Independent News & Media Regulatory News (INM)

Operating Profit up 4.0% to €34m and Net Debt reduced to €89.3m

Dublin/London 13 March 2015: Independent News & Media PLC (INM ID, INM LN) today announces its full year results for the 12 months ended 31 December 2014.

KEY HIGHLIGHTS1 

§ Strong Performance in 2014 with an encouraging start to 2015

2014 was a good year for the Group, with margins improving, profits growing and advertising growth for the first time since 2007, coupled with continued positive momentum in Digital audience growth. 2015 has started well and whilst it is still very early in the year, we anticipate a full year performance in line with expectations.

§ Operating Profit2 increased 4.0% to €34.0m with Operating Margin increasing by 60bps to 10.7%

Driven by tight management of the cost base and continued strong Digital revenue growth offsetting the decline in publishing revenues.

§ Advertising revenue growth of 0.8%, with total revenues declining by 1.1% to €318.7m

Digital advertising revenue growth of 37.5%, more than offsetting the decline in Publishing advertising revenue. Circulation revenue declined by 2.0%. In the Republic of Ireland, INM has over 50% of the quality daily market, almost 65%4 of the quality Sunday market and over 33%4 of all daily newspapers sold in the Republic of Ireland are INM titles, while the Belfast Telegraph and Sunday Life increased market share in their respective markets.

§ Net Debt reduced by 6.3% to €89.3m, representing 2.2x EBITDA of €41.1m

Net interest charge2 for 2014 down €14.7m to €6.0m.

§ Continued growth in digital audience with INM websites showing 37% increase in traffic YoY

The Group's publishing websites attracted 11.9m unique users in Dec 2014 (a 37% YoY increase), generated 82.4m page impressions5 (a 27% YoY increase) and peaked in Oct 2014 to 12.8m unique users5 and 98.3m page impressions5.

§ Leading media group in Ireland

Leading newspaper and media group across the island of Ireland, with a significant shareholding in APN.

§ Connect with large audience on weekly basis

2.4m combined readers connect each week in print and online (JNRS 2014) with the Irish Independent, The Herald, the Sunday Independent and the Sunday World.

§ Continued focus on cost management

Operating costs, pre-exceptionals down by €5.0m. Continued drive for efficiencies, whilst investing where appropriate.

§ APN stake valued at €131.7m (as at 12 March 2015)

Carrying value at year end of €68.7m.

§ Appointment of new Group CEO and Group CFO

Robert Pitt (CEO) and Ryan Preston (CFO) joined in October and December respectively.

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Commenting on the results, Robert Pitt, Group Chief Executive, said:

"2014 was a year of significant change and progress for Independent News & Media. We have strong market-leading print titles across all categories and independent.ie is the clear go-to news portal for Irish consumers. Despite the many challenges facing our industry, the Group businesses submitted a strong performance in 2014. There was a significant focus on ensuring that the Group's titles and hugely successful digital offering are both aligned and calibrated to meet the continued challenges facing news publishing both now and throughout the cycle. As part of our strategy, there was continued progress achieved in removing costs from the business, which had the dual effect of reducing the impact of a year-on-year decline in revenue on profit, whilst also enabling significant investment in our expanding digital offering. Our continuing focus on cost management remains core to ensuring the Group is fit for purpose and remains competitive in a constantly evolving media environment. With a great team of journalists and operational staff, whom we would like to thank, we look forward to continuing to play a prominent role in the delivery of both news and content in Ireland into the future."

FINANCIAL HIGHLIGHTS1

§ Strong Operating Profit2 result of €34.0m, up 4.0% on the prior year driven by tight management of the cost base and continued strong digital revenue growth offsetting the decline in publishing revenues.

§ Net Debt reduced by 6.3% to €89.3m representing 2.2x EBITDA of €41.1m, with net interest charge2 for 2014 down €14.7m to €6.0m.

§ Total Revenue of €318.7m, down 1.1% on the prior year.

§ Total advertising revenue up 0.8% on the prior year. Excluding the Community Telegraph in Northern Ireland which ceased publishing at the end of 2013, total advertising revenue up 1.5%.

§ Digital advertising revenue growth of 37.5%, more than offsetting the decline in publishing advertising revenue.

§ Circulation revenue declined by 2.0%. In the Republic of Ireland, INM has over 50% of the quality daily market, almost 65% of the quality Sunday market and over 33% of all daily newspapers sold in the Republic of Ireland are INM titles, while the Belfast Telegraph and Sunday Life increased market share in their respective markets.

