Our Company Charman's Letter Televisa

Dear fellow shareholders:

We are proud of our performance in 2009, which once again illustrates the strength of our business model. This was a year in which Mexico experienced the perfect storm: global financial distress, declining export revenues, lower remittances, and fear of an influenza epidemic. In short, Mexico faced one of the worst economic environments in its modern history: the economy shrank by 6.5 percent, the worst decline in 77 years, and the Mexican peso depreciated against the US dollar by 21 percent, on average.

Even in the midst of this challenging environment, our core business continued to deliver solid results. Our diversification into other geographic areas and into multiple streams of income proved to be the key to our ability to drive growth and protect margins.

Consolidated sales increased 9.1 percent to Ps.52.4 billion, and, with the exception of Publishing, all of our business segments grew during 2009. Similarly, operating segment income grew by 4.2 percent, to Ps.20.7 billion, and the resulting operating segment income margin was 38.8 percent. Our geographic diversification and business model allowed us to generate enough revenue in hard currency to cover the majority of our dollar-denominated operating expenses, thus minimizing the impact of the peso depreciation on our margins.

During the year we continued to derive a significant portion of our revenue from advertising and content exports. The quality of our content and strength of our platforms helped us to grow in these segments despite our clients' tighter budgets, and our presence in approximately 57 countries helped to minimize the impact of the economic slowdown in many key markets.

Our subscription-based revenue represented approximately 39 percent of our total revenue during the year. This figure, which includes our Pay-TV Networks operation, Sky, and our Cable and Telecom investments, represented 18 percent of total revenue only five years ago. During the year, our successful video and triple-play offerings drove double-digit organic growth in this segment.

During 2009 we produced more than 71 thousand hours of content. Our telenovelas continued to capture the hearts and minds of our audience. In fact, our 8pm telenovela, Hasta que el Dinero nos Separe, became the third-highest-rated novela ever. After more than 50 years, this enduring formula is here to stay.

We reached audiences interested in other genres as well. In all, during 2009 we aired 70 of the top-100-rated programs in Mexico. Our average weekday prime-time audience share was 72.4 percent, and our weekday prime-time audience share for Channel 2 was 36.6 percent.

During 2009, our Television Broadcasting business performed slightly better than expected, growing revenues 0.5 percent with a margin of 47.9 percent. These results were driven by our successful content, a solid client base, and little dependence on local advertising revenues.

In 2009 we once again proved that drama has universal appeal. We demonstrated that we can successfully bring our content, as well as our production expertise, to markets previously thought impenetrable. For example, during 2009 we launched the third season of the Chinese version of La Fea más Bella, which became the second-highest rated show in China in its time slot. Also in 2009, we launched a second novela in this market, the Chinese version of our original story Las Tontas no van al Cielo. Both were produced in collaboration with leading local media companies.

The quality of our content has been critical to our ability to build a solid pay-TV networks business. During 2009, Televisa Networks produced and distributed many of the top-rated channels on cable platforms in Mexico. Furthermore, our Pay-TV Networks business has continued to expand its reach globally. As of December 31, 2009, we reached 23 million subscribers through our cable and DTH affiliates worldwide-that's approximately two million more subscribers than in 2008. As a result, full-year sales increased by 23.7 percent to Ps.2.7 billion.

The diversity of our channel offering has been a key element to the success of our Pay-TV networks business. Building on this strategy, we recently launched two new networks. In August 2009, through a partnership with Estadio W, we launched TDN, a sports network, which brings to our portfolio of pay-TV channels one of the most important genres in terms of ratings and commercial opportunities. And in February 2010 we launched Foro TV, our dedicated news network, which rounds out our portfolio and brings significant commercial and subscription potential.

During 2009, after a slow start early in the year, Sky successfully reached out to new market segments by expanding its video offerings. As a result, subscriber additions during the fourth quarter of 2009 were the highest on record, bringing Sky's total subscriber base to almost two million. In addition, after the successful launch of its new satellite in early 2010, Sky now offers high-definition channels, which we believe will be a significant differentiator.

