Abril S.A. and subsidiaries

(A free translation of the original in Portuguese) Abril S.A. Abril S.A. and subsidiaries FINANCIAL STATEMENTS as at December 31, 2011 and Independent Auditor s Report

(A free translation of the original in Portuguese) Abril S.A. Abril S.A. and subsidiaries FINANCIAL STATEMENTS as at December 31, 2011 and Independent Auditor s Report CONTENTS Page Management report 1 Balance sheets 2-3 Statements of income 4 Statements of changes in equity 5 Statements of cash flow 6 Statements of value added 7 Notes to the financial statements 8-71 Board of directors and executive board 72 Independent auditor s report 73-74

(A free translation of the original in Portuguese) Abril S.A. Management Report Dear Stockholders In compliance with statutory requirements, we submit for your consideration the Financial Statements of Abril S.A. for the year ended December 31, 2011. Acknowledgements: We would like to thank our customers for the credibility placed on us, and our stockholders, suppliers and employees for their commitment and excellence, indispensable for the Abril Group s success. We are at your disposal for any clarifications deemed necessary. São Paulo, March 22, 2012. The Management 1

(A free translation of the original in Portuguese) Abril S.A. BALANCE SHEETS (All amounts in thousands of Reais) A S S E T S Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 CURRENT ASSETS: Cash and cash equivalents (Note 6) 5 10 369,160 357,357 Trade receivables (Note 7) 870 499 643,623 534,632 Inventory (Note 8) - - 111,039 103,074 Taxes to be offset (Note 9) 20,047 14,237 98,811 79,091 Dividends and interest on capital receivable (Note 28) 86,127 53,236 - - Advances to suppliers and others (Note 10) 216 1,784 47,89 37,666 Total current assets 107,265 69,766 1,270,523 1,111,820 NON-CURRENT ASSETS: LONG-TERM RECEIVABLES Loans and other credits with related parties (Note 28) 3,563 95,235 69,140 194,486 Trade receivables (Note 7) - - 17,437 17,178 Taxes to be offset (Note 9) - - 2,831 2,115 Deferred income tax and social contributions (Note 17) - - 97,222 105,049 Judicial deposits (Note 18) 1-77,269 71,672 Advances to suppliers and others (Note 10) - - 8,972 3,447 3,564 95,235 272,871 393,947 INVESTMENTS (Note 11) 766,654 640,847 945 155 INTANGIBLE ASSETS (Note 12) 0 0 570,924 364,153 PROPERTY, PLANT AND EQUIPMENT (Note 13) 0 0 434,853 340,833 Total non-current assets 770,218 736,082 1,279,593 1,099,088 Total assets 877,483 805,848 2,550,116 2,210,908 2

(Continued) Abril S.A. CURRENT LIABILITIES: BALANCE SHEETS (All amounts in thousands of reais) LIABILITIES AND EQUITY 3 Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Trade and other payables (Note 14) 28,323 27,967 729,264 625,769 Loans, financing and debentures (Note 15) - - 123,731 174,457 Income tax and social contributions payable - - 14,961 15,588 Taxes and contributions payable (Note 16) 2,839 785 113,627 80,282 Dividends payable (Note 20.4) 45,757-49,996 308 Magazine subscriptions - - 295,736 239,133 Total current liabilities 76,919 28,752 1,327,315 1,135,537 NON-CURRENT LIABILITIES: LONG-TERM LIABILITIES Loans and other debts with related parties (Note 28) 520,391 521,334 45,516 16,107 Loans, financing and debentures (Note 15) - - 471,587 306,112 Taxes and contributions payable (Note 16) 551 745 73,165 131,567 Deferred income tax and social contributions (Note 17) 10,974-269,244 260,358 Provision for contingencies (Note 18) - - 102,753 79,893 Long-term partnership program (Note 28) 1,566 18,705 1,566 18,705 Provision for losses on operations of subsidiaries (Note 11) 77,685 37,815 - - Other payables (Note 14) - - 63,215 48,228 Total non-current liabilities 611,167 578,599 1,027,046 860,970 Total liabilities 688,086 607,351 2,354,361 1,996,507 EQUITY (Note 20): Share capital 32,778 32,778 32,778 32,778 Revaluation reserves 12,790 12,660 12,790 12,660 Revenue reserves 143,829 153,059 143,829 153,059 Total equity 189,397 198,497 189,397 198,497 Non-controlling interests - - 6,358 15,904 189,397 198,497 195,755 214,401 Total liabilities and equity 877,483 805,848 2,550,116 2,210,908 The accompanying notes are an integral part of these financial statements.

(A free translation of the original in Portuguese) STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31 (All amounts in thousands of reais, except earnings per share) Abril S.A. Parent 2011 2010 2011 2010 Revenue (Note 22) 2 4 3,151,707 3,027,743 Cost of sales (Note 23) - - (1,446,805) (1,539,851) Gross profit 2 4 1,704,902 1,487,892 Selling expenses (Note 23) - - (858,160) (745,663) Administrative expenses (Note 23) (4,025) (12,975) (471,496) (419,556) Other income, net (Note 24) 11,930 3,914 4,829 4,062 Share of profit (loss) of subsidiaries and associates (Note 11) 228,537 200,495 - - Operating profit 236,444 191,438 380,075 326,735 FINANCE INCOME AND COSTS (Note 25): Finance income 3,995 4,437 69,607 79,139 Finance costs (57,278) (33,417) (136,755) (115,947) Foreign exchange gains (losses), net - (2) (9,123) 1,025 Profit before income tax and social contributions 183,161 162,456 303,804 290,952 INCOME TAX AND SOCIAL CONTRIBUTIONS (Note 26) Current - - (124,340) (97,411) Deferred - - 6,418 (29,439) Profit for the year 183,161 162,456 185,882 164,102 PROFIT ATTRIBUTABLE TO Owners of the Company 183,161 162,456 Non-controlling interests 2,721 1,646 185,882 164,102 Basic and diluted earnings per share - in R$ (Note 20.6) 8.1027 7.1867 The accompanying notes are an integral part of these financial statements. There was no other comprehensive income. Accordingly, the Company is not presenting a statement of comprehensive income. 4

(A free translation of the original in Portuguese) Abril S.A. STATEMENTS OF CHANGES IN EQUITY - PARENT AND CONSOLIDATED (All amounts in thousands of Reais) 5 Attributable to owners of the parent Capital Revenue reserves reserve Additional Share Share Revaluation Legal dividend Retained Non-controlling Total capital premium reserves reserve proposed earnings Total interests equity BALANCES AS AT DECEMBER 31, 2009 156,964 64,438 12,485 6,808 27,344 69,202 337,241 2,351 339,592 Capital increase in accordance with the EGM of February 17, 2 5,631 9,327 14,958 14,958 Spin-off of Abril Educação in accordance with the EGM of February 28, 2010 (Note 11.6.a) (129,817) (73,765) (12,576) (216,158) (216,158) Realization of revaluation reserve 266 (266) - - Income tax on realization - of revaluation reserve (91) 91 - Reversal of legal reserve (253) 253 - - Interim dividends - EGM of August 25, 2010 (Note 20.4) (27,344) (72,656) (100,000) (100,000) Profit for the year 162,456 162,456 1,646 164,102 Other movements in non-controlling interests (Note 20.7) - 11,907 11,907 Allocation of profit for the year: - Additional dividend proposed (Note 20.4) 146,504 (146.504) - - BALANCES AS AT DECEMBER 31, 2010 32,778-12,660 6,555 146,504-198,497 15,904 214,401 Dividends paid in accordance with the AGM of April 29, 2011 (Note 20.4) (146,504) (146,504) - (146,504) Realization of revalution reserve 197 (197) - - Income tax on realization - of revaluation reserve (67) 67 - Profit for the year 183,161 183,161 2,721 185,882 Other movements in non-controlling interests (Note 20.7) - (12,267) (12,267) Allocation of profit for the year: - Minimum mandatory dividend (Note 20.4) (45,757) (45,757) (45,757) - Additional dividend proposed (Note 20.4) 137,274 (137,274) - - BALANCES AS AT DECEMBER 31, 2011 32,778-12,790 6,555 137,274-189,397 6,358 195,755 The accompanying notes are an integral part of these financial statements.

(A free translation of the original in Portuguese) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (All amounts in thousands of Reais) Abril S.A. Parent 2011 2010 2011 2010 CASH FLOW FROM OPERATING ACTIVITIES Cash generated from (used in) operations (Note 27) (28,183) (10,369) 510,885 324,180 Interest paid (1,496) (1,779) (134,224) (64,005) Income tax and social contributions paid - - (115,954) (86,715) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (29,679) (12,148) 260,707 173,460 CASH FLOW FROM INVESTING ACTIVITIES: Purchases of: Intangible assets - - (69,465) (58,258) Property, plant and equipment - - (130,817) (36,917) Investments - (32,790) (636) (24,887) Loan repayments received from (made to) related parties, net 47,187 163,087 167,684 (142,849) Capital increase in subsidiaries (3,219) - - - Dividends received 152,460 115,987 - - Acquisition of subsidiary, net of cash received (20,000) (32,035) (113,121) (29,340) Cash received in business combination - - - 4,702 Cash written off on disposal of investments - - - (17,244) NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES 176,428 214,249 (146,355) (304,793) CASH FLOW FROM FINANCING ACTIVITIES: New loans and financing - - 121,836 108,072 Repayment of loans and financing - - (13,730) (54,384) Dividends paid (146,504) (201,921) (146,504) (203,368) Payment of taxes and contributions - PAES, REFIS IV and taxes in installments (250) (205) (64,151) (48,678) NET CASH USED IN FINANCING ACTIVITIES (146,754) (202,126) (102,549) (198,358) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (5) (25) 11,803 (329,691) (+) Cash and cash equivalents at beginning of year 10 35 357,357 687,048 (=) Cash and cash equivalents at end of year 5 10 369,160 357,357 NET CHANGE IN CASH AND CASH EQUIVALENTS (5) (25) 11,803 (329,691) The accompanying notes are an integral part of these financial statements. - - 6

(A free translation of the original in Portuguese) STATEMENTS OF VALUE ADDED FOR THE YEARS ENDED DECEMBER 31 (All amounts in thousands of Reais) Abril S.A. Parent 2011 2010 2011 2010 REVENUE 2 4 3,453,952 3,316,002 Gross sales and services 2 4 3,425,290 3,286,286 Other revenue - - 34,070 18,154 Provision for impairment of trade receivables - - (5,408) 11,562 INPUTS ACQUIRED FROM THIRD PARTIES (7,905) 9,026 1,993,652 1,938,127 Raw materials consumed - - 214,273 204,734 Cost of sales and services - - 1,096,143 1,179,062 Materials, energy, outsourced services and other (7,905) 9,026 683,236 554,331 GROSS VALUE ADDED 7,907 (9,022) 1,460,300 1,377,875 RETENTIONS - - 69,352 63,512 Depreciation and amortization - - 69,352 63,512 NET VALUE ADDED GENERATED 7,907 (9,022) 1,390,948 1,314,363 VALUE ADDED RECEIVED THROUGH TRANSFER 232,532 204,932 70,468 78,192 Share of profit (loss) of subsidiaries 228,537 200,495 - - Finance income 3,995 4,437 69,607 79,139 Foreign exchange gain - - 861 (947) TOTAL VALUE ADDED TO DISTRIBUTE 240,439 195,910 1,461,416 1,392,555 DISTRIBUTION OF VALUE ADDED: Personnel and payroll charges - - 576,089 552,192 Salaries - - 480,565 461,556 Benefits - - 63,061 61,203 Government Severance Indemnity Fund for Employees (FGT - - 32,463 29,433 Taxes and contributions - 35 513,391 506,851 Federal - 35 499,804 486,866 State - - 5,698 8,151 Municipal - - 7,826 7,277 Results of enrollment in REFIS - - 63 4,557 Remuneration of third parties' capital 57,278 33,419 186,039 169,410 Interest 57,278 33,417 136,755 115,947 Foreign exchange losses - 2 9,984 (1,972) Rental - - 38,382 38,985 Other - - 918 16,450 Remuneration of own capital 183,161 162,456 185,897 164,102 Profits reinvested 137,404 62,456 137,404 62,456 Dividends 45,757 100,000 45,757 100,000 Non-controlling interests - - 2,736 1,646 TOTAL VALUE ADDED DISTRIBUTED 240,439 195,910 1,461,416 1,392,555 The accompanying notes are an integral part of these financial statements. 7

(A free translation of the original in Portuguese) Abril S.A. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (All amounts in thousands of Reais unless otherwise stated) 1. GENERAL INFORMATION Abril S.A. (the Company ) is a corporation headquartered in São Paulo, State of São Paulo, controlled by Ativic S.A. The Company shares its corporate, managerial and operating structures and costs with its subsidiaries. The activities of the Company and its subsidiaries include the holding of equity interests in companies, mainly those operating in the communications industry, operating in publishing and printing activities, comprising the editing, printing, distribution and sale of magazines, yearbooks, guides and technical publications, operating on the Internet as providers of content, access and sales of advertising space and products, companies engaged in the production, acquisition, licensing, distribution, import and export of its own or third parties' television programs, and the provision of other services related to systems for transmission, reception and distribution of TV signals and programs, and operating as service providers for the organization and promotion of exhibitions and trade shows and for sales of advertising and publicity. The issue of these financial statements was authorized by the Company s Board of Directors on March 20, 2012. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these parent company and consolidated financial statements are set out below. These policies have been consistently applied to the years presented. 2.1. Basis of presentation The financial statements have been prepared under the historical cost convention, as modified by financial assets and financial liabilities (including derivative instruments, when applicable) measured at fair value. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company s accounting policies. Those areas which involve a higher degree of judgment or complexity, or where assumptions and estimates are significant to the parent company and consolidated financial statements are disclosed in Note 3. 2.1.a financial statements The consolidated financial statements have been prepared and are being presented in accordance with the accounting practices adopted in Brazil, including the pronouncements issued by the Brazilian Accounting Pronouncements Committee 8

9 Abril S.A. (CPC), as well as according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). 2.1.b Parent company financial statements The parent company financial statements have been prepared in accordance with the accounting practices adopted in Brazil issued by the CPC and are disclosed together with the consolidated financial statements. In the parent company financial statements, subsidiaries are recorded based on the equity accounting method. The same adjustments are made in the parent company and consolidated financial statements to reach the same profit or loss and equity attributable to the owners of the parent entity. In the case of Abril S.A., the accounting practices adopted in Brazil applicable to the parent company financial statements differ from the IFRS applicable to separate financial statements only in relation to the evaluation of investments in subsidiaries. These should be calculated based on the equity accounting method, instead of at cost or fair value in accordance with IFRS. 2.1.c Changes in accounting policies and disclosures 2.2. Consolidation There are no new CPCs/IFRS pronouncements or interpretations effective from 2011 that would be expected to have a material impact on the Company's financial statements. The following accounting policies are applied during the preparation of the consolidated financial statements. Subsidiaries Subsidiaries are all entities for which the Company has the power to determine the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date on which control ceases. The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of assets or liabilities resulting from a contingent consideration arrangement, when applicable. Acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values as at the acquisition date. The Company recognizes any non-controlling interest in the acquiree either at its fair value or at the non-controlling interest s proportionate share of the fair value of the acquiree s net assets. The measurement of the non-controlling interests to be recognized is determined in each acquisition. The excess of the consideration transferred plus the acquisition-date fair value of any previous equity interest in the acquiree above the fair value of the Company s share of the identifiable net assets acquired is recorded as goodwill.

