Management Report

Operational Performance

The Group delivered a strong set of results for 2016 despite the print markets remaining challenging throughout the year. Cash generation was also strong providing resilience and financial flexibility to invest, to grow dividends and over time meet pension obligations.

Group revenue increased by 20.3% to £713.0 million. The increase in revenue includes the benefit of the acquisition of Local World in November 2015 and an additional week of trading in 2016, partly offset by the cessation of the Independent print and distribution contract in April 2016 and the sale of Rippleffect in August 2016.

On a like for like basis, revenue fell by 8.0% with publishing digital revenue growing by 12.8% and publishing print revenue falling by 10.7%. The challenges in print advertising markets resulted in a decline in display advertising across a number of sectors, in particular retail. Most classified advertising categories also came under pressure, in particular recruitment. Circulation revenues declined 5.2% with volume declines partially mitigated by cover price increases. Strong growth in digital display and transactional revenue of 24.7% was partly offset by digital classified revenue declines of 11.3%, primarily due to falls in recruitment advertising. The growth in digital display and transactional revenue was driven by the growth in digital audience with average monthly page views on a like for like basis growing by 15.4% to 636.1 million.

Good cost control together with the acquisition of Local World and an additional week of trading contributed to adjusted operating profit growing by 25.5% with adjusted EBITDA of £159.7 million. The Group delivered structural (including synergy) cost savings of £25 million, £10 million ahead of the £15 million target for the full year. We have delivered £10 million of synergy savings in 2016 from the integration of Local World and expect annualised synergy savings of £15 million in 2017, £3 million ahead of our original £12 million target at the time of the acquisition. Restructuring charges in respect of cost reduction measures were £15.1 million in 2016 and are expected to be £10 million in 2017.

Adjusted profit before tax grew by 23.9% and adjusted earnings per share grew by 12.4% reflecting the increased revenues and tight management of the business.

Statutory operating profit increased by £11.3 million to £93.5 million reflecting the benefit of the increased adjusted operating profit partially offset by higher non-recurring operating charges of £26.0 million in 2016 compared to £4.4 million in 2015. The non-recurring items comprise an increase of £11.5 million in the provision for historical legal issues, a £10.7 million charge for the closure of a print plant and a press line (£9.1 million fixed asset write off and £1.6 million of closure costs), a £2.0 million charge for terminating a contract to sell certain assets to the Iliffe family following the acquisition of Local World, a £2.0 million non-cash impairment charge against the carrying value of goodwill in our Specialist Digital division partially offset by a £0.2 million profit on the disposal of properties in Cardiff and Coventry.

Statutory profit before tax increased by £9.3 million to £76.5 million with the higher statutory operating profit partially offset by higher interest cost following the acquisition of Local World. Statutory profit after tax fell by £7.5 million to £69.5 million due to a tax charge of £7.0 million in 2016 compared to a tax credit of £9.8 million in 2015. The 2015 tax credit included the benefit of no tax on the gain on the accounting deemed disposal of the 19.98% interest in Local World and from a higher credit from the change in the future rate of corporation tax. As a result of the lower statutory profit after tax and the increased shares in issue related to the acquisition of Local World, statutory earnings per share fell by 5.3 pence to 24.9 pence.

Financial Flexibility

The strong cash flows generated by the Group have resulted in a significant decline in leverage since the acquisition of Local World and provide resilience and financial flexibility to invest, to grow dividends and over time meet pension obligations despite the uncertain economic environment.

In 2016, the Group repaid from cash the £80 million Acquisition Term Loan procured for the acquisition of Local World and replaced the undrawn £60 million bank facility with a new amortising £110 million bank facility which is committed until December 2021. No drawings have been made on the new bank facility.

Net debt on a contracted basis fell by £62.4 million from £92.9 million to £30.5 million. Net debt comprises the outstanding private placement loan notes of £68.3 million and cash balances of £37.8 million. The private placement loan notes are due for repayment in June 2017.

Statutory net debt (which includes the US$ denominated private placement loan notes at the reporting date exchange rate and the related cross-currency interest rate swap at fair value) fell by £60.1 million from £88.7 million to £28.6 million. The fair value of the Group's cross-currency interest rate swap was an asset of £14.8 million and the sterling equivalent of the US$ denominated private placement loan notes was £81.2 million.

Historical Legal Issues

In March 2016, the Supreme Court refused the Group's application to appeal the decision of the Court of Appeal which upheld the findings of Mr Justice Mann in May 2015.

Following the Supreme Court hearing, the Group started to accelerate the resolution of these historical matters. Good progress has been made on settling civil claims with damages for over 80% of claims settled by the year end. To maintain momentum in bringing the process to a conclusion it was clear that costs, in particular the claimants' legal costs, would be higher resulting in an increase in the provision for dealing with these historical matters by £11.5 million in December 2016 bringing the total amount provided to £52.5 million. During the year, £29.7 million has been charged against the provision and the provision remaining at the end of 2016 was £18.1 million.

Although there still remains uncertainty as to how these matters will progress, the Board remains confident that the exposures arising from these historical events are manageable and do not undermine the delivery of the Group's strategy.

Pension Schemes

The Group operates defined contribution pension schemes 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 last actuarial funding valuations of the defined benefit pension schemes were as at 31 December 2013. The valuations were completed in December 2014 with deficit funding contributions agreed of circa £36 million per annum from 2015 to 2023 reducing to circa £21 million for 2024 and 2025. In addition, the Group agreed additional contributions would be paid at 50% of the excess if dividends paid in 2015 were above 5 pence per share and if a greater than 10% annual increase thereafter.

Payments in 2016 were £40.7 million (2015: £20.0 million) comprising £35.7 million (£36.2 million scheduled payment reduced by £0.5 million prepaid in 2014) of deficit funding and alongside the share buyback programme, the Group paid to the defined benefit pension schemes an additional £5.0 million in August 2016 with up to a further £2.5 million payable in 2017.

The accounting pension deficit increased by £160.8 million to £466.0 million (£385.1 million net of deferred tax) driven by a fall in long term interest rates and higher inflation expectations. The increase in the accounting pension deficit does not have an immediate impact on the agreed funding commitments. The next valuation date of the schemes is 31 December 2016 and valuations are expected to be finalised by March 2018.

Dividends and Share Buyback

The Board proposes a final dividend of 3.35 pence per share for 2016, an increase of 6.3%, bringing the total dividend for 2016 to 5.45 pence per share, an increase of 5.8%. The final dividend which is subject to approval by shareholders at the Annual General Meeting on 4 May 2017 will be paid on 9 June 2017 to shareholders on the register on 12 May 2017.

The final dividend for 2015 of 3.15 pence per share was paid in June 2016 and the interim dividend for 2016 of 2.10 pence per share was paid in November 2016. Total dividend payments in 2016 amounted to £14.6 million.

The Board approved a share buyback programme of up to £10 million, which commenced in August 2016. The share buyback programme makes efficient use of the surplus cash in the Group and will enhance earnings per share. It confirms the Board's confidence in the cash flow generated by the Group and its commitment to generating returns to shareholders. Alongside the share buyback, the Board agreed to contribute a minimum of £5 million or up to a maximum of 75% of the share buyback as additional funding to the defined benefit pension schemes. At the year end the Group had acquired 2.5 million shares for £2.3 million.

The Board continues to adopt a progressive dividend policy which is aligned to the free cash generation of the business. The free cash generation for the purposes of assessing the dividend is the net cash flow generated by the Group before the repayment of debt, dividend payments, other capital returns to shareholders and additional contributions made to the defined benefit pension schemes as a result of any substantial increase in dividends and/or capital returns to shareholders. When setting the level of dividends the Board will ensure that the Group maintains adequate headroom for investment and any unexpected cash flow requirements for historical events or to fund further restructuring. Based on the Board's expectation of future cash flows, the Board expects dividends to increase by at least 5% per annum.

The Company will also consider the return of capital to shareholders through a share buyback if it has generated surplus cash and sees an opportunity to enhance earnings per share and therefore shareholder value. Prior to initiating a share buyback programme the Company will carefully consider the cash generation of the business, investment requirements and the Group's obligations to the Group's defined benefit pension schemes.

Current Trading and Outlook

We have refreshed our strategy and have adopted new financial KPIs to ensure an even closer alignment between our strategic initiatives and their financial outcomes. Our four key areas of strategic focus are to grow digital audience and revenue, to build new diversified revenue streams, to protect our strong print brands and to seek out strategic opportunities that drive value. The Board remains confident that our strategy will meet our objective to deliver sustainable growth in revenue, profit and cash flow over the medium term.

Revenue in the first two months of 2017 is expected to fall by 9% on a like for like basis. The like for like trends for 2017 exclude from the 2016 comparative: the extra week of trading in 2016, the Independent print and distribution contract which ceased in April 2016, Rippleffect which was sold in August 2016 and the four Metros handed back to DMGT and other portfolio changes. Print markets, in particular advertising revenue trends, are expected to remain challenging and volatile during 2017 while digital audience and revenue is expected to continue to grow.

