Gruppo Editoriale L Espresso Società per azioni

Gruppo Editoriale L Espresso Società per azioni Interim Report at June 30, 2007

Gruppo Editoriale L Espresso Società per azioni Interim Report at June 30, 2007 The Interim Report has been translated from that issued in Italy, from the Italian into the English language solely for the convenience of international readers.

Gruppo Editoriale L Espresso 5 Contents Report of the Board of Directors on the Group operations at June 30, 2007 Operating performance for the 1 st Half of 2007 11 Results by area 13 Subsequent events and outlook 15 Consolidated results at June 30, 2007 16 Results of the Parent Company Gruppo Editoriale L Espresso SpA at June 30, 2007 24 Consolidated Interim Financial Statements at June 30, 2007 Balance Sheet 30 Income Statement 31 Statement of Cash Flows 32 Statement of Changes in the Shareholders Equity 33 Notes to the Consolidated Interim Financial Statements at June 30, 2007 37 Attachments 84 Interim Financial Statements of Gruppo Editoriale L Espresso SpA at June 30, 2007 Balance Sheet 90 Income Statement 91 Statement of Cash Flows 92 Statement of Changes in the Shareholders Equity 93 Notes to the Interim Financial Statements of the Parent Company at June 30, 2007 97 Report of the Independent Auditors 135 Summary reclassified interim financial data of subsidiaries at June 30, 2007 139

Gruppo Editoriale L Espresso 7 Company Gruppo Editoriale L Espresso Società per Azioni Share Capital Euro 65,167,018.20 Tax ID and Rome Company Register no. 00488680588 VAT no. 00906801006 Registered office Rome, Via Cristoforo Colombo, 149 Secondary office Rome, Via Cristoforo Colombo, 90 Board of Directors: Honorary Chairman Chairman Managing Director Directors Board of Statutory Auditors: Chairman Statutory Auditors Independent Auditors Carlo Caracciolo Carlo De Benedetti Marco Benedetto Agar Brugiavini Carlo Caracciolo Rodolfo De Benedetti Francesco Dini Sergio Erede Mario Greco Luca Paravicini Crespi Alberto Piaser Tiziano Onesti Enrico Laghi Luigi Macchiorlatti Vignat Deloitte & Touche SpA

Report of the Board of Directors on the Group operations at June 30, 2007

Report of the Board of Directors 11 Report of the Board of Directors on the Group operations at June 30, 2007 Operating performance and consolidated results for the 1 st Half of 2007 Consolidated results 1 st Half 1 st Half % change ( million) 2006 2007 2007/2006 Revenues 601.5 561.6-6.6% Gross operating profit 125.8 122.7-2.5% Operating profit 105.7 102.1-3.4% Pre-tax profit 95.5 92.8-2.7% Net profit 54.8 50.0 Dec. 31 June 30 ( million) 2006 2007 Net financial position (262.7) (313.2) Group Shareholders Equity 562.8 520.2 Employees 3,384 3,427 The Consolidated Income Statement of the first half 2007, as a consequence of the different accounting applied to the employee termination indemnity (TFR) as of December 31, 2006, necessarily adopted to be in line with the legislative modifications regarding the TFR s destination, has recorded a positive impact of 11.6 million as a reduction in personnel costs. The impact on net profit is equal to 7.8 million, subsequent to a provision of 3.8 million for deferred tax liabilities. Further detail regarding the calculation of employee termination indemnities under international accounting principles is provided in the notes to the consolidated interim financial statements. The table that follows shows consolidated results net of the above-mentioned changes in the tax treatment of employee termination indemnities. Consolidated results 1 st Half 1 st Half % change ( million) 2006 2007 2007/2006 Revenues 601.5 561.6-6.6% Gross operating profit (before TFR impact) 125.8 111.1-11.7% Operating profit (before TFR impact) 105.7 90.4-14.4% Pre-tax profit (before TFR impact) 95.5 81.2-14.9% Net profit (before TFR impact) 54.8 42.2 To provide a more consistent comment on the operating performance for the first half of 2007, below we include an analysis of figures net of the above-mentioned non recurrent phenomenon. * * * * * The increase in advertising revenues, better than the market for all the Group s media, and the increase of the cover price of all daily newspapers from 0.90 to 1, allowed the Espresso Group to partially counterbalance the foreseen slowdown of the add-on products revenues and margins due to the progressive saturation of the market and to the fact that in the previous year the most successful initiatives had been concentrated in the first half-year. It is therefore possible to estimate that during the second half-year this negative difference should attenuate, even more so considering the current good trend of the outstanding initiatives. Net of optional products, the most significant economic results are showing a positive trend: consolidated revenues grew from 460.1mn in the first half of 2006 to 487mn (+5.8%) in the first six months of 2007, the gross operating profit increased from 78.6mn (17.1% margin on sales) to 88.7mn (18.2% margin on sales) and the operating profit improved both as absolute value to 68.1mn (+16.4%) and as margin on sales, from 12.7% to 14%. The first half-year advertising revenues totalled 335.8mn, with an increase of 7.1% with respect to the corresponding 2006 period. The trend was positive also in comparison with the Group s competitors: according to the FCP (advertising concessionaires association) most recent data as of May 2007, advertising in La Repubblica and in the Group s local newspapers grew by 5.3% as compared with 3.8% of the market. The gap with respect to the competitors is even more positive for the other media of the Group: in fact, in the first half of the year advertising revenues in the three radio stations has increased by 10.5% as