Transactions, balances and unrealized gains and losses on transactions between Company entities are eliminated. The accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. 2.3. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision market, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Board of Directors that makes the Company s strategic decisions. 2.4. Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the Company s controlled entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency ). The consolidated financial statements are presented in Brazilian Reais (R$), which is the Company s functional currency, and also the Group s presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or the dates of valuation when items are remeasured. Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currency are recognized in the statement of income. Foreign exchange gains and losses that relate to borrowing, cash and cash equivalents and other accounts subject to foreign exchange variation are presented in the statement of income as "Foreign exchange variations, net" in the finance income or costs group. 2.5. Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less, with an immaterial risk of change in value. 2.6. Financial assets 2.6.1 Classification The Company classifies its financial assets at initial recognition in the following categories: at fair value through profit or loss, and loans and receivables. In these financial statements there are no held-to-maturity assets or available-for-sale assets. The classification depends on the purpose for which the financial assets were acquired. 10

a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if they are acquired principally for realization in the short term. All financial assets in this category are classified as current assets. Derivatives, for example swap contracts, are also measured at fair value through profit or loss. b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinate payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period, which are classified as non-current assets. The Company s loans and receivables comprise loans to subsidiaries, trade receivables, other receivables and cash and cash equivalents. 2.6.2 Recognition and measurement Normal purchases and sales of financial assets are recognized on the transaction date. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the statement of income. Financial assets are derecognized when the right to receive cash flow from the investment has expired or been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortized cost using the effective interest method. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active or the asset has no public quotation, the Company establishes the fair value by using valuation techniques. These include the use of recent arm s length transactions, reference to other instruments that are substantially the same, the discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying to the minimum possible on entity-specific inputs. 2.6.3 Offsetting financial instruments Financial assets and liabilities are offset and the net amounts reported in the balance sheet when there is a legal right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. 2.7. Impairment of financial assets Assets carried at amortized cost The Company assesses as at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events occurring after the initial recognition of the asset (a "loss event") and that loss event (or events) has an impact on the estimated 11

future cash flow of the financial asset or group of financial assets that can be reliably estimated. The criteria that the Company uses to determine that there is objective evidence of an impairment loss include: (i) Significant financial difficulty on the part of the issuer or debtor (ii) A breach of contract, such as a default or delinquency in interest or principal payments (iii) The Company, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that it would not otherwise consider (iv) It becomes probable that the borrower will enter bankruptcy or other financial reorganization (v) The disappearance of an active market for that financial asset because of financial difficulties. The amount of any impairment loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flow, discounted at the financial asset s original effective interest rate. The carrying amount of the asset is reduced and the loss is recognized in the statement of income. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor s credit rating), the reversal of the previously recognized impairment loss is recognized in the statement of income. 2.8. Trade receivables Trade receivables refer mainly to the sale of advertising, printing services, subscriptions and products. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. The provision for the impairment of trade receivables is established based on the level of historical losses and on the knowledge and monitoring of the current situation of customers and is deemed to be sufficient to cover possible losses on the realization of the receivables (Note 7). 2.9. Inventory Inventory is stated at the average cost of purchase or production, lower than replacement cost or net realizable value and, when applicable, this cost is reduced by the provision for obsolescence and/or for a write-down to market value (Note 8). Imports in transit are stated at the accumulated cost of each import. The Company and its subsidiaries recognize a provision for losses on slow-moving finished products and raw materials. This provision is constituted based on a percentage relating to the time that the items remain in stock, up to the maximum limit of three years. After this period, a full provision is recorded for probable losses. Spare parts for machinery and equipment can remain in stock while there is a possibility of utilization, even if a provision has been made. 12

2.10. Judicial deposits Judicial deposits are monetarily restated and presented as a deduction from the corresponding liability, when applicable. 2.11. Intangible assets i) Goodwill Goodwill represents the excess of the cost of an acquisition over the net fair value of the assets and liabilities of the acquired entity. Goodwill on acquisitions of subsidiaries is recorded as Intangible assets in the consolidated financial statements, while in the parent company financial statements it is recorded as investments, unless the acquired entity has been merged into the Company. If negative goodwill is determined, the amount is recorded as a gain in the profit for the period on the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of any goodwill relating to the entity sold. Goodwill is allocated to cash-generating units (CGUs) for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of CGUs that are expected to benefit from the business combination on which the goodwill arose, identified according to operating segment. ii) Computer software Computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over the estimated useful life of the software. Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:. It is technically feasible to complete the software product so that it will be available for use. Management intends to complete the software product and use or sell it. There is an ability to use or sell the software product. It can be demonstrated that the software product will generate probable future economic benefits. Adequate technical, financial and other resources to complete the development and to use or sell the software product are available, and. The expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalized as part of the software product include the software development employee costs and an appropriate portion of applicable 13

overheads. Costs also include finance costs related to the development of the software product. Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Computer software development costs recognized as assets are amortized on a straightline basis over their estimated useful lives, at the rates disclosed in Note 12. iii) Portfolio of customers Contractual customer relationships acquired in the course of a business combination are recognized at their fair value at the acquisition date. The contractual customer relationships have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected life of the customer relationship. iv) Non-competition agreements Non-competition clauses agreed with sellers in the course of a business combination are carried at fair value as at the acquisition date. These agreements have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected life of the agreement. v) Trademarks and licenses Acquired trademarks and licenses are initially stated at historical cost. Trademarks and licenses acquired in a business combination are carried at fair value at the acquisition date. Trademarks and licenses are not amortized. 2.12. Property, plant and equipment Property, plant and equipment are stated at historical acquisition cost, increased by spontaneous revaluations carried out as at December 31, 2005 by the subsidiaries Editora Abril S.A. and Abril Gráfica Ltda., based on an appraisal prepared by a specialized company, covering only the printing plant, buildings and land. Depreciation is calculated on a straight-line basis considering their costs and residual values over their estimated useful life, in accordance with the rates disclosed in Note 13. Land and buildings comprise mainly the buildings, sheds and offices. Land is not depreciated. Machinery and industrial equipment mainly includes the industrial printing plant used for printing magazines and periodicals. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in "Other income, net" in the statement of income. When revalued assets are sold, the respective amounts included in the revaluation reserve are transferred to retained earnings. The costs of borrowing used to finance the construction of property, plant and equipment are capitalized during the time period necessary to construct and prepare the assets for their intended use. 14

15 Abril S.A. Repairs and maintenance costs are allocated to profit or loss as they are incurred. The cost of major renovations is included in the carrying amount of the asset, when it is probable that the Company will realize future economic benefits exceeding the performance initially expected for the existing asset. Major renovations are depreciated over the remaining useful life of the related asset. 2.13. Impairment of non-financial assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flow (cash-generating units). Non-financial assets other than goodwill that were adjusted due to impairment are subsequently reviewed for possible reversal of the impairment at the balance sheet date. 2.14. Advances from customers Advances received for future advertising are recorded as revenue when the advertising is published. 2.15. Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. In practice, they are usually recognized at the amount of the related invoice. 2.16. Loans, financing and debentures Loans, financing and debentures are recognized initially at fair value, net of transaction costs incurred, and are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the total amount payable is recognized in the statement of income over the period of the borrowing using the effective interest method. Borrowing is classified under current liabilities unless the Company and its subsidiaries have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. 2.17. Provisions Provisions are recognized when the Company and its subsidiaries have a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount of this outflow can be reliably estimated. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time

value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as an interest expense. 2.18. Magazine subscriptions The balance of the "magazine subscriptions" account refers to the advance receipt of subscriptions and is realized through the production and contracted delivery of future publications. 2.19. Current and deferred income tax and social contribution The income tax and social contribution expenses for the period comprise current and deferred taxes and are recognized in the statement of income. The current income tax and social contributions are calculated on the basis of the tax laws enacted at the end of the reporting period. The current income tax and social contributions are presented on a net basis, separated by taxpaying entity, in liabilities when there are amounts payable, or in assets when the prepaid amount exceeds the total amount due on the reporting date. Deferred income tax and social contributions are recognized on income tax and social contribution losses and temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The current tax rates of 25% for income tax and 9% for social contributions are used to calculate deferred taxes. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available to offset temporary differences and/or tax losses, based on the projections of future results. These use internal assumptions and projections of future economic scenarios and may, therefore, be subject to change. 2.20. Employee benefits (i) Pension obligations The pension plan sponsored by the Company and its subsidiaries is a defined contribution plan administered by Sociedade de Previdência Privada - Abrilprev, for which the contributions are made on a compulsory, contractual or voluntary basis. Once the contributions have been made, the Company has no obligations regarding additional payments. Regular contributions comprise the net periodic costs for the period during which they fall due and are, consequently, included in personnel costs. (ii) Profit sharing The Company and its subsidiaries offer their employees a profit sharing program named "Superação", linked to the accomplishment of pre-established goals. This profit share is recognized on a monthly basis and adjusted at the end of the year, when the amount can be accurately calculated. (iii) Long-term incentive The long-term partnership program provides for the sale to the Company's officers of shares of the direct subsidiary Beigetree Participações S.A., which holds a direct interest in the capital of the subsidiary Editora Abril S.A. 16

2.21. Equity Abril S.A. Under the program, the Company is obliged to repurchase the shares granted to the officers, 50% in the year subsequent to the option exercise and 50% upon termination of the employment agreement, the employee s death or in the event of a public offering of the Company's shares. These shares cannot be sold to third parties without the Company's previous approval. Further, any rights these shares could come to generate will be the full property of the Company. The options on shares allocated to the long-term partnership program can be exercised on an annual basis, provided that the authorized officer is, on the purchase date, an employee or administrator of the Company or its subsidiaries. Share capital Common and preferred shares are classified as equity. Dividends and interest on capital The distribution of minimum mandatory dividends is provided for in the financial statements and the excess of the adjusted profit for the year is recognized as an additional dividend proposed in equity, and is submitted to the General Meeting of Stockholders for approval. From the year beginning on January 1, 2011, the Company and its subsidiaries started accruing interest on capital, when applicable, and its approval and allocation is submitted to a resolution of the General Meeting of Stockholders. 2.22. Statements of income Revenue recognition a) Revenue from sales of products and services The Company and its subsidiaries recognize revenue when its amount can be reliably measured, when it is probable that future economic benefits will result from the transaction and when specific criteria have been met for each of the Company s activities. The revenue from advertising (net of volume bonuses), sales of products and printing services are recognized when the related advertising is published, the products delivered or services are rendered, respectively. Sales of magazines to points of sale are recognized at the circulation date, net of loss estimates. Revenue from magazine subscriptions are recognized proportionally to the copies delivered. The Company carries out advertising barter transactions, to which the fair value concept is applied. b) Interest income Interest income is recognized on an accruals basis, using the effective interest method. Cost Costs related to advertising are recognized when the relevant advertisement is published. Production costs are determined by the specific lot method and take into consideration the average purchase or production price. The cost of services rendered is recognized when the services are effectively rendered. The cost of magazine production and sale is recognized on the date of each issue, and the costs of subscription and distribution of copies are calculated when the magazines are delivered to the subscribers. 17

2.23. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of income on a straight-line basis over the period of the lease. Some subsidiaries of the Company lease certain items of property, plant and equipment. Leases of property, plant and equipment where its subsidiaries hold substantially all of the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased item and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding lease obligations, net of finance charges, are included in other long-term liabilities. The interest element of the finance cost is charged to the statement of income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the useful life of the asset. The subsidiaries Treelog S.A. - Logística e Distribuição and Tex Courrier Ltda. assume substantially all of the risks and rewards of ownership of the vehicle fleet, which are classified as finance leases. Finance leases are recorded in the same manner as financed purchases, recognizing at the beginning of the lease the property, plant and equipment item and a financing liability (lease). 2.24. New standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company The following new standards, amendments to and interpretations of existing standards were issued by the IASB but are not effective for 2011. The early adoption of these standards, although encouraged by the IASB, has not been implemented in Brazil by the Brazilian Accounting Pronouncements Committee (CPC).. IFRS 9 "Financial instruments" addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost. The classification is made at initial recognition, and the basis for this depends on the entity s business model and the contractual cash flow characteristics of the financial instruments. For financial liabilities, the standard retains most of the requirements of IAS 39. The main change is that, in cases where the fair value option is used for financial liabilities, the part of the fair value change due to an entity s own credit risk is recorded in other comprehensive income rather than the statement of income, unless this creates an accounting mismatch. The Company has yet to assess the full impact of IFRS 9. The standard is applicable as from January 1, 2013.. IFRS 10 " financial statements" builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control. The Group has yet to assess the full impact of IFRS 10. The standard is applicable from January 1, 2013. 18

