GRUPO CLARÍN S.A. Annual Report and Consolidated Financial Statements for the year ended December 31, 2014, presented on a comparative basis GRUPO CLARIN S.A. ANNUAL REPORT FOR FISCAL YEAR No. 16 ENDED DECEMBER 31, 2014 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 S.A. (PRIMA), Compañía 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. 2014 MACROECONOMIC ENVIRONMENT The growth rate of the world economy in 2014 (+3.3%) was virtually similar to the previous biennium according to recent figures published by the International Monetary Fund. This year’s general slowdown of the emerging economies, particularly and more markedly of Latin- American economies, was offset by the better performance of the main developed countries. In fact, while the group of emerging economies led by China and Russia once again registered above-average growth—though lower than in 2013 (+4.4%, i.e. 0.3 percentage points below the level of the previous year)—growth in developed countries (+1.8%) remained below average but showed a marked improvement against the previous year (0.5 percentage points above the level of 2013). The world economy continued to grow at two different paces, below average for developed countries and above average for emerging countries, reflecting the structural nature of the global accumulation process, centered on emerging economies. Of particular note is the sharp slowdown of Latin-American economies, which during the last three years have recorded growth rates below the global average, with a growing gap. The poor growth rate registered in 2014 by this group of countries, of only 1.2% (compared to +2,8% in 2013) is the lowest in the last five years (excluding the contraction attributable to the 2008/2009 crisis) and is a consequence of the stagnation of its most important member (Brazil). In this global framework, in 2014 the Argentine economy faced its most complex year in the last decade. The contraction of exports and of economic activity, though lower in both cases than those of 2009, were in this case coupled with inflationary acceleration, the loss of purchasing power and a decrease in employment. This scenario was affected to a large extent by the negative side effects of the early devaluation of the Argentine peso implemented by the end of January 2014, when the Central Bank of Argentina (“BCRA”, for its Spanish acronym) decided to adjust the official Ps./USD exchange rate by +23% compared to the preceding month. The decision not to return to the voluntary international debt market also contributed to this scenario, but to a lesser extent. The abovementioned devaluation of the Argentine peso per se, together with an adjustment in interest rates aimed at stabilizing the demand for local currency, allowed the Government to stop the drain on international reserves suffered by the BCRA in spite of the implementation of foreign exchange controls. Devaluation also caused an inflationary acceleration that gave rise to a considerable drop in the purchasing power of people’s income (in pesos and especially in US dollars), and rapidly offset the competitiveness gained through such devaluation. Consequently, and despite the expansive trend of fiscal policy, in 2014 the Argentine economy registered a sharp contraction in consumption and in the level of economic activity, compared to 2013. Despite this recessive environment and the slowdown in prices recorded in the last part of the year as a consequence of BCRA’s decision to anchor the exchange rate, there was a sharp rise in inflation levels during 2014. The price index surveyed by the consulting company ECOLATINA closed the year at +37.7%, i.e. approximately 10.5 percentage points above the level of the previous year. This increase is the highest since 2002, and contrasts with the single- digit levels registered by all other countries in the region, except for Venezuela. These annual price dynamics exceeded of the increase in the official Ps./USD exchange rate (by approximately 6 percentage points). Consequently, by the end of 2014, the real Ps./USD 1 exchange rate (taking into account the inflation rate differential between Argentina and the United States) stood below the rate registered in December 2013, a month before the devaluation. This complex scenario, marked by decreases in both consumption and economic activity coupled with high inflation, was also marked by a decrease in exports that exacerbated the scarcity of foreign currency. During 2014, export values decreased by almost 12% year-on-year, equivalent to USD9.7 billion. This new decrease of the main source of foreign currency for the Argentine economy, confirmed that it is impossible to continue to finance economic activity with by depleting currency reserves, and that the size of the economy needs to be adjusted to the decrease in the availability of