PROMOTORA DE INFORMACIONES, S.A. (PRISA) AND SUBSIDIARIES

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5 PROMOTORA DE INFORMACIONES, S.A. (PRISA) AND SUBSIDIARIES Consolidated Financial Statements for 2014 prepared in accordance with International Financial Reporting Standards as adopted by the European Union 2

6 PROMOTORA DE INFORMACIONES, S.A. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2014 AND 2013 (Thousands of euros) ASSETS Notes * EQUITY AND LIABILITIES Notes * A) NON-CURRENT ASSETS 1,536,749 4,936,108 A) EQUITY 11 (617,771) 1,569,326 I. PROPERTY, PLANT AND EQUIPMENT 5 142, ,709 I. SHARE CAPITAL 215, ,266 II. GOODWILL 6 599,958 2,459,449 II. OTHER RESERVES 80, ,149 III. INTANGIBLE ASSETS 7 137, ,107 III. ACCUMULATED PROFIT (765,239) 880,097 - From prior years 1,471,593 1,528,802 IV. NON-CURRENT FINANCIAL ASSETS 12a 185,647 52,777 - For the year: Profit attributable to the Parent (2,236,832) (648,705) V. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 8 46, ,133 IV. TREASURY SHARES (3,116) (518) VI. DEFERRED TAX ASSETS ,346 1,242,714 V. EXCHANGE DIFFERENCES (4,842) (12,451) VII. OTHER NON-CURRENT ASSETS 3,831 5,219 VI. NON- CONTROLLING INTERESTS (141,337) (37,217) B) NON-CURRENT LIABILITIES 2,984,524 3,524,692 B) CURRENT ASSETS 2,054,821 1,760,286 I. NON-CURRENT BANK BORROWINGS 12b 2,645,505 3,238,855 I. INVENTORIES 9 159, ,252 II. NON-CURRENT FINANCIAL LIABILITIES 12b 118, ,809 II. TRADE AND OTHER RECEIVABLES III. DEFERRED TAX LIABILITIES 19 60,013 29, Trade receivables for sales and services 458, , Receivable from associates 3,579 12,148 IV. LONG-TERM PROVISIONS ,964 95, Receivable from public authorities 19 32,453 54, Other receivables 69, ,143 V. OTHER NON-CURRENT LIABILITIES 44,678 54, Allowances (67,212) (72,331) 496,452 1,242,837 C) CURRENT LIABILITIES 1,224,817 1,602,376 III. CURRENT FINANCIAL ASSETS 12a 127, ,836 I. TRADE PAYABLES 317,521 1,091,746 IV. CASH AND CASH EQUIVALENTS 152, ,293 II. PAYABLE TO ASSOCIATES 2,008 2,956 V. OTHER CURRENT ASSETS - 7 III. OTHER NON-TRADE PAYABLES 67, ,235 VI. ASSETS CLASSIFIED AS HELD FOR SALE 10 1,118, IV. CURRENT BANK BORROWINGS 12b 108, ,227 V. CURRENT FINANCIAL LIABILITIES 12b ,181 VI. PAYABLE TO PUBLIC AUTHORITIES 19 57, ,151 VII. PROVISIONS FOR RETURNS 6,945 11,141 VIII. OTHER CURRENT LIABILITIES 45,681 73,739 IX. NON-CURRENT LIABILITIES HELD FOR SALE ,478 - TOTAL ASSETS 3,591,570 6,696,394 TOTAL EQUITY AND LIABILITIES 3,591,570 6,696,394 * The consolidated balance sheet at December 31, 2013 has been restated, for comparative purposes and in accordance with IFRS 11, to consolidate Sistema Radiópolis, S.A. de C. V., GLR Costa Rica, S.A. and My Major Company Spain, S.L using the equity method 3 The accompanying Notes 1 to 28 and Appendix I and II are an integral part of the consolidated balance sheet at December 31, 2014.

7 PROMOTORA DE INFORMACIONES, S.A. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT FOR 2014 AND 2013 (Thousands of euros) Notas * Revenue 1,408,215 1,510,875 Other income 46,513 39,285 OPERATING INCOME 14 1,454,728 1,550,160 Cost of materials used (260,580) (279,774) Staff costs 15 (433,242) (452,300) Depreciation and amortisation charge 5-7 (102,537) (107,287) Outside services 15 (576,652) (558,187) Change in allowances, write-downs and provisions 15 (19,788) (32,941) Impairment of goodwill 6 (7,046) (2,500) Other expenses (26,163) (17,597) OPERATING EXPENSES (1,426,008) (1,450,586) PROFIT FROM OPERATIONS 28,720 99,574 Finance income 210,890 4,290 Finance costs (236,551) (185,463) Changes in value of financial instruments 1,874 3,830 Exchange differences (net) (15,277) 379 FINANCIAL LOSS 16 (39,064) (176,964) Result of companies accounted for using the equity method 8 36,173 5,937 Loss from other investments (134) (352) PROFIT BEFORE TAX FROM CONTINUING OPERATIONS 25,695 (71,805) Expense tax 19 (132,607) (41,529) PROFIT FROM CONTINUING OPERATIONS (106,912) (113,334) Loss after tax from discontinued operations (2,203,004) (916,017) CONSOLIDATED PROFIT FOR THE YEAR (2,309,916) (1,029,351) Profit attributable to non-controlling interests 11j 73, ,646 PROFIT ATTRIBUTABLE TO THE PARENT (2,236,832) (648,705) BASIC EARNINGS PER SHARE (in euros) 21 (1.39) (0.65) - Basic earnings per share from continuing activities (in euros) 21 (0.02) Basic earnings per share from discontinuing activities (in euros) 21 (1.37) (0.91) (*) The consolidated income statement at December 31, 2013 has been restated for comparative purposes and in accordance with IFRS 5 to present the result of DTS as a discontinued operation. Also, in accordance with IFRS 11, the consolidated income statement has been restated to consolidate Sistema Radiópolis, S.A. de C.V., GLR Costa Rica, S.A. and My Major Company Spain using the equity method The accompanying Notes 1 to 28 and Appendix I and II are an integral part of the consolidated income statement for

