Consolidated Annual Accounts 2017

Atresmedia Corporación de Medios de Comunicación, S.A. 2017 FINANCIAL STATEMENTS 34 Interest rate hedges In July 2017, the Company entered into interest rate swaps (IRS) in order to fix the finance cost arising from the variable rates applicable to each of the tranches of the syndicated financing arranged at that date. These IRSs expire in July 2022 and the hedged amount is EUR 157,500 thousand, with an average weighted fixed interest rate of 0.466%. Their fair value at 31 December 2017 was EUR 1,164 through, recognised as a non-current financial liability. The fair value of the IRSs at 31 December 2016 related to the syndicated financing arranged at the date amounted to EUR 1,927 thousand. 11.- Inventories Inventories in the balance sheets at 31 December 2017 and 2016: Thousands of euros 2017 2016 Programme rights, net- Rights on external productions 345,480 362,388 In-house productions and productions in progress 37,736 33,247 Sports broadcasting rights 17,100 16,788 Write-down of inventories of external productions (34,385) (35,963) 365,931 376,460 Raw and other materials- Dubbing, soundtracks and titles 2,990 2,704 Other materials 1,067 1,081 4,057 3,785 Advances to suppliers 3,895 2,766 Total 373,883 383,011 “Advances to suppliers” in the accompanying balance sheets as at 31 December 2017 and 2016 includes basically advances paid in connection with external production commitments and live broadcasting. Changes in write-downs of inventories in the accompanying balance sheets (in thousands of euros): Balance at 1/1/17 Additions Transfers Disposals or reduction s Balance at 31/12/17 Write-downs of inventories (35,963) (83) - 1,661 (34,385) Balance at 1/1/16 Additions Transfers Disposals or reduction s Balance at 31/12/16 Write-downs of inventories (35,545) (850) - 432 (35,963) The write-downs recognised arose as a result of the decision, based on estimates made by the Company, that certain titles would not be marketable and it was not likely that they would form part of the Parent’s programme schedule. At 31 December 2017, the Company had commitments, mainly for the purchase of audiovisual property rights and the production of programmes, amounting to EUR 142,865 thousand (2016: EUR 184,087 thousand). In addition, the Company has purchase commitments to distributors, the definitive amount and price of which will be determined once the programmes are produced and, in certain cases, by establishing the acquisition price on the basis of box-office takings. The best estimate of these commitments in 2017 amounted to EUR 78,082 thousand (2016: EUR 153,179 thousand).