. IFRS 11"Joint arrangements" was issued in May 2011. The standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations involved in the arrangement, rather than its legal form. There are two types of joint arrangements: (i) joint operations - arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses, and (ii) joint ventures - arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. The proportional consolidation method will no longer be permitted in joint ventures. The standard is applicable from January 1, 2013.. IFRS 12 "Disclosure of interests in other entities" includes the disclosure requirements for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance sheet vehicles. The Company has yet to assess IFRS 12 s full impact. The standard is applicable from January 1, 2013.. IFRS 13 Fair value measurement was issued in May 2011. IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRS. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS or US GAAP. The Company is yet to assess IFRS 13 s full impact. The standard is applicable from January 1, 2013. There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company. 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Estimates and judgments are continually reassessed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, which are described below: a) Estimated impairment of goodwill The Company tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.13. The recoverable amounts of cash-generating units (CGUs) have been determined based on value-in-use calculations. These calculations require the use of estimates (Note 12). b) Revenue from barter and advertising As mentioned in Note 2.22, some subsidiaries of the Company carry out advertising barter transactions, to which the fair value concept is applied. Because revenue from advertising barter transactions cannot be reliably measured at the fair value of the advertising services received, in accordance with Pronouncement CPC 30 Revenue, Management uses historical experience and estimates to determine the fair value of services delivered. c) Provision for contingencies As mentioned in Note 18, some subsidiaries of the Company are party to lawsuits and administrative proceedings, which include labor, civil and tax lawsuits arising in the normal course of business. When the Company's management, based on past experience and the opinion of its legal advisors, considers that a loss on these lawsuits is probable, a provision for contingencies is recognized at an amount considered sufficient to cover the eventual losses in the lawsuits. 19

d) Deferred taxes As mentioned in Note 17, the Company and its subsidiaries recognize deferred income tax and social contribution on income tax and social contribution losses, respectively, as well as on temporary differences, since it understands that there are perspectives for future recovery, 4. FINANCIAL RISK MANAGEMENT 4.1. General considerations and policies The Company and its subsidiaries have a risk management policy which provides guidelines on transactions and requires the diversification of transactions and counterparties. According to this policy, the nature and general position of financial risks are monitored and managed on a regular basis to evaluate their results and their financial impact on cash flow. The credit limits of counterparties are also periodically reviewed. The Risk Management Committee assists management in examining and reviewing information related to risk management, including significant policies, procedures and practices used in risk management. 4.2. Financial risk factors The activities of the Company and its subsidiaries expose them to several types of financial risk: market (including currency and interest rate), credit and liquidity risk. The Company's global risk management program is focused on the uncertainty of financial markets and seeks to minimize possible adverse effects on financial performance. The risk management policy was established by the Board of Directors and determines the existence of a Risk Management Committee. In accordance with this policy, market risks are protected when it is deemed necessary to support the corporate strategy or maintain the level of financial flexibility. Corporate Treasury identifies, assesses and may contract financial instruments for the purposes of hedging the Company against potential financial risks, mainly those arising from interest and foreign exchange rates. a) Market risk The Company and its subsidiaries are subject to market risks arising from their business activities. These market risks mainly involve the possibility of fluctuations in exchange rates and variations in interest rates. i) Exchange rate risk Some subsidiaries of the Company have borrowing and contracts with suppliers denominated in foreign currency. The risk relating to these transactions arises from possible fluctuations in exchange rates, which may increase the balances of the related liabilities. The consolidated liabilities subject to this risk represent approximately 1.18% of total borrowing and trade payables as at December 31, 2011 (3.14% in 2010). The Group has entered into derivatives agreements (swaps) to hedge against this type of risk only for borrowing obtained under BACEN Resolution 2770/00. Additionally, for liabilities denominated in foreign currency, there is a continuous 20

21 Abril S.A. monitoring of these market rates in order to evaluate the eventual contracting of derivatives to hedge against the volatility risk of these rates. The market values of these transactions do not substantially differ from the amounts recorded in the financial statements as at December 31, 2011 and 2010. ii) Interest rate risk Some subsidiaries of the Company have loans, financing and debentures in local currency, which are subject to interest rates linked to indices (mainly the Interbank Deposit Rate - CDI ). The risk related to these liabilities arises from possible fluctuations in these rates. The Company has not entered into derivative agreements to hedge against this type of risk as at December 31, 2011 and 2010. However, the market rates are constantly monitored in order to assess the need to contract derivatives to hedge against fluctuations in these rates. In addition to loans and financing, the direct subsidiary Editora Abril S.A. issued debentures not convertible into, nor exchangeable for, shares. This liability was contracted at an interest rate linked to the CDI, and the related risk arises from the possible increase in CDI rates. The market values of the instruments mentioned above did not differ significantly from the amounts recorded in the financial statements as at December 31, 2011 and 2010. Based on simulations made, the impact on profit, after income tax and social contribution, with a variation of 0.25% in the CDI rate, would correspond to a maximum amount of R$279. b) Credit risk Credit risk is managed on a corporate basis. The credit risk arises from cash and cash equivalents, marketable securities and trade receivables. In relation to banks and financial institutions, the Company invests only in the securities of entities independently classified with a minimum rating of "braaa" (by Standard & Poor s) or "Aaa.br" (by Moody s). The rates contracted for marketable securities reflect normal market conditions, which establish remuneration ranging from 100% to 102.45% of the CDI rate. The sales policy of the Company and its subsidiaries determines the credit risk level that they are willing to accept in the course of their business. The diversification of their receivables portfolio, selectivity in accepting customers, as well as the monitoring of sales terms per business segment and limits on individual positions are among the procedures adopted to minimize possible defaults or problems on accounts receivable. c) Liquidity risk Prudent liquidity risk management implies the maintenance of sufficient cash and marketable securities, as well as the availability of committed credit lines and the capacity to liquidate market positions. Due to the dynamic nature of the business of the Company and its subsidiaries, the treasury area maintains flexibility of funding through committed credit lines.

Management monitors the Company's consolidated liquidity level, taking into consideration the expected cash flow, unutilized credit lines and cash and cash equivalents. 4.3 Fair value estimates The carrying values of trade receivables and payables, less impairment provision, are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flow at the current market interest rate that is available to the Group for similar financial instruments. The Group adopted CPC 40/ IFRS 7 for financial instruments that are measured at fair value in the balance sheet, which requires the disclosure of fair value measurements by level of the following fair value measurement hierarchy: Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). Information, other than quoted prices, included within Level 1 derived from the market for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). Inputs for the asset or liability that are not based on data adopted by the market (that is, unobservable inputs) (Level 3). As at December 31, 2011 and 2010, the Group has only bank deposit certificates, classified as cash equivalents, in Level 2. 5. CAPITAL MANAGEMENT The Company's objective when managing its capital is to ensure its continuity, offering a proper return to the stockholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital using the gearing ratio. This ratio is calculated as net debt divided by earnings before interest, taxes, depreciation and amortization (EBITDA). 6. CASH AND CASH EQUIVALENTS Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Cash 1 1 120 152 Banks 4 9 59,190 70,075 Bank deposit certificates: Held for trading (i) - - 309,850 287,130 Total 5 10 369,160 357,357 22

(i) Subject to yields from 100% to 102.45% of the Interbank Deposit Certificate (CDI) rate, designated at fair value through profit or loss, with variable maturities and redeemable at any time. 7. TRADE RECEIVABLES 7.1. Trade receivables Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Advertising - - 235,268 207,758 News stands and retail - - 276,369 212,821 Printing services - - 35,312 34,246 Barter - - 102,402 86,487 Classified ads - - 3,218 2,856 Internet - - 4,102 1,108 Copyright - - 22,943 22,720 Receivables from related parties - - 15,486 10,115 Other 870 499 13,591 19,858 870 499 708,691 597,969 Doubtful debt allowance - - (47,631) (46,159) 870 499 661,060 551,810 Current 870 499 643,623 534,632 Non-current - - 17,437 17,178 Trade receivables from magazine subscriptions are presented on a net basis in the account "magazine subscriptions" in current liabilities. 7.2. The aging of trade receivables is as follows: Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Not yet due: 870 499 509,972 374,981 Past due: - - 198,719 222,988 Up to 30 days - - 132,483 161,921 From 31 to 60 days - - 11,773 10,624 From 61 to 90 days - - 6,601 3,327 From 91 to 180 days - - 12,551 4,374 From 181 to 360 days - - 2,619 9,492 Over 360 days - - 32,692 33,250 870 499 708,691 597,969 Doubtful debt allowance - - (47,631) (46,159) 870 499 661,060 551,810 23

7.3. The changes in the provision for impairment of trade receivables were as follows: Balances as at December 31, 2009 64,472 Additions/reversals (10,594) Actual losses (7,719) Balances as at December 31, 2010 46,159 Additions/reversals 5,218 Actual losses (3,746) Balances as at December 31, 2011 47,631 8. INVENTORY 12/31/2011 12/31/2010 Raw materials 44,802 44,010 Work in progress 6,993 6,415 Finished goods 44,109 42,071 Consumables and spare parts 4,917 1,100 Imports in transit 11,599 14,714 Provision for obsolete and slow-moving inventory (1,381) (5,236) 111,039 103,074 9. TAXES TO BE OFFSET Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Income tax on financial investments 9,168 8,491 38,969 36,893 Prepaid income tax and social contributions 1,404 1,286 12,191 7,638 Withholding income tax 9,448 4,436 14,429 7,951 Social Contributions on Revenue (COFINS) - - 13,247 12,346 Social Integration Program (PIS) - - 3,578 3,354 Tax on Financial Transactions (IOF) 27-734 562 Federal taxes - - 10,987 9,687 Other - 24 7,507 2,775 20,047 14,237 101,642 81,206 Current 20,047 14,237 98,811 79,091 Non-current - - 2,831 2,115 20,047 14,237 101,642 81,206 24

10. ADVANCES TO SUPPLIERS AND OTHERS Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Advances to employees - - 6,010 4,748 Advances on dividends - - - 1,828 Advancest to suppliers - 1,559 6,606 15,694 Advances on copyright - - 5,698 3,489 Advance payaments 120 127 32,855 11,585 Other 96 98 5,693 3,769 216 1,784 56,862 41,113 Current 216 1,784 47,890 37,666 Non-current - - 8,972 3,447 11. INVESTMENTS IN SUBSIDIARIES (PARENT) 11.1) The direct investments of Abril S.A. in subsidiaries as at December 31, 2011 and 2010 were as follow: 25

12/31/2011 12/31/2010 Investments in Investments in Equity (Provision for Equity (Provision for (Net capital losses in) (Net capital losses in) Subsidiaries Ownership % deficiency) subsidiaries deficiency) subsidiaries A.R. & T. Ltda. (a) 100.00 3,440 3,440 3,283 3,283 Abril Comunicações S.A. (b) 100.00 158,103 158,103 137,123 137,123 Abril Marcas Ltda. (c) 100.00 1,237 1,237 1,236 1,236 Abril Musiclub Ltda. (d) 100.00 24 24 24 24 Beigetree Participações S.A. (f) 100.00 8,497 8,497 5,309 5,309 Casa Cor Promoções e Comercial S.A. (h) 100.00 2,447 2,447 6,913 3,456 - Goodwill - 20,720-8,706 - Purchase price allocation - 17,605 - - - Income tax and social contributions - 5,985 - - Editora Abril S.A. (i) 100.00 466,045 466,045 370,130 370,130 Elemidia Consultoria e Serviços de Marketing S.A. (j) 70.00 17,463 12,224 35,958 25,171 - Goodwill - 35,704-35,704 - Purchase price allocation - 11,151 - - - Income tax and social contributions - 3,792 - - Nimbuzz Brasil S.A. (k) 49.00 224 110 53 26 Redtree Participações S.A. (l) 100.00 18,513 18,513 49,512 49,512 Usina do Som Brasil Ltda. (m) 100.00 478 478 472 472 Webco Internet S.A. (n) 100.00 579 579 695 695 Total investments 766,654 640,847 Abril Radiodifusão S.A. (e) 100.00 (101,588) (101,588) (64,530) (64,530) - Goodwill - 20,313-20,313 - Purchase price allocation - 3,519-6,465 - Income tax and social contributions - 1,197 - - Canais Abril de Televisão Ltda. (g) 100.00 (1,126) (1,126) (63) (63) Total provision for losses in subsidiaries (77,685) (37,815) 26

(a) R. & T. Ltda. - purchasing and selling machinery and equipment for the communications segments. (b) Abril Comunicações S.A. - holding equity interests in companies, mainly those operating in the communications industry, providing services related to systems for transmission, reception and distribution of TV signals and programs, internet provider, as well as selling advertising and publicity. (c) Abril Marcas Ltda. - selling its own and third-party goods, as well as licensing its own and third-party brands, operating trade and sale franchise activities, representing domestic or foreign companies, holding equity interests in other companies, and operating credit card management and insurance and reinsurance activities. (d) Abril Musiclub Ltda. - selling, through direct marketing, discs, compact discs and other phonographic and video phonographic productions to the public in general, by means of a catalog subscribers club linked by the interest in purchasing such assets, and providing services to third parties, in general, in the form of the rental of a database of associates to the subscribers club and the sale of advertising space throughout Brazil. (e) Abril Radiodifusão S.A. - providing radio broadcasting and telecommunications services, producing, operating, distributing and advertising programming services, producing and operating the Company's website, and producing and promoting, as well as operating and distributing a musical television channel in the Portuguese language, and other related activities. On November 20, 2009, the Company acquired, through its subsidiary Beigetree S.A., a 30% interest in Abril Radiodifusão S.A., and the remaining 70% that was held by its parent company (Ativic S.A.) was fully transferred to the Company on November 29, 2010. This acquisition was effected for R$32,139 and generated goodwill of R$19,928 after the allocation of the purchase price. (f) Beigetree Participações S.A. - holding equity interests in other companies, in Brazil or abroad, as stockholder or quotaholder, or under any other title, and also in representing, in general, itself or third parties, internal or international businesses. (g) Canais Abril de Televisão Ltda. - recording, producing, editing, distributing, importing and exporting films, documentaries and television programs, and trading (by means of the purchase and sale, licensing, distribution or any other form) audiovisual contents, and commercial advertising and publicity. (h) Casa Cor Promoções e Comercial S.A. - services related to the organization and promotion of exhibitions, trade shows, congresses, cultural, sports and artistic spectacles, as well as exhibits and events of any nature, amusement, entertainment and auxiliary services, landscaping, decoration and similar services and any activities related to them. On December 16, 2011 the Company acquired 50% of Casa Cor s shares and currently holds 100% of the capital, as described in Note 11.5.d. (i) Editora Abril S.A. - publishing and printing activities, comprising the editing, printing and sale of magazines, yearbooks and guides, and technical publications, selling advertising and publicity, and database marketing. (j) Elemidia Consultoria e Serviços de Marketing S.A. - franchises in the marketing consulting and service segment, creating, producing and broadcasting advertising, in general, by any means, mainly electronic media, as well as holding equity interests in other 27

companies, in Brazil and abroad. On August 31, 2010, the Company acquired 70% of the share capital of Elemidia Consultoria e Serviços de Marketing S.A. (Note 11.6.c.). (k) Nimbuzz Brasil S.A. - selling software, licensing or assigning the use of software to order, advertising and publicity, including campaign planning, and value added services. (l) Redtree Participações S.A. - holding equity interests in other companies, in Brazil or abroad, as stockholder or quotaholder, or under any other title, and also in representing in general, for its own account or for the account of third parties, internal or international businesses. It is the parent company of the segment of "distribution" of magazines, periodicals and other products to distributors as well as of retail and subscription sales. (m) Usina do Som Brasil Ltda. - providing services related to the generation and provision of digital entertainment in the form of data, audio, video and text for distribution through electronic means and media. (n) Webco Internet S.A. - creating, operating and maintaining Internet sites and portals, providing services related to online Internet advertising, and holding equity interests in other companies. 11.2) The balance of other investments, in the consolidated financial statements, as at December 31, 2011 and 2010, refers basically to investments in cultural projects made through tax incentives. 11.3) The equity in the results and the provision for losses in the direct subsidiaries of Abril S.A. at December 31, 2011 and 2010 were as follow: 28

