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This is the right time for Televisa. Our core businesses —content and distribution— are as compelling and competitive as ever. We are in the right place. Mexico, our main market, is a healthy and dynamic economy that is poised to continue growing at a solid pace. And we are executing on the right business model. In the past three years Televisa made significant strategic investments in Univision and Iusacell and every day we build further on their potential to be important value drivers for Televisa. 1 content: Contribution to Sales: 47% Contribution to OSI(1): 54% content: licensing & syndication Exports its programs and formats to television net- works around the world. In the U.S., distributes its content: content through Univision under a Programming License Agreement (PLA). The PLA, which was ex- advertising tended to at least 2025, resulted in royalties to Tele- visa of US$248 million in 2012. The world’s largest media company in the Spanish-speaking world based on its mar- ket capitalization and a major participant Over 50 countries worldwide in the international entertainment busi- (approximate reach) ness, Televisa operates four broadcast net- works —2, 4, 5, and 9— in Mexico through Contribution to Sales: 8% 258 affiliated stations throughout the country, and sells advertising on its pay- TV channels and Internet assets. It also produced more than 69 thousand hours of content in 2012 for free-to-air television. Contribution to Sales: 34% Tele visa at a glance content: network subscription publishing The leading Spanish-language magazine Produces and distributes 22 pay-TV brands. publisher; produced 186 titles with a cir- In the U.S., distributes its pay-TV channels culation of approximately 129 million through Univision. Produced approximately 20 magazines in 2012. Also, continued to ex- thousand hours of content in 2012 for pay-TV pand the reach of its titles through digital networks. platforms: • Cosmopolitan • Men’s Health • National Geographic • Seventeen +33 million pay-TV subscribers 20 countries reached Contribution to Sales: 5% Contribution to Sales: 5% Contribution to OSI(1): 2% 2 SKY unconsolidated Mexico’s leading direct-to-home satellite businesses television system; also operates in Central America and the Dominican Republic. De- Iusacell (50%). Mexico’s third largest mobile telecom provider. mographic expansion through new packag- Expanded its number of users by 37 percent during 2012. es: MiSky and VeTV; more than one million subscribers added in 2012. Univision (8%). The leading Spanish-language media company in the U.S., and the number four network regardless of language. Subscriber base: 5.2 million Ocesa Entretenimiento (40%). Live-entertainment company in Mexico. Organized nearly 4,500 events in Mexico in 2012. Most Contribution to Sales: 20% successful show: Michael Jackson The Immortal World Tour by Contribution to OSI(1): 23% Cirque du Soleil. Imagina (14.5%). Spanish media group whose main activities include the commercialization of sports rights including the Spanish Soccer League La Liga, production of television content and movies, digital production and post-production services, transmission of content via satellite and techni- cal and advisory services. other businesses Gaming. Bingo parlors and online lottery business. Tele visa Soccer teams. Two of Mexico’s professional soccer teams. Azteca stadium. Mexico’s largest stadium. Radio. Network of 91 owned and affiliated radio stations. at a glance Contribution to Sales: 6% Contribution to OSI(1): 1% cable & telecom Cablevisión, Cablemás, and TVI offer video, voice, and broad- band services in Mexico City, Monterrey, and several cities in Mexico. Telecom company Bestel provides broadband and long-distance services in Mexico and the United States. Cablevisión Cablemás TVI Video 787,054 1,147,007 374,733 Broadband 509,137 567,247 229,720 Voice 318,927 302,197 133,178 Total RGUs 1,615,118 2,016,451 737,631 Contribution to Sales: 22% Contribution to OSI(1): 20% (1) Operating segment income (OSI) is defined as operating income before corporate expenses, depreciation and amortization, and other expense, net. For a reconciliation of total operating segment income with consolidated operating income, see Note 25 to our year-end consoli- 3 dated financial statements. dear fellow shareholders: During 2012, Televisa continued growing both its revenues and operating segment income at a solid pace. Consolidated net sales grew by 10.7 percent to 69 billion pesos and operating segment in- come grew by 12 percent to 28 bil- lion pesos. Our content business was as successful as ever ico, notwithstanding very strong competition to During the year we produced more than 90 thou- attract audiences. The large majority of global sand hours of content in four different languages media and entertainment companies make their and competed with our content in over 50 coun- pay-TV networks available