Strategic Update

During 2016, we undertook a detailed review of our vision and strategy to ensure that it continued to support our overriding goal of driving shareholder value whilst over time funding our historical pension obligations. The review concluded that the strategy remained appropriate although the vision and strategic objectives needed to be refreshed to reflect the progress made over the past few years and the fast changing media environment. This section summarises our vision and strategic objective arising from the review.

Our vision is "to be an essential part of people's daily lives by delivering quality content and services that inform, enlighten and enrich". To deliver this vision it is clear that quality content is and will remain at the heart of our business.

Our strategic objective remains to deliver sustainable growth in revenue, profit and cash flow over the medium term.

This will be delivered through four key areas of strategic focus:

· Grow: Grow digital audience and revenue through deepening relationships with readers and optimising response for advertisers;

· Build: Build a diversified product portfolio and sustainable mix of new revenue;

· Protect: Protect our print brands by efficiently delivering quality products; and

· Consolidate: Seek out strategic opportunities that drive value.

Growth from digital and new revenue streams will begin to outstrip print declines on an aggregate basis, leading to a stabilisation of Group revenue and then a return to top line growth. This, combined with our inbuilt and relentless focus on efficiencies, makes the Board confident that the delivery of sustainable growth in revenue, profit and cash flow is achievable in the future, for the benefit of all stakeholders.

Key highlights of progress on each area of strategic focus during 2016 are set out below:

Grow

We have continued to build on the significant digital audience and revenue we developed over the past three years with average monthly page views growing by 15.4% to 636.1 million and digital display and transactional revenue growth of 24.7%, both on a like for like basis.

Our newsrooms across the business are organised and staffed to drive audience growth and engagement to maximise commercial opportunities to grow revenues.

Our digital ambition is supported by continued investment in product development. In 2016 we developed a fully responsive site with increased focus on mobile and video. The new site improves the user experience across all platforms and also presents new and improved ad formats to improve response for our advertisers. We commenced the roll out of the new site in the second half of 2016 and expect a full roll out during 2017.

Build

Alongside ensuring we have great digital sites which build on our core print portfolios, we continue to launch new sites. After the successful launch of Belfast Live last year, we launched Glasgow Live and Dublin Live. The three "Live" sites delivered 3.0 million monthly browsers and 8.7 million page views in December 2016.

To leverage our print brands and content generation capabilities we have also launched new sites such as football.london and an MUFC app. These sites target niche audiences which are more valuable to advertisers.

During 2017, we will continue to explore new product ideas to leverage our portfolio of print and digital brands whilst seeking to diversify the revenue streams beyond advertising.

Strategic Update continued

Protect

Protecting our print brands through understanding our print readers and delivering a quality product, whilst leveraging our brands, communities and advertisers to maximise our financial performance remains a key area of strategic focus.

Our national newspapers continue to deliver strong financial performance with their core revenue stream being circulation revenue. The success of our titles has been recognised by multiple industry awards during the year. In 2016 we also secured a 5 year sponsorship deal from TSB plc for the Pride of Britain awards alongside all of our 'Pride of' events across our portfolio. This re-enforces the strength of our brands and relevance of our audience to advertisers.

During 2016, we continued to enhance our regional print brands through the roll out of a new design with less focus on crime, more reporting on things to do in the city and improved coverage in areas such as football and entertainment. Alongside enhancing our newspapers we continue to rationalise the portfolio and during 2016 we closed a small number of regional newspapers and at the end of 2016 we handed back to DMGT four of the eight Metros franchises we operated.

We are committed to building a loyal reader subscription base for our regional dailies and the regional 'Plus' loyalty programme has been rolled out to 14 of our regional dailies with plans to complete the full roll out in 2017. Results so far show high levels of reader engagement and improved order retention.

We launched a new national newspaper, The New Day, on 29 February 2016. Although the title received many supportive reviews, its circulation was below our expectations. As a result, we decided to close the title on 6 May 2016.

Tight management of the cost base remains essential and we have delivered £25 million of structural (including synergy) cost savings. The synergy savings from the acquisition of Local World were £10 million in 2016 and we are now forecasting to deliver annualised synergy savings of £15 million in 2017, £3 million ahead of the original target of £12 million announced at the time of the acquisition in 2015.

Excellent progress has been made during 2016 following the acquisition of Local World through sharing best practices across the Group with a number of non system dependent changes implemented during the year. In addition to relocating all central operations previously located at Local World's head office to the Group's operations at Canary Wharf, we have:

· Rationalised regional management structures including the creation of a number of super regions in the South East, East Midlands and South Wales;

· Rolled out best practice operational structures across the functions of advertising, editorial and newspaper sales;

· Began the process of centralising recruitment advertising into Bristol and private advertising into Hull; and

· Combined the national advertising sales across print and digital throughout the entire Group under the umbrella of Trinity Mirror Solutions.

In addition to the Local World synergy savings, initiatives have included the closure of the Newcastle print plant at the end of 2015 and of the Cardiff plant at the end of 2016 and numerous initiatives to drive efficiencies across editorial, advertising, pre press, property and all back office functions.

For 2017 we have targeted a further £15 million of structural cost savings, including the incremental £5 million of synergy savings from the acquisition of Local World.

Consolidate

To complement the strategic initiatives listed above we will seek out strategic opportunities that drive value. We will continue to exercise rigorous discipline in considering any acquisition opportunities that enhance our local strategy or brings new diversified revenue streams. We see ourselves as a consolidator in the newspaper industry and will continue to do so subject to tight financial returns.

In October 2016, the Group acquired a 50% stake in Brand Events 1 Limited (renamed to Brand Events TM Limited), one of UK's leading creators and operators of consumer event formats for £750,000 and has committed to provide further financing of up to £750,000. We will partner with the business in growing and developing events within the Food, Sports and Crafts division, areas that resonate well with our core audience across our regional footprint.

Strategic Update continued

Key Performance Indicators

To track delivery of our strategy, the following KPIs will be reported on at each reporting date:

FINANCIAL MEASURE	GROUP KPIs
Publishing digital revenue growth	At least 15% pa
Circulation revenue	Single digit declines
Print advertising revenue	At least in line with national market trends
Operating margin	Grow operating margin to support profits
Dividend growth	At least 5% pa

Had these KPIs been set for 2016, we would have met the circulation revenue, operating margin and dividend growth KPIs. Like for like publishing digital revenue growth in 2016 was 12.8% with digital display and transactional revenue growing by 24.7% offset by an 11.3% decline in classified revenue, primarily due to recruitment. Print advertising revenue was worse than the national market trends.

People

Olivia Streatfeild joined the Board as a non executive director in January 2016. Olivia had held an executive role at TalkTalk and was previously an Associate Principle at McKinsey & Co and the combination of her consultancy and executive experience provides valuable insight and support to the Board.

In July 2016, Eirik Svendsen joined the Group in the newly created role of Group Chief Technology Officer reporting to the Chief Executive. Eirik had previously been an executive at Schibsted Media Group, an international media group, since 2011. His career history to date has included internet-centric companies across Europe, with roles at world-leading broadcasting software company Vizrt and publishing software company Escenic, amongst others. In his new role, Eirik leads the Product, Engineering and Systems and Infrastructure teams and has overall responsibility for all technology and product management strategy and implementation across the Group including innovation of the customer experience and architectures

In October 2016, Julia Warren joined as Group HR Director. Julia was previously the HR Director for Serco in UK and Europe and was a member of their Executive Management team for Central Government. Prior to that Julia was HR Director at Thomson Reuters and has also worked at Hay Management Consultants and John Lewis. Julia brings a wealth of experience which will be of enormous value to Trinity Mirror as the Group continues its transformation. Julia is also a Non-Executive Director of the British Chamber of Commerce and a Trustee of the Army Family Federation.

In January 2017, the Group appointed Andy Atkinson as the Chief Revenue Officer for Trinity Mirror. Andy joined the Group in 2014 as Sales Director of Trinity Mirror Solutions, with responsibility for leading the sales teams in London and Manchester. Prior to joining Trinity Mirror, Andy was Head of Trading at Google, and has also held senior roles at IDS and Channel 5.

We would like to thank all our colleagues for their contribution to the full year performance.

Group Review

Income statement	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Revenue
Publishing	660.0	528.8	660.0	528.8
Print	581.0	485.9	581.0	485.9
Digital	79.0	42.9	79.0	42.9
Printing	36.2	44.9	36.2	44.9
Specialist Digital	12.9	15.4	12.9	15.4
Central	3.9	3.6	3.9	3.6
Revenue	713.0	592.7	713.0	592.7
Costs	(620.2)	(512.7)	(576.6)	(489.1)
Associates	0.7	2.2	1.1	6.0
Operating profit	93.5	82.2	137.5	109.6
Financing	(17.0)	(15.0)	(4.3)	(2.1)
Profit before tax	76.5	67.2	133.2	107.5
Tax	(7.0)	9.8	(27.0)	(21.1)
Profit after tax	69.5	77.0	106.2	86.4
Earnings per share	24.9p	30.2p	38.1p	33.9p

The results have been prepared for the 53 weeks ended 1 January 2017 (2016) and the comparative period has been prepared for the 52 weeks ended 27 December 2015 (2015). The additional week contributed revenue of £9.1 million and operating profit of £2.8 million. The results are presented on a statutory and adjusted basis to provide a more meaningful comparison of the Group's trading performance. Set out in note 18 is the reconciliation between the statutory results and the adjusted results.

