GRUPO CLARÍN S.A. 2012 ANNUAL REPORT To the Shareholders of Grupo Clarín S.A. We hereby submit for your consideration the Annual Report and Exhibit, the Parent Company Only Balance Sheet, the Parent Company Only Comprehensive Statement of Income, the Parent Company Only Statement of Changes in Shareholders’ Equity and the Parent Company Only Statement of Cash Flows and Notes of Grupo Clarín S.A. (hereinafter, “the Company” or “Grupo Clarín”) for fiscal year No. 14 ended December 31, 2012 and the Consolidated Financial Statements as of December 31, 2012. The main subsidiaries in which Grupo Clarín S.A. has a direct or indirect controlling interest are: Arte Gráfico Editorial Argentino S.A. (AGEA), Artes Gráficas Rioplatense S.A.(AGR), Compañía Inversora en Medios de Comunicación S.A. (CIMECO) Cablevisión S.A. (Cablevisión), Primera Red Interactiva de Medios Argentinos (PRIMA) S.A., Contenidos de Medios Digitales S.A.(CMD), Arte Radiotelevisivo Argentino S.A.(ARTEAR), GC Gestión Compartida S.A., Inversora de Eventos S.A.(IESA) and Radio Mitre S.A., among others. 2012 MACROECONOMIC ENVIRONMENT The dynamism that emerging economies were able to sustain in spite the overall slowdown of the developed countries’ economies was one of the few positive economic highlights of 2012. The serious social and economic crisis that continues to affect several Euro Zone countries led to considerable deterioration in the block of developed countries, which could not be offset by the modest upturn of the US or Japan's return to growth. Most industrial emerging countries – led by China and, to a lesser extent, India – proved resilient to such deterioration and were able to continue to grow during the year under review at an above- average rate, thus funneling growth in other emerging countries that provide these industrial economies with agricultural and non-agricultural commodities. All emerging countries recorded lower growth rates compared to 2011. The world has continued to register growth at two different structural paces, reflecting the operation of the new global accumulation mechanism focused on emerging economies. The poor performance of the Argentine economy in 2012 is the exception to the rule prevailing in the emerging countries for two reasons. First of all because, unlike its peers, the world did not represent a burden for Argentina. In fact, even though the slowdown of the Brazilian economy did have a negative impact on Argentina’s industrial exports, in 2012 the price of its agricultural products in general and the price of soya in particular, were higher on average than those of the previous year and remained high compared to historical levels (largely offsetting the lower volume of the crop harvest). Secondly, because unlike in other emerging countries and the region as a whole, local economic policies accentuated, instead of mitigating, the effects of the global financial crisis. The year 2012 stands out as an actual turning point in the performance of the Argentine economy. The change in the ground rules fuelled in the aftermath of last year's presidential elections broadly and significantly damaged economic activity developing a disturbing scenario of stagflation (stagnation plus high inflation). 1 Not even the strong acceleration in the rate of increase in the money supply – which ended the year with an annual increase of 40%, attributable to increased financing from the Central Bank to the Treasury – was sufficient to revert the halt in economic activity. Thus, the balance of the Argentine economy at the end of 2012 is at best modest, as a direct result of the policies applied in response to the imbalances created in, and carried over from, the previous years. The most significant negative side effects of the policies implemented in 2012 were decrease in th|e generation of genuine employment, the stagnation of the purchasing power of workers’ salaries, the capital depletion of the Central Bank, the decrease in exports and the loss of international reserves. The scenario of stagflation is paired with certain additional disturbing conditions under which the economy is operating, such as an accelerated loss of competitiveness, increased primarization and shortage of local and foreign reproductive investments (noticeable mainly in the capital depletion of key strategic sectors). In terms of key macroeconomic equilibrium, we note a slight improvement in the real generation of foreign currency on the external front, which is mainly attributable to the sudden closing of the economy, an unusual situation that negatively affected several aspects of the real economy. This performance is the result of the strong contraction of imports, in general, and intermediate goods and capital, in particular. Consequently, the external surplus for the year was slightly higher than that of the previous year and remained above USD 10 billion for the eleventh consecutive year. However, this apparent strategic achievement is tainted by two specific