2006 annual report

ANTENA 3 TELEVISION
ANTENA 3 TELEVISION
AV. ISLA GRACIOSA, 13
SAN SEBASTIÁN DE LOS REYES
MADRID . SPAIN
2006 ANNUAL REPORT
2006 ANNUAL REPORT
WWW.ANTENA3.COM
2006 ANNUAL REPORT
3
Chairman’s Statement
6
Chief Executive’s Report
8
2006 MILESTONES
11
Financial Results 12
ANTENA 3 TELEVISION Audiences
13
ANTENA 3 GROUP 19
ANTENA 3 TELEVISION’s shareholders
20
ANTENA 3 TELEVISION in the stock market
30
CORPORATE SOCIAL RESPONSIBILITY
35
ANTENA 3 FOUNDATION: Working to help children and young people
36
Social Responsibility
38
ANTENA 3 TELEVISION
43
2006, a year of big changes in the audio-visual sector
44
ANTENA 3 TELEVISION has the best image
48
UNIPREX
51
ONDA CERO: The most profitable radio
52
EUROPA FM: Great music radio
53
MULTIMEDIA AND MOVIERECORD
MULTIMEDIA AND MOVIERECORD: Emerging businesses
UNIPUBLIC
57
58
63
UNIPUBLIC: Creating events
64
ATRES ADVERTISING
67
ATRES ADVERTISING: Leading the advertising market
FINANCIAL REPORT 2006
ANNUAL CORPORATE GOVERNANCE REPORT 68
73
181
2006 ANNUAL REPORT
CHAIRMAN’S
STATEMENT
In 2006 the Spanish stock market has had a record-breaking year and the economy has maintained optimum growth levels thanks to greater
investment and job creation. Despite everything,
this has been a difficult year for media companies on the Spanish stock market. Nonetheless,
ANTENA 3 TV’s share price has risen 183.2% sin-
2006 is the confirmation of a project started three
ce it was floated on the stock market.
years ago. If in 2005 we achieved a success that
we thought unreachable, the results obtained in
The trust that the shareholders have deposited
2006 show that goals are useless if they repre-
in GRUPO ANTENA 3’s management team has
sent limits or ends. Once again, I can say with
also been rewarded in 2006, which is some-
great satisfaction that goals are more than that
thing I am particularly proud of, especially as
for us: starting points and that is exactly the
regards the small investors; whose faith in our
mind-set with which we approached 2006, the
company makes it possible for ANTENA 3 TV to
best year in GRUPO ANTENA 3’s history.
become better every year. If the General Shareholders’ Meeting approves the dividend payment
I am proud to preside a Board of Directors that
we are proposing, the dividend yield, one of
has known how to guide the Company to where
GRUPO ANTENA 3’s most appealing features in
it is today: one the most important multimedia
this area, will be one the highest of the compa-
companies in Europe. But my gratitude does not
nies quoted on the Ibex. Apart from the periodi-
end there. Without the effort and dedication of
cal remuneration already established, 2006 gave
management and the employees of the group’s
us the opportunity to offer our shareholders an
different companies, we would have never achie-
extraordinary payment through ANTENA 3 TV’s
ved the business effectiveness that we can all
share buyback of 10% of Santander. The result
boast of today: workers and shareholders.
of this operation, applauded by the market,
allows each shareholder to see their respective
stake increase by 11%.
The Group’s excellent financial situation comes
at a time of great uncertainty, but also one with
many opportunities. On one hand, new operators have entered the market, making 2006 one
of the most competitive in the history of television. On the other, it was also the year in which
Digital Terrestrial Television went from being a
ANTENA 3 TV has also made a considerable
wish to becoming a promising reality. Although
effort in social responsibility, which has been
much remains to be done in this area, which is ai-
mainly carried out through its foundation. We
ded by the Public Administrations, ANTENA 3 TV
wish to show how television or radio can also
is committed to developing the television of he
The information society is developing at an in-
be an effective way of improving our society. In
future, and also the new forms of audiovisual
credible pace. Just a few years ago it would have
its second year, the FUNDACIÓN ANTENA 3 has
leisure born of the impressive technological de-
been impossible to imagine a similar scenario.
undertaken many initiatives focused mainly on
velopments we are seeing.
Audiences and the way of consuming television
education and child development.
will change, new revolutions will arrive through
The GRUPO ANTENA 3 is determined to ex-
Internet or the mobile pone and we shall con-
The effectiveness, transparency and responsi-
pand because we believe that the future is to-
tinue to participate in this challenge with the
bility that accompany us in our goal of conti-
day. Therefore in 2006 we have created a new
same innovative and cutting-edge spirit that has
nuing to increase the value of our company;
company, ANTENA 3 MULTIMEDIA, which chan-
allowed us to take advantage of new business
the excitement and effort to make it, in the
nels all our creative potential generated in radio
opportunities that give value to shareholders.
coming years, a cutting-edge company. This,
and television towards new forms of audiovisual
consumption.
once again, the spirit that motivates us and
To do so, we have the best management team
with which we face 2007. There are no goals,
and a highly professional shareholder structure
only stages.
which is obviously familiar with the media. Three
groups, Grupo Planeta, De Agostini as well as
and RTL Group bring together their enormous
experience in the field of communication to
make GRUPO ANTENA 3 one of the leading multimedia companies.
José Manuel Lara
CHIEF
EXECUTIVE’S
REPORT
Both our audience share and advertising turnover are not a fluke but the consequence of a solid
project whose foundation allows us to see a future full of optimism and opportunities.
2006 began with a great business and managerial challenge for the ANTENA 3 TV team: outdo
ANTENA 3 TV closed out 2006 with an audience
the magnificent figures posted the previous year,
share of 19.4%. The television model, desig-
when we doubled our results, way beyond all
ned in 2003, is based on a wide variety of te-
forecasts.
levision genres and has been able to captivate
all kinds of audiences, especially families, where
And now, a year later, with a much more compe-
ANTENA 3 TV has been the leader with 22.5%;
titive market, GRUPO ANTENA 3 closed out 2006
and the youngest audiences with 26.3%, showing
with the best results in its history, at a time when
an improvement of four tenths over 2005.
a far-reaching audiovisual revolution is underway
in Spain. The arrival of new free-to-air channels,
These audience figures would not have been pos-
an increasing number of theme channels and the
sible without the best entertainment program-
use of DTT which has just burst on the scene,
mes, in-house production the best cinema or the
not only has it not intimidated us, but rather it
most exciting European football tournaments.
has made us stronger and more determined than
ever to defend our leading position as a Multimedia Group.
Our highly professional management has enabled us to record an EBITDA margin of 34.8%
and a net operating income of 290 million
euros. These figures, which make us one of
the largest European communications groups,
would not have been possible without a sound,
long-term business model.
But the new business also lies in the consumption
habits that arise as a consequence of the current
technological revolution, which will come from
the convergence between television, telephony
which represents an increase of 4.4% over the
and Internet. To meet this growing demand and
previous year. Furthermore, ATRES ADVERTI-
Another area where ANTENA 3 TV has once
exploit the contents in non-conventional me-
SING, which has become the most important
again stood out is the success and credibility of
dia, we have created the company ANTENA 3
Spanish exclusive advertising company, has made
its news services, which have increased their lead
MULTIMEDIA, the best instrument to make
ANTENA 3 TV the leader in cost per grp, in other
over public television, which was the almost un-
GRUPO ANTENA 3 the leader in the emerging
words, it maximises profits from audiences.
reachable leader until 2005.
businesses that are complementary to radio
ATRES ADVERTISING’s efforts and audacity have
and television.
been decisive in being able to reach the economic
As a result of our editorial stance, which stays
figures that we present in this annual report.
away from tasteless portrayals of the news and
As regards Digital Terrestrial Television, the te-
seeks to connect with a society that is increasin-
levision sector continues to ask the govern-
2006 has also been a great year for UNIPUBLIC.
gly more advanced and informed, the perception
ment for a real commitment in order to give it
Its consolidation as a company specialised in the
that the public has of ANTENA 3 TV is, for the
a definitive boost. Nonetheless, ANTENA 3 TV,
organisation of events has been possible thanks
third straight year, the most highly valued by Spa-
in keeping with its need to advance, has made
to a diversification plan that has generated new
nish viewers. I am particularly proud of this fact
ANTENA NEOX and ANTENA NOVA the most
lines of business. Today it is one of the leading
because it shows that our future is even more
viewed channels among this type of media. This
companies in the sector.
promising.
is only the beginning of a new way of watching
and producing television.
Apart from television, I would like to point out
We have the best capital to enjoy the present
while looking towards the future: the drive to
the milestone represented by the Group’s radio
All the Group’s creative efforts have a clear re-
grow in the television, radio, advertising or In-
business, through the company UNIPREX, which
ference in the Advertising management carried
ternet businesses convinced that only this way,
has also registered considerable audience growth
out by ATRES ADVERTISING, the company in
outdoing ourselves day after day, will we be
in 2006: 6% more than the previous year. In
charge of selling ad space in radio, cinema and
able to maintain the leadership that we feel
more concrete terms, ONDA CERO has obtained
television. In its second year it has captured
responsible to uphold for our shareholders
profits that almost double those of last year. And
14% of the investment in conventional media,
and society.
EUROPA FM is today one of the highest rated
radio stations.
ANTENA 3 wants to be where the opportunities
are and, with this in mind, has created the subsidiary UNIPREX TV, which it already manages under the brand VER-T, the local TV channel.
Maurizio Carlotti
2006 MILESTONES
FINANCIAL
RESULTS
GRUPO ANTENA 3
The GRUPO ANTENA 3 posted its best ever results in 2006, enabling the company to strengthen its position
in the Spanish audio-visual market.
Ë The Group reported sales of 1,002 million euros
Ë EBITDA margin came to 34,8%.
Ë Net operating profit amounted to 290 million euros
ANTENA 3 TV
Maintains its leading position in terms of audience share and the advertising market.
Ë A total of 870 million euros in sales
Ë EBITDA margin reached 37.4%
Ë Net profit of 307 million euros
UNIPREX
In 2006, through its radio stations, ONDA CERO and EUROPA FM, UNIPREX reported 3.5% growth in
sales in line with that experienced by the radio sector. Its gross operating profit, meanwhile, was 10%
higher than that reported in 2005. The net result totalled 19 million euros, versus 13 million euros
in 2005.
13
ANTENA 3 TELEVISION
AUDIENCES
ANTENA 3 TV saw out 2006 with an average audience share of 19.4%, continuing as the second-ranking
Spanish TV channel. In one of the most competitive years in Spanish television history, in which 24 new
channels have come on to the market, this figure is particularly impressive. ANTENA 3 TV also continued
as leader in the family target, with 22.4%. These figures are the result of a successful programming policy
which started in 2003.
-1.1
-1.9
-1.3
-2.2
+5.6
+1.8
2005 2006
2005 2006
ANTENA 3 TV
Telecinco
2005 2006
TVE1
2005 2006
Forta
2005 2006
2005 2006
Cuatro
La Sexta
ANTENA 3 TV and other companies audiences 2006 vs 2005 (SOURCE: SOFRES A.M.)
2006 MILESTONES
antena 3 televisiOn
audiences
21.9
21.3
19.4
19.1
All day
Prime Time
All individuals
All individuals
2006
2006
2005
2005
23.5
23.2
22.4
All day
Family Target
20.7
Prime Time
Family Target
2006
2005
2006
2005
All day. January-December 2006 vs 2005 (SOURCE: SOFRES A.M.)
PRIME TIME: 20:30 h to 24:00 h / FAMILY TARGET: Individuals under 55 years of age living in households of three or more members
2006 MILESTONES
antena 3 television
audience Share evolution
25.0
20.0
15.0
10.0
5.0
n
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ANTENA 3 TV
n
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ANTENA 3 TV
Telecinco
TVE 1
Autonómicas
La 2
La Sexta
Cuatro
0.0
JA
06
06
06
05
05
05 ‘05
05
06
06
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Monthly Audience Share Evolution - All Individuals (SOURCE: SOFRES A.M.)
30.0
25.0
20.0
15.0
10.0
5.0
0.0
JA
05
05
06
06
05
05
05
05
05
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06
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Monthly Audience Share Evolution - Family Target (SOURCE: SOFRES A.M.)
Telecinco
TVE 1
Autonómicas
La 2
La Sexta
Cuatro
16
ANTENA 3 TV:
LEADER IN THE FAMILY TARGET
2006 MILESTONES
lute leader in this slot, with year-on-year growth
towards the consolidation of a TV model to
ON ANTENA 3 TV THE UEFA
ChamPIONS LEAGUE OBTAINED
THE LARGEST AUDIENCE SHARE
OF THE LAST SEVEN YEARS
which the company firmly committed itself sin-
The secret behind the success of ANTENA 3 TV’s
pressive: the Champions League broadcasts re-
ce the arrival of its current management team.
family programming is its well-balanced mixtu-
ported 41.2% audience share, almost 11 points
This model is designed to meet the demands of
re of television categories, in which sport plays
above TVE1’s figures the year before.
all components of the family, providing an offer
a major role. ANTENA 3 TV began free-to-air
which has made ANTENA 3 TV leader in most
broadcasting of the UEFA CHAMPIONS LEAGUE
TV categories. This successful formula has made
in 2006. And it was in 2006 that the first phase
THE BEST BRAND IMAGE FOR
THE THIRD STRAIGHT YEAR
ANTENA 3 TV leader in the family target (22.4%)
of what is the most prestigious European foot-
ANTENA 3 TV’s editorial position and its progra-
for the second year in a row. Faced with the arri-
ball tournament worldwide reported its highest
mming policy are responsible for the way the
val of new competitors, ANTENA 3 TV not only
viewing figures for the last 7 years.
company is generally perceived by the public.
ANTENA 3 TV’s 2006 year end figures point
maintained its high viewing figures, but it also
reported the lowest fall in this target.
of +8.2 points and almost 1,500,000 new viewers
vs. TVE1. In the family target – ANTENA 3 TV’s
main audience – these results are even more im-
ANTENA 3 TV stands out because of the success
6,352,000 viewers tuned in, tantamount to a 39%
of its entertainment programs – which pay special
audience share, making ANTENA 3 TV the abso-
attention to younger segments of the audience
THE BEST NEWS ON TV
– the rigorous standards of its news programs,
In 2005, there was an unprecedented develo-
the creativity of its series and its broadcasting of
pment in the European TV sector: for the first
the most important sporting events.
time, a private channel became the benchmark
for news, ousting the public television channels
And this is reflected in the way the channel is
in the process. 2005 was the year in which An-
perceived by the public. According to the GECA
tena 3 Noticias moved ahead of TVE’s Teledia-
2006 image study, ANTENA 3 TV had the best
rio. In 2006, this trend was even more marked.
brand image and was Spain’s most highly va-
ANTENA 3 TV not only remained leader in its to-
lued channel, for the third successive year.
tal main news programs (22.9%), but widened
ANTENA 3 TV is the audience’s most valued
the gap against TVE by more than half a point.
channel – and in fact its percentage increases -
ANTENA 3 TV’s news programs attract the most
for the second successive year. According to the
viewers from Monday to Friday, and also at the
GECA index, ANTENA 3 TV scored 6.71 points,
weekend, beating TVE1 by 1.2 points.
+0.2 points up on its figure for 2005.
ATRES ADVERTISING
manages advertising
in media that are
of great commercial
interest
17
2006 MILESTONES
antena 3 TelevisiOn
brand image
+0.20
ANTENA 3 TV
6.71
+0.38
Telecinco
6.69
TVE1
Cuatro
6.20
6.28
La 2
La Sexta
6.18
5.77
2004
2005
2006
6.13 6.51 6.71
ANTENA 3 TELEVISION annual growth
Audience image ratings (SOURCE: GECA Index 2006)
ANTENA 3 GROUP
ANTENA 3 TELEVISION’S
SHAREHOLDERS
ANTENA 3 TV is the parent company of GRUPO ANTENA 3, listed on the Spanish market since 29 October 2003. Its leading shareholders include, amongst others,
the top European media group, the leading Spanish language publishing group worldwide, and multinationals in the film and TV content sector operating all over the
world. The shareholders of GRUPO ANTENA 3 are able to offer their combined expertise in the expert management of communications companies (communications
understood in the broadest sense of the word).
The Grupo Planeta De Agostini is a new alliance formed by Grupo Planeta and De Agostini which will reinforce its leadership, not only in the publishing world, but also in new sectors of the economy, especially in audiovisual media.
EL GRUPO PLANETA
GRUPO DE AGOSTINI
Planeta is a Spanish publishing and media group
This Italian multi-national group operates in the publis-
with a leading position in content production in
hing market, in the production and distribution of TV
the Spanish language market. Planeta has a do-
and cinema contents, and in the financial and insurance
minant
sectors. De Agostini operates in 30 countries and pu-
position,
overshadowing
its
competitors:
it is the leading Spanish publishing group and the se-
blishes in 13 languages.
venth worldwide.
Part of Bertelsman, the giant German company leader in the European media sector, it operates mainly in TV, radio
and content production. Its content production división, Freemantle, is one of the largest global producers. Every month,
its TV channels are watched by an average of 250 million viewers across the globe.
A group of companies firmly established in the business of development, construction and management of cooperatives.
It is presently engaged in a process of expansion, growth and diversification towards new markets particularly in the
media sectors.
21
ANTENA 3 GROUP
Antena 3 Television
shareholder structure
DECEMBER 2006
Grupo Planeta De Agostini
42.63%
Treasury Stock
2.50%
Stock Market
30.46%
Grupo Rayet
5.86%
RTL Group
18.55%
ANTENA 3 GROUP
STRUCTURE OF THE BOARD
OF DIRECTORS AND
ITS COMMITTEES
BOARD OF DIRECTORS ANTENA 3 DE TELEVISION, S.A.
Chairman
Chief Executive Officer
Directors
José Manuel Lara Bosch
Maurizio Carlotti
José Miguel Abad Silvestre
Nicolás Abel Bellet de Tavernost
José Creuheras Margenat
José Luis Díaz Fernández *
Marco Drago
Joan David Grimà Terré *
Elmar Heggen
José Luis López de Garayo Gallardo
Pedro Antonio Martín Marín
Pedro Ramón y Cajal Agüeras
Non Director Secretary
Non Director Deputy Secretary
Luis Gayo de Pozo
Carmen Rodríguez Martín
BOARD COMMITTEES
Executive Committee
Chairman José Manuel Lara Bosch
Audit and Control Committee
Chairman Elmar Heggen
Appointments and Remunerations Committee
Chairman Joan David Grimà Terré *
Maurizio Carlotti
Deputy Chairman Pedro Ramón y Cajal Agüeras
Deputy Chairman Nicolas Abel Bellet de Tavernost
Nicolas Abel Bellet de Tavernost
Marco Drago
Joan David Grimà Terré *
José Creuheras Margenat
Joan David Grimà Terré *
José Luis López de Garayo Gallardo
Pedro Antonio Martín Marín
Secretary Luis Gayo del Pozo
Members José Miguel Abad Silvestre
Secretary Carmen Rodríguez Martín
Members José Miguel Abad Silvestre
Secretary Luis Gayo del Pozo
Deputy Secretary Carmen Rodríguez Martín
* Once the disposal of the stake in Group Santander was completed, these board members, named at the bank’s request, resigned on 20-12-06
leaving vacant its respective seats on the board of directors and the commitees.
23
ANTENA 3 GROUP
José Manuel Lara Bosch
Maurizio Carlotti
José Miguel Abad Silvestre
Nicolás Abel Bellet de Tavernost
José Creuheras Margenat
José Luis Díaz Fernández *
Marco Drago
Joan David Grimà Terré *
Elmar Heggen
José Luis López de Garayo Gallardo
Pedro Antonio Martín Marín
Pedro Ramón y Cajal Agüeras
Luis Gayo del Pozo
Carmen Rodriguez Martín
ANTENA 3 GROUP
antena 3 group
corporate structure
25
ANTENA 3 GROUP
antena 3 group
management team
CORPORATE CENTRE
RADIO
NEW BUSSINESS
Chief Executive Officer
General Manager
General Manager
Maurizio Carlotti
Javier González Ferrari
Giorgio Sbampato
Chief Operating Officer
Director Radio Operations
Silvio González
Ramón Mateu
EVENTS
General Secretary
Deputy General Manager Radio
UNIPUBLIC General Manager
Luis Gayo
Ramón Osorio
Ignacio Ayuso
Antonio Manso
TELEVISION
FUNDACIÓN ANTENA 3
Director Communication & Marketing
General Manager
Executive Director
Javier Bardají
Mikel Lejarza
Carmen Bieger
Director Legal Affairs
Director News
Carmen Rodríguez
Gloria Lomana
Director Finance
Director Audit and Process Control
Fernando Costi
ADVERTISING
Director Strategy
ATRES ADVERTISING General Manager
José Manuel González
Eduardo Olano
Director CEO Office
Carmen Bieger
26
ANTENA 3 GROUP
UNIPREX is one of the Group’s greatest assets,
offering two consolidated and differentiated options, ONDA CERO and EUROPA FM. We must
also highlight the recent commitment to developing local TV, via UNIPREX TELEVISIÓN, S.L.U.,
which complements the above offers with its
VER-T brand.
By virtue of the trust shown by listeners and the
company’s management and programming policy, UNIPREX has reported profits higher than
GRUPO ANTENA 3 – through its subsidiaries,
the market average. UNIPREX’s sales per listener
ANTENA 3 TV, UNIPREX, ANTENA 3 MULTIME-
came to double those of its rivals.
DIA, MOVIERECORD, UNIPUBLIC and ATRES
ADVERTISING – reported net profit which was
ANTENA 3 MULTIMEDIA was created in 2006, and
up on the 2005 figure. Naturally, this has helped
is intended to be the axis for GRUPO ANTENA 3’s
the company maintain and consolidate its privileged position in the media sector.
Despite the emergence of the new free-to-air
TV channels, ANTENA 3 TV’s dividend yield was
higher than the Spanish market average. It has
also continued to be one of TV viewers’ preferred
channels, on the strength of its quality programs,
the rigour and credibility of its news programs,
sports coverage, and the professionalism of all of
the Company’s employees.
ATRES ADVERTISING
is the leading
exclusive advertising
agency in terms of net sales
in the advertising market.
digital activities. Its purpose is the management
of contents in non-conventional media, Internet,
fixed and wireless telephony, teletext and the
a3n24 news channel, in addition to other commercial media which have developed through
27
ANTENA 3 GROUP
the convergence of different technologies in the
In terms of revenues, ATRES ADVERTISING is
media sector. GRUPO ANTENA 3 aims to use
the leading company in the exclusive advertising
ANTENA 3 MULTIMEDIA to secure a leading
sector. It has not settled merely for providing
position in new businesses which could comple-
advertising spaces, however – it has also moved
ment its primary TV and radio operations.
into multimedia communications. Its purpose has
been to work together with clients on preparing
MOVIERECORD has confirmed and consolidated
its leadership in the cinema sector, now boasting
a 45% audience share and 54% of the advertising investment in this market.
ATRES ADVERTISING
manages diverse
programming that
offers all types of
audiences for advertisers
their communications plans, providing necessary
guidance for planning and creativity. The result
of this partnership is integrated campaigns, based on shared media management, allowing the
client to cut costs and take advantage of the ex-
After five years of losses, the success of the
pertise acquired.
company’s new contracting policy has enabled it
to report profits.
UNIPUBLIC is the leading organiser of all types
of events, particularly of a sporting nature. It has
In DTT, we can point to the fact that in their first
two core activities: sporting events, especially
year of operations, ANTENA NEOX and ANTENA
cycling competitions; and services for the pro-
NOVA have reported the highest viewing figures
duction, marketing and exploitation of all types
of these new channels.
of non-sporting events.
Through UNIPUBLIC, GRUPO ANTENA 3 has moved into the field of non-conventional advertising
at national, region and local level, enhancing the
added value of the commercial offer.
28
ANTENA 3 GROUP
GRUPO ANTENA 3 AND THE
CINEMA: “LOS BORGIA” IS
A BIG HIT IN 2006
An important part of GRUPO ANTENA 3’s activi-
ANTENA 3 FORMS ALLIANCE
WITH INDRA AND CREATES
I3 TELEVISION
ties is its commitment to developing the Spanish
In 2006, ANTENA 3 TV and Indra signed an im-
the acquisition of rights and various forms of
portant agreement whereby both parties took
sponsorship.
cinema industry, and its ongoing support built
around large-budget films, cinema, TV movies,
control of 50% of the capital of I3 TELEVISIÓN.
This company specialises in selling IT applications
In the first category, we may draw special atten-
and developing technology-based and IT system
tion to LOS BORGIA, one of 2006’s most outs-
projects in the media.
tanding films. Directed by Antonio Hernández,
the film tells the story of this important family
This company’s projects include, amongst
which dominated the clergy, and is notable for
others, the marketing of advertising spaces,
the precision of its historical details. Other films
the management and production of audio-
include BIENVENIDO A CASA, directed by David
visual contents and the management of pro-
Trueba; LA MÁQUINA DE BAILAR, a comedy
grammes’ websites.
featuring Santiago Segura, directed by Oscar
Aibar; and TRASTORNO, a thriller directed by
This new company owns the global marketing
rights for IT solutions providing support for various areas of the audio-visual business, such as
marketing and advertising management, audience management and treatment, audio-visual production, contracts, production rights and stock.
With the aim of offering the broadest possible
range of solutions, other suppliers’ and clients’
applications have been added to those developed
by I3. The company’s employees have come from
ANTENA 3 TV’s IT systems and technology divi-
sion, and from other companies in the sector.
Fernando Cámara.
ANTENA 3 GROUP
29
ANTENA 3 TV has acquired, amongst others, the
following rights: SALVADOR, a film directed by
Manuel Huerga based on the life of Puig Antich,
an anarchist, and nominated for the Goya
awards; PÉREZ, EL RATONCITO DE TUS SUEÑOS, an animated comedy for children, directed
by Juan Pablo Buscarini; and CÁNDIDA, a comedy directed by Guillermo Fresser, of GOMA
ESPUMA the comedy duo of ONDA CERO.
GRUPO ANTENA 3 also produced EL EQUIPO
JA, a comedy based on the famous TV series,
GRUPO ANTENA 3 has also stepped up its su-
The A Team, and directed by Juan Mu-
pport to the Spanish film-making industry
ñoz, one half of the famous comedy duo,
through the sponsorship and promotion of the
Cruz y Raya; LOLA, la película, directed by
Catalunya International Film Festival in Sitges,
Miguel Hermoso, a biographical portrait of
and the Spanish Film Festival in Malaga.
the acclaimed artist Lola Flores; and SIETE
MESAS DE BILLAR FRANCÉS, a classic melo-
drama, directed by Gracia Querejeta, with the
leading roles played by Maribel Verdú and
Blanca Portillo.
ANTENA 3 TV has committed itself to several
productions for 2007, of which we may highlight INDEPENDENCIA, a high-budget period
piece directed by Antonio Hernández which recounts key events in the Spanish people’s struggle against the armies of Napoleon.
In the TV Movie section, ANTENA 3 TV produced
REGRESO AL EDÉN, Instituto Cubano de Cine’s
ambitious study of Cuban independence; and
LA BELLA OTERO, a biography of the Belle Epo-
que diva, based on the novel by Carmen Posadas,
with Natalia Verbeke in the lead role.
ANTENA 3 TELEVISION
IN THE STOCK MARKET
The dollar became weaker in 2006, particularly in
the last quarter. The signs of slowdown in the US
economy, largely caused by weak housing figuIn 2006, the Spanish market reported historic le-
res, caused the euro to regain its footing against
vels of growth. This strong performance was co-
the dollar last seen two years before.
rroborated by the figures of the main European
ANTENA 3 TV SHARE PRICE
ACCUMULATES A GAIN OF 183.2%
2006 proved to be a tough year (unlike 2005) for
equity indices. The IBEX 35 rose 31.8%, ahead of
The Spanish economy remained solid in 2006.
media companies on the Spanish market. In fact,
the other European indices. London’s FTSE was
Indeed, at year end, the government raised its
over the course of the year ANTENA 3 TV’s shares
up by 10.7%, Paris’s CAC by 17.5%, Dax – the
estimated growth for this year from 3.4% to
slipped 11% against the previous year. At 2006
German stock market index – by 21.9%, while
3.8%. Internal demand (underpinned by econo-
year end, its market cap stood at €3.65Bn.
the Eurostoxx climbed 15.1%.
mic agents, flows of immigrants, the increased
female activity rate), job creation, interest rates
The most striking development in 2006 was the
In the US, 2006 levels were also a considerable
(which, despite the upward trend, remain low
arrival of new free-to-air TV channels on the
improvement on the previous year’s: the DJI rose
in real terms), and increased investment, are the
Spanish market. The emergence of these new
16.3% (in 2005 it slipped 0.61%), the S&P500
factors behind this economic growth.
rivals has eroded existing operators’ growth in
was up 13.6%, and the Nasdaq technology in-
audience share, and share prices have been ad-
dex reported 6.8% growth.
justed accordingly.
Oil prices were a source of uncertainty in 2006:
Grupo Santander’s structured withdrawal from
in July, they hit $78.3 / barrel, fuelled by tensions
ANTENA 3 TV, in which it owned 10% of the
caused by the Israeli / Lebanese conflict and Iran’s
share capital, was a particularly significant opera-
nuclear policy. During the course of the year,
tion. This transaction was executed in three sta-
however, the situation eased, and by the end of
ges: a 5% reduction of the share capital through
the year, oil prices stood at $60 / barrel.
the amortisation of Grupo Santander shares; the
acquisition – through Treasury Stock – of 5% of
the company’s shares from the aforesaid group;
and the payment of a dividend whereby shareholders were given shares from the above acquisition on the basis of one share for every 48
shares with dividend rights.
31
ANTENA 3 GROUP
AVERAGE MEDIA SECTOR
SHARE PRICE IN SPAIN IN 2006
40%
30%
20%
n
n
n
n
n
10%
0%
(10%)
(20%)
(30%)
(40%)
ANTENA 3 TeleVision
Share performance 2006
300%
+183,2%
250%
200%
150%
100%
50%
0%
EN
05
05
06
06
05 ‘05
05
05
05
05
05
05
05
05
06
06
06
06
06
06
06
06
06
06
B
R ‘ BR ‘ AY ‘ UN ‘ UL ‘ GO ‘ EP ‘ CT ‘ OV ‘ DIC ‘ NE ‘ EB ‘ AR ‘ BR ‘ AY ‘ UN ‘ UL ‘ GO ‘ EP ‘ CT ‘ OV ‘ DIC ‘
S
S
J
J
FE
F
E
A
A
J
J
M
M
O
O
MA
M
N
N
A
A
E‘
ANTENA 3 TV
Telecinco
Prisa
Sogecable
IBEX 35
32
ANTENA 3 GROUP
On 27 October, exactly three years since
ANTENA 3 TV’s stock market floatation, the
company held its third Analysts and Investors
Meeting in London, with numbers attending up
on 2005. In this meeting, in-depth information
was provided on the operation of the Company’s
Furthermore, on 29 November, the Extraordinary
different areas, and the company also presented
Shareholders’ Meeting approved payment of a di-
its business estimates for 2007.
vidend in kind, consisting of 1 share for every 48
existing shares, charged to unrestricted reserves.
