Postmedia Netw ork Canada Corp. Investor and Analyst Conference - PowerPoint PPT Presentation

Postmedia Netw ork Canada Corp. Investor and Analyst Conference Call July 7, 2016

Forw ard Looking Statements This presentation may include information that is “forward-looking information” under applicable Canadian securities laws and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The Company has tried, where possible, to identify such information and statements by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “may,” “will,” “could,” “would,” “should” and similar expressions and derivations thereof in connection with any discussion of future events, trends or prospects or future operating or financial performance. Forward-looking statements in this presentation include statements with respect to: the implementation and completion of the Recapitalization Transaction, including the New Capital Offering; the anticipated benefits and consequences of the Recapitalization Transaction; the implementation and results of the Company’s transformation initiatives, including the realization of anticipated cost savings. By their nature, forward-looking information and statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future By their nature, forward-looking information and statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These risks and uncertainties include, among others: the risk that the Recapitalization Transaction may not be completed on the terms described in this presentation or at all; the costs associated with the Recapitalization Transaction; the risk that the anticipated benefits and consequences of the Recapitalization Transaction may not be achieved; competition from other newspapers and alternative forms of media; and the effect of structural changes and economic conditions in the industry in which Postmedia operates on advertising, circulation and digital revenue. For a complete list of our risk factors please refer to the section entitled “Risk Factors” contained in our annual management’s discussion and analysis for the years ended August 31, 2015, 2014 and 2013 and in our annual information form dated November 25, 2015. Although the Company bases such information and statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this presentation. Given these risks and uncertainties, undue reliance should not be placed on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statements. Other than as required by law, the Company does not undertake, and specifically declines, any obligation to update such information or statements or to publicly announce the results of any revisions to any such information or statements. Unless otherwise noted, all references to “$” are to Canadian dollars. 2

R ECAPITALIZATION T RANSACTION

Who is Postmedia? 20 Million monthly reach (digital + print) which is 70% of Canadian adults. Sources: Overall monthly reach figure is derived from internal calculations to factor out duplication Population Base: Vividata Q4 2015, Adults 18+, 28,887,000 Postmedia/SunMedia Print owned & represented readership: Vividata Q4 2015; monthly readership Reach/Frequency per publication: 22 weekday insertions + 4 Sat. + 4 Sun. insertions; + Est’d Community Daily/Weekly using Circulation Reports & RPC estimates Digital: comScore Canada Inc. Postmedia Network Canada Corp. Multi-platform, Adults 18+, 3-month Average Jan/Feb/Mar 2016 & Google Analytics for Owned Small Market Dailies (includes duplication) 4

Recapitalization Transaction The Recapitalization Transaction will: • Reduce Postmedia’s outstanding debt by approximately C$307 million • Reduce Postmedia’s annual cash interest costs by approximately C$50 million • C$110 million of new capital invested in the form of new second lien U.S. dollar denominated secured notes (the “New Capital Offering”) Pre- Post- Recapitalization Recapitalization (C$ mm) (C$ mm) First Lien Notes $303 $225 (1) Second Lien Notes $345 -- (2) New Second Lien Notes -- $116 Total Debt $648 $341 1. Translated to CAD using 04-Jul-16 exchange rate of 1.2844 2. Includes C$110 million capital raise and C$5.5 million backstop fee 5

Key Elements of the Proposed Recapitalization  Holders of the Existing First Lien Notes will receive their pro rata share (1) of: Holders of • C$78 million repayment, at par Existing • C$225 million New First Lien Notes First Lien  Interest will continue to be paid in the ordinary course Notes  Accrued and unpaid interest up to the Effective Date will be paid in cash at closing  Holders of the Existing Second Lien Notes will receive their pro rata share (2) of 98% of the pro forma common equity of the Company Holders of Existing  The interest payment due July 15, 2016 will be paid in cash at closing; no further cash Second interest payments thereafter Lien Notes  Holders of the Existing Second Lien Notes will have the opportunity to participate in the New Capital Offering, to the extent permissible by law. Holders of Existing  The holders of the Existing Common Shares will collectively retain approximately 2% Common of the pro forma common equity of the Company Shares 1. Pro rata share based on the principal amount of their First Lien Notes 2. Pro rata share based on the principal amount of their Second Lien Notes and any accrued and unpaid interest from and after July 15, 2016 6

New Capital Offering Description • Postmedia will raise cash proceeds through a New Capital Offering of C$110 million in New Second Lien Notes (US$ denominated) • Holders of the Existing Second Lien Notes will have the right, to the extent permissible by law, to participate in the New Capital Offering up to their respective pro rata share, based on the principal amount of their Second Lien Notes held by such holders as at a record date to be determined • Holders who participate will receive New Second Lien Notes on a dollar for dollar basis Backstop • One of the holders of Second Lien Notes (the “Backstop Party”) has agreed to backstop and consummate the New Capital Offering to the extent other holders do not subscribe for their pro rata share of the new Capital Offering • In consideration for entering into this agreement, the Backstop Party will receive a fee of 5% of the New Capital Offering (US$ equivalent of C$5.5 million in additional New Second Lien Notes) to be applied to acquire New Second Lien Notes on implementation of the Recapitalization Transaction 7

Key Terms of the New First Lien Notes Principal C$ 225 mm • Amount Maturity July 15, 2021 • Interest 8.25% • Rate Security Same as the First Lien Notes Indenture • Permitted at any time at par (plus accrued and unpaid interest), • without make-whole, premium or penalty Mandatory 50% of Excess Cash Flow to pay principal on the New Redemption • First Lien Notes at par twice per year Minimum Excess Cash Flow payment of C$10 mm annually • 8

Key Terms of the New Second Lien Notes Principal US$ equivalent of C$ 115.5 mm • Amount Maturity July 15, 2023 • Interest 10.25% cash interest or 11.25% PIK interest (1) • Rate Security Same as the First Lien Notes Indenture (second priority lien) • Permitted after the New First Lien Notes are repaid in full at par • plus accrued and unpaid interest, without make-whole, premium or penalty Redemption No mandatory redemption • No amortization • 1. No cash interest for the first 3 years unless the New First Lien Notes and any other First Lien debt balance is C$112.5 mm or less, and in all cases, there must be nothing drawn on the ABL facility. 9

Timeline and Process Commence CBCA proceedings • Mailing of Information Circular, Voting Materials and for • Early August 2016 holders of Existing Second Lien Notes, information about the New Capital Offering Meetings of the First Lien Noteholders, Second Lien • Late August 2016 Noteholders to approve the Recapitalization Transaction expected to be completed by the end of • September 2016 September 2016 subject to obtaining all necessary consents and approvals Outside date under the Support Agreements for • December 16, 2016 completing the Recapitalization 10

Strategy – Looking Ahead NEW REVENUE EXTEND THE STREAMS LEGACY RUNWAY  Local Sales  Digital Marketing  National Sales Services (DMS) - Search  Digital Sales & Social Solutions  Circulation  Content Marketing  Infomart  Strategic Media Partnerships 11

Q3 F16 F INANCIAL R ESULTS