8 PROMOTORA DE INFORMACIONES, S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR 2014 AND 2013 (Thousands of euros) Reserves for first-time Prior years Accumulated Equity Share Share application accumulated Treasury Exchange profit attributable to Non-controlling capital premium Reserves of IFRSs profit shares differences for the Year the Parent interests Equity Balance at December 31, , , ,569 (72,661) 1,024,616 (727) 17,805 (255,033) 2,185, ,953 2,611,627 Capital increases (Note 11a y 11b) 6,134 54,353 60,487 60,487 Conversion of financial liabiities into equity (Note 12b) (76,511) (76,511) (76,511) Issuance of equity instruments (Note 11a) 127, , ,566 Treasury share transactions (Note 11g) - Delivery of treasury shares 1,619 1,619 1,619 - Purchase of treasury shares (121) (121) (121) - Reserves for treasury shares 1,289 (1,289) Distribution of 2012 results - Reserves (685,793) 430, ,033 Income and expense recognised in equity - Translation differences ( Note 11i) (17,216) (30,256) (47,472) (16,404) (63,876) - Result for 2013 (648,705) (648,705) (380,646) (1,029,351) Other (86,636) 90,642 4,006 (6,926) (2,920) Changes in non controlling interest (Note 11j) - Dividends paid during the year (35,390) (35,390) - Due to changes in scope of consolidation 1,586 1,586 - Due to changes in percentage of consolidation (25,390) (25,390) Balance at December 31, , ,815 (75,005) (72,661) 1,528,802 (518) (12,451) (648,705) 1,606,543 (37,217) 1,569,326 Capital increases (Note 11a y 11b) 110, , , ,823 Conversion of financial liabiities into equity (Note 12b) 41,575 41,575 41,575 Issuance of equity instruments (Note 11a) (81,158) (81,158) (81,158) Conversion of financial instruments into equity (Note 11a) (434,000) (434,000) (434,000) Treasury share transactions (Note 11g) - Delivery of treasury shares 2,500 2,500 2,500 - Purchase of treasury shares (4,935) (4,935) (4,935) - Reserves for treasury shares 163 (163) Distribution of 2013 results - Reserves (596,555) (52,150) 648,705 Income and expense recognised in equity - Translation differences ( Note 11i) (10,322) 7,609 (2,713) 531 (2,182) - Result for 2014 (2,236,832) (2,236,832) (73,084) (2,309,916) - Measurement of financial instruments (Note 12a) 11,762 11,762 11,762 Other (262) 5,263 5,001 (6,152) (1,151) Changes in non controlling interest (Note 11j) - Dividends paid during the year - Due to changes in scope of consolidation (25,384) (25,384) (31) (31) Balance at December 31, ,808 1,328,671 (1,175,055) (72,661) 1,471,593 (3,116) (4,842) (2,236,832) (476,434) (141,337) (617,771) The accompanying Notes 1 to 28 and Appendix I and II are an integral part of the consolidated statement of changes in equity for

9 PROMOTORA DE INFORMACIONES, S.A. AND SUBSIDIARIES CONSOLIDATES STATEMENTS OF COMPREHENSIVE INCOME FOR 2014 AND 2013 (Thousands of euros) CONSOLIDATED PROFIT FOR THE YEAR (2,309,916) (1,029,351) Income and expense recognized directly in equity 9,580 (63,876) Translation differences (2,182) (63,876) Measurement of financial instruments 16,336 - Financial assets available for sale 16,336 - Tax effect (4,574) TOTAL RECOGNIZED INCOME AND EXPENSE (2,300,336) (1,093,227) Attributable to the Parent (2,227,783) (696,177) Attributable to non-controlling interests (72,553) (397,050) The accompanying Notes 1 to 28 and Appendix I and II are an integral part of the consolidated statement of comprehensive income for