2011 2010 Profit (loss) Equity Profit (loss) Equity Subsidiaries Ownership % for the year in the results for the year in the results A.R. & T. Ltda. 100.00 317 317 207 207 Abril Comunicações S.A. 100.00 29,207 29,207 21,655 21,655 Abril Marcas Ltda 100.00 75 75 360 360 Abril Musiclub Ltda. 100.00 - - (66) (66) Abril Radiodifusão S.A. 100.00 (37,444) (37,444) (43,313) (43,313) - Purchase price allocation - (1,373) Beigetree S.A. 100.00 - - (8,987) (8,987) Beigetree Participações S.A. 100.00 1,053 1,053 289 289 Canais Abril de Televisão Ltda. 100.00 (1,062) (1,062) (3,057) (3,057) Casa Cor Promoções e Comercial S.A. 100.00 (i) 6,616 3,918 6,186 3,093 - Purchase price allocation - (302) - - Editora Abril S.A. 100.00 268,145 267,188 217,453 217,453 Elemidia Consultoria e Serviços de Marketing S.A. 70.00 1,053 847 1,243 870 - Purchase price allocation - (2641) - - Nimbuzz Brasil S.A. 49.00 (290) (142) (186) (91) Redtree Participações S.A. 100.00 (30,999) (30,999) 12,208 12,208 Usina do Som Brasil Ltda. 100.00 11 11 6 6 Webco Internet S.A. 100.00 (116) (116) (132) (132) Net effect on the result for the year 228,537 200,495 Comprising: - Equity in the results of subsidiaries 268,416 273,485 - Provision for losses in subsidiaries (39,879) (72,990) (i) 50% in 2010. In 2011 50% up to November 2011 and 100% in December 2011 29

11.4) Changes in investments: Balance Interest Purchase Price Income tax Capital Balance at Equity Additions on Capital price allocation and social gain at Subsidiaries 12/31/2010 in the results (write-off) Dividends capital increase allocation amortization (*) contribution (loss) 12/31/2011 A.R. & T. Ltda. 3,283 317 - - (160) - - - - - 3,440 Abril Comunicações S.A. 137,123 29,207 - (686) (7,541) - - - - - 158,103 Abril Marcas Ltda 1,236 75 - (6) (68) - - - - - 1,237 Abril Musiclub Ltda. 24 - - - - - - - - - 24 Beigetree Participações S.A. 5,314 1,053 (477) - - 2,608 - - - - 8,498 Casa Cor Promoções e Comercial S.A. 3,456 3,918 20,000 (5,480) (134) - - - - (19,313) 2,447 - Goodwill 8,706 - - - - - (17,907) - - 29,921 20,720 - Purchase price allocation - (302) - - - - 17,907-5,985-23,590 Editora Abril S.A. 370,128 267,188 - (158,384) (12,887) - - - - - 466,045 Elemidia Consultoria e Serviços de Marketing S.A. 11,376 847 - - - - - - - - 12,223 - Goodwill 35,704 - - - - - - - - - 35,704 - Purchase price allocation 13,791 - - - - - - (2,641) 3,792-14,942 Nimbuzz Brasil S.A. 27 (142) - - - 226 - - - - 111 Redtree Participações S.A. 49,512 (30,999) - - - - - - - - 18,513 Webco Internet S.A. 695 (116) - - - - - - - - 579 Usina do Som Brasil Ltda. 472 11 - - (5) - - - - - 478 Total investments 640,847 271,057 19,523 (164,556) (20,795) 2,834 - (2,641) 9,777 10,608 766,654 Abril Radiodifusão S.A. (64,530) (37,444) 385 (101,589) - Goodwill 20,313 - - - - - - - - - 20,313 - Purchase price allocation 6,465 (1,373) - - - - - (1,573) 1,197-4,716 Canais Abril de Televisão Ltda. (63) (1,062) - - - - - - - - (1,125) Total provision for losses in subsidiaries (37,815) (39,879) 385 - - - - (1,573) 1,197 - (77,685) (*) Presented in the parent company s results together with equity in the results of investees. 30

Balance Purchase Balance at Equity Addition price Capital at Subsidiaries 12/31/2009 in the results (disposal) Dividends allocation increase 12/31/2010 A.R. & T. Ltda. 1,141 207 - - - 1,935 3,283 Abril Comunicações S.A. 115,468 21,655 - - - - 137,123 Abril Educação S.A. 216,158 - (216,158) - - - - Abril Marcas Ltda 876 360 - - - - 1,236 Abril Musiclub Ltda. - (36) - - - 60 24 Beigetree Participações S.A. 14 289 - - - 5,011 5,314 Canais Abril de Televisão Ltda - (2,504) - - - 2,504 - Casa Cor Promoções e Comercial S.A. 3,448 3,093 - (3,085) - - 3,456 - Goodwill 8,706 - - - - - 8,706 Editora Abril S.A. 289,931 217,453 - (137,254) - - 370,130 Elemidia Consultoria e Serviços de Marketing S.A. - 870 24,296 - - - 25,166 - Goodwill - - 35,704 - - - 35,704 Nimbuzz Brasil S.A. 117 (91) - - - - 26 Redtree Participações S.A. - 32,231 - - - 17,281 49,512 Webco Internet S.A. - (48) - - - 743 695 Usina do Som Brasil Ltda. 466 6 - - - - 472 Total investments 636,325 273,485 (156,158) (140,339) - 27,534 640,847 Abril Musiclub Ltda. (210) (30) - - - 240 - Abril Radiodifusão S.A. - (43,313) 5,545 - (26,778) 16 (64,530) - Goodwill - - - - 20,313-20,313 - Purchase price allocation - - - - 6,465-6,465 Beigetree S.A. (222) (8,987) 9,209 - - - - Canais Abril de Televisão Ltda. (9,266) (553) - - - 9,756 (63) Redtree Participações S.A. (8,038) (20,023) - - - 28,061 - Webco Internet S.A. (2,223) (84) - - - 2,307 - Total provision for losses in subsidiaries (19,959) (72,990) 14,754 - - 40,380 (37,815) 31

11.5) During the year ended December 31, 2011, the Company and its subsidiaries presented the following changes in their ownership interests: a) On December 20, 2010, the subsidiary Elemidia Consultoria e Serviços de Marketing S.A. acquired 280,000 shares of AOH S.A., holding 70% of its equity interest, for R$5,000. This transaction generated goodwill of R$4,152. b) On April 1, 2011, the Company sold for R$1 the shares it held in ATB Agência de Talentos Brasileiros Ltda. to Abril Educação S.A. This transaction did not have any effect on the Company s results. c) On October 31, 2011, the subsidiary Editora Novo Continente S.A. carried out a partial spin-off of its equity based on a report prepared by independent experts and transferred a portion of this equity to the Company. This transaction aimed at an improvement in the operational and administrative efficiency of the transactions. The capital of Editora Novo Continente S.A. after this partial spin-off was increased from R$2,250 to R$300. This transaction did not have any effect on the Company s results. d) On November 18, 2011, the subsidiary DGB Logística S.A. Distribuição Geográfica do Brasil acquired 1,712.456 quotas of Tex Courrier Ltda. ( Tex ), holding a 90% interest, for R$92,700. This transaction generated a goodwill of R$100,291. Based on an appraisal report prepared by the Company s advisors, part of the goodwill arising on the transaction was allocated to intangible assets with finite useful life. The calculation of goodwill, its allocation and the preliminary goodwill arising on this transaction are as follow: Carrying Fair value Fair Positiion as at November 18, 2011: amounts adjustment values Recognized amounts of identifiable assets acquired and liabilities assumed: Trade receivables 19,079-19,079 Taxes recoverable 46-46 Advances and prepaid expenses 2,043-2,043 Judicial and compulsory deposits 209-209 Property, plant and equipment 11,323-11,323 Intangible asset - operating system - 14,522 14,522 Intangible asset - non-compete clause - 828 828 Intangible asset - portfolio of customers - 18,623 18,623 Intangible assets - other 95-95 Financial institutions (12,527) - (12,527) Trade payables (17,015) - (17,015) Taxes payable (3,726) - (3,726) Loans and financing (3,813) - (3,813) Provision for contingencies (23,299) - (23,299) Taxes payable (3,992) - (3,992) Deferred income tax and social contribution - (11,550) (11,550) Total identified net assets (31,577) 22,423 (9,154) Non-controlling interest - 10% 914 Goodwill (Goodwill subject to impairment) 100,940 Total purchase price (consideration) - Amount paid (there was no cash balance) 60,000 - Amount payable 32,700 92,700 32

All identified amounts are provisional and may be revised within one year from the transaction date, as established by CPC 15 Business combinations. e) On December 16, 2011 the Company acquired 50% of the share capital of Casa Cor Promoções e Comercial S.A., and it currently holds 100% of its share capital. This transaction generated a capital gain of R$10,608, classified as other operating income, and a goodwill of R$26,808. The calculation of goodwill and its preliminary allocation are as follow: Position as at December 16, 2011: amounts adjustment values Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 9,157-9,157 Trade receivables 4,488-4,488 Taxes recoverable 2,87-2,87 Advances and prepaid expenses 1,807-1,807 Judicial and compulsory deposits 119-119 Deferred income tax 152-152 Property, plant and equipment 124-124 Intangible asset - trademarks - 9,234 9,234 Intangible asset - non-compete clause - 568 568 Intangible asset - portfolio of customers - 8,104 8,104 Intangible assets - other 4-4 Trade payables (4,887) - (4,887) Taxes payable (2,801) - (2,801) Other payables (6,481) - (6,481) Provision for contingencies (5) - (5) Other payables (3,173) - (3,173) Deferred income tax and social contribution - (7,044) (7,044) Total identified net assets 1,374 10,862 12,236 Goodwill (Goodwill subject to impairment) (*) 27,764 Total purchase price (consideration): - Amount paid 20,000 - Amount of interest prior to carrying amounts 9,393 - Remeasurement of prior interest at fair value 10,607 40,000 (*) Considering the goodwill existing in 2010, in the amount of R$8,707, the addition to goodwill in 2011 amounted to R$19,058. All identified amounts are provisional and may be revised within one year from the deal date, as established by CPC 15 - Business combinations. 11.6) During the year ended December 31, 2010, the Company and its subsidiaries presented the following changes in their ownership interests: a) The Company's parent company, Ativic S.A., carried out in March 2010, with a base date of January 1, 2010, a corporate reorganization mainly involving the companies Abril S.A., Abril Radiodifusão S.A. and Abril Educação S.A. In this transaction, the Company's parent company, Ativic S.A., transferred all of its share capital (70%) in Abril Radiodifusão S.A. to Abril S.A., which already indirectly held the remaining 30% in this company (Note 11.4.a). 33

Also in this reorganization, Abril S.A., by means of a partial spin-off, transferred its interest in Abril Educação S.A. to its parent company Ativic S.A. The main groups of assets, liabilities and results of Abril Educação S.A.(consolidated) that were the basis for this transaction were as follow: ASSETS Current 289,622 Non-current 116,864 Total assets 406,486 LIABILITIES AND EQUITY Current 125,301 Non-current 65,027 Equity 216,158 Total liabilities and equity 406,486 RESULT Gross profit 208,985 Operating expenses, net (169,957) Profit for the year (Note 21) 39,028 This corporate reorganization was considered as a transaction involving entities under common control and, pursuant to the accounting policy adopted by the Company, was recorded at its book value. Therefore, the business segment "Education" was fully spun off on January 1, 2010, and was therefore characterized as a discontinued operation. b) Additionally, on November 26, 2010, the direct subsidiary Beigetree S.A. merged its direct subsidiary TGR Participações Ltda. On November 29, 2010, the direct subsidiary Beigetree S.A., holder of 70% of the share capital of Abril Radiodifusão S.A., transferred all of the shares held in that company to Abril S.A., and was subsequently merged into Abril Radiodifusão S.A. c) On August 31, 2010, the Company acquired 70% of the equity interest in Elemidia Consultoria e Serviços de Marketing S.A., for R$60,000. This transaction generated goodwill of R$40,394. 34

