Quarterly Report GCLA: Ps. 18.0 / share (BCBA) GCLA: USD 9.5 / GDS (LSE) Total Shares: 287,418,584 Total GDSs: 143,709,292 Market Value: USD 1,358.1 MM Closing Price: November 10 th, 2010 Grupo Clarín announces its Nine Months (9M10) and Third Quarter (3Q10) results for 2010 Buenos Aires, Argentina, November 11 th, 2010 - Grupo Clarín S.A. ( Grupo Clarín or the Company - LSE: GCLA; BCBA: GCLA), the largest media company in Argentina, announced today its nine months and third quarter results for 2010. Figures in this report have been prepared in accordance with Argentine GAAP as of September 30 th, 2010 and are stated in Argentine Pesos, unless otherwise indicated. Highlights (9M10 vs. 9M09): Net Sales totaled Ps. 5,502.1 million, an increase of 12.4% from 9M09, mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment and, to a lesser extent, higher sales in the Printing and Publishing segment, and partially offset by lower revenues in the Broadcasting and Programming segment. Adjusted EBITDA (1) reached Ps. 1,748.9 million, an increase of 19.2% from 9M09, mainly driven by higher sales in the Cable and Internet access and Printing and Publishing segments. Grupo Clarín s Adjusted EBITDA Margin (2) for 9M10 was 31.8%, compared to 30.0% in 9M09. Net Income totaled Ps. 381.1 million, compared to Ps. 194.3 million reported in 9M09. FINANCIAL HIGHLIGHTS (In millions of Ps.) 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Net Sales 5,502.1 4,895.4 12.4% 1,986.0 1,872.8 1,668.3 6.0% 19.0% Adjusted EBITDA (1) 1,748.9 1,467.0 19.2% 595.9 623.2 504.1 (4.4%) 18.2% Adjusted EBITDA Margin (2) 31.8% 30.0% 6.1% 30.0% 33.3% 30.2% (9.8%) (0.7%) Net Income 381.1 194.3 96.2% 134.0 153.0 103.4 (12.4%) 29.6% (1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortization) and selling and administrative expenses (excluding depreciation and amortization). We believe that Adjusted EBITDA is a meaningful measure of our performance. It is commonly used to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not an Argentine GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. (2) We define Adjusted EBITDA Margin as Adjusted EBITDA over Net Sales. Contacts In Buenos Aires: In London: In New York: Alfredo Marín M. Julia Díaz Ardaya/ Romina Vázquez Alex Money Lorna Ellen Melanie Carpenter Pete Majeski Grupo Clarín S.A. Temple Bar Advisory I-advize Corporate Communications Tel: +54 11 4309 7215 Tel: +44 20 7002 1080 Tel: +1 212 406 3692 Email: investors@grupoclarin.com E-mail: info@templebaradvisory.com E-mail: clarin@i-advize.com
OPERATING RESULTS Net sales reached Ps. 5,502.1 million, an increase of 12.4% from Ps. 4,895.4 million in 9M09 mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment, higher sales in the Printing and Publishing segment and partially offset by lower revenues in the Broadcasting and Programming segment. Following is a breakdown of Net Sales by business segment: NET SALES (In millions of Ps.) 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Cable TV and Internet Access 3,562.1 3,135.0 13.6% 1,281.9 1,168.3 1,079.6 9.7% 18.7% Printing and Publishing 1,296.7 1,137.6 14.0% 447.9 457.3 387.3 (2.0%) 15.6% Broadcasting and Programming 774.7 813.5 (4.8%) 301.6 290.5 253.7 3.8% 18.9% Digital Content and Others 168.0 135.8 23.7% 59.2 55.7 49.5 6.3% 19.7% Subtotal 5,801.5 5,222.0 11.1% 2,090.7 1,971.8 1,770.1 6.0% 18.1% Eliminations (299.4) (326.5) (8.3%) (104.7) (99.0) (101.8) 5.7% 2.8% Total 5,502.1 4,895.4 12.4% 1,986.0 1,872.8 1,668.3 6.0% 19.0% Cost of sales (Excluding Depreciation and Amortization) reached Ps. 2,580.7 million, an increase of 6.6% from Ps. 2,421.9 million reported for 9M09 due to higher costs in our business segments, mainly in Printing and Publishing and Cable TV and Internet Access, partially offset by lower costs in the Broadcasting and Programming segment. Selling and Administrative Expenses (Excluding Depreciation and Amortization) reached Ps. 1,172.5 million, an increase of 16.5% from Ps. 1,006.5 million in 9M09. This increase was mainly due to higher costs in the Cable and Internet access, Printing and Publishing and Digital Contents and others segments and partially offset by the Broadcasting and Programming segment. Adjusted EBITDA reached Ps. 1,748.9 million, an increase of 19.2% from Ps. 1,467.0 million reported for 9M09, driven by higher sales in the Cable and Internet access and Printing and Publishing segments, and mainly due to margin expansion in the Cable and Internet access segment.