Group revenue, increased by £120.3 million or 20.3% to £713.0 million. Like for like revenue fell 8.0%. Further details on the revenue trends for each division are shown in the Divisional Review.

Costs comprised:

	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Labour	(239.4)	(195.8)	(239.4)	(195.8)
Newsprint	(67.4)	(63.8)	(67.4)	(63.8)
Depreciation	(22.2)	(22.4)	(22.2)	(22.4)
Other	(291.2)	(230.7)	(247.6)	(207.1)
Non-recurring items	(26.0)	(4.4)	-	-
Restructuring charges in respect of cost reduction measures	(15.1)	(15.3)	-	-
Amortisation of intangible assets	(0.3)	(1.8)	-	-
Pension administrative expenses	(2.2)	(2.1)	-	-
Other	(247.6)	(207.1)	(247.6)	(207.1)
Costs	(620.2)	(512.7)	(576.6)	(489.1)

Statutory costs increased by £107.5 million or 21.0% to £620.2 million. Adjusted operating costs increased by £87.5 million or 17.9% to £576.6 million.

	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Operating profit pre associates	92.8	80.0	136.4	103.6
Associates	0.7	2.2	1.1	6.0
Operating profit	93.5	82.2	137.5	109.6

Statutory operating profit pre associates increased by £12.8 million or 16.0% to £92.8 million while adjusted operating profit pre associates increased by £32.8 million or 31.7% to £136.4 million. Adjusted operating margin pre associates increased by 1.6 percentage points from 17.5% to 19.1%.

Statutory operating profit increased by £11.3 million or 13.7% to £93.5 million. Adjusted operating profit increased by £27.9 million or 25.5% to £137.5 million. Adjusted operating margin increased by 0.8 percentage points from 18.5% to 19.3%.

Group Review continued

The Group has a 21.53% investment in PA Group and a 50% interest in Brand Events TM Limited (which was acquired on 6 October 2016 and changed its name from Brand Events 1 Limited). Up to 13 November 2015, prior to acquiring the entire business, the Group held a 19.98% investment in Local World, accounted for as an associated undertaking.

	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Result before amortisation and non-recurring items	1.1	6.0	1.1	6.0
Amortisation of intangible assets	(0.3)	(2.5)	-	-
Non-recurring items	(0.1)	(1.3)	-	-
Share of results of associates	0.7	2.2	1.1	6.0

The statutory and adjusted result for associates fell by £1.5 million and £4.9 million respectively. The decline is wholly attributable to Local World which was an associated undertaking until November 2015 prior to it becoming a wholly owned subsidiary.

	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Investment revenues	0.6	0.6	0.6	0.6
Pension finance charge	(10.4)	(10.9)	-	-
Finance costs	(7.2)	(4.7)	(4.9)	(2.7)
Interest on bank overdrafts and borrowings	(4.9)	(2.7)	(4.9)	(2.7)
Fair value gain on derivative financial instruments	11.3	0.3	-	-
Foreign exchange loss on retranslation of borrowings	(13.6)	(2.3)	-	-
Financing costs	(17.0)	(15.0)	(4.3)	(2.1)

Statutory financing costs which include the pension finance charge, the change in derivative financial instruments and the foreign exchange changes on retranslation of foreign currency borrowings increased by £2.0 million to £17.0 million. Adjusted financing costs increased by £2.2 million to £4.3 million reflecting the interest on the £80 million term loan procured to partially fund the acquisition of Local World in November 2015. This loan was repaid in December 2016.

The statutory tax charge of £7.0 million (2015: credit £9.8 million) comprises a current tax charge of £19.2 million (2015: £8.9 million) and a deferred tax credit of £12.2 million (2015: credit £18.7 million). The statutory effective tax rate is lower than the standard rate of corporation tax for the reasons set out in the reconciliation below:

Reconciliation of tax charge	2016 %	2015 %
Standard rate of corporation tax	(20.0)	(20.3)
Items not deductible in determining taxable profit (non qualifying depreciation/assets disposals)	(5.4)	(2.6)
Items not taxable in determining taxable profit (utilised tax losses/asset disposals)	1.1	10.9
Prior period adjustment (current and deferred tax)	2.3	0.4
Deferred tax rate change (from future reduction in corporation tax rate)	12.6	25.6
Tax effect of share of results of associates (brought in post tax)	0.2	0.6
Tax (charge)/credit rate	(9.2)	14.6

The adjusted tax charge of £27.0 million (2015: £21.1 million) represents 20.3% (2015: 19.6%) of adjusted profit before tax. The rate is higher than the statutory effective tax rate as it excludes the impact of the rate change and non taxable items.

	Statutory results		Adjusted results
	2016	2015	2016	2015
	£m	£m	£m	£m
Profit after tax	69.5	77.0	106.2	86.4
Weighted average number of shares (000's)	278,895	254,936	278,895	254,936
Earnings per share	24.9p	30.2p	38.1p	33.9p

Statutory earnings per share fell by 5.3 pence or 17.5% to 24.9 pence. Adjusted earnings per share increased by 4.2 pence or 12.4% to 38.1 pence.

The increase in the weighted average number of shares year on year primarily reflects the impact of the 8.7% equity placing on 28 October 2015 and the issue of shares representing 1.3% of equity on 13 November 2015, both relating to the acquisition of Local World partially offset by the shares bought back as part of the share buyback programme.

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 acquired digital classified recruitment business and our digital marketing services business; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates. After completing the acquisition of the 80.02% of Local World not previously owned on 13 November 2015, Local World is included in the Publishing division. Prior to 13 November 2015 the Group's 19.98% interest was equity accounted for as an associated undertaking and included in the Central division.

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

	2016	2015	Variance	Variance
	£m	£m	£m	%
Publishing	660.0	528.8	131.2	24.8%
Printing	36.2	44.9	(8.7)	(19.4%)
Specialist Digital	12.9	15.4	(2.5)	(16.2%)
Central	3.9	3.6	0.3	8.3%
Revenue	713.0	592.7	120.3	20.3%
Publishing	148.4	113.7	34.7	30.5%
Printing	-	-	-	-
Specialist Digital	2.4	2.6	(0.2)	(7.7%)
Central	(13.3)	(6.7)	(6.6)	(98.5%)
Adjusted operating profit	137.5	109.6	27.9	25.5%

The year on year revenue trends are distorted by the acquisition of Local World in 2015, revenue from the Independent print and distribution contract which ceased in April 2016, revenues from Rippleffect which was sold in August 2016, revenue from the contract to publish the Rugby World Cup match day programmes in 2015 and 2016 is a 53 week period to 1 January 2017 (2015: a 52 week period to 27 December 2015). Revenue trends in this report are presented on an actual and a like for like basis after adjusting for these items.

Publishing

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

	2016	2015	Variance	Variance
	£m	£m	£m	%
Print	581.0	485.9	95.1	19.6%
Circulation	310.6	271.7	38.9	14.3%
Advertising	236.6	182.0	54.6	30.0%
Other	33.8	32.2	1.6	5.0%
Digital	79.0	42.9	36.1	84.1%
Display and transactional	58.4	30.4	28.0	92.1%
Classified	20.6	12.5	8.1	64.8%
Revenue	660.0	528.8	131.2	24.8%
Costs	(511.6)	(415.1)	(96.5)	(23.2%)
Adjusted operating profit	148.4	113.7	34.7	30.5%
Adjusted operating margin	22.5%	21.5%	1.0%	4.7%

Revenue increased by £131.2 million to £660.0 million with print revenue increasing by £95.1 million and digital revenue increasing by £36.1 million. On a like for like basis revenue fell by 8.4% with print revenue declining by 10.7% and digital revenue growing by 12.8%.

Costs increased by £96.5 million to £511.6 million driven by the acquisition of Local World partially offset by ongoing cost mitigation and structural cost savings.

Operating profit increased by £34.7 million or 30.5% to £148.4 million with operating margin increasing by 1.0 percentage point from 21.5% to 22.5%.

Divisional Review continued

Publishing continued

Print revenue

Print revenue grew by 19.6%. On a like for like basis print revenue fell by 10.7%.

Circulation revenue improved by 14.3%. Like for like circulation revenues fell by 5.2% with volume declines partially mitigated by cover price increases.