12 Report of the Board of Directors compared with 2.5% of the market, and advertising sales in the network of the internet sites grew by over 65% (classified advertising has more than doubled), ahead of the segment as a whole which is growing strongly (up 42.5%). A new project for the online sale of advertising, limited to some local newspapers, will be launched in the autumn. The project is aimed at gaining new customers which would otherwise be difficult to reach through traditional sales channels. Circulation revenues (+4.3% net of add-on products impact) have benefited from the increase in the cover price, which just marginally affected the newspapers sales; in contrast, they have been slightly damaged by the journalists strikes in support of the dispute for the national contract renewal. La Repubblica reported an average circulation of 618 thousand copies per issue (634 thousand copies per issue in the first half of 2006), while local newspaper had an average overall circulation of 466 thousand copies per issue, substantially in line with the corrisponding period of the previous year. La Repubblica maintained its leadership among Italian newspapers in terms of readership: the last Audipress poll attributes to the newspaper over 3 million readers, while readers of local newspapers as a whole are 2.9 million. L espresso registered an average circulation of 420 thousand copies per issue (as compared with 432 thousand in the first six months of 2006), penalized, on the one hand, by lower sales of add-on products and aided, on the other hand, by the manifest appreciation for the quality of its reportages and by an ever-increasing number of subscribers. The Group s radio stations have recorded good audience results: as a whole they averaged 8.7 million daily listeners and 23 million weekly listeners (Audiradio 2007 1st half-year). Radio Deejay is still the most popular Italian private radio station with 5.6 million daily listeners and 13.3 million weekly listeners; Radio Capital has confirmed 1.8 million daily listeners and 6.4 million weekly listeners; m2o attained a daily audience of 1.3 million listeners and 3.3 million weekly listeners. Finally, All Music has reached over 2.8 million viewers (IPSOS) among the target people aged 15-34; growth rates being higher than those attained by other TV broadcasting stations dedicated to the young. The strong upward trend of the Group s network of Internet sites in June 2007 reached 12 million unique users and 491 million page views. Repubblica.it has confirmed its place as the first Italian news broadcasting website with 9.3 million unique users, growing by 44% over the previous year. Also the audio-video area data are quite remarkable ones, with RepubblicaTv that has recorded over 1.5 million unique users, the new service of classified ads (725 thousand unique users) and the job search site (Miojob has nearly attained near 500 thousand unique users). During this half-year new websites have been launched for the Group s local dailies, especially focused on the areas of local communities, interactivity and contributions from citizens, who can communicate and send their own texts to the newspaper. A series of social networking services for the young people (m2o, Radio Deejay) has also been launched, along with www.seidimoda.it, the website dedicated to the women s universe. Finally, a number of tests are being conducted to finalize the distribution on mobile terminals of the contents produced daily by the various titles. ***** At June 30, 2007, consolidated net financial debt amounted to 313.2 million, up from 262.7 million at the end of 2006 as the payment of 67.2 million in dividends, the capital expenditure for investments amounting to 18.1 million and the purchase of 7,120,950 treasury stocks for 27 million, more than offset the cash flow generated by operating activities, amounting to 69.7 million. At June 30, 2007, the Group employed 3,427 persons including term contracts, 43 more than the 3,384 it employed at December 31, 2006 due primarily to the enhancement of supplements and local news sections of newspaper la Repubblica.

Report of the Board of Directors 13 Results by area Repubblica Division 1 st Half 1 st Half % change ( million) 2006 2007 * 2007/2006 Revenues 304.4 271.5-10.8% Operating and personnel costs (248.4) (237.0) -4.6% Gross operating profit 55.9 34.5-38.3% Depreciation, amortization and write-downs (6.0) (6.3) +5.0% Operating profit 50.0 28.3-43.5% Employees 707 722 Figures for the division include the share in revenues and costs of the Parent Company that may not be attributed to a specific activity * Figures stated net of the effect of the recalculation of employee termination indemnities The effect on the first six months of the year of lower sales of add-on products registered by la Repubblica was made stronger by the fact that in the same period in 2006, the three most successful series generating the strongest profits (La Grande Cucina, l Enciclopedia dei Ragazzi and Management) had already been published. The reduction in revenues and margins of add-on products was however offset by the 0.10 increase in the cover price of newspapers and the good performance of advertising sales, up 8.3% on the first six months of 2006. Growth was registered both by national commercial advertising (up 7.7%) and local editions (with advertising sales up 6%), in addition to a positive contribution generated by magazine Velvet, well received by advertisers, and advertising sales of site Repubblica.it continue to soar (up 77.1% on the first six months of 2006, and up 92% in the 2 nd Quarter). Costs declined prevalently due to lower quantities published and purchased of add-on products, while a number of printing agreements were renegotiated, resulting in savings. The first half of the year were however negatively affected by rising raw material prices (paper, ink and plates), in addition to the cost for the development of Velvet, launched in November 2006. As mentioned, site Repubblica.it, consolidated its position as the Italian reference point among information sites, recording month after month record viewers and registering a steady increase in the average time spent by visitors on the site. Information content will be steadily enhanced and will have more in-depth analysis, thanks to the agreement reached with journalists at la Repubblica according to which all journalists will be able, on a voluntary basis, to contribute articles, audios and videos to be published on the site, in addition to the printed edition. Periodicals Division 1 st Half 1 st Half % change ( million) 2006 2007 * 2007/2006 Revenues 72.3 48.2-33.3% Operating and personnel costs (61.3) (41.5) -32.3% Gross operating profit 11.0 6.7-39.1% Depreciation, amortization and write-downs (0.5) (0.5) +14.4% Operating profit 10.5 6.1-41.5% Employees 123 120 Figures for the division include the share in revenues and costs of the Parent Company that may not be attributed to a specific activity * Figures stated net of the effect of the recalculation of employee termination indemnities As previosly mentioned, the results of the division were negatively affected by the decline in sales of add-on products that determined also a decline in the circulation of L espresso, down from an average of 432 thousand copies per issue to 420 thousand. Without considering such negative effect, the profitability of the division is stable. L espresso registered however renewed interest for the quality of the editorial content of the magazine focused on journalist investigations with a strong social impact. Its internet site has more than doubled its number of users, reaching about 900 thousand unique users. Visitors were offered the possibility not only to consult and gain more in-depth knowledge of news and issues published

