Consolidated Annual Accounts 2017

Atresmedia Corporación de Medios de Comunicación, S.A. and Subsidiaries Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 2 and 29). In the event of discrepancy, the Spanish-language version prevails. 2017 CONSOLIDATED FINANCIAL STATEMENTS 31 based on the best estimate of the number of instruments that will vest, and this estimate is revised based on the rights expected to vest. Once the services received and the corresponding increase in “Other equity instruments” are recognised, no additional adjustments are made to equity after the vesting date, without prejudice to making the corresponding reclassifications in equity. If the Group withholds equity instruments to pay income tax to the taxation authority, the plan is treated as having been settled in full in equity instruments, except for the portion of the instruments withheld that exceed the fair value of the tax obligation. 4. Business combinations On 3 July 2017, the deed for purchase by subsidiary Atres Advertising, S.L.U. of 170,645 shares of Smartclip Latam, S.L., representing 94.82% of its share capital, was placed on public record. Consideration for the transaction amounted to EUR 14,975 thousand and was paid in full in accordance with the contractual terms. With the scope of the transaction, the Group entered into a call option with Smartclip Latam, S.L.'s non-controlling shareholders for all of their shares, which represent a 5.18% stake, and the non-controlling shareholders of its subsidiary, Smartclip Comunicacao Ltda, for shares representing 24.16% of its share capital. Both options are exercisable four years after the date of the agreement, at a maximum price of EUR 6.8 million. An upfront payment for the option of EUR 989 thousand was paid on the signing of the contract. The acquisition-date fair value of contingent consideration was part of the consideration transferred. Given the nature of these agreements, the company was fully consolidated. Smartclip Latam, S.L., incorporated in 2015, is the parent of the Smartclip Group, which is composed of Smartclip Hispania, S.L., Smartclip Comunicacao Ltda and Smartclip Mexico S.A.P.I. Its core business is the provision of marketing solutions in the digital advertising market, with operations in Spain and Latin America. This integration bolsters the Group’s competitive position in the digital advertising market, with project synergies based mainly in the sharing of know-how of two renowned teams in the advertising market and product innovation, which will promote their digital commercial exploitation. As a result of the transaction, in accordance with the accounting rules in IFRS 3, the Group assessed the (tangible and intangible) assets and liabilities of the acquiree to determine the goodwill arising on the transaction, measured as the difference between consideration transferred and the of the fair value of the net identifiable assets acquired and liabilities assumed. The following table summarises the consideration transferred, the acquisition-date fair values of the identifiable assets and liabilities of the Smartclip group, the date on which control was obtained, and the goodwill generated. The amounts may be modified within one year from the acquisition, as provided for in the standard.