Between ANTENA 3 TV’s stock market floatation in October 2003 and to 29 December 2006,
Dividend yield, one of ANTENA 3 TV’s most ap-
share prices rose 183.2%.
pealing features, is above the Spanish market
average, standing presently at 5%.
ANTENA 3 TV’S DIVIDEND YIELD IS
ABOVE THE MARKET AVERAGE
Shareholder structure
On 29 March 2006, the General Sharehol-
At 31 December 2006, the Share Capital of
ders’ Meeting approved a 2005 dividend pa-
ANTENA 3 TV amounted to €158.33 million,
yment of €0.43 / share. This amount, together
consisting of 211,112,800 shares with a par va-
with September 2005’s interim dividend of
lue of €0.75.
€0.38 / share, amounts to approximately 80% of
ANTENA 3 TV’s Net Profit.
Stock information
Share Capital (€ thousand)
Number of shares
2006
158,335
211,112,800
Year end market cap (€ thousand)
3,766
Share price 31/12 (€/share)
17.84
High (€/share)
23.2
Low (€/share)
15.15
Weighted Average Price (€/share)
18.57
Average trading volume (rights)
1,565,915
Average trading volume (€)
29,079,042
33
ANTENA 3 GROUP
TAKES THE BEST CARE OF
ITS SHAREHOLDERS
The Investor Relations Department and the Shareholders Office are responsible for releasing re-
levant news and furnishing market performance
and financial outlook data of interest to shareholders and investors.
In 2006, the Investor Relations Department and
the Management took part in 8 sector conferences in Spain, Europe and the United States. It also
If you require access to basic clearly-presented
organised 7 Roadshows in Europe, the US and
information about the Company, in compliance
Canada.
with legal requirements, the www.antena3.com
website includes a section with relevant facts, fi-
In addition to these activities abroad, the Depart-
nancial results and other interesting news.
ment holds regular meetings with analysts and
investors in ANTENA 3 TV’s headquarters, and
Anyone requiring further information about our
contacts them by phone for specific matters, re-
Company can also write to the e-mail of the In-
sults estimates, market vision, etc.
vestor Relations Department: ir@antena3tv.es
Non-institutional shareholders can also contact the Shareholders Office directly at the following e-mail address: oficinadelaccionista@
antena3tv.es
SOCIAL RESPONSIBILITY
ANTENA 3 FOUNDATION:
WORKING TO HELP CHILDREN
AND YOUNG PEOPLE
The Fundación considers this project to be parti-
the Health Department of the Madrid Autono-
cularly important and one which requires great
mous Government, several of these educational
sensitivity. Accordingly, it is working in conjunc-
programs are broadcast in other hospitals such as
FUNDACIÓN ANTENA 3 began 2006 firmly fo-
tion with the Asociación Española de Pedia-
Doce de Octubre, Ramón y Cajal, La Princesa and
cused on children and teenagers, the group it
tría (Spanish Association of Paediatricians) and
Hospital Clínico San Carlos.
considers to be most receptive to the fostering
the Colegio Oficial de Psicólogos de España
of values, and that which needs the most help.
(Official Spanish Association of Psychologists),
This, however, is only a fraction of the Fundación’s
By reaching out to the young people of today,
whose know-how and expertise ensure that
hospital activities. FUNDACIÓN ANTENA 3 provi-
we are investing in the adults of tomorrow. With
Canal FAN 3’s contents meet the objectives set.
des funds for these hospitals’ libraries and stocks
this guiding purpose, various initiatives were
of toys and games, and supplies laptop compu-
carried out in 2006 geared towards education,
Canal FAN3 is currently being aired in Madrid’s
ters to enable these children to communicate
fostering reading and healthy habits. Part of the
Niño Jesús and La Paz hospitals. What is more,
with their families, friends and teachers, despite
Fundación’s attention has been focused on deve-
through a cooperation agreement signed with
being bed-bound or in isolation.
loping and implementing a Hospital Assistance
Programme for hospitalised children.
Lastly, the Fundación’s hospitals programme
promotes and assists in the construction and
The aim of this programme is to improve the daily
maintenance of boarding houses for the pa-
life of hospitalised children. One of the initiatives
rents of long-term sick children.
has been to design and set up the Canal FAN3
closed-circuit TV channel.
Promoting Values and Principles has been another linchpin of the Fundación’s activities, with
This is a free no-advertising channel offering con-
particular importance attached, amongst others,
tents for children and teenagers, broadcast in
to road safety, promoting reading and healthy
children’s hospitals and in the paediatric wards of
habits.
public and private hospitals.
The Fundación has worked particularly hard on
Canal FAN3 offers a mixture of entertainment
raising awareness and educating children and
– films, series and cartoons – educational progra-
teenagers about road safety. In conjunction with
ms, fostering of healthy habits and information
UNIPUBLIC, it created and started up a roadshow
on health, helping sick children to understand
which visited the 21 Spanish cities chosen as bac-
what they are going through in an accessible and
kdrops for the stage finishes of Spain’s Cycling
enjoyable way.
Vuelta. The Road Safety Roadshow – visited by
37
SOCIAL RESPONSIBILITY
28,500 people – provided children and young
the development of action plans designed to
Campaign, organised by Fundación Solidaridad
people with enjoyable games and learning acti-
raise awareness amongst the general public.
Carrefour and by Alain Afflelou (the opticians).
vities, the primary aim of which was to introduce
Through this initiative, the Fundación undertakes
This was yet another example of its readiness to
children to the principles of road safety. Leading
to continue working towards raising awareness
disseminate and foster healthy habits. During
institutions in this sector such as the General
and implementing actions designed to reduce
the campaign, different messages were aired on
Traffic Directorate (DGT), Cruz Roja (Red Cross),
the number of traffic accidents.
ANTENA 3 TV and ONDA CERO stressing how
RACE, AESLEME and MAPFRE, cooperated with
the Fundación on this project.
important it was for young children to have good
In April 2006, the Fundación, ANTENA 3 TV and
sight when learning. At the end of the campaign,
UNIPUBLIC oversaw the “Un Libro, Un Juguete”
children aged 6-8 were given sight tests, and fra-
FUNDACIÓN ANTENA 3 complemented the abo-
(A Book, A Toy) campaign in Barcelona. This ini-
mes and lenses were handed out free of charge
ve activities with an awareness-raising campaign
tiative, one of a number of activities carried out
to the children who required them (according to
in ANTENA 3 TV and ONDA CERO, whereby chil-
by the Fundación to promote reading, coincided
the results of the tests). During the campaign,
dren and teenagers offered their own advice gea-
with Spain’s National Book Day. The public res-
5,000 sight tests were performed and 2,955 sets
red towards raising awareness and encouraging
ponse was such that more than 4,000 books
of glasses were handed out free of charge.
responsible driving habits over the festive period.
were collected over a three-day period. The bo-
FUNDACIÓN ANTENA 3’s concerns about road
oks were delivered to the library of San Juan de
Lastly, FUNDACIÓN ANTENA 3 plays an active
Dios children’s hospital.
role, together with Fundación Inocente Inocente,
safety led it to sign the European Road Safety
in preparing and selecting causes and beneficia-
Charter, an initiative of the European Commis-
In October, FUNDACIÓN ANTENA 3 took part in
ries for the ANTENA 3 TV’s Gala Inocente aired
sion. The purpose of the Charter is to promote
the VII Prevention of Sight-Related School Failure
every year on 28 December.
Fundación Antena 3 has offered its assistance, in the form of donations and sponsorship,
to different institutions and foundations:
ËFUNDACIÓN HOSPITALITAT DE LA MARE DE DÉU DE LOURDES DE
BARCELONA: creating a free hostel for low-income families of sick
children undergoing hospital treatment in Barcelona.
ËAPASCIDE (Asociación de Padres de Niños Sordociegos): creating the
first occupational and residential centre for deaf and blind children in
Seville.
ËINFANCIA SIN FRONTERAS for its Lucha contra la Malaria (Fight Malaria) campaign in Niger.
ËFUNDACIÓN GRUP SET FOR ITS HACIA LA CONCORDIA A TRAVÉS DE
LA MÚSICA (harmony through music) programme.
ËSponsoring the II “EL CHUPETE” CHILDREN’S ADVERTISING FESTIVAL,
which focused on advertising in new technologies.
ËDonating advertising spaces free of charge in ANTENA 3 TV, ONDA
CERO and MOVIERECORD. In 2006, the following institutions benefited from this programme: Banco de Sangre de Barcelona (Barcelona
Blood Bank), Save the Children, the Ayudemos a un Niño association
and the Más Vida foundation.
SOCIAL
RESPONSIBILITY
This year, the start of the summer holiday exodus
coincided with the coming into force of the new
License by Points law. ANTENA 3 TV broadcast
EL GRAN TEST DE LA CONDUCCIÓN (THE BIG
DRIVING TEST), and made use of the same initiati-
SOCIAL AND CULTURAL INITIATIVES
ves deployed in the Easter campaign: radio spots,
In 2006 – more so than in any other year –
small adverts in the leading Spanish broadsheets
ANTENA 3 TV took to the streets, making direct
and full-page adverts in magazines. ANTENA 3 TV
contact with the general public, and engaging it
also handed out 100,000 invitations for taking
in social and cultural initiatives.
part in El gran test de la conducción.
In 2006, ANTENA 3 TV’s social activities got under way with the traditional Traffic Campaign.
COLLABORATION WITH
FUNDACIÓN ANTENA 3
This year several formulas were employed.
ANTENA 3 TV, FUNDACIÓN ANTENA 3 and
UNIPUBLIC have been awarded the European Road
For the second successive year, the Easter holi-
Safety Charter as a result of all these initiatives.
day exodus was marked by ANTENA 3 TV’s and
ONDA CERO’s road safety campaign, carried out
On the Sant Jordi feast days on 21, 22 and 23
in conjunction with FUNDACIÓN ANTENA 3.
April, ANTENA 3 TV, FUNDACIÓN ANTENA 3,
ONDA CERO, EUROPA FM and the Barcelona
As in previous years, this campaign targeted
City Council organised the UN LLIBRE PER UN
areas such as speeding, use of the seatbelt,
REGAL campaign. Viewers and listeners were en-
consumption of alcohol, etc.... The 2006 slogan
couraged to do their bit towards helping society
was NO CORRAS NENG. This campaign featured
at large by donating books to the Sant Joan de
Estopa, the Spanish rock group, and Neng de
Déu Children’s Hospital.
Castefa, with their version of the famous song
PRECAUCIÓN, AMIGO CONDUCTOR (Be careful
Last December, ANTENA 3 TV and FUNDACIÓN
at the wheel, my friend). Hundreds of spots were
ANTENA 3 broadcasted a special INOCENTE,
aired on ONDA CERO and EUROPA FM, together
INOCENTE gala which raised funds to fight
with the TV campaign. In the largest cities, half
against children’s cancer, so helping some of the
a million stickers were handed out at strategic
most vulnerable members of society.
departure points on the most important dates.
4000 drivers were given free CDs with music,
and campaign members were out in force at
1000 service stations to remind people to drive
carefully.
ATRES ADVERTISING
allows advertisers to
associate themselves
with actions that are
of great social interests
From 19 May to 14 October, A3 joined the Spanish rock group Estopa on tour, helping to bring
home to young people the message of the road
safety campaigns.
39
SOCIAL RESPONSIBILITY
On 27 May, in Madrid and on 3 June, in Barcelona, ANTENA 3 TV presented APASSIONATA, the
world’s biggest equestrian show.
GRUPO ANTENA 3
AND THE ENVIRONMENT
The companies in GRUPO ANTENA 3 have a mi-
In 2006, ANTENA 3 TV carried out many other
nimal impact on the environment, when compa-
activities with children, young people and, gene-
red with companies in other economical sectors.
rally speaking, with anybody who felt like having
However, this area is taken very seriously, and this
fun and taking part in other activities taking pla-
is particularly apparent in the company’s energy
ce on the street.
saving plans and recycling of waste.
From 16 to 18 March, ANTENA 3 TV and ONDA
Energy is saved through rational management of
CERO oversaw the VENTE CON NOSOTROS DE
electrical consumption, chiefly in ANTENA 3 TV’s
FALLAS campaign in Valencia, in conjunction
studios and sets. Its lighting employs state-of-
with the Valencia City Council. Over this 3-day
the-art technology which allows considerable
period, five coaches were put at the disposal of
energy savings.
any viewers and listeners who wished to go on a
tour of Valencia’s most important fallas (the fallas
By recycling office waste, such as paper, IT mate-
are the large figures prepared and burned during
rial or video tapes, the company makes better use
the Festival of San José in Valencia).
of its resources, and also prevents potential environmental damages (potentially pollutant wastes
28 May, Madrid: ANTENA 3 TV, together with the
are collected by specialised waste companies).
Madrid City Council, offered viewers the chance
of taking part in a unique event: an attempt to
What is more, all the Group companies have equi-
create the LARGEST FINGER PAINTING IN THE
pped their premises with containers for batteries
WORLD, thereby setting a Guinness World
and paper collection (for subsequent recycling).
Record ®. Around 3,000 children used 2,000
kilos of paint to achieve their common goal of
GRUPO ANTENA 3, eager to cover and respond
painting a 1,170 m2 canvas.
to the requirements of its audience, its advertisers and its shareholders, and underpinned by
In the summer, ANTENA 3 TV was again in the
the skills of its employees, has consolidated its
thick of things with the III JUNIOR CYCLING
position as the leading company in the multime-
VUELTA, in which 6,000 children took part.
dia commercial communications sector in Spain.
40
SOCIAL RESPONSIBILITY
In 2006, ANTENA 3 TV organised an lnternship
Programme geared towards university students
TRAINING 2006
In recent years, ANTENA 3 TV has emerged as
a cutting-edge Company in the field of training.
Every year the company does its utmost to improve the competitiveness and skills of its emplo-
ATRES ADVERTISING
with its multimedia
focus, has the sales
team with the most
comprehensive vision
and Professional Training pupils. 26 agreements were signed with various training centres,
enabling 184 pupils to undergo work experience courses in the Company’s different lines
of business.
yees, with the aim of being able to confidently
tackle future challenges.
Furthermore, for yet another year, ANTENA 3
TV, together with Universidad Carlos III, the
In 2006, a great deal of effort has gone into
University of Salamanca and Santillana Forma-
preparing our employees for the technological
ción, has sponsored a Masters in Audio-visual
changes posed by digitalisation, and for DTT.
Company Management and an MBA in Television Companies.
The 2006 Training Catalogue contained 339
courses, mainly offering technical knowledge,
languages and business skills. 158 of these courses have been given to a total of 1,737 employees, each of whom had an average of 20.6 training hours, and a quality average of 8.2 points
out of ten.
The Company has also implemented a Management training plan, the primary object of which
has been to develop different management skills
and so optimise managers’ performances. The
purpose here is to increase our organisation’s and
our teams’ ability to adapt to the forthcoming
changes in the sector posed by the emergence of
new competitors and the far-reaching technological changes caused by DTT.
41
SOCIAL RESPONSIBILITY
Code of Self-Regulation
on TV Content and Childhood
This Code was signed on 9 December 2004 by
ANTENA 3 TV DE TELEVISIÓN, S.A., Gestevisión
Telecinco, S.A., Sogecable, S.A. and Radio Televisión Española, and approved by the Spanish Government on the same date as a complementary
mechanism in administrative and legal proceedings, deemed compatible with laws in force. In
2006, the new national TV operators, Veo TV, Net
TV and La Sexta, and the Autonomous Community public operators forming part of la FORTA, also
The Code establishes a system whereby TV
signed the aforesaid Code.
contents are controlled by the operators. In
addition to the aforementioned signatories of
The purpose of the Code is to ensure that the
the Code, representatives of TV content pro-
following main requirements, amongst others,
duction companies and information professio-
are met:
nals shall take part in this system, through the
establishes two slots in which minors are afforl Reconciling the freedom of expression and of
Self-Regulation Committee.
ded protection:
Furthermore, a procedure is established to mo-
programming of the signatory operators with
child protection principles, thereby ensuring
l The general protection slot: From 06.00 to
nitor the application of the Code. Institutions
that television contents in certain time slots
22.00. During this period, programs aired
representing young people and children, parents
are suitable for viewing by minors.
shall not include any contents not recom-
and teachers, consumers and users shall take
mended for children under the age of 18.
part in this procedure, and, together with the TV
that parents or guardians are furnished with
l The reinforced protection slot: Monday to
operators who are the original signatories of the
a critical selection of the programs seen
Friday from 08.00 to 09.00 and from 17.00
Code, they shall constitute the Mixed Monitoring
by children.
to 20.00; Saturdays, Sundays and national
Committee.
l Promoting parental control, in such a way
l Safeguarding the basic rights of the children
taking part in TV programs.
TV operators are aware that within the concept
of minors defined by laws applicable, it is necessary to distinguish between children and teenagers. Accordingly, the Code of Self-Regulation
holidays from 09.00 to 12.00. During these
periods, programs shall not include any con-
The bodies responsible for the monitoring and
tents not recommended for children below
control of the application of the Code have ope-
the age of 13.
rated regularly since the Code came into force on
9 March 2005.
ANTENA 3 TELEVISIoN
2006, A YEAR OF
BIG CHANGES IN THE
AUDIO-VISUAL SECTOR
To explain this performance, we need look no
further than ANTENA 3 TV’s programming grid,
which by virtue of its solidity, balance, stability,
and consistency, has proved compelling to the
different audience types, while viewers have
remained loyal as a result of the channel’s unshakeable commitment to innovation and quality.
For the third successive year, ANTENA 3 TV was
Without a shadow of a doubt, 2006 has been
Spain’s most valued channel, reporting sustained
the toughest and most competitive year in
growth over the last few years.
ANTENA 3 TV’s history. ANTENA 3 TV has proved
capable of maintaining the results reported in
In 2006, ANTENA 3 TV has become the channel
2005, and its privileged market position, minimi-
for watching the most prestigious European com-
sing the effects caused by the profound change
petitions. Indeed, ATRES ADVERTISING’s broad-
of panorama in the audio-visual sector.
casting of the first phase of the UEFA CHAM-
ANTENA 3 TV stands out as the viewers’ No. 2
choice, maintaining its top spot amongst Spanish
ATRES ADVERTISING
obtained its greatest
power ratio
in 2006
PIONS LEAGUE reported the highest audience
figures for this competition of the last 7 years:
39% audience share and 6,352,000 viewers.
families (22.4%), and with the leading position
In ANTENA 3 TV’s ranking of its most watched
amongst the younger viewers (under 24), with
broadcasts in 2006, eight out of the top ten were
a 26.3% market share (up 0.4%). These results
UEFA CHAMPIONS LEAGUE broadcasts (all with
were achieved in a year in which we have seen
over 6 million viewers). These figures confirm the
the emergence of five new Autonomous Com-
success of this formula.
munity stations and over eighteen DTT channels.
What is more, on top of Cuatro, we saw the arri-
LEADERSHIP IN NEWS
val of la Sexta, another general channel, which
In 2005, ANTENA 3 TV pulled off a major coup,
broadcast the 2006 World Cup in Germany.
unprecedented in Europe, by wresting the
Nº 1 position in news programs from a public TV
ANTENA 3 TV’s good results were particularly
channel. In 2006, ANTENA 3 TV not only consoli-
significant in the first half of the year, especia-
dated this position but grew stronger.
lly in January and February, when it was the
top option.
45
ANTENA 3 TELEVISION
reported a 22.9% audience share, vs. 21.7%
CINEMA, ONE OF ANTENA 3 TV’S
TRADEMARKS
COMEDY REIGNS AMONG
THE SERIES ON ANTENA 3 TV
for
of
Another star of television is film, one of the cor-
Comedy is one of the riskiest and most difficult
ANTENA 3 TV’s news programmes is shown by
nerstones of ANTENA 3 TV’s programming. For
genres in fiction but can also lead to big payoffs
the gap that has been opened up against TVE1:
yet another year 8 of the Channels films were
in terms of audience. ANTENA 3 TV has clearly
1.2 points against the previous year. The leader-
ranked among the top ten most watched films of
committed to comedy and is the leit motiv of its
ship is absolute both on weekdays and at the
the year. Not only does ANTENA 3 TV show the
productions in 2006.
weekends.
best cinema, it showcases them: the promotion
The main broadcasts of ANTENA 3 NOTICIAS
TVE1.
The
undisputed
dominance
of these films, in terms of frequency and creati-
In 2006 LOS HOMBRES DE PACO has become
What causes viewers to believe and place their
vity, is one of the Channel’s most highly valued
one of the most well-liked series after its premier
trust in certain news programs? The answer
features.
in 2005, reaching an audience share of 21.5%.
is the careful editorial position developed by
Comedy was also the protagonist of the recently
the country’s leading newsreaders. ANTENA 3
ANTENA 3 TV’s three most successful movie pro-
finished series AQUÍ NO HAY QUIEN VIVA and MIS
NOTICIAS 2, presented by Matías Prats, boasts a
grammes are, EL PELICULÓN, CINEMATRIX and
ADORABLES VECINOS, which were huge hits.
23.1% audience share, with 2,965,000 viewers,
MULTICINE. MULTICINE finished the year as the
making it the most popular news programme
leader in its time slot with 21.8%. EL PELICULÓN
In 2006 ANTENA 3 TV recovered one of its most
in 2006. In December 2006, it had been the pri-
(19.2%) and CINEMATRIX (19.2%) have become
successful family-oriented sitcoms of the last
me time leader for 26 months in a row. Not only
the movie slots with the best image in national
few years: MANOLO Y BENITO CORPOREISION,
that, but Matías Prats still has the most highly
television, according to GECA.
the updated version of MANOS A LA OBRA.
valued image amongst TV personalities and
continues to be the most popular newsreader
in Spain. In 2006, in fact, he was given the Gold
TP best newsreader award for the third time.
E
29.5%
5,658,000 viewers
EMO
30.0%
5,352,000 viewers
30.1%
5,012,000 viewers
HUMAN TRAFFICKING
25.0%
4,588,000 viewers
THE SIEGE
27.7%
4,553,000 viewers
24.0%
4,387,000 viewers
26.9%
4,350,000 viewers
ICE AG
The air of renewal which has swept through
ANTENA 3 TV’s programming in 2006 has also had
an impact on its news programs. ESPEJO PÚBLICO,
one of the channel’s main hopes, has been reborn
as a new daily morning news programme/magazine, after 10 years of being aired on Sunday afternoons (and after winning numerous awards).
This new ANTENA 3 TV format is presented by
Susanna Griso, a “star” newsreader, and also,
according to the GECA 2006 image study, one of
the most highly valued.
FINDING N
THE MUMMY
THE TRA
NSP
ORTER
SPIDE
RMAN
46
ANTENA 3 TELEVISION
Other well-known series shown are SIN RASTRO
(Without a trace) one of the most renowned
shows, receiving ten awards, including two
Emmys and NUMB3RS, which comes to Spain
backed after its success in the US and Europe.
VARIETY IS THE KEY TO SUCCESS
ANTENA 3 TV is already a hit in Spanish homes.
Another of the Channel’s cornerstones, apart
To achieve this, the Channel has researched, pro-
from news, is entertainment. ANTENA 3 TV has
duced and acquired very productive and varied
a wide range of programmes and genres that
TV programmes.
has been successfully backed by TV viewers.
With daily game shows like LA RUEDA DE LA
ATRES ADVERTISING
manages diverse
programming that
offers all types of audiences
for advertisers
Instead of basing its success on a single format or
FORTUNA (The Wheel of Fortune) (25.7%),
genre, ANTENA 3 TV seeks to meet the demands
leader of its time slot and one of the big hits in
of all types of audiences through comprehensive
2006; EL PRECIO JUSTO (The price is right). or
programming. News, film and game shows, as
¿QUIÉN QUIERE SER MILLONARIO? (Who wants
well as comedy, talk-shows, soap operas, series or
to be millionaire?). To these must add 1 CONTRA
children’s programming form part of the Channel’s
100 (1 vs. 100), once of the most successful inter-
programming, and is the best way to successfully
national game shows.
reach the widest range of audiences.
Magazines are an essential part of generaThis makes ANTENA 3 TV the most valued news
list TV programming. In this genre stands out
On 25 December, this sitcom premiered with
programmes. ANTENA 3 NOTICIAS is clearly the
EN ANTENA, which is broadcast in the afterno-
4,464,000 viewers and an audience share of
news programme par excellence after two conse-
on and has already become a hit after being on
25.8%. This figure rose to 31.3% for the family
cutive years as audience leaders, even increasing
the air for only three months. This programme,
target.
their lead over its competitors.
presented by one of the most popular faces in television, Jaime Cantizano, has revolutionised the
While comedy has been the focus of our in-house
concept of magazine by avoiding the more shrill
production, suspense and intrigue have domina-
elements of this format with new sections such
ted our foreign fiction. Among the series shown
as the “lie detector”, which is the absolute lea-
on ANTENA 3 TV stands out 24, the big winner
der in its time slot with a 24.6% audience share.
at the 58th annual Emmy Awards, the most pres-
This talk show has been such a hit that the com-
tigious award in television.
petition has been forced to copy the formula.
47
ANTENA 3 TELEVISION
The long-running and most successful talk-show
on television can also be seen on ANTENA 3 TV.
EL DIARIO DE PATRICIA (23.4%), is by far the
leader of the afternoon time slot, with new stories, encounters and emotions.
And when talking about entertainment, we must
always mention comedy. Late night belongs to
ATRES ADVERTISING
makes an extensive
catalogue of
advertising formats available
to advertisers
In every aspect, ANTENA 3 TV is, according to
GECA, the leader in film, soap operas, and national and foreign series, which explains why it has
more films among the top ten most watched of
any other channel in 2006.
ANTENA 3 TV thanks to BUENAFUENTE, which is
a favourite of both the critics and viewers, having
As regards the soap opera, ANTENA 3 TV can
won the TP Gold and Ondas awards. Another
boast the success of PASIÓN DE GAVILANES,
comedy hit is HOMOZAPPING, the hottest, most
EL CUERPO DEL DESEO and RUBI. The soap
humorously critical show dedicated to its version
opera can hit a younger note as well, as with
of the NEWS.
REBELDE, which has become a mass pheno-
menon: its sound track went double platinum
ANTENA 3 TV also stands out in sports. The most
in Spain. As regards national series, along with
popular of all competitions in the king of sports
the well-known hits, AQUÍ NO HAY QUIEN VIVA
is shown for free on ANTENA 3 TV: the UEFA
and MIS ADORABLES VECINOS, this year ano-
CHAMPIONS LEAGUE. The first stage broadcast
ther series, which began at the end of 2005,
on our channel has obtained the largest audien-
has taken root with the Spanish public:
ce of the last 7 years.
LOS HOMBRES DE PACO. In foreign fiction,
24, along with SIN RASTRO and NUMB3RS
The fact that ANTENA 3 TV is a favourite among
kids, the most watched year after year, is nothing new. Children’s programming is one of the
Channel’s cornerstones which stands out for its
continuity. Successful products such as MEGATRIX
with more than 11 years on the air or the
cartoons favoured by viewers THE SIMPSONS,
this year’s TP Gold and SHIN-CHAN, make
ANTENA 3 TV the most imaginative and fun
channel in Spanish television.
make up our programming.
ANTENA 3 TELEVISION
HAS THE BEST IMAGE
For the third straight year, ANTENA 3 TV has
been the channel with the best image and the
most highly valued by Spanish viewers according
ENTERTAINMENT PROGRAMMES
to the 2006 GECA Image Index. With an avera-
With an average score of 6.15, ANTENA 3 TV
ge score of 6.71, the Channel is the top-ranked
is the highest-rated Channel by Spanish viewers.
and, despite the arrival of new operators in
BUENAFUENTE and HOMOZAPPING are the
the Spanish television market – Cuatro and
top-ranked.
La Sexta –, increased by 0.20 points compared
FILM
to 2005.
ANTENA 3 TV stands out for yet another year
as the channel with the highest score in series
– both national and foreign – and entertainment
ATRES ADVERTISING
imbues the image
of programmes in
commercial values
for advertisers
EL PELICULÓN and CINEMATRIX are the movie
slots with the best image in national television
with a rating 7.04 and 6.49 respectively.
programmes. Its film slots EL PELICULÓN and
TV PERSONALITIES
CINEMATRIX are the most highly rated by Spa-
Matías Prats is for the second straight year the
nish viewers.
TV professional with the best image in Spanish
television with an average rating of 8.06 (+0.32
Likewise, according to the GECA Index, Matías
against 2005 and +0.68 opposed to 2004).
Prats is the best professional in Spanish televi-
Matías Prats is also the only television personali-
sion.
ty whose rating exceeds eight points.
SERIES
NEWS PRESENTERS
With an average score of 7.11 (+0.25 against
The news presenters at ANTENA 3 NOTICIAS are
2005), the series on ANTENA 3 TV – both na-
the top rated in for the two main news hours:
tional and foreign – have obtained the highest
score.
Matías Prats, besides being the TV personality
with the best image, is also the best news presenThe channel is the highest rated in terms of na-
ter, with an average rating of 8.06.
tional fiction, where it obtained an average score
of 7.19, and foreign fiction as well, by obtaining a
Susanna Griso stands out as the best lunch time
rating of 7.04. Meanwhile, THE SIMPSONS is the
news presenter with a rating of 6.58 (+0.20
highest-rated cartoon: 6.98.
against 2005).