10 PROMOTORA DE INFORMACIONES, S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR 2014 AND 2013 (Thousands of euros) (*) PROFIT BEFORE TAX FROM CONTINUING OPERATIONS 25,695 (71,805) Depreciation and amortisation charge and provisions 154, ,487 Changes in working capital (25,612) (128,507) Inventories 13,392 5,548 Accounts receivable 403,245 (44,173) Accounts payable (447,498) (87,932) Other current assets 5,249 (1,950) Income tax recovered (paid) (33,635) (51,285) Other profit adjustments (15,209) 151,735 Financial results 39, ,964 Gains and losses on disposal of assets (21,605) - Other adjustments (32,668) (25,229) CASH FLOWS FROM OPERATING ACTIVITIES 105,902 55,625 Recurrent investments (74,111) (93,638) Investments in intangible assets (50,822) (66,227) Investments in property, plant and equipment (23,289) (27,411) Investments in non-current financial assets (9,656) (3,676) Proceeds from disposals 550,172 6,908 Investments in non-current financial assets 1,650 4,214 CASH FLOWS FROM INVESTING ACTIVITIES 468,055 (86,192) Proceeds and payments relating to equity instruments 100,305 1,531 Proceeds relating to financial liability instruments 61, ,855 Payments relating to financial liability instruments (605,497) (16,199) Dividends and returns on other equity instruments paid (25,753) (30,213) Interest paid (50,232) (59,388) Other cash flow from financing activities (21,731) (78,011) CASH FLOWS FROM FINANCING ACTIVITIES (541,784) 92,575 Effect of foreign exchange rate changes (15,824) (12,556) CHANGE IN CASH FLOWS FROM CONTINUING OPERATIONS 16,349 49,452 Cash flows from operating activities from discontinued operations (116,883) 83,584 Cash flows from investing activities from discontinued operations (43,333) (58,331) Cash flows from financing activities from discontinued operations 158,140 (49,746) Effect of foreign exchange rate changes from discontinued operations (1,135) 1,214 CHANGE IN CASH FLOWS FROM DISCONTINUED OPERATIONS (3,211) (23,279) CHANGE IN CASH FLOWS IN THE YEAR 13,138 26,173 Cash and cash equivalents at beginning of year 139, ,260 - Cash 129,645 97,256 - Cash equivalents 9,648 16,004 Cash and cash equivalents- Change in scope of consolidation - (140) Cash and cash equivalents at end of period 152, ,293 - Cash 57, ,645 - Cash equivalents 95,098 9,648 (*) The consolidated statement of cash flow at December 31, 2013 has been restated for comparative purposes and in accordance with IFRS 5 to present the cash flow of DTS as a discontinued operation. Also, in accordance with IFRS 10, the consolidated statement of cash flow has been restated to consolidate Sistema Radiópolis, S.A. de C.V. and GLR Costa Rica, S.A. using the equity method The accompanying Notes 1 to 28 and Appendix I and II are an integral part of the consolidated statement of cash flows for

11 Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with IFRSs as adopted by the European Union (see notes 2 and 29). In the event of a discrepancy, the Spanishlanguage version prevails. PROMOTORA DE INFORMACIONES, S.A. (PRISA) AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENT FOR 2014 (1) GROUP ACTIVITIES AND PERFORMANCE a) Group activities Promotora de Informaciones, S.A. ( Prisa or the Company ) was incorporated on January 18, 1972, and has its registered office in Madrid, at Gran Vía, 32. Its business activities include, inter alia, the exploitation of printed and audiovisual media, the holding of investments in companies and businesses and the provision of all manner of services. In addition to the business activities carried on directly by the Company, Prisa heads a group of subsidiaries, joint ventures and associates which engage in a variety of business activities and which compose the Group ( the Prisa Group or the Group ). Therefore, in addition to its own separate financial statements, Prisa is obliged to present consolidated financial statements for the Group including its interests in joint ventures and investments in associates. The consolidated financial statements for 2013 were approved by the shareholders at the Annual General Meeting held on April 28, The Group s consolidated financial statements for 2014 were authorized for issue by the Company s directors on February 27, These consolidated financial statements are presented in thousands of euros as this is the currency of the main economic area in which the Group operates. Foreign operations are accounted for in accordance with the policies described in Note 2e. Shares of Prisa are admitted to trading on continuous market of the Spanish Stock Exchanges (Madrid, Barcelona, Bilbao and Valencia), and until September 22, 2014, on the New York Stock Exchange. In September 2, 2014, Prisa notified NYSE of its intent to terminate the registration of the ADSs with the Securities and Exchange Commission ("SEC") as agreed Board of Directors of July,

12 b) Evolution of the financial structure of the Group In December 2013, the Group signed an agreement to roll over its financial debt, thus extending the maturities, making the reduction process more flexible and enhancing its liquidity profile (see note 12b). The liquidity profile improved as a result of an additional credit line of EUR 353 million signed with certain institutional investors and a significant reduction in interest payments in cash. The refinancing agreement includes a number of commitments to reduce the debt. The Group has several options to meet these objectives such as selling non-core assets, buying back debt at a discount in the market, leveraging operating assets, transferring debt between tranches and carrying out other corporate transactions. The contract has automatic mechanisms that prevent an early termination under certain assumptions if such commitments are not met, thus providing stability to the Group's capital structure. In 2014 the Group carried out a number of operations to meet its debt reduction commitments. So, EUR 643,542 thousands of debt was paid off, with the proceeds from the sale of 13.7% of Mediaset España Comunicación, S.A. ( Mediaset España ), with an average discount of 25.7% (see notes 3 and 12b). Also, the Board of Directors of Prisa held on July 22, 2014 approved a capital increase for a total value of EUR 100,000 subscribed by Consorcio Transportista Occher, S.A. de C.V. ( Occher ). The proceeds of this capital increase were used to pay off EUR 133,133 thousand of debt with a discount of 25% (see notes 11 and 12b). With these operations, during 2014 the debt of the Group has reduced in EUR 776,675 thousand. In June 2014, the Group signed an agreement with Telefónica de Contenidos, S.A.U. for the sale of 56% of DTS, Distribuidora de Televisión Digital, S.A. for an amount of EUR 750 million, subject to usual adjustment in this type of transaction until the close of the transaction. Prisa registered, at this time, an accounting loss of EUR 750,383 thousand for this operation. At June 30, 2014, net equity of Prisa was negative in EUR 593,513 thousand, as a consequence of the transaction of DTS. According to the Corporate Enterprises Act, this situation constitutes a cause for dissolution. In order to reestablish this capital impairment situation, was launched a mechanism of automatic conversion of a portion of Tranche 3 of the Company s debt into equity loans in an amount sufficient to compensate for this capital impairment situation. During this period the Company undertook the aforementioned operations of buying up debt at a discount using proceeds from the share capital increase and the sales of Mediaset España (10%), which reduced the amount of equity loan required to compensate for the capital impairment situation