Following is a breakdown of adjusted EBITDA by business segment: ADJUSTED EBITDA (In millions of Ps.) 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Cable TV and Internet access 1,391.2 1,117.7 24.5% 473.6 460.3 413.5 2.9% 14.5% Printing and Publishing 223.3 195.8 14.1% 65.1 99.7 59.0 (34.7%) 10.2% Broadcasting and Programming Digital Content and Others 131.1 144.0 (9.0%) 58.0 60.4 28.0 (3.9%) 107.5% 3.4 9.5 (64.0%) (0.7) 2.8 3.6 NA NA Subtotal 1,748.9 1,467.0 19.2% 595.9 623.2 504.1 (4.4%) 18.2% Eliminations - - NA - - - NA NA Total 1,748.9 1,467.0 19.2% 595.9 623.2 504.1 (4.4%) 18.2% Financial results net totaled Ps. (335.6) million compared to Ps. (549.8) million for 9M09. The decrease was mainly due to lower financial debt and peso depreciation, which went from 3.80 pesos per dollar at the end of 2009, to 3.96 pesos per dollar as of September 30 th, 2010. Equity in earnings from unconsolidated affiliates in 9M10 totaled Ps. 0.5 million, compared to Ps. 9.0 million for 9M09. Other expenses, net reached Ps. (4.6) million, compared to Ps. (2.4) million in 9M09. Income tax as of September 2010 reached Ps. (361.5) million, from Ps. (182.5) million in September 2009. Net income totaled Ps. 381.1 million, compared with Ps. 194.3 million reported for 9M09. This was mainly a consequence of higher EBITDA in the Cable and Internet access and Printing and Publishing segments, and partially offset by the peso depreciation. Cash used in acquisitions of property, plant and equipment (CAPEX) totaled Ps. 726.4 million in 9M10, an increase of 34.3% from Ps. 541.0 million reported for 9M09. Out of the total CAPEX in 9M10, 90.9% was allocated to the Cable TV and Internet access segment, 4.4% to the Printing and Publishing segment and the remaining 4.7% to other activities. Our Capex in the Cable TV and Internet access segment contemplates subscriber growth, network upgrades, digitalization and further development of the triple play strategy. Debt profile (1) : Debt coverage ratio for the period ended September 30 th, 2010 was 1.18x and the Net Debt at the end of this period totaled Ps. 2,094.6 million. (1) Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (last 12 months). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest. The Net Debt does not include cash in reserve accounts in Cablevisión S.A.