49
ANTENA 3 TELEVISION
LEVEL OF ENTERTAINMENT
ENTERTAINMENT PROGRAMMES
FILM RANKING
6.71
1
ANTENA 3 TV
6.15
1
EL PELICULÓN
1
ANTENA 3 TV
2
TELE 5
6.69
2
TELE 5
5.98
2
CINEMATRIX
6.49
3
TVE-1
6.28
3
TVE-1
5.95
3
VERSIÓN ESPAÑOLA”
6.48
4
CUATRO
6.20
5
LA 2
6.18
6
LA SEXTA
5.77
NATIONAL SERIES
1
ANTENA 3 TV
2
3
FOREING SERIES
7.19
1
ANTENA 3 TV
TELE 5
7.19
2
TVE-1
6.66
3
7.04
MOST VALUED FOR ITS SERIES
7.04
1
ANTENA 3 TV
7.11
CUATRO
6.89
2
TELE 5
7.01
TELECINCO
6.76
3
CUATRO
6.61
NEWS PRESENTERS
TV PERSONALITIES 2006
1
Matías Prats
8.06
1
Matías Prats
8.06
2
Jesús Vázquez
7.85
2
Iñaki Gabilondo
7.17
3
Bertín Osborne
7.60
3
Pedro Piqueras
6.92
4
Lorenzo Milá
6.87
5
Susanna Griso
SOURCE: GECA Index 2006
6.58
UNIPREX
ONDA CERO:
THE MOST
PROFITABLE RADIO
The
commercial
effort
made
by
ATRES
ADVERTISING, the GRUPO ANTENA 3’s company
that manages advertising in radio, the print press,
television and cinema, has allowed ONDA CERO
One of GRUPO ANTENA 3’s greatest assets is,
to obtain a turnover per listener that is twice that
without a doubt, radio; a market in which the
of the competition.
Company owns two established and unique
stations: ONDA CERO and EUROPA FM
These historic results have been obtained
thanks to the complementary nature of natio-
The radio map, while waiting for new frequency
nal and local advertising, as well as the ability
concessions as a result of the new Technical Plan,
to adapt commercial resources to the new mar-
has not undergone significant changes. Howe-
ket demands.
ver, UNIPREX’s growth outlook has been confirmed. In 2006, with audience increase of 6%
For a company that had been running a deficit
compared to 2005, radio has been yet another
until 2004, it is even more remarkable that it has
success store for the GRUPO ANTENA 3. ONDA
obtained an EBITDA margin of 25% in 2006,
CERO has consolidated its leadership in terms of
which brings us closer to the levels reached by
profitability per listener and has almost doubled
the leading channel in the sector.
its profits compared to the previous year.
With revenues of up to 100 million euros and
a gradually growing audience share, especially
in music radio, UNIPREX has achieved two main
objectives: be one of the leading radio stations,
based on a unique style that is different from the
polarisation of the competition and also become
a company whose profitability grows beyond the
market average.
ATRES ADVERTISING
obtains the greatest
commercial
effectiveness in radio
as well
53
EUROPA FM:
GREAT MUSIC RADIO
We try to make our programmes pleasant, where
irony is more important than being aggressive, as
our professionals listen closely to the audience’s
demands.
EUROPA FM one of the best music stations, with
CARLOS HERRERA: THE BEST
COMMUNICATOR IN SPANISH RADIO
highly valued product and an increasingly more
Carlos Herrera is also a master in the art of ma-
loyal audience. The changes made in program-
king news entertaining, mixing current events
ming, with a more dynamic morning show and
with the most incredible stories of people who
more exciting and provocative programmes at
call the show. The host of HERRERA EN LA ONDA
night, have already started to bear fruit. This was
adds a unique style, a way of looking at life.
Another of UNIPREX’s goals is to make
made possible due to market research, product
assessment, with an average listening time of
His talk shows are the most diverse in Spanish
162 minutes per audience member, and an au-
radio, with a cast of regulars made even better
dience whose increase was just confirmed by the
by new personalities who have recently come
Estudio General de Medios.
on board. New sections have also been added
– among them “voices in the news”– as well as
CREDIBILITY
new approaches and collaborators who make
ONDA CERO, with two million listeners, is one
the show even better.
of the leasing radio stations, with its acceptance and credibility helping it gain audience share
The answer to the mornings with Carlos Herrera
in a changing and very competitive market. Its
in the afternoon has a name: GOMAESPUMA.
current programming is designed for the two mi-
Guillermo Fesser and Juan Luis Cano live the
llion listeners that listen to ONDA CERO everyday,
moment in their own peculiar way and Internet
without counting the 500,000 that continue to
events accordingly. They do not shy away from
tune into EUROPA FM’s broadcast.
being critical or provocative, but their way of doing radio is enriched everyday by the complicity
In radio there is not remote control. Listeners
identify with voices, a recognisable style and way
of understanding life and communication. Therefore the main focus of the last two seasons has
been precisely to combine growth with stability
and the consolidation of programming based on
informing and entertaining.
and spontaneous participation of listeners.
54
UNIPREX
‘YOU DESERVE THIS RADIO’
The success of ONDA CERO and EUROPA FM is
based on our attractive products, in which the
various pieces fit together and the contents are
chosen by only taking into account the demands
and needs of listeners. Our radio station has popularised the slogan “te mereces esta radio” (you
deserve this radio) as proof of our commitment.
At night, its time to the day’s events with the
LA BRÚJULA, a news and opinion programme
UNIPREX GROWS WITH DTT
that is directed and presented each season by
To these two products, UNIPREX adds a third,
Carlos Alsina. This is also a show that deals with
which has just started and complements the
the news in a special way, with a touch of irony
other two: VER-T. Our commitment to local te-
and without the dogmatism heard on other sta-
levision, within UNIPREX, is one of this season’s
tions. This night time news programme has been
new surprises. In 2006 digital terrestrial television
slowly winning over followers, as can bee seen
has taken off locally in Spain. New horizons have
by the growing number of listeners that tune
opened in the media and the GRUPO ANTENA 3,
into LA BRÚJULA on ONDA CERO.
true to its commitment to grow and be present
A similar style can be heard early mornings, from
in various markets, has not wanted to wait on
Also growing is the number of listeners who
Monday to Friday, with Luján Argüellas. Or on
the sidelines. From the beginning our objective
follow the news and controversies in Spanish
the weekends with the magazine talk show di-
has been to link local television with radio, there-
sports, with Iñaki Cano. AL PRIMER TOQUE, after
rected and presented by Isabel Gemio on Satur-
by establishing the greatest number of synergies
taking on this new director and presenter, now
day and Sunday mornings, early morning with
possible between their contents.
has a faster pace and doe not shy away from but
Juan Antonio Cebrián or the always entertaining
rather embraces debate and provocation. Late-
and fun RADIOESTADIO with Javier Ares and
night sports on ONDA CERO is above all a stage
Javier Ruiz Taboada.
open to discussion, where you can hear all types
of voices and opinions on the world of sports.
ONDA CERO’s news is the backbone of its pro-
gramming. They are achieving prestige and creditability base on the professionalism and rigour of
its programmes, helping the channel improve its
results. Respect for different opinions and sensitivities seen in our society is the best distinguishes
the news directed by Julián Cabrera.
UNIPREX
Apart from broadcasting VER-T, UNIPREX TV
55
covers ANTENA 3 TV in the audiovisual production that the channel does for ES.MADRID, the
local television channel for the Town Hall of Madrid. This experience, the first of its kind in the
Group, opens new business prospects based on
the production of audiovisual contents for third
parties, mainly for those publicly owned local
television operators that want production with
strict cost control while providing high quality.
UNIPREX’s good results are also the fruit of
the effort and resources provided by the
GRUPO ANTENA 3. The restructuring of resour-
Therefore, UNIPREX TV, a subsidiary of UNIPREX,
ces, both in terms of the marketing carried out
is in charge of managing all the local television
by ATRES ADVERTISING, as well as in terms of
licenses it is awarded. It already has licenses in
administration, human resources and financial
Madrid, Catalonia and Valencia (currently, it is
management are the bases for achieving ever
applying for new concessions in Seville, Malaga
more ambitious objectives.
and the Canary Islands). UNIPREX, which operates with the trade name VER-T, started broadcasting on 4 September 2006 in Madrid, Alcalá
de Henares, Alcobendas and Fuenlabrada. In the
short and mid-term it will also begin broadcast in
Torrent (Valencia) and Cornellá (Barcelona).
VER-T is a new way of doing local television, ba-
sed on familiarity, plurality and the continuous
participation of viewers as the main creators of
the programming. VER-T intends to be an audiovisual bridge between citizens and their surroundings with proposals for news and activities for
the entire family.
ATRES ADVERTISING
with its sales
network, also seeks
to be the leader locally
MULTIMEDIA AND MOVIERECORD
MULTIMEDIA
AND MOVIERECORD:
Emerging
businesses
MULTIMEDIA AND MOVIERECORD
Obtaining in-depth knowledge on the consumption habits, interests, and tastes of our
viewers in order to offer them telephony, merchandising and audiovisual products is of the ut-
In order to concentrate all of the GRUPO
most importance in the present so that we can
ANTENA 3’s multimedia initiatives and promote the
grow beyond the advertising “ceiling”.
company’s presence in the digital World, in 2006
ANTENA 3 MULTIMEDIA, S.L.U. was formed.
Therefore, we have had to implement a technology investment policy that allows us to optimise
ATRES ADVERTISING
complements the
reach of TV with
impacts in segmented
and quality audiences
This new company has a flexible structure, fo-
our human resources and production even more,
cused on constant innovation and the search
while diversifying into other fields of action. In
for new lines of business based on the philoso-
multimedia, contents have been integrated into
phy of turning the audience into a user and the
non-conventional mediums: Internet, fixed and
viewer into a customer.
mobile telephony, Teletext, Canal de Noticias
a3n24, as well as CDs or very successful maga-
Interactivity is not a challenge, it is a reality that
zines.
transforms into a wide range of contents and
products. ANTENA 3 TV’s viewers are closer to
At the cinema, MOVIERECORD is still the indis-
their favourite contents because they can parti-
putable leader of the advertising market in this
cipate, choose, buy, comment or be in contact
sector. And ANTENA 3 TV’s DTT offers its pu-
with people who have their same taste. They ob-
blic the most attractive contents on its two new
tain information and entertain themselves with
channels: ANTENA.NEOX and ANTENA.NOVA.
television content, at the cinema, their mobiles,
on the web, via digital broadcast, in Spain or
In short, ANTENA 3 MULTIMEDIA, GRUPO
the Americas.
ANTENA 3’s spearhead to position itself in emer-
ging businesses that are complements or close to
The public transcends the world of television and
television and radio.
radio through other formats such as Film, Internet, fixed and mobile telephony. These are plat-
The new company is consists of two areas – Sales
forms that complement each other and, thanks
and Contents – which are in charge of defining,
to the work of the license and merchandising de-
developing and maintaining all the new initiati-
partment of ANTENA 3 MULTIMEDIA, they beco-
ves in the various media and formats in which it
me new lines of business that have opened roads
operates. Specifically, its activities are divided into
travelled until now by other types of media.
Telephony, Licenses, Internet and Others.
59
MULTIMEDIA AND MOVIERECORD
l Television on your mobile: ANTENA 3 TV has
achieved important technological developments
Ë
TELEphony
for mobile phones.
l Premium Rate Products: Premium telephony
ANTENA 3 TV viewers, through live televi-
products connect viewers with ANTENA 3 TV.
sion channels, can have fun by downloading
Through these services, given special rates
ANTENA 3 TV’s hit series and programmes. The
by the operators, viewers can participate in-
download and streaming figures of the two main
teractively with the channel’s programmes
mobile operators, confirm the leadership of our
such as, LA RUEDA DE LA FORTUNA (Wheel
television station in the mobile world.
of Fortune) or ¿QUIÉN QUIERE SER MILLO-
In 2006 we launched a pioneering video news
NARIO? (Who wants to be a millionaire?),
alert service which has been well received
among others.
by users who see the mobile as a useful tool to
The public’s response has been so positive to
keep informed.
these services over the last few years that in
Driven by this quest to be on the cutting edge
the last year the Channel has created late-late
of technology, ANTENA 3 TV is involved in two
night formats for those viewers who want to
Digital Video Broadcasting Handheld ( DVB-H)
participate in programmes such as ADIVINA
pilot projects being carried out in Spain, in colla-
QUIÉN GANA ESTA NOCHE.
More than 40 million calls and sms, equal to
boration with Movistar ( Madrid and Barcelona)
The contxta services; sms designed to perso-
70,000 hours in consumption have made the
and Vodafone ( Valencia and Seville), and Amena
nalise mobile phones are in step with the new
303 one of the leading information services via
( Gijón and Zaragoza).
uses of 3G handsets. The telephone informa-
mobile in Spain.
Ë
Licenses
tion service 11843 is designed to handle the
l Other contents for mobile : Along with the 303,
queries most requested by users, mainly spe-
we have the largest alert service for immigrants.
Products designed for young audiences, such as
cialising in leisure and entertainment.
To be more specific, this consists of nearly one mi-
the MP4 music reproducer for the group RBD, the
l News Service 303: ANTENA 3 TV is the first
llion sms with news from 10 countries for 12,000
REBELDE series, or Neng’s Game for the Playsta-
company to offer information via mobile te-
subscribers to the MI TIERRA service. The MMS
tion have given a bid boost to the licensing de-
lephone. The News Service 303 has created
subscribers have received more than two thou-
partment.
the largest subscriber base to receive the
sand current affair news items, sports or cinema
Although the music market is going through
main news alerts on their mobile phones.
with photos, on both Movistar and Vodafone. Fur-
tough times, more than half a million units have
This is a service that also allows users to lis-
thermore, the WAP and I-Mode portals maintain
been sold in projects such as RBD, the group from
ten to hourly bulletins that cover all aspects
the most complete information with services and
the REBELDE series; Pignoise, BSO from the LOS
of current events: national news, sports, eco-
downloads of our best programmes and series.
HOMBRES DE PACO series; and LOS MÁS DE LA
nomy, sport, society, culture, the weather
FIESTA. We should also point out the substantial
or lotteries.
sales of UPA DANCE in France and Italy.
60
Ë
MULTIMEDIA AND MOVIERECORD
In 2006 we have continued to carry out promo-
PIONS, and through the on-line broadcast that is
tions with various publishing groups, where we
aired free on ANTENA 3 TV. The IPTV experience
have offered DVS’s of our most successful series.
does not end there because in October the a3no-
In
Megatrix
ticias24horas channel premiered, also on Inter-
Magazine is a monthly meeting place with
net, thereby enabling many viewers to access the
ANTENA 3 TV’s youngest viewers and the perfect
Channel’s information services from anywhere in
vehicle for cross-advertising with announcers.
the world.
We have also created a Promotional Marketing de-
Our products are rounded out by the sports web-
partment, which continuously offers promotions
sites lavuelta.com and todociclismo.com, as
to announcers along with ANTENA 3 TV products
well as the sites dedicated to large productions
as an incentive to shop.
such as the LOS BORGIA.
the
publishing
sector,
the
INTERNET
Ë
OTROS CONTENIDOS
In 2006 the GRUPO ANTENA 3 has intensified
l Canal a3n24: It is broadcast 24 hours a day with
and reshaped its presence on the Internet in order
continuous information that is updated in real
to provide more contents, services and tools to its
time. Under a concept that is similar to Internet,
viewers and listeners.
current events are dealt with by using headlines
Through antena3.com and ondacero.es we
related to general news, as well as stock, sports
have stayed in direct contact 24 hours a day
six million for the year; in total, almost 400 mi-
and meteorological information. This is a multi-
with the people who follow our programmes
llion pages visited (13% more than in 2005).
media channel that can be seen via IPTV or mobi-
and series. We have also signed collaboration
Furthermore, we have introduced new sales for-
le.
agreements with prestigious portals such as
mats through spots shown before watching vi-
l Teletexto: In terms of news, and despite the arri-
Yahoo Spain.
deos, which has been well-received by announ-
val of two new television channels, ANTENA 3 TV’s
The more than 30 web sites that show the Chan-
cers and constitutes a new line of business.
teletext has increased its market share by 4%.
nels most successful contents on the web are an
Internet can be exploited as many ways as our
Nearly 400 million hits a year for the largest and
example of how the interactivity and convergen-
imagination will allow. Towards this end we have
most complete information with news, real time
ce between television and Internet is not only
created a virtual community called TERCERA
information related to the stock market, traffic,
possible but also rewarding.
AVENIDA, which in barely five months already
sports, agenda and programming.
ANTENA 3 TV sees Internet as a window that
has two hundred thousand subscribers registe-
l ANTENA 3 INTERNACIONAL: Canal Internacional
goes beyond the television broadcast, an op-
red, with the possibility to own their own gra-
has consolidated its position in the pay TV market
portunity that enables it secure loyal viewers 24
phic character in the community to play, have fun
in Latin America and the U.S throughout 2006.
hours a day. The OJD’s official numbers for 2006
communicate, chat and participate in contests.
ANTENA 3 TV’s programming reaches more than
confirm it: a monthly average of a million and a
One of the world’s most exciting sporting events,
5 million homes in around 20 countries through
half users, 50% more than last year; the number
the CHAMPIONS LEAGUE, can be followed on
the main cable and satellite networks. Its program-
of hits has grown by more than 100%, reaching
Internet on the web site TERRITORIO CHAM-
ming includes the Channel’s fictional series and
MULTIMEDIA AND MOVIERECORD
DTT
than a dozen new programmes in the last
programmes. Canal Internacional also broadcast
ANTENA 3 TV is the first Spanish audiovisual
quarter of 2006. This means that ANTENA 3
shows produced specifically for Latin American
company to invest in the production of program-
TV has invested more than any other Spanish
viewers.
mes for DTT. In their first year, ANTENA.NEOX
audiovisual company in the production of
l ANTENA 3 EDITORIAL: ANTENA 3 EDITORIAL is
and ANTENA.NOVA have become the most
programmes for DTT.
ANTENA 3 TV’s music publisher, which not only
watched channels on DTT, among the new chan-
publishes and manages the rights of our chan-
nels. Both broadcasts, along with a third that
In December 2006, a year after its launch,
nels’ music programmes but also is entering the
doubles in ultra digital quality, the Channel’s ana-
DTT represented 4% of TV audiences, with
other areas of music publishing related to the
logue programming, make up ANTENA 3 TV’s
over 2 million people watching a DTT chan-
broadcasting of music programmes.
current digital terrestrial television.
nel every day. ANTENA 3 TV is committed to
entertainment, current events and informational
Ë
61
this technological change, which will be con-
Ë
CINEma / MOVIERECORD
ANTENA.NEOX, the channel designed for chil-
cluded in 2010 when analogue television is
In 2006 MOVIERECORD’s screen share increased
dren and young people and teenagers, heads the
finally switched off. This will also change the
3% compared to 2005, up to 45%, thereby con-
monthly audience ranking of the new channels.
way we watch and make television.
solidating its leadership in the sector.
ANTENA.NOVA has become the new channel for
After the company showed losses for five conse-
family programming. Apart from national and fo-
cutive years, and backed a variable contract model
reign series, both channels have premiered more
with the cinema operators, for the first time the
income statement has shown a positive balance.
This was due to three main factors: maintaining
the leading rating, improving the percentage of
expenses over sales and increasing the sales per
screen ratio.
ATRES ADVERTISING
strives to be the
market leader, and is
present in emerging media
that could interest advertisers
unipublic
UNIPUBLIC:
Creating events
In 2006 UNIPUBLIC solidified its position as
a company specialised in the organisation of
ATRES ADVERTISING
offers its clients 360º
communication
A YEAR OF DIVERSIFICATION
UNIPUBLIC organised the 62ND VUELTA DE
events. Its diversification plan has led to the crea-
ESPAÑA bicycle race, which has been one of the
tion of new lines of business that have enabled
best in terms of competition and participation, as
UNIPUBLIC to become one the lost important
well as the involvement of the fans in the street
companies in this sector.
and the media, resulting in a 5.6 point increase
in television audience share with respect to last
UNIPUBLIC designs and develops all kinds of
year. However, 2006 was about more than just
sporting events, organises roadshows and pro-
cycling for the company. Since becoming part of
motional tours, from creating the idea to its im-
the GRUPO ANTENA 3 two years ago, UNIPUBLIC
plementation providing its customers with com-
has been organising various events in other areas
prehensive project management.
such the ESPACIO AVANZA road-show designed
to inform the public about information technology after winning a public bid called by Red.es, a
company owned by Ministry of Industry, Tourism
and Commerce. Or the event for the Town Hall
of Madrid which required the installation, organisation and setting up the ice-skating rink and
snow slide in AZCA for Christmas 2006.
The other roadshows created, developed and
carried out by UNIPUBLIC have covered part of
its business in 2006 with tours throughout the
entire peninsula for clients such as Unión Fenosa,
Hewlett Packard, and ANTENA 3 TV itself. With
the TERRITORIO CHAMPIONS 2006 roadshow.
65
UNIPUBLIC
As regards the organisation of sports events,
we should point out the First International
MADRIDERS OF FREESTYLE MOTORCROSS Cup,
an event that has allowed UNIPUBLIC to enter
the world motocross combining spectacle (light
show, live DJs, cheerleaders,...) with the expectation associated with this extreme sport. Córdoba,
Granada, Badalona and Leganés were chosen as
the stages to show the amazing jumps and acrobatics of eight riders from various countries.
Basketball has also been one of the protagonists
after reaching an agreement with the Madrid
Town Hall to organise the COPA DEL REY 2006.
UNIPUBLIC was in charge of the logistics and
management of tickets.
UNIPUBLIC AND THE MILLION
DOLLAR RACE
In 2006, UNIPUBLIC laid the foundation for what
will be its most ambitious project in 2007: THE
ABU DHABI CYCLING RACE OF CHAMPIONS.
This race will be take place in November of 2007,
divided into three stages, with an overall distance
of 200 kilometres. The best cyclist from all over
the world will fight for the one million dollar
prize: the winners of the general classification
and the classification by team of the Giro, Tour
and Vuelta.
ATRES ADVERTISING
ATRES ADVERTISING:
LEADING THE
ADVERTISING MARKET
GDP. Television, press and radio, three of the four
Antena 3 TV, leader in price
thanks to the quality
of its audience
media that ATRES ADVERTISING manages, are
ATRES ADVERTISING has positioned ANTENA 3
The listeners with
the greatest commercial
capacity tuned into
ONDA CERO and EUROPA FM
the mediums that corner almost 80% of total
TV as the leader in cost / grp in television. The
In radio ATRES ADVERTISING sells impacts in
advertising market.
Channel’s audience has been essential in convin-
an audience with an excellent consumer profile.
cing the market to pay a higher price in 2006,
ONDA CERO is the generalist channel with the
Within this situation and after its second year in
which demonstrates the quality of each one of
best audience profile: equal mix of both sexes,
business, ATRES ADVERTISING once again soli-
its impacts.
young listeners from the upper and middles clas-
For yet another year the advertising market continues its upward trend, growing faster than the
dified its leadership in the advertising market by
ses, urban and with intermediate to higher edu-
capturing 14% of investment in conventional
In a complicated year in which competition
cation – data extracted from EGM Radio XXI 3ª
media, which represents an increase of 4.4%
in the television sector intensified due to the
release 2006, Monday to Friday –.
compared to last year.
entry of two new national channels, ANTE-
Its highly effective marketing, which is ATRES
NA 3 TV closed the year with a turnover of
EUROPA FM, after reaching its record high au-
837 million euros
dience share in the 3rd release 2006 of EGM
ADVERTISING’s main objectives in each and
with 516,000 listeners, places it among the five
every one of the media that it commercialises, is
top radio stations and the music channel that is
the main reason it is at the head of Spanish ex-
growing the fastest.
clusive advertising companies. The power ratios
achieved in each format show how ATRES AD-
With such a high quality audience, ATRES
VERTISING has managed to obtain the maximum
ADVERTISING has obtained a turnover of 94 mi-
return from the respective audiences.
llion euros in 2006, which represents a growth
rate of 3.8% against of 2005 and revenue
per listener that easily beat that of its most
direct competitors.
69
ATRES ADVERTISING
power ratios
vs main competitors
ONDA CERO
2.0
ANTENA 3
1.47
Telecinco
1.41
MOVIERECORD
1.18
SER
SCREEVISION
0.85
0.80
SOURCE: TV, Estimate Marketing ATRES ADVERTISING Dpt.2006. Adults
SOURCE: Radio, IPO Marketing ATRES ADVERTISING Dpt. and EGM 3rd release 2006
SOURCE: Cinema, Estimate Marketing ATRES ADVERTISING Dpt.and Nielsen EDI audience share 06
evolution Antena 3 TV
GRP Costs vs market
ANTENA 3
ANTENA 3
6.5%
ANTENA 3
14.1%
10.0%
ANTENA 3
9.2%
TTV
10.5%
TTV
TTV
4.5%
4.5%
TTV
3.2%
1º TRIMETRE 2006
2º TRIMETRE 2006
3º TRIMETRE 2006
4º TRIMETRE 2006
SOURCE: Estimate of Marketing ATRES ADVERTISING Dpt. National conventional advertising costs of GRP’s in Adults
70
ATRES ADVERTISING
Regionally speaking, this challenge once again
constitutes the success of the company’s commercial effectiveness. In one year of marketing
the media of the Joly Group, La Gaceta de Salamanca and Diario de Navarra, ATRES ADVERTI-
MOVIERECORD, king of the
most recognised media
SING has been able to increase their advertising
turnover by 6% overall.
In the advertising business of the big screen,
MOVIERECORD is once again the clear leader in
What makes ATRES ADVERTISING stand out
terms of reach, audience and cinemas.
is its ability to develop multimedia campaigns.
Advertisers can take advantage of the synergies
Today it has 1,700 screens, representing 43%
between the company’s media and obtain inte-
of the audience, which has enabled ATRES
grated advertising that can rely on the qualitative
ADVERTISING to absorb 54% of the adver-
benefits of each media format. ATRES ADVERTI-
tising investment in cinema. The reason for
SING offers new commercial formulas that provi-
its success is clear: a quality circuit and the
de added value: creativity in the media.
greatest coverage in the market at the advertisers’ disposal.
Television, radio, press and cinema are the media
that ATRES ADVERTISING has been commercia-
Print press, a credible and
prestigious complement
to multimedia
lising until now. However, in keeping with its di-
One of the challenges ATRES ADVERTISING fa-
sing markets. Its objective is to reach every pos-
ced in 2006 was entering the print press market.
sible audience of interest for advertisers.
ADN was launched on March 1st., and backed
by this company as a marketer. In the latest release by EGM it is already the sixth most read
daily in general information, in an environment
of growing investment in print media where free
dailies are the main driver.
versification strategy in search of new formats,
the company continues to look for new adverti-
71
ATRES ADVERTISING
CINEMA: SHARE PER
SCREEN AND VIEWER
MOVIERECORD
MOVIERECORD
43%
45%
SCREENVISION
41%
SCREENVISION
34%
DISCINE G.P.C.
21%
DISCINE G.P.C.
17%
Share per screen (SOURCE: MOVIERECORD Contract Department Dec. 06)
Share per viewer (SOURCE: MOVIERECORD Contract Department Dec. 06)
PAID AND FREE PRESS
+50%
VS 2005
FREE
7%
PAID
93%
+5%
VS 2005
SOURCE: Marketing Department Estimate
FINANCIAL REPORT 2006
Translation of a report originally issued in Spanish based on our work performed in accordance with generally accepted auditing standards in Spain and of financial
statements originally issued in Spanish and prepared in accordance with generally accepted accounting principles in Spain (see Note 24). In the event of a discrepancy,
the Spanish-language version prevails.
Auditors’ Report
75
76
Antena 3 de Televisión, S.A.
BALANCE SHEETS AT 31 DECEMBER 2006 AND 2005
Thousands of Euros
31/12/2006
31/12/2005
ASSETS
NON-CURRENT ASSETS
Intangible assets (Note 5)
667
429
Property, plant and equipment (Note 6)
61,678
66,479
Land and buildings
58,400
57,270
Plant
72,728
71,517
Other items of property, plant and equipment
75,797
72,246
Allowances and accumulated depreciation
(145,247)
(134,554)
378,534
378,456
Treasury shares (Note 4-d)
5,627
29,519
Tax receivables (Note 16)
23,844
30,703
470,350
505,586
Long-term investments (Note 7)
Total non-current assets
CURRENT ASSETS
Inventories (Note 8)
295,666
267,789
Programme rights
252,211
236,874
Consumables and other inventories
3,678
4,042
Advances to suppliers
39,777
26,873
Accounts receivable
240,726
235,622
Trade receivables for sales and services (Note 9)
200,448
197,781
Receivable from Group companies and associates (Note 10)
43,669
30,191
Tax receivables (Note 16)
10,413
22,135
Sundry accounts receivable
3,933
4,007
Allowance for bad debts
(17,737)
(18,492)
95
109,763
16,397
27,709
240
779
553,124
641,662
1,023,474
1,147,248
Short-term investments (Note 4-f)
Cash
Accrual accounts
Total current assets
TOTAL ASSETS
The accompanying Notes 1 to 24 are an integral part of the balance sheet at 31 December 2006.
77
Thousands of Euros
31/12/2006
31/12/2005
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY (Note 11)
Share capital 158,335
166,668
Legal reserve
31,667
33,334
5,627
29,519
Other reserves
(277,148)
39,750
Profit for the year
306,900
207,472
-
(83,038)
225,381
393,705
2,430
454
108,640
183,931
Reserve for treasury shares
Interim dividend
Total shareholders’ equity
DEFERRED INCOME
PROVISIONS FOR CONTINGENCIES AND CHARGES (Note 12)
NON-CURRENT LIABILITIES
Other payables (Note 12)
Capital payments payable Total non-current liabilities
38,400
33,139
-
120
38,400
33,259
CURRENT LIABILITIES
Bank borrowings (Note 13)
208,202
1,430
Trade payables (Note 14)
182,684
193,364
Payable to Group companies and associates (Note 10)
104,645
226,973
1,156
1,973
Taxes payable (Note 16)
28,556
11,461
Remuneration payable
7,234
10,776
Other non-trade payables (Note 15)
18,077
3
Other provisions (Note 15)
97,746
89,919
322
-
648,623
535,899
1,023,474
1,147,248
Customer advances
Accrual accounts
Total current liabilities
TOTAL LIABILITIES
78
ANTENA 3 DE TELEVISIÓN, S.A.
INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005
Thousands of Euros
2006
2005
DEBIT
EXPENSES
Amortisation of programmes and other rights (Note 20)
293,901 292,158
Staff costs (Note 20)
101,562 105,085
Depreciation and amortisation charge
15,109 17,276
Change in operating allowances
(3,065)
2,183
Rent and royalties (Note 20)
30,750 24,517
119,787 114,100
1,149 673
559,193 555,992
Profit from operations
310,560 308,699
Finance and similar costs
6,985 18,707
Exchange losses
1,052 -
8,037 18,707
Financial profit
3,085 -
313,645 293,597
228 1,292
Change in control portfolio allowances (Note 7)
1,889 1,857
Extraordinary expenses (Notes 4-j and 20)
7,606 12,906
9,723 16,055
Extraordinary profit
111,028 5,900
Profit before tax
424,673 299,496
Income tax (Note 16)
117,773 92,024
306,900 207,472
Other current operating expenses (Note 20)
Taxes other than income tax
Profit from ordinary activities
Losses on property, plant and equipment intangible assets and control portfolio
Profit for the year
79
Thousands of Euros
2006
2005
CREDIT
INCOME
Revenue (Note 20)
Advertising revenue
837,390 835,926
Sales discounts
(33,455)
(35,901)
803,935 800,025
65,819 64,666
869,754 864,691
10,698 3,400
424 205
11,122 3,605
-
15,102
Gains on disposals of property, plant and equipment intangible assets and control portfolio (Note 4-j)
80,349 -
Gains on transactions involving treasury shares
40,101 4,506
301 17,449
120,751 21,955
Other income Interest and similar income
Exchange gains
Financial loss
Extraordinary income The accompanying Notes 1 to 24 are an integral part of the income statement for the year ended at 31 December 2006.
80
Antena 3 de Televisión, S.A.
Notes to the 2006 financial statements
1. Company description
Antena 3 de Televisión, S.A. (“the Company”), with registered office at Avenida Isla Graciosa 13, San Sebastián de los Reyes (Madrid), was incorporated on 7 June
1988, and its then sole company object was the indirect management of a public television service.
For this purpose, it submitted a bid in response to the call for tenders made under Article 8 of Private Television Law 10/1988, of 3 May, and, pursuant to a resolution
of the Spanish Council of Ministers of 25 August 1989, was awarded a concession for the indirect management of the television service, for a period of ten years,
which ended on 3 April 2000.
On 7 May 1996, the shareholders at the Annual General Meeting resolved to change and extend the Company’s company object, as permitted by Satellite Telecommunications Law 37/1995.
On 10 March 2000, the Council of Ministers adopted a resolution renewing the concession for the indirect management of the television service for a period of ten
years from 3 April 2000. The terms of this renewal were the same as for the former concession, with the added obligation of commencing digital broadcasting on
3 April 2002. The Company made all the necessary investments to enable it to begin broadcasting on that date the Antena 3 de Televisión, S.A. signal pursuant to
Royal Decree 2169/1998 of 9 October, which approved the Spanish Technical Plan for Digital Terrestrial Television.
The Annual General Meeting of Antena 3 de Televisión, S.A. and the Company’s Board of Directors Meeting, on 28 April 2003 and 29 July 2003, respectively, resolved
to request the admission to listing of all the shares of Antena 3 de Televisión, S.A. on the Madrid, Barcelona, Bilbao and Valencia stock exchanges, and their inclusion
in the Spanish Unified Computerized Trading System (Continuous Market).
On 29 October 2003 the Company’s shares commenced trading on these stock markets.
On 25 November 2005, the Council of Ministers resolved to expand the concession contract, simultaneously with the rest of concession-holders in Spain, by
granting the Company three Digital Terrestrial Television (DTT) channels, on a single frequency and on one multiplex, which would replace the channel through
which the network has been broadcasting all its analogue programmes simultaneously since April 2002. Thus, from 30 November 2005, the Company has offered
three different types of programming: the general Antena 3 Televisión channel which uses analogue technology and two DTT channels, each with a different type
of programming.
In view of the business activities carried on by the Company, it does not have any environmental liability, expenses, assets, provisions or contingencies that might be
material with respect to its equity, financial position and results of operations. Therefore, no specific disclosures relating to environmental issues are included in these
notes to the financial statements.
81
2. Basis of presentation
Fair presentation
The financial statements for 2006, which were prepared from the Company’s accounting records, are presented in accordance with the Spanish National Chart of Accounts
and, accordingly, present fairly the Company’s equity, financial position and results of operations. These financial statements, which were prepared by the Company’s directors, will be submitted for approval by the shareholders at the Annual General Meeting, and it is considered that they will be approved without any changes.
3. Proposed distribution of profit
The Company’s directors will propose to the shareholders at the Annual General Meeting that the profit for 2006 be distributed as follows:
• Delivery to shareholders of treasury shares representing the Company’s share capital in the proportion of one share for every 48 shares entitled to participate in
the distribution. The tax revenue or payment, if applicable, pursuant to current tax legislation, will form an additional part of this dividend and will be received or
paid, respectively, by Antena 3 de Televisión, S.A.
• The remaining amount of the total profit for the year will be used to offset previous years’ losses.
4. Valuation standards
The main valuation methods applied by the Company in preparing its financial statements for 2006, in accordance with the Spanish National Chart of Accounts,
were as follows:
A) Intangible assets
Intangible assets include basically the costs incurred in the acquisition or production of computer software when it will foreseeably be used for several years. Most
of these assets are amortised on a straight-line basis over five years. In the event of software obsolescence, the related allowances for decline in value are recorded
or the asset is written off.
B) Property, plant and equipment
Property, plant and equipment are carried at cost.
The costs of expansion, modernization or improvements leading to increased productivity, capacity or efficiency or to a lengthening of the useful lives of the assets
are capitalized.
82
Upkeep and maintenance expenses are expensed currently.
The Company depreciates its property, plant and equipment by the straight-line method at annual rates based on the following years of estimated useful life:
Structures
Plant
Computer hardware
Other fixtures
Other items of property, plant and equipment
Years of Estimated Useful Life
33
5, 8 and 12.5
5 and 10
5, 10 and 12.5
6 and 10
C)Long-term investments
Long-term investments consist basically of unlisted securities, which are valued at the lower of cost and underlying book value of the holdings, adjusted by the
amount of the unrealized gains disclosed at the time of acquisition and still existing at year-end, net, where appropriate, of the required allowances for decline in
value if cost is higher than fair value at the end of each year or period.
The Company owns majority holdings in the share capital of certain companies and owns holdings of 20% or more in the share capital of other companies (see Note
7). The financial statements at 31 December 2006 do not reflect the increases in the value of the Company’s holdings in these companies which would result from
fully consolidating the majority holdings and from accounting for the holdings in associates using the equity method. The effect of using consolidation procedures in
accordance with International Financial Reporting Standards adopted by the EU (EU-IFRSs), would be an increase in shareholders’ equity at 31 December 2005 of EUR
30,341 thousand, a decrease in profit for the year of EUR 17,183 thousand and a decrease in assets of EUR 117,657 thousand, which are reflected in the Group’s
consolidated financial statements at that date prepared in accordance with International Financial Reporting Standards.
D) Treasury shares
The treasury shares acquired by the Company without a capital reduction resolution having been adopted by the shareholders at the Annual General Meeting are
initially valued at cost. During the period that treasury shares remain on the asset side of the Company’s balance sheet they must be valued at the lowest of cost,
year-end market price, average market price in the last quarter and underlying carrying amount, and the related value adjustments required if the market price at
year-end is lower than the acquisition cost are recognized in profit for the year.
83
In addition, pursuant to Ruling Nine of the Official ICAC Bulletin Number 48, issued by the Spanish Accounting and Audit Institute (ICAC) in December 2001, if the
underlying carrying amount were the lowest value and, therefore, the parameter to be taken into account for estimating the writedown, the amount of the related provision can be broken down into two parts: the market effect, which would be allocated to the income statement as another marketable security, and the effect arising
from the possible capital reduction which, due to the similarity to the situation that would have arisen had the shares been acquired for this purpose, would be allocated
to reserves.
If the treasury shares were finally disposed of, it must be taken into account that the amount of the provision charged to reserves pursuant to the foregoing paragraph
would give rise to a credit to reserves.
Pursuant to Article 79.3 of the Consolidated Companies Law, the Company has recorded the related restricted reserve (see Note 11).
E) Inventories
Programme rights
Rights and programmes inventories are valued, based on their nature, as follows:
1. Inventoriable in-house productions (programmes produced to be re-run, such as series) are measured at acquisition and/or production cost, which includes
both external costs billed by third parties for programme production and for the acquisition of resources, and internal production costs, which are calculated by
applying preset internal rates on the basis of the time during which operating resources are used in production. The costs incurred in producing the programmes
are recognised, based on their nature, under the appropriate headings in the income statement and are included under “Programme Rights” in the balance sheet
with a credit to “Inclusion in Programme Rights” under “Amortisation of Programmes and Other Rights” in the accompanying income statement.
Amortisation of these programmes is recorded under “Amortisation of Programmes and Other Rights” in the income statement, on the basis of the number of
showings, in accordance with the rates shown below:
st
1 showing
nd
2
showing
The maximum period for amortisation of series is three years, after which the unamortised amount is written off.
Given their special nature, the series which are broadcast daily are amortised in full when the first showing of each episode is broadcast.
Amortisation Rate
90 %
10 %
84
2. Non-inventoriable in-house productions (programmes produced to be shown only once) are valued by the same methods and procedures as those used to value
inventoriable in-house productions. Programmes produced and not shown are recognised at year-end under “Programme Rights - In-House Productions and
Productions in Process” in the balance sheet. The cost of these programmes is recognised as an expense under “Amortisation of Programmes and Other Rights”
in the income statement at the time of the first showing.
3. Rights on outside productions (films, series and other similar productions) are recorded at acquisition cost. These rights are deemed to have been acquired when
the term of the right commences for the Company. Payments made to outside production distributors prior to commencement of the term of the right are recorded under “Advances to Suppliers” in the balance sheet. The amortisation of the rights is recorded under “Amortisation of Programmes and Other Rights” in
the income statement on the basis of the number of showings, in accordance with the rates shown below, which are established on the basis of the number of
broadcasts contracted:
Films
Number of Showings Contracted
1
2
100%
50%
50%
showing
-
50%
30%
3 showing
-
-
20%
Series
st
1 showing
nd
2
rd
st
1 showing
nd
2
showing
3 or More
Number of Showings
1
2 or More
100%
50%
-
50%
4. Live broadcasting rights are measured at cost. The cost of these rights is recognised as an expense under “Amortisation of Programmes and Other Rights” in the
income statement at the time of broadcast of the event on which the rights were acquired.
Consumables and other inventories
Dubbings, sound tracks, titles and signature tunes of outside productions are recorded at acquisition or production cost. The amortisation of rights is recorded under
“Amortisation of Programmes and Other Rights” in the income statement at the time of the showing, by the same method as that used for outside productions.
85
Other inventories are recorded at acquisition cost and are allocated to profit by the effective or actual amortisation method over the production period.
Allowances
The Company records allowances to reduce the unamortised value of in-house productions and of the rights on outside productions which it considers will not be
shown. When these rights expire, the allowances recorded are used to write off the cost of the rights.
Classification of programmes
Programme inventories are classified as current assets, in accordance with the Spanish National Chart of Accounts and standard practice in the industry in which the
Company operates. However, programmes are amortised over several years (see Note 8).
F) Short-term investments
This includes Antena 3 de Televisión, S.A.’s investments in companies which are intended to be realized or settled in the near term. At 31 December 2006, these
investments were recorded at their estimated net asset value taking into account Antena 3 de Televisión, S.A.’s investment risk. The data on the net worth position of
these investees were obtained from these companies’ respective unaudited financial statements at 31 December 2006. The companies in this situation at 31 December 2006 were: Antena 3 Temática, S.A., Sole-Shareholder Company in liquidation, Antena 3 Directo, S.A., Sole-Shareholder Company and Guadiana Producciones,
S.A., Sole-Shareholder Company.
G) Exchange differences
Assets and liabilities and receivables and payables denominated in foreign currencies are translated to euros at the exchange rates ruling at the transaction date, and
the receivables and payables are adjusted at year-end to the exchange rates then prevailing, unless exchange hedges or other similar instruments have been arranged,
in which case they are valued at the hedged exchange rate.
The positive net exchange differences arising on adjustment of foreign currency payables and receivables to year-end exchange rates are recorded under “Deferred
Income” on the liability side of the balance sheet, unless exchange losses have been charged to income in prior years, in which case the positive differences are
credited to profit for the year up to the limit of the negative net differences charged to income in prior years. Negative differences are charged to income. Positive
differences deferred in prior years are credited to income in the year in which the related accounts receivable and payable fall due or are repaid early, or as negative
exchange differences for the same or a higher amount are recognized.
86
H) Income tax
The income tax expense is recorded on the basis of accounting profit before taxes, increased or decreased, as appropriate, by the permanent differences. Tax relief
and tax credits, excluding tax withholdings and prepayments, are recorded as a reduction of the tax charge for the year in which they arise.
In 2001 the Company started to be taxed on a consolidated basis with other Group companies (see Note 16). In this connection, in calculating its income tax, the
Company took into consideration the Spanish Accounting and Audit Institute (ICAC) Resolution of 9 October 1997, establishing the methods for the recording of
income tax at companies that file consolidated tax returns.
I) Recognition of revenue and expenses
Revenue and expenses are recognized on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises.
However, in accordance with the accounting principle of prudence, the Company only records realised revenue at year-end, whereas foreseeable contingencies and
losses, including possible losses, are recorded as soon as they become known.
At present, the Company basically obtains revenue from the sale of advertising space; this revenue is recognised in the income statement when the related advertising
spot is broadcast.
J) Provisions for contingencies and charges
The Company recognises under “Provisions for Contingencies and Charges” and “Other Provisions” on the liability side of the accompanying balance sheet the estimated amount required for probable or certain third-party liability arising from collateral and other similar guarantees provided by the Company, litigation, indemnity
payments and outstanding obligations of undetermined amount, and to cover estimated potential losses. These allowances are recorded when the liability, obligation
or decision giving rise to the indemnity, payment or loss arises.
These headings also include the provisions required to cover the negative net worth of Group companies.
EUR 72,255 thousand were credited in this connection to “Extraordinary Profit” in the accompanying income statement for 2006, related mainly to the reversal of
the portfolio provision of the subsidiary Publicidad 3, S.A., Sole-Shareholder Company.
87
k) Termination benefits
Under current labour legislation, the Company is required to pay termination benefits to employees terminated under certain conditions. The Company’s directors do
not anticipate the generation of any liabilities additional to those already recorded in this connection.
l) Costs deriving from the three-year variable compensation plan
The Company charges the amount incurred in the year in connection with implementation of the three-year variable compensation plan to “Staff Costs” or “Other
Current Operating Expenses” in the accompanying income statement, based on the labour relationship or the services contract of the beneficiaries, with a credit to
“Non-Current Liabilities – Other Payables” and “Current Liabilities – Other Non-Trade Payables” in the accompanying balance sheet (see Note 20-c).
The amount incurred is calculated on the basis of the terms of the plan, taking into account the profit for 2006 and the Company’s estimate of the future market
value of the Company’s shares, and it is expected that the entire plan will be paid in cash.
m) Financial instruments
The Company performs transactions with financial instruments to hedge the exchange rate risk on the purchases of broadcasting rights in the year (see Note 19-a).
A swap contract was arranged to cover the increased cost of the three-year variable compensation plan that would arise as a result of an increase in the Company’s
share price (see Note 19-b). The liability hedged by this contract was calculated by taking into account the initial contracted price of the Company’s shares.
n) Dividends
The extraordinary dividend distributed with a charge to unrestricted reserves through the delivery of shares representing the Parent’s share capital, was valued at the
shares’ market price on the day before distribution. The gains obtained as a result of this valuation were recorded in equity.
Pursuant to current tax legislation, the tax revenue or payment, as applicable, also formed part of this dividend.
88
5. Intangible assets
The transactions recorded in 2006 in intangible asset accounts and the related accumulated amortisation are summarised as follows:
Thousands of Euros
Cost
Balance at
31/12/05
Additions Retirements
or Provisions
Balance at
31/12/06
Intellectual property
305 -
-
305
Computer software
19,776 182 (1)
19,957
20,081 182 (1)
20,262
Accumulated amortisation
Intellectual property
(268)
(33)
-
(301)
Computer software
(17,181)
(1,480)
1
(18,660)
(17,449)
(1,513)
1
(18,961)
1,569 (634)
Allowances
Total
(2,203)
429 -
At 31 December 2006, the cost and accumulated amortisation of the fully amortised intangible assets in use amounted to EUR 14,516 thousand.
667
89
6. Property, plant and equipment
The transactions recorded in 2006 in property, plant and equipment accounts and the related accumulated depreciation are summarised as follows:
Thousands of Euros
Balance at 31/12/05
Additions
or Provisions
Retirements
Transfers
or Reductions
Balance at
31/12/06
Land and structures
57,270 1,145
-
(15)
58,400
Plant
71,517 2,100
(890)
1
72,728
Computer hardware
24,067 2,982
(1,163)
1
25,887
Other fixtures and items of property, plant and equipment
47,532 2,012
(310)
13
49,247
646 663
-
(646)
663
201,032 8,902
(646)
206,925
Cost
Construction in progress
Accumulated depreciation
(2,363)
Structures
(16,395)
(1,936)
-
(1)
(18,332)
Plant (54,158)
(6,627)
765
-
(60,020)
Computer hardware
(20,958)
(1,958)
1,104
-
(21,812)
Other fixtures and items of property, plant and equipment
(36,244)
(3,075)
288
-
(39,031)
(127,755)
(13,596)
2,157
(1)
(139,195)
Allowances
Total
(6,798)
-
746
-
66,479 (6,052)
61,678
At 31 December 2006, the cost and accumulated depreciation of the fully depreciated items of property, plant and equipment in use amounted to EUR 72,352
thousand.
The Company takes out insurance policies to sufficiently cover the possible risks to which its property, plant and equipment are subject.
90
7. Long-term investments
The transactions recorded in 2006 in the “Long-Term Investments” accounts and the related allowances are summarised as follows:
Thousands of Euros Balance at 31/12/05
Additions or Provisions
Retirements or
Transfers
Reductions
Balance at
31/12/06
Investments in Group companies
Antena 3 Editorial, S.A.U.
60 -
-
-
60
Antena 3 Multimedia, S.L.U.
3
-
-
-
3
Atres Advertising, S.L.U.
3
-
-
-
3
1,804 -
-
-
1,804
300 -
(150)
(150)
-
22,874 -
-
-
22,874
2,200 -
-
-
2,200
505 -
-
-
505
Unipublic, S.A.U.
39,187 -
(2,094)
-
37,093
Total investments in Group companies
66,936 -
(2,244)
Ensueño Films, S.L.U.
I3 Televisión, S.L.
Movierecord Cine, S.A.U.
Organizaciones Deportivas y Culturales Unipublic, S.A.U.
Publicidad 3, S.A.U.
(150)
64,542
Investments in associates
Canal Factoría de Ficción, S.A.
240 -
(120)
-
120
V-News Agencia de Noticias, S.L.
-
252
-
-
252
I3 Televisión, S.L.
-
-
-
150
150
240 252
150
522
Total investments in associates
(120)
Other investments
T.V.I. Televisâo Independente, S.A.
2,016 -
-
-
2,016
Total other investments
2,016 -
-
-
2,016
422 -
(301)
-
121
334,630 -
-
-
334,630
397 -
(397)
-
-
(25,788)
(123)
2,614
-
(23,297)
(397)
-
397
-
-
378,456 378,534
Long-term guarantees given
Long-term loans to Group companies
Other long-term loans
Investment valuation allowance
Long-term loan impairment allowance
Total
91
The period provision to the long-term investment valuation allowance amounting to EUR 123 thousand is recorded under “Change in Control Portfolio Allowances”
in the accompanying income statement.
The main transactions performed in the year in relation to the holdings in Group companies were as follows:
• On 24 April 2006, the shareholders at the Universal General Meeting of Canal Factoría de Ficción, S.A. resolved to reduce the capital of the company by EUR 300
thousand in order to forgive all the capital calls not paid since the incorporation of the company. The percentage of ownership of Antena 3 remained unchanged
although the investment was reduced by the amount of the unpaid capital calls, i.e. EUR 120 thousand.
• On 11 May 2006, Antena 3 de Televisión, S.A. transferred 50% of its ownership interest in I3 Televisión S.L. to Indra Sistemas, S.A. for a price equal to the shares’
par value, i.e. EUR 150 thousand. The percentage of ownership of Antena 3 de Televisión, S.A. in I3 Televisión, S.L. was reduced to 50% with an investment of
EUR 150 thousand. Although the Company owns 50% of the share capital it does not manage the company and it is therefore considered an associate.
• On 13 November 2006, Antena 3 de Televisión, S.A. acquired an equity interest in V-News Agencia de Noticias, S.L. by participating in a capital increase, in which
it subscribed and paid EUR 252 thousand for 50% of the share capital.
• The reduction of the investment in Unipublic S.A., Sole-Shareholder Company, was the result of a review of the purchase price under the terms of the sale and
purchase agreement dated 26 May 2005.
• “Long-Term Loans to Group Companies” includes the participating loans granted to subsidiaries (see Note 10).
At the end of each year or period the directors assess the business plans of their investees, revise them if necessary and estimate the value of the holdings and the
recoverability of the investments made.
92
The Group companies and information thereon are as follows:
CompanyLocationLine of Business
% of Ownership
Capital Reserves
Profit (Loss) for the Year
Interim
Dividend
(1,000)
Antena 3 Editorial, S.A.U.
Madrid
Management of rights
100%
60 12 2,515
Antena 3 Multimedia, S.L.U.
Madrid
TV-based commercial management
100%
3
(1)
(25)
-
Atres Advertising, S.L.U.
Madrid
Management of advertising
100%
3
229
812
-
Ensueño Films, S.L.U.
Madrid
Audiovisual productions
100%
1,804 (2,056)
3,419
-
Movierecord Cine, S.A.U.
Madrid
Advertising in cinemas
100%
801 651
790
-
y Culturales Unipublic, S.A.U.
Madrid
Organisation of sports events
100%
72 1,952
13
-
Publicidad 3, S.A.U.
Madrid
Broadcasting services
100%
60 (183,738)
75,061
-
Unipublic, S.A.U.
Madrid
Organisation of sports events
100%
600 10,596
(890)
-
Organizaciones Deportivas
The information on Atres Advertising, S.L., Sole-Shareholder Company, Unipublic, S.A., Sole-Shareholder Company, and Movierecord Cine, S.A., Sole-Shareholder
Company, was obtained from the audited financial statements at 31 December 2006.
The associates and information thereon are as follows:
Thousands of Euros
CompanyLocationLine of Business
% of Ownership
Capital Reserves
Profit (Loss)
for the Year
Canal Factoría de Ficción, S.A
Madrid
Production of fiction programmes
40%
300
25
87
I3 Televisión, S.L.
Madrid
IT services
50%
300
-
(66)
Audiovisual recording and reproduction
50%
503
-
(174)
V-News Agencia de Noticias, S.L. Granada
The other investees of the Company and information thereon are as follows:
Thousands of Euros
CompanyLocationLine of Business
% of Ownership
T.V.I. Televisâo Independente, S.A. Lisbon
Television
0.001%
(a) Information not available
None of Antena 3 de Televisión, S.A.’s investees is listed on Spanish or foreign stock exchanges.
Capital and
Reserves
Share Premium
65,810
(a)
Profit (Loss)
for the Year
(a)
93
8. Inventories
The detail of the balance of “Inventories” in the balance sheet at 31 December 2006 is as follows:
Thousands of Euros
Programme rights, net
Rights on outside productions
246,147
In-house productions and productions in progress
34,439
Sports broadcasting rights
3,214
Allowance for inventory obsolescence (31,589)
252,211
Consumables and other inventories
Dubbings, sound tracks and titles
1,976
Other materials
1,702
3,678
Advances to suppliers
39,777
Total 295,666
“Advances to Suppliers” in the accompanying balance sheet at 31 December 2006 includes basically prepayments in connection with commitments to outside production rights.
At 31 December 2006, the Company had commitments, mainly for the purchase of audiovisual property rights, amounting to EUR 167,505 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 amounts to EUR 84,660 thousand.
It is estimated that EUR 139,434 thousand of rights on inventoriable in-house and outside productions will be amortised in 2007 (see Note 4-e).
94
9. Trade receivables
The detail of the balance of “Trade Receivables” in the balance sheet at 31 December 2006 is as follows:
Thousands of Euros
Trade receivables for sales
196,389
Barter trade receivables
3,497
Trade notes receivable
562
Total
200,448
10. Balances and transactions with Group companies and associates
The detail of the balances with Group companies and associates in the accompanying balance sheet at 31 December 2006 is as follows:
Thousands of Euros
Balances Receivable at Short Term
Balances Payable at Short Term
Long-Term Operating
Short-Term
Receivable from Short-Term Operating
Loans to ReceivablesLoans Group Companies Payables Payables
Group Companies
and Associates
Payable to Group
Companies
and Associates
Group companies
Antena 3 Directo, S.A.U. (a)
-
-
10,052
10,052
9,956
-
9,956
Antena 3 Editorial, S.A.U.
-
16
1,345
1,361
4,197
-
4,197
Antena 3 Multimedia, S.L.U.
-
26
746
772
13
819
832
Atres Advertising, S.L.U.
-
693
2,312
3,005
-
3,211
3,211
Antena 3 Temática, S.A.U. in liquidation (a)
-
-
2,563
2,563
2,409
-
2,409
Compunet Servicios Telemáticos, S.L.U.
-
-
-
-
10
-
10
5,500
14
17,826
17,840
2,277
-
2,277
Fundación Unipublic
-
59
-
59
-
-
-
Fundación Antena 3
-
-
-
-
300
-
300
Guadiana Producciones, S.A.U.
-
-
2
2
164
-
164
Movierecord Cine, S.A.U.
-
237
2,756
2,993
-
3
3
Organizaciones Deportivas y Culturales de Unipublic, S.A.U.
-
-
10
10
1,332
-
1,332
329,130
-
628
628
65,276
-
65,276
-
98
-
98
8,346
346
8,692
Ensueño Films, S.L.U.
Publicidad 3, S.A.U.
Unipublic, S.A.U.
(sigue)
95
Uniprex, S.A.U.
-
1,406
-
1,406
1,098
645
1,743
Uniprex Televisión, S.L.U.
-
5
628
633
78
174
252
Other companies
-
-
282
282
10
-
10
Associates and related companies
Canal Directo Interactivo, S.L.
-
-
-
-
-
15
15
Canal Factoría de Ficción, S.A.
-
215
-
215
-
-
-
Centro de Estudios CEAC, S.L.
-
29
-
29
-
-
-
DeAPlaneta, S.L.
-
290
-
290
-
1,155
1,155
Editorial Página Cero Norte, S.A.
-
3
-
3
-
-
-
Editorial Planeta, S.A.
-
145
-
145
-
-
-
Grundy Producciones, S.A.
-
-
-
-
-
944
944
I3 Televisión, S.L.
-
121
-
121
672
1,044
1,716
I.P. Network, S.A.
-
-
-
-
-
12
12
Metropole Production
-
123
-
123
-
-
-
Planeta Directo, S.L.
-
492
-
492
-
-
-
Planeta Junior Italia, S.R.L.
-
49
-
49
-
-
-
Prodigius Audiovisual, S.A.
-
-
-
-
-
139
139
Sociedad Anónima Del Video, S.L.
-
354
-
354
-
-
-
Sportfive GMBH
-
138
-
138
-
-
-
V-News Agencia de Noticias, S.L.
-
6
-
6
-
-
-
4,519
39,150
43,669
96,138
8,507
104,645
Total
334,630 (a) Participating loans granted to companies the investments in which are intended to be realised or settled in the near term.
The credit lines granted to the Group companies earn average interest tied to Euribor.
The accounts receivable from and payable to the companies the investments in which are intended to be realised or settled in the near term were taken into account
in order to estimate the net asset value and to consider the total risk associated with Antena 3 de Televisión, S.A.’s investments in these companies (see Note 4-f).
The detail of the transactions carried out in 2006 with the Group companies and associates is as follows:
Thousands of Euros
Sales and Finance
Services
Income
Purchases,
Acquisitions of Rights
and Other Services
Finance
Costs
Group companies
Antena 3 Editorial, S.A.U.
66
5,593
-
167
Antena 3 Multimedia, S.L.U.
22
-
819
-
3,442
-
14,936
-
Ensueño Films, S.L.U.
588
587
1,000
-
Fundación Unipublic
51
-
-
-
211
151
39
-
Organizaciones Deportivas y Culturales Unipublic, S.A.U.
-
-
-
32
Publicidad 3, S.A.U.
-
-
-
634
386
-
1,421
145
4,199
-
6,073
892
-
-
150
-
Atres Advertising, S.L.U.
Movierecord Cine, S.A.U.
Unipublic, S.A.U.
Uniprex, S.A.U.
Uniprex Televisión, S.L.U.
Associates and related companies
Canal Factoría de Ficción, S.A.
666
178
-
-
Canal Directo Interactivo, S.L.
-
-
15
-
75
-
-
-
242
-
3,027
-
DeAPlaneta Producciones Cinematográficas, S.L.
-
-
691
-
Editorial Página Cero Norte, S.A.
5
-
-
-
165
-
-
-
-
-
1,296
-
I3 Televisión, S.L.
379
-
3,939
-
I.P. Network, S.A.
-
-
218
-
249
-
-
-
1,600
-
-
-
-
-
5
-
Planeta Junior Italia, S.R.L.
42
-
-
-
Prodigius Audiovisual, S.A.
-
-
360
-
RTL Televisión GmbH
2
-
100
-
Santander Investment Services, S.A.
4
-
240
-
Sociedad Anónima del Video, S.L.
345
-
-
-
Vox Film & Fernseh GmbH & Co. KG
674
-
-
-
13,413
6,509
34,329
1,870
Centro de Estudios CEAC, S.L.
DeAPlaneta, S.L.
Editorial Planeta, S.A.
Grundy Producciones, S.A.
Metropole Production, S.A.
Planeta Directo, S.L.
Planeta Junior, S.L.
Total
97
11. Shareholders’ equity
The transactions recognised in the various equity accounts in the accompanying balance sheet at 31 December 2006 are summarised as follows:
Thousands of Euros
Share CapitalLegal Reserve
Balances at 31 December 2005
Reserve for
Treasury Shares
Other Reserves
Interim
Dividend
Profit (Loss)
for the Year
166,668 33,334 29,519 39,750 (83,038)
207,472
Distribution of 2005 profit
-
-
-
30,471
83,038
(207,472)
Reduction of share capital (8,333)
(1,667)
-
(190,002)
-
-
Change in reserve for treasury shares
-
-
63,830
(63,830)
-
-
Adjustment of value of treasury stock to underlying carrying amount
-
-
(87,722)
-
-
-
Extraordinary dividend
-
-
-
(93,537)
-
-
2006 profit
-
-
-
-
-
306,900
158,335
31,667
5,627
-
306,900
Balances at 31 December 2006
(277,148)
Share capital
Until 29 November 2006, the Company’s share capital consisted of 222,224,000 fully subscribed and paid shares of EUR 0.75 par value each, all of which are of the
same class and series and carry the same rights.
