Investment Opportunity

Strictly confidential

Investment opportunity

June 2012

Disclaimer

This document (the “Document”) has been drawn up by Mediobanca S.p.A. (“Mediobanca”) and Citi Global Markets, Ltd. (“Citi”) on the basis of information publicly available and provided by Telecom Italia S.p.A. (“Telecom Italia”) and Telecom Italia Media S.p.A.. Mediobanca and Citi assumed and relied, without independent verification, upon the accuracy and completeness of such information.

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M E D I O B A N C A S.p.A. Citi Global Markets, Ltd. Stefano Argenton Alessandra Pasini Piazzetta Enrico Cuccia, 1 Via Mercanti, 12 20121 Milan, Italy 20121 Milan, Italy Phone: +39 02 8829 235 Phone: +39 02 8906 8224 Fax: +39 02 8829 943 Fax: +39 02 3604 9262 E-mail: [email protected] E-mail: [email protected]

I Situation overview and scope of the transaction

Telecom Italia Media S.p.A. (“TI Media”) is the company which heads up the Telecom Italia group’s activities in the media sector. Telecom Italia owns 77.4% of its share capital1. TI Media shares are listed on the Italian stock market and no other shareholder owns a stake of more than 2% of its share capital.

The current TI Media group structure is as follows: 23

Telec o m Ita lia S.p.A.

77.4%2

Telec o m Ita lia Corporate Media S.p.A. services

51%3 100%

Telec o m Ita lia Network MTV Italia S.r.l. Media Broadcasting S.r.l. Operator

100%

MTV Pubblicità S.r.l.

Based on average stock market prices in May 2012, TI Media had an average market capitalization of €230m.

1 The share capital of TI Media is equal to €212.2m, made up of 1,446,317,896 ordinary shares and 5,496,951 non-voting saving shares with no face value. 2 Stake amounting to 77.7% of the voting rights, 2.2% of which is owned by the wholly-owned subsidiary Telecom Italia Finance S.A.. 3 The other 49% is held by US group Viacom. The company’s articles of association includes a pre-emption right for the shareholders in the event of transfer of shares.

The Board of Directors of TI Media has recently approved a corporate reorganization according to which its TV business will be transferred to a newly incorporated, fully-owned subsidiary. The resulting group structure, post the reorganisation will be the following: 4

Telec o m Ita lia S.p.A.

77.4%

Telec o m Ita lia Corporate Media S.p.A. services4

100% 100%

Telec o m Ita lia La7 S.r.l. Media Broadcasting S.r.l.

51%

MTV Italia S.r.l. Network Operator 100%

MTV Pubblicità S.r.l.

Telecom Italia is considering the disposal of its 77.4% stake in TI Media in order to focus on its core telecom business. Telecom Italia, together with TI Media, is also willing to contemplate the divestiture of TI Media’s TV business and Network Operator business separately in order to take into consideration the different asset characteristics.

4 Following the corporate reorganization, the corporate services related to the TV business will be transferred to La7 S.r.l.. The corporate services related to the Network Operator business will be transferred to Telecom Italia Media Broadcasting S.r.l. if the Network Operator business is sold separately.

II Investment highlights

- Interesting market position for an asset with good prospects:

• TI Media group is the third player in the Italian free-to-air television market, with a loyal viewer base due to its programming schedule focused on information and in-depth analysis;

• TI Media is a unique opportunity to enter the Italian free-to-air TV market, with upsides relating to the growth of its audience share and to the expected changes in the competitive landscape.

- Unique opportunity to invest in an attractive market, with growth potential:

• Italian advertising expenditure per capita and as a percentage of GDP is considerably lower than in the US and other western European countries, and with meaningful scope for growth5;

• total advertising expenditure is expected to bottom out in 2012 and grow at an annual compounded growth rate of 4.1%6 in the 2013-2015 period;

• despite the envisaged growth of new media, traditional free-to-air TV is expected to remain a reference point over the next few years, in terms of audience share and advertising revenues, with an increasing focus on themed channels. TI Media group is expected to benefit from its competences in the development of new content and channels tailored to segmented audience.

- TI Media’s TV business is an attractive asset with good visibility and a strong momentum in the market:

• bucking the declining trend of the audience share of its main competitors, in the last three years La7 has experienced outstanding and constant growth in advertising revenues due mainly to the ongoing increase in terms of audience share;

• La7 and MTV One channels have an appealing channel numbering (i.e. number 7 & 8 on the remote control).

