective to deliver sustainable growth in revenue and profit will be delivered through five key areas of strategic focus:

· "One Trinity Mirror": Harnessing the combined strength of our journalists and our audience reach under a unified organisation structure;

· Protecting and revitalising our core brands in print;

· Continued relentless focus on efficiency and cost management;

· Accelerating our digital capabilities to extend their reach as our audiences adopt new technologies; and

· Investing in new businesses built around distinctive content or audience.

We have made good progress on all of these objectives and set out below is an update on each of these with a summary of the next steps.

"One Trinity Mirror": Harnessing the combined strength of our journalists and our audience reach under a unified organisation structure

· We have created a shared content unit, providing high-quality features pages which can be used without amendment in multiple titles across the country. This unit produces content of general appeal but which does not require a specific local flavour. Specific areas of focus are travel, motoring, food, fashion and film and entertainment reviews;

· We have also increased content sharing and collaborative working between our national and regional brands and we have launched Trinity Mirror Wire, providing all of our newsrooms with access to the best live news stories and pictures from across the Group on a daily basis;

· National advertising sales across the business, both print and digital, have been consolidated under our National Advertising Sales Agency. We now fully leverage the strength of our portfolio providing compelling advertising solutions to our customers with our unique portfolio of national and regional print and digital brands. Packages include the Daily Big City package comprising our daily national and regional titles with an average circulation in excess of 1.6 million and a readership in excess of 4 million and a Sunday package incorporating all our Sunday titles with an average circulation in excess of 1.8 million and a readership in excess of 4 million. Alongside these print packages we have compelling cross-media and digital packages; and

· We have centralised all photo archives into one central library creating a single shared resource that all our journalists can access. In addition to using our content across core brands, the move enables increased publication of stand-alone products, such as magazines and books.

Next steps

"One Trinity Mirror: Harnessing the combined strength of our journalists and our audience reach under a unified organisation structure" was a key area of our initial focus within our strategy during the last quarter of 2012 and during 2013 to unify our national and regional brands. As the reorganisation is largely complete and is now our normal way of working, our focus now is to continue to enhance the effectiveness of the structure and is no longer going to be separately identified for reporting purposes.

Management Report continued

Strategic Update continued

Protecting and revitalising our core brands in print

· Launch of an enhanced publishing package for our regional Saturday titles with a rebranded edition of the We Love Telly magazine published in the Daily Mirror coupled with enhanced entertainment and features content. The launch of a new magazine for the Sunday Mirror, Notebook, with a strong emphasis on fashion and beauty;

· The launch of two new free weekly newspapers in Scotland, Aberdeen Now and Edinburgh Now. These are available free in the Daily Record in Aberdeen and Edinburgh respectively and are also distributed separately in the two markets. The new titles showcase the best of the local markets, including the arts, business, columnists, sport and, of course, the people. The launch of four new titles in the North Liverpool market place. The Star series now has free bespoke editions for Anfield and Walton, Maghull and Aintree, Kirkby, and Crosby and Bootle. The launch of the Bracknell Times as a free weekly title;

· The launch of more localised editions of key titles. These have included North and South editions of the Manchester Evening News, a Wirral edition of the Liverpool Echo and a county edition of the Chester Chronicle. Building on the success of the hybrid edition of the Manchester Evening News we have launched hybrid editions of the Birmingham Mail in Birmingham, the Western Mail in Swansea and the Reading Post in Reading. Hybrid editions are where the paid for circulation is supplemented by free copies to grow reach and therefore response for our advertisers;

· The redesign of the Daily Mirror and Sunday Mirror together with the launch of an innovative brand campaign under the banner #Madeuthink, the first campaign of its kind for 10 years. The resulting look is both more modern and more in tune with the intelligent tabloid credentials which make the Mirror stand out from its rivals, and the multi-platform brand campaign ran across print, outdoor, TV, digital, mobile and social media. Across the year, the standard of journalism from the Mirror team has been exceptional. This is reflected in the ABC figures as both Daily Mirror and Sunday Mirror have outperformed the market in 2013. The redesign, coupled with our brand campaign will enable us to further build on this momentum; and

· We closed the Liverpool Post during the year. Its business content will continue within the pages of the Liverpool Echo. Around the same time, we launched seven-day publishing on the Liverpool Echo with the Sunday Echo. This is believed to be the first regional daily newspaper launch of a Sunday edition in the UK for many years and is testimony to the power, growth and success of the Echo brand across all platforms. The move will also strengthen the brand's online publishing by creating a flow of content across the weekend that will further enhance the Echo's audience growth across desktop, mobile and social media platforms.

Next steps

To keep our print portfolio under continuous review with a view to improving products wherever possible.

Continued relentless focus on efficiency and cost management through the use of technology to simplify, centralise or outsource those processes which are non-consumer facing

· Cost management remains a key area of focus with adjusted operating costs falling by £38.5 million year on year to £562.6 million. The decline in costs is net of additional investment to revitalise our core brands, to accelerate our digital capabilities and in new businesses. We delivered £12 million of structural costs savings in 2013, £2 million ahead of the £10 million target that was set at the beginning of the year. The remainder of the cost reductions have been driven by ongoing cost mitigation actions and a fall in newsprint prices.

Next steps

The focus on efficiency and tight cost management will remain a key area of focus going forward. Our structural cost savings target for 2014 is £10 million.

Accelerating our digital capabilities to extend their reach as our audiences adopt new technologies

· All of our key brands' websites have been upgraded onto a new technology platform delivering a far improved user experience on desktop and more significantly on mobile. The product teams continue to make significant improvements to our sites including picture galleries, live blogging and search optimisation. In addition, we have reorganised our newsrooms to ensure that we can make the most of breaking news with a variety of multimedia storytelling tools;

· Content is also increasingly being produced to meet the digital only demands of the communities we serve. Some examples have been our coverage of a child in North Korea dying of starvation by the side of the road while just yards away soldiers load rice onto trucks, the murder of a soldier in Woolwich and the Nigella Lawson and Charles Saatchi exclusive. Taken together, these stories achieved 19.6 million page views on the day of publication and 41.7 million page views within a month;

Management Report continued

Strategic Update continued

Accelerating our digital capabilities to extend their reach as our audiences adopt new technologies continued

· A new What's On service for our regional website is now up and running. It provides readers with a combination of event listings, reviews and great editorial content;

· Since launching the Daily Mirror and Daily Record Apple e-editions in 2012 they both launched Android and Kindle e-editions during the year. Similarly, we launched Apple e-editions and Android e-editions for all of our other key brands;

· We also strengthened our digital teams through investment in additional resource across sales, product development and editorial including the doubling of the size of the Mirror.co.uk digital editorial team. Based in London and Manchester, the 25 additional staff have enabled us to significantly increase our online content and drive audience;

· We have set up a new Data Journalism Unit responsible for developing engaging content ideas for our websites and print publications. The objective is to filter through the huge amounts of freely available data from different sources, identify which of it is of interest to our audience and turn it into compelling content. Early projects include creating dynamic ways to display court lists, providing education information in an easy-to-use format, developing clever tools for property prices and unearthing hidden data which can drive powerful stories. This included the launch of the Real Schools Guide available online and in print across our key regional titles, which pulled in more than 20 key data feeds from different government bodies to provide parents with a simple-to-use way of working out which school is right for their children; and

· We have seen strong growth in unique users and page views for all relaunched sites with particularly strong growth on mobile as all sites are mobile enabled. We have also seen good growth in digital display advertising for all our sites and we anticipate this to improve further as we continue to grow audiences:

- Average monthly unique users across our publishing business up 58.9% year on year to 41.1 million;

- Average monthly page views across our publishing business up 66.3% year on year to 221.8 million; and

- Accelerating growth of publishing digital revenue from year on year decline in the first half of 10.0% to year on year growth of 16.8% in the second half.

Next steps

Whilst we now have the basics in place we will continue to make significant improvements to usability and content across desktop, mobile and tablets in order to drive both digital audience and revenue.

Investing in new businesses built around our distinctive content and audience

· We launched a number of new digital products through our new product development team and have made investments in print products;

· In May 2013, we launched a new social media site, UsVsTh3m. The new site tests a different publishing model from the one we are familiar with and takes a mobile-first approach with a focus on social sharing. In June 2013, the first full month, the site had 464,000 unique visitors and since then it has enjoyed explosive growth with average monthly unique users in excess of four million in the last quarter of 2013;

· In December 2013, we introduced Ampp3d, a mobile-first, socially-driven data journalism site. Ampp3d aims to publish more serious stories through charts and graphs and produce infographics to explore both the day's news agenda and a range of topics that people care passionately about;

· The Daily Record and STV have formed an innovative digital partnership that delivers the popular STV Player to the Record's expanding desktop, mobile and tablet audience;

· We completed our 20% investment in Local World which was cleared by the Office of Fair Trading on 28 June 2013. Local World delivered a strong performance in its first year of trading with our share of its adjusted post-tax profit being £5.1 million; and

· We have also increased investment in Sport Media, our sports contract publishing business. During the year, Sport Media secured new three-year publishing contracts for match day programmes and magazines with Premier League clubs: Tottenham Hotspur, West Bromwich Albion and Manchester United which alongside existing contracts with Arsenal, Chelsea, Aston Villa and Everton brings the total to seven. Sport Media also secured the print and digital publishing rights for the 2015 Rugby World Cup, being hosted in the UK.

Next steps

Investment in new businesses built around our distinctive content and audience is a key part of our strategy to deliver growth. We continue to consider and evaluate opportunities and will make investments as appropriate.

Management Report continued

Strategic Update continued

Summary

Having made good progress on the strategic initiatives set out in March 2013, in particular the organisation and cultural changes through the 'One Trinity Mirror' initiative, going forward we will focus on the following four strategic initiatives with clearly defined objectives:

· Protecting and revitalising our core brands in print to outperform the market trends for print;

· Growing our existing brands onto digital delivery channels to deliver growth in digital audience and revenues;

· Continuing our relentless focus on efficiency and cost management to deliver structural reductions in the cost base; and

· Launching, developing, investing in or acquiring new businesses built around distinctive content or audience to build a portfolio of growing businesses.

All investments are required to deliver meaningful revenues over time, to have returns in excess of our cost of capital within three years and be earnings enhancing by the end of the second investment year.

Our strategy, with a clear vision and defined goals and targets, together with the changes in culture that we have made, have enabled us to build strong foundations for progress in 2013 and provides confidence in the further development of the strategy. Our open and flexible approach to new business opportunities is already attracting highly talented individuals to the Group.

Capital Structure

Our financial position remains robust with continued strong cash generation and falling debt with no drawings on the bank facility. During the year, net debt fell by £45.8 million to £97.0 million and leverage (contracted net debt to adjusted EBITDA for the 12 months to 29 December 2013), has now fallen below one times. We are on track to repay £44.2 million of maturing debt in June 2014 substantially from cash flow.

In December 2013, we paid £9.1 million of pension funding payments that were due in 2014. Therefore pension deficit funding payments in 2013 were £19.0 million, which is £9.0 million higher than previous guidance. The early payment of pension deficit funding payments provides the most efficient use of capital over the short term due to the low returns available on cash balances.

During 2013, we reached agreement with the trustees of the principal pension schemes to align the funding valuations of all schemes to 31 December 2013 with future valuations every three years in line with legislation. We anticipate that these valuations will be completed during 2014. The revised recovery plan agreed in these valuations may impact the current recovery plans which require funding payments of £33.5 million per annum from 2015 with no payments in 2014.