13 The formalization of the process of conversion of debt into equity loan took place last September 15, amounting to EUR 506,834 thousand. This amount included the impact of those operations and also the operating losses until the conversion took place and brought the company's equity to two thirds of share capital (see note 12b). In December 2014, the Group reviewed the value of the sale price of DTS and recorded an additional impairment of EUR 23,789 thousand for the estimated impact of the evolution of the business of DTS until the close of the transaction, which according to company estimates, could occur in the second quarter of 2015 (see note 3- Other significant operations). At 31 December 2014, as a result of, among other items, a review of the sale price of DTS, the equity of the parent company with regard to the cause of dissolution and/or reduction of capital stipulated in Spain's Corporate Enterprises Act (including participating loans outstanding at year-end) stood at EUR 31,554 thousand. In a bid to restore the equity balance, the automatic mechanism was again deployed to convert Tranche 3 of company debt into participating loans in a sufficient amount to offset the equity imbalance at the conversion date (see note 12b). As occurred with the automatic conversion that took place in the second half of 2014, in accordance with the Corporate Enterprises Act, the date on which the debt will be converted into participating loans will be five business days prior to expiry of the two-month period allowed for taking the necessary measures to restore the company's equity, calculated from the date on which the Directors became aware of the negative equity, i.e. the date on which they authorized the financial statements showing the situation of negative equity. (2) BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS a) Application of International Financial Reporting Standards (IFRSs) The Group s consolidated financial statements were prepared in accordance with International Financial Reporting Standards ( IFRSs ) as adopted by the European Union, in conformity with Regulation (EC) no. 1606/2002 of the European Parliament and of the Council, taking into account all mandatory accounting policies and rules and measurement bases with a material effect, as well as with the Commercial Code, the obligatory legislation approved by the Institute of Accounting and Auditors of Accounts, and other applicable Spanish legislation. In accordance with IFRSs, the following should be noted in connection with the scope of application of International Financial Reporting Standards and the preparation of these consolidated financial statements of the Group: The IFRSs are applied in the preparation of the consolidated financial information of the Group. The financial statements of individual companies that are part of the Group are prepared and presented in accordance with accounting standards in each country. In accordance with IFRSs, these consolidated financial statements include the following consolidated statements of the Group:

14 - Consolidated balance sheet - Consolidated income statement - Consolidated statement of comprehensive income - Consolidated statement of changes in equity - Consolidated statement of cash flows As required by IAS 8, uniform accounting policies and measurement bases were applied by the Group for all transactions, events and items in 2014 and In 2014, the following amendment to accounting standard came into force which, therefore, was taken into account when preparing the accompanying consolidated financial statements: - IFRS 10: Consolidated Financial Statements - IFRS 11: Joint arrangements - IFRS 12: Disclosure of interests in other entities - IAS 27 (Revised): Individual financial statements - IAS 28 (Revised): Investments in associates and joint ventures - Amendment to IFRS 10, 11 and 12: Transition Guidance - Amendment to IFRS 10, 12 and 27: Investment companies - IAS 32: Presentation - Offsetting financial assets and financial liabilities - Amendment to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets - Amendment to IAS 39: Novation of Derivatives and Continuation of Hedge Accounting The application of these amendments and interpretations did not have a significant impact on the Group s consolidated financial statements for this year. At December 31, 2014, the Prisa Group had not applied the following standards or interpretations issued, since the effective application thereof was required subsequent to that date or they have not been adopted by the European Union. Standards, amendments, and interpretations Mandatory application for financial years beginning on or after Approved for use in the EU IFRIC 21 Levies 17 June 2014 (*) Not yet approved for use in the EU

15 Standards, amendments, and interpretations Mandatory application for financial years beginning on or after Approved for use in the EU Amendment to IAS 19 Employee contributions to defined benefit plans. 1 July 2014 Annual improvements to IFRS Cycle and Cycle Amendments to IAS 16 and IAS 38 Minor amendments to a number of standards. Acceptable methods of depreciation and amortisation. 1 July January 2016 Amendment to IFRS 11 Improvements to IFRS Cycle Amendment to IFRS 10 and IAS 28 Amendment to IAS 27 Amendment to IAS 16 and IAS 41 Accounting for purchase of interests in joint arrangements. Minor amendments to a number of standards. Sale or contribution of assets between an investor and its associate/joint venture. Equity method in separate financial statements. Production plants will be measured at cost, instead of at fair value. 1 January January January January January 2016 IFRS 15 Revenue from contracts with customers. 1 January 2017 IFRS 9 Financial instruments. 1 January 2018 (*) The European Union approved IFRIC 21 (EU Official Journal, 14 June 2014), amending the date of entry into force established by the IASB (1 January 2014) to 17 June All the accounting principles and measurement bases with a material effect on the consolidated financial statements were applied. As at the date of authorization of the accompanying financial statements, the directors are assessing the potential impact of the future application of these standards on the Group s consolidated financial statements. b) Fair presentation and accounting principles The consolidated financial statements were obtained from the separate financial statements of Prisa and its subsidiaries and, accordingly, they present fairly the Group s equity and financial position at December 31, 2014, and the results of its operations, the changes in equity and the cash flows in the year then ended. The Group prepared its financial statements on a going concern basis. Also, with the exception of the consolidated statement of cash flows,