§ The Group continued its focus on cost management, with operating costs reducing by 1.7%, despite a planned investment in our Digital business. The Group recently announced the integration of its print and digital news operations which will further improve operational and cost efficiencies.

§ APN stake valued at €131.7m (as at 12 March 2015), compared to its carrying value at year end of €68.7m.

§ The Group recorded a total Net exceptional charge of €29.7m in 2014, which includes:-

§ €16.7m non-cash accounting adjustment relating to the deemed partial disposal loss arising from the Group's non-participation in APN's equity issue in 2014. As a result, the Group's share in APN reduced to 18.6%;

§ €9.3m relating to miscellaneous restructuring costs, primarily redundancy costs;

§ €6.3m impairment of APN's intangible assets;

§ €3.5m accounting adjustment on retirement benefits; and

§ €0.5m exceptional charge on the disposal of the Education businesses.

§ The net retirement benefit obligation has increased from €60.6m at 31 December 2013 to €100.5m at 31 December 2014 with the increase driven primarily by a decrease in the discount rate applicable to the various schemes.

§ The Group successfully disposed of its Education businesses in June 2014. The results of the Education businesses are reported as "Discontinued Operations" in both 2014 and 2013. The South African business results (disposed of in August 2013) are reported as "Discontinued Operations" in 2013 only.

§ Full and final settlement of South African warranties and industry wide competition commission enquiries.

§ The Directors are not proposing a dividend for 2014.

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OPERATIONAL HIGHLIGHTS

§ Strong Publishing Performance

§ 2.4m combined readers each week in print and online (JNRS 2014) connect with the Irish Independent, The Herald, the Sunday Independent and the Sunday World.

§ The Irish Independent continues to dominate the quality daily market with an ABC of 112,502 - increasing market share and maintaining its No.1 position in the daily quality market.

§ The Irish Independent now sells more copies per day than the Irish Times and Irish Examiner combined and has over 50% of the daily quality market in the Republic of Ireland.

§ The Sunday Independent, which recorded an ABC1 of 219,007, increased its market share (now at 64.7% of the Sunday quality market) and remains by far the biggest selling quality Sunday newspaper, while also providing the largest regular audience on the island of Ireland across any advertising platform.

§ The Herald recorded an ABC1 of 49,512 in the popular daily market and is Dublin's most-read newspaper for the under 35's (JNRS 2014).

§ Sunday World, which recorded an ABC1 of 189,562, maintained its market share in the popular Sunday market and continues to be the largest selling tabloid on the island of Ireland.

§ In Northern Ireland, the Belfast Telegraph recorded an ABC1 of 45,905, while the Sunday Life recorded an ABC1 of 42,239 - both newspapers increasing market share in their respective markets.

§ Newspread, the Group's distribution business, had a strong performance in 2014, continuing its successful record in retaining key contracts and continues to diversify its business.

§ Substantial digital audience growth

§ The Group's publishing websites attracted 11.9m unique users2 in Dec 2014 (a 37% YoY increase), generated 82.4m page impressions2 (a 27% YoY increase), however they peaked in Oct 2014 to 12.8m unique users2 and 98.3m page impressions2.

§ independent.ie is Ireland's No.1 online news publisher (comScore, Media Metrix Newspaper category report), while a record of over 800m page impressions2 were read on independent.ie in 2014.

§ Significant increase in independent.ie traffic - with page impressions2 reaching a record high of 83m (Jan 2015) a 27% year-on-year increase, while unique users2 have increased to 9m, an increase of 36% year-on-year.

§ sundayworld.com significantly increased its traffic with page impressions up 44% year-on-year and unique users2 up by 34% (Dec 2014) - the website has also experienced a huge increase in mobile traffic with a 98% increase in mobile page impressions2 year-on-year (Dec 2014).

§ BelfastTelegraph.co.uk - Northern Ireland's leading commercial news website increased its monthly unique users2 by 20% year-on-year (Feb 2015).

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§ Investment in Digital

§ The Group continues to invest in Digital in order to deliver market-leading online products that increase user engagement and provide the platform to drive revenues through a range of advertising formats.

§ The independent.ie platform has been enhanced, with a redesign that includes new sections, giving the user a more streamlined and user friendly experience with richer content, including video and photo galleries and social integration. Exciting new products were rolled out in 2014 such as the Windmill Lane sessions, Christmas Gift Finder and e-commerce product Independent Travel.