- TI Media’s TV business has strong revenue growth potential as the recent audience trends continue:

• certain broadcasters in Italy have an advertising share far higher than their audience share; La7 would benefit from a more balanced distribution of TV advertising among the privately-held broadcasters;

• taking the recent positive results in terms of audience share into consideration, La7 could benefit from the revision of certain terms of the existing advertising agent agreement.

5 Source: Zenith Optimedia. 6 Source: Screen Digest.

- TI Media’s Network Operator is a valuable asset:

• full occupancy of its 3 multiplexes and good visibility of its medium-term revenues;

• cash flow generation will benefit from the completion of capital expenditures linked to the digitalization process of the transmission network (the full analogue switch-off is expected by the end of June 2012).

- TI Media’s Network Operator has a strong upside potential:

• in the event of a positive outcome of a legal proceeding which is currently pending, the Network Operator could be awarded the frequencies of a fourth national multiplex.

- Telecom Italia has a flexible approach:

• Telecom Italia is keen to dispose of its 77.4% stake in TI Media. However, Telecom Italia, together with TI Media, may also contemplate the divestiture of TI Media’s TV business and Network Operator business separately in order to take into consideration the different asset characteristics.

III Italian media industry overview

Advertising Market in Italy

Italy is an attractive market with currently relatively low advertising expenditures and with prospects for growth. With €7.7bn total advertising expenditure in 2011, Italy has an advertising expenditure per capita (€100.3) and as a percentage of GDP in Italy (0.4%) considerably lower than in the United States and the other western European countries.

Chart 1. - Advertising expenditure per capita Chart 2. - Advertising expenditure as a % of by country, 2011 in € GDP by country, 2011

1.00% 345.7

0.77% 0.70%

214.5 211.3

0.49% 0.48% 147.3 0.40% 114.5 100.3

USA Germany UK France Spain Italy USA UK Germany Spain France Italy

Source: Zenith Optimedia

The advertising expenditure in Italy is expected to bottom out in 2012, and to grow at an annual compounded growth rate of 4.1% in the 2013-2015 period. The level of expected advertising expenditure in Italy in 2015 is €8.5bn, in line with the pre-crisis levels.

Chart 3. - Total advertising expenditure in Italy in 2009-2015E

€m CAGR 2012E-2015E: +4.1% 8,800 8,489 8,400 8,178 8,000 7,796 7,757 7,681 7,524 7,600 7,322 7,200 6,800 6,400 2009 2010 2011 2012E 2013E 2014E 2015E

Source: Screen Digest

TV advertising generated approximately €3.8bn in 2011, which represented approximately half of the total advertising in Italy, more than double of the amount spent for newspapers and magazines advertising.

Chart 4. - Breakdown of 2011 advertising expenditure by medium in Italy

Radio 7% Internet Newspapers 15% 12%

Magazines 9%

Out-of-home 6%

Cinema 1%

Television Mobile 49% 1%

Source: Screen Digest

In 2011 advertising accounted for some 43% of the TV industry’s total turnover.

Chart 5. - Breakdown of 2011 total spending in TV industry in Italy

Advertising revenues 43%

RAI Public funding 20%

Pay TV subscriptions 37%

Source: Screen Digest

Italian Television Market Overview

Mediaset group and Rai group are the leading operators with the largest audience share but have been recently suffering market competitive dynamics and have been experiencing declining audience shares.

TI Media (La7 and La7D channels) is the third largest operator and has been able to increase its audience share over the last years (from 3.02% in 2009 to 4.13% in 2011), also at the expense of the two market leaders.

Chart 6. - Breakdown of 2009 Italian TV Chart 7. - Breakdown of 2011 Italian TV audience by broadcaster7 audience by broadcaster7

Mediaset group Mediaset group 39.49% 36.37%

Other channels Other channels 11.80% 13.43%

La7 La7 & La7D 3.02% RAI group 4.13% RAI group Sky Italia 40.55% 41.00% FOX Sky Italia 3.00% FOX 1.69% 3.92% 1.61%

Source: Auditel

The Italian TV advertising market is characterised by the fact that certain privately-held broadcasters have an advertising share which is far higher than their audience share; in 2011 Mediaset group collected 62.2% of the total TV advertising revenues, despite having an audience share of just 36.4%, while La7 collected 3% of the total TV advertising revenues, slightly below its audience share.