Carrying Fair value Fair Position as at August 31, 2010: amounts adjustment values Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 2,682-2,682 Trade receivables 3,324-3,324 Other receivables 2,519-2,519 Receivables from related parties 368-368 Investments 3,431 3,431 Property, plant and equipment 3,678 494 4,172 Intangible assets - operating system - 9,716 9,716 Intangible assets - non-competition clauses - 700 700 Intangible assets - portfolio of customers - 8,792 8,792 Intangible assets - other 3,224-3,224 Financial institutions (93) - (93) Trade payables (149) - (149) Taxes payable (203) - (203) Other payables (1,813) - (1,813) Loans and financing (126) - (126) Provision for contingencies (1,570) - (1,570) Taxes payable (266) - (266) Deferred income tax and social contribution - (6,699) (6,699) Total identifiable net assets 15,006 13,003 28,009 Non-controlling interest - 30% (8,403) Goodwill (Goodwill subject to impairment) 40,394 Total purchase price (consideration) 60,000 11.7) As at December 31, 2009, the Company held an indirect interest in Abril Radiodifusão S.A., recorded as an associate on that date and accounted for using the equity method. The investment amount as at December 31, 2009 was R$6,065, and a negative equity in the results of R$464 was recognized. As mentioned in Note 11.6, Abril Radiodifusão S.A. became a subsidiary of the Company in 2010. Jointly-controlled subsidiaries 11.8) As at December 31, 2011 and 2010, the main groups of assets, liabilities and results of the jointly-controlled subsidiaries were as follow: 35

Casa Cor (*) Nimbuzz 2010 2011 2010 ASSETS Current 16,013 255 80 Non-current 3,647 8 11 Total assets 19,660 263 91 LIABILITIES AND EQUITY Current 8,130 44 24 Non-current 3,070-15 Equity 8,460 219 52 Total liabilities and equity 19,660 263 91 RESULT Gross profit 16,306 - - Operating expenses, net (10,120) (294) (186) Profit (loss) for the year 6,186 (294) (186) (*) As mentioned in Note 11.5.d, on December 16, 2011 the Company acquired 50% of the shares of Casa Cor, and currently holds 100% of its capital. 36

12. INTANGIBLE ASSETS a) Changes in intangible assets 2011 Annual Net Additions from Net amortization balance as at Net business Revision of balance at rates 12/31/2010 Additions write-offs combinations allocation Amortization Transfers (i) 12/31/2011 Computer systems 141,746 10,858 204 13,070 (2,054) (25,219) 24,055 162,66 Trademarks and patents 17,066 - (832) 9,234 - - 25,47 Portfolio of customers 31,041 - (1,268) 24,864 (2,558) (1,824) - 50,26 Deferred investment cost 2,607 - (1,082) - - - 1,53 Software under development 41,84 57,875 - - - (23,723) 75,992 Goodwill on investments 129,153 - - 124,150 385 - - 253,69 Other 700 732 (1,366) 1,412 5 (12) (135) 1,336 364,153 69,465 (4,344) 172,730 (4,222) (27,055) 197 570,924 (i) Considers changes between property, plant and equipment and intangible assets. (ii) Refers to property, plant and equipment from the acquisition of Tex, AOH and 50% of Casa Cor, as mentioned in Note 11. 37

Annual Net Net amortization balance as at Net Corporate balance at rates 12/31/2009 Additions write-offs reorganization Amortization Transfers (i) 12/31/2010 Computer systems 13% 140,045 16,776 (208) (5,897) (24,144) 15,174 141,746 Trademarks and patents - 16,930 39-97 - - 17,066 Portfolio of customers - 25,109 8,792 - - (2,860) - 31,041 Software under development - 17,737 42,237 - (3,006) - (15,128) 41,840 Goodwill on investments 107,072 35,704 - (13,623) - - 129,153 Other - - 3,307 - - - - 3,307 2010 (i) 306,893 106,855 (208) (22,429) (27,004) 46 364,153 Considers transfers between property, plant and equipment and intangible assets. b) Review of estimated useful life: In 2010 the Company analyzed the useful lives of the computer systems, in order to adjust the economic useful lives for calculating the amortization of these items. This analysis was carried out by internal experts since the Company understood that they had the required expertise for measuring these assets. The effects of this analysis were recorded in the financial statements. During the year ended December 31, 2011, the technical teams of the Company and its subsidiaries performed analyses to determine the need to adjust the estimated useful lives of intangible assets and concluded that it was not necessary to adjust the rates currently used. c) Impairment tests for goodwill Goodwill is allocated to cash-generating units (CGU), identified according to operating segment. Below is a summary of the allocation of goodwill by operating segment: 2011 2010 Abril S.A. Abril Radiodifusão S.A. (Media) 20,313 19,928 DGB Logística S.A. Distribuidora Geográfica do Brasil (Distribution) 64,814 64,814 TEX Courrier Ltda. (Distribution) 100,514 - Casa Cor Promoções e Comercial S.A. (Other) 21,779 8,707 Elemidia Consultoria e Serviços de Marketing S.A. (Media) 34,792 35,704 AOH S.A., controlada da Elemidia (Media) 5,064-247,276 129,153 The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-income tax and social contribution cash flow projections based on financial budgets approved by management, covering a five-year period. The amounts related to cash flow after the period of five years are extrapolated based on estimated growth rates presented below. 38

The key assumptions used for value-in-use calculations as at December 31, 2011 were as follow: Segment Media Distribution Other Abril Radidifusão DGB Casa Cor Net revenue growth 10.50% 22.40% 74.74% Perpetual growth rate 4.50% 3.68% 3.68% Discount rate 18.30% 12.58% 16.50% The key assumptions used for value-in-use calculations at December 31, 2010 were as follow: Segment Media Distribution Other Abril Radidifusão DGB Casa Cor Net revenue growth 14.60% 13.04% 63.89% Perpetual growth rate 4.50% 4.27% 4.42% Discount rate 12.02% 12.80% 12.02% Management utilized the business projection based on past performance and on its expectations of market development. The growth rate used is consistent with the projections included in the Company's reports. The fixed discount rate used corresponds to the CDI rate at the end of the reporting period plus a debt spread of 1.75% p.a. (1.38% in 2010), which reflects specific risks related to the individual segments. 39

13. PROPERTY, PLANT AND EQUIPMENT a) Changes in property, plant and equipment 2011 Annual Net Additions from Net depreciation balance as at Net business balance at rates 12/31/2010 Additions write-offs Depreciation combinations Transfers (i) 12/31/2011 Land - 40,408 - (78) - - - 40,330 Buildings 3% 60,820 - (2,458) (1,744) - - 56,618 Facilities 9% 19,428 2,643 (600) (3,619) 197 8,312 26,361 Machinery and industrial equipment 9% 131,889 9,640 (724) (15,788) 3,082 40,015 168,114 Television equipment 20% 18,447 710 - (4,194) - 39 15,002 Furnitures and fixtures 10% 7,939 1,070 (190) (1,447) 919 194 8,485 Vehicles 20% 12,432 8,685 (348) (6,675) 5,781 268 20,143 Computer equipment 27% 16,192 14,565 (29) (8,830) 1,067 4,628 27,593 Other property, plant and equipment 16% to 27% 3,010 44 (1,277) - 466 (577) 1,666 Construction in progress - 30,268 93,460 (117) - 6 (53,076) 70,541 340,833 130,817 (5,821) (42,297) 11,518 (197) 434,853 (i) Considers transfers between property, plant and equipment and intangible assets. (ii) Refers to property, plant and equipment from the acquisition of Tex, AOH and 50% of Casa Cor, as mentioned in Note 11. 40

2010 Annual Net Net depreciation balance at Net Corporate balance at rates 12/31/2009 Additions disposals Depreciation reorganization (ii) Transfers (i) 12/31/2010 Land - 40,432 - (24) - - - 40,408 Buildings 3% 63,841 1,535 (1,466) (2,957) (133) - 60,820 Facilities 9% 13,599 1,156 (135) (2,619) 3,386 4,041 19,428 Machinery and industrial equipment 9% 122,037 5,528 (1,048) (14,168) 821 18,719 131,889 Television equipment 20% 7,184 1,823 (35) (4,223) 13,386 312 18,447 Furniture and fixtures 10% 5,477 2,112 (52) (919) 1,075 246 7,939 Vehicles 20% 9,274 8,643 (422) (4,068) (640) (355) 12,432 Computer equipment 27% 11,718 4,584 (226) (6,424) 4,298 2,242 16,192 Other property, plant and equipment 16% to 27% 2,992 527 (258) (1,130) 404 475 3,010 Construction in progress - 9,421 46,728 - - (155) (25,726) 30,268 285,975 72,636 (3,666) (36,508) 22,442 (46) 340,833 41

(i) Takes into account transfers between property, plant and equipment and intangible assets. (ii) Refers to property, plant and equipment from the acquisition of the interest in Elemidia from Abril Radiodifusão S.A. and proceeds from the sale of the interest in Abril Educação S.A., as mentioned in Note 11. b) Review of estimated useful lives In 2010 the Company and its subsidiaries concluded the first of the periodic analyses in order to adjust the estimated economic useful lives for the calculation of depreciation. For the purpose of this analysis of a significant portion of the assets, a specialized company was contracted to review the useful lives and issue a Valuation Report. In preparing the report, the contracted company considered the operational planning of the Company and its subsidiaries for the next years, along with internal information such as the maintenance and use of the assets, external information for comparison such as available technologies, recommendations, manufacturers' manuals and asset historical rates, and the effects disclosed in the report were recorded in the financial statements. In 2011, the technical teams of the Company and its subsidiaries performed analyses to determine whether it was necessary to adjust the estimated useful lives of property, plant and equipment items and concluded that it was not necessary to adjust the rates currently in use. c) Revaluation In 2010, the Company opted to maintain the revaluation balances until their full realization. As at December 31, 2011 and 2010, the total balances of the revaluations, less depreciation, were as follow: Description 2011 2010 Machinery and equipment 256,833 256,942 Buildings 69,739 69,739 Land 36,880 36,880 363,452 363,561 Accumulated depreciation (270,364) (266,430) 93,088 97,131 During 2011, depreciation expenses relating to the revaluation portion, amounting to R$3,745 (R$4,311 in 2010) were recorded in the consolidated financial statements. As mentioned in Note 18.3, some subsidiaries of the Company offered property, plant and equipment items as guarantees for labor lawsuits. Additionally, the subsidiary Editora Abril S.A. included in its statement of income lease expenses of R$640 as at December 31, 2011(R$22 in 2010). 42

14. TRADE AND OTHER PAYABLES Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Domestic 65 1 243,246 211,861 Foreign - - 40,341 16,581 Barters - - 28,224 29,242 Related parties - - 2,851 1,126 Salaries and social charges - - 152,450 145,987 Advances received - - 193,486 179,209 Rentals payable - - 3,037 3,293 Long-term partnership program 8,169-8,169 - Payables for acquisition of equity interest 20,089 27,966 57,668 27,965 Copyright - - 29,493 25,012 Other payables - - 33,514 33,721 28,323 27,967 792,479 673,997 Current 28,323 27,967 729,264 625,769 Non-current - - 63,215 48,228 15. LOANS, FINANCING AND DEBENTURES Loans, financing and debentures have the following characteristics: 12/31/2011 12/31/2010 Non- Non- Current current Current current Debentures placed 62,811 360,000 93,396 280,707 Loans and financing: In local currency: FINEM 6,632 22,150 6,330 20,505 Leases 69 27 387 96 Bank loans 38,001 63,975 72,025-44,702 86,152 78,742 20,601 In foreign currency: Machinery and paper financing 16,218 25,435 2,319 4,804 Senior notes - 44,433-38,264 Senior notes in portfolio - (44,433) - (38,264) Eurobonds - 314,922-266,680 Eurobonds in portfolio - (314,922) - (266,680) 16,218 25,435 2,319 4,804 Total loans and financing 60,920 111,587 81,061 25,405 Total 123,731 471,587 174,457 306,112 43

15.1. The maturities of long-term loans and financing and debentures at December 31, 2011 were as follow: Maturity R$ % on total 2013 53,691 11.39% 2014 185,368 39.31% 2015 123,287 26.14% 2016 109,241 23.16% 15.2. Debentures 471,587 100.00% On June 24, 2010, the direct subsidiary Editora Abril S.A. and the debenture holders signed the 9th Amendment to the Deed for the Issue of Debentures, postponing the payments of the installments scheduled for June 30, 2010 and December 28, 2010 to June 30, 2012, with the other conditions remaining unchanged. These debentures have a nominal value of R$97.12 each, totaling R$291,358. Debentures in the portfolio total R$20,298. On June 30, 2011, the Company made advance redemption of all outstanding debentures, through the payment of the balance of the nominal value of all outstanding debentures, plus interest. On September 24, 2010, the Second Issue of Debentures of Editora Abril S.A. was carried out, in a single series totaling R$100 million and 100 units, with the value of each unit being R$1 million. The funds obtained from the issue will be used to fund the investments and operations of Editora Abril S.A., as well as for the repayment of an agreement totaling R$50 million. The debentures have a three-year period and will mature on October 7, 2013. The repayment of the principal will be made in four semiannual installments, beginning in April 2012, subject to interest of CDI + 1.375% per year, paid semiannually from April 2011. The guarantees granted for this agreement were the surety of Abril S.A. and the pledge of the subscription receivables of Editora Abril S.A. On June 30, 2011, the Third Issue of Debentures of Editora Abril S.A. was carried out, in a single series totaling R$320 million and 320 units, with the value of each unit being R$1 million. The proceeds from the issue were fully used to settle the debt arising from the Company s first issue of debentures. The debentures have a five-year period and will mature on June 30, 2016. The repayment of the principal will be made in three annual installments, beginning on June 30, 2014, subject to interest at CDI + 2% per year. The debentures contain clauses requiring compliance with certain financial ratios. As at December 31, 2011 and 2010, the Company was in compliance with all current requirements. 15.3. Loans and financing in local currency Bank loans (working capital) As at December 31, 2011, the Company and its subsidiaries had bank borrowing totaling R$101,976 (R$72,025 in 2010), with maturities through 2014. These funds are intended for working capital and are subject to charges ranging from CDI plus 0.90% to CDI plus 2.19% p.a. Part of these borrowing, amounting to R$76,321 is guaranteed by credit rights, with a minimum amount of 10% of the loan balance, arising from the sales of magazine subscriptions, through debits from current accounts, and sales of advertising space in publications. In addition, this loan agreement has clauses requiring compliance with certain 44

financial covenants, such as gearing ratios and interest coverage ratios, and non-financial covenants such as the guarantee of minimum sales of advertising and sending reports to the fiduciary agent. As at December 31, 2011, the Company was in compliance with all of the current requirements. This borrowing was contracted as provided for in BACEN Resolution 2770/00 and is subject to foreign exchange variations. The Company has a swap contract to hedge against possible fluctuations in exchange rates, with the same term as the hedged transaction. FINEM On May 8, 2008, the Company obtained financing through the Financing Program for Business Enterprises (FINEM) credit line of the National Bank for Economic and Social Development (BNDES) with a total amount of R$ 26,137, for the development of its own customer management software. Of this amount, R$21,369 was released in 2008, R$4,617 in 2009 and R$1,461 in 2010. The total financing term is seven years, with a two-year grace period for the payment of the principal. During this period only interest is paid, on a quarterly basis. After this period, the interest and principal will be paid monthly. The cost of this transaction was based on the Long-term Interest Rate (TJLP) plus interest of 4.30% p.a. and is guaranteed by the surety of Abril S.A. and a statutory lien of 130% on machinery and equipment. 15.4. Loans and financing in foreign currency Financing of machinery and paper The subsidiary Editora Abril S.A. has direct financing with equipment and paper suppliers as follows: Type Maturity Charges Paper financing May 2012 109.5% p.a. over CDI Machinery financing May 2013 8.0% p.a. over exchange variation (Swiss franc) Machinery financing June 2016 Libor 6 + 3.5% p.a. over exchange variation (U.S. dollar) a) Eurobonds in portfolio On October 25, 1995, the direct subsidiary Abril Comunicações S.A. raised in the foreign market, through the issue of Eurobonds, the amount of US$100,000,000, equivalent to R$187,580 as at December 31, 2011 (R$166,620 in 2010), with an initial maturity of October 25, 2003. Charges corresponded to interest of 12% p.a. above the foreign exchange variation, falling due semi-annually, on April 25 and October 25 of each year. On October 24, 2003, the Company partially redeemed Eurobonds amounting to US$2,075,000. The remaining debt as at December 31, 2004 was US$97,925,000. In accordance with a supplementary fiduciary instrument dated February 2, 2007, the maturity of the debt principal was changed to October 25, 2011 and interest decreased to 8% p.a., falling due semi-annually, on April 25 and October 25 of each year, payable upon the settlement of the principal. In accordance with a supplementary fiduciary instrument dated January 17, 2011, the maturity of the debt's principal was changed to October 25, 2016. 45