SALES BREAKDOWN BY SOURCE OF REVENUE SEPTEMBER 2010 (In millions of Ps.) Cable TV & Internet access Printing & Publishing Broadcasting Digital Content & Programming & Others Eliminations Total % Advertising 35.8 706.3 464.2 46.4 (79.2) 1,173.6 21.3% Circulation - 398.3 - - (0.0) 398.3 7.2% Printing - 132.9 - - (23.6) 109.3 2.0% Video Subscriptions 2,651.1 - - - - 2,651.1 48.2% Internet Subscriptions 754.8 - - - (1.8) 753.1 13.7% Programming - - 240.5 - (78.0) 162.4 3.0% Other Sales 120.3 59.1 70.0 121.6 (116.8) 254.3 4.6% Total Sales 3,562.1 1,296.7 774.7 168.0 (299.4) 5,502.1 100.0% SALES BREAKDOWN BY SOURCE OF REVENUE SEPTEMBER 2009 (In millions of Ps.) Cable TV & Internet access Printing & Publishing Broadcasting Digital Content & Programming & Others Eliminations Total % Advertising 36.6 594.4 416.4 21.3 (62.4) 1,006.2 20.6% Circulation - 358.7 - - - 358.7 7.3% Printing - 96.1 - - (21.1) 75.0 1.5% Video Subscriptions 2,414.8 - - - - 2,414.8 49.3% Internet Subscriptions 591.0 - - - (1.4) 589.6 12.0% Programming - - 305.2 - (133.8) 171.3 3.5% Other Sales 92.6 88.4 92.0 - (107.9) 279.7 5.7% Total Sales 3,135.0 1,137.6 813.5 135.8 (326.5) 4,895.4 100.0% RESULTS BY BUSINESS SEGMENT CABLE TV AND INTERNET ACCESS Net Sales Net sales increased by 13.6% to Ps. 3,562.1 million for 9M10 compared to Ps. 3,135.0 million for 9M09. The increase is mostly attributable to an increase in subscription charges registered during the last twelve months, and also reflects the growth in Cable, Broadband and Digital subscribers. The company has discontinued the consolidation of 99.6 thousand subscribers since October 1 st, 2009. Therefore, Total Consolidated Cable TV Basic Subscribers reached 3,350,800 as of September 2010, compared to the 3,289,000 reported for the same date in 2009. Internet subscribers reached 1,102,189 in September 2010, compared to the 975,500 of September 2009.
Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 2.8% to Ps. 1,438.0 million for September 2010, compared to Ps. 1,399.3 million in September 2009. This was mainly due to higher salaries, network expenses and fixed assets maintenance costs. Partially offset by lower programming costs associated to the unilateral rescission of the football contract with the AFA for the premier league matches, now being aired on broadcast TV, and also due to renegotiations with programming suppliers. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 18.6% to Ps. 732.9 million for 9M10, compared to Ps. 618.0 million reported in 9M09. This increase is driven by higher fees for services, marketing expenses, salaries, duties and contributions and commissions. Depreciation and Amortization Depreciation and amortization expenses increased by 5.8% to Ps. 373.4 million for 9M10 from Ps. 353.0 million reported in 9M09. PRINTING AND PUBLISHING Net Sales Net sales increased by 14.0% to Ps. 1,296.7 million in 9M10, compared to Ps. 1,137.6 million in 9M09. This was the result of higher sales in advertising, circulation, printing services and CIMECO. Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 10.8% to Ps. 691.9 million in 9M10, compared to Ps. 624.3 million in 9M09. The increase was mainly the result of higher salaries and social security expenses and higher printing costs. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 20.1% to Ps. 381.5 million in 9M10, compared to the Ps. 317.6 million reported for 9M09. This was primarily the result of higher salaries, fees and marketing expenses. Depreciation and Amortization Depreciation and amortization expenses decreased by 2.3% to Ps. 46.1 million in 9M10 compared to Ps. 47.2 million in 9M09. We have discontinued the proportional consolidation of the 49% stake in Papel Prensa from April 1 st, 2010. BROADCASTING AND PROGRAMMING Net Sales Net sales decreased by 4.8% to Ps. 774.7 million in 9M10, compared to Ps. 813.5 million in 9M09. The decrease was primarily the result of lower sports programming sales due to the unilateral contract rescission by AFA, and was partially offset by higher sales at Canal Trece and in our racing car business.
Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) decreased by 2.1% to Ps. 505.8 million in 9M10, compared to Ps. 516.5 million in 9M09. This is attributable to lower sports programming production due to the unilateral contract rescission by AFA and lower co-production and events costs, partially offset mainly by increases in salaries. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) decreased by 9.9% to Ps. 137.8 million in 9M10, compared to Ps. 153.0 million in 9M09. The decrease was primarily the result of Ps. 20.9 million due to a reversal of allowances for doubtful accounts related to advertising and partially offset by salary increases. Depreciation and Amortization Depreciation and amortization expenses decreased by 17.1% to Ps. 27.2 million in 9M10 compared to Ps. 32.8 million reported in 9M09. DIGITAL CONTENT AND OTHERS Net sales in this segment are derived from administrative and corporate services rendered by the Company and by our subsidiary GC Gestión Compartida S.A. to third parties as well as to other subsidiaries of the Company (which are eliminated in the consolidation). Additionally, this segment includes the production of digital content. Net sales to third parties are largely derived from advertising in our web pages and portals. Cost of sales (excluding depreciation and amortization) is driven mainly by salaries and professional fees paid to advisers. In this period, net sales increased 23.7% to Ps. 168.0 million from Ps. 135.8 million reported in 9M09, due to higher sales in digital content and Gestión Compartida. EBITDA resulted in Ps. 3.4 million.
OPERATING STATISTICS BY BUSINESS SEGMENT CABLE TV AND INTERNET ACCESS 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Homes Passed (1) 7,468.8 7,422.9 0.6% 7,468.8 7,453.6 7,422.9 0.2% 0.6% Bidirectional Homes Passed Cable TV 58.2% 55.4% 5.0% 58.2% 56.8% 55.4% 2.4% 5.0% Total Consolidated Subscribers (1)(3) 3,350.8 3,289.0 1.9% 3,350.8 3,312.2 3,289.0 1.2% 1.9% Subscribers - Argentina 3,144.7 3,097.6 1.5% 3,144.7 3,108.8 3,097.6 1.2% 1.5% Subscribers - International 206.2 191.4 7.7% 206.2 203.3 191.4 1.4% 7.7% Uruguay 102.0 93.7 8.9% 102.0 101.0 93.7 1.0% 8.9% Paraguay 104.1 97.7 6.6% 104.1 102.3 97.7 1.8% 6.6% % over Homes Passed 44.9% 45.4% (1.2%) 44.9% 44.4% 45.4% (21.0%) (1.1%) Total Equity Subscribers (4) 3,426.8 3,265.3 4.9% 3,426.8 3,386.0 3,265.3 1.2% 4.9% Churn Rate % 13.7% 15.7% (12.9%) 13.1% 13.4% 13.9% (2.3%) (5.7%) Digital Video Digital Ready Pay TV Subs 2,201.4 2,121.1 3.8% 2,201.4 2,201.4 2,121.1-3.8% Total Digital Decoders 663.5 474.2 39.9% 663.5 602.9 474.2 10.1% 39.9% Argentina 557.4 398.8 39.8% 557.4 505.4 398.8 10.3% 39.8% International 106.0 75.4 40.6% 106.0 97.4 75.4 8.8% 40.6% Penetration over Digital Ready TV Subs 30.1% 22.4% 34.6% 30.1% 27.4% 22.4% 10.1% 34.6% Internet Subscribers Total Internet Subscribers (1) 1,102.2 975.5 13.0% 1,102.2 1,055.8 975.5 4.4% 13.0% Cablemodem (1) 1,074.5 939.5 14.4% 1,074.5 1,026.1 939.5 4.7% 14.4% ADSL (1) 17.83 24.1 (26.0%) 17.8 19.3 24.1 (7.7%) (26.0%) Dial Up (1) 9.8 11.9 (17.5%) 9.8 10.4 11.9 (5.6%) (17.5%) % over Bidirectional Homes Passed 25.4% 24.7% 2.7% 25.4% 24.9% 24.7% 1.7% 2.7% Total ARPU (2) 121.0 107.5 12.5% 128.3 119.1 110.1 7.7% 16.5% (1) Figures in thousands (2) Net Sales/ Average Pay TV Subscribers (3) Total subscribers consolidated following the same consolidation methods used in the financial statements as of each year end. (4) Total subscribers considering the equity share in each subsidiary.