foreign currency. The drop in imports mitigated to a large extent the decrease in exports, which gave rise to a new decline in the annual trade balance surplus (USD6.7 billion, a record low since 2001), although the decline was of only USD1.3 billion, compared to 2013. In spite of this reduced trade surplus, and despite the fact that the Government lifted restrictions on the purchase of foreign currency by individuals for the purpose of saving, subject to a 20% tax advance, to be credited against future income tax (referred to in Argentina as ‘savings’ dollars), the level of BCRA’s reserves at year-end (USD31.4 billion) stood slightly above the level registered in 2013 (+USD0.8 billion), after dropping below USD27.0 billion in early April. The significant increase in the level of reserves during the last months of the year is mainly due to the fact that Argentina received the first tranches of the currency swap executed with the Central Bank of the People’s Republic of China (approximately USD2.7 billion out of an agreed aggregate of USD11.0 billion). A material portion of the imbalances faced by the Argentine economy is attributable to fiscal and monetary issues. The national public accounts have been deteriorating uninterruptedly since 2005 (when the primary fiscal surplus reached its record high, accounting for 3.9% of GDP). The national primary fiscal imbalance worsened significantly throughout 2014 and was increasingly financed with the printing of currency. In 2014, the monetary authority issued a record high amount of pesos in order to aid the National Treasury (approximately Ps. 160.0 billion, a 70% increase, compared to the amount issued the previous year). However, the year-on-year growth of the monetary base (+22.5%) was lower than the increase in 2013, mainly due to the aggressive treasury bill placement policy implemented by the monetary authority. The aggregate amount of outstanding treasury bills (Ps. 260.5 billion as of December 2014) more than doubled the figures recorded in 2013. Said financing in local currency was coupled with the aid to the National Treasury in foreign currency for approximately USD11 billion, which were used to honor interest payments on the country’s sovereign debt held by private creditors and international agencies. The National Treasury's debt with the Central Bank currently stands at more than USD50 billion. Without counting remittances from the National Social Security Administration (ANSES, for its Spanish acronym) and the Central Bank, the national primary deficit rose to Ps. 159.7 billion (approximately 3.7% of nominal GDP) during the year, almost doubling the figure for 2013. The financial deficit (i.e. deficit after payments of interest on public debt) climbed to Ps. 230.9 billion (approximately 5.3% of GDP) in the year under analysis. Both figures are record highs since 2003, both in absolute and in relative terms. Such fiscal deterioration took place in spite of the last decade’s increasing increase in the tax pressure (a current record high for the three governmental levels [(national, provincial and municipal)] on a consolidated basis). Of particular note are the results of the recently published Annual Survey of Urban Households, which reveal the magnitude of the impact of recession on employment rates in the Argentine economy. According to such survey, total employment (private and public) experienced a year- on-year drop of 2.5% as of the 3rd quarter of 2014, which accounts for almost 400,000 fewer employed workers than in 2013. Such loss of employment was not reflected in higher unemployment rates due to the drop in activity and employment rates. Perspectives for the Upcoming Year Latin-American emerging economies are adapting to the new global scenario marked by the strengthening of the US dollar with respect to the rest of the currencies and the fall in the prices 2 of oil and most agricultural and non-agricultural commodities. Adjustment includes, in general, a depreciation of their currencies in real terms aimed at adjusting their imports to the lower generation of dollars (commercial and financial. This, in turn, leads to a greater or lesser extent to the slowdown of these countries’ growth rates (and decrease of their nominal GDP in US- dollar terms). In the case of the Argentine economy in particular, this new external scenario, which is clearly less favorable than that of previous years, is coupled with the fact that the stagnation of the Brazilian economy is expected to continue. In this framework, the short-term performance of the Argentine economy will depend mostly on the country's ability to generate sufficient foreign currency to honor interest payments on its foreign debt and to finance the necessary imports to recover the growth of productive activity, in order not to add more pressure on the BCRA's reserves.