Our Cable and Telecom platforms continued to deliver strong results during 2009. In the aggregate, revenue generating units (RGUs) for our three cable investments reached 2.8 million, of which 651 thousand were broadband subscribers and 356 thousand were telephony subscribers.

On October 1, 2009, we began consolidating Cablevision Monterrey, also known as TVI. By the end of 2009, TVI had 425 thousand RGUs, which represented incremental sales of Ps.391 million. As a result of the success of our triple-play offerings, total revenue in our Cable and Telecom business, which includes Bestel, grew by 39.5 percent during the year to Ps.9.2 billion, or 33.6 percent excluding the consolidation of TVI. Operating segment income grew by 39.2 percent to Ps.3 billion during the year, or 32.9 percent excluding the consolidation of TVI.

In 2009, our three cable investments collaborated with Megacable to launch YOO, a cobranded effort to competitively market each of such cable companies' triple-play offerings under a common brand. YOO's launch marks the first time that a cable offering has been made on a national level in Mexico. In addition to being an effective tool for accelerating growth in the number of triple-play customers, YOO demonstrated the value of collaboration.

In our Publishing business, revenue was down 9.3 percent from last year. Our performance in this business was as much a result of the recession as of structural changes in the industry as a whole. We took a number of steps to restructure this business during 2009, and we will continue our effort to transform it into a stronger, more profitable business in 2010. We remain the leading publisher in 18 of the 20 markets in which we operate, and we believe that the strength of our brands will enable us to turn this business around as the economic environment improves.

During 2009 our Gaming business became profitable for the first time since its launch. While we still face challenges in this business, we continue to see potential in our license and are working to find new ways to integrate our content offerings and extract maximum value from this business.

The ongoing diversification of Televisa, from a traditional media company into a relevant player in the telecommunications industry, will continue to be a critical element of our strategy, and our ability to gain access to the mobile spectrum being auctioned in Mexico during 2010, will be an important step in our ongoing diversification. For that reason, earlier this year we announced a potential investment of US$1.44 billion to acquire an initial 30 percent equity stake in Nextel Mexico, together with an option to acquire an additional 7.5 percent interest in the company. We found Nextel Mexico to be the right partner to help us enter the wireless market in a very efficient and timely manner.

With new spectrum, Nextel Mexico will aim to expand its services and grow its subscriber base. We are exploring potential synergies between Nextel Mexico and Televisa. Nextel Mexico could potentially have access to our 3.7 million pay-TV households-that's nearly 12 million potential new customers. Nextel Mexico would also have access to Bestel, one of the largest backbone and backhaul-network operators in Mexico. In addition, Televisa's advertising, marketing, and content platforms will be a very important differentiator. Televisa will be accessing an experienced management team, a solid customer base, and a very profitable operation. The new Nextel Mexico will have the potential to become a very important participant in the delivery of wireless broadband and telephony services in our core markets.

We are enthusiastic about our prospects for 2010. Our upcoming shows, including our ever-popular novelas, began the year with strong ratings. Our up-front negotiations for 2010 concluded successfully, growing by 5.5 percent over last year's upfront. We intend to continue positioning Televisa as the leading and most profitable producer of Spanish-language content in the world. We will do so through our scale, our unparalleled library of scripts and content, our skilled team of people, and our ability to develop some of the most cherished and admired talent in the Spanish-speaking world.

The Soccer World Cup will be an important event to many of our businesses, and we have invested accordingly. Sky will be the only platform in Mexico to transmit all 64 matches of the Soccer World Cup, 24 of which will be available exclusively to Sky subscribers. In addition, our sports network, TDN, will transmit ten of the matches on an exclusive basis, and the remaining 30 will be transmitted through our over-the-air channels.

In keeping with our plans, throughout 2009 we maintained a very solid balance sheet. We will continue to be selective in the use of the cash we generate as we seek out opportunities that make sense for our business and support our strategic objectives.

As always, I am deeply appreciative of the dedication of our employees, executive team, and board of directors. I am grateful to our customers and audiences for their loyalty during these challenging times. And I appreciate the confidence that our shareholders continue to place in our company. We are excited about the future of Televisa, and we hope you are, too.

Emilio Azcárraga Jean
Chairman of the Board and Chief Executive Officer