The RAI group’s advertising revenues, which in 2011 amounted to 21.7% of the total TV advertising, are affected by the cap provided for in the Italian Consolidated Broadcasting Act8.

7 The audience share of MTV Italia free-to-air channels, owned by TI Media, is not included in Auditel surveys. 8 The RAI group can broadcast commercials for a maximum of 12% per hour compared to commercials for a maximum of 18% per hour by privately-held broadcasters.

Chart 8. - Breakdown of 2011 TV advertising by broadcaster

La7 MTV RAI group 3.0% 1.3% 21.7% Sky Italia 6.2%

Other broadcasters 5.5%

Mediaset group 62.2%

Source: Screen Digest

Chart 9. – Advertising share vs audience share

Adv. share 70%

60%

50%

40%

30%

20%

10% Other channels Audience share 0% 0% 10% 20% 30% 40% 50% 60% 70%

The market scenario is however changing and La7 expects that this market asymmetry (between advertising and audience share) could gradually dwindle away. La7 could therefore benefit from a more balanced distribution of TV advertising between the privately-held broadcasters.

Digital Terrestrial Television Overview

In accordance with EU regulations, Italy is converting its broadcasting infrastructure equipment, switching from analogue to digital systems – the so-called switch-off process. The switch-off in Italy is expected to be completed by the end of June 2012, when the last regions of Southern Italy, still served by analogue broadcasting services, will change to the digital systems.

There are 19 multiplexes currently assigned in Italy, with key players Mediaset group and Rai group owning 5 multiplexes each and TI Media group owning 3 multiplexes:

Chart 10. – Multiplexes assigned in Italy910

DVB-T technology DVB-H technology

3 3

Others*

* One DVB-T multiplex each for Prima TV, Rete Capri and Europa TV; one DVB-H multiplex for 3 Italia.

9 In May 2010, following the acquisition of local TV operator TivuItalia, Screen Service Broadcasting Technologies S.p.A. requested to AGCOM the assignment of a license for a further multiplex in DVB-T technology. 10 DVB-T is the European standard for the broadcast transmission of digital terrestrial television; DVB-H is a technical specification for the transmission of digital television to handheld receivers such as mobile telephones and PDAs.

IV TI Media overview

TI Media group is currently organized into three business units:

- La7 (La 7 S.r.l. following the corporate reorganization), which is responsible for television publishing activity, via national free-to-air broadcasters La7 and La7D, and multimedia publishing activity, via websites La7.it and La7.tv;

- MTV Group (MTV Italia S.r.l. and MTV Pubblicità S.r.l.), which is responsible for television publishing activity, via national free-to-air broadcasters MTV One and MTV Music, and producing content with a focus on musical programmes, live events and other entertainment programmes;

- Network Operator (Telecom Italia Media Broadcasting S.r.l.), which is responsible for renting broadcasting capacity of digital terrestrial bandwidth on its digital multiplexes to TI Media group broadcasters and other broadcasters.

La7

La7 operates two national free-to-air broadcasters: La7 and La7D:

- La7 (channel 7 on the remote control) is a generalist television broadcaster with a programming schedule which focuses on information and in-depth analysis. Its viewers’ base is composed mostly of individuals with medium-high levels of education and earnings;

- La7D (channel 29 on the remote control) has a programming schedule dedicated to women which has recorded compelling growth in audience share since its inception in March 2010, reaching 2.9 m daily contacts in the first quarter of 2012.

In terms of audience, La7 is the third operator on the Italian free-to-air television market after Rai and Mediaset groups. Starting from 2010, La7’s audience share has increased significantly and in the last twelve months the average audience share ranged between 3.2% and 4.4% with peaks of over 10% for its most successful programmes in prime-time. Consistently, the number of contacts for La7 has continued to grow over the last years, reaching 487,000 average contacts per day in 1Q 2012.

Chart 11. – La7 and La7D average monthly audience share

4.4%

4.2%

4.3% 4.0%

3.7% 3.7% 3.9% 3.6% 3.5% 3.8% 3.8% 3.4% 3.7% 3.6% 3.3% 3.5% 3.2% 3.4% 3.4% 0.36% 0.35%0.35% 3.3% 0.33% 0.33% 0.34% 0.34% 3.2% 0.32%0.32% 3.1% 0.25% 0.26%0.26% 3.0% 3.0% 0.24% 0.23% 0.23% 0.24% 0.32% 2.8% 2.8% 0.17% 0.14% 2.7% 0.13% 0.12%0.13% 2.6% 0.10% 0.08%