in Mexico, offering tries around the globe. Sales increased 7.2 percent content to over 40 percent of Mexican house- reaching 32.9 billion pesos, with an operating seg- holds. It makes me proud that our own produc- ment income margin of 46.9 percent. tions compete so successfully with those of such renowned companies. We continued breaking our own audience records by producing successful telenovelas, newscasts Internationally, we continued to expand the num- and general entertainment shows. Moreover, our ber of countries where our content is transmitted. coverage of special events, such as the Summer Our pay-TV networks division reached a more Olympic Games and the Pope’s visit to Mexico, de- than 33 million subscribers, of which two thirds livered larger audiences than those of our com- are outside of Mexico. petitors, even though we were broadcasting the same content. In the United States, through Univision, our content continued conquering new audiences. Our pay-TV networks remained among the most- During 2012, Univision Network increased its watched networks on pay-TV platforms in Mex- ranking among the major American networks, 4 We continue to work closely with Univision to help them make the most effective use of our content, and to produce content that is increasingly relevant to the Hispanic market becoming the fourth most watched network Sky repositioned itself from a platform focused ex- during prime time among adults between 18-34 clusively on a high-end customer base into a pro- regardless of language. Our content continues to vider of pay-TV content available to all segments of have growing success in the most competitive the population. Since then, Sky has added approxi- market in the world. mately one million subscribers every year. Most notably, this growth has been achieved in spite of We continue to work closely with Univision to intense competition in the pay-TV industry. help them make the most effective use of our con- tent, and to produce content that is increasingly Our cable companies continued to deliver strong relevant to the Hispanic market. Our interests are growth perfectly aligned. We both want Univision to grow Revenues for the cable and telecommunications as fast as possible, while setting the foundation division grew by 14.2 percent to 15.6 billion pesos for its continued success. This way, we benefit not and operating segment income margin reached only from a growing stream of royalties, but also 37.3 percent. A large portion of this growth was as an equity investor in a company that continues driven by the increasing adoption of voice and consolidating its position as the leader in the His- broadband services by our video customers. panic market. At the same time, video subscribers grew at a healthy pace. In our publishing division, sales increased 8.2 percent during 2012. In spite of the many chal- Our cable operations closed the year with 2.3 mil- lenges that this industry is facing globally, oper- lion video subscribers, 754 thousand voice sub- ating segment income margin reached 13 percent scribers and 1.3 million broadband subscribers. for the year. As of the end of 2012, on average, 33 percent of our cable video customers also subscribed to our Sky, our satellite pay-TV platform, reached over voice service, and 57 percent to our broadband 5 million subscribers in 2012 service. Going forward, there is a big opportunity Revenues increased 15.9 percent to 14.5 billion to keep expanding our base of voice and broad- pesos and operating segment income margin con- band customers. tinued to be remarkably strong, reaching 45.3 per- cent for the year. 5 The pay-TV industry in Mexico presents great In 2012 we received regulatory approval from opportunities Mexico’s Antitrust Authority to become an equity Pay-TV penetration in Mexico today is increasing holder in Iusacell. This mobile operator has been at a fast pace, and it remains a market with great undergoing a transformation from the moment potential. Broadband penetration is very low by in- we made the US$1.6 billion investment back in ternational standards, but there is strong demand 2011 and we are excited about the initial results. for high quality, high-speed broadband services. Iusacell closed the year with 7.4 million subscrib- ers, a year-over-year growth of 37 percent. In addition, the majority of our current custom- ers subscribe to our basic services at low prices. We are commencing 2013 from a position of This means that as purchasing power in Mexico strength grows, so will our customers’ desire for higher From 2009 through 2011 we had to overcome many broadband speeds, exclusive programming, high- challenges, including the global financial crisis, definition content, and other premium services the deepest economic contraction in Mexico’s re- that we offer. cent history, the entry of a new pay-TV competitor, and the loss of an important advertising customer.

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