PRINTING AND PUBLISHING 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Circulation (1) 364.8 396.7 (8.0%) 350.3 366.8 388.7 (4.5%) (9.9%) Circulation share % (2) 43.7% 47.0% (7.2%) 43.1% 42.9% 46.6% 0.5% (7.4%) Advertising share % (3) 54.9% 57.0% (3.7%) 55.0% 54.9% 57.3% 0.2% (3.9%) (1) Average number of copies according to IVC (including Diario Clarín and Olé) (2) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: AGEA and IVC. (3) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: Monitor de Medios Publicitarios S.A. BROADCASTING AND PROGRAMMING 9M10 9M09 YoY 3Q10 2Q10 3Q09 QoQ YoY Advertising share % (1) 36.1% 35.6% 1.2% 35.4% 36.2% 36.9% (2.0%) (4.0%) Audience share % (2) Prime Time 40.8% 39.7% 2.8% 45.6% 38.0% 39.5% 20.1% 15.2% Total Time 29.8% 29.8% 0.0% 33.2% 27.1% 29.0% 22.4% 14.4% (1) Company estimate, over ad spend in Ps. in broadcast TV for AMBA region. (2) Share of broadcast TV audience according to IBOPE for AMBA. Prime Time is defined as Monday through Friday from 8pm to 12am. Total Time is defined as Monday through Sunday from 12pm to 12am. DIGITAL CONTENT AND OTHERS 9M10 9M09 YoY Page Views (1) 540.4 504.1 7.2% Unique Visitors (1) 20.5 17.3 18.8% (1) In millions. Average. Source IAB and Company Estimates. DEBT AND LIQUIDITY (In millions of Ps.) Sept 10 Sept 09 % Change June 10 % Change Short Term and Long Term Debt Current Financial Debt 407.5 279.7 45.7% 362.6 12.4% Financial loans 56.4 36.4 54.9% 52.8 6.7% Negotiable obligations 239.4 115.6 107.1% 238.2 0.5% Accrued interest 67.9 57.3 18.5% 31.5 115.9% Acquisition of equipment 30.1 28.6 5.1% 27.6 8.9% Sellers Financing Capital 3.8 31.7 (88.1%) 4.0 (5.1%) Sellers Financing accrued interest - 1.5 (100.0%) 1.66 (100.0%) Related Parties Capital - - NA - NA Related Parties accrued interest 1.0 - NA - NA Bank overdraft 8.8 8.6 2.6% 6.9 28.2% Non-Current Financial Debt 2,275.3 2,520.0 (9.7%) 2,250.9 1.1% Financial loans 118.5 110.6 7.1% 109.4 8.3% Negotiable obligations 1,997.4 2,170.4 (8.0%) 1,982.5 0.7% Accrued interest - 1.1 (100.0%) - NA
Acquisition of equipment 31.2 35.0 (10.7%) 31.5 (0.7%) Sellers Financing 120.1 202.9 (40.8%) 119.5 0.6% Related Parties Capital 8.1 - NA 8.1 - Total Financial Debt (A) 2,682.8 2,799.7 (4.2%) 2,613.5 2.6% Measurement at fair Value 6.8 (17.5) (138.6%) - NA Total Short Term and Long Term Debt 2,689.5 2,782.2 (3.3%) 2,613.5 2.9% Cash and Cash Equivalents (B)* 588.2 388.8 51.3% 422.5 39.2% Net Debt (A) (B) 2,094.6 2,410.9 (13.1%) 2,191.1 (4.4%) Net Debt/Adjusted Ebitda (Last 12 Months) 0.92x 1.3x (26.2%) 1.01x (8.3%) % USD Debt 94.1% 89.3% 5.4% 94.4% (0.3%) % Ar. Ps Debt 5.9% 10.7% (44.9%) 5.6% 5.2% * Does not include Reserve Accounts amounting to 229.3 MM ARS as of September 30 th, 2010. Negotiable obligations include Cablevisión USD 100.0 MM notes due October 2012; Cablevisión USD 235.1 MM notes due October 2015, Multicanal USD 100.4 MM notes due July 2013, Multicanal USD 80.3 MM notes due July 2016 and AGEA Ps. 112.5 MM notes due 2011. Total Financial Debt (1) and Net Debt, decreased from Ps 2,799.7 million to Ps. 2,682.8 million and decreased from Ps. 2,410.9 million to Ps. 2,094.6 million. This represents a decrease of 4.2% in the Total Debt and a decrease of 13.1% in the Net Debt. Debt coverage ratio (1) as of September 30 th, 2010 was 1.18x in terms of Total Financial Debt and was 0.92x in the case of Net Debt. (1) Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest. Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (last 12 months). Net Debt ratio does not include Reserve Accounts amounting to 229.3 MM ARS as of September 30 th, 2010. STOCK AND MARKET INFORMATION Grupo Clarín trades its stock in the Buenos Aires Stock Exchange (BCBA) and in the London Stock Exchange (LSE), in the form of shares and GDS s, respectively. GCLA (BCBA) Price per Share 18.00 GCLA (LSE) Price per GDS (USD) 9.5 Total Shares 287,418,584 Total GDSs 143,709,292 Market Value (USD MM) 1,358.1 Closing Price November 10th, 2010
CONFERENCE CALL AND WEBCAST INFORMATION Grupo Clarín will host a conference call and webcast to discuss its Third Quarter Results for 2010, on Thursday, November 11 th, 2010. Presentations by: Alejandro Urricelqui, Chief Financial Officer; Alfredo Marin, Officer Time: 12 pm Buenos Aires Time/3:00 pm London Time/10:00 am New York Time To access the conference call, please dial: from within Argentina + 0 800 333 0050; from within the United Kingdom +44 (800) 092 3582; from within the United States +1 (800) 311 9401; and from all other countries+1 (334) 323 7224. The Conference ID is #6118. To access the simultaneous webcast presentation, please direct your browser to: There will be a two week replay available starting one hour after the conclusion of the conference call. To access the replay, please dial +1 (877) 919-4059 toll free from the U.S., or +1 (334) 323-7226 from anywhere outside the U.S. The replay passcode is: 60399456 The PDF version of the webcast presentation will be available at http://www.grupoclarin.com.ar/ir prior to the call, on November 11 th, and archived in our Website after its conclusion. ABOUT THE COMPANY Grupo Clarín is the largest media company in Argentina and the market leader in the Cable Television and Internet Access, Printing and Publishing, and Broadcasting and Programming segments. Its Cable Television network is one of the largest in Latin America, with one of the largest broadband subscriber base in Argentina. Its flagship newspaper Diario Clarín is the highest circulation newspaper in Latin. Grupo Clarín is the main producer of media content in Argentina, including news, sports and entertainment and reaches substantially all segments of the Argentine population in terms of wealth, geography and age. Disclaimer Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Grupo Clarín. You can identify forward-looking statements by terms such as expect, believe, anticipate, estimate, intend, will, could, may or might the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. Grupo Clarín does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in Grupo Clarín s projections or forward-looking statements, including, among others, general economic conditions, Grupo Clarín s competitive environment, risks associated with operating in Argentina a, rapid technological and market change, and other factors specifically related to Grupo Clarín and its operations.