La7 La7D

Source: Auditel

Chart 12. – La7 average number of daily viewers

600,000 481,001 476,951 486,528 500,000

400,000 351,838 372,943

300,000

200,000

100,000

- 2009 2010 2011 1Q 2011 1Q 2012

Source: Auditel

The most successful La7 programmes are as follows:

Following the arrival of Enrico Mentana in August 2010, TGLa7 recorded outstanding growth in audience share in all of its editions, reaching an 8.1% average share in the evening edition in the first quarter of 2012, with more than 2.1 m viewers and an average of 3.6 m contacts

Talk show hosted by Lilli Gruber in access prime-time, which achieved a 5.4% average share in the first quarter of 2012, with more than 1.6 m viewers and an average of 3.6 m contacts

Talk show conducted by Corrado Formigli aired in the Thursday prime-time slot (audience share equal to 4.2% and more than 6.1 m contacts per episode)

Talk show hosted by Gad Lerner aired in the Monday prime-time slot (audience share equal to 4.4% and almost 5.7 m contacts per episode)

The three-day reading programme with Fabio Fazio and Roberto Saviano aired in prime time on 14, 15 and 16 May achieved an outstanding average audience share of 12.7%, with some 3 m viewers per night and total contacts in excess of 15 m

The comeback of Maurizio Crozza’s one-man show in prime-time on 23 May achieved an excellent average audience share of 8.2%, with more than 2.2 m viewers and total contacts equal to 6.9 m

Virtually all of La7’s turnover comes from advertising revenues currently collected by Cairo Communication. Under the terms of the advertising agent agreement, which expires in 2014,11 the annual advertising revenues paid by Cairo Communication to La7 cannot be lower than a minimum amount, which is made up of a fixed component plus a portion related to audience share, thus providing a floor to La7’s advertising revenues. Taking into consideration its recent positive results in terms of audience share, La7 could benefit from the revision of certain terms of the existing advertising agent agreement.

La7’s 2008 – 2011 financial results show a significant improvement, mainly relating to the actions taken to increase the audience share/advertising revenues while reducing costs, as well as the disposal of certain non-core assets (pay-per-view operations in 2008 and press agency Telecom Italia Media News S.p.A. in 2009).

La7’s key figures are as follows:12

2008 2009 2010 2011 1Q 2012 1Q 2011 € m % € m % € m % € m % € m % € m % La7 advertising sales 81.0 83.2% 92.2 81.2% 95.2 82.4% 117.1 83.7% 32.4 88.6% 27.3 81.8% La7D advertising sales - - - - 4.3 3.7% 7.0 5.0% 2.1 5.7% 1.4 4.3% Content Competence Centre from Telecom Italia 9.0 9.3% 15.3 13.4% 12.9 11.2% 13.3 9.5% - - 3.7 11.0% Multimedia, Media Services and other revenues 7.4 7.6% 6.1 5.4% 3.2 2.7% 2.5 1.8% 2.1 5.6% 1.0 3.0% Total revenues 97.4 100.0% 113.7 100.0% 115.6 100.0% 139.9 100.0% 36.5 100.0% 33.4 100.0%

EBITDA (65.8) -67.6% (37.8) -33.3% (35.6) -30.8% (22.0) 12 -15.8% (15.4) -42.0% (3.0) -9.0%

EBIT (91.7) -94.1% (65.4) -57.5% (63.0) -54.5% (49.5) 12 -35.4% (22.7) -62.1% (9.9) -29.7%

The data for 1Q 2012 reflect:

- substantial increase of programming costs for the new 2012-13 season;

11 Upon the occurrence of certain circumstances, the advertising agent contract with Cairo Communication may be renewed until 2019. 12 Excluding the €20.5m compensation paid by Telecom Italia following the termination of the Content Competence Centre contract in September 2011.

- absence of Content Competence Centre revenues to Telecom Italia (€3.7m in 1Q 2011), the contract for which was terminated in September 2011; - the costs incurred for the LA7HD channel experimental phase.

La7’s figures represented above include certain overhead costs which, following the envisaged company reorganization described earlier, will not be entirely borne by La7.

MTV GROUP

MTV Group’s core business is broadcasting of free-to-air channels MTV ONE (channel 8 on the remote control) and MTV Music (channel 67 on the remote control). MTV One is a generalist channel with a programming schedule dedicated to entertainment and music, while MTV Music is a themed channel focusing on music. Both channels target a young audience. MTV One’s and MTV Music’s turnover is represented mainly by advertising revenues managed by the wholly-owned subsidiary MTV Pubblicità S.r.l..

