Televisa BRINGING Grupo Televisa, S.A. IT Av. Vasco de Quiroga 2000 ALL C.P. 01210 México, D.F. (5255) 5261-2445 together Annual Report 2005 www.televisa.com ANNUAL REPORT 2005 AT TELEVISA, investor INFORMATION Corporate headquarters Legal counsel Independent auditors Grupo Televisa, S.A. Mijares, Angoitia, Cortés y Fuentes, S.C. PricewaterhouseCoopers, S.C. Av. Vasco de Quiroga 2000 Montes Urales 505, 3rd Fl. Mariano Escobedo 573 C.P. 01210 México, D.F. C.P. 11000 México, D.F. C.P. 11580 México, D.F. (5255) 5261 2000 (5255) 5201-7400 (5255) 5263-6000 Fried, Frank, Harris, Shriver & Depositary Jacobson LLP JPMorgan Chase Bank One New York Plaza One Chase Manhattan Plz., 40th Floor New York, New York 10004 U.S.A. New York, New York 10081 USA (212) 859-8000 (866) JPM-ADRS (576-2377) letter to our [email protected] > 2shareholders 4financial highlights contents at a glance 6 Investor relations Common stock data We ask that investors and analysts CPOs (Certificados de Participación Ordinarios) covering Grupo Televisa, S.A., direct all inquiries to comprise 117 shares (25 A Shares, 22 B Shares, 35 D Shares, and 35 L Shares) and are listed and admitted for trading on the Bolsa Mexicana de Valores, S.A. de C.V. Grupo Televisa, S.A. (the Mexican stock exchange), under the ticker symbol TLEVISA CPO. The GDSs Av. Vasco de Quiroga 2000 (Global Depositary Shares), each representing five CPOs, are listed on the New C.P. 01210 México, D.F. York Stock Exchange and trade under the ticker symbol TV. On March 22, 2006, building (5255) 5261-2445 Televisa changed its GDS ratio from its previous 1 GDS per 20 CPOs to 1 GDS [email protected] per 5 CPOs, a 1:4 GDS split. excitement, 8 driving results Website Dividend policy http://www.televisa.com Decisions regarding the payment and amount of dividends are subject to approval by a majority of the A Shares and B Shares voting together generally, but not necessarily, on the recommendation of the board of directors, as well as a majority of the A Shares voting separately. On March 25, 2004, the company’s board of directors approved a dividend policy under which Televisa intends to pay an annual regular dividend of Ps.0.35 per CPO. SEC filings Televisa files and submits reports to the US Securities and Exchange Commission on an annual basis. This annual report contains both historical information and forward-looking statements. These forward-looking statements, as well as other broadening forward-looking statements made by the company, or its representatives from audiences, time to time, whether orally or in writing, involve risks and uncertainties relating bringing it all to the company’s businesses, operations, and financial condition. A summary of stimulating together these risks is included with the company’s submissions accompanying this annual 14 growth 18 report with the US Securities and Exchange Commission, and this summary, as well as the other filings with and submissions to the US Securities and Exchange Commission, are and will be available through the office of investor relations upon written request. The pro-forma information is presented for informational purposes only and does not purport to represent Televisa’s financial position or results of operations. Furthermore, the reader should not rely on the pro-forma information as an management indication of the results of operations of future periods. 23 discussion bringing our communities board of directors signi, s.c. 22 : together 35 This annual report is available in both English and Spanish. April 2006. DESIGN Este informe anual está disponible tanto en español como en inglés. Abril 2006. financial 36 statements we are BRINGING IT ALL together We are integrating and leveraging all of our media assets to extend the reach of our content beyond the screen and to extract maximum value from it. As a result, we are growing and diversifying the audiences for our programs, building enthusiasm for our brands, increasing ratings and revenues, and delivering ever greater value to our shareholders. BRINGING IT ALL TOGETHER / 1 DEAR FELLOW shareholders At Televisa, we are integrating all of our business segments distribute pay-television channels in the United States, 40.7% to create value for our shareholders. By leveraging all of our was another driver of our sales. TuTV currently reaches assets to transform our television content into rich multi- approximately 1.3 million viewers in the United States. consolidated media experiences for our audiences, we are drawing higher Given the popularity of our programming, improving operating ratings and increasing revenues in all of our businesses. Our macroeconomic conditions in Mexico and abroad, and income before ability to capitalize on the synergies that exist among our the rapid growth of the Hispanic population in the depreciation and