facts. One of them is the widening of the trade deficit in the energy sector, estimated in around USD 3.5 billion this year. This phenomenon worsens an historical problem of the Argentine economy, because in order to avoid affecting the country’s foreign reserve position, the surplus of the agricultural sector in the coming years must not only cover the structural deficit of the industrial sector, but also that of the energy sector. The second specific fact is the evolution of the Central Bank's international reserves. The monetary authority has again registered a drop in its foreign currency position of more than USD 3 billion. The achievement of a higher foreign trade surplus and the substantial decrease in capital flight and profit / dividend remittances were not sufficient to cover the use of reserves appropriated to the service of foreign currency sovereign debt and, particularly, the collapse in foreign currency inflows to the financial system. As opposed to most other emerging countries in the region, which were able to accumulate reserves throughout the year, Argentina’s decrease in foreign reserves brought this variable to USD 43.1 billion at year-end, its low record since 2007. The continued deterioration on the fiscal front deepened still further in 2012. Primary spending has again outgrown revenues. The national primary deficit (without counting profit remittances from BCRA and ANSES) exceeded Ps. 35 billion, more than doubling the figure for 2011. The financial deficit (i.e. after payment of interest on public debt) grew in 2012 to over Ps. 80 billion. Both figures are the highest since 2003, in absolute and relative terms. This fiscal deterioration occurred in spite of record-high tax pressure and is mostly financed with the printing of currency, which fuels the already high inflationary expectations. 2 Perspectives for the Upcoming Year Under the new scheme in which the Argentine economy is advancing, its short-term and medium- term performance mostly depends on its ability to generate sufficient foreign currency to cover the external structural deficit of industrial (and now also of its energy) sector and honor interest payments on its indebtedness. With respect to the latter, the final outcome of the claims brought by holdouts who did not participate in any of the various exchange offers has implications that are difficult to assess as of the date of this report and is an additional source of concern. Without access to voluntary financing from capital markets, the debt service is directly contingent upon an increase in prices and/or volume of exports and/or the use of reserves. The baseline scenario for the Argentine economy in the coming year is supported by three important assumptions. On the external front, the US-dollar supply is expected to increase, mostly as a result of the harvest volume and the resulting agricultural exports. This will be paired with the shorter maturities of sovereign debt in foreign currency, mainly attributable to the no service of the 2012 coupon of the GDP-linked bonds. Meanwhile, at a regional level, the most relevant highlight is the expected improvement in the performance of Brazil (estimated to grow more than in prior years) and its related positive impact on the Argentine exports (mostly, industrial exports) to that market. At the strictly local level, the mid-term congressional elections could cause a more aggressive drive in economic policy, albeit at the risk of worsening carryover imbalances. In fact and by way of example, inflationary pressures are expected to build up again in line with the recovery of the economic activity, which would continue to hinder the scope of significant improvements in social indicators and the distribution of income of the Argentine people. In the absence of measures that address the distortions accumulated in the last few years and without an additional supply of US dollars from the agricultural sector, the external restriction would inevitably appear again beyond 2013, compromising the economic performance and endangering the ability to move forward with pending issues as well as the accomplishments achieved so far. THE YEAR 2012 AND THE MEDIA SECTOR IN ARGENTINA By the end of the year 2012, the global media industry –undoubtedly one of the most seriously affected by the severe financial crisis of 2009 – recorded the highest growth rate in the last five years, thus consolidating the signs of recovery shown in the aftermath of that crisis. That performance is mostly accounted for by the dynamism maintained by most emerging economies in spite of the prolonged slowdown of the developed countries’ economic activity, and its related direct impact on the positive performance of this industry. By way of example, in the year under analysis the Latin American media industry was the one that experienced (and according to market estimates is expected to continue to experience) the highest growth on a global basis, even above that of its Asian counterparts.