On October 23, 1998, the direct subsidiary Editora Abril S.A. effected investments in the international market amounting to US$97,925,000, equivalent to R$183,688 (the amount of the principal) as at December 31, 2011 (R$163,163 in 2010), backed by the Eurobonds issued by the Company, with interest of 8% p.a., payable semi-annually on April 25 and October 25 of each year, which will be received on the settlement of the mentioned Eurobonds. Accordingly, all Eurobonds issued are held by the Group. b) Senior notes and senior notes in the portfolio On November 26, 1996, the direct subsidiary Tevecap S.A. (subsequently merged into Abril Comunicações S.A.) raised in the foreign market the amount of US$250,000,000, equivalent to R$468,950 at December 31, 2011 (R$416,550 in 2010). The principal of these securities had an initial maturity date on November 26, 2004. The charges correspond to interest of 12.625% p.a. above the foreign exchange variation and fall due every six months, on May 25 and November 25 of each year, from May 25, 1997. From the funding date to December 31, 2011, the Company and its subsidiaries acquired these notes, which are held in the portfolio to maturity. As at December 31, 2011, the conditions and charges on these notes were annual LIBOR interest plus 3%, limited to 12.65% p.a., above the exchange variation, and the maturity date of the principal and charges is November 26, 2016. 16. TAXES AND CONTRIBUTIONS PAYABLE Parent 12/31/2011 12/31/2010 12/31/2011 12/31/2010 Taxes and contributions payable - REFIS and PAES (i) 797 950 146,497 181,253 Installment payments (i) - - 160 523 Social Contributions on Revenue (COFINS) 1,636-24,921 21,620 Value-added Tax on Sales and Services (ICMS) - - 1,334 307 Social Integration Program (PIS) 355-5,444 4,634 Social Security Contributions (INSS) - - 1,029 895 Other 602 580 7,407 2,617 3,390 1,530 186,792 211,849 Current 2,839 785 113,627 80,282 Non-current 551 745 73,165 131,567 (i) In November 2009, the Company and some of its subsidiaries enrolled in the Tax Recovery Program (REFIS), established by Law 11941/09 and Provisional Measure 470/09, to finance their tax liabilities through a special payment in installments system for tax and social security obligations. 46

Parent Balance payable as at 12/31/2009 1,077 216,106 Payments from Jan to Dec/10 (205) (50,522) Interest from Jan to Dec/10 78 14,438 Enrollment in REFIS ICMS-RJ (a) - 9,054 Adjustment to REFIS IV from Jan to Dec/10-2,359 Corporate reorganization - (9,659) Balance payable as at 12/31/2010 950 181,776 Payments from Jan to Dec/11 (250) (64,151) Interest from Jan to Dec/11 97 22,864 Write-off due to utilization of credit - (156) Additions - 1,309 Corporate reorganization - 5,015 Balance payable as at 12/31/2011 797 146,657 Current 246 73,492 Non-current 551 73,165 As a consequence of the enrollment in the REFIS IV, Tax Recovery Program, the Company must pay the installments on the due dates, as well as to waive its legal claims and any plea of rights on which the related lawsuits are based, subject to the immediate rescission of the installment program and, consequently, the loss of the benefits of the Program. On February 4, 2011, the Federal Official Gazette published Joint Ordinance 2, which establishes terms for taxpayers to rectify the information previously sent and to send the information required for the consolidation of information. The Company and its subsidiaries elected to consolidate the REFIS amounts, as permitted by the Brazilian Federal Revenue (RFB). During 2012, RFB has a commitment to make available a specific tool (software) using which the companies that enroll in the program may challenge the inclusions of irregular amounts in their installment payments. 17. DEFERRED INCOME TAX AND SOCIAL CONTRIBUTIONS 17.1. The deferred income tax and social contributions recognized in non-current assets can be presented as follow: 12/31/2011 12/31/2010 Income tax and social contributions on temporary differences 52,395 55,284 Income tax and social contributions on tax losses 44,827 49,765 Total 97,222 105,049 47

As a significant portion of the deferred income tax and social contributions balance is calculated on temporary differences, the realization period is contingent upon the realization of these provisions. The income tax and social contributions on temporary differences are as follow: 12/31/2011 12/31/2010 Provisions: Losses on subsidiaries 8,400 7,323 Tax contingencies 8,351 6,975 Labor contingencies 6,559 6,172 Returns of copies - retail 6,224 6,787 Civil contingencies 4,626 3,733 Volume discount 4,193 4,585 Provision for unsold items - news stands 3,904 794 Doubtful debt allowance 3,072 3,599 Bonuses 1,903 - Cancelation of subscriptions 477 406 Obsolescence 469 1,771 Losses on property, plant and equipment 445 445 Losses on loans 28 3,291 Foreign exchange variations - 4,082 Other 3,744 5,321 Total 52,395 55,284 17.2. The deferred income tax and social contributions on income tax and social contribution losses, respectively, and temporary differences are recorded in non-current assets by some subsidiaries of the Company, due to the possibility of future realization, as mentioned in Note 17.1. Certain subsidiaries had income tax losses of R$619,355 and social contribution losses of R$868,005 for which management did not record income tax and social contribution assets because of the uncertainty of future realization. When deferred income tax and social contribution tax assets on tax losses are not recognized, the deferred tax on temporary differences, totaling R$435,488 at December 31, 2011, is not recognized either. 17.3 For certain subsidiaries, deferred income tax and social contributions on tax losses were recognized in non-current assets due to the possibility of their future recovery, according to the projections of results prepared and approved by management which take into account the periods of their realization, as follow: Year % 2012 44.71% 2013 8.68% 2014 18.25% 2015 13.54% 2016 14.83% 100.00% 48

The studies that support the expected recoverability of these assets do not consider the realization of temporary differences since there is no reasonable estimate of the realization periods. 17.4. The deferred income tax and social contributions recorded in non-current liabilities comprise the following: Parent 12/31/2011 12/31/2011 12/31/2010 Income tax and social contributions on foreign exchange variations - 163,248 188,292 Income tax and social contributions on depreciation - 68,457 53,893 Income tax and social contributions on revaluations - 13,492 15,077 Income tax and social contributions on temporary differences - 2,678 3,096 Income tax and social contributions on depreciation 10,974 21,369 - Total 10,974 269,244 260,358 17.5 The changes in deferred tax assets and liabilities during the year were as follow: Deferred income tax assets 12/31/2010 Effect on 12/31/2011 result Temporary differences 55,284 (2,889) 52,395 Tax losses 49,765 (4,938) 44,827 Deferred income tax liability 105,049 (7,827) 97,222 Foreign exchange variations 188,292 (25,043) 163,248 Depreciation 53,893 14,564 68,457 Revaluations 15,077 (1,585) 13,492 Temporary 3,096 (418) 2,678 Purchase price allocation (i) - - 21,369 260,358 (12,482) 269,244 Total net effect on result 4,655 49

(i) Refers to the deferred income tax liability calculated on the allocation of the purchase price in business combinations occurred during the year ended December 31, 2011, as described in Note 11.5. 18. PROVISION FOR CONTINGENCIES AND JUDICIAL DEPOSITS Some subsidiaries of the Company are party to lawsuits and administrative proceedings, which include labor, civil and tax lawsuits arising from the normal course of business.. The provision for contingencies was made, taking into account the evaluation of probable losses by the legal advisors, the nature of the lawsuits and past experience. Where necessary, judicial deposits have been made. The Company's management, based on the opinion of its legal advisors, believes that the provision for contingencies, presented below, is sufficient to cover losses on the lawsuits: a) Composition of non-current liabilities: Lawsuits 12/31/2011 12/31/2010 Tax 63,567 50,982 Labor 25,137 19,062 Civil 14,049 9,849 102,753 79,893 b) The nature of the lawsuits may be summarized as follows: Labor lawsuits There are various labor claims in progress, mainly referring to proportional vacation pay, salary differences, night shift premiums, overtime and social charges, among others. There are no individual claims of a significant amount requiring specific disclosure. Civil lawsuits The Company and certain subsidiaries are defendants in civil claims at several judicial levels and, of the amount of provision made, R$ 6,726 in 2011 (R$ 6,097 in 2010) referred to the sum of numerous civil processes related to requests for indemnities for moral and/or material damages arising from disclosures made by the magazines of Editora Abril S.A. and its subsidiaries. There are no individual claims of a significant amount requiring specific disclosure. Tax lawsuits Some subsidiaries of the Company are party to tax lawsuits, for which management, based on the opinion of its legal advisors, has recorded the necessary provisions. There are no individual claims of a significant amount requiring specific disclosure. 18.1. As at December 31, 2011 and 2010, the balances of judicial deposits recorded in non-current liabilities, presented as a reduction of the provision for contingencies, were as follow: 50

12/31/2011 12/31/2010 Labor 13,423 9,326 Civil 3,240 4,190 Tax 7,824 6,909 24,487 20,425 18.2. Judicial deposits recorded in non-current assets are as follow: 12/31/2011 12/31/2010 Labor 17,096 17,909 Civil 6,036 3,934 Tax 54,137 49,829 77,269 71,672 18.3. The property and equipment of some subsidiaries of the Company was pledged as guarantees for lawsuits. These guarantees totaled R$1,267 as at December 31, 2011 (R$4,410 at December 31, 2010). 18.4. Some subsidiaries of the Company are also defendants in the following tax and civil lawsuits which involve a risk of loss classified by management as possible, for which no provision for contingencies has been recognized, and no adverse material effects on the financial statements are expected: 12/31/2011 12/31/2010 Civil contingencies (a) 145,578 184,881 Tax contingencies (b) 310,070 467,268 455,648 652,149 a) Civil contingencies Some subsidiaries of the Company are defendants in civil claims at various judicial levels. Of the total amount of the contingency above, R$ 145,261 in 2011 (R$ 102,860 in 2010) refers to the sum of several requests for indemnities for moral and/or material damages arising from disclosures made by the magazines of Editora Abril S.A. Among these civil lawsuits, there are two significant cases totaling R$ 51,698, the first of which is for an amount of R$37,241 related to a claim for indemnity filed by a magazine distribution service provider and the second for an estimated amount of R$14,457 related to a claim for damages due to articles publicized in the Company s magazines. The other claims are for amounts which are not significant and, therefore, do not require specific disclosure. 51

b) Tax contingencies The tax lawsuits involving some subsidiaries of the Company include assessment notices related to PIS (Social Integration Program) and COFINS (social contributions on revenue) amounting to R$117,443, withholding income tax amounting to R$93,618, and income tax and social contributions amounting to R$27,858. The likelihood of unfavorable outcomes in these lawsuits is classified by the Company's tax advisors as possible. Except for the lawsuits mentioned above, the tax contingencies not subject to provisions refer to amounts which are not significant and, therefore, do not require specific disclosure. 19. PRIVATE PENSION AND RETIREMENT PLANS Some subsidiaries of the Company are the sponsors of the private pension fund Abrilprev Sociedade de Previdência Privada ("Abrilprev"), the main purpose of which is to supplement the official social security benefits. Joining the plan is optional for all employees of the sponsors. Abrilprev operates as a defined contribution plan, and the main actuarial method used to determine the level of contributions is the capitalization method. The cost of the plan, which is borne by the employees and the sponsoring companies, is determined annually by an actuarial calculation carried out by a qualified professional and is expressed as a fixed percentage to be applied to the sponsors' payrolls. The granting of a retirement supplement is related to the length of service rendered to the sponsoring companies, the length of contribution to the government Social Security program, the minimum age established and the termination of the employment relationship. Once the contributions have been made, the Company has no obligations related to additional payments. For the years ended December 31, 2011 and 2010, the Company and its subsidiaries made contributions to Abrilprev totaling R$10,676 () and R$9,688 (), respectively, fully recorded in the results of the sponsoring companies. The contribution due from the sponsoring company was 2.0693% as at December 31, 2011 (3.1225% in 2010) on the payroll of the employees who participate in the plan. 20. EQUITY 20.1. Share capital The Company's capital at December 31, 2011 and 2010 was R$32,778 and comprised 22,343,992 shares, of which 11,171,996 were common shares and 11,171,996 were preferred shares, all registered and without par value. On February 17, 2010, there was a capital increase of the capital of the Company with the shares of Abril Radiodifusão S.A., amounting to R$5,631, with the issue of 914,122 new shares. On February 28, 2010, there was a partial spin-off related to the amount of investments held in Abril Educação S.A., which reduced the Company's capital by R$129,817, with the cancellation of 4,051,294 shares. Each common share is entitled to one vote in the resolutions of the General Stockholders' Meeting. The preferred shares do not have voting rights in the resolutions, except as provided for by the applicable legislation. All of the issued shares were fully paid-up. 52