16 these consolidated financial statements were prepared in accordance with the accrual basis of accounting. Given that the accounting policies and measurement bases applied in preparing the Group s consolidated financial statements for 2014 may differ from those applied by some of the Group companies, the necessary adjustments and reclassifications were made on consolidation to unify these policies and bases and to make them compliant with IFRSs as adopted by the European Union. c) Responsibility for the information and use of estimates The information in these financial statements is the responsibility of the Group s directors. In the consolidated financial statements for 2014 estimates were occasionally made by executives of the Group and of the entities in order to quantify certain of the assets, liabilities and obligations reported herein. These estimates relate basically to the following: - The measurement of assets and goodwill to determine the possible existence of impairment losses (see notes 4f and 4d). - The useful life of property, plant, and equipment, and intangible assets (see notes 4b and 4e). - The hypotheses used to calculate the fair value of financial instruments (see note 4g). - The assessment of the likelihood and amount of undetermined or contingent liabilities. - Estimated sales returns received after the end of the reporting period. - The estimates made for the determination of future commitments. - The recoverability of deferred tax assets (see note 19). Although these estimates were made on the basis of the best information available at the date of preparation of these consolidated financial statements on the events analysed, it is possible that figures in the future differed materially from estimates and assumptions used. In this case, the effects in the corresponding consolidated income statements for future periods, as well as in assets and liabilities, would be recognized. In 2014, there were no significant changes in the accounting estimates made at the end of 2013, except in the valuation of the investment of DTS and the recoverability of deferred tax assets (see note 19). In relation of the valuation of the investment of DTS, as a result of the agreement for the sale of the 56% of DTS in June 2014 (see notes 1a and 2- Other significant operations), Prisa has valued the stake in the company at the value of the transaction, subject to the adjustments corresponding to the effective time of the sale and registered the corresponding impairment

17 d) Comparison of the information In June 2014, Prisa executed with Telefónica de Contenidos, S.A.U. a sale purchase agreement of all the shares of DTS, Distribuidora de Televisión Digital, S.A. (DTS) held by Prisa (see note 3- Other significant operations). Consequently, the Group reclassified the results of DTS as a discontinued operation (under "Loss after tax from discontinued operations ). In accordance with IFRS 5, for purposes of comparison, the consolidated income statement and consolidated cash flow of 2013 were restated to present DTS as a discontinued operation. Also, in accordance with IFRS 11, balance sheet, income statement and statement of cash flow at December 31, 2013, have been restated to consolidate Sistema Radiópolis, S.A. de C.V., GLR Costa Rica, S.A. and My Mayor Company Spain, S.L. using the equity method instead of proportionally method. Additionally the details of the notes of 2013 of this report have been restates so figures are consistent. The effect of these changes is collected on the "Changes in scope of consolidation column. The main impacts in the financial statement of 2013 were as follows: Operating income (19,031) Operating expenses 12,209 Profit from operations (6,821) Financial results (30) Result of companies accounted for using the equity method and other investments 4,674 Income tax 2,178 Profit attributable to the parent

18 2013 Non- Current Assets- 7,038 Property, plant and equipment (6,382) Goodwill (22,775) Intangible assets (370) Non- current financial assets (12) Investments accounted for using the equityy method 37,869 Deferred tax assets (1,292) Current Assets- (14,575) Trade and other receivables (9,360) Current financial assets (5,075) Cash and cash equivalents (140) Total assets (7,537) Non- Current Liabilities (48) Current Liabilities- (7,489) Trade payables (1,175) Other non-trade payables (8) Payable to public authorities (4,530) Other current liabilities (1,776) Total liabilities (7,537) e) Basis of consolidation The consolidation methods applied were as follows: Full consolidation- Subsidiaries are accounted for using the equity method, and all their assets, liabilities, income, expenses and cash flows are included in the consolidated financial statements after the necessary adjustments and eliminations have been carried out. Subsidiaries are companies over which the parent company exercises control, i.e. it has the power to direct their financial and operating policies, it is exposed or is entitled to variable earnings or has the ability to influence their earnings. Subsidiaries accounted for using the equity method are listed in Appendix I. The results of subsidiaries which are acquired or sold during the year are included in the consolidated income statement from the effective date of acquisition or until the effective date of disposal, as appropriate