§ The Group launched its new mobile adaptive product in May 2014 for independent.ie, with 48% (Dec 2014) of its audience1 now accessing its content via mobile - a significant year on year growth in page impressions, via mobile of 152%.

§ The Group's editorial structure is moving to a fully integrated "Platform Neutral" content hub. All content operations have been rolled into a centralised content hub to serve all audiences across the day and across the Group's multiple platforms (print, browser and mobile).

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§ New Senior Management Appointments

In July 2014, Robert Pitt was appointed Group Chief Executive Officer and joined the Group in October. Robert, whose career spans twenty years, holds a BA in Economics from University College Dublin. Most recently he held senior management roles in the retail sector in Eastern Europe. From May 2012, he was Chief Operations Officer of Tesco Czech Republic until joining INM.

In September 2014, Ryan Preston was appointed Group Chief Financial Officer and joined the Group in December. Ryan, who is a native of Belfast, holds a BA (Hons) in Accounting from University of Ulster in Jordanstown. Most recently, Ryan was Group Finance Director of Tesco Europe.

In January 2015, Fionnan Sheahan, Group Political Editor with INM, was appointed Editor of the Irish Independent while Cormac Bourke, Executive Editor, Irish Independent was appointed Editor of the Sunday Independent.

Earlier this month, Gail Walker was appointed editor of the Belfast Telegraph. Gail, who is the first female editor of the Belfast Telegraph began her career in journalism with the Belfast Telegraph as a graduate trainee in 1990 and was most recently the newspapers Deputy Editor (Features).

OUTLOOK

INM performed strongly in 2014, with profit growth of 4.0% and growing advertising revenue. 2015 has started well and whilst it is still very early in the year, we anticipate a full year performance in line with expectations.

APN & GROUP'S SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES

The Group's Associates and Joint ventures mainly comprise of its 18.6% shareholding in APN, its 50% shareholding in the Irish Daily Star and its 50% shareholding in CarsIreland.ie. The Dublin daily freesheet, Metro Herald, a joint venture agreement between INM, The Irish Times Limited and DMG Media Ltd, ceased trading on 19 December 2014.

APN's revenues from continuing operations, for the year were A$843.2m, up 3% on the same period last year, while EBITDA from continuing operations and before exceptionals was A$164.1m, up 1%. Net profit after tax (NPAT) before exceptional items was A$75.2m, up 27% on the prior corresponding period. APN did not declare a dividend.

- ENDS -

For further information, contact:

INDEPENDENT NEWS & MEDIA PLC

GROUP INCOME STATEMENT

* Note 5

GROUP STATEMENT OF COMPREHENSIVE INCOME

GROUP BALANCE SHEET

GROUP STATEMENT OF CHANGES IN EQUITY

* 2014: A negative movement of €0.3m relates to cash flow hedging reserve (€0.4m), available-for-sale financial assets reserve (€0.5m) and the Group's share of the movement on APN's fair value reserve of €0.6m. (2013: Other movement of €0.3m relates to cashflow hedging reserve of €0.4m and available-for-sale financial assets reserve (€0.1m)).

GROUP CASH FLOW STATEMENT

NOTES TO THE FINANCIAL INFORMATION 

1. Basis of Preparation of Financial Information under IFRS

Reporting Entity and Basis of Accounting

Independent News & Media PLC ("the Company") is a company domiciled in Ireland. These condensed preliminary Group financial statements as at and for the twelve months ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as "the Group") and the Group's interest in associates and joint ventures.

This financial information has been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due during the 12 months from the date of approval of the 2014 Annual Report, the time period that the Directors have considered in evaluating the appropriateness of the going concern basis. Consideration has been given to the fact that the Group is in a net liability position as at 31 December 2014 when making this assessment.

Financial Information

The financial information in this announcement does not constitute the statutory accounts of the Company and the Group, a copy of which is required to be annexed to the Company's annual return to the Companies Registration Office in Ireland. A copy of the statutory accounts in respect of the year ended 31 December 2014 will be annexed to the Company's annual return for 2014. The annual report and accounts will be approved by the Board of Directors by 1 May 2015. Accordingly, this financial information is unaudited. A copy of the statutory accounts required to be annexed to the Company's annual return in respect of the year ended 31 December 2013 has been annexed to the Company's annual return for 2013 to the Companies Registration Office. The audit opinion on these financial statements was unqualified.

The 2014 statutory accounts of the Company will be available on the Company's website inmplc.com as of 1 May 2015. Consistent with prior years, the full financial statements for the year ended 31 December 2014 and the audit report thereon will be completed and available to all shareholders at least 20 working days before the AGM.