The Daily Mirror volume fell by 10.8% compared to a 5.1% fall for the UK national daily tabloid market. The market trends have been distorted by cover price cuts and increased sampling in the market. This is against cover price increases for our titles.

The Sunday Mirror and Sunday People volumes declined by 14.7% and 14.1% respectively in a UK national Sunday tabloid market that fell by 6.6%. The Daily Record was down 11.5% against an overall Scottish daily tabloid market decline of 7.9% and the Sunday Mail was down 13.9% against an overall Scottish Sunday tabloid market decline of 10.0%. The market trends in the national Sunday market and Scotland have been distorted by cover price discounting and changes in sampling.

The market for our regional titles remains difficult with declines of 15.1% for paid for dailies, 17.1% for paid for weeklies and 17.9% for paid for Sundays. All titles are experiencing difficulty and our overall trends remain challenged in the market.

Print advertising revenue increased by 30.0% with display and other up by 3.3% and classified up by 75.4%. Like for like print advertising revenues fell by 17.9% with display and other lower by 15.1% and classified lower by 20.5%. Increased challenges in print advertising markets saw declines in display advertising across a number of sectors, in particular retail. Most classified advertising categories also came under pressure, in particular recruitment.

The Daily Mirror print advertising volume market share in the UK national daily tabloid market fell from 18.3% to 17.4%. The Sunday Mirror and Sunday People share fell with the Sunday Mirror share falling from 17.5% to 16.2% and the Sunday People share falling from 11.3% to 10.9%. The Daily Record share improved from 15.9% to 16.8% and the Sunday Mail share improved from 26.6% to 30.5%.

Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.

Other print revenue increased by 5.0%. Like for like other print revenues decreased by 1.5% with declines in leaflets and business enterprise revenue partially offset by improvements in Sports Media and syndication.

Digital revenue

Digital revenue grew by 84.1% with display and transactional revenue growing by 92.1% and classified revenue growing by 64.8%. Like for like digital revenue grew by 12.8% with strong digital growth from display and transactional revenue of 24.7% driven by an increase in audience partly offset by classified revenue declines of 11.3%, primarily due to recruitment. Strong growth in digital audience, with average monthly page views on a like for like basis growing by 15.4% to 636.1 million, drove the growth in display and transactional revenue.

Printing

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

	2016	2015	Variance	Variance
	£m	£m	£m	%
Contract printing	25.4	32.8	(7.4)	(22.6%)
Newsprint supply	8.5	9.9	(1.4)	(14.1%)
Other revenue	2.3	2.2	0.1	4.5%
Revenue	36.2	44.9	(8.7)	(19.4%)
External costs	(147.9)	(148.9)	1.0	0.7%
Publishing division recharge	111.7	104.0	7.7	7.4%
Adjusted operating result	-	-	-	-

Revenue fell by £8.7 million or 19.4% to £36.2 million. The fall in revenue reflects the impact of the cessation of the contract to print the Independent in April 2016 and the acquisition of Local World on 13 November 2015 which resulted in contract print revenue from Local World post acquisition being accounted for as internal revenue. On a like for like basis revenue fell by £1.2 million or 3.4% reflecting the impact of lower volumes partially offset by higher newsprint prices.

Divisional Review continued

Printing continued

External costs fell by £1.0 million or 0.7% to £147.9 million with the increased costs from Local World and higher newsprint costs more than offset by lower external volumes and cost reduction initiatives. The net cost recharged to the Publishing division was £111.7 million compared to £104.0 million in the prior year. Although the Publishing division recharge increased year on year, this now includes costs of printing certain Local World titles which were previously included in external revenue. Excluding recharges in relation to Local World titles, recharges to the Publishing division fell by £9.7 million due to cost reduction initiatives.

Specialist Digital

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

	2016	2015	Variance	Variance
	£m	£m	£m	%
Advertising	4.8	5.0	(0.2)	(4.0%)
Other	8.1	10.4	(2.3)	(22.1%)
Revenue	12.9	15.4	(2.5)	(16.2%)
Costs	(10.5)	(12.8)	2.3	18.0%
Adjusted operating profit	2.4	2.6	(0.2)	(7.7%)

The Specialist Digital division includes Trinity Mirror Digital Recruitment, our digital classified recruitment business and Communicator Corp, our digital communications agency. Rippleffect was sold in August 2016. Recruitment advertising revenues reduced by £0.2 million compared to 2015 and our marketing services businesses showed revenue declines of £2.3 million. Communicator Corp revenues were in line with 2015 and the Rippleffect disposal impact was £2.3 million. Operating profit fell marginally by £0.2 million.

Central

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

	2016	2015	Variance	Variance
	£m	£m	£m	%
Revenue	3.9	3.6	0.3	8.3%
Costs	(18.3)	(16.3)	(2.0)	(12.3%)
Associates	1.1	6.0	(4.9)	(81.7%)
Adjusted operating loss	(13.3)	(6.7)	(6.6)	(98.5%)

The Central division includes revenue and costs not allocated to the operational divisions and the share of results of associates. Revenue primarily relates to rental income from surplus office space at the Group's main office at Canary Wharf which increased as more vacant space was leased to third parties. Costs increased by £2.0 million from £16.3 million to £18.3 million reflecting increased central costs predominantly from higher legal costs.

The result for 2016 was a loss of £13.3 million compared to a loss of £6.7 million in 2015. The reduction in associates is from Local World which was an associated undertaking until November 2015 prior to it becoming a wholly owned subsidiary. Excluding associates the adjusted operating loss increased by £1.7 million.

Other Items

Related party transactions

There were no material non trading transactions during the period.

Principal risks and uncertainties

There is an ongoing robust process for the identification, evaluation and management of the principal risks and uncertainties faced by the Group. Appropriate management actions are in place to minimise the impact of the risks and uncertainties which are identified as part of the risk process.

The principal risks and uncertainties are the same as last year:

· 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;

· 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; and

· 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.

The outcome of the June 2016 UK referendum on EU membership has created increased macroeconomic uncertainty. The impact on the Group has been the reduction in gilt and bond yields and the impact of this on the deficit in the defined benefit schemes. The weakening of sterling has also contributed to increased newsprint costs in the second half of 2016 and in the first half of 2017. Considerations in relation to the uncertainty and these immediate impacts are included in the principal risks above. Whilst the impact is uncertain and hard to assess there is a risk that our revenues could be lower than expectations.

These principal risks and uncertainties, the risk appetite in relation to these and the progress made during the year are set out in the Trinity Mirror plc 2016 Annual Report.

Assessment of the Group's prospects

The directors have assessed the Group's prospects, both as a going concern and its longer term viability.

Going concern statement

The directors consider it appropriate to adopt the going concern basis of accounting in the preparation of the Group's annual consolidated financial statements.

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 principal risks and uncertainties relating to its business activities.

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.

Other Items continued

Assessment of the Group's prospects continued

Viability statement

The directors have a reasonable expectation that the Company and the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

The directors assessed the prospects of the Group over a three year period which reflects the budget and planning cycle adopted by the Group. A three year period is adopted as it enables the directors to consider the impact of declining print revenues, the investment required to drive growth in digital and to identify the extent to which costs need to be minimised to support profits and cash flow. The assessment takes into account the Group's current position and the principal risks and uncertainties facing the Group including those that would threaten the business model, future performance, solvency or liquidity.

Sensitivity analysis is applied to the projections to model the potential effects should principal risks and uncertainties actually occur, individually or in combination. The Board also assessed the likely effectiveness of any proposed mitigating actions.

It is understood that such future assessments are subject to a level of uncertainty that increases with time and, therefore, future outcomes cannot be guaranteed or predicted with certainty. Also, this assessment was made recognising the principal risks and uncertainties that could have an impact on the future performance of the Group and also the financial risks described in the notes to the consolidated financial statements.

Further information concerning the review of going concern and viability are set out in the Trinity Mirror plc 2016 Annual Report.