In accordance with FRS 11 (Impairment of Fixed Assets and Goodwill), the annual review of the carrying value of investments in subsidiary companies held by the Company resulted in a non cash impairment charge of £700.0 million against the carrying value of investments held by the Company. This impairment is higher than the non cash impairment of £225.0 million in the consolidated balance sheet, as the value in use of a number of cash generating units were substantially higher than their carrying value and whilst this could not be taken into account in the review of the carrying value of the Group's consolidated goodwill and publishing rights and titles, it supported the higher carrying value of investments held by the Company.

Although there is no cash impact arising from the impairment of investments held by the Company, this results in there being a negative balance on the profit and loss account reserve of £514.8 million (2012: £198.6 million positive profit and loss reserve).

Management Report continued

Capital Structure continued

In order to provide flexibility to consider the potential return of capital to shareholders, the Board will undertake a court approved capital reduction to eliminate the deficit on the Company's profit and loss account reserve. Prior to applying to the court to cancel part of the share premium account, which has a balance of £1,121.6 million, to eliminate the deficit on the profit and loss account reserve, the Company is seeking shareholder approval of a special resolution of the Company's shareholders at a General Meeting to be held on 28 March 2014. Subject to the confirmation of the court, the reduction of capital is expected to become effective during the first half of 2014. At the date on which the court approves the capital reduction, the Company will have a nil balance on the profit and loss account reserve and therefore no distributable reserves. The Company will rebuild distributable reserves from profits generated after the date on which court approval has been granted.

Board Changes

Kathleen O'Donovan and Gary Hoffman stepped down from the Board on 16 May 2013 and 13 March 2014 respectively. The Board thanks them both for their contribution and wishes them both well for the future. Lee Ginsberg and Helen Stevenson joined the Board as non-executive directors from 1 January 2014. Following the departure of Gary Hoffman, Jane Lighting took on the role of Senior Independent Director on 13 March 2014.

Current Trading

2014 has started in line with our expectations with revenue in January and February falling by 3% year on year. By category circulation revenue fell by only 1%, advertising revenue fell by 8%, printing revenue grew by 4% and other revenues fell by 1%. We continue to see good growth in digital revenues for the Publishing division.

Outlook

Whilst we expect continued month on month volatility, at this early stage in the year we anticipate an improvement in trends as we progress through 2014. Although newsprint prices have increased for the first half of 2014, in addition to an increase in the second half of 2013, we expect further structural cost savings of £10 million and ongoing cost mitigation actions to ensure that we have adequate headroom for investment whilst supporting profits and cash flows.

Following the capital reduction and after the repayment of £44.2 million of maturing debt in June 2014, we will have increased financial flexibility to consider all options for driving value for shareholders. This will include a potential return of capital to shareholders, considering further investment opportunities to build a stable and growing portfolio of print and digital assets, alongside meeting our obligations to fund our pension schemes to address historic deficits.

Increased financial flexibility, together with continued momentum on the delivery of the Group's strategy for growth provides the Board with confidence that performance for 2014 will be in line with expectations.

Management Report continued

Group Review

Income statement

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
Revenue	663.8	706.5	663.8	706.5
Costs	(801.9)	(678.8)	(562.6)	(601.1)
Associates	3.3	7.2	6.8	1.7
Operating (loss)/profit	(134.8)	34.9	108.0	107.1
Financing	(26.0)	(25.2)	(6.7)	(8.4)
(Loss)/profit before tax	(160.8)	9.7	101.3	98.7
Tax	64.4	7.2	(22.2)	(25.0)
(Loss)/profit after tax	(96.4)	16.9	79.1	73.7
(Loss)/earnings per share	(39.0)p	6.8p	32.0p	29.9p

The results have been prepared for the 52 weeks ended 29 December 2013 (2013) and the comparative period has been prepared for the 52 weeks ended 30 December 2012 (2012).

The results are presented on a statutory and adjusted basis to provide a more meaningful comparison of the Group's performance. Set out in note 19 is the reconciliation between the statutory and the adjusted results. As set out in the half-yearly financial report, the statutory comparatives have been restated for the implementation of the amended pension accounting standard, IAS 19 (Amended). Note 2 sets out the impact of this change on the previously reported statutory results.

Revenue

Group revenue is the same on both a statutory and adjusted basis.

	2013	2012	Variance	Variance
	£m	£m	£m	%
Circulation	285.8	297.2	(11.4)	(3.8%)
Advertising	262.7	292.8	(30.1)	(10.3%)
Publishing Print	236.3	264.2	(27.9)	(10.6%)
Publishing Digital	17.2	16.5	0.7	4.2%
Specialist Digital	9.2	12.1	(2.9)	(24.0%)
Printing	65.7	66.3	(0.6)	(0.9%)
Other	49.6	50.2	(0.6)	(1.2%)
Publishing Print	34.3	34.8	(0.5)	(1.4%)
Publishing Digital	2.8	2.9	(0.1)	(3.4%)
Specialist Digital	9.5	9.3	0.2	2.2%
Central	3.0	3.2	(0.2)	(6.3%)
Revenue	663.8	706.5	(42.7)	(6.0%)

Revenue fell by £42.7 million or 6.0% to £663.8 million due to the difficult economic environment and the structural pressures facing print media. As we moved through the year the impact of a marginally improving economy and our strategic actions resulted in an improving revenue trend.

Total print revenue showed a continuous improvement as the year progressed. Circulation revenue in January and February was impacted by the changes in the Sunday national tabloid market which saw a new UK national Sunday title launched towards the end of February 2012. From March the circulation revenue trend shows a steady improvement driven by a good volume performance and cover price increases. Advertising revenue improved as the year progressed, particularly in the last quarter, though there remains month on month volatility.

Management Report continued

Group Review continued

Revenue continued

Total digital revenues showed a steady improvement as the year progressed with strong growth seen in the last quarter of the year. Publishing digital revenue moved into growth in the second half of the year and this growth accelerated as our strategy of building audience gained momentum. The improved performance reflects the strong growth in publishing digital display advertising. Specialist Digital revenues experienced a significant decline from August due to the sale of the Specialist Digital property business at the end of August.

Excluding the Specialist Digital property business, total digital revenues fell by £1.1 million or 2.9% to £36.8 million. The performance in the first half was a decline of 8.9% which improved to an increase of 2.7% in the second half.

Costs

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
Labour	(210.0)	(214.0)	(210.0)	(214.0)
Newsprint	(102.3)	(122.0)	(102.3)	(122.0)
Depreciation	(26.4)	(29.1)	(26.4)	(29.1)
Other	(463.2)	(313.7)	(223.9)	(236.0)
Non-recurring items	(234.3)	(71.5)	-	-
Amortisation of other intangible assets	(2.2)	(3.0)	-	-
Pension administrative expenses	(2.8)	(3.2)	-	-
Other	(223.9)	(236.0)	(223.9)	(236.0)
Costs	(801.9)	(678.8)	(562.6)	(601.1)

Statutory costs increased by £123.1 million or 18.1% to £801.9 million while adjusted costs fell by £38.5 million or 6.4% to £562.6 million.

Labour costs fell by £4.0 million or 1.9% to £210.0 million due to restructuring actions during the year in print which was partly offset by salary inflation and investment in digital resource.

Newsprint costs fell by £19.7 million or 16.1% to £102.3 million due to reduced paid for volumes, fewer free copies distributed, reduced pagination and from the benefit of a price reduction.

Depreciation fell by £2.7 million or 9.3% to £26.4 million as capital expenditure is much reduced in recent years following the major press investment.

Other costs, excluding non-recurring items, amortisation of other intangible assets and pension administrative expenses, fell by £12.1 million or 5.1% to £223.9 million due to actions taken and tight management of costs.

Non-recurring items included in statutory costs in the current year and prior year are set out below. Statutory costs also include the amortisation of other intangible assets and the pension administrative expenses which are excluded from the adjusted results.

Both statutory and adjusted costs benefited from £12 million of structural cost savings and include investment of £8 million in digital and print initiatives. Structural cost savings for 2014 are expected to be £10 million with incremental investment in digital expected to be £5 million. The Group's restructuring costs for 2014 are expected to be £12 million including £2 million of costs in relation to the outsourcing of certain IT support functions.

Management Report continued

Group Review continued

Non-recurring items

	Statutory results
	2013	2012
	£m	£m
Impairment of goodwill and other intangible assets	(225.0)	(60.0)
Restructuring charges	(9.9)	(11.5)
Profit on disposal of subsidiary undertaking	0.6	-
Non-recurring items excluding associates	(234.3)	(71.5)
Non-recurring items included in associates	(0.5)	5.5
Non-recurring items including associates	(234.8)	(66.0)

The impairment review of the carrying value of assets performed at the reporting date resulted in an impairment of £225.0 million in respect of assets relating to the cash generating units in the Publishing division. The impairment comprises £3.4 million relating to goodwill and £221.6 million relating to publishing rights and titles.

Associates

	Statutory results		Adjusted results
	2013	2012	2013	2012
	£m	£m	£m	£m
Result before amortisation and non-recurring items	6.8	1.7	6.8	1.7
Amortisation of other intangible assets	(3.0)	-	-	-
Non-recurring items	(0.5)	5.5	-	-
Share of results of associates	3.3	7.2	6.8	1.7

The Group has a 21.5% investment in PA Group and a 20.0% investment in Local World, accounted for as associated undertakings.

Our statutory share of the post tax profit from associates fell by £3.9 million or 54.2% to £3.3 million and on an adjusted basis increased by £5.1 million or 300.0% to £6.8 million. The current year includes for the first time our share of the results of Local World.

The adjusted results exclude amortisation of other intangible assets and non-recurring items to be consistent with the treatment adopted by the Group. The non-recurring items in the current year reflects our share of restructuring charges incurred by Local World and in the prior year relate to a gain on disposal of its 50% interest in a business by PA Group.

On 16 December 2013, PA Group announced the disposal of its weather forecasting business, MeteoGroup for a cash consideration of €190 million. The transaction is subject to German competition clearance and is expected to complete in early 2014 with 75% of the consideration payable on completion with the balance payable one year after completion. PA Group is expected to report a profit on disposal of some £125 million. The Group will account for its share of such profit as an exceptional gain at the time of completion. At this stage it is unclear as to the quantum or timing of any dividend payable by PA Group following completion of the transaction.

Operating (loss)/profit

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
Operating (loss)/profit	(134.8)	34.9	108.0	107.1
Operating margin (pre associates)	(20.8%)	3.9%	15.2%	14.9%

The statutory operating loss for the year amounts to £134.8 million compared to an operating profit of £34.9 million in the prior year due to the impact of the impairment charge noted above.

Adjusted operating profit increased by £0.9 million or 0.8% to £108.0 million with operating margin increasing by 0.3 percentage points from 14.9% to 15.2%.

Management Report continued

Group Review continued

Financing

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
Investment revenues	0.3	0.4	0.3	0.4
Pension finance charge	(13.2)	(11.2)	-	-
Finance costs	(13.1)	(14.4)	(7.0)	(8.8)
Interest on bank overdrafts and borrowings	(7.0)	(8.8)	(7.0)	(8.8)
Fair value loss on derivative financial instruments	(8.8)	(13.0)	-	-
Foreign exchange gain on retranslation of borrowings	2.7	7.4	-	-
Financing	(26.0)	(25.2)	(6.7)	(8.4)

The pension finance charge increased by £2.0 million to £13.2 million as a result of a higher opening net deficit in the pension schemes.