General Information

The Group is required to present its annual consolidated financial statements for the year ended 31 December 2014 in accordance with EU adopted International Financial Reporting Standards (IFRS) and with those parts of the Companies Acts, 1963 to 2013, applicable to companies reporting under IFRS. This financial information comprises the Group Balance Sheets as at 31 December 2014 and 31 December 2013 and related Group Income Statements, Cash Flow Statements, Statements of Comprehensive Income, Statements of Changes in Equity and selected notes for the years then ended of Independent News & Media PLC. This financial information for the years ended 31 December 2014 and 31 December 2013 has been prepared in accordance with the Listing Rules of the Irish Stock Exchange.

The consolidated financial statements are prepared on the historical cost basis except for the measurement of certain financial instruments at fair value and the measurement of the net defined benefit pension liability at the fair value of the plan assets less the present value of the defined benefit obligation. Except as described below, the accounting policies and methods of computation and presentation adopted in the preparation of this financial information are consistent with those applied in the Annual Report for the year ended 31 December 2013 and are described in those financial statements on pages 65 to 78.

Except for the changes below, the Group has consistently applied the accounting policies set out below to all years presented in these consolidated financial statements.

The following new and amended standards and interpretations are effective for the Group for the first time for the financial year beginning 1 January 2014:

· IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities. IASB also issued IAS 27 Separate Financial Statements (2011), which supersedes IAS 27 (2008) and IAS 28 Investments in Associates and Joint Ventures (2011), which supersedes IAS 28 (2008)

· Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)

· Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

· Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)

· IFRIC 21 Levies

NOTES TO THE FINANCIAL INFORMATION (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

General Information (continued)

None of the aforementioned had a material impact on the Group, except for the additional disclosures required by IFRS 12.

Comparative information

There have been no restatements to the comparative information in the financial statements.

Risks and uncertainties

(i) Exposure to changes in the economies in which we operate and changing customer spending patterns

The Group's results are impacted by factors outside its control such as the prevailing economic climate, levels of employment, disposable income, interest rates, consumer sentiment and consumer perception of economic conditions. In particular, newspaper advertising revenues are cyclical and substantially dependent upon prevailing economic conditions. Advertising revenue has historically been cyclical, with less being spent on advertising in times of economic downturn. Following the divestitures completed by the Group over recent years, including the South African business in 2013, the main geographies to which the Group is directly exposed are now the Republic of Ireland and Northern Ireland (with indirect exposure to Australasia via its investment in APN). This geographic concentration means that the Group is significantly exposed to the economic environment in the Republic of Ireland and Northern Ireland.

In common with the majority of media businesses, INM's revenues are heavily dependent on circulation volumes and print advertising, with revenue from circulation having increased as a percentage of overall revenue given the decline in advertising revenue over recent years. Competition for advertising among newspaper publishers is largely based upon circulation, readership and content. While circulation volumes for INM's titles have declined over recent years, INM's titles continue to retain market leading positions, in terms of both circulation and readership in most of their key markets.

(ii) The Impact of Technological and Market Changes

The Group operates in highly competitive environments that can be subject to rapid change. The Group's products and services, and their means of delivery, are affected by technological innovations, changing legislation, competitor activity or changing customer behaviour. A structural change in advertising markets resulting in significant advertising moving away from traditional products to the internet may affect the Group's results both positively and negatively. Also, print media operations have been facing declining circulation numbers for some time due to factors including, but not limited to, the proliferation of internet use. The Group continues to develop online strategies to complement its products.

The Group's businesses are dependent on technology. Information systems are critical for the effective management and provision of services around the Group. Disruption to the Group's information technology infrastructure could result in lost revenue. Business continuity plans are in place for all significant businesses.

Capital expenditure on printing presses, digital technology and other assets can be significant. It is difficult to predict future changes and the cost of updating, renewing or replacing existing technologies and the impact of this on the Group's operating performance. Were a significant change to occur that required material unforeseen expenditure, this could have a material adverse effect on INM's business, results of operations and overall financial condition.

NOTES TO THE FINANCIAL INFORMATION (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

Risks and uncertainties (continued)

(iii) Political, Economic and Social Risks

The markets in which the Group operates may be affected by numerous factors, many of which are beyond the Group's control and the exact effects of which cannot be accurately predicted. Within geographical markets, such factors include general economic and political activities, including the extent of any governmental regulation and taxation. The Group could be adversely affected by changes in economic, political, administrative, taxation or other regulatory factors, whether under Irish law or in any other jurisdictions in which the Group may operate now or in the future.