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 53 weeks ended 1 January 2017. 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 cash flow statement

for the 53 weeks ended 1 January 2017 (52 weeks ended 27 December 2015)

	notes	2016 £m	2015 £m
Cash flows from operating activities
Cash generated from operations	11	91.5	62.6
Income tax paid		(12.2)	(9.7)
Net cash inflow from operating activities		79.3	52.9
Investing activities
Interest received		0.6	0.6
Dividends received from associates		-	16.3
Proceeds on disposal of subsidiary undertaking	17	1.8	-
Proceeds on disposal of land and buildings		10.6	-
Purchases of property, plant and equipment		(4.3)	(3.6)
Acquisition of associate undertaking	16	(0.8)	-
Acquisition of subsidiary undertaking		-	(148.2)
Net debt acquired on acquisition of subsidiary undertaking		-	(11.9)
Net cash received from/(used in) investing activities		7.9	(146.8)
Financing activities
Dividends paid		(14.6)	(12.5)
Interest paid on borrowings		(5.9)	(1.7)
(Repayment of)/ Increase in borrowings		(80.0)	80.0
Issue of ordinary share capital		-	34.5
Purchase of own shares		(2.3)	-
Purchase of shares for LTIP		(2.0)	-
Net cash (used in)/received from financing activities		(104.8)	100.3

Net (decrease)/increase in cash and cash equivalents		(17.6)	6.4

Cash and cash equivalents at the beginning of the period	12	55.4	49.0
Cash and cash equivalents at the end of the period	12	37.8	55.4

Consolidated statement of changes in equity

for the 53 weeks ended 1 January 2017 (52 weeks ended 27 December 2015)

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

At 28 December 2014	(25.8)	(606.7)	-	(4.4)	42.0	(594.9)

Profit for the period	-	-	-	-	(77.0)	(77.0)
Other comprehensive costs for the period	-	-	-	-	18.0	18.0
Total comprehensive income for the period	-	-	-	-	(59.0)	(59.0)

Issue of shares	(2.5)	-	(37.9)	-	-	(40.4)
Credit to equity for equity-settled share-based payments	-	-	-	-	(1.8)	(1.8)
Dividends paid	-	-	-	-	12.5	12.5
At 27 December 2015	(28.3)	(606.7)	(37.9)	(4.4)	(6.3)	(683.6)

Profit for the period	-	-	-	-	(69.5)	(69.5)
Other comprehensive costs for the period	-	-	-	-	156.3	156.3
Total comprehensive costs for the period	-	-	-	-	86.8	86.8

Credit to equity for equity-settled share-based payments	-	-	-	-	(1.5)	(1.5)
Purchase of shares for LTIP	-	-	-	-	2.0	2.0
Purchase of own shares	-	-	-	-	2.3	2.3
Dividends paid	-	-	-	-	14.6	14.6
At 1 January 2017	(28.3)	(606.7)	(37.9)	(4.4)	97.9	(579.4)

Consolidated balance sheet

at 1 January 2017 (at 27 December 2015)

	notes	2016 £m	2015 £m
Non-current assets
Goodwill		102.0	104.5
Other intangible assets		799.5	799.8
Property, plant and equipment		262.1	300.1
Investment in associates		21.8	19.2
Retirement benefit assets	13	-	29.4
Deferred tax assets		81.5	55.2
Derivative financial instruments	12	-	3.5
		1,266.9	1,311.7
Current assets
Inventories		5.8	6.2
Trade and other receivables		89.8	121.8
Derivative financial instruments	12	14.8	-
Cash and cash equivalents	12	37.8	55.4
		148.2	183.4
Total assets		1,415.1	1,495.1
Non-current liabilities
Borrowings	12	-	(132.6)
Retirement benefit obligations	13	(466.0)	(334.6)
Deferred tax liabilities		(164.1)	(175.9)
Provisions	14	(3.6)	(7.2)
		(633.7)	(650.3)
Current liabilities
Trade and other payables		(83.1)	(94.3)
Borrowings	12	(81.2)	(15.0)
Current tax liabilities		(9.8)	(8.4)
Provisions	14	(27.9)	(43.5)
		(202.0)	(161.2)
Total liabilities		(835.7)	(811.5)
Net assets		579.4	683.6

Equity
Share capital	15	(28.3)	(28.3)
Share premium account	15	(606.7)	(606.7)
Merger reserve	15	(37.9)	(37.9)
Capital redemption reserve	15	(4.4)	(4.4)
Retained earnings and other reserves	15	97.9	(6.3)
Total equity attributable to equity holders of the parent		(579.4)	(683.6)

Notes to the consolidated financial statements

for the 53 weeks ended 1 January 2017 (52 weeks ended 27 December 2015)

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 27 December 2015 have been filed with the Registrar of Companies and those for the 53 weeks ended 1 January 2017 will be filed following the Annual General Meeting on 4 May 2017. The auditors' reports on the statutory accounts for the 52 weeks ended 27 December 2015 and for the 53 weeks ended 1 January 2017 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 53 weeks ended 1 January 2017 is 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 and will be sent to shareholders who have elected to receive a hard copy by the end of March 2017.

The financial information has been prepared for the 53 weeks ended 1 January 2017 and the comparative period has been prepared for the 52 weeks ended 27 December 2016. Throughout this report, the financial information for the 53 weeks ended 1 January 2017 is referred to and headed 2016 and for the 52 weeks ended 27 December 2015 is referred to and headed 2015.

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 and for derivative financial instruments and shared-based payments that have been measured at fair value.

The accounting policies used in the preparation of the consolidated financial statements for the 53 weeks ended 1 January 2017 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 2016 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.

Annual Improvements 2010-2012 cycle and 2011-2013 cycle have been implemented and had no material impact on the Group.

The following standards, which have not been applied and when adopted are not expected to have a material impact on the Group, were in issue and will be effective for periods beginning on are after 1 January 2016 unless stated below:

· IFRS 10 (Amended)'Consolidated Financial Statements'

· IFRS 11 (Amended) 'Joint Arrangements'

· IFRS 12 (Amended) 'Disclosure of Interests in Other Entities'

· IAS 1 (Amended) 'Presentation of Financial Statements'

· IAS 16 (Amended) 'Property, Plant and Equipment'

· IAS 27 (Amended) 'Separate Financial Statements'

· IAS 28 (Amended) 'Investments in Associated and Joint Ventures'

· IAS 38 (Amended) 'Intangible Assets'

· Annual improvements 2012 - 2014 cycle

· IAS 7 (Amended) 'Statement of Cash Flows' - effective for periods beginning on or after 1 January 2017*

· IAS 12 (Amended) 'Income taxes' - effective for periods beginning on or after 1 January 2017*

· IFRS 2 (Amended) 'Share-based Payment' - effective for periods beginning on or after 1 January 2018*

· IFRS 9 (Amended) 'Financial Instruments' - effective for periods beginning on or after 1 January 2018

· IAS 40 (Amended) 'Investment Property' - effective for periods beginning on or after 1 January 2018*

· Annual improvements 2014 - 2016 cycle - effective for periods beginning on or after 1 January 2018*

* Not yet endorsed for use in the EU

The following new standards which have not been applied and for which the impact on the Group is being assessed:

· IFRS 15 (Issued)'Revenue from Contracts with Customers' - effective for periods beginning on or after 1 January 2018

· IFRS 16 (Issued) 'Leases' - effective for periods beginning on or after 1 January 2019

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty 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:

Provisions

There is uncertainty as to liabilities arising from the outcome or resolution of the ongoing historical legal issues. Provisions are measured at the best estimate of the expenditure required to settle the obligation based on the assessment of the related facts and circumstances at each reporting date.

2. Accounting polices (continued)

Key sources of estimation uncertainty (continued)

Retirement benefits

Actuarial assumptions adopted and external factors can significantly impact the surplus or deficit of defined benefit pension schemes. 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. Advice is sourced from independent and qualified actuaries in selecting suitable assumptions at each reporting date.

Impairment of goodwill and other intangible assets

In addition to the areas of judgement outlined below, there are also sources of estimation uncertainty in the value in use calculation. The most significant area of uncertainty relates to expected future cash flows for each cash-generating unit.

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:

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. It also requires assessment of the appropriateness of the cash-generating unit at each reporting date. 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. Projections are based on both internal and external market information and reflect past experience. The discount rate reflects a long-term equity and debt mix based on the period end enterprise value assuming a long-term debt to EBITDA ratio of 2.5 times.

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 (Executive directors) 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 recruitment and our digital marketing services business; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates. After completing the acquisition of the 80.02% of Local World not previously owned on 13 November 2015, Local World is included in the Publishing division. Prior to 13 November 2015, the Group's 19.98% interest was equity accounted for as an associated undertaking and included in the Central division.