Within finance costs, the interest on bank overdrafts and borrowings fell by £1.8 million or 20.5% to £7.0 million due to the reduction in debt following the repayments in the current and prior year.

The net charge from the fair value changes on derivative financial instruments and the foreign exchange changes on retranslation of foreign currency borrowings increased by £0.5 million to £6.1 million.

(Loss)/profit before tax

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
(Loss)/profit before tax	(160.8)	9.7	101.3	98.7

The statutory loss before tax for the year amounts to £160.8 million compared to a profit of £9.7 million in the prior year due to the operating loss from the impact of the impairment charge noted above.

Adjusted profit before tax increased by £2.6 million or 2.6% to £101.3 million due to the higher operating profit and lower net interest cost.

Tax

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
Tax credit/(charge)	64.4	7.2	(22.2)	(25.0)
Effective tax rate	40.0%	74.2%	(21.9%)	(25.3%)

The statutory tax credit of £64.4 million (2012: £7.2 million) comprises a current tax charge of £18.1 million (2012: £23.3 million) and a deferred tax credit of £82.5 million (2012: credit of £30.5 million). The deferred tax credit includes a material credit relating to the impact on opening deferred tax balances of changes in the rate of corporation tax and a further material credit relating to the impairment charge noted above.

The adjusted tax charge of £22.2 million (2012: £25.0 million) represents 21.9% (2012: 25.3%) of adjusted profit before tax and reflects the benefit of the reduction in the rate of corporation tax and that the share of results of associates is accounted for after tax and is now a more significant component of adjusted operating profit.

Management Report continued

Group Review continued

(Loss)/earnings per share

	Statutory results		Adjusted results
	2013	2012	2013	2012
		(restated)
	£m	£m	£m	£m
(Loss)/profit after tax	(96.4)	16.9	79.1	73.7
Number of shares	247,328	246,686	247,328	246,686
(Loss)/earnings per share	(39.0)p	6.8p	32.0p	29.9p

The statutory loss after tax amounts to £96.4 million compared to a profit of £16.9 million in the prior year due to the loss before tax from the impact of the impairment charge noted above with the loss per share being 39.0 pence.

Adjusted profit after tax increased by £5.4 million or 7.3% to £79.1 million with adjusted earnings per share increasing by 2.1 pence or 7.0% to 32.0 pence.

Divisional Review

The Group has four operating segments, each of which is a division, that are regularly reviewed for the purposes of allocating resources and assessing performance. The divisional review that follows is presented on an adjusted basis and there is no difference between the operating profit by division and the segment result of each operating segment that is shown in note 3.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the publishing segment and to third parties; Specialist Digital which includes our digital classified and our digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates.

The revenue and adjusted operating profit by operating segment is presented below:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Publishing	576.4	615.6	(39.2)	(6.4%)
Printing	65.7	66.3	(0.6)	(0.9%)
Specialist Digital	18.7	21.4	(2.7)	(12.6%)
Central	3.0	3.2	(0.2)	(6.3%)
Revenue	663.8	706.5	(42.7)	(6.0%)
Publishing	118.5	125.1	(6.6)	(5.3%)
Printing	-	-	-	-
Specialist Digital	0.4	(2.9)	3.3	113.8%
Central	(10.9)	(15.1)	4.2	27.8%
Adjusted operating profit	108.0	107.1	0.9	0.8%

Publishing

The Publishing division publishes paid for national newspapers and paid for and free regional newspapers and operates a portfolio of related digital products. Key brands include the Daily Mirror, the Sunday Mirror, the Sunday People, the Daily Record, the Sunday Mail, the Liverpool Echo, the Manchester Evening News, the Evening Chronicle (Newcastle), the Birmingham Mail and the South Wales Echo (Cardiff) and we publish Metros in each of our key metropolitan markets.

The Publishing division also holds events and exhibitions related to its publishing activities and undertakes contract publishing for football and other sports.

Management Report continued

Divisional Review continued

Publishing continued

The revenue and operating profit of the Publishing division is as follows:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Circulation	285.8	297.2	(11.4)	(3.8%)
Advertising	253.5	280.7	(27.2)	(9.7%)
Print advertising	236.3	264.2	(27.9)	(10.6%)
Digital advertising	17.2	16.5	0.7	4.2%
Other	37.1	37.7	(0.6)	(1.6%)
Print other	34.3	34.8	(0.5)	(1.4%)
Digital other	2.8	2.9	(0.1)	(3.4%)
Revenue	576.4	615.6	(39.2)	(6.4%)
Print	556.4	596.2	(39.8)	(6.7%)
Digital	20.0	19.4	0.6	3.1%
Costs	(457.9)	(490.5)	32.6	6.6%
Operating profit	118.5	125.1	(6.6)	(5.3%)
Operating margin	20.6%	20.3%	0.3%	1.5%

Revenue fell by 6.4% or £39.2 million to £576.4 million.

Circulation revenue fell by 3.8% with January and February declining by 13.4% and March to December declining by 1.8%. The January and February performance was distorted by the launch of a new UK national Sunday title towards the end of February 2012. The March to December revenue trend was an improvement on the prior year reflecting the benefit of cover price increases for a number of our titles and improved year on year volume trends. The Daily Mirror in particular continued to achieve volume trends ahead of the market.

The Daily Mirror, the Sunday Mirror and the Sunday People have outperformed circulation market trends. The Daily Mirror circulation volume was down 4.6%, the best performer in a UK national daily tabloid market that declined by 8.6%. Excluding January and February, the Sunday Mirror declined by 5.6%, the best performer in the UK national Sunday tabloid market, and the Sunday People declined by 9.6% in a UK national Sunday tabloid market that declined by 10.4%. The Daily Record and the Sunday Mail both outperformed the Scottish circulation market trends. The Daily Record was down 9.7% against an overall Scottish daily tabloid market decline of 10.2%. Excluding January and February, the Sunday Mail was down 9.7% against an overall Scottish Sunday tabloid market decline of 10.4%.

The market for our regional titles remains difficult with declines of 7.9% for paid for dailies, 8.8% for paid for weeklies and 10.5% for paid for Sundays. These declines are broadly in line with the trends forecast for the market. As with the Sunday national titles, the regional Sunday titles performance is distorted by the launch of a new UK national Sunday title towards the end of February 2012.

Advertising revenues declined by 9.7% with print declining by 10.6% and digital increasing by 4.2%. Within print advertising, display declined by 10.4%, classified by 10.5% and other categories by 11.4%. The improvement in digital advertising is driven by growth of 30.1% in display with classified declining by 18.0%.

The Daily Mirror and the Sunday Mirror have grown print advertising volume market share with the Daily Mirror growing share from 18.0% to 18.4% and the Sunday Mirror growing underlying share from 15.5% to 17.1%. The Sunday People maintained underlying share at 10.9%. The Daily Record grew share from 14.6% to 14.7% and the Sunday Mail underlying share declined from 28.5% to 27.7% against the main Scottish competitor set. The Sunday market has been distorted by the launch of a new UK national Sunday title in February 2012 and therefore for the Sunday titles underlying excludes January and February.

For our regional newspapers, we believe our print advertising performance is broadly in line with market trends with the exception of recruitment where we have underperformed the market following the centralisation of all recruitment advertising in 2012 which was reversed in the second quarter of 2013. We have seen an improvement in the recruitment trend in the second half of the year but this is still behind the market performance.

Although our digital advertising revenue performance is being adversely impacted by an 18.0% decline in classified advertising revenues we have seen a strong 30.1% growth in display advertising revenues.

We have delivered strong growth in our publishing digital audience with average monthly unique users for the year up 58.9% to 41.1 million year on year with average monthly page views for the year up 66.3% to 221.8 million year on year. We have seen particularly strong growth in mobile. In December, average monthly unique users were up 101.6% to 55.7 million year on year with average monthly page views up 135.5% to 328.4 million year on year.

Management Report continued

Divisional Review continued

Publishing continued

We have seen accelerating growth in total unique users and page views as we progressed through the year, in particular for Mirror.co.uk. Growth is being driven by our investment in accelerating the Group's digital capabilities with our core websites now operating on a new digital content management system which has enhanced features and is fully mobile enabled.

Digital display revenue has similarly seen accelerated growth as we progressed through the year, again in particular for Mirror.co.uk. The growth in digital display revenue lags the audience growth as we build the audience and invest in the commercial digital selling skills of sales teams.

Other revenues fell by 1.6% with print declining by 1.4% and digital by 3.4%. The print decline is driven by reduced leaflets, reader offers and returns waste sales partly offset by increased revenues from events, syndication and by the new contracts secured by our sports contract publishing business including the match day programmes contract for Manchester United. The digital decline is due to reduced interactive and online revenues including bingo. There was a much better performance in the second half as our sales teams drove new opportunities on the back of the growing audiences.

Publishing digital revenues grew by 3.1% during the year. Excluding digital recruitment advertising, which fell by 24.8% and was impacted by the centralisation of all recruitment advertising in 2012 which was reversed in the second quarter of 2013, publishing digital revenues grew by 9.7%.

Costs fell by £32.6 million or 6.6% to £457.9 million. The cost reduction includes structural cost actions by management and the continued tight management of the cost base to help mitigate the impact of a challenging print market. The reduction includes the benefit of a fall in newsprint prices. The reduction is net of a £2 million investment in digital resources and product development and £4 million in print initiatives.

Although revenues fell by £39.2 million, operating profit only fell by £6.6 million or 5.3% to £118.5 million. Operating margin increased by 0.3 percentage points from 20.3% to 20.6%.

Printing

The Printing division provides printing services to the Publishing division and to third parties. The division is the largest UK provider of newspaper contract printing services to third parties and operates eight print sites with 25 full colour presses. The Publishing division accounted for 64% of the volumes for the Printing division with the balance being for third party customers. The Printing division has a nil operating result as the net costs, being all external revenues less costs, are charged to the Publishing division.

The revenue and costs of the Printing division is as follows:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Contract printing	38.4	36.7	1.7	4.6%
Newsprint supply	24.6	26.7	(2.1)	(7.9%)
Other revenue	2.7	2.9	(0.2)	(6.9%)
Revenue	65.7	66.3	(0.6)	(0.9%)
External costs	(198.4)	(219.5)	21.1	9.6%
Publishing division recharge	132.7	153.2	(20.5)	(13.4%)
Costs	(65.7)	(66.3)	0.6	0.9%
Operating result	-	-	-	-

Revenues fell by £0.6 million or 0.9% to £65.7 million. Higher revenues from contract printing have been more than offset by reduced revenues from newsprint supplied to contract print customers due to newsprint price and volume reductions together with a decline in other revenues as a result of a fall in waste prices.

External costs fell by £21.1 million or 9.6% to £198.4 million. This includes newsprint price and volume declines and cost reduction initiatives partially offset by costs associated with increases in contract printing revenues and inflationary cost increases.

The costs recharged to the Publishing division were £132.7 million compared to £153.2 million in the prior year. The reduction in the recharge includes the benefit of the fall in newsprint prices and volumes, reduced volumes for the Sunday titles following the launch of a new UK national Sunday title towards the end of February 2012 and the benefit of cost reduction measures which have been partially offset by inflationary cost increases.