(iv) Environmental, Health and Safety Laws, Regulations and Standards

The Group is subject to a broad range of laws, regulations and standards, including those relating to pollution, the health and safety of employees, protection of the public, protection of the environment and the storage and handling of hazardous substances and waste materials. These regulations and standards are becoming increasingly stringent. It is the Group's policy to require that all of its subsidiaries comply with applicable laws, regulations and standards. However, violations of such laws, regulations and standards, in particular environmental and health and safety laws, could result in restrictions on the operation of the Group's sites, damages, fines or other sanctions and increased costs of compliance with potential reputational damage.

(v) Newsprint Price Risk/Supply Risk

Newsprint represents a significant cost within the Group's publishing operations. Newsprint price volatility is a factor facing all operators in the print media industry and can influence a company's profitability significantly, depending on the prevailing economic conditions at a particular time. In some instances, it is possible that cover prices can be increased to offset newsprint price increases and thereby maintain margins, although there can be no assurance that cover prices can be effectively increased. As the price of newsprint affects all operators in broadly equal terms, it does not tend to result in competitive advantage or disadvantage for any one participant in that market. Newsprint prices are subject to volatility arising from variations in supply and demand. Generally, these variations are not large but from time to time increases may be significant. The Group's newsprint requirements are monitored closely and, where deemed advantageous, long-term arrangements are agreed with suppliers to limit the potential for price volatility. The Group has a number of newsprint suppliers to reduce dependency on any specific supplier.

(vi) Taxation Risk

The Group is subject to taxation at differing rates across the jurisdictions in which it operates. Whilst endeavouring to manage its tax affairs in an efficient manner, due to an ever more complex international tax environment, there will always be a level of uncertainty when provisioning for the Group's tax liabilities. There is also a risk of tax laws being amended by authorities in the jurisdictions in which the Group operates which could have an adverse effect on the Group's results. The Group continually takes the advice of external experts to help minimise this risk.

(vii) Litigation

From time to time, by the nature of their business, newspapers are subject to libel or other types of litigation. Although the Group's newspaper titles have procedures in place to attempt to limit the nature and extent of any exposure in this area and the Group also makes provisions, where necessary, in this regard on an annual basis, there can be no assurance that litigation in the future will not have a material adverse effect on the Group's business, results or financial condition.

(viii) Financial Risks

The principal financial risks are credit risk, liquidity risk and market risk. Market risk includes foreign exchange risk, interest rate risk, and price risk.

NOTES TO THE FINANCIAL INFORMATION (continued)

2. Financial Restructuring

During 2013, the Group restructured its debt facilities ('the Restructuring'). This Restructuring entailed a number of elements:

(i) The disposal of INMSA in August 2013 (see note 18) and the application of the net proceeds to the repayment of debt resulting in an initial amendment and restatement of the Group's remaining core debt facilities;

(ii) A restructuring of the Group's significant Republic of Ireland defined benefit pension schemes involving the reduction of members' accrued benefits (this was approved by the Irish Pensions Board in September 2013). In accordance with IAS 19, an exceptional gain of €111.4m arose on completion of the restructuring relating to negative past service costs and settlement of liabilities (see note 12); and

(iii) Following the completion of these events at (i) and (ii), the final stage of the Restructuring took place in December 2013, whereby, in return for the payment to the Lenders of €40.0m, being the net proceeds of a capital raise and the issue to them of 152,517,988 new fully-paid Ordinary Shares ('Lender Shares') representing €10.7m in value of the enlarged issued share capital of the Company (see note 11), the Company achieved a debt reduction of approximately €199.3m and modified terms (including a maturity in 2018, with no bank amortisations until 2015) for the residual debt. Of this €199.3m debt reduction, €40.0m was repaid from the proceeds of the capital raise, €10.7m related to the Lender Shares at the issue price and the balance of €148.6m (including €6.6m of interest differential capitalised - see note 7 for further information) related to the debt write-off. In addition, €12.1m of net bank fees were credited to the Income Statement as an exceptional finance gain.

3. Revenue

An analysis of the Group's revenue from continuing operations for the year is as follows:

4. Segmental Reporting

Segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the Board of Directors. The key performance measure that is reviewed for these segments is operating profit/(loss) before exceptional items. Exceptional items are reviewed at a level higher than these operating segments and appear as a reconciling item from the key performance measure reviewed by the CODM to the IFRS result. Finance income and expense, share of results of associates and joint ventures (with the exception of one significant associate which is separately considered) and taxation are reviewed and considered by the CODM at a Group level only.