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

Segment revenue and results

53 weeks ended 1 January 2017	Publishing 2016 £m	Printing 2016 £m	Specialist Digital 2016 £m	Central 2016 £m	Total 2016 £m
Revenue
Segment sales	660.0	147.9	13.3	3.9	825.1
Inter-segment sales	-	(111.7)	(0.4)	-	(112.1)
Total revenue	660.0	36.2	12.9	3.9	713.0
Segment result	148.4	-	2.4	(13.3)	137.5
Non-recurring items					(26.1)
Restructuring charges in respect of cost reduction measures					(15.1)
Amortisation of intangible assets					(0.6)
Pension administrative expenses					(2.2)
Operating profit					93.5
Investment revenues					0.6
Pension finance charge					(10.4)
Finance costs					(7.2)
Profit before tax					76.5
Tax charge					(7.0)
Profit for the period					69.5

3. Operating segments (continued)

Segment revenue and results (continued)

52 weeks ended 27 December 2015	Publishing 2015 £m	Printing 2015 £m	Specialist Digital 2015 £m	Central 2015 £m	Total 2015 £m
Revenue
Segment sales	528.8	148.9	16.2	3.6	697.5
Inter-segment sales	-	(104.0)	(0.8)	-	(104.8)
Total revenue	528.8	44.9	15.4	3.6	592.7
Segment result	113.7	-	2.6	(6.7)	109.6
Non-recurring items					(5.7)
Restructuring charges in respect of cost reduction measures					(15.3)
Amortisation of intangible assets					(4.3)
Pension administrative expenses					(2.1)
Operating profit					82.2
Investment revenues					0.6
Pension finance charge					(10.9)
Finance costs					(4.7)
Profit before tax					67.2
Tax credit					9.8
Profit for the period					77.0

4. Revenue

	2016 £m	2015 £m

Publishing Print	581.0	485.9
Circulation	310.6	271.7
Advertising	236.6	182.0
Other	33.8	32.2
Publishing Digital	79.0	42.9
Display and transactional	58.4	30.4
Classified	20.6	12.5
Printing	36.2	44.9
Specialist Digital	12.9	15.4
Central	3.9	3.6
Total revenue	713.0	592.7

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

	2016 £m	2015 £m

UK and Republic of Ireland	709.9	589.9
Continental Europe	2.8	2.7
Rest of World	0.3	0.1
Total revenue	713.0	592.7

5. Non-recurring items

	2016 £m	2015 £m

Contract termination fee (a)	(2.0)	-
Impairment of goodwill (b)	(2.0)	-
Provision for historical legal issues (c)	(11.5)	(29.0)
Closure of print sites and press line (d)	(10.7)	(3.4)
Profit on disposal of land and buildings (e)	0.2	-
Local World acquisition transaction costs (f)	-	(5.6)
Gain on deemed disposal of Local World associate interest (g)	-	33.6
Non-recurring items included in administrative expenses	(26.0)	(4.4)
Non-recurring items included in share of results of associates (h)	(0.1)	(1.3)
Total non-recurring items	(26.1)	(5.7)

5. Non-recurring items (continued)

(a) In the first quarter of 2016, following extensive work on the separation of certain titles the Group had agreed to dispose to the Iliffe family as part of the acquisition of Local World, the Board concluded that it was in the best interests of the Company not to proceed with the disposal and therefore pay a break fee of £2.0 million to Iliffe Print Cambridge Limited.

(b) In the first half, an impairment review comparing the carrying value of the Group's assets with the value in use was undertaken in accordance with IAS 36. The review indicated that a £2.0 million charge against the carrying value of goodwill in our Specialist Digital division was required.

(c) Provision of £11.5 million (2015: £29.0 million) to cover the costs of dealing with historical legal issues in relation to phone hacking. It remains uncertain as to how these matters will progress, whether further allegations or claims will be made, and their financial impact. Due to this uncertainty a contingent liability has been highlighted in note 19.

(d) Costs associated with closure of the printing site in Cardiff and a press line in Scotland (Cardonald) including the write off of fixed assets of £9.1 million (2015: costs associated with the closure of the printing sites in Scotland (Blantyre) in June 2015 and Newcastle in December 2015 including the write off of fixed assets of £2.5 million).

(e) Profit on disposal of Cardiff and Coventry properties with net proceeds of £10.6 million less carrying value of £10.4 million.

(f) In 2015, transaction costs incurred by the Group relating to the acquisition of Local World on 13 November 2015.

(g) In 2015, gain on the accounting deemed disposal of the 19.98% interest in Local World on 13 November 2015.

(h) Group's share of restructuring costs incurred by PA Group (2015: Group's share of transaction related costs incurred by Local World and restructuring costs incurred by PA Group and Local World).

6. Investment revenues

2016

£m

2015

£m

Interest income on bank deposits and other interest receipts

0.6

7. Finance costs

	2016 £m	2015 £m

Interest on bank overdrafts and borrowings	(4.9)	(2.7)
Total interest expense	(4.9)	(2.7)
Fair value gain on derivative financial instruments	11.3	0.3
Foreign exchange loss on retranslation of borrowings	(13.6)	(2.3)
Finance costs	(7.2)	(4.7)

8. Tax

	2016 £m	2015 £m
Corporation tax charge for the period	(20.4)	(9.8)
Prior period adjustment	1.2	0.9
Current tax charge	(19.2)	(8.9)
Deferred tax credit for the period	1.8	2.1
Prior period adjustment	0.6	(0.6)
Deferred tax rate change	9.8	17.2
Deferred tax credit	12.2	18.7
Tax (charge)/credit	(7.0)	9.8

Reconciliation of tax (charge)/credit	%	%
Standard rate of corporation tax	(20.0)	(20.3)
Tax effect of items that are not deductible in determining taxable profit	(5.4)	(2.6)
Tax effect of items that are not taxable in determining taxable profit	1.1	10.9
Prior period adjustment	2.3	0.4
Deferred tax rate change	12.6	25.6
Tax effect of share of results of associates	0.2	0.6
Tax (charge)/credit rate	(9.2)	14.6

Included in the 'tax effect of items that are not taxable in determining taxable profit' is the impact of the utilisation of unrecognised losses of £1.7 million (gross) and losses on asset disposals (2015: utilisation of unrecognised losses of £2.1 million (gross) and the impact of the non-taxable gain on the accounting deemed disposal of the 19.98% interest in Local World of £33.6 million).

The standard rate of corporation tax for the year is 20% (2015: blended rate of 20.25% being a mix of 21% up to 31 March 2015 and 20% from 1 April 2015). The current tax liabilities amounted to £9.8 million (27 December 2015: £8.4 million) at the reporting date.

8. Tax (continued)

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 18% to 17% in 2020 has been accounted for in the current year resulting in a £9.8 million credit in the consolidated income statement and a £4.4 million charge in the consolidated statement of comprehensive income (2015: change in rate from 20% to 19% in 2017 and from 19% to 18% in 2020 resulting in a £17.2 million credit in the consolidated income statement and a £6.0 million charge in the consolidated statement of comprehensive income).

The tax on actuarial losses on defined benefit pension schemes taken to the consolidated statement of comprehensive income is a credit of £32.1 million comprising a deferred tax credit of £26.5 million and a current tax credit of £5.6 million (2015: credit of £2.2 million comprising a deferred tax credit of £0.8 million and a current tax credit of £1.4 million). The deferred tax charge including the future change in tax rate of £0.6 million (2015: £6.0 million) comprises a charge of £4.4 million (2015: £6.0 million) from the change in future tax rates and a credit of £3.8 million (2015: nil) from a change in the expected reversal of timing differences. The tax on share-based payments taken to equity is nil (2015: credit of £0.5 million comprising a deferred tax charge of £1.1 million and a current tax credit of £1.6 million).

9. Dividends

		2016 Pence per share	2015 Pence per share
Dividends paid per share and recognised as distributions to equity holders in the period		5.25	5.00
Dividend proposed per share but not paid nor included in the accounting records		3.35	3.15

2016

Pence

per share

2015

Pence

per share

Dividends paid per share and recognised as distributions to equity holders in the period

5.25

5.00

Dividend proposed per share but not paid nor included in the accounting records

3.35

3.15

The Board proposes a final dividend for 2016 of 3.35 pence per share. An interim dividend for 2016 of 2.10 pence per share was paid on 25 November 2016 bringing the total dividend in respect of 2016 to 5.45 pence per share. The 2016 final dividend payment is expected to amount to £9.2 million. The 2016 interim dividend payment amounted to £5.8 million.

On 5 May 2016 the final dividend proposed for 2015 of 3.15 pence per share was approved by shareholders at the Annual General Meeting and was paid on 10 June 2016. 2015 final dividend payment amounted to £8.8 million.

10. Earnings per share

	2016 £m	2015 £m

Profit after tax before adjusted* items	106.2	86.4
Adjusted items:
Non-recurring items (after tax)	(22.0)	1.5
Amortisation of intangibles (after tax)	(0.5)	(3.9)
Pension charges (after tax)	(10.1)	(10.4)
Restructuring charges (after tax)	(12.1)	(12.2)
Finance costs (after tax)	(1.8)	(1.6)
Tax legislation changes	9.8	17.2
Profit for the period	69.5	77.0

* Adjusted items relate to the exclusion of non-recurring items, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the pension administrative expenses, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the impact of tax legislation changes. Set out in note 18 is the reconciliation between the statutory results and the adjusted results

	2016 Thousand	2015 Thousand

Weighted average number of ordinary shares for basic earnings per share	278,895	254,936
Effect of potential dilutive ordinary shares in respect of share awards	1,864	5,024
Weighted average number of ordinary shares for diluted earnings per share	280,759	259,960

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 2,805,385 (2015: 2,681,295).