Management Report continued

Divisional Review continued

Specialist Digital

The Specialist Digital division includes Trinity Mirror Digital Recruitment, our digital classified recruitment vertical and Rippleffect and Communicator, our digital marketing services businesses. Trinity Mirror Digital Property Limited, a digital classified property vertical was sold effective the end of August 2013. Happli, a daily deals business, which was launched in 2011 and closed in 2012, was also included in the Specialist Digital division.

Trinity Mirror Digital Recruitment has rationalised its portfolio and focuses on the key brands of GAAPweb (finance and accountancy), totallylegal (legal), SecsintheCity (secretarial) and Fish4. Rippleffect is an award-winning digital marketing services agency which helps brands connect with their audiences, providing services which combine the right digital strategy with the best in design and technology to ensure engaging, creative and commercially successful digital solutions. Communicator is a digital communications agency which develops and manages digital communications across email, mobile, social and web enabling clients to send targeted customer communications on a global scale.

The revenue and operating profit of the Specialist Digital division is as follows:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Advertising	9.2	12.1	(2.9)	(24.0%)
Other	9.5	9.3	0.2	2.2%
Revenue	18.7	21.4	(2.7)	(12.6%)
Costs	(18.3)	(24.3)	6.0	24.7%
Operating profit/(loss)	0.4	(2.9)	3.3	113.8%

The revenue and operating profit of the Specialist Digital division excluding Trinity Mirror Digital Property Limited and Happli is as follows:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Advertising	7.3	9.2	(1.9)	(20.7%)
Other	9.5	9.1	0.4	4.4%
Revenue	16.8	18.3	(1.5)	(8.2%)
Costs	(16.6)	(18.0)	1.4	7.8%
Operating profit	0.2	0.3	(0.1)	(33.3%)

Advertising revenue relating to the digital classified recruitment vertical declined by £1.9 million or 20.7% to £7.3 million due to reduced activity in the recruitment market and the impact of a rationalisation of the portfolio. Other revenues from the digital marketing services businesses grew by £0.4 million or 4.4% to £9.5 million with both businesses growing year on year.

The Specialist Digital division underlying operating profit fell by £0.1 million to £0.2 million with cost savings substantially offsetting the revenue declines.

Central

The Central division includes revenue and costs not allocated to the operational divisions and the share of results of associates.

The revenue and operating loss of the Central division is as follows:

	2013	2012	Variance	Variance
	£m	£m	£m	%
Revenue	3.0	3.2	(0.2)	(6.3%)
Costs	(20.7)	(20.0)	(0.7)	(3.5%)
Associates	6.8	1.7	5.1	300.0%
Operating loss	(10.9)	(15.1)	4.2	27.8%

The result for the year was a loss of £10.9 million compared to a loss of £15.1 million in the prior year.

Management Report continued

Divisional Review continued

Central continued

Revenue primarily relates to rental income from surplus office space at the Group's main office at Canary Wharf.

Costs not allocated to the operational divisions increased by £0.7 million from £20.0 million to £20.7 million. The cost increase is driven by a £2 million investment in a new business development team and a number of initiatives which we invested in during the year.

The increase in the share of results of associates is driven by £5.1 million from our 20.0% interest in Local World which was completed on 7 January 2013. The PA Group profit at £1.7 million remained the same as the prior year.

Other Items

Pensions

The Group operates a defined contribution pension scheme with contributions and associated costs charged to operating profit. The defined benefit pension schemes operated by the Group were closed to future accrual in 2010.

The Group continues to fund pension scheme deficits in accordance with funding schedules agreed with the pension scheme trustees. Valuations are undertaken on a triennial basis. As part of the refinancing in March 2012, the Group agreed to reduce the annual deficit funding payments to £10.0 million for 2012, 2013 and 2014. In December 2013 the Group accelerated payment of £9.1 million due in 2014.

The Group has aligned the triennial valuations of the principal pension schemes to 31 December 2013. These valuations are expected to be finalised during 2014 and may result in a change to the recovery plans which currently require payment of £33.5 million per annum from 2015. At this stage no contributions are due in 2014. However, as part of the valuations currently being undertaken, the Group may make payments in 2014 if agreed in the new recovery plans.

The accounting pension deficit fell during the year by £45.5 million from £297.7 million (£229.2 million net of deferred tax) to £252.2 million (£201.8 million net of deferred tax) reflecting the impact of an increase in assets of £58.0 million partially offset by an increase in liabilities of £12.5 million. The increase in assets was driven by asset returns and company contributions being higher than pension payments. The increase in liabilities is due to a further fall in the real discount rates of 0.65% from 1.70% to 1.05% partially offset by a change in demographic assumptions.

Assumed life expectancies at the year end are around 0.3 years lower than the prior year. This reflects the results of a postcode mortality analysis carried out by the Group's actuaries in 2013, which showed that the Group's scheme members are expected to live to a marginally lower age than a typical UK pension scheme member. The prior year life expectancies were consistent with the assumptions for the latest funding valuations, which included a margin for prudence. In addition, for the year end valuation, the Group has included assumptions for future rates of pension commutation and of early retirement reductions applying to pensions, to reflect recent experience in the schemes. These three updated assumptions reduced the net deficit at the beginning of the year by £47 million.

The change in the accounting pension deficit does not impact current funding commitments. Retirement benefit assets of £15.7 million represent the surplus on certain schemes and the retirement benefit obligations of £267.9 million represent the deficit on certain schemes.

Net debt

The Group held available cash balances at the reporting date of £15.5 million. At the prior year end the Group held available cash balances of £10.0 million and also held £14.2 million in escrow in respect of the investment in Local World which completed on 7 January 2013.

Contracted net debt, assuming that the private placement loan notes and the cross-currency interest rate swaps are not terminated prior to maturity, fell by £45.8 million from £142.8 million to £97.0 million.

Net debt on a contracted basis is different to the statutory net debt which includes the US$ denominated private placement loan notes at the year end exchange rate and the related cross-currency interest rate swaps at fair value.

On a statutory basis, net debt fell by £39.7 million from £127.9 million to £88.2 million. The fair value of the Group's cross-currency interest rate swaps at the reporting date was a liability of £1.3 million (2012: £2.5 million asset). The period end Sterling amount of the US$ denominated and the Sterling private placement loan notes was £102.4 million (2012: £154.6 million).

The Group repaid the maturing loan notes of £54.5 million in October 2013 from cash balances without the need to draw on the Group's bank facility. Repayments on the private placement loan notes beyond 2013 are £44.2 million in June 2014 and £68.3 million in June 2017.

Management Report continued

Other Items continued

Net debt continued

In June 2012, the Group entered into a two year interest rate swap in respect of £100.0 million of loan notes which ensures that interest on this debt is now fixed at 2.6% until June 2014.

The Group had no drawings during the year on its £110.0 million bank facility which is in place until August 2015. The facility amount reduces to £101.8 million in March 2014 and further reduces to £93.5 million in March 2015.

Related party transactions

With the 20.0% investment in Local World, the associate is a related party. The Group provides contract printing and media sales services to Local World on normal commercial terms. There have been no further changes in the nature of other related party transactions and no material transactions during the year.

Principal risks and uncertainties

The principal risks and uncertainties together with mitigating actions that affected the Group in 2013 and going forward are described in the Trinity Mirror plc 2013 Annual Report. The current principal risks and uncertainties are:

· Strategy - the overall strategy or elements of the strategy are inappropriate and the delivery of the strategy is badly executed;

· Revenue loss - faster than anticipated loss of revenue from print and failure to deliver new revenue streams to offset print decline and drive revenue growth;

· Historical legal issues - damage to reputation arising from historical events, direct financial impact from legal claims and distraction of senior management time from delivering the strategy; and

· Pensions - pension deficits grow at such a rate so as to affect the viability of the Group itself or so that the annual funding costs consume a disproportionate level of cash flow.

There is a risk that shareholder approval and the subsequent court approval of a capital reduction are not given impacting the Company's ability to pay dividends until distributable reserves are restored. This is not considered to be a material risk.

The background to the historical legal issues is:

· Metropolitan Police investigations into inappropriate payments to public officials (Operation Elveden) and phone hacking (Operation Golding). The Company continues to cooperate with the police in their investigations.

· A current and a former journalist were arrested as part of Operation Elveden. The current employee has been informed that no charges will be brought against him and the former employee has been charged.

· Two current and two former journalists employed by the Group were arrested in connection with Operation Golding. None of the journalists have been charged.

· MGN Limited ('MGN'), the publisher of the Group's national newspapers, has been notified by the Metropolitan Police that they are at a very early stage in investigating whether MGN is criminally liable for the alleged unlawful conduct by previous employees in relation to phone hacking on the Sunday Mirror.

· MGN, has received Particulars of Claim for a number of civil claims alleging phone hacking.

· Dan Evans, a former journalist of the Sunday Mirror, has pleaded guilty to phone hacking during his time at the Group in 2003 and 2004.

The Group will not accept wrongdoing and takes all allegations seriously. In addition to co-operating with the police, external lawyers have been appointed to investigate all the allegations that have been made against our employees. It is too soon to know how these matters will progress, whether further allegations or claims will be made, and their financial impact. However, due to the uncertainty whether further allegations or claims will be made, regarding the future financial implications a contingent liability has been highlighted in note 20.

Management Report continued

Other Items continued

Going concern

In accordance with LR 9.8.6(3) of the Listing Rules, and in determining whether the Group's annual consolidated financial statements can be prepared on a going concern basis, the directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowing facilities and the risks and uncertainties relating to its business activities. These are set out in this Management Report with further detail provided in the Trinity Mirror plc 2013 Annual Report.

The key factors considered by the directors were as follows:

· the implications of the challenging economic environment and the structural changes in the market on the Group's revenues and profits. The Group undertakes regular forecasts and projections of trading for targeting performance and identifying areas of focus for management to improve performance and mitigate the impact of any deterioration in the economic outlook and structural challenges;

· the impact of the competitive environment within which the Group's businesses operate;

· the impact on our business of key suppliers (in particular newsprint) being unable to meet their obligations to the Group;

· the impact on our business of key customers being unable to meet their obligations for services provided by the Group; and

· the committed finance facilities available to the Group. The Group has access to a committed bank facility of £110.0 million under which drawings can be made with 24 hours' notice and was undrawn at the year end. The bank facility reduces to £101.8 million in March 2014 and further reduces to £93.5 million in March 2015 and remains at this level until August 2015. The Group also has overdraft facilities of £25.0 million to meet day-to-day working capital requirements.

Having considered all the factors impacting the Group's businesses, including downside sensitivities, the directors are satisfied that the Group will be able to operate within the terms and conditions of the Group's financing facilities for the foreseeable future.

The directors have reasonable expectations that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group's annual consolidated financial statements.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Results Announcement in accordance with applicable laws and regulations. The responsibility statement below has been prepared in connection with the Company's full Annual Report for the 52 weeks ended 29 December 2013. Certain points thereof are not included within this Annual Results Announcement.