The Company’s shareholders at an Extraordinary General Meeting held on 29 November 2006 resolved to reduce capital through the redemption of 11,111,200
shares for EUR 8,333 thousand, in order to reimburse contributions made by the shareholder Macame, S.A. This capital reduction was charged to the Company’s
unrestricted reserves pursuant to Article 167.1.3 of the Consolidated Companies Law.
Accordingly, the Company’s share capital consists of 211,112,800 fully subscribed and paid shares of EUR 0.75 par value all of which are of the same class and series
and carry the same rights.
98
The shareholder structure at 31 December 2006 was as follows:
Percentage of Ownership
Grupo Planeta-de Agostini, S.L.
42.63
RTL Group Communications S.L.U.
18.55
Grupo Rayet, S.A.
5.86
Treasury shares
2.50
Other shareholders
30.46
100.00
Legal reserve
Under the Consolidated Companies Law, 10% of the net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least
20% of share capital.
The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. Otherwise,
until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.
As a result of the reduction in share capital carried out in 2006, the balance of the legal reserve fell by EUR 1,667 thousand.
Other reserves
“Other Reserves” includes restricted reserves of EUR 281 thousand relating to the “Reserve for Adjustment of Share Capital to Euros”.
As a result of the capital reduction, a reserve was constituted for EUR 8,333 thousand, an amount equal to the par value of the shares, which may only be used if the
same conditions as those for the reduction of share capital are met, pursuant to Article 167.1.3 of the Consolidated Companies Law.
99
Reserve for treasury shares
Pursuant to the Consolidated Companies Law, a restricted reserve must be recorded for an amount equal to the value of the treasury shares held by the Company.
This reserve amounts to EUR 5,627 thousand.
Also, the par value of the treasury shares cannot exceed 5% of the Company’s share capital and the shares must be fully paid in.
At 31 December 2006 the Company owned 5,284,146 treasury shares representing 2.503% of the Company’s share capital.
The changes in treasury shares in 2006 and 2005 were as follows:
2006
2005
Number
of Shares
Number
of Shares
3,703,817
1,926,008
Purchases
11,361,200
1,777,809
Sales
(5,686,893)
-
Delivery of shares (4,093,978)
-
5,284,146
3,703,817
At beginning of year
At end of year In December 2006, as a result of the resolution of the Extraordinary General Meeting held on 29 November 2006, 11,111,200 shares were acquired from Banco
Santander Central Hispano according to conditions approved at the Extraordinary General Meeting by the shareholders.
Dividends
At the Annual General Meeting of Antena 3 de Televisión, S.A. held on 29 March 2006, the shareholders approved a final dividend out of 2005 profit of EUR 0.43
per share, which gave rise to a total of EUR 93,964 thousand and was paid to shareholders on 26 April 2006.
At the Extraordinary General Meeting of Antena 3 de Televisión, S.A. held on 29 November 2006, the shareholders resolved to distribute an extraordinary dividend
with a charge to unrestricted reserves through the delivery of treasury shares representing the Company’s share capital in the proportion of one share for every 48
shares entitled to participate therein. The tax revenue or payment, if applicable, pursuant to current tax legislation, formed an additional part of this dividend and was
collected or paid, respectively, by the Company.
100
12. Provisions and other long-term payables
The balance of the long-term “Provisions for Contingencies and Charges” heading in the accompanying balance sheet relates in full to the provision recorded by the
Company for the amount of the negative equity of the subsidiaries of Antena 3 de Televisión, S.A., the investments in which are intended to be held at long term.
The main item in “Non-Current Liabilities – Other Payables” relates to the estimated total non-current liabilities to date arising from the pluriannual incentive, loyaltybuilding and variable compensation programmes currently in force, which amount to EUR 37,782 thousand (see Note 4-l).
13. Bank borrowings
The breakdown of the balance of “Bank Borrowings” on the liability side of the accompanying balance sheet at 31 December 2006 is as follows:
Thousands of EurosLimit
Credit facilities
Unpaid interest Total
Balance Drawn Down at Short Term
344,000
207,531
-
671
344,000
208,202
The interest rates paid by the Company in 2006 on the loans and credit facilities arranged with banks are mainly tied to Euribor plus a spread ranging from
0.2% to 0.6%.
101
14. Trade payables
The detail of “Trade Payables” in the balance sheet at 31 December 2006 is as follows:
Thousands of Euros
Payable to suppliers
109,941
Payable for unreceived invoices
71,220
Barter payables
1,523
Total
182,684
15. Other non-trade payables and other provisions
“Other Non-Trade Payables” on the liability side of the accompanying balance sheet mainly includes estimated current liabilities arising from the multiyear incentive,
loyalty-building and variable compensation programmes currently in force, which amount to EUR 14,919 thousand (see Note 4-l).
The breakdown of “Other Provisions” on the liabilities side of the accompanying balance sheet at 31 December 2006 is as follows:
Thousands of Euros
Other provisions for short-term contingencies and charges
60,682
Trade discounts payable 37,064
Total
97,746
102
16. Tax matters
The detail of the balances of “Tax Receivables” and “Taxes Payable” on the asset and liability sides, respectively, of the accompanying balance sheet at 31December
2006 is as follows:
Thousands of Euros
Long term
Prepaid taxes
23,844
23,844
Short term
Prepaid taxes
10,412
Income tax receivable
1
10,413
Total tax receivables
34,257
Short term
Tax withholdings payable
7,669
Income tax payable
14,120
Accrued social security taxes payable
1,195
VAT payable
5,572
Total taxes payable
28,556
Pursuant to the Spanish Corporation Tax Law 43/1995, of 27 December, on 26 December 2000 Antena 3 de Televisión, S.A. notified the Madrid tax authorities of its
decision to file consolidated tax returns indefinitely provided that the requirements established in Article 81 of this Law are met and it does not decide to cease to
apply the consolidated tax regime (Law 24/2001, of 27 December).
The filing of consolidated tax returns gives rise to reciprocal intra-Group balances, due to the offset of the losses incurred by certain companies against the profit
earned by other Group companies. These balances are recorded under “Payable to Group Companies” and “Receivable from Group Companies”, as appropriate.
Income tax is calculated on the basis of accounting profit determined by application of generally accepted accounting principles, which does not necessarily coincide
with taxable profit.
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The reconciliation of 2006 profit per books to the taxable profit for income tax purposes is as follows:
Thousands of Euros
Profit before taxes for 2006 Taxable Profit
Tax Charge
424,673
148,636
Permanent differences
Increases
3,889
1,361
Permanent differences due to consolidation
(77,839)
(27,244)
Total permanent differences
(73,950)
(25,883)
Tax credits
(9,934)
Tax loss carryforwards
Adjusted profit per books and expense for the year
350,723
112,819
Income tax adjustments
4,954
Income tax expense
117,773
Timing differences
Increases
Arising in the year
36,712
12,849
(22,083)
(7,729)
14,629
5,120
365,352
127,873
Decreases
Arising in prior years
Total timing differences
Taxable profit and net tax payable
Tax credits taken in 2006
(30,965)
Gross tax payable
96,908
2006 prepayments
(85,113)
Tax payable
11,795
Tax payable by Group companies
2,325
Income tax payable
14,120
104
The difference between the tax charge allocated to the current year and to prior years and the tax charge already paid or payable for such years, which is recognised
under “Prepaid Income Tax”, arose as a result of timing differences derived mainly from the following:
Thousands of Euros
Balance at Additions
Reductions
31-12-05
Balance at
31-12-06
PREPAID TAXES
Contingencies and charges
22,025
5,272
(10,195)
17,102
Non-current accounts payable
10,933
8,235
(2,238)
16,930
91
133
-
224
33,049
13,640
Other items
Total
(12,433)
34,256
Based on the estimate made by the Company’s directors of the years in which sufficient future profit will be obtained to enable these prepaid taxes to be offset and
used, EUR 23,844 thousand were recorded under “Non-Current Assets – Tax Receivables” and EUR 10,412 thousand were recorded in the “Prepaid Taxes” account
under “Current Assets – Tax Receivables”. Also, on the basis of the aforementioned estimate of future profit, the directors consider that there is no reasonable doubt
as to the recovery of the amounts recognized in the accompanying balance sheet within the legally established time periods and limits. At 31 December 2006 the
Company did not have any tax credits to be offset.
At 31 December 2006 the tax authorities were reviewing the Company’s VAT and personal income tax for the years from 2002 to 2004 and income tax for the years
from 2001 to 2004. The Company’s directors do not expect any material liabilities with an impact on the financial statements to arise as a result of a review of the
open years.
105
17.Other guarantee commitments to third parties and contingent assets and liabilities
A) Guarantee commitments to third parties
The detail of the guarantees provided by the Company to financial institutions for third parties is as follows
Thousands of Euros
Group companies and associates 8,163
Other guarantees
15,212
Total
23,375
The Company’s directors consider that the liabilities not foreseen at 31 December 2006, if any, which might arise from the guarantees provided would not be material.
B) Contingent liabilities
At 31 December 2006, certain civil, labour, criminal and administrative lawsuits had been filed against the Company which were taken into account in estimating any
contingent liabilities. Noteworthy because of their amount were the lawsuits with certain copyright management companies.
The directors of the Company and its legal advisers do not expect any material liabilities additional to those already recorded to arise from the outcome of the lawsuits
in progress.
C)Litigation
On 18 December 2006, the Madrid Provincial Appellate Court handed down a decision acquitting the National Professional Football League (LFP) of all the claims
made by Antena 3 de Televisión, S.A. with respect to the provisional execution of the court decision whereby the LFP was ordered to pay EUR 25.5 million plus interest,
which was recorded in the 2005 financial statements. The Company has appealed against this decision.
106
18. Foreign currency balances and transactions
A) Foreign currency balances
The breakdown, by currency, of the equivalent euro value of the Company’s foreign currency debts included in “Trade Payables” on the liability side of the accompanying balance sheet at 31 December 2006 is as follows:
Currency
Thousands of Euros
US dollars 61,825
Other currencies
114
Total
61,939
B) Foreign currency transactions
The foreign currency transactions performed in 2006 related mainly to transactions denominated in US dollars. Their equivalent euro values translated at the average
exchange rates for the year were as follows:
Thousands of Euros
Sales
Purchases and other Total
US Dollars
Other
2,209
-
86,160
292
88,369
292
107
19. Financial instruments
A) Exchange rate hedges
At 31 December 2006 the Company had arranged transactions to hedge its foreign currency asset and liability positions amounting to USD 108,829 thousand, at a
weighted average exchange rate of EUR 1.2616 / USD, the detail being as follows:
Maturity
Thousands of US Dollars
2007
80,417
2008
25,330
2009
3,082
Total
108,829
The net fair value of the hedging financial instruments amounted to financial liabilities of EUR 4,442 thousand at year-end.
B) Swap
In order to cover the increased cost of the three-year variable compensation plan that would arise in the event of an increase in the Company’s share price, a swap
contract was arranged in December 2006 with an underlying of 4,950,000 Antena 3 de Televisión S.A. shares whereby the Company will settle with the agent bank
the positive or negative difference between the initial price and the market value of the shares on maturity in June 2009. The effect on the 2006 income statement
is to reduce staff costs by EUR 571 thousand.
108
20. Income and expenses
a) Revenue
Most of the Company’s sales are made in Spain.
b) Amortisation of programmes and other rights
The detail of “Amortisation of Programmes and Other Rights” in 2006 is as follows:
Thousands of Euros
Broadcasting of in-house productions
149,723
Outside production services
127,887
Programme broadcasting rights 110,023
Performances of and contributions by entertainers
12,490
Other amortisation
28,637
Live broadcasting rights
18,169
Addition to inventories
(153,028)
Total
293,901
The “Addition to Inventories” account reflects the expenses incurred in making programmes. In accordance with the Company’s procedures, these expenses are
capitalised and subsequently amortised as described in Note 4-e.
c) Staff costs
The breakdown of staff costs for 2006 is as follows:
Thousands of Euros
Wages and salaries
83,996
Social security costs and other employee welfare expenses 13,888
Other staff costs
3,678
Total
101,562
109
The remuneration of the members of senior management who are not executive directors amounted to EUR 2,696 thousand in 2006.
As the Spanish National Securities Market Commission (CNMV) was informed on 12 May 2004, the Company’s shareholders at the Annual General Meeting on that
date approved a three-year variable compensation and loyalty-building plan for the directors of the Antena 3 Group. Once the criteria of the Appointments and Remuneration Committee had been taken into account and the agreements of the relevant governing bodies had been obtained, the CNMV was notified of this plan
on 4 January 2005. It is aimed at two groups of directors and managers, for which homogeneous conditions were established, and it continued to be implemented
this year.
The most salient matters relating to the implementation of this plan at 31 December 2006 were as follows:
1. Plan beneficiaries: a total of 31 beneficiaries, all of them in the two categories established in the plan, namely: executives and professionals related to the Antena
3 Group by an employment relationship or a contract for services (both directors and non-directors). At 31 December 2006 there were 27 beneficiaries at Antena
3 de Televisión, S.A.
2. Overall amount of the plan: the implementation of the plan at 2006 year-end represented 86.0% of the maximum incentive possible approved by the General
Meeting. This percentage is the sum of:
a. 1.72% of the result of multiplying by 11.6 the difference between EUR 120,000 thousand and the consolidated EBITDA of the Antena 3 Group at 31 December
2006, based on the formally prepared and audited financial statements and in accordance with the criteria established at the aforementioned General Meeting.
The maximum percentage approved by the General Meeting in this connection was 2%.
b. 0.860% of the difference between EUR 1,392,000 thousand and the average stock market value of the Company in December 2006, up to a limit of EUR
2,000,000 thousand. The maximum percentage approved by the General Meeting in this connection was 1%.
3. Means of applying the plan to the different groups:
a. Until 10 July 2009: group with mixed variable compensation, which includes the payment of 30% of the total amount in July 2007 and the remaining 70% in July
2009. This group includes 13 beneficiaries, 10 of whom work for Antena 3 de Televisión, S.A., and the amount assigned is 75% of the aforementioned 86%.
b. Until 10 July 2007: group with variable compensation in cash only. This group consists of 18 beneficiaries, 17 of whom work for Antena 3 de Televisión, S.A.,
and the amount assigned is 11% of the aforementioned 86%.
The amount accrued for senior managers with respect to this plan is EUR 5,996 thousand, estimated on the basis of their staying with the Company until the plan
ends in June 2009.
110
The average number of employees in 2006, by category, was as follows:
Professional Category
Number of Employees
Senior management 29
Operations and programmes personnel 919
Management 156
Interns
45
Specific-project hires 173
Total
1,322
D) Rent and royalties
“Rent and Royalties” in the accompanying income statement for 2006 includes most notably the amounts paid to Retevisión I, S.A. as fees for the distribution of the
audiovisual signal.
E) Other current operating expenses
The breakdown of the balance of “Other Current Operating Expenses” in the 2006 income statement of income is as follows:
Thousands of Euros
Work performed by other companies
14,792
Communications
7,162
Advertising and publicity
8,627
Copyright and other expenses
89,206
Total
119,787
F) Fees and other amounts paid to auditors
The fees accrued in 2006 for audit services provided to Antena 3 de Televisión, S.A. by Deloitte, S.L. amounted to EUR 173 thousand. Also, the fees for other professional services provided to the Company by its auditors in 2006 amounted to EUR 61 thousand.
111
G) Extraordinary expenses
The detail of “Extraordinary Expenses” in the income statement for 2006 is as follows:
Thousands of Euros
Period provisions for contingencies and charges (Note 4-j)
5,883
Other extraordinary expenses
1,723
Total
7,606
21. Remuneration and other benefits of the directors
The compensation earned in 2006 by the former and current members of the Board of Directors for salaries and attendance fees amounted to EUR 1,923
thousand.
The Company has not granted any loans or advances to its Board members and it does not have any supplementary pension, retirement bonus, special indemnity or
life insurance commitments to them in their capacity as directors.
The amount accrued for directors under the three-year loyalty-building and variable compensation plan was EUR 10,655 thousand. This amount was estimated on
the basis of their staying with the Company until the plan ends in June 2009.
22. Detail of the equity interests held by the directors in companies engaging in similar activities
and performance by them, as independent professionals or as employees, of similar activities
Pursuant to Article 127 ter.4 of the Spanish Companies Law, introduced by Law 26/2003, of 17 July, which amends Securities Market Law 24/1988, and the Consolidated Companies Law, in order to reinforce the transparency of listed corporations, following is a detail of the companies engaging in an activity that is identical,
similar or complementary to the activity that constitutes the company object of Antena 3 de Televisión, S.A. in which the members of the Board of Directors own
equity interests, per the representations made by each of the directors, and of the functions, if any, that they discharge at those companies, and of the activities
that the members of the Board of Directors carry on, as independent professionals or as employees, that are identical, similar or complementary to the activity that
constitutes the company object of Antena 3 de Televisión, S.A.
112
A) Directors of Antena 3 de Televisión, S.A. who are also directors or executives of other Antena 3 de Televisión Group companies
• Maurizio Carlotti: director acting severally of Publicidad 3, S.A., Sole-Shareholder Company.
B) Directors of Antena 3 de Televisión, S.A. who are also directors or executives of significant shareholders of the Antena 3 de Televisión Group
• José Manuel Lara Bosch: Chairman of the Board of Directors of Grupo Planeta- de Agostini, S.L.
• José Manuel Abad Silvestre: director and Managing Director of Grupo Planeta- de Agostini, S.L.
• Marco Drago: Deputy Chairman of the Board of Directors of Grupo Planeta- de Agostini, S.L.
• José Creuheras Margenat: director of Grupo Planeta- de Agostini, S.L.
• Nicolás Abel Bellet de Tavernost: member of the Operations Management Committee of RTL Group Communication, S.L.U.
• Elmar Heggen: member of the Management Committee and Regional Operations and Development Vice President of RTL Group, S.A.
C) Equity interests and, if appropriate, positions held by directors in the year-ended 31 December 2006, in companies engaging in an activity that is identical, similar or complementary to the activity of Antena 3 de Televisión, S.A. and of its Group companies
None of the directors of Antena 3 de Televisión, S.A. performs, as an independent professional or as an employee, activities that are identical, similar or complementary to the activity that constitutes the company object of Antena 3 de Televisión, S.A.
D) Members of the Board of Directors of Antena 3 de Televisión, S.A. who are also directors of other companies listed on official stock
markets in Spain
• José Manuel Lara Bosch: director of Banco de Sabadell and of Compañía de Distribución Logista, S.A .
• Pedro Ramón y Cajal Agüeras: director of Indra Sistemas, S.A.
E) Activities performed by the directors of Antena 3 de Televisión, S.A., as independent professionals or as employees, that are identical, similar or complementary to the activity carried on by the Company
• Nicolás Abel Bellet de Tavernost: Chairman of the Board of Directors of Métropole Televisión. S.A. (television services).
• Elmar Heggen: member of the Board of Directors of Sportfive, S.A. and Freemantlemedia, S.A.
113
23. Statements of changes in financial position for 2006 and 2005
Following are the statements of changes in financial position for 2006 and 2005:
Thousands of Euros
2006
2005
-
-
Dividends distributed
109,429
166,309
Capital reductions and distribution of treasury shares
278,073
-
APPLICATION OF FUNDS
Funds applied in operations
Non-current asset additions-
Intangible assets
Property, plant and equipment
Long-term investments-
Investments in subsidiaries, associates and other companies
182
428
8,902
10,722
252
46,555
Guarantees and deposits
-
282
Long-term loans
-
-
-
17,039
204,404
26,586
-
62,250
601,242
330,171
-
-
601,242
330,171
Transfer to long term of prepaid taxes and tax credits earned in prior years
Acquisition of treasury shares
Repayment or transfer to short term of non-current liabilities
TOTAL FUNDS APPLIED
FUNDS OBTAINED IN EXCESS OF FUNDS APPLIED (INCREASE IN WORKING CAPITAL)
TOTAL
114
Thousands of Euros
2006
2005
206,191
219,947
SOURCE OF FUNDS
Funds obtained from operations
Non-current asset disposals
Treasury shares
Intangible assets
Property, plant and equipment
Long-term investments
Investments in subsidiaries, associates and other companies
178,909
-
-
1
853
1,577
51
3,561
Guarantees and deposits
-
-
Repayment or transfer to short-term of long-term loans-
-
1,397
6,859
-
-
1,822
Non-current liabilities
5,141
22,930
Deferred income
1,976
454
399,980
251,689
Transfer to short term of prepaid taxes
Transfer to short term of long-term investments
TOTAL FUNDS OBTAINED
FUNDS APPLIED IN EXCESS OF FUNDS OBTAINED
(DECREASE IN WORKING CAPITAL)
TOTAL
Thousands of Euros
201,262
78,482
601,242
330,171
2006
2005
Increase
Decrease
Increase
Decrease
27,877
-
25,585
-
5,104
-
1,854
-
Short-term investments
-
109,668
-
59,487
Cash
-
11,312
22,392
-
Accrual accounts
-
539
-
605
Current liabilities
-
112,724
-
68,221
32,981
234,243
49,831
128,313
-
201,262
-
78,482
CHANGE IN WORKING CAPITAL
Inventories
Accounts receivable
Total
CHANGE IN WORKING CAPITAL 115
The reconciliation of the profit for the year to the funds obtained from operations is as follows:
Thousands of Euros Profit for the year 2006
2005
306,900
207,472
Add
Depreciation and amortisation charge and start-up costs
Provision to investment valuation allowance and charge to reserve for treasury shares
Amortisation of debt arrangement expenses 15,109
17,276
1,889
1,857
-
845
Less
Amount used of the provision for contingencies and charges
(75,291)
(7,503)
Gains on disposals of treasury shares
(40,101)
-
Gains on non-current asset disposals (2,315)
-
206,191
219,947
Funds obtained from operations 24. Explanation added for translation to English
These financial statements are presented on the basis of accounting principles generally accepted in Spain. Certain accounting practices applied by the Company that
conform with generally accepted accounting principles in Spain may not conform with generally accepted accounting principles in other countries.
116
ANTENA 3 DE TELEVISIÓN, S.A.
DIRECTORS’ REPORT FOR 2006
Business performance and situation of the Company
Net revenue increased by 0.6% in 2006, from EUR 865 million in 2005 to EUR 870 million, due mainly to the conflicting movements in the advertising market and in
Antena 3 de Televisión, S.A.’s audience figures. While the former continued to grow significantly, the Company’s audience share was adversely affected by the entry
into the market of two new analogue channels (Cuatro and La Sexta) and the commencement of digital terrestrial television broadcasts, which multiply the range of
channels on offer to viewers. Although the audience of the digital channels is still small it should be noted that the Antena 3 channels (Nova and Neox) are amongst
the most popular.
Profit from operations was EUR 311 million, slightly up on the EUR 309 million achieved in 2005. With the limited increase in revenue, rigorous cost controls were
required in order to obtain a similar operating margin to last year. As a result expenses, including content and distribution of the signal of the new digital channels,
rose by only 0.6.
In March 2006, after various appeals, the subsidiary Uniprex S.A., Sole-Shareholder Company, paid the Radio Blanca Group the amounts ordered in the arbitral award
of 16 March 2004 together with the interest accrued up to the payment date. In August Antena 3 de Televisión, S.A. and the Telefónica Group reached a negotiated
agreement with respect to the interpretation of the agreement for sale by the Telefónica Group to Antena 3 de Televisión, S.A. of all the shares of Uniprex S.A., SoleShareholder Company, specifically in connection with the allocation between the two parties of the costs arising from the arbitral award with respect to the support
agreement between Uniprex S.A., Sole-Shareholder Company and the Radio Blanca Group. As a result of this agreement Publicidad 3, S.A., Sole-Shareholder Company, the subsidiary holding the shares of Uniprex S.A., Sole-Shareholder Company, received EUR 63 million from the Telefónica Group as a reduction of the cost of
acquiring Uniprex S.A., Sole-Shareholder Company, in 2002.
The effect on Antena 3 de Televisión, S.A.’s accounts of this transaction and the transactions with treasury shares, as detailed in the related heading, was to raise
extraordinary profit for the year to EUR 111 million.
Profit before and after taxes stood at EUR 425 million and EUR 307 million, respectively, compared to EUR 299 million and EUR 207 million, respectively, in 2005.
2006 marked the first year of the transition from analogue to digital television, with the consequent broadening of the variety of television channels on offer. This
wider range also extends to technologies that are including television products in their traditional content, such as wireless telephones and the Internet. Antena 3 de
Televisión, S.A. continued to play an active role in all these new developments through its multimedia division. Some have already begun to give economically tangible
results while others allow the Company to remain at the forefront and guarantee the possibility of rolling out activities in new markets when they are developed.
117
However, the foregoing does not mean that the idea of generalist television is going to disappear. The experience of many other countries has shown that the
multiplication of television channels and audience fragmentation reduces the number of viewers for a given programme at a given time. It has also demonstrated
that viewers tend to focus on a limited number of channels that offer programmes of interest to wide-ranging social groups. These are precisely the most attractive
groups for advertisers of mass consumption products when launching their advertising campaign. The interest of these advertisers is reinforced by the fact that no
other medium in Spain has the same penetration as television. The impact of two new competitors in this area affected Antena 3 de Televisión, S.A. in 2006 since
they achieved a considerable combined audience share. It is to be hoped that their viewing figures will not continue increasing at the same rate in future and that
the erosion of our audience will be limited.
Significant events subsequent to year-end
There were no significant events between year-end and the preparation of the Company’s financial statements.
Outlook for the Company
Satisfying the needs of viewers and advertisers will continue to be the fundamental objective of Antena 3 de Televisión, S.A. The outlook for the television advertising market
remains positive within a favourable economic context. In addition, as indicated above, the impact on viewing figures of the entry of new free television competitors is expected
to be reduced.
The Company will aim to maintain the high levels of quality and competitiveness of its analogue channel while simultaneously consolidating its digital channels to ensure that
they are a benchmark in the new market at all times. As in previous years, the efficiency and cost control plans that have given such excellent results will be maintained.
The reinforcement of multimedia initiatives will play an essential part in Antena 3 de Televisión S.A. retaining its privileged position in such dynamic and changing worlds as
advertising and television content.
Research and development activities
The Company does not carry out any specific research and development activities; however, it updates its investments in all new technologies related to engineering,
systems and content distribution on an ongoing basis.
118
Treasury share acquisitions
At the beginning of 2006 Antena 3 de Televisión S.A. held 3,703,817 treasury shares of EUR 0.75 par value each, representing 1.67% of the Company’s share capital.
Making partial use of the authorisation granted to this effect by the shareholders at the Annual General Meeting on 29 March 2006, the Company acquired 250,000 treasury
shares on the terms stipulated. The Company subsequently decided to sell all its treasury shares on the market.
As a result of the resolution adopted by the shareholders at the Extraordinary General Meeting held on 29 November 2006, 11,111,200 treasury shares were acquired from
Banco Santander Central Hispano in December 2006 according to the terms approved at the Extraordinary General Meeting.
At the aforementioned Extraordinary General Meeting, the shareholders also resolved to distribute an extraordinary dividend in December with a charge to reserves. This dividend consisted of the distribution of one treasury share for every 48 shares held by shareholders and gave rise to the distribution of 4,093,978 shares. 1,733,076 shares were
also sold on the market in December.
As a result of the above transactions, at 31 December 2006 the Company held 5,284,146 treasury shares of EUR 0.75 par value each, representing 2.503% of the Company’s
share capital, and the gains arising on treasury share transactions in 2006 amounted to EUR 40 million.
Use of financial instruments and main financial risks
The Company performs transactions with financial instruments mainly to hedge the exchange rate risk on the purchases of broadcasting rights in the year.
At 31 December 2006 the Company had arranged transactions to hedge its foreign currency asset and liability positions amounting to USD 108,829 thousand, at a
weighted average exchange rate of EUR 1.2616/USD. The net fair value of the hedging financial instruments amounted to financial liabilities of EUR 4,442 thousand
at year-end.
In order to cover the increased cost of the three-year variable compensation plan that would arise in the event of an increase in the Company’s share price, a swap
contract was arranged. The liability hedged by this contract was calculated taking into account the initial contracted price of the Company’s shares.
The Company has established the risk management systems required to ensure that all market transactions are carried out according to established policies, rules and
procedures and within the limits approved for each case. The Company’s main financial risks are as follows:
119
a) Foreign currency risk. The Company’s foreign currency risks relate mainly to the payments to be made in international markets to acquire broadcasting rights. The
Company arranges hedging instruments, mainly exchange hedges, to mitigate its foreign currency risk exposure.
b) Liquidity risk. The Company’s liquidity policy consists of arranging sufficient credit lines and short-term investments to satisfy its financial requirements on the basis
of expected business performance.
c) Credit risk. The Company does not have any significant credit risk since the average customer collection period is very short and guarantees are required for credit
sales. Cash placements are made and derivative instruments are arranged with institutions of recognized solvency.
Translation of a report originally issued in Spanish based on our work performed in accordance with generally accepted auditing standards in Spain and of consolidated financial statements originally issued in Spanish and prepared in accordance with IFRSs as adopted by the European Union (see Notes 2 and 26). In the event of
a discrepancy, the Spanish-language version prevails.
Auditors’ report
121
122
Consolidated BALANCE SHEETS AT 31 DECEMBER 2006 AND 2005
Thousands of Euros
NOTES
2006
2005
ASSETS
Goodwill
4
180,739
180,739
Other intangible assets
5
29,776
20,982
Property, plant and equipment
6
77,777
83,714
Investments accounted for using the equity method
7
431
479
Deferred tax assets
20
37,573
52,044
Other non-current assets
7
631
881
NON-CURRENT ASSETS
326,927
338,839
8
290,553
259,365
Inventories
3,678
4,042
9
258,065
249,417
Current financial assets
1,144
3,478
Current tax assets
2,697
4,591
Other current assets
1,719
3,151
Cash and cash equivalents
20,569
140,014
Programme rights Trade and other receivables
20
CURRENT ASSETS
578,425
664,058
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS
465
545
TOTAL ASSETS
905,817
1,003,442
123
Thousands of Euros
NOTES
2006
2005
Share capital
10-a
158,335
166,668
Restricted reserves
10-b
45,908
63,134
Retained earnings
146,594
274,279
Treasury shares
10-c
(95,115)
(29,519)
Interim dividends
10-d
-
(83,038)
255,722
391,524
Bank borrowings
12
400
629
Provisions
11
749
1,717
Other non-current liabilities
11
43,212
36,936
44,361
39,282
Bank borrowings
12
208,489
1,860
Trade and other payables
14
226,996
234,164
4,620
11
LIABILITIES AND EQUITY
EQUITY
NON-CURRENT LIABILITIES
Other financial liabilities
Provisions
11
96,034
297,577
Current tax liabilities
20
31,713
14,326
Other current liabilities
11
36,931
23,466
CURRENT LIABILITIES
604,783
571,404
LIABILITIES DIRECTLY LINKED TO NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS
951
1,232
TOTAL LIABILITIES AND EQUITY
905,817
1,003,442
The accompanying Notes 1 to 26 are an integral part of the consolidated balance sheets at 31 December 2006 and 2005.