Chart 13. – MTV Group gross advertising revenues

€m

79.4 67.1 60.6 56.3

13.7 11.7

2008 2009 2010 2011 1Q 2011 1Q 2012

MTV Group’s activities also include:

- management of themed channels (Nickelodeon, Comedy Central, MTV Hits, MTV Classic, MTV Dance, MTV Rocks and others) broadcasted on the Sky Italia satellite platform (“Satellite”);

- multimedia publishing business, via websites mtv.it, nicktv.it, nickjr.it and comedycentral.it (“Multimedia”);

- content production for Telecom Italia group’s mobile operator (“Mobile”);

- content production for musical programmes and live events (“Playmaker”).

MTV Group’s key figures are as follows:

2008 2009 2010 2011 1Q 2012 1Q 2011 € m%€ m%€ m%€ m%€ m%€ m% MTV One 62.6 55.1% 45.7 46.9% 47.1 48.2% 37.3 50.5% 5.2 44.4% 7.8 57.3% MTV Music - - - - 1.4 1.4% 3.1 4.2% 0.6 5.2% 0.5 3.9% Satellite - Nickelodeon and Comedy Central 13.7 12.1% 14.8 15.2% 17.5 17.8% 16.3 22.0% 4.1 35.4% 3.7 26.8% Satellite - Music Platform 8.7 7.7% 8.1 8.3% 7.3 7.5% 3.4 4.6% 0.9 8.1% 0.5 4.0% Multimedia 6.0 5.2% 6.3 6.4% 5.6 5.7% 5.3 7.1% 0.6 5.4% 1.0 7.0% Mobile 6.8 6.0% 7.0 7.2% 3.4 3.5% 1.1 1.4% 0.1 1.1% 0.2 1.3% Playmaker 32.1 28.2% 27.4 28.2% 24.3 24.8% 13.0 17.6% 0.2 1.4% 1.1 8.4% Other revenues and eliminations (16.2) -14.3% (11.9) -12.3% (8.9) -9.1% (5.5) -7.5% (0.1) -0.9% (1.2) -8.6% Total revenues 113.6 100.0% 97.4 100.0% 97.8 100.0% 73.8 100.0% 11.7 100.0% 13.7 100.0%

EBITDA 14.5 12.7% 10.9 11.2% 12.3 12.6% 6.6 9.0% (1.9) -16.1% (0.6) -4.3%

EBIT 6.6 5.8% 3.0 3.1% 5.0 5.1% - - (2.9) -25.1% (2.0) -14.8%

Starting from 2011 MTV Group’s financial results have suffered from a decline in gross advertising revenues and Playmaker activities, partly offset by a reduction in costs.

In recent months TI Media and Viacom have embarked on a review of the MTV Group’s activities, which will lead to MTV being transformed from a musical and entertainment TV channel to a generalist free-to-air channel. From this viewpoint TI Media is considering the possibility of selling the Satellite business to Viacom.

NETWORK OPERATOR

The Network Operator rents broadcasting capacity of digital terrestrial bandwidth on its digital multiplexes. As of 31 March 2012 the Network Operator managed:

- 2 national digital multiplexes:

o TIMB1, covering 90.1% of the Italian population;

o TIMB2, with 94.2% coverage;

- one digital multiplex (TIMB3) covering the areas where the switch-off process has been already completed13, with coverage of 75.0% of the Italian population and 95% in the areas concerned;

- one digital multiplex in Sardinia (TIMB4, covering 2.4% of the Italian population and 85.1% of the regional population).

A legal proceeding is currently pending for the assignment to the Network Operator of the frequencies of a fourth national multiplex.

13 Switch-off of the analogue signal in Italy is expected by the end of June 2012.

Chart 14. – Network Operator national multiplexes population coverage as of 31 March 2012

Sw itch-off completed areas. TIMB1 TIMB2 TIMB3

As of 31 March 2012 broadcasting capacity on all three of TIMB’s national multiplexes was fully occupied.