14 Report of the Board of Directors in the paper edition, but also to interact with the magazine and its journalists through blogs, proposals and polls. The performance of advertising sales confirmed the good reception of the magazine by its market: though remaining substantially in line with the first six months of 2006, advertising sales of L espresso performed considerably better than the average of news magazines sector that closed the first half of the year reporting a decline of 9% (source: FCP) Other periodicals of the division (National Geographic, Limes, Micromega and Le Guide de L espresso) continue to perform well both in terms of sales, amounting in the first six months of 2007 to 4.6 million, and in terms of operating profit, equal to 0.4 million. Circulations were also good, averaging 119 copies per issue for National Geographic, and 15 and 14 thousand copies respectively for Limes and Micromega. Starting in January 2007, magazine Mente&Cervello, published by affiliated company Le Scienze, has become monthly, with enhanced coverage of issues relating to psychology and neurosciences, with the contribution of internationally famed experts. Local newspapers 1 st Half 1 st Half % change ( million) 2006 2007 * 2007/2006 Revenues 131,3 135,7 +3,4% Operating and personnel costs (101,9) (103,4) +1,5% Gross operating profit 29,4 32,3 +10,0% Depreciation, amortization and write-downs (6,6) (6,4) -4,3% Operating profit 22,7 26,0 +14,2% Employees 1.301 1.289 * Figures stated net of the effect of the recalculation of employee termination indemnities Local newspapers of the Group registered in the first half of the year an increase in profitability, with the operating margin on sales reaching 19.1%, up almost two percentage points on the same period in the previous year. Such progress was achieved thanks to the good trend of advertising sales, in particular of local advertising (up 5.9%), to the growth in revenues from the increase in the cover price to 1 and a careful monitoring of operating costs, despite the 5.5% increase in the price of paper. Circulation of local newspapers was stable (down 0.7% on the first six months of 2006) thanks to the increasing focus on the respective areas that allowed to limit the pressure imposed by the competition offered by free press newspapers and the joint sale of competitor s newspapers. Local newspapers sites were renovated with the aim of developing closer ties with readers around local and city news and issues, introducing new interactive channels open to contributions from readers and in-depth analysis on major events and facts. The changes were well received by the audience so in June reached a total of 451 thousand unique users, up 47.7% on the same month in 2006. The joint offer of classified advertising on paper editions and internet sites (commercial and recruitment ads) also met a strong interest, growing in terms of sales by 15% on June 2006. Radio 1 st Half 1 st Half % change ( million) 2006 2007 * 2007/2006 Revenues 40.4 46.2 +14.2% Operating and personnel costs (20.5) (20.0) -2.7% Gross operating profit 19.9 26.2 +31.6% Depreciation, amortization and write-downs (1.6) (1.7) +9.9% Operating profit 18.4 24.5 +33.4% Employees 161 166 * Figures stated net of the effect of the recalculation of employee termination indemnities The good performance of advertising sales, up 10.5% on the first half in 2006 allowed to improve significantly the profitability of the Group s three radio stations, improving the gross opera-

Report of the Board of Directors 15 ting margin on sales from 49.3% in the first six months of 2006, to 56.8% in the same period in 2007, and the operating margin on sale from 45.4% to 53.1%. Advertising sales on internet sites also grew strongly, up 23.8% on the first half of 2006 with an acceleration in the 2 nd Quarter, as a result of investments made by all three radio stations to create a multimedia community of listeners that are also able to interact from any location and at all times of the day. New programs were added to the list of those that can be downloaded as podcasts, while the offer of musical and digital content of the Deejay Store was enriched, and radio m2o launched its social networking site s2o on which users can exchange messages and share contents with other lists of users. In the first six months of the year, the publication of compilations under the m2o trademark continued, distributed at newsstands, in music stores and also made available for download on the digital platform launched in the first months of 2007. All Music in addition to contributing to the production of editorial content. Advertising sales, up 7.4%, grew more than the market average, allowing the television station to achieve a positive gross operating profit despite the increase in operating costs due primarily to the development and the maintenance of the broadcasting equipment. The migration of broadcasting to digital was completed in July and now, completely renewed, it s able to support the new digital technologies. Subsequent events and outlook Projections on advertising sales for July and August point to a continuation of the positive trend both for the radio stations and the internet sites of the Group. Expectations for a growth in advertising sales and a decline in revenues and margins on add-on products on the previous year are confirmed. Consolidated net profit for 2007 will in any case be lower than in the previous year, no longer benefiting from deferred tax assets recorded on accumulated losses of subsidiaries. 1 st Half 1 st Half % change ( million) 2006 2007 * 2007/2006 Revenues 10.8 12.0 +11.3% Operating and personnel costs (10.9) (11.5) +5.2% Gross operating profit (0.2) 0.5 n.s. Depreciation, amortization and write-downs (1.3) (1.4) +5.6% Operating profit (1.5) (0.9) +39.0% Employees 101 103 * Figures stated net of the effect of the recalculation of employee termination indemnities The Group s television station strengthened its position among TV stations aimed at a young public and at the same time enhanced convergence with the web and interactivity with the public. The offer of programs available for podcasting was enlarged and the internet site was progressively transformed into a meeting place in which users can interact with proposals and comments,

16 Report of the Board of Director Consolidated results at June 30, 2007 Consolidated Income Statement 1 st Half 1 st Half ( million) 2006 2007 Revenues 601.5 561.6 Change in inventories (1.8) (1.5) Other operating income 8.2 9.0 Purchases (89.6) (83.5) Services received (234.9) (213.1) Other operating charges (9.7) (10.2) Investments valued at equity 0.7 0.8 Personnel costs (148.5) (140.3) Depreciation, amortization and write-downs (20.1) (20.6) Operating profit 105.7 102.1 Financial income (expense) (10.3) (9.2) Pre-tax profit 95.5 92.8 Income taxes (40.5) (42.5) Net profit 55.0 50.3 Minority interests (0.2) (0.4) GROUP NET PROFIT 54.8 50.0 Revenues and operating results were discussed in detail in the first part of the present report, to which we make reference.