The directors confirm to the best of their knowledge:

a) the consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

b) the Management Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

By order of the Board of directors

Simon Fox Vijay Vaghela

Chief Executive Group Finance Director

Consolidated income statement

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

	notes	2013 £m	2012 (restated) £m

Revenue	3,4	663.8	706.5
Cost of sales		(344.9)	(370.8)
Gross profit		318.9	335.7
Distribution costs		(74.9)	(77.6)
Administrative expenses:
Non-recurring items:	5
Impairment of goodwill and other intangible assets		(225.0)	(60.0)
Other		(9.3)	(11.5)
Amortisation of other intangible assets		(2.2)	(3.0)
Pension administrative expenses	15	(2.8)	(3.2)
Other administrative expenses		(142.8)	(152.7)
Share of results of associates:
Results before non-recurring items and amortisation		6.8	1.7
Non-recurring items	5	(0.5)	5.5
Amortisation of other intangible assets		(3.0)	-
Operating (loss)/profit	3	(134.8)	34.9
Investment revenues	6	0.3	0.4
Pension finance charge	15	(13.2)	(11.2)
Finance costs	7	(13.1)	(14.4)
(Loss)/profit before tax		(160.8)	9.7
Tax credit	8	64.4	7.2
(Loss)/profit for the period attributable to equity holders of the parent		(96.4)	16.9

Statutory (loss)/earnings per share		2013 Pence	2012 Pence
(Loss)/earnings per share - basic	10	(39.0)	6.8
(Loss)/earnings per share - diluted	10	(39.0)	6.7

Adjusted* earnings per share		2013 Pence	2012 Pence
Earnings per share - basic	10	32.0	29.9
Earnings per share - diluted	10	30.7	29.1

* Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge, the pension administrative expenses and the impact of tax legislation changes. Set out in note 19 is the reconciliation between the statutory results and the adjusted results.

Consolidated statement of comprehensive income

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

	notes	2013 £m	2012 (restated) £m

(Loss)/profit for the period		(96.4)	16.9

Items that will not be reclassified to profit and loss:
Actuarial gains/(losses) on defined benefit pension schemes	15	42.5	(64.1)
Tax on actuarial gains/(losses) on defined benefit pension schemes	8	(8.5)	14.6
Deferred tax charge resulting from the future change in tax rate	8	(8.9)	(4.6)
Share of items recognised by associates		(1.0)	(1.7)
Other comprehensive income/(costs) for the period		24.1	(55.8)

Total comprehensive costs for the period		(72.3)	(38.9)

Consolidated statement of changes in equity

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

	Share capital £m	Share premium account £m	Capital redemption reserve £m	Retained earnings and other reserves £m	Total £m

At 30 December 2012	(25.8)	(1,121.6)	(4.3)	512.7	(639.0)

Loss for the period	-	-	-	96.4	96.4
Other comprehensive income for the period	-	-	-	(24.1)	(24.1)
Total comprehensive costs for the period	-	-	-	72.3	72.3

Credit to equity for equity-settled share-based payments	-	-	-	(8.0)	(8.0)
Purchase of own shares	-	-	-	3.0	3.0
At 29 December 2013	(25.8)	(1,121.6)	(4.3)	580.0	(571.7)

	Share capital £m	Share premium account £m	Capital redemption reserve £m	Retained earnings and other reserves £m	Total £m

At 1 January 2012	(25.8)	(1,121.6)	(4.3)	476.3	(675.4)

Profit for the period (restated)	-	-	-	(16.9)	(16.9)
Other comprehensive costs for the period (restated)	-	-	-	55.8	55.8
Total comprehensive costs for the period	-	-	-	38.9	38.9

Credit to equity for equity-settled share-based payments	-	-	-	(2.5)	(2.5)
At 30 December 2012	(25.8)	(1,121.6)	(4.3)	512.7	(639.0)

Consolidated balance sheet

at 29 December 2013 (30 December 2012)

	notes	2013 £m	2012 £m
Non-current assets
Goodwill		12.0	17.8
Other intangible assets		671.1	894.9
Property, plant and equipment		337.6	357.5
Investment in associates		26.8	12.6
Retirement benefit assets	15	15.7	36.7
Deferred tax assets		57.0	68.9
Derivative financial instruments	13	1.9	5.2
		1,122.1	1,393.6
Current assets
Inventories		8.9	7.0
Trade and other receivables		110.5	107.1
Cash and cash equivalents	14	15.5	24.2
		134.9	138.3
Total assets		1,257.0	1,531.9
Non-current liabilities
Borrowings	12	(62.0)	(104.9)
Retirement benefit obligations	15	(267.9)	(334.4)
Deferred tax liabilities		(180.7)	(262.9)
Provisions		(13.8)	(8.8)
		(524.4)	(711.0)
Current liabilities
Borrowings	12	(40.4)	(49.7)
Trade and other payables		(90.3)	(101.1)
Current tax liabilities		(16.7)	(21.3)
Provisions		(10.3)	(7.1)
Derivative financial instruments	13	(3.2)	(2.7)
		(160.9)	(181.9)
Total liabilities		(685.3)	(892.9)
Net assets		571.7	639.0

Equity
Share capital	16	(25.8)	(25.8)
Share premium account	16	(1,121.6)	(1,121.6)
Capital redemption reserve	16	(4.3)	(4.3)
Retained earnings and other reserves	16	580.0	512.7
Total equity attributable to equity holders of the parent		(571.7)	(639.0)

Consolidated cash flow statement

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

	notes	2013 £m	2012 £m
Cash flows from operating activities
Cash generated from operations	11	92.9	109.2
Income tax paid		(22.0)	(18.1)
Net cash inflow from operating activities		70.9	91.1
Investing activities
Interest received		0.3	0.4
Dividend received from associates		2.3	0.1
Proceeds on disposal of subsidiary undertaking		2.5	-
Proceeds on disposal of property, plant and equipment		0.7	0.3
Purchases of property, plant and equipment		(8.0)	(5.6)
Acquisition of associate undertaking		(14.2)	-
Net cash used in investing activities		(16.4)	(4.8)
Financing activities
Interest paid on borrowings		(5.7)	(7.9)
Repayment of borrowings		(54.5)	(69.7)
Purchase of own shares		(3.0)	-
Net cash used in financing activities		(63.2)	(77.6)

Net (decrease)/increase in cash and cash equivalents		(8.7)	8.7

Cash and cash equivalents at the beginning of the period	14	24.2	15.5
Cash and cash equivalents at the end of the period	14	15.5	24.2

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

1. General information

The financial information in the Annual Results Announcement is derived from but does not represent the full statutory accounts of Trinity Mirror plc. The statutory accounts for the 52 weeks ended 30 December 2012 have been filed with the Registrar of Companies and those for the 52 weeks ended 29 December 2013 will be filed following the Annual General Meeting on 15 May 2014. The auditors' reports on the statutory accounts for the 52 weeks ended 30 December 2012 and for the 52 weeks ended 29 December 2013 were unqualified, do not include reference to any matters to which the auditors drew attention by way of emphasis of matter without qualifying the reports and do not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

Whilst the financial information included in this Annual Results Announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. This Annual Results Announcement constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules (DTR). The Annual Report for the 52 weeks ended 29 December 2013 will be available on the Company's website at www.trinitymirror.com and at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP on 13 March 2014 and will be sent to shareholders who have elected to receive a hard copy in April 2014.

The financial information has been prepared for the 52 weeks ended 29 December 2013 and the comparative period has been prepared for the 52 weeks ended 30 December 2012. Throughout this report, the financial information for the 52 weeks ended 29 December 2013 is referred to and headed 2013 and for the 52 weeks ended 30 December 2012 is referred to and headed 2012.

2. Accounting polices

The financial information has been prepared in accordance with IFRS as adopted by the European Union. These are subject to ongoing amendment by the International Accounting Standards Board and by the European Union and are therefore subject to change. As a result, the financial information contained herein will need to be updated for any subsequent amendment to IFRS or any new standards that are issued. The financial information has been prepared under the historical cost convention as modified by the revaluation of freehold properties which on transition to IFRS were deemed to be the cost of the asset.

The accounting policies used in the preparation of the consolidated financial statements for the 52 weeks ended 29 December 2013 have been consistently applied to all the periods presented except for the changes in accounting policy noted below and are set out in the Trinity Mirror plc 2013 Annual Report. These consolidated financial statements have been prepared on a going concern basis as set out in the Management Report in this Annual Results Announcement.

Changes in accounting policy

The same accounting policies, presentation and methods of computation are followed in the consolidated financial statements as applied in the Group's latest annual consolidated financial statements.

The Group has adopted IAS 19 (Amended) 'Employee Benefits' during the current financial period and has been applied retrospectively to 2012 for comparative purposes. Statutory operating profit for 2012 has been reduced by £3.2 million due to pension administrative expenses, which were previously allowed for in the pension finance charge, now charged to statutory operating profit and the pension finance charge has increased by £6.0 million due to a change in the basis of calculation. Together, the changes have resulted in a £9.2 million reduction in statutory profit before tax and a £6.9 million reduction in statutory profit after tax with statutory earnings per share decreasing by 2.8 pence. The adjusted results are not impacted as they exclude both the pension administrative expenses and the pension finance charge.

The Group has adopted new, amended and revised standards during the current financial period which have had no material impact on the Group:

· IFRS 1 (Amended) 'First-time Adoption of International Financial Reporting Standards' - effective for periods beginning on or after 1 January 2013

· IFRS 7 (Amended) 'Financial Instruments' - effective for periods beginning on or after 1 January 2013

· IFRS 13 (Issued) 'Fair Value Measurement' - effective for periods beginning on or after 1 January 2013

· IAS 1 (Amended) 'Presentation of Financial Statements' - effective for periods beginning on or after 1 July 2012

Improvements to IFRS (2011), effective for periods starting on or after 1 January 2013 has had no material impact on the Group.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

2. Accounting polices (continued)

Changes in accounting policy (continued)

At the date of approval of these consolidated financial statements the following new and amended standards, which have not been applied and when adopted will have no material impact on the Group, were in issue but not yet effective:

· IFRS 9 (Issued) 'Financial Instruments' - effective for periods starting on or after 1 January 2015

· IFRS 10 (Issued) 'Consolidated Financial Statements' - effective for periods beginning on or after 1 January 2014

· IFRS 11 (Issued) 'Joint Arrangements' - effective for periods beginning on or after 1 January 2014

· IFRS 12 (Issued) 'Disclosure of Interests in Other Entities' - effective for periods beginning on or after 1 January 2014

· IAS 27 (Revised) 'Separate Financial Statements' - effective for periods beginning on or after 1 January 2014

· IAS 28 (Revised) 'Investments in Associates' - effective for periods beginning on or after 1 January 2014

· IAS 32 (Amended) 'Financial Instruments' - effective for periods beginning on or after 1 January 2014

Critical judgements in applying the Group's accounting policies

In the process of applying the Group's accounting policies, described above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements:

Acquisitions and intangible assets

Judgements have been made in respect of the identification of intangible assets based on pre-acquisition forecasts and market analysis. The initial valuations of acquired intangible assets are reviewed for impairment at each reporting date, or more frequently if necessary.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Impairment of goodwill and other intangible assets

Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the cash-generating unit to which these have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

Retirement benefits

Actuarial assumptions adopted and external factors can significantly vary the surplus or deficit of defined benefit pension schemes. Advice is sourced from independent actuaries in selecting suitable assumptions.

Derivative financial instruments

Derivative financial instruments are recognised at fair value and can change significantly from period to period.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

3. Operating segments

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board and chief operating decision maker to allocate resources to the segments and to assess their performance. The Group has four operating segments that are regularly reviewed by the Board and chief operating decision maker.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the publishing segment and to third parties; Specialist Digital which includes our acquired digital classified and digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and the share of results of associates.

The accounting policies used in the preparation of each segment's revenue and results are the same as the Group's accounting policies described in note 2. The Board and chief operating decision maker are not provided with an amount for total assets by segment. The Group's operations are located in the UK and the Group is not subject to significant seasonality during the year.