20.2. Revaluation reserves The revaluation reserves of the subsidiaries, constituted up to December 31, 2005, are realized based on the depreciation, write-offs or sales of the related revalued assets, and the amounts realized are transferred to retained earnings, net of the tax effects. 20.3. Revenue reserves Legal reserve The legal reserve is credited annually with 5% of the profit for the year and cannot exceed 20% of the capital. The purpose of the legal reserve is to ensure the integrity of capital and it can be used only to offset losses and increase capital. 20.4. Dividends proposed The bylaws of the Company establish that the stockholders are entitled to a minimum dividend of 25% of the profit for the year, after the deduction of the allocation to the legal reserve, and the remaining profit is at the disposal of the general meeting for the approval of its distribution. The preferred shares have priority in the payment of a dividend, and the "Class A" shares will acquire voting rights if the Company does not pay the minimum dividends to which they are entitled for more than three consecutive years, and will retain the voting rights up to the date when that payment is made. As determined by Law 9249/95, the Company's management proposed, subject to approval at the General Stockholders' Meeting, that 25% of the adjusted profit for the years ended December 31, 2011 and 2010 be allocated for the distribution of dividends. Dividends were calculated as follow: 2011 2010 Profit for the year 183,161 162,456 Reversal of legal reserve - 253 Realization of revaluation reserve (130) (176) 183,031 162,533 Retained earnings balance - 56,766 Profit retention balance - 27,345 183,031 246,644 Distribution of dividends in accordance with the Stockholders' General Meeting of August 25, 2010 - (100,000) Distribution of dividends in accordance with the Stockholders' General Meeting of April 29, 2011 - (146,644) Minimum dividend proposed 45,757 Additional dividend proposed 137,274 183,031-53

20.5. Additional dividend proposed It is the policy of the Company and its subsidiaries to propose the distribution of additional dividends up to the amount of the profit for the year exceeding the amount required in the Company s bylaws and the minimum limit pursuant to the prevailing legislation. The amounts proposed as additional dividends remain in equity, within the revenue reserves, subject to resolution and approval at the stockholders meeting. 20.6. Earnings per share - continuing operations a) Basic Earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of shares issued by the Company, as follow: 2011 2010 Profit attributable to the owners of the Company 183,161 162,456 Total Company shares (in thousands) 22,605 22,605 b) Diluted Earnings per share - R$ 8.1027 7.1867 Diluted earnings per share are calculated by adjusting the weighted average number of outstanding shares to assume the conversion of all potential dilutive shares. The Company does not have potential dilutive shares (for example: convertible debt and share options), and therefore the diluted earnings per share is the same as the basic earnings per share. 20.7. Non-controlling interests Balance as at 12/31/2009 2,351 Profit for the year 1,646 Dividends distributed to non-controlling stockholders (1,157) Business combination (i) 13,064 Balance as at 12/31/2010 15,904 Profit for the year 2,721 Capital increase 4,239 Dividends distributed to non-controlling stockholders (1,260) Interest on capital (148) Business combination (i) (15,098) Balance as at 12/31/2011 6,358 (i) Movements in non-controlling interests consider the effects of the operations described in Note 11.5 and the total amount is comprised as follows: 54

12/31/2011 12/31/2010 Acquisitions Tex Courrier Ltda. (3,158) - AOH S.A. (1,109) - Elemídia Consultoria e Serviços de Marketing S.A. - 10,415 Shopping Mídia Consultoria e Serviços de Marketing Ltda. - 1,389 Derivo Consultoria e Serviços de Comunicação S.A. - 468 Via Mídia Consultoria e Serviços de Marketing Ltda. - 479 Mastermídia Consultoria e Serviços de Marketing Ltda. 158 Media Corp Serviços de Publicidade e - Mídia Corporativa Ltda. - 6 Target Mídia Consultoria e Serviços de Marketing Ltda. - 149 - Sales TV Manacá Ltda. (228) - Changes in ownership interest S.C.P. Femininas (352) - Elemidia Consultoria e Serviços de Marketing S.A. (5,715) - Shopping Mídia Consultoria e Serviços de Marketing Ltda. (1,095) - TV Pelicano S.A. (3,441) - (15,098) 13,064 21 SEGMENT REPORTING The Company s management defined the operating segments based on reports used for strategic decision-making. The Company manages its operations considering three segments: Media, which comprises all content platforms, Printing, which comprises the operation of printing of magazines and other printing products, and Distribution, which comprises the activities of sale of copies in the retail market and subscriptions. Other considers the results of allocation of the costs of shared services and telecommunications services. 55

STATEMENTS OF INCOME BY SEGMENT Media Printing Distribution Other Total Elimination Revenue 2,264,878 307,508 812,662 402,563 3,787,611 (635,904) 3,151,707 - From external customers 2,264,878 (33,206) 711,546 208,489 3,151,707-3,151,707 - Between segments - 340,714 101,116 194,074 635,904 (635,904) - Operating costs and expenses (1,807,796) (228,280) (795,027) (507,031) (3,338,134) (635,904) (2,702,230) Depreciation and amortization (21,794) (19,392) (7,336) (20,880) (69,402) - (69,402) Operating profit 435,288 59,836 10,299 (125,348) 380,075-380,075 FINANCE INCOME AND COSTS (67,813) (8,825) - 367 (76,271) - (76,271) Profit before income tax and social contribution 367,475 51,011 10,299 (124,981) 303,804-303,804 INCOME TAX AND SOCIAL CONTRIBUTIONS: (102,127) (13,476) (2,319) - (117,922) - (117,922) Profit for the year 265,348 37,535 7,980 (124,981) 185,882-185,882 PROFIT ATTRIBUTABLE TO Owners of the Comany 262,553 37,535 8,054 (124,981) 183,161-183,161 Non-controlling interests 2,795 - (74) - 2,721-2,721 Profit for the year 265,348 37,535 7,980 (124,981) 185,882-185,882 2011 56

STATEMENTS OF INCOME BY SEGMENT Media Printing Distribution Other Total Elimination Revenue 2,033,807 292,308 906,142 412,649 3,644,906 (617,163) 3,027,743 - From external customers 2,033,807 99,215 813,287 81,434 3,027,743-3,027,743 - Between segments - 193,093 92,855 331,215 617,163 (617,163) - Operating costs and expenses (1,629,889) (231,665) (891,985) (501,112) (3,254,651) 617,163 (2,637,488) Depreciation and amortization (21,876) (16,758) (8,417) (16,469) (63,520) - (63,520) Operating profit 382,042 43,885 5,740 (104,932) 326,735-326,735 FINANCE INCOME AND COSTS (30,908) (3,339) (551) (985) (35,783) - (35,783) Profit before income tax and social contributions 351,134 40,546 5,189 (105,917) 290,952-290,952 INCOME TAX AND SOCIAL CONTRIBUTIONS: (109,569) (11,838) (1,953) (3,490) (126,850) - (126,850) Profit for the year 241,565 28,708 3,236 (109,407) 164,102-164,102 PROFIT ATTRIBUTABLE TO Owners of the Company 241,645 28,708 3,236 (107,841) 165,748-165,748 Non-controlling interests (80) - - (1,566) (1,646) - (1,646) Profit for the year 241,565 28,708 3,236 (109,407) 164,102-164,102 2010 57

22. REVENUES Net revenue is comprised as follows: 2011 2010 Gross sales and service revenue 3,425,290 3,286,286 Taxes on sales (273,583) (258,543) Net revenue 3,151,707 3,027,743 23. EXPENSES BY NATURE The details of expenses by nature are as follow: Administrative Parent 12/31/2011 Total Personnel expenses 2,785 2,785 Consulting and outsourced services 1,020 1,020 Other expenses 220 220 4,025 4,025 Administrative Parent 12/31/2010 Total Personnel expenses 10,878 10,878 Consulting and outsourced services 2,039 2,039 Other expenses 58 58 12,975 12,975 58

2011 Cost Selling Administrative Total Depreciation 26,079 735 15,483 42,297 Amortization 2,096 12,886 12,123 27,105 Compensation Personnel expenses 304,710 184,127 176,673 665,510 Management compensation (Note 28) - - 26,643 26,643 Selling: Direct sales 553,658 60,205-613,863 Copyright 852 43,902-44,754 Commission - 78,136-78,136 Advertising broadcasting - 153,838-153,838 Events and seminars - 34,649-34,649 Promotion - 66,596 1,057 67,653 Doubtful debt - - allowance - 5,408-5,408 Consulting Outsourced services 76,417 66,982 152,593 295,992 Logistics Freight 64,954 18,175 6,290 89,419 Distribution - 75,296-75,296 Materials and services Raw materials and materials for use and consumption 234,067 2,132 28,902 265,101 Printing 17,618 5,175-22,793 Other Maintenance and repairs 17,167 2,441 18,128 37,736 Rental 10,819 2,858 35,306 48,983 Other expenses (income) 138,368 44,619 (1,702) 181,285 1,446,805 858,160 471,496 2,776,461 59

2010 Cost Selling Administrative Total Depreciation 25,389 638 10,454 36,481 Amortization 2,544 11,945 12,541 27,030 Compensation Personnel expenses 305,611 172,458 157,416 635,485 Management compensation (Note 28) - - 32,108 32,108 Selling Direct sales 730,495 69,666-800,161 Copyright 3,453 33,859-37,312 Commission 0 97,476-97,476 Advertising broadcasting 0 56,110-56,110 Events and seminars 0 46,470-46,470 Promotions 1,434 66,148 1,227 68,809 Doubtful debt - allowance - (12,735) - (12,735) Consulting - Outsourced services 68,639 66,192 149,881 284,712 Logistics - Freight 55,005 24,096 3,449 82,550 Distribution - 67,817-67,817 Materials and services - Raw materials and materials - for use and consumption 230,046 2,526 24,576 257,148 Printing 19,442 6,006-25,448 Other - Maintenance and repairs 16,804 2,565 18,429 37,798 Rental 10,364 3,389 34,467 48,220 Other expenses (income) 70,625 31,037 (24,992) 76,670 1,539,851 745,663 419,556 2,705,070 24. OTHER INCOME (EXPENSES), NET Parent 2011 2010 2011 2010 Capital losses in subsidiaries and associate (1,188) (800) (1,135) (797) Net gain on sale of property, plant and equipment 0 0 911 1,053 Gain on purchase of investment 13,118 4,447 13,065 13,447 Amortization of goodwill 0 0 (2,770) 0 Tax and contractual fines 0 0 (257) (3,533) Provision for losses on trade receivables 0 0 (2,837) 0 Provision for losses on intercompany loans 0 0 (321) (578) Non-recurring income (expenses) 0 0 10,933 (111) Donations 0 0 (5,084) (3,384) Other 0 267 (7,676) (2,035) 11,930 3,914 4,829 4,062 60

25. FINANCE INCOME AND COSTS Parent 2011 2010 2011 2010 Finance income: Earnings from marketable securities - - 39,714 48,747 Interest on loans 2,784 3,554 3,634 4,282 Interest on taxes and judicial deposits 1,160 883 7,429 13,588 Interest and discounts obtained from customers - - 17,876 10,061 Interest on other assets 51-954 2,461 3,995 4,437 69,607 79,139 Finance costs: Interest on loans, financing and debentures - - (61,761) (45,852) Intercompany loans (47,821) (25,240) 4,166 (514) Taxes (9,078) (6,049) (31,060) (27,700) Discounts granted (370) - (32,796) (28,536) Interest on other liabilities - (2,128) (14,162) (13,345) Other finance costs (9) - (1,142) - (57,278) (33,417) (136,755) (115,947) Foreign exchange gains (losses), net: Income (expenses) on assets indexed to foreign currenccy - - 862 (945) Income (expenses) on liabilities indexed to foreign currency - (2) (9,985) 1,970 - (2) (9,123) 1,025 Finance income (costs), net (53,283) (28,982) (76,271) (35,783) 26. INCOME TAX AND SOCIAL CONTRIBUTION EXPENSES The amounts charged and credited to the income tax and social contributions account and to the deferred income tax and social contributions account in the statements of income for the years ended December 31, 2011 and 2010 comprise: 61

2011 2010 Current (124,340) (97,411) Income tax and social contributions constituted during the year (124,340) (97,411) Deferred 4,655 (29,439) Reversal of deferred income tax and social contributions on revaluations 1,585 2,761 Realization of deferred income tax and social contribution assets on tax losses (4,938) 794 Reversal of provision for deferred income tax and social contributions on temporary differences (2,471) (24,680) Constitution of deferred income tax and social contribution liabilities on depreciation (14,564) (1,885) Constitution of deferrred income tax and social contributions on foreign exchange variations 25,043 (6,429) Other 1,763 - (117,922) (126,850) The reconciliation of the income tax and social contribution expenses for the years ended December 31, 2011 and 2010 are as follow: 62

Parent 2011 2010 2011 2010 Profit before income tax and social contributions 183,161 162,456 303,804 290,952 Standard tax rates 34% 34% 34% 34% Income tax and social contribution charges (62,275) (55,235) (103,293) (98,924) Share of profit (loss) of subsidiaries 77,703 68,168 - - Amortization of goodwill - (958) - (958) Profits computed abroad - - 27,137 (12,158) Temporary differences without the constitution of income tax 3,054 (2,687) (16,106) 12,833 Capital losses in subsidiaries (404) (272) (4,189) (272) Permanent differences: (3) 1,926 (2,349) Disposal of property, plant and equipment - - - 1,757 Offset of unrecorded tax losses from prior years - - 1,074 (771) Income tax and social contributions on tax losses not utilized (10,762) (9,013) (30,015) (23,164) Tax benefits - - 4,673 2,812 Deferred income tax and social contribution payable - - - (10,511) Recording of Withholding Tax on Net Income (ILL) - - - 2,472 Interest on capital (7,311) - - - Other (5) - 871 2,383 Total income tax and social contributions - - (117,922) (126,850) 63