diverse media assets has been a key factor that has enabled United States, we continue to see solid growth potential us to continue to increase our sales and expand our margins in this segment. amortization during the past several years. margin Through our programming exports segment, we reached In 2005, our results once again speak for themselves. Pro- audiences in more than 50 countries in 2005. In the forma consolidated sales grew 8 percent to Ps.32.5 billion. United States, our programs continue to be a key driver Our operating income before depreciation and amortization of Univision’s success. In 2005, we provided 39% of the increased 16 percent to Ps.13.2 billion, and we achieved a Univision network's nonrepeat broadcast hours, including record-high margin of 40.7 percent. I attribute these results most of its prime-time programming. In fact, in 2005 the to three primary factors. The first is our ability to consis- Univision network attracted the largest prime-time and tently produce high-quality content for our audiences. The total-day audience of adults ages 18–49 and 18–34 in its second is, as I mentioned, our ability to leverage all of our history. We also provided 23% of Telefutura network’s business segments and capitalize on their synergies to nonrepeat broadcast hours and virtually all of Galavision extract maximum value from our content. The third factor is network's programming. our disciplined management of costs and expenses. We believe that the Hispanic community in the United Our television broadcasting segment remains the corner- States presents a tremendous opportunity for Televisa. stone of our operations. Our programs consistently pull in Given the size and rapid growth of this market and, in high ratings and, in 2005, drew an average sign-on to sign- particular, its demographic similarity to Mexico and Latin off audience share of more than 70 percent. In fact, we America, we continue to explore ways to increase our pres- aired 87 of the top 100 television shows in Mexico during ence in this region. the year. We expanded our advertising revenues, which grew 5.1 percent this year. Once again, we managed our Sky Mexico, our direct-to-home satellite television business, operations to keep costs and expenses relatively flat. All of remains the undisputed leader in the Mexican pay-television this adds up to continued expansion in our operating industry. Sky's superior content offerings and customer income before depreciation and amortization margin, service continue to draw subscribers. In addition, during which reached 47.7 percent for the year—a record for this 2005 we completed the DirecTV subscriber migration segment. process. As a result of these efforts, we added 248 thou- sand subscribers during the year and brought Sky's total Our pay-television networks segment delivered strong subscriber base to more than 1.25 million. This growth growth once again. This segment benefited from an translated into outstanding sales and margin expansion increase in sales from channels sold in Mexico and in 2005. We expect Sky to continue to experience strong throughout Latin America as well as from higher adver- growth in 2006, due in part to its exclusive broadcast of tising revenues. TuTV, our joint venture with Univision to 34 of the 64 World Cup soccer games. 2/ TELEVISA ANNUAL REPORT 2005 Over the past three years we have returned over US$950 million to our shareholders Cablevisión, our cable television business in Mexico City, to operate sportsbooks and number draws, including the has seen an amazing turnaround thanks to the conversion of establishment of 65 locations throughout Mexico. We plan our system from an analog to a digital format. Thus far we to launch this business in the second quarter of 2006. have converted 51 percent of our network and have seen a concomitant rise in our subscriber base, ranging from 34 The digital era has created appealing opportunities for our percent to as much as 98 percent in certain areas. At close company. In 2004, we began using our vast library and media of year our subscriber base had reached more than 422 assets to deploy our content in the Mexican wireless space thousand, and our broadband customer base had grown to through SMS. In addition, last November we launched 61 thousand from 26 thousand. We expect to see healthy Tarabu—the first legal, online digital music store in Latin subscriber growth as we complete our conversion to the America. This is just the beginning. In addition to SMS and digital format. In addition, we recently announced our music we will soon offer video and will keep expanding the intention to start providing voice services through our reach of our content well beyond the television screen. cable platform; this initiative will open a completely new revenue source for this business.