Segment revenue and results

52 weeks ended 29 December 2013	Publishing 2013 £m	Printing 2013 £m	Specialist Digital 2013 £m	Central 2013 £m	Total 2013 £m
Revenue
Segment sales	576.4	198.4	20.0	3.0	797.8
Inter-segment sales	-	(132.7)	(1.3)	-	(134.0)
Total revenue	576.4	65.7	18.7	3.0	663.8
Segment result	118.5	-	0.4	(10.9)	108.0
Amortisation of other intangible assets					(5.2)
Pension administrative expenses					(2.8)
Non-recurring items					(234.8)
Operating loss					(134.8)
Investment revenues					0.3
Pension finance charge					(13.2)
Finance costs					(13.1)
Loss before tax					(160.8)
Tax credit					64.4
Loss for the period					(96.4)

52 weeks ended 30 December 2012 (restated)	Publishing 2012 £m	Printing 2012 £m	Specialist Digital 2012 £m	Central 2012 £m	Total 2012 £m
Revenue
Segment sales	615.6	219.5	23.0	3.2	861.3
Inter-segment sales	-	(153.2)	(1.6)	-	(154.8)
Total revenue	615.6	66.3	21.4	3.2	706.5
Segment result	125.1	-	(2.9)	(15.1)	107.1
Amortisation of other intangible assets					(3.0)
Pension administrative expenses					(3.2)
Non-recurring items					(66.0)
Operating profit					34.9
Investment revenues					0.4
Pension finance charge					(11.2)
Finance costs					(14.4)
Profit before tax					9.7
Tax credit					7.2
Profit for the period					16.9

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

4. Revenue

	2013 £m	2012 £m

Circulation	285.8	297.2
Advertising	262.7	292.8
Printing	65.7	66.3
Other	49.6	50.2
Total revenue	663.8	706.5

The Group's operations are located primarily in the UK. The Group's revenue by location of customers is set out below:

	2013 £m	2012 £m

UK and Republic of Ireland	659.9	702.1
Continental Europe	3.7	3.8
Rest of World	0.2	0.6
Total revenue	663.8	706.5

5. Non-recurring items

	2013 £m	2012 £m

Impairment of goodwill and other intangible assets (a)	(225.0)	(60.0)
Restructuring charges (b)	(9.9)	(11.5)
Profit on disposal of subsidiary undertaking (c)	0.6	-
Non-recurring items included in administrative expenses	(234.3)	(71.5)
Non-recurring items included in share of results of associates (d)	(0.5)	5.5
Total non-recurring items	(234.8)	(66.0)

(a) An impairment review comparing the carrying value of the Group's assets with value in use was undertaken in accordance with IAS 36. The review indicated that a £225.0 million impairment charge against goodwill and publishing rights and titles in respect of the Nationals and certain regional (Scotland, North East and Cardiff) cash-generating units was required (2012: £60.0 million impairment charge against goodwill in the digital recruitment cash-generating unit (£52.0 million) and the digital property cash-generating unit (£8.0 million)).

(b) Restructuring charges of £9.9 million (2012: £11.5 million) were incurred in delivery of cost reduction measures.

(d) Share of the after tax non-recurring items incurred by Local World in respect of restructuring charges (2012: gain made by PA Group Limited on disposal of its 50% interest in Canada Newswires).

6. Investment revenues

2013

£m

2012

£m

Interest income on bank deposits and other interest receipts

0.3

0.4

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

7. Finance costs

	2013 £m	2012 £m

Interest on bank overdrafts and borrowings	(7.0)	(8.8)
Total interest expense	(7.0)	(8.8)
Fair value loss on derivative financial instruments	(8.8)	(13.0)
Foreign exchange gain on retranslation of borrowings	2.7	7.4
Finance costs	(13.1)	(14.4)

8. Tax

	2013 £m	2012 (restated) £m
Current tax
Corporation tax charge for the period	(19.1)	(23.7)
Prior period adjustment	1.0	0.4
Current tax charge	(18.1)	(23.3)
Deferred tax
Deferred tax credit for the period	48.3	6.9
Deferred tax rate change	34.3	23.2
Prior period adjustment	(0.1)	0.4
Deferred tax credit	82.5	30.5
Tax credit	64.4	7.2

	%	%
Reconciliation of tax credit
Standard rate of corporation tax	23.3	(24.5)
Tax effect of items that are not deductible in determining taxable profit/(loss)	(1.0)	(152.8)
Deferred tax rate change	16.6	239.2
Prior period adjustment	0.6	8.2
Tax effect of share of results of associates	0.5	4.1
Tax credit rate	40.0	74.2

The standard rate of corporation tax reduced from 24% to 23% on 1 April 2013. The blended rate for the accounting year is 23.25% being a mix of 24% up to 31 March 2013 and 23% from 1 April 2013 (2012: 24.5% being a mix of 26% up to 31 March 2012 and 24% from 1 April 2012). The current tax liabilities amounted to £16.7 million (2012: £21.3 million) at the reporting date.

The opening deferred tax position is recalculated in the period in which a change in the standard rate of corporation tax has been enacted or substantively enacted by parliament. The change in rate from 23% to 20% (2012: from 25% to 23%) has been accounted for in the year resulting in a £34.3 million credit (2012: £23.2 million credit) in the consolidated income statement and a £8.9 million debit (2012: £4.6 million debit) in the consolidated statement of comprehensive income.

The tax on actuarial gains/(losses) on defined benefit pension schemes taken to the consolidated statement of comprehensive income is a debit of £8.5 million (2012: £14.6 million credit) comprising a deferred tax debit of £9.2 million and a current tax credit of £0.7 million (2012: £14.6 million deferred tax credit).

The tax on share-based payments taken to equity is a credit of £5.9 million (2012: £nil).

9. Dividends

No dividend was declared for both 2013 and 2012.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

10. Earnings per share

	2013 £m	2012 (restated) £m

Profit after tax before adjusted* items	79.1	73.7
Adjusted* items:
Non-recurring items (after tax)	(187.3)	(62.6)
Amortisation of other intangibles (after tax)	(4.8)	(2.3)
Finance costs (after tax)	(4.9)	(4.3)
Pension charges (after tax)	(12.8)	(10.8)
Tax legislation changes	34.3	23.2
(Loss)/profit for the period	(96.4)	16.9

*Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge, the pension administrative expenses and the impact of tax legislation changes. Set out in note 19 is the reconciliation between the statutory results and the adjusted results.

Weighted average number of ordinary shares	Thousand	Thousand

Weighted average number of ordinary shares for basic earnings per share	247,328	246,686
Effect of potential dilutive ordinary shares in respect of share options	10,063	6,698
Weighted average number of ordinary shares for diluted earnings per share	257,391	253,384

Basic earnings per share is calculated by dividing profit for the period attributable to equity holders of the parent by the weighted average number of ordinary shares during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares. The weighted average number of potentially dilutive ordinary shares not currently dilutive was 5,215,571 (2012: 6,406,571).

Statutory (loss)/earnings per share	Pence	Pence

(Loss)/earnings per share - basic	(39.0)	6.8
(Loss)/earnings per share - diluted	(39.0)	6.7

Potentially dilutive ordinary shares in respect of share options have not been included in the statutory diluted (loss)/earnings per share calculation as they are antidilutive in this instance.

Adjusted* earnings per share	Pence	Pence

Earnings per share - basic	32.0	29.9
Earnings per share - diluted	30.7	29.1

*Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge, the pension administrative expenses and the impact of tax legislation changes. Set out in note 19 is the reconciliation between the statutory results and the adjusted results.

The basic earnings per share impact for each non-recurring item disclosed in note 5 are as follows:

	Pence	Pence

Impairment of goodwill and intangible assets	(73.1)	(24.3)
Restructuring charges	(2.8)	(3.3)
Profit on disposal of subsidiary undertaking	0.3	-
Loss per share - non-recurring items included in administrative expenses	(75.6)	(27.6)
(Loss)/profit per share - non-recurring items included in share of results of associates	(0.2)	2.2
Loss per share - total non-recurring items	(75.8)	(25.4)

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

11. Notes to the consolidated cash flow statement

	2013 £m	2012 (restated) £m

Operating (loss)/profit	(134.8)	34.9
Depreciation of property, plant and equipment	26.4	29.1
Impairment of goodwill and other intangible assets	225.0	60.0
Amortisation of other intangible assets	2.2	3.0
Share of results of associates	(3.3)	(7.2)
Charge for share-based payments	2.3	2.8
Profit on disposal of subsidiary undertaking	(0.6)	-
Profit on disposal of fixed assets	(0.2)	(0.1)
Write-off of fixed assets	1.2	-
Pension funding in excess of income statement charge	(16.2)	(7.7)
Operating cash flows before movements in working capital	102.0	114.8
(Increase)/decrease in inventories	(1.9)	2.7
Increase in receivables	(4.4)	(6.0)
Decrease in payables	(2.8)	(2.3)
Cash flows from operating activities	92.9	109.2

12. Borrowings

	2013 £m	2012 £m

Loan notes	(102.4)	(154.6)
Derivative financial instruments (note 13)	(3.2)	(2.7)
	(105.6)	(157.3)
The borrowings are repayable as follows:
On demand or within one year	(43.6)	(52.4)
In the second year	-	(41.3)
In the fourth year	(62.0)	-
In the fifth year	-	(63.6)
	(105.6)	(157.3)
The borrowings are included in the consolidated balance sheet as follows:
Amount included in non-current liabilities	(62.0)	(104.9)
Amount included in current liabilities	(43.6)	(52.4)
	(105.6)	(157.3)

The amount included in non-current liabilities represents borrowings of £62.0 million (2012: £104.9 million) and in current liabilities represents borrowings of £40.4 million (2012: £49.7 million) and derivative financial instruments of £3.2 million (2012: £2.7 million). Non-current assets include £1.9 million (2012: £5.2 million) relating to derivative financial instruments which are included in net debt in note 14.

	2013 £m	2012 £m
Loan notes movement in the period:
Opening balance	(154.6)	(226.8)
Foreign exchange gain on retranslation	2.7	7.4
Repayments	49.5	64.8
Closing balance	(102.4)	(154.6)
Composition of loan notes:
US$350 million loan notes	-	(49.7)
£22 million loan notes	-	-
US$252 million loan notes	(92.4)	(94.9)
£10 million loan notes	(10.0)	(10.0)
	(102.4)	(154.6)

Private placement loan notes totalling US$602 million and £32 million were issued in 2001 (US$350 million and £22 million) and 2002 (US$252 million and £10 million). On the issue date the capital repayments and fixed rate interest on the US$ denominated loan notes were swapped into floating rate Sterling through the use of cross-currency interest rate swaps. As hedge accounting under IAS 39 has not been applied, the loan notes and cross-currency interest rate swaps are shown separately in accordance with IAS 39. The loan notes are disclosed at amortised cost and translated into Sterling at the reporting date exchange rate and the cross-currency interest rate swaps are disclosed at fair value at the reporting date. These values do not represent the amounts required to repay the loan notes or cancel the related cross-currency interest rate swaps.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

12. Borrowings (continued)

At the reporting date there were no outstandings in respect of the US$350 million loan notes and £22 million loan notes that were issued in 2001 following repayments made in 2008, 2011 and 2013. At the reporting date there were US$150 million and £10 million outstanding in respect of the US$252 million loan notes and £10 million loan notes that were issued in 2002 following a repayment made in 2012.