124
CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005
Thousands of Euros
NOTES
2006
2005
Revenue
17-a
934,409
932,042
67,290
72,737
Other income
Programme amortisation and other procurements
17-b
(303,966)
(303,725)
Staff costs
17-c
(149,156)
(152,087)
(20,173)
(22,059)
17-d
(200,390)
(201,550)
328,014
325,358
Net impairment losses
(50)
8,737
Net gain (loss) on changes in the value of financial instruments at fair value
(4,159)
14,253
Exchange differences
6,608
(14,451)
Net financial loss
(1,628)
(14,064)
Share of results of associates (110)
-
65,620
2,835
Other gains
-
30
Other losses
-
-
394,295
322,698
20
104,578
96,688
289,717
226,010
2006
2005
Basic
1.331
1.034
Diluted
1.331
1.034
Depreciation and amortisation expense Other operating expenses
OPERATING PROFIT
Net gain from disposal of non-current assets 18
PROFIT BEFORE TAX FROM CONTINUING OPERATIONS
Income tax
PROFIT FOR THE YEAR
Earnings per share
From continuing operations
The accompanying Notes 1 to 26 are an integral part of the consolidated income statements for 2006 and 2005.
125
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005
Thousands of Euros
Share Restricted Treasury
Retained
Interim Capital
Reserves
Shares
Earnings
Dividend
Balance at 31 December 2004
166,668
36,548
(2,933)
150,416
-
Equity
Attributable
to the
Parent
350,699
Gains and losses:
Net changes in cash flow hedges
-
-
-
8,971
-
8,971
Profit for the year
-
-
-
226,010
-
226,010
Treasury share transactions:
Acquisition of treasury shares
-
26,586
(26,586)
Distribution of profit:
-
(26,586)
-
(26,586)
-
2004 dividend
-
-
-
(83,271)
-
(83,271)
Interim dividend out of 2005 profit
-
-
-
-
(83,038)
(83,038)
Tax effect of IFRS adjustments
-
-
-
(3,563)
-
(3,563)
Changes in the scope of consolidation and other
-
-
-
2,302
-
2,302
166,668
63,134
Balance at 31 December 2005
(29,519)
274,279
(83,038)
391,524
Gains and losses:
Net changes in cash flow hedges
-
-
-
(2,769)
-
(2,769)
Profit for the year
-
-
-
289,717
-
289,717
Treasury share transactions:
-
Acquisition of treasury shares
-
5,627
(204,404)
(114,916)
-
(313,693)
Sale of treasury shares
-
(29,519)
138,808
178,909
-
288,198
Distribution of profit:
-
2005 dividend
-
-
-
(177,002)
83,038
(93,964)
2006 extraordinary dividend
-
-
-
(93,537)
-
(93,537)
(8,333)
6,666
-
(198,335)
-
(200,002)
Tax effect of IFRS adjustments
-
-
-
(12,882)
-
(12,882)
Changes in the scope of consolidation and other
-
-
-
3,130
-
3,130
158,335
45,908
146,594
-
255,722
Capital reduction
Balance at 31 December 2006
(95,115)
126
CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005
Thousands of Euros
1.- CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit for the year before tax
2006
2005
394,295
322,698
Adjustments for
(3,880)
71,439
Depreciation / amortisation 20,173
22,059
Provisions
42,230
46,721
Gains / Losses from investing activities (+/-):
(65,572)
(11,602)
Profit of companies accounted for using the equity method
110
-
Financial profit / loss
(821)
14,262
Changes in working capital
(58,809)
(60,324)
Net cash from operations
331,605
333,813
Other working capital payments
(208,037)
-
(83,730)
(38,625)
39,838
295,189
Income taxes paid
Net cash flows from operating activities
2.- CASH FLOWS FROM INVESTING ACTIVITIES
Investments (24,658)
(68,811)
(252)
(45,231)
(24,406)
(23,580)
Disposals
66,573
20,217
Subsidiaries, joint ventures and associates
66,573
15,800
Property, plant and equipment and intangible assets
-
4,416
Subsidiaries, joint ventures and associates
Property, plant and equipment and intangible assets
Net cash flows from investing activities 41,915
3.- CASH FLOWS FROM FINANCING ACTIVITIES
(48,594)
Finance costs paid
524
(3,879)
Capital reduction
(200,002)
-
Dividends paid
(104,214)
(166,309)
Acquisition of treasury shares
(103,610)
(26,586)
Bank borrowings
206,400
(91,944)
Net cash flows from financing activities (200,902)
(288,718)
NET INCREASE / DECREASE IN CASH (119,149)
(42,123)
140,014
178,471
(296)
3,666
139,717
182,137
20,569
140,014
Cash and cash equivalents at beginning of year
Changes in the scope of consolidation / IFRS
Cash and cash equivalents at beginning of year - new scope of consolidation
Cash and cash equivalents at end of year
127
Antena 3 de Televisión, S.A. and Subsidiaries
Notes to the 2006 and 2005 Consolidated Financial Statements
1. Description of the Group
Antena 3 de Televisión, S.A., the Group’s Parent, with registered office at Avenida Isla Graciosa, 13, San Sebastián de los Reyes (Madrid), was incorporated on 7 June
1988, and its then sole company object was the indirect management of a television service.
For this purpose, it submitted a bid in response to the call for tenders made under Article 8 of Private Television Law 10/1988, of 3 May, and, pursuant to a resolution
of the Spanish Council of Ministers of 25 August 1989, was awarded a concession for the indirect management of the television service, for a period of ten years,
which ended on 3 April 2000.
On 7 May 1996, the shareholders at the Annual General Meeting resolved to change and extend the Parent’s corporate purpose, as permitted by Satellite Telecommunications Law 37/1995.
On 10 March 2000, the Council of Ministers adopted a resolution renewing the concession for the indirect management of the television service for a period of ten
years from 3 April 2000. The terms of this renewal were the same as for the former concession, with the added obligation of commencing digital broadcasting on 3
April 2002. The Parent made all the necessary investments to enable it to begin broadcasting on that date the Antena 3 de Televisión, S.A. signal pursuant to Royal
Decree 2169/1998 of 9 October, which approved the Spanish Technical Plan for Digital Terrestrial Television.
On 25 November 2005, the Council of Ministers resolved to expand the concession contract, simultaneously with the rest of concession-holders in Spain, by granting
the Parent three Digital Terrestrial Television (DTT) channels, on a single frequency and on one multiplex, which would replace the channel through which the network
has been broadcasting all its analogue programmes simultaneously since April 2002. Thus, from 30 November 2005, the Parent has offered three different types of
programming: the general Antena 3 Televisión channel which uses analogue technology and two DTT channels, each with a different type of programming.
In relation to the renewal of the radio broadcasting service concessions owned by Uniprex, S.A., Sole-Shareholder Company, to date applications have been submitted to the competent authorities, in accordance with the legislation in force, for the renewal of concessions about to expire and for authorisation of a change of
ownership of other concessions. In certain cases the renewal of the concession was granted expressly, whereas in others it was obtained by the administrative silence
route after the pertinent appeals were filed with a higher administrative body, in accordance with Article 43 of the Public Authorities and Common Administrative
Procedure Law.
The other Group companies engage mainly in activities relating to the production, reproduction and broadcasting of sounds and images (see Note 2).
128
The Parent’s Annual General Meeting and its Board of Directors Meeting, on 28 April 2003 and 29 July 2003, respectively, resolved to request the admission to listing
of all the shares of Antena 3 de Televisión, S.A. on the Madrid, Barcelona, Bilbao and Valencia stock exchanges, and their inclusion in the Spanish Unified Computerized Trading System (Continuous Market).
On 29 October 2003, the Parent’s shares commenced trading on these stock markets.
In view of the business activities carried on by the companies, they do not have any environmental liability, expenses, assets, provisions or contingencies that might
be material with respect to the equity, financial position and results of operations of the corporate Group. Therefore, no specific disclosures relating to environmental
issues are included in these notes to the consolidated financial statements.
2. Basis of presentation of the financial statements and basis of consolidation
a) Basis of presentation
These consolidated financial statements were prepared on the basis of the accounting records kept by the Parent and by the other Group companies in accordance
with International Financial Reporting Standards (EU-IFRSs), adopted by the European Union in conformity with Regulation (EC) no. 1606/2002 of the European
Parliament and the Council.
The Group’s consolidated financial statements were prepared taking into account all the mandatory accounting policies and rules and measurement bases with a
material effect on the consolidated financial statements, as well as the alternative treatments permitted by the relevant legislation in this connection, and, accordingly,
they present fairly the Group’s consolidated equity and financial position at 31 December 2006 and the results of its operations, the changes in consolidated equity
and the consolidated cash flows in the year then ended.
However, since the accounting policies and measurement bases used in preparing the Group’s consolidated financial statements for 2006 (EU-IFRSs) differ from those
used by the Group companies (Spanish GAAP), the required adjustments and reclassifications were made on consolidation to unify the policies and methods used
and to make them compliant with EU-IFRSs.
The 2006 consolidated financial statements of the Group and the 2006 individual financial statements of the Group companies, which were prepared by the companies’ respective directors, will be submitted for approval by the related shareholders at the respective Annual General Meetings, and it is considered that they will
be approved without any changes.
The 2005 consolidated financial statements, which were approved by the shareholders at the Annual General Meeting on 29 March 2006 and are included for comparison purposes, were also prepared in accordance with EU-IFRSs applied on a basis consistent with that applied in 2006.
129
Responsibility for the information and for the estimates made
The information in these financial statements is the responsibility of the Group’s directors.
In the Group’s consolidated financial statements for 2006 estimates were occasionally made in order to quantify certain of the assets, liabilities, income, expenses and
commitments reported herein. These estimates relate basically to the following:
• The impairment losses on certain assets (see Notes 5, 6 and 9),
• The assumptions used in the calculation of liabilities arising from the three-year executive compensation plan (see Note 18-b),
• The useful life of the property, plant and equipment and intangible assets (see Notes 3-b and 3-c),
• The measurement of goodwill arising on consolidation (see Note 4),
• Programme amortisation (see Note 3-d),
• The fair value of certain unquoted assets (see Notes 7 and 13), and
• Provisions (see Note 11)
Although these estimates were made on the basis of the best information available at 31 December 2006 on the events analysed, events that may take place in the
future might make it necessary to change these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively,
recognising the effects of the change in estimates in the related consolidated income statements.
b) Basis of consolidation
Subsidiaries
Following are the subsidiaries included in the scope of consolidation:
Corporate NameLocation
Year of Line of Business
Owner Company
Incorporation
2006
%
Antena 3 Directo, S.A.U. (*)
Madrid
1994
Direct TV sales
Antena 3 de Televisión, S.A.
100
Antena 3 Editorial, S.A.U.
Madrid
1990
Management of rights
Antena 3 de Televisión, S.A.
100
Antena 3 Multimedia, S.L.U.
Madrid
2004
Commercial management by television
Antena 3 de Televisión, S.A.
100
Antena 3 Temática, S.A.U. en liquidación (*)
Madrid
1998
Audiovisual productions
Antena 3 de Televisión, S.A.
100
Atres Advertising, S.L.U.
Madrid
2004
Management of advertising
Antena 3 de Televisión, S.A.
100
Ensueño Films, S.L.U.
Madrid
2000
Audiovisual productions
Antena 3 de Televisión, S.A.
100
Guadiana Producciones, S.A.U. (*)
Madrid
1994
Audiovisual productions
Antena 3 de Televisión, S.A.
100
Movierecord Cine, S.A.U.
Madrid
1966
Advertising in cinemas
Antena 3 de Televisión, S.A.
100
Organizaciones Deportivas y Culturales Unipublic, S.A.U.
Madrid
1984
Organisation of sports events
Antena 3 de Televisión, S.A.
100
Publicidad 3, S.A.U.
Madrid
1982
Radio broadcasting services
Antena 3 de Televisión, S.A.
100
Unipublic, S.A.U.
Madrid
1975
Organisation of sports events
Antena 3 de Televisión, S.A.
100
Antena de Radiodifusión, S.A.U.
Madrid
1994
Radio broadcasting services
Publicidad 3, S.A.U.
100
Medipress Valencia, S.A.U.
Valencia
1998
Radio broadcasting services
Publicidad 3, S.A.U.
100
Uniprex, S.A.U.
Madrid
1967
Radio broadcasting services
Publicidad 3, S.A.U.
100
Antena 3 Televisión Digital Terrestre de Canarias, S.A.U.
Las Palmas
2006
Local digital terrestrial television
Uniprex, S.A.U.
100
Canal Media Radio Galicia, S.L.U.
A Coruña
1997
Radio broadcasting services
Uniprex, S.A.U.
100
Madrid
1997
Radio broadcasting services
Uniprex, S.A.U.
100
Compañía Tres Mil Ochocientos, S.L.U.
A Coruña
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Corporación Radiofónica Castilla León, S.A.U.
Valladolid
2000
Radio broadcasting services
Uniprex, S.A.U.
100
Estaciones Radiofónicas de Aragón, S.A.U.
Zaragoza
1972
Radio broadcasting services
Uniprex, S.A.U.
100
Madrid
1989
Radio broadcasting services
Uniprex, S.A.U.
100
San Sebastián
1988
Radio broadcasting services
Uniprex, S.A.U.
100
Lleida
1991
Radio broadcasting services
Uniprex, S.A.U.
100
Onda Cero, S.A.U.
Coslada
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Ondadit, S.L.U.
Madrid
1994
Radio broadcasting services
Uniprex, S.A.U.
100
Radio Alamedilla, S.A.U.
Salamanca
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Radio Noticias 90, S.A.U.
Las Palmas
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Madrid
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Radio Tormes, S.A.U.
Salamanca
1989
Radio broadcasting services
Uniprex, S.A.U.
100
Rkor Radio, S.L.U.
Barcelona
1983
Radio broadcasting services
Uniprex, S.A.U.
100
Madrid 2004
Indirect management of TV service
Uniprex, S.A.U.
100
Barcelona
2005
Local digital terrestrial television
Uniprex, S.A.U.
100
Uniprex Televisión Digital Terrestre de Andalucía, S.L.U.
Sevilla
2006
Local digital terrestrial television
Uniprex, S.A.U.
100
Uniprex Televisión Digital Terrestre de Canarias, S.L.U.
Las Palmas
2006
Local digital terrestrial television
Uniprex, S.A.U.
100
Valencia
2005
Local digital terrestrial television
Uniprex, S.A.U.
100
Valladolid
1997
Radio broadcasting services
Canal Media Radio, S.A.U.
100
Valencia
1997
Radio broadcasting services
Canal Media Radio, S.A.U.
100
Canal Media Radio, S.A.U.
Grupo Universal de Emisoras de Radio Amanecer, S.A.U.
Ipar Onda, S.A.U.
La Veu de Lleida, S.L.U.
Radio Sistemas Radiofónicos Cinco, S.L.U.
Uniprex Televisión, S.L.U.
Uniprex Televisión Digital Terrestre Catalana, S.L.U.
Uniprex Valencia TV, S.L.U.
Canal Radio Castilla y León, S.L.U.
Canal Radio Valencia, S.L.U.
(*) Companies included in non-current assets and non-current liabilities of discontinued operations.
131
The Parent has the capacity to exercise effective control over all these subsidiaries, and, consequently, their financial statements are fully consolidated with those of
the Parent. Adjustments were made to the financial statements of the subsidiaries to adapt the accounting policies used to those applied by the Group.
The results of subsidiaries acquired during the year are included in the consolidated income statement from the date of acquisition to year-end.
Associates
Following are the companies over which Antena 3 de Televisión, S.A. is in a position to exercise significant influence, but not control:
Corporate NameLocation
I3 Televisión, S.L.
Year of IncorporationLine of Business
Owner Company
2006 %
Madrid
2005
IT services
Antena 3 de Televisión, S.A.
50
Granada
2006
Audiovisual and recording reproduction
Antena 3 de Televisión, S.A.
50
Canal Factoría de Ficción, S.A.
Madrid
2000
Production of fiction programmes
Antena 3 de Televisión, S.A.
40
Unimedia Central de Medios, S.A. (*)
Madrid
1997
Advertising
Unipublic, S.A.U.
49
Corporación Radiofónica Región de Murcia, S.A.
Murcia
2000
Radio broadcasting services
Uniprex, S.A.U.
50
Teledifusión Madrid, S.A.
Madrid
2005
Radio broadcasting services
Uniprex Televisión, S.L.U.
10
V-News Agencia de Noticias, S.L. (*) Company included in non-current assets and non-current liabilities of discontinued operations.
Changes in the scope of consolidation and main transactions in 2006
On 26 May 2006, the Group formed Antena 3 Televisión Digital Terrestre de Canarias, Sole-Shareholder Company, the company object of this company being the
indirect management of the local digital terrestrial television service.
On 14 July 2006, the Group formed Uniprex Televisión Digital Terrestre Andalucía, S.L., Sole-Shareholder Company, and Uniprex Televisión Digital Terrestre, S.L., Soleshareholder Company, the company object of these two companies being the indirect management of the local digital terrestrial television service.
These companies were included in the scope of consolidation as subsidiaries in 2006, and were consequently fully consolidated.
On 24 April 2006, the shareholders at the Annual and Universal General Meeting of Canal Factoría de Ficción, S.A. resolved to reduce the capital of the company
by EUR 300 thousand in order to forgive all the capital calls not paid since the incorporation of the company. The percentage of ownership of Antena 3 remained
unchanged although the investment was reduced by the amount of the unpaid capital calls, i.e. EUR 120 thousand.
132
On 11 May 2006, Antena 3 de Televisión, S.A. transferred 50% of its ownership interest in I3 Televisión S.L. to Indra Sistemas, S.A. for a price equal to the shares’ par
value, i.e. EUR 150 thousand. The percentage of ownership of Antena 3 de Televisión, S.A. in I3 Televisión, S.L. was reduced to 50% with an investment of EUR 150
thousand. Although the Parent owns 50% of the share capital it does not manage the company and it is therefore accounted for using the equity method.
On 13 November 2006, the Parent acquired an equity interest in V-News Agencia de Noticias, S.L. by participating in a capital increase, in which it subscribed and
paid EUR 252 thousand for 50% of the share capital. As in the previous case, the Parent does not manage the company which, accordingly, is consolidated using
the equity method.
The effect of the exclusion of the assets and liabilities of these companies from the consolidated financial statements is insignificant in all cases.
Changes in the scope of consolidation and main transactions in 2005
On 26 May 2005, Antena 3 de Televisión, S.A. acquired all the share capital of Unipublic, S.A., Sole-Shareholder Company, whose company object is to carry on
advertising activities and to organise sporting contests. As a result of this acquisition, Unipublic was fully consolidated from 1 June 2005.
On the same date, the Parent acquired all the share capital of Organizaciones Deportivas y Culturales Unipublic, S.A., Sole-Shareholder Company, whose company
object is identical to that of Unipublic, S.A., Sole-Shareholder Company, and which was also fully consolidated from 1 June 2005.
On 14 July 2005, the Group formed Uniprex Television Digital Terrestre Catalana, S.L., Sole-Shareholder Company, and Uniprex Valencia TV, S.L., Sole-Shareholder
Company, the company object of these two companies being the indirect management of the local digital terrestrial television service.
I3 Televisión S.L., Sole-Shareholder Company, was formed on 30 November 2005 with the purpose of developing, installing and marketing IT-based applications and
systems and of marketing software products.
These companies were included in the scope of consolidation as subsidiaries in 2005, and were consequently fully consolidated.
Teledifusión Madrid, S.A., in which Uniprex Televisión, S.L., Sole-Shareholder Company, has a 10% ownership interest, was incorporated on 27 December 2005.
From this date this company, whose company object consists of the indirect management of the local digital terrestrial television service, was accounted for using
the equity method.
On 29 December 2005, Uniprex, S.A., Sole-Shareholder Company, acquired all the share capital of Rkor Radio, S.L., Sole-Shareholder Company, which engages in the
provision of radio broadcasting services and which was fully consolidated from 29 December 2005.
133
3. Accounting policies
The principal accounting policies used in preparing the Group’s consolidated financial statements, in accordance with EU-IFRSs, were as follows:
a) Consolidation goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets and liabilities
of a subsidiary at the date of acquisition.
The acquired assets and liabilities are provisionally measured at the date on which the Group obtains control over the subsidiary. This measurement is reviewed within
a year from the acquisition date, until the fair value of assets and liabilities is definitively determined. Any excess of the cost of acquisition of the company over the
corresponding carrying amount will be temporarily recognised as goodwill.
Goodwill is only recognised when it has been acquired for consideration and represents, therefore, a payment made by the acquirer in anticipation of future economic
benefits from assets of the acquired company that are not capable of being individually identified and separately recognised.
Goodwill acquired on or after 1 January 2004, is measured at acquisition cost and that acquired earlier is recognised at the carrying amount at 31 December 2003.
In both cases, at the end of each reporting period goodwill is reviewed for impairment (i.e. a reduction in its recoverable amount to below its carrying amount) and
any impairment is written down with a charge to “Net Impairment Losses” in the accompanying consolidated income statement.
An impairment loss recognised for goodwill is not reversed in a subsequent period.
b) Other intangible assets
Administrative concessions
This heading includes mainly the cost assigned to administrative concessions for radio broadcasting acquired by Uniprex, S.A., Sole-Shareholder Company, and
by Publicidad 3, S.A., Sole-Shareholder Company. The corresponding amount in the accompanying balance sheet relates to the expenses incurred to directly obtain the concession from the State or from the related public agency, and this amount is being amortised on a straight-line basis over the initial concession period
of the licence.
134
Computer software
The acquisition and development costs incurred by third parties in relation to the basic computer systems used in the Group’s management are recorded with a charge
to “Other Intangible Assets” in the consolidated balance sheet.
Computer system maintenance costs are recorded with a charge to the consolidated income statement for the year in which they are incurred.
Computer software is amortised on a straight-line basis over a period of between three and five years from the entry into service of each application, on the basis of
its estimated useful life.
Audiovisual productions
The balance of “Audiovisual Productions” relates to the costs incurred by the Group in the making of film productions. The carrying amount includes the production costs incurred in relation to the remuneration paid to co-producers and the launch and first sale costs. The Group starts to amortise the films from the date of
commercial release or from the date on which the rating certificate is obtained. Each film production is amortised on an annual basis over the first commercial cycle
of the film, which the Group considers to be four years. Accordingly at each year-end the amortised percentage through that date is approximately the same as the
percentage of the revenue generated until then with respect to the present value of the estimated total revenue for that period. The Group records the appropriate
provisions on the net carrying amounts of these film productions in those cases where it is considered necessary based on future marketing expectations.
Since activities related to the acquisition, production and marketing of audiovisual productions are part of the Group’s normal operations, they are included in operating activities for cash flow statement purposes, and the charges to the consolidated income statement are included under “Programme Amortisation and Other
Procurements”.
c) Property, plant and equipment
Land and buildings acquired for the performance of the Group’s business activity or for administrative purposes are recognised in the consolidated balance sheet at
acquisition or production cost net of the related accumulated depreciation and any recognised impairment losses.
Replacements or renewals of complete items that lead to a lengthening of the useful life of the assets or to an increase in their economic capacity are recorded as
additions to property, plant and equipment, and the items replaced or renewed are derecognised.
Periodic maintenance, upkeep and repair expenses are recognised in the consolidated income statement on an accrual basis as incurred.
Fixtures and equipment are measured at cost net of the related depreciation and any recognised impairment losses.
135
Depreciation is calculated, using the straight-line method, on the basis of the acquisition cost of the assets less their residual value; the land on which the buildings
and other structures stand has an indefinite useful life and, therefore, is not depreciated.
The period property, plant and equipment depreciation charge is recognised in the consolidated income statement and is based on the application of the following
depreciation rates, which are determined on the basis of the average years of useful life of the various assets:
Years of Useful Life
Structures
33
Plant
10
Machinery and tools
5, 8, 10 and 12.5
Furniture
10
Computer hardware
5 to 10
Transport equipment and other items of property, plant and equipment 6 and 10
Assets held under finance leases are recognised in the corresponding asset category, and are depreciated over their expected useful lives on the same basis as owned
assets or, where shorter, over the term of the relevant lease.
D) Programme rights
Programme rights are valued, based on their nature, as follows:
1. Inventoriable in-house productions (programmes produced to be re-run, such as series) are measured at acquisition and/or production cost, which includes
both external costs billed by third parties for programme production and for the acquisition of resources, and internal production costs, which are calculated by
applying preset internal rates on the basis of the time during which operating resources are used in production. The costs incurred in producing the programmes
are recognised, based on their nature, under the appropriate headings in the consolidated income statement and are included under “Programme Rights” in the
consolidated balance sheet with a credit to “Inclusion in Programme Rights” under “Programme Amortisation and Other Procurements” in the accompanying
consolidated income statement.
Amortisation of these programmes is recorded under “Programme Amortisation and Other Procurements” in the consolidated income statement, on the basis of
the number of showings, in accordance with the rates shown below:
136
st
1 showing
nd
2
showing
The maximum period for amortisation of series is three years, after which the unamortised amount is written off.
Amortisation Rate
90%
10%
Given their special nature, the series which are broadcast daily are amortised in full when the first showing of each episode is broadcast.
2. Non-inventoriable in-house productions (programmes produced to be shown only once) are valued by the same methods and procedures as those used to value
inventoriable in-house productions. Programmes produced and not shown are recognised at year-end under “Programme Rights - In-House Productions and
Productions in Process” in the consolidated balance sheet. The cost of these programmes is recognised as an expense under “Programme Amortisation and Other
Procurements” in the consolidated income statement at the time of the first showing.
3. Rights on outside productions (films, series and other similar productions) are measured at acquisition cost. These rights are deemed to have been acquired when
the term of the right commences for the Group.
When payments to outside production distributors are made in foreign currency, these rights are recognised in the consolidated balance sheet by applying to the
foreign currency amount the spot exchange rate prevailing when the term of the right commences.
Also, the initial value of all the outside productions acquired by the Group by means of derivative instruments designated as cash flow hedges pursuant to IAS 39
will include:
• the portion of the cumulative loss or gain on the hedging instrument on the date on which the term of the right commences.
• for payments made prior to the commencement of the right, the accumulated exchange gains or losses on that date.
The amortisation of the rights is recognised under “Programme Amortisation and Other Procurements” in the consolidated income statement on the basis of the
number of showings, in accordance with the rates shown below, which are established on the basis of the number of showings contracted:
137
Films
Number of Showings Contracted
1
2
3 or More
100%
50%
50%
showing
-
50%
30%
3 showing
-
-
20%
st
1 showing
nd
2
rd
Series
st
1 showing
nd
2
showing
Number of Showings Contracted
1
2 or More
100%
50%
-
50%
4. Live broadcasting rights are measured at cost. The cost of these rights is recognised as an expense under “Programme Amortisation and Other Procurements” in
the consolidated income statement at the time of broadcast of the event on which the rights were acquired.
Advances on purchases of rights
Payments made to acquire outside productions are recognised under “Programme Rights - Advances on Purchases of Rights” in the consolidated balance sheet and
if such payments are in foreign currency they are measured at the closing rate.
Allowances
The Group records allowances to reduce the unamortised value of in-house productions and of the rights on outside productions which it considers will not be shown.
When these rights expire, the allowances recorded are used to write off the cost of the rights.
Classification of programme rights
In accordance with standard practice in the industry in which the Group operates, programme rights are classified as current assets and the portion that is amortised
over more than one year is detailed in Note 8.
138
E) Non-current assets and liabilities of discontinued operations
The Group classifies under this item in the consolidated balance sheet the non-current assets and disposal groups whose carrying amount is expected to be recovered
through a sale transaction rather than through continuing use. The assets in this condition at 31 December 2006 were those relating to Antena 3 Directo, S.A., SoleShareholder Company, Antena 3 Temática, S.A., Sole-Shareholder Company in liquidation, Guadiana Producciones, S.A., Sole-Shareholder Company and Unimedia
Central de Medios, S.A.
Non-current assets of discontinued operations are recorded at the lower of carrying amount and market value.
Non-current liabilities of discontinued operations include the fair value of the liabilities associated with the aforementioned assets, which are expected to be sold
at short term.
F) Classification of financial assets and liabilities as current or non-current
In the accompanying consolidated balance sheet, financial assets and liabilities are classified on the basis of when it is estimated that they will be realised, i.e. financial
assets and liabilities that are expected to be realised in the course of the company’s normal business cycle or within no more than 12 months are classified as current
assets, and those which do not meet these requirements are classified as non-current assets.
Deferred tax assets and liabilities are classified as non-current regardless of when they are expected to be realised.
g) Trade and other receivables
Trade receivables are recognised in the consolidated balance sheet at the amount invoiced and the related value adjustment is recognised if there is objective evidence
of the risk of non-payment by the debtor.
h) Derivative instruments
Foreign exchange hedges
The derivative financial instruments held by the Group companies are basically cash flow hedges arranged to mitigate the exposure of the cash flows associated with
outside production rights to fluctuations in the US dollar/euro exchange rate.
Hedging instruments are recognised in the consolidated balance sheet at fair value and the changes therein are recognised directly in equity. When the term of the
broadcasting rights designated as a hedged item commences, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset and from then on any change in the fair value of the hedging instrument is recognised directly in profit for the year.
The Group periodically tests the efficiency of the hedges outstanding, and the ineffective portion is recognised immediately in the consolidated income statement.
139
If a hedged transaction is no longer expected to occur, or no longer qualifies for hedge accounting, the net cumulative gain or loss recognised in equity is transferred
to net profit or loss for the year.
Swaps
In order to cover the higher cost of the three-year variable compensation plan that would arise as a result of an increase in the Parent’s share price, a swap contract
was arranged which meets all the requirements to be a hedging derivative.