Report of the Board of Director 17 Consolidated Balance Sheet ASSETS Dec. 31, June 30, ( million) 2006 2007 Intangible assets with an indefinite useful life 638.2 643.1 Other intangible assets 4.4 3.9 Intangible assets 642.6 646.9 Property, plant and equipment 233.3 225.0 Investments valued at equity 27.0 26.8 Other investments 4.0 4.0 Non-current receivables 3.1 2.0 Deferred tax assets 68.7 60.0 NON-CURRENT ASSETS 978.7 964.7 Inventories 35.6 31.1 Trade receivables 285.8 308.7 Marketable securities and other financial assets 0.1 0.1 Tax receivables 37.2 46.1 Other receivables 25.4 31.0 Cash and cash equivalents 172.6 123.5 CURRENT ASSETS 556.8 540.6 TOTAL ASSETS 1,535.5 1,505.3 LIABILITIES AND SHAREHOLDERS EQUITY Dec. 31, June 30, ( million) 2006 2007 Share capital 65.2 65.2 Reserves 344.2 336.4 Retained earnings (loss carry-forwards) 49.8 68.6 Net profit (loss) for the period 103.6 50.0 Group Shareholders Equity 562.8 520.2 Minority interests 10.5 10.6 SHAREHOLDERS EQUITY 573.3 530.7 Financial debt 413.9 405.0 Provisions for risks and charges 12.0 11.6 Employee termination indemnities and other retirement benefits 107.7 93.8 Deferred tax liabilities 110.8 118.2 NON-CURRENT LIABILITIES 644.4 628.6 Financial debt 21.5 31.7 Provisions for risks and charges 12.5 14.8 Trade payables 176.0 163.9 Tax payables 22.8 45.1 Other payables 85.0 90.4 CURRENT LIABILITIES 317.8 345.9 TOTAL LIABILITIES 962.2 974.5 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1,535.5 1,505.3

18 Report of the Board of Director Intangible assets amount to 646.9 million, up 4.3 million on December 31, 2006 ( 642.6 million), net of amortization, due primarily to investments in radio broadcasting frequencies made by subsidiary Elemedia. Property, plant and equipment amount to 225 million, down 8.3 million on December 31, 2006 ( 233.3 million). The capital expenditure made, equal to 12.1 million, was more than offset by the depreciation expense for the period ( 19.4 million) and the disposal of assets amounting to 1.1 million relating prevalently to printing plant no longer in use. Investments amount to 30.8 million, almost unchanged from 31.1 million at December 31, 2006. Non-current receivables amount to 2 million and consist of security deposits and tax receivables on advances paid on Employee termination indemnities. At December 31, 2006, the item included the value of the option for the acquisition of the remaining 51% of the share capital of Editoriale Corriere di Romagna, now included among Other receivables under current assets. Deferred tax assets amount to 60 million and include temporary differences between amounts recorded in the balance sheet and those recognized for tax purposes. The 8.7 million reduction on December 31, 2006 is due to the use of the provision by subsidiary Elemedia to offset income taxes for the period. At December 31, 2006, the company had in fact completed the recording of deferred tax asset on accumulated losses on the merger of radio and internet activities. Inventories amount to 31.1 million and include inventories of paper, printing material, publications and add-on products. The 4.5 million reduction is due to the lower inventories of addon products and paper. Trade receivables amount to 308.7 million, up 22.9 million on December 31, 2006 due primarily to higher advertising sales. Tax receivables amount to 46.1 million, up 8.9 million on 37.2 million at December 31, 2006 due primarily to Ires and Irap advances paid in the period, partly offset by uses of tax credits on investments (as per Law 62/2001, Law on Publishing). At December 31, 2006, the advances were in fact reported net of the theoretical tax debt, while at June 30, 2007 the amount payable and receivable at the time of payment of the first tax advance were recorded separately. Other receivables amount to 31 million and include 8.6 million of grants relating to the interest payments on subsidized loans, amounting to 112 million, stipulated at the end of 2005. The 5.6 million increase is due primarily, on the one hand, to accrued income from rights on licenses for the sale of add-on products not yet distributed and, on the other hand, to the mentioned value of the option to purchase the remaining share in the capital stock of Editoriale Corriere di Romagna. Cash and cash equivalents, held in the form of short-term deposits, decline by 49.1 million on December 31, 2006. Cash flow generated from operating activities ( 69.7 million) was in fact absorbed by the payment of 67.2 million in dividends, the acquisition of treasury stock for

Report of the Board of Director 19 27 million, the scheduled repayment 8.9 million in loans, and capital expenditure for investments of the period amounting to 18.1 million. Shareholders Equity at June 30, 2007 amounted to 530.7 million ( 573.3 million at December 31, 2006), of which 520.2 million belonging to the Group ( 562.8 million at the end of 2006), and 10.6 million relating to minority interests ( 10.5 million at December 31, 2006). The item includes also the value of treasury stock held by the Parent Company at June 30, 2007 (n.18,470,950, representing 4.25% of the share capital), subtracted from the Shareholders Equity. Non-current financial payables amounted to 405 million and include 300 million of bonds issued on October 27, 2004 and subsidized 10-year loans extended in the last quarter of 2005. Provisions for risks and charges, both current and non-current, grow by 1.9 million due primarily to the accrual to the provision for corporate restructuring costs relating to the Milan printing center of la Repubblica. Employee termination indemnities and other retirement benefits amount to 93.8 million ( 107.7 million at December 31, 2006). The 13.9 million decline is due primarily to the restating of Employee termination indemnities matured at December 31, 2006 net of the component relating to future retribution increases. More detailed information regarding the accounting treatment of Employee termination indemnities under IFRS, in addition to changes and the breakdown of the provision at June 30, 2007 are reported in the notes to the Consolidated Interim Report at June 30, 2007. Deferred tax liabilities amount to 118.2 million ( 110.8 million at December 31, 2006) and include about 44 million relating to the tax impact of the recording of TV broadcasting frequencies of All Music. The 7.4 million increase is due primarily to the deduction of accumulated amortization of intangible assets with an indefinite useful life and the effect of the recording in the income statement of the difference resulting from the restatement of employee termination indemnities accrued at December 31, 2006. Such difference, in fact, did not give rise to current tax liabilities, while a related deferred tax liability was recorded. Current financial debt amounts to 31.7 million, up 10.2 million on December 31, 2006, due to higher interest payments on the bond issue and on subsidized loan contracts. Trade payables amount to 163.9 million, down 12.1 million due primarily to the reduction in payables on capital expenditure (down 2.8 million), and the decline in payables on purchases of paper and printing materials, the acquisition of finished products and promotions (down 11.6 million), affected in turn by the lower volume of add-on products launched in the first months of the year with respect to the last period of 2006. Tax payables amount to 45.1 million and grow by 22.3 million due to the income tax (Ires) and regional tax on productive activities (Irap) expense for the period, in addition to higher VAT payables. As mentioned, at December 31, 2006 the theoretical tax debt was netted against related tax receivables for the period.