ASSETS CURRENT ASSETS CONSOLIDATED BALANCE SHEETS As of September 30, 2010 and December 31, 2009 In Argentine Pesos (Ps.) September 30, 2010 December 31, 2009 Cash and banks 390,089,200 353,448,122 Short-term investments 198,060,921 105,994,857 Trade receivables, net 904,917,666 807,894,500 Other receivables, net 256,658,821 224,291,008 Inventories 261,388,515 233,796,980 Other assets 246,034,339 66,634,166 Total current assets 2,257,149,462 1,792,059,633 NON-CURRENT ASSETS Trade receivables, net 1,255,934 7,383,794 Other receivables, net 121,995,571 114,889,697 Inventories 34,581,343 46,722,943 Investment in unconsolidated affiliates 259,965,978 67,598,985 Other investments 1,098,242 1,099,540 Property, plant and equipment, net 2,734,531,577 2,538,482,919 Intangible assets, net 715,848,894 806,361,141 Other assets 11,566,536 253,494 Subtotal 3,880,844,075 3,582,792,513 Goodwill 2,721,804,397 2,716,022,085 Total non-current assets 6,602,648,472 6,298,814,598 Total assets 8,859,797,934 8,090,874,231 LIABILITIES CURRENT LIABILITIES Accounts payable 814,565,093 668,572,856 Long-term debt 402,992,898 341,535,190 Salaries and Social Security payable 350,053,123 318,166,460 Taxes payable 397,472,149 363,603,538 Sellers financi ng 3,781,843 6,115,988 Other liabilities 103,783,814 73,641,115 Total current liabilities 2,072,648,920 1,771,635,147 NON-CURRENT LIABILITIES Accounts payable 26,016,335 22,365,991 Long-term debt 2,162,865,347 2,138,246,066 Salaries and Social Security payable 312,596 478,956 Taxes payable 97,429,305 129,545,361 Sellers financi ng 120,145,623 116,250,465 Other liabilities 233,738,441 293,098,838 Provisions 135,929,495 129,763,743 Total non-current liabilities 2,776,437,142 2,829,749,420 Total liabilities 4,849,086,062 4,601,384,567 MINORITY INTEREST 845,789,789 708,556,355 SHAREHOLDERS EQUITY 3,164,922,083 2,780,933,309 Total liabilities, minority interest and shareholders equity 8,859,797,934 8,090,874,231
CONSOLIDATED STATEMENTS OF INCOME For the nine-month periods ended September 30, 2010 and 2009 In Argentine Pesos (Ps.) September 30, 2010 September 30, 2009 Net sales 5,502,089,679 4,895,440,203 Cost of sales (excluding depreciation and amortization) Consolidated (2,580,702,323) (2,421,921,869) Subtotal 2,921,387,356 2,473,518,334 Expenses (excluding depreciation and amortization) Selling expenses (530,994,419) (464,585,524) Administrative expenses (641,461,327) (541,901,225) Expenses subtotal (1,172,455,746) (1,006,486,749) Depreciation of property, plant and equipment (1) and other investments (357,763,339) (339,469,288) Amortization of intangible assets, goodwill and other assets (98,164,313) (100,573,152) Depreciation and amortization subtotal (455,927,652) (440,042,440) Financing and holding results Generated by assets Interest 12,166,758 19,340,301 Other taxes and expenses (72,535,110) (72,642,015) Impairment of inventories and materials (2,228,013) (2,499,963) Exchange differences 9,038,383 24,641,007 Holding gains on inventories 20,720,783 6,103,602 Holding gains (losses) on derivatives 5,617,152 (6,354,588) Effect of financial discounts on assets and other (3,875,787) (1,661,289) Generated by liabilities Interest (166,514,224) (246,165,013) Exchange differences (110,786,909) (297,018,638) Effect of financial discounts on liabilities (25,326,907) 32,127,971 CER restatement (1,340,794) (660,757) Holding losses on derivatives (449,600) (3,598,000) Other (132,017) (1,365,661) Equity in earnings from unconsolidated affiliates, net 496,301 8,989,856 Other income (expense), net (4,559,374) (2,405,218) Income before income tax, tax on assets and minority interest 953,294,600 483,820,740 Income tax and tax on assets (361,497,458) (182,484,567) Minority interest (210,712,950) (107,065,662) Income for the period 381,084,192 194,270,511 (1) Chargeable to: Cost of sales (313,204,646) (307,667,779) Selling expenses (25,322,884) (15,148,071) Administrative expenses (19,235,809) (16,541,536) The Consolidated Statements of Operations for each business segment are included in the Financial Statements as of September 30 th, 2010, available at
CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine-month periods ended September 30, 2010 and 2009 In Argentine Pesos (Ps.) CASH PROVIDED BY OPERATING ACTIVITIES September 30, 2010 September 30, 2009 Income for the period 381,084,192 194,270,511 Income tax and tax on assets 361,497,458 182,484,567 Accrued interest, net 154,347,466 226,824,712 Adjustments to reconcile net income for the period to cash provided by operating activities: Depreciation of property, plant and equipment and other investments 357,763,339 339,469,288 Amortization of intangible assets, goodwill and other assets 98,164,313 100,573,152 (Reversal) setting up of allowances for doubtful accounts (2,730,895) 35,654,669 Provision for contingencies 32,168,743 23,628,144 Allowance for impairment of inventories and materials 2,228,013 2,499,963 Exchange difference and other financial results 126,091,286 246,553,350 Equity in earnings from unconsolidated affiliates, net (496,301) (8,989,856) Minority interest 210,712,950 107,065,662 Holding (gains) losses on derivatives (5,167,552) 9,952,588 Holding gains on inventories (20,720,783) (6,103,602) Results on sale of property, plant and equipment 418,255 (9,515,060) Changes in assets and liabilities: Trade receivables (100,378,814) (124,185,138) Other receivables (8,867,449) (18,213,415) Inventories (33,081,985) 10,846,276 Other assets (4,987,327) (1,146,358) Accounts payable 163,363,918 37,762,632 Salaries and Social Security payable 37,556,358 35,979,972 Taxes payable (132,162,737) (89,566,763) Other liabilities 37,280,954 8,168,665 Provisions (15,747,809) (21,871,015) Income tax and tax on assets payments (323,463,368) (87,836,677) Cash provided by operating activities 1,314,872,225 1,194,306,267 CASH USED IN INVESTMENT ACTIVITIES Acquisition of property, plant and equipment, net (726,401,141) (541,009,979) Acquisition of intangible assets (7,185,320) (6,717,630) Acquisition of subsidiaries, net of cash acquired - (2,009,733) Proceeds from sale of property, plant and equipment 27,233 19,988,031 Certificates of deposit - (33,000,000) Collection of loans 3,849,499 12,500,000 Collection of interest - 1,071,061 Collection of dividends 9,469,412 4,524,023 Cash used in investment activities (720,240,317) (544,654,227)
CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine-month periods ended September 30, 2010 and 2009 In Argentine Pesos (Ps.) CASH USED IN FINANCING ACTIVITIES September 30, 2010 September 30, 2009 Loans obtained 58,238,426 120,080,473 Payment of loans (94,421,802) (229,411,279) Payment of interest (39,020,913) (120,432,802) Net (payments) collections of derivatives (8,988,613) 17,350,249 Payment of sellers financing (1,413,133) (400,844,527) Reserve account / Escrow funds (278,944,571) (150,858,680) Restricted funds - (2,500,000) Payments to minority shareholders (72,875,900) (22,083,167) Cash used in financing activities (437,426,506) (788,699,733) FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS 14,120,135 24,723,516 Net Increase (decrease) in cash flow 171,325,537 (114,324,177) Cash and cash equivalents at the beginning of the year 459,135,441 467,592,070 Effect of decrease in cash due to deconsolidation of companies (42,633,400) - Cash and cash equivalents at period end (1) 587,827,578 353,267,893 (1) Includes: Cash and banks 390,089,200 273,548,907 Investments with maturities of less than three months 197,738,378 79,718,986