The fair value of the swap is recorded in the accompanying consolidated balance sheet as a financial asset or liability, as appropriate, with a balancing entry in equity,
and the amount attributable to the accrued portion of the aforementioned compensation plan is charged to the financial profit for the year.
i) Treasury shares
All the treasury shares of the Parent at 31 December 2006 represented 2.503% of the issued share capital at that date (the treasury share transactions performed in
2006 are summarised in Note 10). Treasury shares are deducted from equity.
Acquisitions or sales of treasury shares (see Note 10) are charged or credited to equity at the amount paid or received, respectively, and, therefore, the gains or losses
arising from these transactions are not reflected in the income statement but are recorded as an addition to or reduction of equity, respectively.
j) Costs deriving from the three-year variable compensation plan
The Group charges the amount incurred in the year in connection with implementation of the three-year variable compensation plan to “Staff Costs” or “Other
Operating Expenses” in the accompanying consolidated income statement, based on the labour relationship or the services contract of the beneficiaries, with a credit
to “Other Non-Current Liabilities” and “Other Current Liabilities” in the accompanying consolidated balance sheet (see Note 18-b).
The amount incurred is calculated on the basis of the terms of the plan, taking into account the profit for 2006 and the Parent’s estimate of the future market value
of the shares of Antena 3 de Televisión, S.A., and it is expected that the entire plan will be paid in cash.
The amounts recognised in the 2006 financial statements were discounted to present value using a discount rate that reflects the time value of money. This effect is
included in the consolidated income statement as an interest expense as the value of the provision increases.
140
k) Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the amount received. Finance charges are recognised in the consolidated income statement on an accrual basis
using the effective interest method and are added to the carrying amount of the liability to the extent that they are not settled in the period in which they arise.
l) Termination benefits
Under current labour legislation, the Company is required to pay termination benefits to employees terminated under certain conditions. The consolidated companies’
directors do not anticipate the generation of any liabilities additional to those already recognised in this connection.
m) Provisions
The present obligations arising from past events which could give rise to a loss for the Group which is uncertain as to its amount and timing are recognised as provisions in the consolidated balance sheet at the present value of the most probable amount that it is considered the Group will have to disburse to settle the obligation.
Provisions are quantified on the basis of the best information available at the date of preparation of the consolidated financial statements on the consequences of
the event giving rise to them and are reviewed and adjusted at the end of each year.
n) Recognition of revenue and expenses
Revenue and expenses are recognised on an accrual basis.
Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for the goods and services provided in the
normal course of business, net of discounts, VAT and other sales-related taxes.
The consolidated companies basically obtain revenues from the sale of advertising space; this revenue is recognised in the consolidated income statement when the
related advertising spot is broadcast.
o) Income tax; deferred tax assets and liabilities
The current income tax expense is calculated by aggregating the current tax arising from the application of the tax rate to the taxable profit for the year, after deducting the tax credits allowable for tax purposes, plus the change in deferred tax assets and liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, whereas deferred tax assets (including those relating to temporary differences and tax loss
and tax credit carryforwards) are only recognised to the extent that it is considered probable that the consolidated companies will have sufficient taxable profits in the
future against which the deferred tax assets can be utilised.
141
Tax assets and liabilities are calculated by applying the rates that are expected to be applicable at the date of the reversal. The current rates stand at 32.5% for 2007
and 30% for 2008 and following years.
In 2001 the Group started to be taxed on a consolidated basis. Antena 3 de Televisión, S.A. is the Parent of this consolidated tax Group (see Note 20).
p) Foreign currency transactions
The Group’s functional currency is the euro. Therefore, transactions in currencies other than the euro are deemed to be “foreign currency transactions” and are
recorded by applying the exchange rates prevailing at the date of the transaction.
q) Consolidated cash flow statements
The following terms are used in the consolidated cash flow statements with the meanings specified:
• Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly liquid investments that are subject to an insignificant risk of changes
in value.
• Operating activities: the principal revenue-producing activities of the entity and other activities that are not investing or financing activities.
• Investing activities: the acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents.
• Financing activities: activities that result in changes in the size and composition of the equity and borrowings of the Company that are not operating activities.
r) Earnings per share
Basic earnings per share are calculated by dividing the net profit attributable to the Parent by the weighted average number of ordinary shares outstanding during
the year, excluding the number of shares of the Parent held by the Group.
The Group did not perform any transactions of any kind leading to diluted earnings per share other than the basic earnings per share (see Note 22).
s) Dividends
The extraordinary dividend distributed with a charge to unrestricted reserves through the delivery of shares representing the Parent’s share capital, was valued at the
shares’ market price on the day before distribution. The gains obtained as a result of this valuation were recorded in equity.
Pursuant to current tax legislation, the tax revenue or payment, as applicable, also formed part of this dividend.
142
4. Goodwill
The changes in 2006 in “Goodwill” in the consolidated balance sheet were as follows:
Thousands of Euros
Balance at Additions 31/12/04
Balance at Additions 31/12/05
Balance at 31/12/06
Radio business
Antena de Radiodifusión, S.A.U.
8,591
-
8,591
-
8,591
295
-
295
-
295
1,899
-
1,899
-
1,899
Ipar Onda, S.A.U.
260
-
260
-
260
Medipress Valencia, S.A.U.
559
800
1,359
-
1,359
78
-
78
-
78
314
-
314
-
314
-
9,100
9,100
-
9,100
123,370
-
123,370
-
123,370
Canal Media Radio Galicia, S.L.U.
Canal Media Radio, S.A.U.
Radio Alamedilla, S.A.U.
Radio Tormes, S.A.U. Rkor Radio, S.L.U.
Uniprex, S.A.U.
Organisation of sports events business
Organizaciones Deportivas y Culturales Unipublic, S.A.U.
-
150
150
-
150
Unipublic, S.A.U.
-
35,323
35,323
-
35,323
Total, gross
135,366
45,373
180,739
-
180,739
The Group periodically assesses the recoverability of the goodwill described in the foregoing table, and takes into account two cash-generating units based on the
businesses of its subsidiaries: radio and the organisation of sports events. The Parent uses the strategic plans of the various businesses to calculate any possible impairment, and discounts expected future cash flows.
At 31 December 2006 the directors considered that there was no indication of any impairment loss thereon.
At 31 December 2006 the valuation of the goodwill of Unipublic S.A., Sole-Shareholder Company, Organizaciones Deportivas y Culturales Unipublic, S.A.
Sole-Shareholder Company, and Rkor Radio S.L. Sole-Shareholder Company, was definite.
143
5. Other intangible assets
The breakdown of the balances and transactions recognised in other intangible asset accounts in the consolidated balance sheets in 2006 and 2005 is as follows:
Thousands of Euros
Balance at 31/12/05
Additions or Charges
40,505
-
(13)
2
40,494
Intellectual property
383
-
-
(2)
381
Computer software
27,302
451
(145)
-
27,608
Audiovisual productions
13,601
573
(989)
13,587
26,772
647
-
-
-
647
9,981
13,040
(79)
(13,587)
9,355
92,419
14,064
(1,226)
-
105,257
Cost
Concessions, patents and trademarks
Other intangible assets
Intangible assets in progress
Accumulated amortisation
Disposals or Transfers Reductions
Balance at
31/12/06
(32,891)
(972)
11
-
(33,852)
Intellectual property
(340)
(36)
-
-
(376)
Computer software
(24,106)
(1,824)
140
-
(25,790)
Audiovisual productions
(11,230)
(3,012)
60
-
(14,182)
(647)
-
-
-
(647)
(69,214)
(5,844)
211
-
(74,847)
(2,223)
-
1,589
-
(634)
Concessions, patents and trademarkss
Other intangible assets
Allowances
Total
20,982
29,776
144
Thousands of Euros
Balance at 31/12/04
Cost
Concessions, patents and trademarks
Additions / Derecognition due to Change in Scope
of Consolidation
Additions
or Charges
Disposals or Transfers
Reductions
Balance at
31/12/05
40,507
13
-
(27)
12
40,505
Intellectual property
395
2
-
(2)
(12)
383
Computer software
26,834
106
484
(66)
(56)
27,302
Audiovisual productions
12,194
-
223
(16)
1,200
13,601
Other intangible assets
647
-
-
-
-
647
Intangible assets in progress
867
-
10,314
-
(1,200)
9,981
81,444
121
11,021
(111)
(56)
92,419
(31,883)
(13)
(980)
(3)
(12)
(32,891)
Intellectual property
(317)
(2)
(65)
32
12
(340)
Computer software
(20,932)
(105)
(3,134)
65
-
(24,106)
(8,593)
-
(2,637)
-
-
(11,230)
(647)
-
-
-
-
(647)
(62,372)
(120)
(6,816)
94
-
(69,214)
(2,424)
-
-
201
-
(2,223)
16,648
Accumulated amortisation
Concessions, patents and trademarks
Audiovisual productions
Other intangible assets
Allowances
Total
Fully amortised intangible assets in use at 31 December 2006 and 2005, amounted to EUR 58,567 thousand and EUR 48,868 thousand, respectively.
20,982
145
6. Property, plant and equipment
The breakdown of the balances and transactions recognised in “Property, Plant and Equipment” in the consolidated balance sheets in 2006 and 2005 is as follows:
Thousands of Euros
Balance at 31/12/05
Cost
Additions / Derecognition due to Change in Scope
of Consolidation
Additions
or Charges
Disposals or Transfers
Reductions
Balance at
31/12/06
Land and structures
62,030
-
1,144
(27)
(14)
63,133
Plant and machinery 91,571
-
3,290
(974)
1
93,888
Other fixtures and tools
44,244
-
2,190
-
12
46,446
Furniture
14,206
(46)
810
(362)
1
14,609
Computer hardware
31,593
-
3,164
(1,166)
1
33,592
6,157
-
876
(747)
-
6,286
646
-
663
(646)
-
663
250,447
(46)
12,137
(3,922)
1
258,617
Land and structures
(17,271)
-
(2,018)
6
-
(19,283)
Plant and machinery (68,690)
-
(8,258)
804
(1)
(76,145)
Other fixtures and tools
(32,058)
-
(3,016)
-
-
(35,074)
Furniture
(11,020)
4
(853)
319
-
(11,550)
Computer hardware
(26,101)
-
(2,711)
1,106
-
(27,706)
(4,738)
-
(481)
326
-
(4,893)
(159,878)
4
(17,337)
2,561
(1)
(174,651)
(6,855)
-
-
666
-
(6,189)
83,714
Transport equipment and other items of property,
plant and equipment
Construction in progress
Accumulated depreciation
Transport equipment and other items of
property, plant and equipment
Allowances
Total
77,777
146
Thousands of Euros
Balance at 31/12/04
Cost
Additions / Derecognition due to Change in Scope
of Consolidation
Additions
or Charges
Disposals or Transfers
Reductions
Balance at
31/12/05
Land and structures
61,600
5,388
1,400
(6,358)
-
62,030
Plant and machinery 96,116
236
7,223
(11,987)
(17)
91,571
Other fixtures and tools
42,844
291
2,152
(1,082)
39
44,244
Furniture
14,201
492
245
(732)
-
14,206
Computer hardware
30,353
115
1,640
(760)
245
31,593
3,745
3,125
410
(1,123)
-
6,157
211
-
646
-
(211)
646
249,070
9,647
13,716
(22,042)
56
250,447
Transport equipment and other items of property,
plant and equipment
Construction in progress
Accumulated depreciation
Land and structures
(16,119)
(361)
(1,877)
1,099
(13)
(17,271)
Plant and machinery (71,363)
(81)
(8,340)
11,073
21
(68,690)
Other fixtures and tools
(29,539)
(83)
(3,007)
598
(27)
(32,058)
Furniture
(10,321)
(263)
(969)
512
21
(11,020)
Computer hardware
(23,433)
(74)
(3,277)
685
(2)
(26,101)
(3,259)
(1,447)
(409)
377
-
(4,738)
(154,034)
(2,309)
(17,879)
14,344
-
(159,878)
(7,274)
-
-
419
-
(6,855)
87,762
Transport equipment and other items of property,
plant and equipment
Allowances
Total
83,714
At 31 December 2006 and 2005, fully depreciated property, plant and equipment in use amounted to EUR 91,079 thousand and EUR 78,605 thousand, respectively.
The Group does not have any temporarily idle items.
The Group has taken out insurance policies to cover the possible risks to which its property, plant and equipment are subject and the claims that might be filed against
it for carrying on its business activities. These policies are considered to adequately cover the related risks.
At 31 December 2005, the carrying amount of the Group’s land and structures included EUR 306 thousand (net of the related depreciation) in respect of assets held under
finance leases. These assets relate to Unipublic, S.A., Sole-Shareholder Company which, at 2006 year-end, had not entered into any finance lease agreements.
147
7. Investments accounted for using the equity method and other non-current assets
The changes in these accounts in 2006 and 2005 were as follows:
Thousands of Euros
Balance at 31/12/05
Changes in Scope
of Consolidation
Additions
or Charges
Disposals Transfers
or Reductions
Balance at
31/12/06
Investments accounted for using the equity method
Canal Factoría de Ficción, S.A. 239
-
-
(253)
-
(14)
88
-
-
-
-
88
-
150
-
(33)
-
117
100
-
-
(24)
-
76
Unimedia Central de Medios, S.A.
52
(52)
-
-
-
-
V-News Agencia de Noticias, S.L. -
252
-
(88) -
164
479
350
-
(398)
-
431
24
-
-
15
-
39
Long-term guarantees and deposits
825
-
55
(317)
(1)
562
Long-term loans 398
-
13
(235)
(176)
-
(397)
-
-
309
88
-
31
-
-
(1)
-
30
881
-
68
(229)
(89)
631
Corporación Radiofónica Región de Murcia, S.A.
I3 Televisión, S.L.U.
Teledifusión Madrid, S.A.
Investments accounted for using the equity method
Other investments
Other long-term allowances
Other investments
Other non-current assets
148
Thousands of Euros
Balance at 31/12/04
Additions to Scope of Consolidation
289
-
88
Teledifusión Madrid, S.A.
Unimedia Central de Medios, S.A.
Additions
or Charges
Disposals or Reductions
Balance at
31/12/05
-
(50)
239
-
-
-
88
-
100
-
-
100
-
52
-
-
52
377
152
-
(50)
479
Investments accounted for using the equity method
Canal Factoría de Ficción, S.A. Corporación Radiofónica Región de Murcia, S.A.
Investments accounted for using the equity method
Other investments
Media Park, S.A.
1,142
-
-
(1,142)
-
T.V.I. Televisâo Independente, S.A.
2,016
-
-
-
2,016
11,145
-
-
(11,145)
-
26
144
-
(25)
145
14,329
144
-
(12,312)
2,161
Long-term guarantees and deposits
654
19
282
(130)
825
Long-term loans 585
-
-
(187)
398
(10,722)
(120)
-
8,705
(2,137)
Other long-term allowances
-
-
(397)
-
(397)
Other investments
-
-
31
-
31
4,846
-
-
-
881
Canal Satélite Digital, S.L.
Other
Impairment allowance
Other non-current assets
These assets are carried at fair value. None of the Group’s investees is listed on Spanish or foreign stock exchanges.
149
8. Programme rights
The detail of “Programme Rights” is as follows:
Thousands of Euros
Programme rights, net
Rights on outside productions
In-house productions and programmes in process
Sports broadcasting rights
Impairment losses
Advances on purchases of rights
TOTAL
2006
2005
244,744
241,988
34,439
28,467
3,214
3,214
(31,611)
(38,274)
250,786
235,395
39,767
23,970
290,553
259,365
At 31 December 2006, the Parent had commitments, mainly for the purchase of audiovisual property rights, amounting to EUR 167,505 thousand. In addition, the
Parent 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 amounts to EUR 84,660 thousand.
It is estimated that EUR 139,434 thousand of rights on inventoriable in-house and outside productions will be amortised in 2007 (see Note 3-d).
.
150
9. Trade and other receivables
The detail of “Trade and Other Receivables” in the consolidated balance sheets at 31 December 2006 and 2005, is as follows:
Thousands of Euros
2006
2005
245,620
238,721
Receivable from associates
3,984
1,686
Other accounts receivable
8,460
9,010
258,064
249,417
Trade receivables
Total
The estimated amounts are recognised in the consolidated balance sheet net of allowances for estimated bad debts, on the basis of prior years’ experience and the
Group’s assessment of the current economic climate.
10. Equity
a) Share capital
Until 29 November 2006, the Parent’s share capital amounted to EUR 166,668 thousand and consisted of 222,224,000 fully subscribed and paid shares of EUR 0.75
par value each, all of which are of the same class and series and carry the same rights.
The Parent’s shareholders at an Extraordinary General Meeting held on 29 November 2006 resolved to reduce capital through the redemption of 11,111,200 shares
for EUR 8,333 thousand, in order to reimburse contributions made by the shareholder Macame, S.A. This capital reduction was charged to the Company’s unrestricted
reserves pursuant to Article 167.1.3 of the Consolidated Companies Law.
Accordingly, the Parent’s share capital consists of 211,112,800 fully subscribed and paid shares of EUR 0.75 par value all of which are of the same class and series
and carry the same rights.
b) Restricted reserves
Legal reserve
Under the Consolidated Companies Law, 10% of the net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least
20% of share capital.
151
The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount.
Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for
this purpose.
As a result of the reduction in share capital carried out by the Parent in 2006, the balance of the legal reserve fell by EUR 1,667 thousand.
Reserve for retired capital
As a result of the capital reduction, a reserve was constituted for EUR 8,333 thousand, an amount equal to the par value of the shares, which may only be used if the
same conditions as those for the reduction of share capital are met, pursuant to Article 167.1.3 of the Consolidated Companies Law.
Reserve for treasury shares
Pursuant to the Consolidated Companies Law, a restricted reserve must be recorded for an amount equal to the value of the treasury shares held by the Parent. Also,
the par value of the treasury shares cannot exceed 5% of the Parent’s share capital and the shares must be fully paid in.
Reserves at consolidated companies
The detail of the reserves at fully consolidated companies and at companies accounted for using the equity method at 31 December 2006 and 2005 is as follows:
Thousands of Euros
2006
2005
14,816
932
Unipublic, S.A.U.
8,379
-
Antena 3 Editorial, S.A.U.
4,605
2,691
Other
(2,136)
(1,321)
Fully consolidated
25,664
2,302
Canal Factoría Ficción, S.A.
10
141
Unimedia Central de Medios, S.A.
23
23
Companies accounted for using the equity method
33
164
25,697
2,466
Subgrupo Uniprex Total
152
C) Contributions to consolidated profit by company
The detail of the contributions to the consolidated profit for the year of the fully consolidated companies and companies accounted for using the equity method at
31 December 2006 and 2005 is as follows:
Thousands of Euros
2006
2005
201,431
205,349
Subgrupo Uniprex 18,899
13,884
Publicidad 3, S.A.U.
63,097
(405)
3,002
1,834
139
5,868
3,149
(520)
289,717
226,010
2006
2005
Number
of Shares
Number
of Shares
3,703,817
1,926,008
Purchases
11,361,200
1,777,809
Sales
(5,686,893)
-
Delivery of shares (4,093,978)
-
At end of year
5,284,146
3,703,817
Antena 3 de Televisión, S.A.
Antena 3 Editorial, S.A.U.
Unipublic, S.A.U.
Other
Total
D) Treasury shares
The changes in “Treasury Shares” in 2006 and 2005 were as follows:
At beginning of year
In December 2006, as a result of the resolution of the Extraordinary General Meeting held on 29 November 2006, 11,111,200 shares were acquired from Banco
Santander Central Hispano according to conditions approved at the Extraordinary General Meeting by the shareholders.
The shares of the Parent held by it represent 2.503% of the Parent’s share capital and total 5,284,146 shares, with a value of EUR 95,115 thousand and an average
acquisition price of EUR 18 per share.
153
E) Dividends
At the Annual General Meeting of Antena 3 de Televisión, S.A. held on 29 March 2006, the shareholders approved a final dividend out of 2005 profit of EUR 0.43
per share, which gave rise to a total of EUR 93,964 thousand and was paid to shareholders on 26 April 2006.
At the Extraordinary General Meeting of the Parent held on 29 November 2006 the shareholders resolved to distribute an extraordinary dividend with a charge to
unrestricted reserves through the delivery of treasury shares representing the Parent’s share capital in the proportion of one share for every 48 shares entitled to participate therein. The tax revenue or payment, if applicable, pursuant to current tax legislation, formed an additional part of this dividend and was collected or paid,
respectively, by the Group.
11. Provisions and other liabilities
The changes under the current and non-current provisions in 2006 were as follows:
Thousands of Euros
Balance at 31/12/05
Period
Charge
Litigation
233,588
12,158
(209,615)
(857)
35,274
Operating accounts receivable
35,573
37,064
(35,574)
-
37,063
Other provisions
30,133
12,390
(18,526)
449
24,446
299,294
61,612
(263,715)
(408)
96,783
Total provisions
Amounts Used Transfers
and Payments
Balance at
31/12/06
The amounts used in 2006 did not have any effect on the consolidated income statement since they were used for the purpose for which they were set aside.
The amounts used in relation to litigation relate mainly to the amount paid arising from the arbitral award dated 16 March 2004 with respect to the termination of
the contract entered into by Uniprex, S.A., Sole-Shareholder Company, and the Radio Blanca Group.
The main item under “Other Current Liabilities” and “Other Non-Current Liabilities” relates to the estimated total liabilities incurred to date in relation to the pluriannual incentive, loyalty-building and variable compensation plans in force, which amount to EUR 56,935 thousand, of which EUR 40,785 thousand are recognised
under “Other Non-Current Liabilities” and EUR 16,150 thousand under “Other Current Liabilities” (see Note 3-h).
154
12. Bank borrowings
The detail of ”Bank Borrowings” in the consolidated balance sheets at 31 December 2006 and 2005, is as follows:
Thousands of Euros
2006
Limit
Loans
Credit facilities
Unpaid interest TOTAL
2005
Current
Drawn Down Balance Non-Current Limit
Drawn Down Balance
Current
Drawn Down Balance
Non-Current
Drawn Down
Balance
400
-
400
629
-
629
344,000
207,814
-
319,000
1,634
-
-
675
-
-
226
-
344,400
208,489
400
319,629
1,860
629
The interest rates paid by the Parent in 2006 on the loans and credit facilities arranged with banks are mainly tied to Euribor plus a spread ranging from 0.25%
to 0.60%.
13. Hedging derivative instruments
a) Foreign exchange
The Group uses currency derivatives to hedge significant future transactions and cash flows. The instruments purchased are denominated in US dollars.
At the consolidated balance sheet date, the total amount of outstanding forward foreign currency contracts entered into by the Group was as follows:
Maturity
Thousands of US Dollars
2006
2005
2006
-
87,966
2007
80,417
43,015
2008
25,330
2,062
2009
3,082
-
108,829
133,043
Total
155
At 31 December 2006, the fair value of the Group’s currency derivatives, which are designated and effective as cash flow hedges, was estimated to be EUR 3 thousand of financial assets and EUR 4,445 thousand of financial liabilities (2005: EUR 3,478 thousand of financial assets and EUR 11 thousand in financial liabilities). This
amount was deferred and recognised in equity.
In 2006 EUR 4,723 thousand and EUR 1,896 thousand, were taken to “Finance Costs” and capitalised to “Inventories”, respectively.
b) Swaps
In order to cover the increased cost of the three-year variable compensation plan that would arise in the event of an increase in the Parent’s share price, a swap
contract was arranged in December 2006 with an underlying of 4,950,000 Antena 3 de Televisión S.A. shares whereby the Parent will settle with the agent bank the
positive or negative difference between the initial price and the market value of the shares on maturity in June 2009. The effect on the 2006 consolidated income
statement is to reduce the cost of the plan by EUR 571 thousand.
14. Trade and other payables
The detail of “Trade and Other Payables” in the consolidated balance sheets at 31 December 2006 and 31 December 2005 is as follows:
Thousands of Euros
2006
2005
212,552
222,098
Payable to associates
12,314
9,297
Customer advances
2,130
2,769
226,996
234,164
Trade payables
Total
156
15. Other guarantee commitments to third parties and contingent assets and liabilities
a) Guarantee commitments to third parties
The detail of the guarantees provided by the Group to financial institutions for third parties is as follows:
Description Radio Blanca Group arbitral award
Group companies and associates
Other guarantees
Total
Thousands of Euros
2006
2005
-
247,140
8,163
14,546
15,212
28,669
23,375
290,355
The Parent’s directors consider that the liabilities not foreseen at 31 December 2006, if any, which might arise from the guarantees provided would not be material.
b) Contingent liabilities
At 31 December 2006, certain civil, labour, criminal and administrative lawsuits had been filed against the Group companies which were taken into account in estimating any contingent liabilities. Noteworthy because of their amount were the lawsuits with certain copyright management companies.
The directors of the Parent and its legal advisers do not expect any material liabilities additional to those already recorded to arise from the outcome of the lawsuits
in progress.
c)Litigation
On 22 March 2006, the Madrid Provincial Appellate Court handed down a decision on the appeal filed by Uniprex, S.A., Sole-Shareholder Company requesting that
the arbitral award to the Radio Blanca Group be declared null and void. This decision ordered Uniprex, S.A., Sole-Shareholder Company, to pay the amounts established in the arbitral award, which amounted to EUR 211,650 thousand of capital, interest and costs. In this respect, Uniprex, S.A., Sole-Shareholder Company, filed an
appeal which has yet to be processed. The Radio Blanca Group simultaneously brought legal action to claim payment of additional amounts.
On 18 December 2006, the Madrid Provincial Appellate Court handed down a decision acquitting the National Professional Football League (LFP) of all the claims
made by Antena 3 de Televisión, S.A. with respect to the provisional execution of the court decision whereby the LFP was ordered to pay EUR 25.5 million plus interest,
which was recorded in the 2005 financial statements. The Company has appealed against this decision.
157
16. Risk management policy
A) Risk management policy
The businesses and companies establish the risk management controls required to ensure that transactions in markets are performed in accordance with the Antena
3 Group’s policies, rules and procedures and all transactions take place within the limits approved for each case.
B) Foreign currency risk
Foreign currency risks are concentrated at the Parent and relate basically to the payments to be made in international markets to acquire broadcasting rights.
The Parent arranges hedging instruments, mainly exchange rate hedges, to mitigate its foreign currency risk exposure.
C)Liquidity risk
The Group’s liquidity policy is to arrange credit lines and short-term investments for amounts that are sufficient to support its financing needs, on the basis of the
expected business performance.
D) Credit risk
The Group does not have significant credit risk since the average customer collection period is quite short and guarantees are required for deferred payment sales.
Cash is placed and derivatives are arranged with highly creditworthy entities.
158
17. Income and expenses
A) Revenue
The detail of the Group’s revenue in 2006 and 2005 is as follows:
Thousands of Euros
2006
2005
Advertising sales
981,498
996,080
9,653
1,635
(56,742)
(65,673)
934,409
932,042
2006
2005
Programme broadcasting rights
112,371
115,997
Broadcasting of in-house productions
149,704
165,406
Addition to programme rights
(188,670)
(178,145)
51,064
10,783
128,238
144,672
Performances of and contributions by entertainers
12,822
13,369
Other amortisation
34,405
19,783
4,032
11,860
303,966
303,725
Other sales
Trade and other discounts
Total
B) Programme amortisation and other procurements
The detail of “Programme Amortisation and Other Procurements” is as follows:
Thousands of Euros
Live broadcasting rights
Outside production services
Other purchases
Total
159
C) Staff costs
The detail of “Staff Costs” is as follows:
Thousands of Euros
2006
2005
Wages and salaries
122,847
122,200
Social security costs
21,944
21,978
4,365
7,909
149,156
152,087
Other staff costs
Total
The remuneration of the members of senior management who are not executive directors amounted to EUR 3,293 thousand in 2006.
The average number of employees in 2006, by category, was as follows:
Professional Category
Number of Employees
2006
2005
Senior management
109
122
1,439
1,453
Commercial personnel
290
281
Management personnel
251
280
60
53
272
241
2,421
2,430
Operations and programmes personnel
Interns
Specific-project hires
Total
Three-year variable compensation and executive loyalty-building plan
As the Spanish National Securities Market Commission (CNMV) was informed on 12 May 2004, the Parent’s shareholders at the Annual General Meeting on that date
approved a variable compensation and loyalty building plan for the directors of the Antena 3 Group. Once the criteria of the Appointments and Remuneration Committee had been taken into account and the agreements of the relevant governing bodies had been implemented, the CNMV was notified of this plan on 4 January
2005. It is aimed at two groups of directors and managers, for which homogeneous conditions were established, and it continued to be implemented this year.
160
The most salient matters relating to the implementation of this plan at 31 December 2006, were as follows:
1. Plan beneficiaries: a total of 31 beneficiaries, all of them in the two categories established in the plan, namely: executives and professionals related to the Antena
3 Group by an employment relationship or a contract for services (both directors and non-directors).
2. Overall amount of the plan: the implementation of the plan at 2006 year-end represented 86% of the maximum incentive possible approved by the General
Meeting. This percentage is the sum of:
a. 1.72% of the result of multiplying by 11.6 the difference between EUR 120,000 thousand and the consolidated EBITDA of the Antena 3 Group at 31 Decem-
ber 2006, based on the formally prepared and audited financial statements and in accordance with the criteria established at the aforementioned Meeting. The
maximum percentage approved by the General Meeting in this connection was 2%.
b. 0.86% of the difference between EUR 1,392,000 thousand and the average stock market value of the Parent in December 2006, up to a limit of EUR 2,000,000
thousand. The maximum percentage approved by the General Meeting in this connection was 1%.
3. Means of applying the plan to the different groups:
a. Until 10 July 2009: group with mixed variable compensation, which includes the payment of 30% of the total amount in July 2007 and the remaining 70% in
July 2009. This group includes 13 beneficiaries, and the amount assigned is 75% of the aforementioned 86%.
b. Until 10 July 2007: group with variable compensation in cash only. This group consists of 18 beneficiaries, and the amount assigned is 11% of the aforemen-
tioned 86%.
The amount accrued by senior managers with respect to this plan is EUR 7,635 thousand, estimated on the basis of their staying with the Company until the plan
ends in June 2009.
D) Other operating expenses
The detail of the balance of “Other Operating Expenses” in the consolidated income statements is as follows:
Thousands of Euros
2006
2005
5,949
7,962
Communications
10,280
9,740
Work performed by other companies
28,995
26,774
Operating leases and charges
54,695
54,606
Copyrights
35,147
33,252
Other general expenses
65,324
69,216
200,390
201,550
Advertising and publicity
161
“Operating Leases and Charges” in the accompanying consolidated income statements include mainly the charge for the distribution of the audiovisual signal and
the charge for the assignment of advertising space in cinemas.