20 Report of the Board of Director Other payables amount to 90.4 million, down on 85 million at December 31, 2006 and include 5 million debt relating to the Employee termination indemnities that employees chose to leave with the company (to be paid out to INPS) or to be invested in pension funds.

Report of the Board of Director 21 Changes in the Consolidated Net Financial Position 1 st Half 1 st Half ( million) 2006 2007 SOURCES OF FUNDS Net profit (loss) for the period, including minority interests 55.0 50.3 Depreciation, amortization and write-downs 20.1 20.6 Accruals to provisions for stock option costs 1.3 1.3 Net change in provisions for personnel costs 1.1 (13.9) Net change in provisions for risks and charges (1.2) 1.9 Losses (gains) on disposal of fixed assets (0.1) (0.8) Write-down (revaluation) of equity investments 0.5 - Adjustment for investments valued at equity 0.6 0.2 Cash flow from operating activities 77.4 59.7 Decrease (Increase) in non-current receivables 0.6 1.1 Increase in liabilities / Decrease in deferred tax assets 4.0 16.1 Increase in payables/ Decrease in tax receivables 35.4 13.4 Decrease (Increase) in inventories 0.1 4.5 Decrease (Increase) in trade and other receivables (25.3) (28.5) Increase (Decrease) in trade and other payables 2.6 (3.9) Change in current assets 17.4 2.7 CASH FLOW FROM OPERATING ACTIVITIES 94.8 62.4 Increases in capital and reserves 0.8 0.3 TOTAL SOURCES OF FUNDS 95.6 62.8 USES OF FUNDS Net investment in fixed assets (16.1) (18.6) Net investment in equity investments (2.4) - (Acquisition) sale of treasury stock (19.3) (27.0) Dividends (paid) (62.5) (67.2) Other changes (0.4) (0.3) TOTAL USES OF FUNDS (100.6) (113.2) Financial surplus (deficit) (5.0) (50.4) BEGINNING NET FINANCIAL POSITION (252.6) (262.7) ENDING NET FINANCIAL POSITION (257.7) (313.2) Changes in the consolidated net financial position are commented in the paragraph that follows.

22 Report of the Board of Director Consolidated Statement of Cash Flows and Net Debt The comparison between financial flows from January 1, 2007 and June 30, 2007 and those for the same period in 2006 are reported in the table that follows. 1 st Half 1 st Half ( million) 2006 2007 OPERATING ACTIVITIES Net profit (loss) for the period, including minority interests 55.0 50.3 Adjustments: - Depreciation, amortization and write-downs 20.1 20.6 - Accruals to provisions for stock option costs 1.3 1.3 - Net change in provisions for personnel costs 1.1 (13.9) - Net change in provisions for risks and charges (1.2) 1.9 - Losses (gains) on disposal of fixed assets (0.1) (0.8) - Adjustments to the value of financial assets 0.5 - - Adjustment for investments valued at equity 0.6 0.2 - Dividends (received) (0.0) - Cash flow from operating activities 77.4 59.7 Change in current assets and other flows 24.8 10.0 CASH FLOW FROM OPERATING ACTIVITIES 102.1 69.7 of which: Interest received (paid) through banks 1.0 (0.8) Received (outlay) for income taxes 1.0 (18.6) INVESTING ACTIVITIES Outlay for purchase of fixed assets (16.4) (20.2) Outlay for purchase of equity investments (2.4) - Received on disposal of fixed assets 0.3 2.1 (Purchase) sale of marketable securities and available-for-sale assets 0.0 - Dividends received 0.0 - CASH FLOW FROM INVESTING ACTIVITIES (18.4) (18.1) FINANCING ACTIVITIES Increases in capital and reserves 0.8 0.3 (Acquisition) sale of treasury stock (19.3) (27.0) Issue (repayment) of other financial debt (3.7) (8.9) Dividends (paid) (62.5) (67.2) Other changes (0.4) (0.3) CASH FLOW FROM FINANCING ACTIVITIES (85.1) (103.1) Increase (decrease) in cash and cash equivalents (1.4) (51.5) Cash and cash equivalents at beginning of the period 195.2 172.3 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 193.8 120.8 Cash flow from operating activities amounts to 69.7 million, down 32.4 million on the first six months of 2006 due partly to the lower volume of add-on products resulting in lower margins and a decline in trade receivables, and in part to tax flows. With respect to the first six months of 2006, in fact, on the one hand, the deferred tax provision declined due to the use made by