The Group's subsidiaries previously operated in the Island of Ireland and South Africa. In August 2013, the Group disposed of its South African operations. Accordingly, the South African segment was included under discontinued operations in 2013. The Group disposed of its Education Businesses in June 2014, and accordingly the Island of Ireland Non-Publishing segment is included under discontinued operations.

NOTES TO THE FINANCIAL INFORMATION (continued)

4. Segmental Reporting (continued)

* €8.5m plus discontinued operations share of associates and joint ventures of €0.2m, and discontinued operations net finance income of €0.1m, less discontinued operations taxation charge of €1.5m equals €7.3m of discontinued operating profit (before exceptional items) per the Income Statement.

APN's revenues for the year ended 31 December 2014 were €572.5m (2013: €593.3m) and APN's operating profit before exceptional items for the year ended 31 December 2014 was €88.8m (2013: €94.2m).

NOTES TO THE FINANCIAL INFORMATION (continued)

4. Segmental Reporting (continued)

NOTES TO THE FINANCIAL INFORMATION (continued)

5. Exceptional Items

Exceptional items are those items of income and expense that the Group considers are material and/or of such a nature that their separate disclosure is relevant to a better understanding of the Group's financial performance.

* Of the exceptional charge of €29.7m in 2014, €4.3m is shown as an exceptional expenditure outflow in the Group Cash Flow Statement. The €4.3m primarily relates to miscellaneous restructuring costs (primarily redundancy costs of €3.6m) in the Island of Ireland. In 2013, of the exceptional gain of €215.3m, €13.7m is shown as an exceptional expenditure outflow in the Group Cash Flow Statement. The €13.7m primarily relates to South African asset disposal costs of €6.2m and miscellaneous restructuring costs (primarily redundancy costs) of €7.5m in the Island of Ireland.

(i) 2014

Primarily relates to the following:

(a) A charge of €9.3m related to miscellaneous restructuring costs, primarily redundancy costs in the Island of Ireland;

(b) A retirement benefits accounting adjustment of €3.5m due to the transfer of certain members from the defined benefit plan to the Company's defined contribution plan (note 12). This comprises a €9.3m exceptional gain on the transfers out by members, somewhat offset by an exceptional charge of €5.8m on the booking of a liability for payments to the defined contribution pension scheme in respect of those members; and

(c) A net charge of €0.6m relating to the liquidation of a Group entity, Independent Aviation Services Limited. This includes a €2.1m charge recycled from foreign currency translation reserves to the Group Income Statement as an exceptional charge as the company involved was a USD denominated entity and a €1.5m gain on the early settlement of an onerous contract booked in this entity.

2013

Primarily relates to the following:

(a) A retirement benefits restructuring gain of €111.4m due to the restructuring of the significant Republic of Ireland defined benefit pension schemes;

(b) A charge of €4.9m related to the employee share issue in December 2013; and

(c) A charge of €14.4m related to miscellaneous restructuring costs, primarily redundancy costs in the Island of Ireland.

(ii) 2014

Relates to a €1.0m gain on the write-off of Anti-dilution bank debt, which did not fall due in accordance with the terms of the 2013 Restructuring. In connection with the 2013 debt restructuring, €1.0m remained outstanding subject to the satisfaction of certain criteria by the Group. These criteria were met in 2014, resulting in the write-off of €1.0m in debt.

NOTES TO THE FINANCIAL INFORMATION (continued)

5. Exceptional Items (continued)

2013

Primarily relates to the following:

(a) A debt write-off of the Group's Bank Facilities of €142.0m in relation to the Restructuring completed in 2013;

(b) A write back of bank back end and amendment fees of €12.6m;

(c) Costs incurred during the year in relation to the Group's renegotiation of its financing arrangements of €5.6m; and

(d) A write off of the balance of the 2009 Bank Facility front end fees of €0.5m.

(iii) 2014

The share of associates' and joint ventures' exceptional items (net of tax and non-controlling interests) of €7.8m can be broken down as follows:

(a) APN - an €8.0m exceptional charge which mainly relates to an impairment of intangible assets (€6.3m);

(b) Independent Star Limited - redundancies of €0.4m; and

(c) A net credit of €0.6m.