At 29 December 2013 the Group had available £110.0 million (2012: £110.0 million) of undrawn committed borrowing facilities of which all conditions precedent had been met. The facility is in place until August 2015 and reduces to £101.8 million in March 2014 and further reduces to £93.5 million in March 2015.

All borrowings are denominated in Sterling unless otherwise indicated. The bank facility and the private placement loan notes are unsecured.

The effective interest rates at the reporting date are as follows:

	2013 %	2012 %

US$ denominated loan notes	7.39	6.78
£ denominated loan notes	7.14	7.14

The fair value of the Group's borrowings is estimated by discounting their future cash flows at the market rate. The estimate at the reporting date is as follows:

	2013 £m	2012 £m

US$ denominated loan notes	(92.4)	(144.6)
£ denominated loan notes	(10.0)	(10.0)

In estimating the fair value of the loan notes the future cash flows have been discounted using an appropriate discount factor that includes credit risk.

The fair value of other financial assets and liabilities, excluding derivative financial instruments in note 13, are not materially different from the book values and are not repeated in this analysis.

13. Derivative financial instruments

The Group has cross-currency interest rate swaps to manage its exposure to foreign exchange movements and interest rate movements on the private placement loan notes. Fair value is calculated using discounted cash flows based upon forward rates available to the Group. The cross-currency interest rate swaps are classed in level two of the financial instruments hierarchy. Level two fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

The movement in the derivative financial instruments is as follows:

	2013 £m	2012 £m

Opening asset	2.5	10.6
Repayments	5.0	4.9
Movement in fair value	(8.8)	(13.0)
Closing (liability)/asset	(1.3)	2.5

The derivative financial instruments are included in the consolidated balance sheet as follows:

	2013 £m	2012 £m

Current liabilities	(3.2)	(2.7)
Non-current assets	1.9	5.2
Closing (liability)/asset	(1.3)	2.5

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

14. Net debt

The statutory net debt for the Group is as follows:

	30 December 2012 £m	Cash flow £m	Derivative financial instruments* £m	Foreign exchange* £m	Loans repaid £m	Transfer to current £m	29 December 2013 £m
Non-current liabilities
Loan notes	(104.9)	-	-	(0.3)	-	43.2	(62.0)
	(104.9)	-	-	(0.3)	-	43.2	(62.0)
Current liabilities
Loan notes	(49.7)	-	-	3.0	49.5	(43.2)	(40.4)
Derivative financial instruments	(2.7)	-	(5.6)	-	5.0	0.1	(3.2)
	(52.4)	-	(5.6)	3.0	54.5	(43.1)	(43.6)
Non-current assets
Derivative financial instruments	5.2	-	(3.2)	-	-	(0.1)	1.9
	5.2	-	(3.2)	-	-	(0.1)	1.9
Current assets
Cash and cash equivalents	24.2	45.8	-	-	(54.5)	-	15.5
	24.2	45.8	-	-	(54.5)	-	15.5
Net debt including cash in escrow	(127.9)	45.8	(8.8)	2.7	-	-	(88.2)
Cash in escrow	(14.2)	14.2	-	-	-	-	-
Net debt excluding cash in escrow	(142.1)	60.0	(8.8)	2.7	-	-	(88.2)

* The impact on the loan notes of translation into Sterling at the settlement date or at the reporting date exchange rate and the impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 7.

The contracted net debt for the Group, assuming that the private placement loan notes and the cross-currency interest rate swaps are not terminated prior to maturity, is as follows:

	30 December 2012 £m	Cash flow £m	Loans repaid £m	Transfer to current £m	29 December 2013 £m
Non-current liabilities
Loan notes	(112.5)	-	-	44.2	(68.3)
	(112.5)	-	-	44.2	(68.3)
Current liabilities
Loan notes	(54.5)	-	54.5	(44.2)	(44.2)
	(54.5)	-	54.5	(44.2)	(44.2)
Current assets
Cash and cash equivalents	24.2	45.8	(54.5)	-	15.5
	24.2	45.8	(54.5)	-	15.5
Net debt including cash in escrow	(142.8)	45.8	-	-	(97.0)
Cash in escrow	(14.2)	14.2	-	-	-
Net debt excluding cash in escrow	(157.0)	60.0	-	-	(97.0)

The statutory net debt reconciles to the contracted net debt as follows:

	2013 £m	2012 £m

Statutory net debt	(88.2)	(142.1)
Loan notes at period end exchange rate	102.4	154.6
Loan notes at swapped exchange rate	(112.5)	(167.0)
Cross-currency interest rate swaps	1.3	(2.5)
Contracted net debt	(97.0)	(157.0)

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

15. Retirement benefit schemes

Defined contribution pension schemes

The Group operates the Trinity Mirror Pension Plan (the 'TMPP Scheme'), which is a defined contribution pension scheme for qualifying employees. The assets of the scheme are held separately from those of the Group in funds under the control of Trustees.

The Group implemented the Auto Enrolment legislation from 1 July 2013. The TMPP Scheme has three sections, one for members who elected to join prior to 1 May 2013 which is now closed to new members, one for members who elect to join from 1 May 2013 and one for members from 1 July 2013 who are auto enrolled.

The current service cost charged to the consolidated income statement of £14.8 million (2012: £13.7 million) represents contributions payable to the scheme by the Group at rates specified in the scheme rules. Contributions that were due have been paid over to the scheme at all reporting dates.

Defined benefit pension schemes

Background

The Group's defined benefit pension schemes were closed to new entrants from 1 January 2003 and closed to future accrual from 31 March 2010.

The principal schemes which together represent the majority of the aggregate value of the assets and liabilities are the Mirror Group Pension Scheme (the 'Old Scheme'), the MGN Past Service Pension Scheme (the 'Past Service Scheme'), the MGN Pension Scheme (the 'MGN Scheme'), the Trinity Retirement Benefit Scheme (the 'Trinity Scheme') and the Midland Independent Newspapers Pension Scheme (the 'MIN Scheme').

The Old Scheme and the Past Service Scheme cover the liabilities for service up to 13 February 1992 for employees and former employees who worked regularly on the production and distribution of Mirror Group's newspapers. The Old Scheme was closed on 13 February 1992 and the Past Service Scheme was established to meet any liabilities which are not satisfied by payments from the Old Scheme and the Maxwell Communications Pension Plan. No contributions have been paid to the Old Scheme since 1992. The disclosures contained in this note in respect of these two schemes are combined (the 'Old Scheme/Past Service Scheme').

The remaining four defined benefit pension schemes have all secured their members benefits by way of a buy-in with insurance companies. It is expected that these schemes will be wound up during 2014 without further contributions from the Group. On completion of the winding up of these schemes, any surplus assets will be either transferred to one of the principal schemes.

Characteristics

The defined benefit pension schemes provide pensions to members which are based on the final salary pension payable normally from age 65 plus surviving spouses or dependents benefits following a member's death. Benefits increase both before and after retirement either in line with statutory requirements or in accordance with the scheme rules. Such increases are either at fixed rates or in line with retail or consumer prices but subject to upper and lower limits.

All of the schemes are independent of the Group with assets held independently of the Group. They are governed by Trustees who administer benefits in accordance with the scheme rules and appropriate UK legislation. The principal schemes each have a professional independent trustee as their chairman with half of the remaining Trustees nominated by the members and half by the Group.

Maturity profile and cash flow

Across the principal schemes, the invested assets at the year end are expected to be sufficient to pay the uninsured benefits due up to 2043, based on the year end assumptions. The remaining uninsured benefit payments, payable from 2044, are due to be funded by a combination of asset outperformance and the deficit contributions currently scheduled to be paid by 2027. The liabilities relate 50% to current pensioners and their spouses or dependants and 50% relate to deferred pensioners. Uninsured benefit payments in 2013 were £47 million, projected to rise to an annual peak in 2035 of £80 million and reducing thereafter.

Funding arrangements

The funding of the Group's principal schemes is subject to UK pension legislation as well as the guidance and codes of practice issued by the Pensions Regulator. Funding targets are agreed between the Trustees and the Group and are reviewed and revised usually every three years. The funding targets must include a margin for prudence above the expected cost of paying the benefits and so are different to the liability value for IAS 19 purposes. The funding deficits revealed by these triennial valuations are removed over time in accordance with an agreed recovery plan and schedule of contributions for each scheme.

Following a period of consultation with the Trustees of the principal schemes, in conjunction with the refinancing completed on 14 March 2012, the Trustees agreed to extend their recovery plans with reduced deficit funding payments for 2012, 2013 and 2014. Normalised levels of contributions will recommence from 2015.

As part of this consultation process the formal valuations for the Old Scheme/Past Service Scheme and the MGN Scheme were completed on 14 March 2012 for a valuation as at 31 December 2010 which showed deficits of £192.5 million and £68.8 million respectively. The next valuation date is as at 31 December 2013.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

15. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Funding arrangements (continued)

Also as part of the consultation process, the Trinity Scheme and the MIN Scheme revised their previous schedules of contributions and recovery plans on 14 March 2012. A valuation was prepared in October 2013 for a valuation as at 30 June 2012 for the Trinity Scheme which showed a deficit of £127.5 million. The last valuation prepared for a valuation as at 31 March 2010 for the MIN Scheme which showed a deficit of £13.3 million. The Trustees of the Trinity Scheme and the MIN Scheme have agreed to carry out valuations as at 31 December 2013 in order that the valuation date of the principal schemes are aligned and therefore have agreed to continue with the recovery plans agreed on 14 March 2012.

During 2013, contributions paid to the defined benefit pension schemes amounted to £19.0 million (2012: £10.9 million) being £9.9 million in respect of the agreed 2013 payments and an accelerated payment of £9.1 million in respect of the agreed 2014 payments (2012: £10.0 in respect of the agreed 2012 payments and a further £0.9 million relating to costs incurred by the schemes in negotiating the revised recovery plans). Payments were £11.6 million (2012: £6.2 million) to the Past Service Scheme, £4.0 million (2012: £2.0 million) to the MGN Scheme, £1.0 million (2012: £0.7 million) to the Trinity Scheme, £1.6 million (2012: £0.9 million) to the MIN Scheme and £0.8 million (2012: £1.1 million) to the smaller schemes. Following the accelerated payment in 2013, no contributions are due in 2014.

Any changes to amounts payable in 2014 and thereafter will be based on the outcome of the valuations of the principal schemes for a valuation as at 31 December 2013 which are ongoing and are expected to be completed in 2014.

Risks

Valuations for funding and accounting purposes are based on assumptions about future economic and demographic variables. This results in risk of a volatile valuation deficit, and the risk that the ultimate cost of paying benefits is higher than the current assessed liability value.

The main sources of risk are:

· Investment risk: a reduction in asset returns (or assumed future asset returns);

· Inflation risk: an increase in benefit increases (or assumed future increases); and

· Longevity risk: an increase in average life spans (or assumed life expectancy).

These risks are managed by:

· Investing in insured annuity policies: the income from these policies exactly matches the benefit payments for the members covered, removing all of the above risks. At the reporting date the insured annuity policies covered 23% of total liabilities;

· Investing a proportion of assets in government and corporate bonds: changes in the values of the bonds broadly match changes in the values of the uninsured liabilities, reducing the investment risk. At the reporting date this amounted to 35% of assets excluding the insured annuity policies;

· Investing a proportion in equities: with the aim of achieving outperformance and so reducing the deficits over the long term. At the reporting date this amounted to 54% of assets excluding the insured annuity policies; and

· The gradual sale of equities over time to purchase additional annuity policies or bonds: to further reduce risk as the schemes, which are closed to future accrual, mature.

