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 65 Changes in deferred tax liabilities: DEFERRED TAX LIABILITIES Thousands of euros Balance at 31/12/15 Additions Disposals IFRS adjustment s Balance at 31/12/16 Additions Disposals IFRS adjustmen ts Other Balance at 31/12/17 Recognition of intangible assets at fair value 25,237 - (1,787) 1,517 24,967 598 (1,820) 1,517 - 25,262 Government grants 202 29 - - 231 - (73) - (9) 148 Amortisation of merger goodwill 741 1,201 - - 1,942 1,201 - - - 3,144 Total 26,180 1,230 (1,787) 1,517 27,140 1,799 (1,893) 1,517 (9) 28,554 The “Recognition of intangible assets at fair value” deferred tax liability relates to the temporary difference between the carrying amount and the tax base of the identified trademark and signal broadcasting licence (IAS 12). The difference in interpretation between international accounting standards and local GAAP regarding the recognition of intangible assets gives rise to a greater deferred tax liability under IFRSs than under the Spanish National Chart of Accounts, to which the income tax legislation is not applicable. International accounting standards also do not recognise the amortisation of intangible assets with an indefinite useful life. The difference in standards is included in “IFRS adjustments”, for EUR 1,517 thousand, which entails the elimination of the tax effect of the accounting amortisation of the license (non-deductible). On the basis of the timing estimate of future profits, the directors consider that there are no reasonable doubts as to the recovery of the amounts recognised in the accompanying balance sheet, in a reasonable timeframe and on the basis of the projections prepared. The key assumptions underlying these projections relate mainly to advertising markets, audience, advertising efficiency ratios and trends in costs. Except for advertising, which is measured on the basis of external information sources, the rest of the 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 10 years. The Group performs of sensitivity analysis of the projections to reasonable changes in the key assumptions used to determine the recoverability of these assets. Therefore, the sensitivity analyses are prepared under various scenarios based on the variables considered to be most relevant, i.e. advertising revenue, which depend mainly on the performance of the advertising market, the investment share reached and the operating margin achieved. These analyses do not provide any evidence that the tax assets and tax credits recognised will be not recovered. f) Tax recognised in equity In addition to the income tax recognised in the consolidated statement of profit or loss, in 2017 and 2016 the Group recognised the following amounts in consolidated equity: Thousands of euros 2017 2016 Hedging instruments 1,955 (639) Total 1,955 (639)