Report of the Board of Director 23 subsidiary Elemedia, while, on the other hand, the different operating performance in the two periods, coupled with the method used in the calculation of advances, resulted in a reduction of tax balances. Cash flow from investing activities is negative by 18.1 million due primarily to the balance payables on the acquisition of full color rotary presses ( 2 million) in addition to expenditure made in the period. In the first six months of 2007 low and high frequency broadcasting equipment of All Music and of the three radio stations were upgraded ( 2.9 million), new radio equipment was acquired ( 4.8 million), the migration to digital of All Music was completed ( 0.7 million), investments were made in the printing centers of la Repubblica, local newspapers and magazines ( 3 million), in addition to the renovation of offices and radio stations( 3,6mn), while information systems were updated and the project for the renewal of the editorial system was started ( 2.6 million). Cash flow from financing activities absorbed resources amounting to 103.1 million. In the first six months of the year, dividends payments amounted to 67.2 million while 7,120,950 treasury stock were acquired for 27 million and 8.9 million in loans were repaid. The table that follows shows the breakdown of the financial position of the Group. ( million) Dec. 31, June 30, 2006 2007 Financial receivables from Group companies 0.6 - Financial payables to Group companies - - Cash and bank deposits 172.0 123.5 Current account overdrafts (0.4) (2.7) Net cash and cash equivalents 172.3 120.8 Marketable securities and other financial assets 0.1 0.1 Bond (308.5) (315.8) Other bank debt (124.1) (116.1) Other financial debt (2.4) (2.1) Other financial assets (liabilities) (435.0) (434.0) NET FINANCIAL POSITION (262.7) (313.2)

24 Report of the Board of Director Results of the Parent Company Gruppo Editoriale L Espresso SpA at June 30, 2007 Income Statement ( million) 1 st Half 1 st Half 2006 2007 Revenues 376.6 319.7 Change in inventories (2.5) (1.6) Other operating income 2.5 3.4 Purchases (66.3) (57.1) Services received (180.8) (157.6) Other operating charges (4.0) (5.4) Personnel costs (58.7) (54.8) Depreciation, amortization and write-downs (6.4) (6.8) Operating profit 60.5 39.8 Financial income (expense) (7.4) (7.7) Dividends 56.3 75.5 Pre-tax profit 109.4 107.6 Income taxes (24.5) (16.5) NET PROFIT 84.8 91.0

Report of the Board of Director 25 Balance Sheet ASSETS Dec. 31, June 30, ( million) 2006 2007 Intangible assets with an indefinite useful life 220.7 220.7 Other intangible assets 2.8 2.2 Intangible assets 223.5 222.8 Property, plant and equipment 68.0 65.0 Investments 391.7 391.7 Non-current receivables 0.3 0.4 Deferred tax assets 14.7 14.0 NON-CURRENT ASSETS 698.3 693.9 Inventories 30.4 26.5 Trade receivables 119.1 117.8 Tax receivables 25.1 31.8 Other receivables 11.2 14.1 Cash and cash equivalents 219.3 189.1 CURRENT ASSETS 405.1 379.4 TOTAL ASSETS 1,103.4 1,073.3 LIABILITIES AND SHAREHOLDERS EQUITY Dec. 31, June 30, ( million) 2006 2007 Share capital 65.2 65.2 Reserves 131.9 106.5 Retained earnings (loss carry-forwards) 49.8 68.6 Net profit (loss) for the period 85.9 91.0 SHAREHOLDERS EQUITY 332.8 331.3 Financial debt 338.7 335.9 Provisions for risks and charges 7.0 6.5 Employee termination indemnities and other retirement benefits 47.6 41.0 Deferred tax liabilities 40.7 44.8 NON-CURRENT LIABILITIES 434.0 428.2 Financial debt 168.3 139.3 Provisions for risks and charges 2.8 5.4 Trade payables 115.2 104.5 Tax payables 12.1 23.5 Other payables 38.1 41.2 CURRENT LIABILITIES 336.6 313.8 TOTAL LIABILITIES 770.6 742.0 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1,103.4 1,073.3

26 Report of the Board of Director Statement of cash flows and net debt ( million) 1 st Half 1 st Half 2006 2007 OPERATING ACTIVITIES Net profit (loss) for the period, including minority interests 84.8 91.0 Adjustments: - Depreciation, amortization and write-downs 6.4 6.8 - Accruals to provisions for stock option costs 1.3 1.3 - Net change in provisions for personnel costs 0.6 (6.6) - Net change in provisions for risks and charges 0.5 2.0 - Losses (gains) on disposal of fixed assets 0.0 (0.0) - Dividends (received) (56.3) (75.5) Cash flow from operating activities 37.3 19.1 Change in current assets and other flows 43.9 12.5 CASH FLOW FROM OPERATING ACTIVITIES 81.2 31.6 of which: Interest received (paid) through banks 2.1 0.8 Received (outlay) for income taxes 1.2 (8.3) INVESTING ACTIVITIES Outlay for purchase of fixed assets (3.2) (4.3) Received on disposal of fixed assets 0.1 0.0 Dividends received 56.3 75.5 CASH FLOW FROM INVESTING ACTIVITIES 53.2 71.2 FINANCING ACTIVITIES Increases in capital and reserves 0.8 0.3 (Acquisition) sale of treasury stock (19.3) (27.0) Issue (repayment) of other financial debt (1.2) (3.1) Dividends (paid) (62.5) (67.2) CASH FLOW FROM FINANCING ACTIVITIES (82.2) (97.0) Increase (decrease) in cash and cash equivalents 52.2 5.9 Cash and cash equivalents at beginning of the period 69.4 60.2 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 121.5 66.1 The operating performance was described in the section on individual divisions to which we refer; below we discuss the financial performance. Capital expenditure of the Parent Company in the 1 st Half of 2007 amounted to 4.3 million and relates primarily to the renovation of offices, the development of information systems of the Group, and the development of editorial systems of la Repubblica and L espresso in addition to investments for the optimization of the operation of new rotary presses of the newspaper and of magazines. At June 30, 2007, net financial debt of the Parent Company amounted to 286.1 million, down slightly from 287.8 million at December 31, 2006. The cash flow from operating activities, amounting to 31.6 million, together with the 75.5 million of dividends received from