Statutory earnings per share	2016 Pence	2015 Pence

Earnings per share - basic	24.9	30.2
Earnings per share - diluted	24.8	29.6

Adjusted* earnings per share	2016 Pence	2015 Pence

Earnings per share - basic	38.1	33.9
Earnings per share - diluted	37.8	33.2

10. Earnings per share (continued)

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

	2016 Pence	2015 Pence

Contract termination fee	(0.7)	-
Impairment of goodwill	(0.7)	-
Provision for historical legal issues	(3.3)	(9.1)
Closure of print sites and press line	(3.5)	(1.1)
Profit on disposal of land and buildings	0.2	-
Local World acquisition transaction costs	-	(1.9)
Gain on deemed disposal of Local World associate interest	-	13.2
(Loss)/profit per share - non-recurring items included in administrative expenses	(8.0)	1.1
Loss per share - non-recurring items included in share of results of associates	-	(0.5)
(Loss)/profit per share - total non-recurring items	(8.0)	0.6

11. Notes to the consolidated cash flow statement

	2016 £m	2015 £m

Operating profit	93.5	82.2
Depreciation of property, plant and equipment	22.2	22.4
Amortisation of intangible assets	0.3	1.8
Impairment of goodwill	2.0	-
Share of results of associates	(0.7)	(2.2)
Charge for share-based payments	1.5	1.5
Gain on deemed disposal of Local World associate interest	-	(33.6)
Profit on disposal of land and buildings	(0.2)	-
Write-off of fixed assets	9.6	4.0
Pension administrative expenses	2.2	2.1
Pension deficit funding payments	(40.7)	(20.0)
Operating cash flows before movements in working capital	89.7	58.2
Decrease in inventories	0.4	1.1
Decrease in receivables	29.7	13.7
Decrease in payables	(28.3)	(10.4)
Cash flows from operating activities	91.5	62.6

12. Net debt

The statutory net debt for the Group is as follows:

	27 December 2015 £m	Cash flow £m	Derivative financial instruments* £m	Foreign exchange* £m	Term loan repaid £m	Transfer to current £m	1 January 2017 £m
Non-current liabilities
Loan notes	(67.6)	-	-	(13.6)	-	81.2	-
Term loan	(65.0)	-	-	-	65.0	-	-
	(132.6)	-	-	(13.6)	65.0	81.2	-
Current liabilities
Loan notes	-	-	-	-	-	(81.2)	(81.2)
Term loan	(15.0)	-	-	-	15.0	-	-
	(15.0)	-	-	-	15.0	(81.2)	(81.2)
Non-current assets
Derivative financial instruments	3.5	-	11.3	-	-	(14.8)	-
	3.5	-	11.3	-	-	(14.8)	-
Current assets
Derivative financial instruments	-	-	-	-	-	14.8	14.8
Cash and cash equivalents	55.4	62.4	-	-	(80.0)	-	37.8
	55.4	62.4	-	-	(80.0)	14.8	52.6
Net debt	(88.7)	62.4	11.3	(13.6)	-	-	(28.6)

* 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 Group has a cross-currency interest rate swap 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 swap is 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.

12. Net debt (continued)

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

	27 December 2015 £m	Cash flow £m	Term loan repaid £m	Transfer to current £m	1 January 2017 £m
Non-current liabilities
Loan notes	(68.3)	-	-	68.3	-
Term loan	(65.0)	-	65.0	-	-
	(133.3)	-	65.0	68.3	-
Current liabilities
Loan notes	-	-	-	(68.3)	(68.3)
Term loan	(15.0)	-	15.0	-	-
	(15.0)	-	15.0	(68.3)	(68.3)
Current assets
Cash and cash equivalents	55.4	62.4	(80.0)	-	37.8
	55.4	62.4	(80.0)	-	37.8
Net debt	(92.9)	62.4	-	-	(30.5)

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

	2016 £m	2015 £m

Statutory net debt	(28.6)	(88.7)
Loan notes at period end exchange rate	81.2	67.6
Loan notes at swapped exchange rate	(68.3)	(68.3)
Cross-currency interest rate swap	(14.8)	(3.5)
Contracted net debt	(30.5)	(92.9)

13. 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 TMPP Scheme are held separately from those of the Group in funds under the control of Trustees. 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. Local World operates a Group Personal Pension Plan (the 'LW Plan'), which is a defined contribution pension scheme for qualifying employees where employees hold a personal pension policy directly with Scottish Widows.

The Group implemented the Auto Enrolment legislation from 1 July 2013. Local World will implement the Auto Enrolment legislation from 1 July 2017.

The current service cost charged to the consolidated income statement of £13.6 million (2015: £13.3 million) represents contributions of £12.3 million (2015: £13.1 million) paid to the TMPP Scheme by the Group at rates specified in the scheme rules and contributions of £1.3 million (2015: £0.2 million) paid into the LW Plan by the Group at rates specified in the scheme rules. All amounts that were due have been paid over to the schemes at all reporting dates.

Defined benefit pension schemes

Background

The defined benefit pension schemes operated by the Group were closed to future accrual in 2010. The Group now has three (2015: five) defined benefit pension schemes following the merger of the Mirror Group Pension Scheme and the MGN Past Service Pension Scheme into the MGN Pension Scheme (together the 'Mirror Schemes').

The remaining schemes are 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').

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 schemes each have a professional independent trustee as their chairman with generally half of the remaining Trustees nominated by the members and half by the Group.

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Maturity profile and cash flow

Across the schemes, the invested assets are expected to be sufficient to pay the uninsured benefits due up to 2045, based on the reporting date assumptions. The remaining uninsured benefit payments, payable from 2046, are due to be funded by a combination of asset outperformance and the deficit contributions currently scheduled to be paid by 2025. The liabilities related 50% to current pensioners and their spouses or dependants and 50% related to deferred pensioners. The average term from the year end to payment of the remaining uninsured benefits is expected to be around 20 years. Uninsured pension payments in 2016, excluding lump sums and transfer value payments, were £41 million, and these are projected to rise to an annual peak in 2039 of £75 million and reducing thereafter.

Funding arrangements

The funding of the Group's 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.

The valuations of the schemes as at 31 December 2013 were completed on 9 December 2014. The valuations showed deficits of £336.7 million for the Mirror Schemes, £31.9 million for the Trinity Scheme and £26.7 million for the MIN Scheme.

As part of the agreement of the valuations, deficit funding contributions were agreed at £36.2 million for 2015, 2016 and 2017. Contributions were agreed at around £36 million from 2018 to 2023 and then reduce to around £21 million for 2024 and 2025 after which contributions were due to cease. The combined deficit was expected to be eradicated by 2027 by a combination of the contributions and asset returns. In December 2014, the Group prepaid contributions for 2015 and 2016 of £16.5 million and £0.5 million respectively.

In addition, the Group agreed that in respect of dividend payments in 2015, 2016 and 2017 that additional contributions would be paid at 50% of the excess if dividends in 2015 were above 5 pence per share. For 2016 and 2017 the threshold increases in line with the increase in dividends capped at 10% per annum.

Payments in 2016 were £40.7 million (2015: £20.0 million) comprising £35.7 million of deficit funding and £5.0 million in connection with the share buyback. Payments due in 2016 were £36.2 million less the prepayment in December 2014 of £0.5 million. Alongside the share buyback programme, the Group paid to the defined benefit pension schemes an additional £5.0 million in August 2016 with up to a further £2.5 million payable in 2017. Payments were £29.6 million (2015: £14.3 million) to the Mirror Schemes, £7.0 million (2015: £3.7 million) to the Trinity Scheme and £4.1 million (2015: £2.0 million) to the MIN Scheme.

The future deficit funding commitments are linked to the three-yearly actuarial valuations. There is no link to the IAS 19 valuations which use different actuarial assumptions and are updated at each reporting date. The next funding valuation of the schemes has an effective date of 31 December 2016 and these valuations, which are currently in progress, are required to be completed by 31 March 2018.

Although the funding commitments do not generally impact the IAS 19 position, IFRIC 14 guides companies to consider for IAS19 disclosures whether any surplus can be recognised as a balance sheet asset and whether any future funding commitments in excess of the IAS 19 liability should be provisioned for. Based on the interpretation of the rules for each of the defined benefit pension schemes, the Group considers that it has an unconditional right to any potential surplus on the ultimate wind-up of each scheme after all benefits to members have been paid. Under IFRIC 14 it is therefore appropriate to recognise any IAS 19 surpluses which may emerge in future, and not to recognise any potential additional liabilities in respect of future funding commitments. This conclusion was reconsidered and reconfirmed during the year following the issuance of an Exposure Draft of changes to IFRIC14 which provides more detailed guidance on this area.

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 17% 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, however some risk remains as the durations of the bonds are typically shorter than that of the liabilities and so the values may still move differently. At the reporting date this amounted to 47% 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 51% 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.

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Pension scheme accounting deficits are snapshots at moments in time and are not used by either the Company or Trustees to frame funding policy. The Company and Trustees are aligned in focusing on the long-term sustainability of the funding policy which aims to balance the interests of the Company's shareholders and members of the schemes. The Company and Trustees are also aligned in reducing pensions risk over the long term and at a pace which is affordable to the Company.

The Group is not exposed to any unusual, entity specific or scheme specific risks. There were no plan amendments, settlements or curtailments in 2016 or during 2015 which resulted in a pension cost.