The Group is not exposed to any unusual, entity specific or scheme specific risks. There were no plan amendments, settlements or curtailments during 2013 which resulted in a pension cost.

Actuarial projections at the reporting date showed removal of the accounting deficit by 2022 due to scheduled contributions and asset outperformance over assumed investment returns.

Results

The Group has adopted IAS 19 (Amended) 'Employee Benefits' during the current financial period and has been applied retrospectively to 2012 for comparative purposes. The impact is set out in note 2.

For the purposes of the Group's annual consolidated financial statements, valuations have been performed in accordance with the requirements of IAS 19 with scheme liabilities calculated using a consistent projected unit valuation method and compared to the value of the scheme assets at 31 December 2013, the day closest to the reporting date for which such values were available.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

15. Retirement benefit schemes (continued)

The assets and liabilities of the principal schemes as at the reporting date are:

	Old Scheme/Past Service Scheme £m	MGN Scheme £m	Trinity Scheme £m	MIN Scheme £m

Present value of uninsured scheme liabilities	(568.8)	(456.8)	(289.0)	(76.8)
Present value of insured scheme liabilities	(181.7)	-	(85.4)	(110.3)
Total present value of scheme liabilities	(750.5)	(456.8)	(374.4)	(187.1)
Invested and cash assets at fair value	399.1	374.2	301.7	61.3
Value of insurance contracts	181.7	-	85.4	110.3
Total value of scheme assets	580.8	374.2	387.1	171.6
Net scheme (deficit)/surplus	(169.7)	(82.6)	12.7	(15.5)

Based on actuarial advice, the assumptions used in calculating the scheme liabilities and the actuarial value of those liabilities are:

	2013	2012
Financial assumptions (nominal % pa)
Discount rate	4.40	4.50
Retail price inflation rate	3.35	2.80
Consumer price inflation rate	2.35	2.00
Rate of pension increase in deferment	2.35	2.00
Rate of pension increases in payment	3.95	3.85
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65	22.3	22.6
Female currently aged 65	24.4	24.7
Male currently aged 55	23.1	23.5
Female currently aged 55	25.4	25.7

The estimated impact on the IAS 19 liabilities and on the IAS 19 deficit at the reporting date, due to a reasonably possible change in key assumptions over the next year, are set out in the table below:

	Effect on liabilities £m	Effect on deficit £m
Discount rate+/- 0.5% pa	-127/+139	-109/+120
Retail price inflation rate +/- 0.5% pa	+25/-27	+16/-18
Consumer price inflation rate +/- 0.5% pa	+49/-44	+48/-44
Life expectancy at age 65 +/- 1 year	+69/-67	+60/-58

The effect on the deficit is lower than the effect on the liabilities due to the matching impact on the value of the insurance contracts held in respect of some of the liabilities. Each assumption variation represents a reasonably possible change in the assumption over the next year but might not represent the actual effect because assumption changes are unlikely to happen in isolation.

The estimated impact of the assumption variations make no allowance for changes in the values of invested assets that would arise if market conditions were to change in order to give rise to the assumption variation. If allowance were made, the estimated impact would likely be lower as the values of invested assets would normally change.

The amount included in the consolidated income statement, consolidated statement of comprehensive income and consolidated balance sheet arising from the Group's obligations in respect of its defined benefit pension schemes is as follows:

Consolidated income statement	2013 £m	2012 (restated) £m

Pension scheme administrative expenses	(2.8)	(3.2)
Pension scheme finance charge	(13.2)	(11.2)
Defined benefit cost recognised in income statement	(16.0)	(14.4)

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

15. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Consolidated statement of comprehensive income	2013 £m	2012 (restated) £m

Actuarial (loss)/gain due to liability experience	(11.8)	14.2
Actuarial loss due to liability assumption changes	(15.4)	(112.2)
Total liability actuarial loss	(27.2)	(98.0)
Returns on scheme assets greater than discount rate	69.7	33.9
Total gain/(loss) recognised in statement of comprehensive income	42.5	(64.1)

Consolidated balance sheet	2013 £m	2012 £m

Present value of uninsured scheme liabilities	(1,392.0)	(1,358.8)
Present value of insured scheme liabilities	(424.1)	(444.8)
Total present value of scheme liabilities	(1,816.1)	(1,803.6)
Invested and cash assets at fair value	1,139.8	1,061.1
Value of insurance contracts	424.1	444.8
Total value of scheme assets	1,563.9	1,505.9
Net scheme deficit	(252.2)	(297.7)

Non-current assets - retirement benefit assets	15.7	36.7
Non-current liabilities - retirement benefit obligations	(267.9)	(334.4)
Net scheme deficit	(252.2)	(297.7)

Net scheme deficit included in consolidated balance sheet	(252.2)	(297.7)
Deferred tax included in consolidated balance sheet	50.4	68.5
Net scheme deficit after deferred tax	(201.8)	(229.2)

Movement in net scheme deficit	2013 £m	2012 (restated) £m

Opening net scheme deficit	(297.7)	(230.1)
Contributions	19.0	10.9
Consolidated income statement	(16.0)	(14.4)
Consolidated statement of comprehensive income	42.5	(64.1)
Closing net scheme deficit	(252.2)	(297.7)

Changes in the present value of scheme liabilities	2013 £m	2012 (restated) £m

Opening present value of scheme liabilities	(1,803.6)	(1,705.8)
Interest cost	(79.4)	(81.8)
Actuarial (loss)/gain - experience	(11.8)	14.2
Actuarial gain - change to demographic assumptions	59.0	1.5
Actuarial loss - change to financial assumptions	(74.4)	(113.7)
Benefits paid	82.7	82.0
Buy-out	11.4	-
Closing present value of scheme liabilities	(1,816.1)	(1,803.6)

Changes in the fair value of scheme assets	2013 £m	2012 (restated) £m

Opening fair value of scheme assets	1,505.9	1,475.7
Interest income	66.2	70.6
Actual return on assets greater than discount rate	69.7	33.9
Contributions by employer	19.0	10.9
Benefits paid	(82.7)	(82.0)
Administrative expenses	(2.8)	(3.2)
Buy-out	(11.4)	-
Closing fair value of scheme assets	1,563.9	1,505.9

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

15. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Fair value of scheme assets	2013 £m	2012 £m

UK equities	223.7	227.6
US equities	159.0	103.9
Other overseas equities	230.3	252.7
Property	28.2	22.1
Corporate bonds	264.7	264.6
Fixed interest gilts	63.9	54.8
Index linked gilts	67.4	90.4
Cash and other	102.6	45.0
Invested and cash assets at fair value	1,139.8	1,061.1
Value of insurance contracts	424.1	444.8
Fair value of scheme assets	1,563.9	1,505.9

All of the scheme assets have quoted prices in active markets. Scheme assets include neither direct investments in the Company's ordinary shares nor any property assets occupied nor other assets used by the Group.

16. Share capital and reserves

The share capital comprises 257,690,520 allotted, called-up and fully paid ordinary shares of 10p each. The share premium account reflects the premium on issued ordinary shares. The capital redemption reserve represents the nominal value of the shares purchased and subsequently cancelled under share buy-back programmes.

Cumulative goodwill written off to retained earnings and other reserves in respect of continuing businesses acquired prior to 1998 is £25.9 million (2012: £25.9 million). On transition to IFRS, the revalued amounts of freehold properties were deemed to be the cost of the asset and the revaluation reserve has been transferred to retained earnings and other reserves.

Shares purchased by the Trinity Mirror Employees' Benefit Trust (the 'Trust') are included in retained earnings and other reserves at £13.4 million (2012: £12.6 million). During the year the Trust purchased 2,600,000 shares for a cash consideration of £3.0 million. The Trust received a payment of £3.0 million from the Company to purchase these shares. During the year, 1,652,091 shares were released to senior managers relating to grants made in prior years.

During the year 2,458,487 share awards were granted to senior managers on a discretionary basis under the Long Term Incentive Plan approved in 2012 (2012: 7,278,368 under the Long Term Incentive Plan approved in 2004). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to the continued employment of the participant and satisfaction of certain performance conditions.

During the year no share awards were granted to senior managers on a discretionary basis under the Deferred Share Award Plan approved in 2006 (2012: 2,683,818 under the Deferred Share Award Plan approved in 2006). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to continued employment of the participant.

17. Acquisition of associated undertaking

On 7 January 2013, the Group acquired a 19.98% equity interest in Local World Limited for a cash consideration of £14.2 million. On the same day, Local World Limited acquired the regional publishing assets previously owned by Northcliffe Media Limited and Iliffe News & Media Limited. Local World Limited subsequently changed its name to Local World Holdings Limited.

Notes to the consolidated financial statements

for the 52 weeks ended 29 December 2013 (52 weeks ended 30 December 2012)

18. Disposal of subsidiary undertaking

On 31 August 2013 the Group disposed of Trinity Mirror Digital Property Limited. The net assets at the date of disposal were as follows:

		£m

Goodwill		2.4
Trade and other receivables		0.8
Trade and other payables		(0.4)
Net assets		2.8
Profit on disposal		0.6
Total consideration		3.4

Satisfied by:
Cash consideration paid		2.5
Deferred consideration		0.9
Total consideration		3.4

Net cash flow arising on disposal:
Cash consideration		2.5
Net cash inflow		2.5

The deferred consideration of £0.9 million was received on 30 December 2013.

19. Reconciliation of statutory results to adjusted results

52 weeks ended 29 December 2013	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Finance costs (c) £m	Pension charges (d) £m	Tax legislation changes (e) £m	Adjusted results £m
Revenue	663.8	-	-	-	-	-	663.8
Operating (loss)/profit	(134.8)	234.8	5.2	-	2.8	-	108.0
(Loss)/profit before tax	(160.8)	234.8	5.2	6.1	16.0	-	101.3
(Loss)/profit after tax	(96.4)	187.3	4.8	4.9	12.8	(34.3)	79.1
Basic (loss)/earnings per share (p)	(39.0)	75.8	1.9	2.0	5.2	(13.9)	32.0

52 weeks ended 30 December 2012 (restated)	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Finance costs (c) £m	Pension charges (d) £m	Tax legislation changes (e) £m	Adjusted results £m
Revenue	706.5	-	-	-	-	-	706.5
Operating profit	34.9	66.0	3.0	-	3.2	-	107.1
Profit before tax	9.7	66.0	3.0	5.6	14.4	-	98.7
Profit after tax	16.9	62.6	2.3	4.3	10.8	(23.2)	73.7
Basic earnings per share (p)	6.8	25.4	0.9	1.8	4.4	(9.4)	29.9

(a) Non-recurring items relate to the items charged or credited to operating profit as set out in note 5 and prior year tax adjustments included in the taxation charge or credit as set out in note 8.

(b) Amortisation of the Group's other intangible assets and amortisation included in share of results of associates.

(c) Impact of the translation of foreign currency borrowings and fair value changes on derivative financial instruments as set out in note 7.

(d) Pension finance charge and pension administrative expenses relating to the defined benefit pension schemes as set out in note 15.

(e) Tax legislation changes relate to the change in the corporation tax rate on the opening deferred tax position as set out in note 8.

20. Contingent liabilities

There is potential for further liabilities to arise from the outcome or resolution of the ongoing historical legal issues. Due to the present uncertainty in respect of the nature, timing or measurement of any such liabilities it is too soon to be able to reliably estimate how these matters will proceed and their financial impact.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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