19 On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values. Any excess of the cost of the subsidiary s acquisition over the Parent Company s share of the net fair value of its assets and liabilities is recognized as goodwill. Any deficiency is credited to the consolidated income statement. The share of third parties of the equity of Group companies is presented under Equity Noncontrolling interests in the consolidated balance sheet and their share of the profit for the year is presented under Profit attributable to non-controlling interests in the consolidated income statement. The interest of non-controlling shareholders is stated at those shareholders proportion of the fair values of the assets and liabilities recognized. All balances and transactions between the fully consolidated companies were eliminated on consolidation. Equity method- Associates are accounted for using the equity method. Associates are companies in which Prisa holds direct or indirect ownership interests of between 20% and 50%, or even if the percentage of ownership does not reach those levels, it has significant influence over their management. This method was also applied to joint ventures, considered as arrangements whereby the parties that exercise joint control over the company are entitled to its net assets on the basis of the arrangement. Joint control is the sharing of control that is contractually decided and set out in an agreement, which exists only when decisions concerning major operations require the unanimous consent of the parties that share control. The companies accounted for using the equity method are listed in Appendices I and II, together with their main financial aggregates. Under the equity method, investments are recognized in the balance sheet at the Group s share of net assets of the investee, adjusted, if appropriate, for the effect of transactions performed with the Group, plus any unrealized gains relating to the goodwill paid on the acquisition of the company. Dividends received from these companies are recognized as a reduction in the value of the Group s investment. The Group s share of the profit or loss of these companies is included, net of the related tax effect, in the consolidated income statement under Result of companies accounted for using the equity method. Other matters - The items in the balance sheets of the foreign companies included in the scope of consolidation were translated to euros using the closing rate method, i.e. all assets, rights and obligations were translated at the exchange rates prevailing at the end of the reporting period. Income statement items were translated at the average exchange rates for the year. The difference between the value of the equity translated at historical exchange rates and the net

20 equity position resulting from the translation of the other items as indicated above is recognized under "Equity Exchange differences" in the accompanying consolidated balance sheet. Balances and transactions in currencies of hyperinflationary economies are translated at the closing exchange rate after adjusting the effects of changes in prices according to local regulations. At December 31, 2014, the only country in which the Group operates that pursuant to IAS 21 could be considered to be a hyperinflationary economy is Venezuela. In February 2014 Venezuela passed a new legislation by means of which a new exchange rate to be applied in certain currency transactions was established from that moment on. The exchange rate applied as of December, 2014 has been the official rate and the new legislation will be applied in the future. In keeping with standard practice, these consolidated financial statements do not include the tax effect of transferring to Prisa s accounts the accumulated reserves and retained earnings of the other consolidated companies, since it is considered that these balances will be used as equity by said companies. The data relating to Sociedad Española de Radiodifusión, S.L., Prisa Radio, S.A., Grupo Santillana de Ediciones, S.L., Prisa Brand Solutions, S.L.U., Dédalo Grupo Gráfico, S.L., Promotora de Emisoras de Televisión, S.A., Gran Vía Musical de Ediciones, S.L., Grupo Latino de Radiodifusión Chile, Ltda., Sistema Radiópolis, S.A. de C.V., Grupo Media Capital SGPS, S.A., DTS, Distribuidora de Televisión Digital, S.A. and Antena 3 de Radio, S.A. contained in these notes were obtained from their respective consolidated financial statements. (3) CHANGES IN THE GROUP STRUCTURE The most significant changes in the scope of consolidation in 2014 were as follows: Subsidiaries In February 2014, Gestión de Medios de Prensa, S.A. is liquidated. Previously it was 52.63% owned by Grupo Empresarial de Medios Impresos, S.L. In March 2014, Emissões de Radiodifusão, S.A. (Radio Regional de Lisboa) acquired a 100% of Moliceiro Comunicaçao Social, S.A. Also in March 2014, Radio Comercial, S.A. (Comercial) acquired a 100% of Sociedade de Imprensa Radio Paralelo, Lda. (Sirpa). In May 2014, Alfaguara Grupo Editorial, S.L.U. was incorporated. It was 100% owned by Santillana Ediciones Generales, S.L. in order to provide the branch of activity engaged in the business of General editions for subsequent sale, as a consequence of the agreement reached with Penguin Random House Group Editorial, S.A. (see section- Other significant operations). Also, in May 2014, Radio 30, S.A. merges by Radio Murcia, S.A

21 In July 2014, Comunicacions Pla, S.L. merges by Radio Lleida, S.L. Also, in July 2014, Onda Musical, S.A. y Corporación Canaria de Información y Radio, S.A. were merged by Sociedad Española de Radiodifusión, S.L. In September 2014, As Chile, SPA was incorporated. It was 100% owned by Diario As, S.L. Also, in September 2014, Frecuencia del Principado, S.A.U. y Radiodifusora Navarra, S.A.U. were merged by Sociedad Española de Radiodifusión, S.L. In addition, in September 2014, Valdepeñas Comunicación, S.L. and Talavera Visión, S.L. were merged by Ediciones LM, S.L. In October 2014, Avante Radio, S.A. was merged by Sociedad Española de Radiodifusión, S.L. Associates During the first half of 2014, Sistema Radiópolis, S.A. de C.V., GLR Costa Rica, S.A. and My Major Company Spain, S.L. started to be accounted for using the equity method. They were previously integrated using proportional consolidation method. In February 2014, Multimedios GLP Chile SPA was incorporated. It was 50% owned by Iberoamericana Radio Chile, S.A. In April 2014, Prisa Noticias, S.L. acquired a 25% of Betmedia Soluciones, S.L. Mediaset España- In April 2014, Prisa through a financial institution proceeded to place a pack of 15 million shares of Mediaset España, representing 3.69% of the share capital of said company, at a rate of 8.08 euros per share, which generated a cash inflow of EUR 121,215 thousands, resulting in a negative difference with the book value of EUR 4,755 thousand, which is registered under the heading "Result of companies accounted for using the equity method" in the accompanying consolidated income statements. Also, in July 2014, Prisa sold shares of Mediaset España, representing 8.5% of the share capital of said company, at a rate of euros per share, which generated a cash inflow of EUR 307,514 thousand, resulting in an income of EUR 14,593 thousand, which is registered under the heading "Result of companies accounted for using the equity method" in the accompanying consolidated income statements. This shares were sold to the own Mediaset España. In addition, during August and September, were sold 6,060,000 shares of Mediaset España. This sale resulted in the reduction of shareholding to 3.66%. These operations resulting in an income of EUR 3,538 thousand, which is registered under the heading "Result of companies accounted for using the equity method" in the accompanying consolidated income statements