2013

The share of associates' and joint ventures' exceptional items (net of tax and non-controlling interests) of €12.4m can be broken down as follows:

(a) APN - primarily relates to the Group's share of non-cash impairment charges for brandsExclusive and APN

Outdoor (€15.0m), offset by other items of €3.0m; and

(b) Independent Star Limited - redundancies of €0.4m.

The above amounts represent INM's share of these items.

(iv) 2014

Relates to the non-cash exceptional accounting adjustment relating to the deemed partial disposal loss arising from INM's non-participation in APN's equity issue in 2014 (note 10).

(v) 2014

Relates to the loss on disposal of the Educational Businesses (see note 18).

2013

Relates to the gain of €28.0m on the disposal of the South African business, offset by costs of €0.4m related to the disposal of the Education Businesses.

(vi) 2013

Relates to INM's South African business which was disposed of in August 2013 and presented as a discontinued operation (see note 18 for further information). This exceptional item relates to the foreign exchange losses of €10.1m booked on an intergroup loan (the settlement of which has occurred arising from the South African disposal proceeds), following classification of this business as held for sale. In the past, foreign currency gains and losses on this loan were recognised in other comprehensive income, on the basis that it formed part of the net investment and its settlement was neither planned nor foreseen in the consolidated financial statements, and presented in the currency translation reserve within equity.

6. Equity Interest in APN and Assessment of Carrying Value

INM had an 18.61% shareholding in APN as at 31 December 2014 (31 December 2013: 28.95%). INM accounts for APN as an associate as INM has representation on the APN Board of Directors and exercises significant influence. See note 10 for summarised financial information in relation to APN.

NOTES TO THE FINANCIAL INFORMATION (continued)

6. Equity Interest in APN and Assessment of Carrying Value (continued)

Recoverable Amount Assessment of Investment in APN

As at 31 December 2014, INM carried its investment in APN on its Balance Sheet at an amount of €68.7m or A$0.53 per APN share held. At 31 December 2014, the APN share price as listed on the Australian Stock Exchange was A$0.835 per share (market value of INM stake was approx. €107.9m at 31 December 2014).

The Group has compared the carrying amount of its investment in APN to the estimated recoverable amount of its investment in APN. The Group has determined that the recoverable amount of INM investment in APN was greater than its carrying amount of A$0.53 per APN share and hence INM's investment in APN is not impaired.

Impairment Charges Recorded by APN/Sensitivity Analysis

See note 5 for details of exceptional items recognised in relation to APN. As mentioned in note 5, in 2014 INM recognised a non-cash impairment charge of €6.3m in relation to APN's New Zealand publishing businesses' cash generating units ('CGUs') (being INM's share of the impairment charge recorded by APN in respect of these CGUs).

Sensitivity Analysis

APN's New Zealand Publishing businesses CGUs have limited headroom such that reasonable changes to key assumptions would potentially give rise to an impairment charge. For these CGU's, a 1% increase in the discount rate used would result in an impairment provision of €3.1m, of which INM would book its share. A 1% decrease in long-term growth rates would result in an impairment provision of €1.6m, of which INM would book its share. If forecasted cash flows were to decrease by 10% an impairment provision of €5.1m would be required, of which INM would book its share.

For APN's Australia Regional Media CGU, a 1% increase in the discount rate used would result in an impairment provision of €1.4m, of which INM would book its share. A 1% decrease in long-term rates would result in an impairment provision of €0.3m, of which INM would book its share. If forecasted cash flows were to decrease by 10%, an increase in the impairment provision of €2.7m would be required, of which INM would book its share.

7. Net Finance Costs

During 2014, the Group credited to exceptional finance income in the Group Income Statement the €1.0m of Anti-dilution debt as this amount did not fall due in accordance with the terms of the 2013 debt restructuring. In connection with the 2013 debt restructuring, €1.0m remained outstanding subject to the satisfaction of certain criteria by the Group. These criteria were met in 2014, resulting in the write-off of €1.0m in debt.

On 2 April 2013, the Group entered into a formal agreement ('Lock-up Agreement') with its Banks to restructure its bank debt facilities entered into in 2009 ('2009 Bank Facility') over a number of stages, to be completed by no later than 31 December 2013 ('the Restructuring'). Interest was accrued and paid in accordance with the 2009 Bank Facility up to the date of the Lock-up Agreement. Thereafter interest was paid on the basis of a notional €150.0m of debt up to the date of completion of the first stage of the Restructuring, being the successful disposal of INMSA and application of the proceeds to reduce the 2009 Bank Facility on 27 August 2013 ('Retranche Date'). The interest differential between the cash paid on the notional €150.0m of debt and the interest accrued on the full 2009 Bank Facility during this interim period was accrued and capitalised to debt on the Retranche Date.

