50
MEDIASET ESPAÑA COMUNICACIÓN, S.A.
NOTES TOTHE FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31, 2013
(Thousands of euros)
It was done by comparing the recoverable amount with the net carrying amount.
To calculate the recoverable amount, the Company discounted estimated future cash flows based on forecasts and
hypotheses using different business parameters for upcoming years.
These hypotheses, depending on the general economic environment foreseen for upcoming years, include payTV market
projection and penetration forecasts, number of subscribers and operating costs as well as investments necessary to
carry out future business.
The estimates cover a period of 5 years; for cash flows not included, income to perpetuity is estimated using a growth
rate of around 2%. Estimated cash flows are discounted at a rate that represents the current market assessment of the
risk-free rate and the specific situation of the industry.The discount rate used was 8.65%.
Based on the assumptions used and the estimated cash flows calculated, the Company made an impairment provision
totaling 84,649 thousand euros.
Sensitivity to changes in assumptions
Changes equivalent to one percent which affect any of the basic business parameters included in projections (such
as WACC, number of subscribers, ARPU, or to perpetuity growth rates) would imply the recovery of the original
acquisition cost in the case of an increase, or additional devaluation not to exceed 90 million euros in the case of a
decrease.
Consequently, based on a 1% reduction hypothesis, the growth rates of some of the business parameters would be
negative.
Telecinco Cinema, S.A.U.
This subsidiary is engaged in cinematographic co-productions in compliance with the legal precepts that apply to
television concessionaires. Therefore, it is not possible to obtain reliably evaluate the amount recoverable either by
calculating the present value of the future cash flows from the investment or by estimating dividends to be received,
which depend on the number of productions made in the future, on the type of production and on their commercial
success. For this reason, the Company has adjusted the valuation in accordance with the equity of the subsidiary as at
year-and 2013 and 2012. Given that the value of the capital and reserves of Telecinco Cinema, S.A.U. was negative at
December 31, 2011, a provision for the same amount as its negative equity was recognized for the participating loan
granted to the company. In 2012, a portion of this provision was reversed, due to the Company’s business performance
during the year. During 2013, a portion of this provision was reversed, for the same reason as above (Note 7.2.2).
1...,40,41,42,43,44,45,46,47,48,49 51,52,53,54,55,56,57,58,59,60,...216