22 The net proceeds from these sales have been used to buy back a portion of its financial debt at a discount (see note 12b). Since the operations described above, this company is not consolidated anymore due to the lack of significant influence, as its stake is below 5%. Significant operations DTS- In June 2014, the Board of Directors of Prisa executed with Telefónica de Contenidos, S.A.U. a sale purchase agreement of all the shares of DTS held by Prisa, representing a 56% of the share capital of DTS, for an amount of EUR 750 million, which is subject to usual adjustment in this type of transaction until the close of the transaction. Mediaset España, shareholder of DTS, had an initial period of 15 calendar days from that moment on, and then extended until July 4, 2014, in order to exercise the pre-emptive right or the tag-along right in accordance with the provisions included in the bylaws and the shareholder s agreement. Once that period expired, Mediaset España did not exercise any of the aforementioned rights. Afterwards, in July 4, 2014, Mediaset España signed an agreement to sale its 22% stake in DTS to Telefónica de Contenidos, S.A. The closing of transaction is subject to the prescriptive authorization of the Spanish antitrust authorities who may impose conditions or commitments for the approval of the operation. In case that as a result of this authorization process, for any reason, the execution of the sale of DTS was not completed, the sale purchase agreement provides a mechanism by means of which Telefónica could, among other options, present an acquirer to Prisa to buy its stake in DTS within six months in the same terms and conditions provided in the sale purchase agreement executed with Telefónica. In addition, if the sale of DTS to Telefónica or to a third party, in accordance with the sale purchase agreement signed with Telefónica, was not executed, the financial and strategic situation of the Group could be impacted in the long term. This transaction, net of the estimated costs to sell, has resulted into an accounting loss of EUR 2,064,921 thousand in the consolidated financial statement of Prisa Group in June 2014 and of EUR 750,383 thousand in the individual accounts of Prisa (see note 1b). At December 31, 2014, the Group reviewed the value of the sale price of DTS and recorded an additional impairment of EUR 23,789 thousand for the estimated impact of the evolution of the business of DTS until the close of the transaction, which according to company estimates, could occur in the second quarter of The result of this transaction is presented in the accompanying consolidated income statements as Loss after tax from discontinued operations (see note 17) and the assets and liabilities of this business as Non-current assets held for sale and Liabilities associated with noncurrent assets held for sale in the accompanying consolidated balance sheet (see note 10). Santillana Ediciones Generales

23 At July 1, 2014, Prisa, through its subsidiary Santillana Ediciones Generales, S.L. has executed the sale of its trade publishing business for a price of EUR 55,429 thousand to Penguin Random House Grupo Editorial, S.A. The operation generated a capital gain before taxes of EUR 22,110 thousand and was registered in Other income of the accompanying consolidated income statement. The transaction consists of the sale of Alfaguara and other Santillana s literary brands in the 22 countries where it operates. It is excluded from the sale the division of publications catering to the education sector. The sale of the trade publishing business in Brazil, Editora Objetiva, Ltda, is also deferred until the particular conditions established in the contract are fulfilled, although the business was valued at its fair value less estimated costs to sale. As a consequence, an impairment of goodwill amounting to EUR 6,791 thousand was registered in the accompanying consolidated income statement. Finally the sale took place on October 1, 2014 for a price of EUR 7,921 thousand, having registered an additional loss of EUR 504 thousand. The main impacts on the balance sheet at December 31, 2014 related to the sale of trade publishing business and Editora Objetiva are summarized as follows: Thousand of euros Non- current assets (15,128) Current financial assets and cash and cash equivalents (2,692) Other current assets (50,620) Non- current and current liabilities (1,096) Carrying amount (37,344) Total consideration after adjustments 58,950 When comparing the information for 2014 and 2013, these changes, the effect of which is presented separately in these notes to the consolidated financial statements in the Changes in the consolidation scope" column, should be taken into account. (4) ACCOUNTING POLICIES The principal accounting policies used in preparing the accompanying consolidated financial statements for 2014 and comparative information were as follows: a) Presentation of the consolidated financial statements In accordance with IAS 1, the Group opted to present the assets in its consolidated balance sheet on the basis of a current/non-current assets distinction. Also, income and expenses are presented in the consolidated income statement according to the nature of the related item. The statement of cash flows was prepared using the indirect method. b) Property, plant, and equipment Property, plant and equipment are carried at cost, net of the related accumulated depreciation and of any impairment losses

