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assumptions are based on past experience and reasonable projections approved by
management of the Parent and updated in accordance with the performance of the advertising
markets.
These future projections cover the next five years. The cash flows for the years not considered
in the projections are estimated to be perpetual, with growth of 0%.
In assessing value in use, the estimated cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the assets. In order to calculate the rate, the current time value of
money and the risk premiums generally used by analysts for the business and geographical
area (Spain) are taken into account, giving rise to future discount rates of 9%-10% in 2013
and 2014.
Based on the methods used and the estimates, projections and valuations of value in use
available to the Parent's directors, at the date of presentation of these consolidated financial
statements, it was determined that the goodwill recognised by the Group represents its
recoverable amount and, therefore, it was not necessary to recognise any impairment losses.
The Group also performs sensitivity analyses when there are reasonably possible changes in
the key assumptions used to calculate the recoverable amount of the radio cash-generating
unit. In this respect, the sensitivity analyses are prepared under various scenarios on the basis
of the variables deemed most significant, i.e. advertising revenue, which depends mainly on
the performance of the advertising market and the investment share, and the discount rate.
The most sensitive variable is the growth of the radio advertising market, for which cumulative
annual growth of 2.4% was used for the projection period, which is in line with a moderate
recovery over the next few years. A variation of 0.5% would give rise to a change in value of
EUR 6 million. Similarly, a variation of 0.5% in the discount rate would give rise to a change of
EUR 9 million. Zero perpetual growth was used. An increase of 0.5% would give rise to an
increase in value of EUR 8 million.