Chart 15. – Network Operator hosting agreements (64.3 Mbps occupied) as of 31 March 2012

Historical partners La7 HD Mbps 4.3

La7/ La7D Mbps 9.5

MTV One/ MTV Music 4Q ‘11 agreements Mbps 6.0

Third parties channels Mbps 44.5

Network Operator’s key figures are as follows:

2008 2009 2010 2011 1Q 2012 1Q 2011 € m % € m % € m % € m % € m % € m % Digital 27.8 62.6% 33.6 67.5% 64.5 84.7% 49.0 89.2% 16.7 91.1% 11.3 88.0% Analogue 16.6 37.4% 16.2 32.5% 11.6 15.3% 5.9 10.8% 1.6 8.9% 1.5 12.0% Total revenuesa 44.4 100.0% 49.7 100.0% 76.1 100.0% 54.9 100.0% 18.3 100.0% 12.8 100.0%

EBITDA 15.6 35.1% 17.8 35.7% 34.7 45.6% 23.0 41.8% 11.3 61.7% 5.5 43.0%

EBIT (11.8) -26.5% (7.0) -14.2% 10.2 13.4% (1.6) -3.0% 5.0 27.0% (0.7) -5.4% a) Of which from 36.3 81.7% 29.3 58.9% 29.0 38.1% 29.1 53.0% 8.7 47.5% 7.3 56.9% TI Media group companies:

The revenues decline incurred in 2011 is mainly attributable to the client Dahlia TV being put into liquidation in January 2011, which rented more than 15 Mbps from the Network Operator in 2010 (i.e. approximately 25% of the Network Operator’s capacity).

Results for the first quarter of 2012 benefited from the full occupancy of the multiplexes achieved over the last months of 2011.

V Key consolidated figures

Key consolidated financial highlights for the 2008 – 1Q 2012 period by business unit are as follows:1415

2008 2009 2010 2011 1Q 2012 1Q 2011 € m % € m % € m % € m % € m % € m % La7 97.4 45.3% 113.7 50.0% 115.6 44.7% 139.9 58.7% 36.5 63.4% 33.4 63.9% MTV Group 113.6 52.9% 97.4 42.8% 97.8 37.8% 73.8 31.0% 11.7 20.3% 13.7 26.1% Network Operator 44.4 20.7% 49.7 21.9% 76.1 29.4% 54.9 23.1% 18.3 31.8% 12.8 24.5% Elimin. and adjustments (40.7) -18.9% (33.5) -14.7% (31.0) -12.0% (30.4) -12.8% (8.9) -15.5% (7.6) -14.5% Total revenues 214.8 100.0% 227.3 100.0% 258.5 100.0% 238.2 100.0% 57.5 100.0% 52.3 100.0%

La7 (65.8) -67.6% (37.8) -33.3% (35.6) -30.8% (22.0) -15.8% (15.4) -42.0% (3.0) -9.0% MTV Group 14.5 12.7% 10.9 11.2% 12.3 12.6% 6.6 9.0% (1.9) -16.1% (0.6) -4.3% Network Operator 15.6 35.1% 17.8 35.7% 34.7 45.6% 23.0 41.8% 11.3 61.7% 5.5 43.0% Elimin. and adjustments 0.1 n.m. 1.9 n.m. 1.8 n.m. ------Total EBITDA (35.6) -16.6% (7.3) -3.2% 13.2 5.1% 7.6 14 3.2% (5.9) -10.3% 1.9 3.6%

La7 (91.7) -94.1% (65.4) -57.5% (63.0) -54.5% (49.5) -35.4% (22.7) -62.1% (9.9) -29.7% MTV Group 6.6 5.8% 3.0 3.1% 5.0 5.1% - - (2.9) -25.1% (2.0) -14.8% Network Operator (11.8) -26.5% (7.0) -14.2% 10.2 13.4% (1.6) -3.0% 5.0 27.0% (0.7) -5.4% Elimin. and adjustments 0.1 n.m. 1.8 n.m. 1.8 n.m. ------

15 EBIT (96.8) -45.1% (67.6) -29.7% (46.0) -17.8% (51.2) -21.5% (20.7) -35.9% (12.7) -24.2%

In the first quarter of 2012 TI Media Group’s revenues benefited from a good performances in La7 and La7D advertising sales and from the full occupancy of the digital multiplexes bandwidth.

In the same quarter the consolidated EBITDA reflected the costs incurred for the new season’s programming schedule and the negative impact from the termination of the Content Competence Centre agreement with Telecom Italia.

14 Does not include the €20.5m compensation paid by Telecom Italia following the termination of the Content Competence Centre contract in September 2011. 15 Does not include the €20.5m compensation paid by Telecom Italia following the termination of the Content Competence Centre contract in September 2011 nor the €56.3m goodwill writedown.