24 Property, plant and equipment acquired prior to December 31, 1983, are carried at cost, revalued pursuant to applicable legislation. Subsequent additions are stated at cost, revalued pursuant to Royal Decree-Law 7/1996 in the case of Agrupación de Servicios de Internet y Prensa, S.L., Pressprint, S.L.U. and Sociedad Española de Radiodifusión, S.L. The costs of expansion, modernization or improvements leading to increased productivity, capacity or efficiency or to a lengthening of the useful lives of the assets are capitalized. Period upkeep and maintenance expenses are charged directly to the consolidated income statement. Property, plant and equipment are depreciated by the straight-line method at annual rates based on the years of estimated useful life of the related assets, the detail being as follows: Years of estimated useful life Buildings and structures Plant and machinery 5 15 Digital set-top boxes 7 Digital access cards 7 Other items of property, plant and equipment 3 10 The gain or loss arising on the disposal or derecognition of an asset is determined as the difference between the selling price and the carrying amount of the asset and is recognized in the consolidated income statement. c) Finance leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Items of property, plant and equipment held under finance lease are recognized in the balance sheet according to the nature of the leased asset. A liability is recognized simultaneously for the same amount, which is the lower of the fair value of the leased asset or the sum of the present values of the lease payables and, where appropriate, the price of any purchase option. The finance charge on these leases is allocated to the income statement so as to produce a constant periodic rate of interest over the lease term. Assets held under finance leases are depreciated over the same estimated useful life as owned assets

25 d) Goodwill Any excess of the cost of the investments in the consolidated companies over the corresponding underlying carrying amounts at the date of acquisition or at the date of first time consolidation, provided that the acquisition is not after control is obtained, is allocated as follows: - If it is attributable to specific assets and liabilities of the companies acquired, by increasing the value of the assets whose market values were higher than the carrying amounts at which they had been recognized in their balance sheets and whose accounting treatment was similar to that of the same assets of the Group. - If it is attributable to non-contingent liabilities, by recognizing it in the consolidated balance sheet if it is probable that the outflow of resources to settle the obligation embody economic benefits and the fair value can be measured reliably. - If it is attributable to specific intangible assets, by recognizing it explicitly in the consolidated balance sheet provided that the fair value at the date of acquisition can be measured reliably. - The remaining amount is recognized as goodwill. Changes in ownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Once control is obtained, additional investments in subsidiaries and decreases in ownership interest without the loss of control do not affect the amount of goodwill. When a parent loses control of a subsidiary, it derecognizes the carrying amount of assets (including any goodwill) and liabilities and the share of non-controlling interests, recognizing the fair value of the consideration received and any residual ownership in the subsidiary. The remaining difference is taken to profit or loss in the income statement for the year. The assets and liabilities acquired are measured provisionally at the acquisition date, and the provisional amounts are reviewed within a period of a year from the acquisition date. Therefore, until the definitive fair value of the assets and liabilities has been established, the difference between the acquisition cost and the carrying amount of the company acquired is provisionally recognized as goodwill. Goodwill is considered to be an asset of the company acquired and, therefore, in the case of a subsidiary with a functional currency other than the euro, it is valued in that subsidiary s functional currency and is translated to euros using the exchange rate prevailing at the balance sheet date. Goodwill acquired on or after January 1, 2004 is measured at acquisition cost and that acquired earlier is recognized at the carrying amount at December 31, 2003, in accordance with Spanish GAAP. In both cases, since January 1, 2004, goodwill has not been amortized and at the end of each reporting period goodwill is reviewed for impairment (i.e. a reduction in its recoverable amount to below its carrying amount) and any impairment loss is recognized (see note 4f). e) Intangible assets

26 The main items included under Intangible assets and the measurement bases used were as follows: Computer software- Computer software includes the amounts paid to develop specific computer programs or the amounts incurred in acquiring from third parties the licenses to use programs. Computer software is amortized using the straight-line method over a period ranging from three to five years, depending on the type of program or development, from the date on which it is brought into service. Prototypes- This account includes basically prototypes for the publication of books, which are measured at the costs incurred in materials and work performed by third parties to obtain the physical medium required for industrial mass reproduction. The prototypes are amortized using the straight-line method over three years from the date on which they are launched on the market, in the case of textbooks, atlases, dictionaries and major works, and over two years in the case of other publications. The cost of the prototypes of books that are not expected to be published is charged to the income statement for the year in which the decision not to publish is taken. New subscribers Installation and connection- This item includes the direct costs incurred in the installation of equipment and the connection of new subscribers to digital satellite pay TV, net of accumulated amortization. These costs are amortized over a useful life of seven years, which is the estimated average subscription period. The Group writes off the carrying amount of the installation and connection costs relating to subscriptions cancelled during the year. These costs are individually identifiable for each subscriber, by DTS, and future economic benefits will flow from them for the digital satellite pay TV business. This item also includes certain costs incurred in installing community digital satellite TV receivers (required to complete the satellite TV signal reception system), net of the related accumulated amortization. These costs are also amortized over an estimated useful life of seven years. These costs are amortized using the method described above by crediting directly the related asset account in the balance sheet. In 2014, New subscribers Installation and connection is registered in Non-current assets held for sale (see note 3- Other significant operations). Advances on copyrights- This account includes the advances paid to authors for the acquisition of book publishing rights. These advances are taken to expenses in the income statement from the date on which the book is launched on the market, at the rate established in each contract, which is applied to the book cover price. These items are presented in the balance sheet at cost, less the portion