Actuarial projections at the 2016 year end showed removal of the accounting deficit by 2024 due to scheduled contributions and asset returns at the current target rate.

Results

For the purposes of the Group's 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 estimated value of the scheme assets at 1 January 2017.

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

	MGN Scheme £m	Trinity Scheme £m	MIN Scheme £m	Total £m

Present value of uninsured scheme liabilities	(1,249.5)	(383.6)	(131.2)	(1,764.3)
Present value of insured scheme liabilities	(174.8)	(80.0)	(108.5)	(363.3)
Total present value of scheme liabilities	(1,424.3)	(463.6)	(239.7)	(2,127.6)
Invested and cash assets at fair value	855.4	365.3	77.6	1,298.3
Value of insurance contracts	174.8	80.0	108.5	363.3
Total value of scheme assets	1,030.2	445.3	186.1	1,661.6
Net scheme deficit	(394.1)	(18.3)	(53.6)	(466.0)

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

	2016	2015
Financial assumptions (nominal % pa)
Discount rate	2.65	3.65
Retail price inflation rate	3.20	3.05
Consumer price inflation rate	2.00	1.85
Rate of pension increase in deferment	2.00	1.85
Rate of pension increases in payment	3.85	3.85
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65	21.8	22.0
Female currently aged 65	23.9	24.0
Male currently aged 55	22.7	22.9
Female currently aged 55	24.8	24.9

The fair values of the insurance policies have been taken as equal to the present values of the liabilities that they insure against and by using the same assumptions as those used to value the liabilities.

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	-188 / +219	-164 / +191
Retail price inflation rate +/- 0.5% pa	+30 / -28	+24 / -22
Consumer price inflation rate +/- 0.5% pa	+49 / -47	+49 / -47
Life expectancy at age 65 +/- 1 year	+82 / -80	+76 / -74

The effect on the deficit is usually 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 in the same directions as the liability values.

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

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	2016 £m	2015 £m

Pension scheme administrative expenses	(2.2)	(2.1)
Pension scheme finance charge	(10.4)	(10.9)
Defined benefit cost recognised in income statement	(12.6)	(13.0)

Consolidated statement of comprehensive income	2016 £m	2015 £m

Actuarial gain due to liability experience	14.0	23.9
Actuarial loss due to liability assumption changes	(340.7)	(16.0)
Total liability actuarial (loss)/gain	(326.7)	7.9
Returns on scheme assets greater/(less) than discount rate	137.8	(18.9)
Total loss recognised in statement of comprehensive income	(188.9)	(11.0)

Consolidated balance sheet	2016 £m	2015 £m

Present value of uninsured scheme liabilities	(1,764.3)	(1,481.4)
Present value of insured scheme liabilities	(363.3)	(352.2)
Total present value of scheme liabilities	(2,127.6)	(1,833.6)
Invested and cash assets at fair value	1,298.3	1,176.2
Value of insurance contracts	363.3	352.2
Total value of scheme assets	1,661.6	1,528.4
Net scheme deficit	(466.0)	(305.2)

Non-current assets - retirement benefit assets	-	29.4
Non-current liabilities - retirement benefit obligations	(466.0)	(334.6)
Net scheme deficit	(466.0)	(305.2)

Net scheme deficit included in consolidated balance sheet	(466.0)	(305.2)
Deferred tax included in consolidated balance sheet	80.9	55.0
Net scheme deficit after deferred tax	(385.1)	(250.2)
Movement in net scheme deficit	2016 £m	2015 £m

Opening net scheme deficit	(305.2)	(301.2)
Contributions	40.7	20.0
Consolidated income statement	(12.6)	(13.0)
Consolidated statement of comprehensive income	(188.9)	(11.0)
Closing net scheme deficit	(466.0)	(305.2)

Changes in the present value of scheme liabilities	2016 £m	2015 £m

Opening present value of scheme liabilities	(1,833.6)	(1,863.2)
Interest cost	(65.3)	(67.5)
Actuarial gain - experience	14.0	23.9
Actuarial gain/(loss) - change to demographic assumptions	30.0	(4.5)
Actuarial loss - change to financial assumptions	(370.7)	(11.5)
Benefits paid	98.0	89.2
Closing present value of scheme liabilities	(2,127.6)	(1,833.6)

Changes in the fair value of scheme assets	2016 £m	2015 £m

Opening fair value of scheme assets	1,528.4	1,562.0
Interest income	54.9	56.6
Actual return on assets greater/(less) than discount rate	137.8	(18.9)
Contributions by employer	40.7	20.0
Benefits paid	(98.0)	(89.2)
Administrative expenses	(2.2)	(2.1)
Closing fair value of scheme assets	1,661.6	1,528.4

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Fair value of scheme assets	2016 £m	2015 £m

UK equities	208.2	181.7
US equities	217.2	192.8
Other overseas equities	235.7	210.7
Property	26.9	20.4
Corporate bonds	220.0	308.7
Fixed interest gilts	196.8	70.9
Index linked gilts	192.1	81.2
Cash and other	1.4	109.8
Invested and cash assets at fair value	1,298.3	1,176.2
Value of insurance contracts	363.3	352.2
Fair value of scheme assets	1,661.6	1,528.4

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.

14. Provisions

	Share-based payments £m	Property £m	Restructuring £m	Other £m	Total £m

At 27 December 2015	(0.3)	(9.6)	(3.7)	(37.1)	(50.7)
Charged to income statement	-	(2.5)	(15.1)	(13.4)	(31.0)
Utilisation of provision	-	4.0	15.4	30.8	50.2
At 1 January 2017	(0.3)	(8.1)	(3.4)	(19.7)	(31.5)

The provisions have been analysed between current and non-current as follows:

	2016 £m	2015 £m

Current	(27.9)	(43.5)
Non-current	(3.6)	(7.2)
	(31.5)	(50.7)

The share-based payments provision relates to National Insurance obligations attached to the future crystallisation of awards.

The property provision relates to onerous property leases and future committed costs related to occupied, let and vacant properties. This provision will be utilised over the remaining term of the leases.

The restructuring provision relates to restructuring charges incurred in the delivery of cost reduction measures. This provision is expected to be utilised within the next year.

The other provision relates to legal and other costs relating to historical litigation expected to be utilised within the next year.

15. Share capital and reserves

The share capital comprises 283,459,571 allotted, called-up and fully paid ordinary shares of 10p each. The share premium account reflects the premium on issued ordinary shares. The merger reserve comprises the premium on the shares allotted in relation to the acquisition of Local World net of £0.8 million of issue costs. 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 (2015: £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 Employee Benefit Trust (the 'Trust') are included in retained earnings and other reserves at £5.5 million (2015: £3.7 million). During the year the Trust purchased 1,600,000 shares (2015: nil) for a cash consideration of £2.0 million (2015: £nil). The Trust received a payment of £2.0 million from the Company to purchase these shares. During the year, 138,634 shares were released relating to grants made in prior years (2015: 5,929,939). During the year 859,794 awards were granted to Executive Directors on a discretionary basis under the Long Term Incentive Plan (2015: 665,287). 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 and are required to be held for a further two years. During the year 1,494,019 awards were granted to senior managers on a discretionary basis under the Senior Management Incentive Plan (2015: 893,873). 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 82,699 awards were granted to Executive Directors under the Restricted Share Plan (2015: 120,543). The awards vest after three years.

The Board approved a share buyback programme of up to £10 million which commenced in August 2016. At the year end the Group had acquired 2,505,366 shares for £2.3 million. The shares are held as Treasury shares.

Satisfied by:
Cash consideration received		2.0
Transactions costs		(0.2)
Total consideration		1.8

Results	Adjusted results ⁽¹⁾		Statutory results
	2016	2015	2016	2015
	£m	£m	£m	£m
Revenue - actual	713.0	592.7	713.0	592.7
Operating profit	137.5	109.6	93.5	82.2
Profit before tax	133.2	107.5	76.5	67.2
Earnings per share ⁽²⁾	38.1p	33.9p	24.9p	30.2p
Dividends per share	-	-	5.45p	5.15p

Net cash flow arising on disposal:
Cash consideration less transaction costs		1.8
Net cash inflow		1.8

	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Pension charges (c) £m	Restructuring charges (d) £m	Finance costs (e) £m	Tax items (f) £m	Adjusted results £m
Revenue	713.0	-	-	-	-	-	-	713.0
Operating profit	93.5	26.1	0.6	2.2	15.1	-	-	137.5
Profit before tax	76.5	26.1	0.6	12.6	15.1	2.3	-	133.2
Profit after tax	69.5	22.0	0.5	10.1	12.1	1.8	(9.8)	106.2
Basic EPS (p)	24.9	8.0	0.2	3.6	4.3	0.6	(3.5)	38.1

Consolidated statement of comprehensive income

Consolidated statement of changes in equity

Segment revenue and results

Publishing

Segment revenue and results (continued)

Publishing

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

Defined benefit cost recognised in income statement

Share-based payments