27. CASH GENERATED FROM OPERATIONS Parent 2011 2010 2011 2010 Profit for the year 183,161 162,456 185,882 164,102 Adjustments for: Depreciation and amortization - - 69,352 63,512 Share of profit (loss) of subsidiaries (226,964) (200,495) - - Net disposals of permanent assets - 6 10,165 2,690 Net disposals of investments 477 - - - Provision for contingencies - - (15,354) (4,566) Realization of deferred income tax - - (4,577) 40,866 Doubtful debt allowance - - 986 18,234 Long-term parternship program (17,139) 8,061 (17,139) 8,061 Interest and foreign exchange variations 45,135 21,764 133,918 52,873 Capital gains in subsidiaries (10,608) - (10,108) - Amortization of goodwill - - - - Changes in working capital Trade receivables (371) (46) (88,615) (179,519) Inventory - - (7,965) 21,866 Taxes to be offset (5,810) (574) (18,556) (10,182) Advances to suppliers and others 1,568 (1,466) (12,796) (3,670) Judicial deposits (1) - (5,328) (15,455) Trade and other payables 356 (365) 97,433 36,559 Taxes and contributions payable 2,013 290 122,072 94,532 Provision for contingencies - payments - - 14,912 (15,406) Taxes and contributions payable - - - 7,581 Magazine subscriptions - - 56,603 42,102 CASH (USED IN) GENERATED FROM OPERATIONS (28,183) (10,369) 510,885 324,180 28. RELATED-PARTY TRANSACTIONS 28.1 The transactions and balances of the Company and its subsidiaries with related parties for the years ended December 31, 2011 and 2010 are summarized below: 64

Parent 12/31/2011 Loans Loans Finance Interest and other and other income Accounts Dividends on capital Accounts credits credits (costs), Related parties receivable receivable receivable payable granted obtained net Abril Comunicações S.A. - - 6,993 - - 400,073 (40,389) Abril Marcas Ltda. - - 63 - - - - Abril Musiclub Ltda. - - 1-445 - - Ativic S.A. - - - - - - 2,783 Abril Radiodifusão S.A. - - - - - - - ART Ltda. 40-136 - 70 1 - Abrilpar Participações S.A. 271 - - - - - - Beigetree Participações S.A. 75 263 - - - 15 - Canais Abril de Televisão Ltda. - - - - 682 - - Casa Cor Promoções e Comercial Ltda. - 3,241 125 - - - - DGB - Logística S.A. Distribuição Geográfica do Brasil 442 - - - - - - Editora Abril S.A. 1 64,345 10,954 - - 120,302 (7,432) Redtree Participações S.A. 1 - - - 2,366 - - Violetree Participações Ltda. 10 - - - - - - Other 17-6 - - - - Current Non-current 857 67,849 18,278-3,563 520,391 (45,038) 65

Parent 12/31/2010 Current Non-current Loans Loans Finance and other and other income Accounts Dividends Accounts credits credits (costs), Related parties receivable receivable payable granted obtained net Abril Comunicações S.A. - - 1-366,667 - Abril Musiclub Ltda. - - - 285 - - Ativic S.A. - - - 93,554-3,554 Abril Radiodifusão S.A. 44-15 - - - Canais Abril de Televisão Ltda. - - - 550 - - Casa Cor Promoções e Comercial Ltda. - 773 - - - - DGB - Logística S.A. Distribuição Geográfica do Brasil 442 - - - - - Editora Abril S.A. (i) - 52,463 - - 154,651 - Redtree Participações S.A. 1 - - 795 - - Violetree Participações Ltda. 9 - - - - - Other 3-3 51 16-499 53,236 19 95,235 521,334 3,554 66

Non-current Current Loans Loans 12/31/2011 and other and other Sales Finance Accounts Accounts Dividends credits credits (expenses), income Related parties receivable payable payable granted obtained net (costs) Abrilpar Participações Ltda 272 - - - - - - Comercial Cabo TV São Paulo S.A. - - - 17,472 - - - Ativic S.A. 2,074-18,594 - - 2,074 2,783 TV Gaivota S.A. 46 - - - - - 692 Consultoria Brasenil - - - 7,652 - - 1,184 Construtora Ene Esse Ltda - - 978 - - - Doria Administração de Bens Ltda 3,240 Editora Ática S.A. 2,673 104 - - - 27,284 - Editora Caras S.A. 4,304 4,419 - - 12,528 6,109 (1,800) Editora Scipione S.A. 519 176 - - - 12,694 - Fundação Victor Civita 1,652 679 - - - 9,858 - GTR Participações Ltda. - - - 42,411 - - - Instituto Abril Ltda 1,562 - - - - - - MIH Brasil Participações Ltda 13,727 Televisão Show Time Ltda 1,169 - - - - - - Acionistas (Pessoas Físicas) - 3,000 (i) 13,457 29,700 (i) Other 1,102 289-1,605 3,288 3,066 522 15,373 8,667 49,996 69,140 45,516 61,085 3,381 (i) The amount of R$ 32,700 refers to consideration for the acquisition of the subsidiary TEX Courrier Ltda., as mentioned in Note 11.5.c. 67

12/31/2010 Non-current Current Loans Loans Dividends and other and other Sales Finance Accounts and accounts credits credits (expenses), income Related parties receivable payable granted obtained net (costs) Ativic S.A. - - 93,554 - - 3,554 Comercial Cabo TV São Paulo S.A. - - 24,416-341 - Editora Ática S.A. 3,237 358 - - 10,189 - Editora Caras S.A. 4,184 3,093-10,727 25,746 74 Editora Scipione S.A. 1,131 414 - - 2,808 - Fundação Victor Civita 2,019 386 - - 4,207 - GTR Participações Ltda. 5-68,913 - - - Instituto Abril Ltda 1,562 - - - - - Televisão Show Time Ltda 1,158 - - - - - Other 694 480 7,603 5,380 70 370 13,990 4,731 194,486 16,107 43,361 3,998 Dividends: Construtora Ene Esse Ltda - 286 - - - - Other - 22 - - - - 13,990 5,039 194,486 16,107 43,361 3,998 a) Key management compensation Key management includes the chief executive officer, directors, vice-presidents, members of the Executive Committee and the head of internal audit. The compensation paid or payable for employee services is as follows: 2011 2010 Salaries and social charges 11,050 10,157 Directors' fees 5,191 4,036 Long-term incentives 2,785 10,878 Profit sharing 7,617 7,037 26,643 32,108 The fees paid to directors were recorded as personnel expenses. No other amounts or additional benefits were paid to these officers. b) Long-term incentives The long-term partnership program provides for the sale of shares in the direct subsidiary Beigetree Participações S.A., which holds a direct interest in the subsidiary Editora Abril S.A., to these officers. The shares earmarked for the program for the following years are as follow: 68

Average purchase price Number Unit value of share Purchase date (lot of shares) in (R$) January 2012 1,584,016 0.28 January 2013 1,496,683 0.28 January 2014 1,344,759 0.28 January 2015 1,138,509 0.28 5,563,967 During 2011 the officers exercised their rights in relation to 1,601,583 preferred shares (1,032,133 in 2010), which are provided for in the account "long-term partnership program" in non-current liabilities, in the amount of R$9,735 at December 31, 2011 (R$18,705 in 2010), with a corresponding entry in the account "long-term partnership program" in the statement of income. These shares are calculated each year according to the repurchase amount, which approximates the market value. The movements in these shares can be presented as follow: Number of shares Movement in the Options Options long-term incentive issued exercised Total payable account Balance at 12/31/2009 1,904,057 4,904,415 6,808,472 10,644 Options issued 1,568,683-1,568,683 - Issue cancelled (282,454) - (282,454) - Options exercised (1,032,133) 1,032,133-244 Options reacquired by the Company - (1,247,923) (1,247,923) (2,717) Appreciation - - - 10,534 Balance at 12/31/2010 2,158,153 4,688,625 6,846,778 18,705 Options issued 5,007,414-5,007,414 - Options exercised (1,601,583) 1,601,583-3,871 Options reacquired by the Company - (3,413,048) (3,413,048) (12,841) Balance at 12/31/2011 5,563,984 2,877,160 8,441,144 9,735 Current 8,169 Non-current 1,566 28.2. Other relevant information on related parties: (a) As a result of the corporate restructuring process which commenced in the year ended December 31, 2001, the direct subsidiary Editora Abril S.A. transferred to its parent company Abril S.A. the receivables from Abril Comunicações S.A. and the investments in certain subsidiaries. As a result of this transfer, subsequent restructurings and transfers and payments which occurred during the period, including the settlement of dividends in the amount of R$84,793, the Company has recorded an account payable with Editora Abril S.A., in non-current liabilities, of R$79,609 at December 31, 2011, bearing no interest. 69

(b) Sales transactions and expenses with related parties were carried out at normal market prices, terms and conditions and refer to sales of printing services, sales of products and services, costs and allocation of general and administrative expenses. (c) Except for the amounts arising from the transactions mentioned in Note 28.2.a and for the loan obtained from the subsidiary Abril Vídeo Distribuição Ltda., which bears no interest, all other loans granted or obtained through loan agreements with related parties bear interest at average market rates. 29. COMMITMENTS The subsidiaries Editora Abril S.A. and Abril Radiodifusão S.A. have long-term contracts related to the leasing of their offices. Future commitments for the payment of these offices as from January 1, 2012 are as follow: 2012 39,877 2013 36,851 2014 3,981 80,709 Expenses incurred on these contracts during the years ended December 31, 2011 and 2010 were R$39,043 and R$25,441, respectively. The contracts do not provide for fines or any other obligations due from the Company in the event of rescission before the contract period. The subsidiaries do not receive any income from subrentals in connection with these contracts. Under the agreement entered into on December 30, 2004 between MTV Networks Brasil Ltda., a division of Viacom International Inc., and the direct subsidiary Abril Radiodifusão S.A., royalties were due on the right to use the name "MTV", payable in monthly installments maturing up to the 20 th day of each month, based on the net revenue in the prior month and calculated based on percentages from 3% to 5% of net revenue, as established in the agreement. As a result of the corporate restructuring, this agreement was terminated in December 2009. On January 22, 2010, new agreements were entered into between MTV Networks Brasil Ltda. and Abril Radiodifusão S.A., where the commitments for the payments of royalties on the right to use the name "MTV" were renegotiated, and linked to the supply of content, the licensing of musical video rights, the authorization of music copyright, and the news agency agreement. The calculations of amounts payable have quarterly and annual periods and consider the minimum amounts guaranteed up to 2018. 30. INSURANCE The policy of the Company and its subsidiaries is to maintain insurance coverage to an amount considered sufficient by management to cover the risks relating to, among others, fire, flood, machinery breakdown, own and third-party goods and merchandise, work accidents and environmental damage. 70

31. ABRIL HEALTH CARE PLAN Some subsidiaries of the Company participate in the Abril Health Plan (Plano de Saúde Abril) which was created to provide medical and hospital assistance to the employees and their dependents. The companies and the employees are, therefore, responsible for the monthly contributions to Associação Abril de Benefícios, the entity which manages the plan. During the years ended December 31, 2011 and 2010, the subsidiaries made contributions to the plan, amounting to R$27,113 and R$25,704 (), respectively. 32. SUBSEQUENT EVENTS On January 30, 2012, the Fourth Issue of Debentures of the subsidiary Editora Abril S.A. was carried out, in a single series totaling R$450 million and 450 units, with the value of each unit being R$1 million. The proceeds from the issue were fully used to settle the debt arising from the Company s third issue of debentures. The balance will be used for the payment of the Company s general expenses. The debentures have a five-year period, a two-year grace period and will mature on January 30, 2017. The repayment of the principal will be made in three annual installments, beginning on January 30, 2015, subject to CDI + 1.80% per year. On January 30, 2012, at an Extraordinary General Meeting, the subsidiary Editora Abril S.A. approved the payment of dividends of R$142,050 based on its balance sheet as at December 31, 2011 and approved the payment of interest on the capital for the year ended December 31, 2011, amounting to R$13,843. On January 30, 2012, at an Extraordinary General Meeting, the Company approved the payment of dividends of R$160,000 based on its balance sheet as at December 31, 2011. On March 15, 2012, the Fifth Issue of Debentures of the subsidiary Editora Abril S.A. was carried out, in a single series totaling R$200 million and 200 units, with the value of each unit being R$1 million. The proceeds from the issue were fully used to settle the debt arising from the Company s second issue of debentures. The balance will be used for the payment of the Company s general expenses. The debentures have a five-year period, a twenty-three months grace period and will mature on March 15, 2017. The repayment of the principal will be made in three annual installments, beginning on March 15, 2014, subject to CDI + 1.375% per year. 71

BOARD OF DIRECTORS ROBERTO CIVITA Chairman GIANCARLO FRANCESCO CIVITA Vice-Chairman Board Members: FLORIS HEINRICH JOHAN BRAND ESMARÉ WIEDEMAN VICTOR CIVITA EXECUTIVE BOARD FÁBIO COLLETTI BARBOSA Chief Executive Officer Directors: ARNALDO FIGUEIREDO TIBYRIÇÁ DOUGLAS DURAN MARCELO VAZ BONINI MARCIO OGLIARA ROBERTO CIVITA CORPORATE CONTROLLER MAURO CATUCCI Accountant: CRC - 1SP 165.052/O-8 72

(A free translation of the original in Portuguese) Independent Auditor s Report To the Board of Directors and Stockholders Abril S.A. We have audited the accompanying financial statements of Abril S.A. (the Company or Parent Company ), which comprise the balance sheet as at December 31, 2011 and the statements of income, changes in equity and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory notes. We have also audited the accompanying consolidated financial statements of Abril S.A. and its subsidiaries ( ), which comprise the consolidated balance sheet as at December 31, 2011 and the consolidated statements of income, changes in equity and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the parent company financial statements in accordance with the accounting practices adopted in Brazil, and for the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the accounting practices adopted in Brazil, and for such internal controls as management determines are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence for the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making these risk assessments, the auditor considers internal controls relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 73 PricewaterhouseCoopers Auditores Independentes, Av. Francisco Matarazzo 1400, Torre Torino, São Paulo, SP, Brasil 05001-903, Caixa Postal 61005 T: (11) 3674-2000, F: (11) 3674-2000, www.pwc.com/br