Report of the Board of Director 27 subsidiaries absorbed in fact the capital expenditure made in the period, the outlay of 27 million for the acquisition of treasury stock, the payment of 67.2 million in dividends and the planned repayment of 3.1 million in bank loans. At the end of June, the Parent Company employed 987 persons, 20 more than at December 31, 2006. Newly hired personnel, mainly on a term contract, was employed primarily in the upgrade of local editions and of supplements of la Repubblica. Reconciliation between Parent Company s financial statements and the Consolidated Financial Statements. Net profit Shareholders Equity ( thousand) 1 st Half at 2006 2007 Dec. 31, 2006 June 30, 2007 Parent Company s financial statements 84,811 91,009 332,802 331,268 Netting of intragroup dividends (62,396) (81,146) - - Shareholders Equity and net profit of subsidiaries 32,726 40,499 451,756 411,290 Netting of carrying value of consolidated subsidiaries 268 (203) (450,637) (451,014) Goodwill, publications, trademarks and frequencies - - 201,480 201,480 Effect of valuation on equity of affiliated companies (577) (207) 27,007 26,800 Other consolidation adjustments (37) (1) 346 331 Consolidated Financial Statements 54,795 49,951 562,754 520,155 Other information Treasury stock held by the Parent Company at June 30, 2007, amounted to 18.5 million (nominal value 0.15 euro) and represented 4.25% of the share capital. With regard to information requirements of article 2428 of the Italian Civil Code on transactions with subsidiaries, affiliated and parent companies, and on the risk management, we refer to the related sections in the notes to the financial statements. A list of companies included in the consolidation area is reported in Attachment 1 of the Notes to the Consolidated Interim Financial Statements at June 30, 2007.

Consolidated Interim Financial Statements at June 30, 2007

30 Consolidated Interim Financial Statements at June 30, 2007 Consolidated Balance Sheet ASSETS Note Dec. 31, June 30, ( thousand) 2006 2007 Intangible assets with an indefinite useful life 638,163 643,071 Other intangible assets 4,432 3,857 Intangible assets (1) 642,595 646,928 Property, plant and equipment (2) 233,337 224,989 Investments valued at equity (3) 27,007 26,800 Other investments (4) 4,043 4,043 Non-current receivables (5) 3,075 1,977 Deferred tax assets (6) 68,667 59,953 NON-CURRENT ASSETS 978,724 964,690 Inventories (7) 35,631 31,095 Trade receivables (8) 285,804 308,735 Marketable securities (9) 50 50 Tax receivables (10) 37,205 46,146 Other receivables (11) 25,437 31,038 Cash and cash equivalents (12) 172,643 123,496 CURRENT ASSETS 556,770 540,560 TOTAL ASSETS 1,535,494 1,505,250 LIABILITIES AND SHAREHOLDERS EQUITY Note Dec. 31, June 30, ( thousand) 2006 2007 Share capital (13) 65,150 65,167 Reserves (14) 344,215 336,420 Retained earnings (loss carry-forwards) (14) 49,828 68,617 Net profit (loss) 103,561 49,951 Group Shareholders Equity 562,754 520,155 Minority interests (15) 10,526 10,575 SHAREHOLDERS EQUITY 573,280 530,730 Financial debt (16) 413,898 405,039 Provisions for risks and charges (17) 12,018 11,607 Employee termination indemnity and other retirement benefits (18) 107,704 93,789 Deferred tax liabilities (6) 110,818 118,184 NON-CURRENT LIABILITIES 644,438 628,619 Financial debt (16) 21,517 31,677 Provisions for risks and charges (17) 12,500 14,840 Trade payables (19) 175,989 163,876 Tax payables (20) 22,769 45,105 Other payables (21) 85,001 90,403 CURRENT LIABILITIES 317,776 345,901 TOTAL LIABILITIES 962,214 974,520 TOTAL LIABILITIES AND SHOREHOLDERS EQUITY 1,535,494 1,505,250 Notes from page 37 to 82 are an integral part of the present interim financial statements.

Consolidated Interim Financial Statements at June 30, 2007 31 Consolidated Income Statement 1 st Half 1 st Half ( thousand) Note 2006 2007 Revenues (22) 601,534 561,569 Change in inventories (7) (1,826) (1,463) Other operating income (23) 8,189 9,043 Purchases (24) (89,628) (83,524) Services received (25) (234,890) (213,133) Other operating charges (26) (9,714) (10,216) Investments valued at equity (3) 688 762 Personnel costs (27) (148,531) (140,334) Depreciation, amortization and write-downs (28) (20,110) (20,633) Operating profit 105,712 102,071 Financial income (expense) (29) (10,252) (9,228) Pre-tax profit 95,460 92,843 Income taxes (30) (40,474) (42,497) Net profit 54,986 50,346 Minority interests (31) (191) (395) GROUP NET PROFIT 54,795 49,951 Earnings per share, basic (32) 0.127 0,119 Earnings per share, diluted (32) 0.123 0,114 Notes from page 37 to 82 are an integral part of the present interim financial statements.

32 Consolidated Interim Financial Statements at June 30, 2007 Statement of Consolidated Cash Flows 1 st Half 1 st Half ( thousand) Note 2006 2007 OPERATING ACTIVITIES Net profit (loss) for the period, including minority interests 54,986 50,346 Adjustments: - Depreciation, amortization and write-downs (28) 20,110 20,633 - Accruals to provisions for stock option costs (27) 1,269 1,328 - Net change in provisions for personnel costs (18) 1,102 (13,915) - Net change in provisions for risks and charges (17) (1,151) 1,929 - Losses (gains) on disposal of equity investments (51) (818) - Write-down (revalutation) of equity investments 543 - - Adjustments for investments valued at equity 577 207 - Losses (gains) on disposal of fixed assets (19) - Cash flow from operating activities 77,366 59,710 Change in current assets and other flows 24,769 10.014 CASH FLOW FROM OPERATING ACTIVITIES 102,135 69,724 on which: Interest received (paid) through banks 1,020 (792) Received (outlay) for income taxes 975 (18,644) INVESTING ACTIVITIES Outlay for purchase of fixed assets (16,376) (20,231) Outlay for purchase of equity investments (2,400) - Received on disposal of fixed assets 321 2,141 Public grants received 1 - Dividends received 19 - CASH FLOW FROM INVESTING ACTIVITIES (18,435) (18,090) FINANCING ACTIVITIES Increases in capital and reserves 750 345 (Acquisition) sale of tresury stocks (19,251) (27,043) Issue (repayment) of other financial debt (3,704) (8,878) Dividends (paid) (33) (62,468) (67,180) Other changes (438) (346) CASH FLOW FROM FINANCING ACTIVITIES (85,111) (103,102) Increase (decrease) in cash and cash equivalents (1,411) (51,468) Cash and cash equivalents at beginning of the period 195,247 172,284 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 193,836 120,816 Notes from page 37 to 82 are an integral part of the present interim financial statements.