NOTES TO THE FINANCIAL INFORMATION (continued)

7. Net Finance Costs (continued)

On subsequent completion of the final stage of the Restructuring on 20 December 2013, being the successful capital raise and application of €40.0m of these proceeds to further reduce the 2009 Bank Facilities, the Group's core debt was reduced to €118.0m plus other available facilities and credit lines. An element of the debt reduction (€6.6m), primarily reflecting write-off of the capitalised interest differential noted above, was credited to finance costs, with the balance of the debt write-off reflected as an exceptional finance gain (note 5).

8. Taxation

(a) Amounts recognised in profit or loss

(b) Amounts recognised in OCI

(c) Reconciliation of effective tax rate

The total tax charge for the year is different from the standard rate of Corporation Tax in Ireland of 12.5% (2013: 12.5%). The differences are explained below:

For further information on movement in deferred tax assets in 2014, see note 16.

NOTES TO THE FINANCIAL INFORMATION (continued)

8. Taxation (continued)

Within the total tax charge of €2.5m (2013: charge of €38.6m), a net credit of €0.7m (2013: net charge of €30.4m) is classified as exceptional tax. The exceptional tax credit in 2014 primarily relates to a tax credit of €1.1m arising on exceptional restructuring charges in the Republic of Ireland of €9.3m and a tax charge of €0.4m arising on an exceptional pension restructuring accounting adjustment of €3.5m in the Republic of Ireland. In 2013, the exceptional tax charge primarily relates to a reduction in the Group's deferred tax asset related to retirement benefit obligations arising from the restructuring of its significant Republic of Ireland defined benefit pension schemes (€13.9m); the reassessment of the probability of recoverability of the Group's deferred tax asset in relation to forecast future profitability as outlined in note 16 (€19.3m); and a tax credit for other exceptional items of €2.8m.

9. Earnings/(Loss) Per Share

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

For diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to assume conversion of all potential dilutive options over ordinary shares once the adjustment does not reduce a loss per share or increase earnings per share. There are no dilutive potential ordinary shares.

At 31 December 2014, 668,201 options (2013: 936,949) were excluded from the diluted weighted average number of ordinary shares calculation because their consideration is not receivable.

Basic and diluted earnings per share before exceptional items are presented in order to give a better understanding of the Group's underlying financial performance.

NOTES TO THE FINANCIAL INFORMATION (continued)

10. Investments in Associates and Joint Ventures

* In 2013, share of results of associates and joint ventures of €1.1m as shown in the Income Statement, plus share of results of associates and joint ventures within discontinued operations of €0.2m, gives the total share of results of associates and joint ventures of €1.3m.

** Relates to the Group's share of the premium paid by APN on its acquisition of non-controlling interests.

*** Relates to the deemed partial disposal of APN. A further €1.8m was reclassified from foreign currency translation reserves giving a loss on deemed disposal of associates in the Group Income Statement of €16.7m.

**** The closing balance primarily relates to the Group's 18.61% (2013: 28.95%) investment in APN. See note 6 for details of the carrying value and impairment assessment relating to the Group's investment in APN.

(i) Carrying Amount

The reporting year end dates of the Group's associates and joint ventures are the same as the Group's reporting year end date.

***** Of the €69.1m in 2014, €68.7m relates to APN and €0.4m to Other. Of the €87.0m in 2013, €86.9m relates to APN and €0.1m to Other.

NOTES TO THE FINANCIAL INFORMATION (continued)

10. Investments in Associates and Joint Ventures (continued)

(ii) Associates

Summarised financial information in respect of the Group's associates is set out below:

The amounts in the above table, with the exception of the amounts in the line referring to the Group's carrying amount of associates (including goodwill arising on acquisition), relate solely to APN. The Group holds an 18.61% shareholding (2013: 28.95%) in APN, an ASX listed publishing and radio network operating entity that operates mainly in Australia and New Zealand. The investment is accounted for using the equity method.

Even though the Group holds less than 20% of the voting rights of APN, it is judged that the Group has significant influence over APN, as Paul Connolly is a director of both INM and APN, and Vincent Crowley (former Group Chief Executive Officer of INM) is a director of APN.

The market value of the Group's interests in associates, which are stock exchange quoted as at 31 December 2014, was €107.9m (2013: €55.8m), all of which relates to APN (see note 6 for further information). 

NOTES TO THE FINANCIAL INFORMATION (continued)