* 29% increase in income from continuing operations * 25% increase in cash flow from continuing operations * 26% increase in earnings per share from continuing operations: from $0.46 to $0.58 Montreal, September 12, 2002 — For the third quarter ended July 31, 2002, Transcontinental Group reported consolidated revenues of $408.8 million compared to $409.3 million in 2001. On a comparative basis, applying the new accounting standards to the third quarter of 2001, income from continuing operations increased 29%, from $19.2 million to $24.7 million; on a per-share basis it rose 26%, from $0.46 in 2001 to $0.58 in 2002, despite the fact that the number of shares outstanding increased by three million following the share issue completed during the quarter. Cash flow from continuing operations increased by 25%, from $41.6 million in 2001 to $52 million in 2002 (from $1.01 to $1.23 per share). For the first nine months of the year, consolidated revenues stood at $1.28 billion compared to $1.31 billion in 2001. On a comparative basis, income from continuing operations rose 22%, from $69.4 million to $84.9 million; on a per-share basis, it rose 16%, from $1.76 in 2001 to $2.04 in 2002, this despite the additional shares outstanding. Cash flow from continuing operations rose 19%, from $134.9 million in 2001 to $161 million in 2002 (from $3.41 to $3.87 per share). "Despite the slight decrease in revenues which stemmed mainly from the fact that the commercial product printing market is still experiencing difficulties, particularly in Mexico and the United States, Transcontinental continues to stand out in its industry because of its steady increase in profitability," said Daniel Denault, Vice-President and Chief Financial Officer of Transcontinental Group. "The reduction in financial expenses, the positive impact of the exchange rate, the ongoing efforts to reduce costs and improve efficiency, as well as the positive contribution of new acquisitions have more than offset decreased sales in the printing sector. "In the second quarter," said Mr. Denault, "we announced an increase in our projected earnings per share for fiscal 2002, to a range of $2.80 to $2.95. Given our performance in the first nine months of the year, our acquisitions at the end of the third quarter and beginning of the fourth, and our continued focus on improving efficiency, particularly through the Horizon 2005 project, the Corporation now expects to reach the upper end of that range." As at July 31, 2002, the total net debt to capital ratio was 23%. Including the acquisition discussed under "Subsequent Event," the total net debt to capital ratio would be 40%, which is lower than the long-term objective of 45% set by the Corporation. With its solid balance sheet, the Corporation is in an excellent position to pursue its growth strategy and reinforce its leading position in its various niches. Subsequent Event On August 9, 2002, Transcontinental completed the largest acquisition in its history when it bought 12 community newspapers from CanWest Global Communications in the four Atlantic provinces and Saskatchewan, along with their 32 related publications, for $255 million (plus working capital). The purchase consists of 10 dailies and two weeklies, as well as the related printing operations. Transcontinental also becomes the printer of the National Post for the Atlantic Provinces. Included as well are the commercial printing facilities Ad Venture, in Saskatoon, and Williams & Crue, in Summerside. This acquisition will contribute significantly to achieving the growth objectives laid out in the Corporation’s development plan. The acquired companies employ close to 900 people and generate annual revenues of about $100 million. These revenues, which will be accounted for as of the acquisition date, will increase Transcontinental Media’s annualized revenues to about $500 million, thereby strengthening its position as the fourth-largest print media group in Canada. New Accounting Standards Since the first quarter of 2002, the Corporation has applied the new accounting standards issued by the Canadian Institute of Chartered Accountants with respect to the accounting of goodwill and other intangible assets. Under the new standards, goodwill and intangible assets with an indeterminate life will no longer be amortized, but will be subject to an annual impairment test.