Consolidated Interim Financial Statements at June 30, 2007 33 Statement of changes in the Consolidated Shareholders Equity Share Share Treasury IFRS Stock option Equity Retained Net Group Minority Total ( thousand) capital premium Stocks reserve reserve reserves earnings profit Sh. Equity Interests Sh. Equity Balance at December 31, 2005 65,072 78,679 (15,070) 49,365 5,574 223,914 26,138 116,336 550,008 10,775 560,783 Movements in net profit - - - - - - 116,336 (116,336) - - - Dividends - - - - - - (62,468) - (62,468) (438) (62,906) Capital increases, capital contributed by shareholders 35 715 - - - - - - 750-750 Stock options - - - - 1,269 - - - 1,269-1,269 Treasury stock transactions - - (19,251) - - - - - (19,251) - (19,251) Transfers between capital and reverses - - - - - 33,217 (33,217) - - - - Net profit (loss) for the period - - - - - - - 54,795 54,795 191 54,986 Balance at June 30, 2006 65,107 79,394 (34,321) 49,365 6,843 257,131 46,789 54,795 525,103 10,528 535,631 Share Share Treasury IFRS Stock option Equity Retained Net Group Minority Total ( thousand) capital premium Stocks reserve reserve reserves earnings profit Sh. Equity Interests Sh. Equity Balance at December 31, 2006 65,150 80,242 (47,838) 46,322 8,354 257,135 49,828 103,561 562,754 10,526 573,280 Movements of net profit - - - - - - 103,561 (103,561) - - - Dividends - - - - - - (67,180) - (67,180) (346) (67,526) Capital increases, capital contributed by shareholders 17 328 - - - - - - 345-345 Stock options - - - - 1,328 - - - 1,328-1,328 Treasury stock transactions - - (27,043) - - - - - (27,043) - (27,043) Transfers between capital and reverses - - - (45) - 17,637 (17,592) - - - - Net profit (loss) for the period - - - - - - - 49,951 49,951 395 50,349 Balance at June 30, 2007 65,167 80,570 (74,881) 46,277 9,682 274,772 68,617 49,951 520,155 10,575 530,730

Notes to the Consolidated Interim Financial Statement at June 30, 2007

Notes to the Consolidated Interim Financial Statements at June 30, 2007 37 Notes to the Consolidated Interim Financial Statement 1. General information Gruppo Editoriale L Espresso SpA (the company or Parent Company ) and those companies in which it holds either directly or indirectly an interest (further on in the present document referred jointly to as the Espresso Group or the Group ) operates mainly in the publishing sector and more specifically in the newspapers and periodicals segment, that of radio stations, advertising, online publishing, and analog and digital terrestrial and satellite television. Gruppo Editoriale L Espresso SpA has its registered office in Italy at Via Cristoforo Colombo, 149, Rome. CIR Compagnie Industriali Riunite S.p.A., holds control of the Company. The Espresso stock is listed on the screen-based trading circuit (Mercato Telematico Azionario, MTA) of the Italian Stock Exchange (Reuters code: ESPI.MI, Bloomberg code: ES IM). The stock is included in the S&P/MIB index. The present consolidated interim report at June 30, 2007 was approved by the Board of Directors of the Parent Company on July 25, 2007. 2. Form and content of the financial statements The present consolidated financial statements were prepared in accordance with international accounting principles (International Accounting Standards, IAS and International Financial Reporting Standards, IFRS), as integrated by the related interpretations (Standing Interpretations Committee, SIC and International Financial Reporting Interpretations Committee, IFRIC) issued by the International Accounting Standards Boards (IASB). More specifically, the present interim report was prepared in compliance with IAS 34, as approved with EU Regulation 1725/2003 and subsequently modified through Regulations 2236/2004 and 2238/2004, and of article 81 of Consob Regulation 11971/1999 on listed companies, and subsequent amendments and additions. The Interim Report at June 30, 2007 must be read in conjunction with the Annual Report at December 31, 2006. The general principle adopted in the preparation of the financial statements is that of the historical cost for all assets and liabilities, with the exception of derivative instruments and certain financial assets/liabilities, some of which are accounted for at their fair value. To allow a more meaningful understanding of the evolution in the year, Balance Sheet figures provided for comparative purposes in the financial statements and in the related notes make reference to December 31, 2006, while operating, Shareholders Equity and cash flow data are compared with the respective figures for the same period in the previous year. The classification, form and detail of items in the financial statements are unchanged from those adopted in the preparation of the 2006 Financial Statements. Below we provide a summary of main criteria used. The classification adopted in the Balance Sheet, both for assets and liabilities, is that of current and non-current. The Balance Sheet is divided into two separate facing sections. The order of reporting is Assets, Shareholders Equity and Liabilities. Financial statements include only major captions and all sub-classifications (e.g. nature of the debtor/creditor, expiration term, etc.) are instead disclosed in the notes. The contents of the Balance Sheet are in compliance with minimum requirements established by IAS 1 as, with the exclusion of publications, radio and television frequencies and trademarks, classified under Intangibile assets with an