E) Other disclosures
The fees for audit services provided to the various companies composing the Antena 3 de Televisión, S.A. and Subsidiaries Group by the main auditors, Deloitte, S.L.,
and by other entities related thereto in 2006 amounted to EUR 272 thousand (2005: EUR 263 thousand).
Also, the fees for other professional services provided to the various Group companies by the main auditors and by other entities related thereto amounted to EUR
71 thousand in 2006 (2005: EUR 73 thousand).
The Corporate Governance Annual Report includes a description of the work of the Audit Committee and an explanation of how the objectivity and independence
of the auditors is guaranteed when the auditors provide non-audit services.
162
18. Gains/Losses of non-current assets
In August 2006, Antena 3 de Televisión, S.A. and the Telefónica Group reached a negotiated agreement with respect to the interpretation of the agreement for the
sale by the Telefónica Group to Antena 3 de Televisión, S.A. of all the shares of Uniprex S.A., Sole-Shareholder Company, specifically in connection with the allocation
between the two parties of the costs arising from the arbitral award with respect to the support agreement between Uniprex S.A., Sole-Shareholder Company and
the Radio Blanca Group. As a result of this agreement the Antena 3 Group received EUR 63,490 thousand from the Telefónica Group as a reduction of the cost of
acquiring Uniprex S.A., Sole-Shareholder Company, in 2002.
19. Business and geographical segments
Basis of segmentation
Segment reporting is structured on the basis of the Group’s various business lines at 2006 year-end, taking into account, on the one hand, the nature of the services
provided and, on the other, the customer segments at which they are targeted.
In 2006 and 2005 the Group focused its business activities on the following business lines in Spain:
• Television
• Radio
• Other businesses, the most noteworthy of which are event management, audiovisual production and the management of advertising in cinemas
163
Thousands of Euros
Television
Radio
Other Businesses
Antena 3
Consolidated Group
2006
2005
2006
2005
2006
2005
2006
2005
860,770
856,895
93,227
90,626
47,703
57,258
1,001,700
1,004,779
(excluding depreciation and amortisation) 542,473
539,733
70,059
68,698
40,981
48,931
653,513
657,362
Gross operating profit (loss)
318,297
317,162
23,168
21,928
6,722
8,327
348,187
347,417
Depreciation and amortisation charge
15,114
17,276
4,307
4,271
752
512
20,173
22,059
303,183
299,886
18,861
17,657
5,970
7,815
328,014
325,358
32
8,737
(82)
-
-
-
(50)
8,737
instruments at fair value
(4,159)
14,253
-
-
-
-
(4,159)
14,253
Exchange differences
6,608
(14,451)
-
-
-
-
6,608
(14,451)
Investment income 6,007
3,719
28
88
2
93
6,037
6,037
Finance costs
7,564
17,797
63
119
38
48
7,665
7,665
Net financial loss
(1,557)
(13,877)
(35)
(34)
(36)
(153)
(1,628)
(14,064)
(86)
-
(24)
-
-
-
(110)
-
2,192
3,185
63,479
28
(52)
(378)
65,619
2,835
-
30
-
-
-
-
-
30
Profit before tax
306,213
297,763
82,199
17,651
5,882
7,284
394,294
322,698
Net profit
201,431
205,349
81,996
13,479
6,289
7,182
289,717
226,010
Net revenue
Operating expenses
Operating profit (loss)
Net impairment losses
recognised / reversed Net gain (loss) on changes
in the value of financial
Share of results of associates Net profit (loss) on disposal
of non-current assets Other gains Balance sheet
ASSETS
Assets by segment 638,631
759,645
211,546
195,049
55,411
48,268
905,588
1,002,963
13
239
163
188
53
52
229
479
638,644
759,884
211,709
195,237
55,464
48,320
905,817
1,003,442
Investments accounted for
using the equity method
Total assets LIABILITIES
Liabilities by segment
638,644
759,884
211,709
195,237
55,464
48,320
905,817
1,003,442
Total liabilities
638,644
759,884
211,709
195,237
55,464
48,320
905,817
1,003,442
164
20. Tax matters
Consolidated Tax Group
Pursuant to current legislation, the Consolidated Tax Group includes Antena 3 de Televisión, S.A., as the Parent, and the Spanish subsidiaries that meet the requirements provided for in Spanish legislation regulating the taxation of the consolidated profits of corporate groups.
The Group’s other subsidiaries file individual tax returns in accordance with the tax legislation in force in each country.
Pursuant to Corporation Tax Law 43/1995, of 27 December, on 26 December 2000, Antena 3 de Televisión, S.A. notified the Madrid taxation authorities of its decision
to file consolidated tax returns indefinitely provided that the requirements established in Article 81 of this Law are met and it does not decide to cease to apply the
consolidated tax regime (Law 24/2001 of 27 December). The filing of consolidated tax returns gives rise to reciprocal intra-Group balances, due to the offset of the
losses incurred by certain companies against the income earned by other Group companies.
The detail of the tax receivables and payables at 31 December 2005 and 2006, is as follows:
165
Thousands of Euros 2006
2005
NON-CURRENT TAX ASSETS
Deferred tax assets
37,573
34,071
Tax loss carryforwards
-
45
Assets relating to tax credits and tax relief
-
17,928
37,573
52,044
CURRENT ASSETS
Corporation tax payable
191
-
2
29
Other tax receivables
2,504
4,562
2,697
4,591
40,270
56,635
NON-CURRENT LIABILITIES
1,514
-
Deferred tax liabilities
1,514
-
Tax withholdings refundable
Total tax receivables
CURRENT LIABILITIES
Tax withholdings payable
8,770
3,266
Corporation tax payable
14,112
803
Accrued social security taxes payable
2,150
2,055
VAT payable
6,608
7,059
73
1,143
31,713
14,326
33,227
14,326
Other taxes payable
Total tax payables
166
The difference between the tax charge allocated to the current year and to prior years and the tax charge already paid or payable for such years, which is recognised
as deferred tax assets or deferred tax liabilities, arose as a result of temporary differences derived mainly from the following items:
Deferred Tax Assets
Contingencies and expenses
Thousands of Euros
Balance at Additions
Reductions
31/12/04 Balance at Additions
Reductions
31-12-05
Balance at
31/12/06
20,453
4,839
3,267
22,025
5,272
10,194
17,102
Non-current accounts payable
2,325
8,609
-
10,933
8,235
2,238
16,930
Hedging financial instruments
4,826
-
4,543
283
1,850
283
1,850
Other
1,002
2
174
830
952
92
1,691
28,605
13,450
7,984
34,071
16,310
12,808
37,573
TOTAL
Deferred Tax Liabilities
Thousands of Euros
Balance at Additions Reductions
31/12/05
Balance at
31/12/06
Derivatives
-
1,491
-
1,491
Revaluation of accounts payable
-
23
-
23
TOTAL
-
1,514
-
1,514
167
The reconciliation of the income tax expense to the income tax expense recognised is as follows:
Thousands of Euros
Consolidated profit before tax
Permanent differences
2006
2005
394,295
322,698
(2,344)
485
Tax losses arising prior to the formation of the Tax Group used in 2006
(19,897)
(18,267)
Adjusted profit
372,054
304,915
35%
35%
Tax rate
Adjusted profit at the applicable tax rate
130,219
106,720
Tax credits
(12,211)
(10,145)
Current tax expense
118,008
96,576
Deferred tax expense
(13,430)
112
Total tax expense
104,578
96,688
26.52%
29.96%
4,978
10,862
109,556
107,550
Effective rate
Temporary differences
Gross tax payable
In addition to the income tax recognised in the consolidated income statement, in 2006 and 2005 the Group recognised the following amounts in consolidated equity:
Thousands of Euros
Sale of treasury shares Hedging financial instruments Other items
2006
2005
(14,035)
-
1,412
(3,563)
(259)
-
(12,882)
(3,563)
At 31 December 2006 the tax authorities were reviewing the Group’s VAT and personal income tax for the years from 2002 to 2004 and income tax for the years
from 2001 to 2004. The Company’s directors do not expect any material liabilities with an impact on the consolidated financial statements to arise as a result of a
review of the open years.
168
At 31 December 2006, the detail of tax loss carryforwards available for offset is as follows:
Year
Thousands of Euros
2007
245
2008
370
2009
476
2010
2,472
2011
315
2012
1,535
2013
3,125
2014
584
2015
8,086
2016
655
2017
28,787
46,650
21. Related party transactions
Transactions between the Parent and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this Note.
Transactions between the Group and its associates and related companies are disclosed below:
169
Balances at 31/12/06
Group companies and associates
Thousands of Euros
Trade Short-Term ReceivablesLoans
Short-Term Receivables
Short-Term
Payables
-
1
1
-
215
-
215
-
Compunet Servicos Telemáticos, S.L.U.
-
-
-
10
Corp.Radiof. Región de Murcia, S.L.
-
-
-
72
Corp.Radiof.de Castilla la Mancha, S.L.
65
-
65
11
Fundación Antena 3
61
-
61
300
Fundación Unipublic
59
-
59
-
121
-
121
1,725
Teledifusión Madrid, S.A.
-
-
-
37
V-News Agencia de Noticias, S.L.
6
-
6
-
527
1
528
2,155
9
-
9
-
44
-
44
-
1,593
-
1,593
1,155
Editorial Planeta, S.A.
145
-
145
-
Grundy Producciones, S.A.
492
-
492
1,244
-
-
-
12
123
-
123
-
Planeta Sistemas y Operaciones, S.L.
-
-
-
1
Prodigius Audiovisual, S.A.
-
-
-
217
Sociedad Anónima del Vídeo, S.L.
354
-
354
-
Sportfive GmbH
138
-
138
-
Unión Ibérica de Radio, S.A.
-
-
-
1,911
Canal Directo Interactivo, S.L.
-
-
-
15
Planeta Junior Italia, S.R.L.
49
-
49
-
Editorial Página Cero Norte, S.L.
12
-
12
102
Editorial Página Cero Galicia, S.L.
1
-
1
7
463
-
463
5,452
5
28
33
43
3,428
28
3,456
10,159
Antena 3 Interactiva, S.A.U.
Canal Factoría Ficción, S.A.
I3 Televisión, S.L.
Total Group companies and associates
Related companies
Audiovisual Española 2000, S.A.
Centro de Estudios CEAC, S.L.
DeAPlaneta, S.L.
I.P. Network, S.A.
Metropole Production, S.A.
Editorial Página Cero, S.A.
Other companies
Total related companies
170
Balances at 31/12/05
Associates
Thousands of Euros
Trade Short-Term ReceivablesLoans
Short-Term Receivables
Short-Term
Payables
142
-
142
-
-
-
-
72
Total associates
142
-
142
72
Related companies
64
-
64
-
-
-
-
92
DeAPlaneta, S.L.
10
-
10
236
Fremantle Media
-
-
-
45
499
-
499
-
-
-
-
1,101
Sociedad Anónima del Vídeo, S.L.
128
-
128
-
Unión Ibérica de Radio, S.A.
480
-
480
1,953
Grundy Producciones, S.A.
-
-
-
2,333
I.P. Network, S.A.
-
-
-
113
M6 Droits Audiovisuals, S.A.
-
-
-
750
87
-
87
-
163
-
163
2,500
Vox Film & Fernseh GmbH & Co.KG
9
-
9
-
SCH Investment, S.A.
-
-
-
66
76
28
104
36
1,516
28
1,544
9,225
Canal Factoría Ficción, S.A.
Corporación .Radiofónica Región de Murcia, S.A.
Audiovisual Española 2000, S.A.
DeAplaneta Producciones Cinematográficas, S.L.
Planeta Directo, S.L.
Prodigius Audiovisual, S.A.
Metropole Production, S.A.
Sportfive GmbH
Other companies
Total related companies
171
Thousands of Euros
Transactions at 31/12/06
Sales
Group companies and associates
Canal Factoría Ficción, S.A.
Purchases,
Acquisition of
Rights and
Other Services
666
-
Teledifusión Madrid, S.A.
-
13
I3 Televisión, S.L.
-
9
51
-
717
22
Fundación Unipublic
Total Group companies and associates
Related companies
Audiovisual Española 2000, S.A.
68
-
-
240
123
-
-
819
1,535
3,027
165
-
Grundy Producciones, S.A.
-
1,296
I.P. Network, S.A.
-
218
249
-
Planeta Directo, S.L.
1,600
-
Planeta Junior, S.R.L.
-
5
Prodigius Audiovisual, S.A.
-
4,035
RTL Televisión GmbH
2
100
479
-
1,146
4,500
674
-
Editorial Página Cero Norte, S.L.
20
178
Editorial Página Cero Galicia, S.L.
9
106
Editorial Página Cero, S.A.
1,998
12,639
Planeta Junior Italia, S.R.L.
42
-
Canal Directo Interactivo, S.L.
-
15
Other companies
9
17
8,119
27,195
Santander Investment Services, S.A.
Centro de Estudios CEAC, S.L.
DeAPlaneta Producciones Cinematográficas, S.L.
DeAPlaneta, S.L.
Editorial Planeta, S.A.
Metropole Production, S.A.
Sociedad Anónima del Vídeo, S.L.
Unión Ibérica de Radio, S.A.
Vox Film & Fernseh GmbH & Co.KG
Total related companies
172
Thousands of Euros
Transactions at 31/12/05
Sales
Finance
Income
Purchases,
Acquisition
of Rights and
Other Services
Associates
Canal Factoría Ficción, S.A.
540
138
-
Total associates
540
138
-
Related companies
Audiovisual Española 2000, S.A.
385
-
-
DeAPlaneta, S.L.
580
-
70
-
-
700
12
-
-
Fremantle Media
-
-
90
Grundy Producciones, S.A.
3
-
4,974
I.P. Network, S.A.
-
-
247
M6 Droits Audiovisuals, S.A.
-
-
2,500
207
-
-
13
-
-
Planeta Directo, S.L.
1,404
-
-
Planeta Junior, S.R.L.
-
-
221
Prodigius Audiovisual, S.A.
-
-
1,607
Rkor Radio, S.L.
-
-
861
RTL Televisión GmbH
-
-
46
SCH Investment, S.A.
-
-
200
Sociedad Anónima del Vídeo, S.L.
250
-
-
Sportfive GmbH
163
-
8,515
1,134
-
4,111
931
-
-
1
-
10
5,083
-
24,152
DeAPlaneta Producc. Cinematográficas, S.L.
Editorial Temas De Hoy, S.A.
Metropole Production, S.A.
Planeta DeAgostini, S.A
Unión Ibérica de Radio, S.A.
Vox Film & Fernseh GmbH & Co.KG
Other companies
Total related companies
173
22. Earnings per share
Basic earnings per share
Basic earnings per share are calculated by dividing the net profit or loss attributable to the Group by the weighted average number of ordinary shares outstanding
during the year, excluding the average number of treasury shares held in the year.
Accordingly:
2006
2005
Net profit for the year (thousands of euros)
289,717
226,010
Weighted average number of shares outstanding (thousands of shares)
217,667
218,520
1.331
1.034
Basic earnings per share (euros)
23. Proposed distribution of profit
The Parent’s directors will propose to the Annual General Meeting that the profit for 2006 be distributed as follows:
• delivery to holders of treasury shares representing the Parent’s share capital in the proportion of one share for every 48 shares entitled to participate in the distribution. The tax revenue or payment, if applicable, pursuant to current tax legislation, will form an additional part of this dividend and will be received or paid,
respectively, by Antena 3 de Televisión, S.A.
• the remaining amount of the total profit for the year will be used to offset previous years’ losses.
174
24. Directors’ compensation
The compensation earned in 2006 by the former and current directors of the Parent for salaries and attendance fees amounted to EUR 1,923 thousand.
The Parent has not granted any loans or advances to its Board members and it does not have any supplementary pension, retirement bonus, special indemnity or life
insurance commitments to them in their capacity as directors.
The amount accrued for directors under the three-year loyalty-building and variable compensation plan was EUR 10,655 thousand. This amount was estimated on
the basis of their staying with the Company until the plan ends in June 2009.
25. Other disclosures relating to the Board of Directors
Pursuant to Article 127 ter.4 of the Spanish Companies Law, introduced by Law 26/2003, of 17 July, which amends Securities Market Law 24/1988, and the Consolidated Companies Law, in order to reinforce the transparency of listed corporations, following is a detail of the companies engaging in an activity that is identical,
similar or complementary to the activity that constitutes the company object of Antena 3 de Televisión, S.A. in which the members of the Board of Directors own
equity interests, per the representations made by each of the directors, and of the functions, if any, that they discharge at those companies, and of the activities
that the members of the Board of Directors carry on, as independent professionals or as employees, that are identical, similar or complementary to the activity that
constitutes the corporate purpose of Antena 3 de Televisión, S.A.
A) Directors of Antena 3 de Televisión, S.A. who are also directors or executives of other Antena 3 de Televisión Group companies
• Maurizio Carlotti: director acting severally of Publicidad 3, S.A. Sole-Shareholder Company
B) Directors of Antena 3 de Televisión, S.A. who are also directors or executives of significant shareholders of the Antena 3 de Televisión Group
• José Manuel Lara Bosch: Chairman of the Board of Directors of Grupo Planeta- de Agostini, S.L.
• José Manuel Abad Silvestre: director and Managing Director of Grupo Planeta- de Agostini, S.L.
• Marco Drago: Deputy Chairman of the Board of Directors of Grupo Planeta- de Agostini, S.L.
• José Creuheras Margenat: director of Grupo Planeta- de Agostini, S.L.
• Nicolas Abel Bellet de Tavernost: member of the Operations Management Committee of RTL Group Communication, S.L.U.
• Elmar Heggen: Regional Operations and Development Vice President of RTL Group, S.A.
175
C) Equity interests and, if appropriate, positions held by directors in the year-ended 31 December 2006, in companies engaging in an activity that is identical, similar or complementary to the activity of Antena 3 de Televisión, S.A. and of its Group companies
None of the directors of Antena 3 de Televisión, S.A. performs, as an independent professional or as an employee, activities that are identical, similar or complementary to the activity that constitutes the company object of Antena 3 de Televisión, S.A.
D) Members of the Board of Directors of Antena 3 de Televisión, S.A. who are also directors of other listed companies
• José Manuel Lara Bosch: director of Banco de Sabadell and of Compañía de Distribución Logista, S.A.
• Pedro Ramón y Cajal Agüeras: director of Indra Sistemas, S.A.
E) Activities performed by the directors of Antena 3 de Televisión, S.A., as independent professionals or as employees, that are identical, similar or complementary to the activity carried on by the Parent
• Nicolás Abel Bellet de Tavernost: Chairman of the Board of Directors of Métropole Televisión. S.A. (television services).
• Elmar Heggen: member of the Board of Directors of Sportfive, S.A. and Freemantlemedia, S.A.
26. Explanation added for translation to English
These consolidated financial statements are presented on the basis of IFRSs as adopted by the European Union. Certain accounting practices applied by the Group
that conform with IFRSs may not conform with other generally accepted accounting principles.
176
ANTENA 3 AND SUBSIDIARIES GROUP (CONSOLIDATED GROUP)
DIRECTORS’ REPORT FOR 2006
Business performance and background
The Group’s net revenue for 2006 reached EUR 1,002 million, slightly down on the EUR 1,005 million obtained in 2005. Antena 3 Televisión, S.A. and Uniprex S.A.,
Sole-Shareholder Company represented 87% and 10%, respectively, of the total figure and the remaining companies accounted for the rest.
Profit from operations was EUR 328 million, a slight increase compared to the EUR 325 million earned in 2005. It should be noted that rigorous cost controls were implemented (reduction of 1.0%) in order to achieve a higher operating margin as a percentage of sales than the previous year, i.e. 32.9% compared to 32.4% in 2005.
Profit before tax was EUR 394 million and profit after tax stood at EUR 290 million, compared to EUR 323 million and EUR 226 million, respectively, in 2005.
2006 marked the first year of the transition from analogue to digital television, with the consequent broadening of the variety of television channels on offer. This
wider range also extends to technologies that are including television products in their traditional content, such as wireless telephones and the Internet. Antena 3 de
Televisión, S.A. continued to play an active role in all these new developments through its multimedia division. Some have already begun to give economically tangible
results while others allow the Company to remain at the forefront and guarantee the possibility of rolling out activities in new markets when they are developed.
However, the foregoing does not mean that the idea of generalist television is going to disappear. The experience of many other countries has shown that the
multiplication of television channels and audience fragmentation reduces the number of viewers for a given programme at a given time. It has also demonstrated
that viewers tend to focus on a limited number of channels that offer programmes of interest to wide-ranging social groups. These are precisely the most attractive
groups for advertisers of mass consumption products when launching their advertising campaign. The interest of these advertisers is reinforced by the fact that no
other medium in Spain has the same penetration as television. The impact of two new competitors in this area affected Antena 3 de Televisión, S.A. in 2006 since
they achieved a considerable combined audience share. It is to be hoped that their viewing figures will not continue increasing at the same rate in future and that
the erosion of our audience will be limited.
With respect to other business lines, noteworthy results are again to be found in radio, which is managed through Uniprex, S.A., Sole-Shareholder Company, with
gross profit from operations (before depreciation and amortisation) amounting to EUR 25 million, 10% up on the previous year and representing a margin on sales of
25%. These figures reveal the high levels of efficiency and profitability that have been reached, allowing a favourable comparison with the market leader in Spanish
radio, which has a considerably greater number of stations. Profit after tax was EUR 19 million, up 42% on 2005.
Movierecord, S.A., Sole Shareholder Company, recorded its first positive result for six years with profit after tax of EUR 1 million. This was the result of a lengthy
reorganisation process ranging from advertising sales in cinemas to relations with cinema owners. It should be pointed out that this positive development has taken
place in a clearly negative climate for advertising in cinemas.
177
Significant events for the Group subsequent to year-end
There were no significant events between year-end and the preparation of the Company’s consolidated financial statements.
Outlook for the Group
Satisfying the needs of viewers and advertisers will continue to be the fundamental objective of Antena 3 de Televisión, S.A. The outlook for the television advertising
market remains positive within a favourable economic context. In addition, as indicated above, the impact on viewing figures of the entry of new free television
competitors is expected to be reduced.
The Company will aim to maintain the high levels of quality and competitiveness of its analogue channel while simultaneously consolidating its digital channels to
ensure that they are a benchmark in the new market at all times. As in previous years, the efficiency and cost control plans that have given such excellent results will
be maintained.
The reinforcement of multimedia initiatives will play an essential part in Antena 3 de Televisión S.A. retaining its privileged position in such dynamic and changing
worlds as advertising and television content.
With regard to Uniprex, S.A., Sole-Shareholder Company, Onda Cero is expected to consolidate its position while the outlook for the contemporary hits station Europa
FM is excellent. This company has also started to develop local digital television: in 2006 it began operating concessions in the Madrid autonomous community and
in the near future it will start operating concessions that have already been obtained in other autonomous communities.
Research and development activities
The Company does not carry out any specific research and development activities; however, it updates its investments in all new technologies related to engineering,
systems and content distribution on an ongoing basis.
Treasury share acquisitions
At the beginning of 2006 Antena 3 de Televisión S.A. held 3,703,817 treasury shares of EUR 0.75 par value each, representing 1.67% of the Company’s share capital.
Making partial use of the authorisation granted to this effect by the shareholders at the Annual General Meeting on 29 March 2006, the Company acquired 250,000
treasury shares on the terms stipulated. The Company subsequently decided to sell all its treasury shares on the market.
As a result of the resolution adopted by the shareholders at the Extraordinary General Meeting held on 29 November 2006, 11,111,200 treasury shares were acquired
from Banco Santander Central Hispano in December 2006 according to the terms approved at the Extraordinary General Meeting.
178
At the aforementioned Extraordinary General Meeting, the shareholders also resolved to distribute an extraordinary dividend in December that was charged to reserves. This dividend consisted of the distribution of one treasury share for every 48 shares held by shareholders and gave rise to the distribution of 4,093,978 shares.
1,733,076 shares were also sold on the market in December.
As a result of the above transactions, at 31 December 2006 the Parent held 5,284,146 treasury shares of EUR 0.75 par value each, representing 2.503% of the
Company’s share capital.
Use of financial instruments and main financial risks
The derivative financial instruments held by the Group companies are basically cash flow hedges arranged to mitigate the exposure of the cash flows associated with
outside production rights to fluctuations in the US dollar/euro exchange rate.
Hedging instruments are recognised in the consolidated balance sheet at fair value and the changes therein are recognised directly in equity. When the term of the
broadcasting rights designated as a hedged item commences, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset and from then on any change in the fair value of the hedging instrument is recognised directly in profit for the year.
The Group periodically tests the efficiency of the hedges outstanding, and the ineffective portion is recognised immediately in the consolidated income statement.
If a hedge transaction is no longer expected to occur, or no longer meets the requirements for hedge accounting, the net cumulative gain or loss recognised in equity
is transferred to net profit or loss for the year.
In order to hedge the increased cost of the three-year variable compensation plan that would arise in the event of an increase in the Parent’s share price, a swap
contract was arranged in 2006 which meets all the requirements to be considered a hedging derivative.
The fair value of the swap is recognised in the accompanying consolidated balance sheet as a financial asset or liability, as appropriate, with a balancing entry in equity,
and the amount attributable to the accrued portion of the aforementioned compensation plan is charged to the consolidated income statement.
The businesses and companies establish the risk management systems required to ensure that transactions in markets are performed in accordance with the Antena
3 Group’s policies, rules and procedures and all transactions take place within the limits approved for each case. The main financial risks inherent to the markets in
which the various businesses of the Group operate are as follows:
179
a) Foreign currency risk. Foreign currency risks are concentrated at the Parent and relate basically to the payments to be made in international markets to acquire
broadcasting rights. The Parent arranges hedging instruments, mainly exchange rate hedges, to mitigate its foreign currency risk exposure.
b) Liquidity risk. The Group’s liquidity policy is to arrange credit lines and short-term investments for amounts that are sufficient to support its financing needs, on
the basis of the expected business performance.
c) Credit risk. The Group does not have significant credit risk since the average customer collection period is quite short and guarantees are required for credit sales.
Cash placements are made and derivative instruments are arranged with institutions of recognized solvency.
181
ANNUAL CORPORATE GOVERNANCE REPORT 2006
A. OWNERSHIP STRUCTURE
A.1. Complete the following table on the company’s share capital:
Date last modified a (€)
29-11-2006 Number of shares
158,334,600.00 211,112,800
If there are different classes of shares, indicate them on the following table:
Class
Number of shares
Unit par value
A.2. List direct and indirect owners of significant holdings and of the amount owned at year-end, excluding directors:
Name or corporate name of shareholders Number of direct shares
Number of indirect shares (*)
Total % of share capital
GRUPO PLANETA- DE AGOSTINI, S.L. 89,995,074 0
42.629
GRUPO RAYET, S.A. 12,362,414 0
5.856
RTL GROUP COMMUNICATION, S.L.U. 39,171,763 0
18.555
Number of direct shares % of share capital
(*) through:
Name or corporate name of the direct shareholder Total
Indicate the most significant movements in the shareholder structure occurring during the year:
Shareholder name or title Op. date Description of operation
MACAME, S.A. 07-12-2006 10% reduction in share capital
BANCO SANTANDER CENTRAL HISPANO, S.A. 14-12-2006 5% reduction in share capital
182
A.3. Complete the following tables on members of the company’s Board of Directors who own shares in the company:
Nombre o denominación social del consejero Fecha primer nombramiento Fecha último nombramiento
Número de acciones directas
Número de acciones
indirectas (*) % Total sobre
el capital social
JOSÉ MIGUELABAD SILVESTRE 23-11-2004 23-11-2004 428 0
0.000
NICOLAS ABEL BELLET DE TAVERNOST 29-10-2003 29-10-2003 81 0
0.000
ELMAR HEGGEN 21-12-2005 21-12-2005 1
0
0.000
JOSÉ MANUEL LARA BOSCH 16-06-2003 16-06-2003 0
645 0.000
JOSÉ LUIS LÓPEZ DE GARAYO GALLARDO 29-10-2003 29-10-2003 122 0
0.000
PEDRO ANTONIO MARTÍN MARÍN 29-08-2003 29-08-2003 1,036 0
0.000
PEDRO RAMÓN Y CAJAL AGÜERAS 29-08-2003 29-08-2003 40 0
0.000
(*) through:
Name or corporate name of the direct shareholder Number of direct shares
LABOGAR, S.A. 645
Total: 645
Total % of the share capital owned by the Board of Directors
0.000
Complete the following tables on members of the company’s Board of Directors who own rights over company shares:
Name or corporate name of the director
Number of direct stock options
Number of stock options Number of indirect equivalent shares Total % of the
share capital
183
A.4. Indicate, if appropriate, relationships of a family, commercial, contractual or corporate nature existing between the owners of
significant ownership interests, to the extent they are known by the company, unless they are of little significance or derive from the
ordinary course of business or trade:
Related names/company names
Type of relationship
Short description
A.5. Indicate, if appropriate, relationships of a family, commercial, contractual or corporate nature existing between the owners of significant ownership interests and the company, unless they are of little significance or derive from the ordinary course of business or trade:
Related names or corporate names
Type of relationship
Brief description
A.6. Indicate any side agreements executed between shareholders which have been reported to the company:
Parties to the side agreement
% of share capital involved
Brief description of the agreement
Indicate, if appropriate, the arrangements between company shareholders which are known to the company:
Parties to the arrangement
% of share capital involved
Brief description of the arrangement
Expressly indicate any modification or rupture of the foregoing side agreements or arrangements that took place during the year.
A.7. Indicate whether there is any individual or legal entity who exercises or may exercise control over the company pursuant to Article 4 of the Securities Market Law:
Name or corporate name
Comment
184
A.8. Complete the following tables on the company’s treasury stock:
At year end:
Number of direct shares Number of indirect share (*) Total % of the share capital
0
2.503
5,284,146 (*) through:
Name or corporate name of the direct shareholder Number of direct shares
Total
List significant variations, within the meaning of Royal Decree 377/1991, made during the year:
Date Number of direct shares Number of indirect shares Total % of share capital
01-12-2006 11,111,200 0
5.000
29-12-2006 -5,827,054 0
2.760
Gains/Losses for the year obtained from transactions with treasury shares (thousands of euros) Miles de euros
40,101
A.9. Detail conditions and term(s) of the mandate(s) of the Annual General Meeting to the Board of Directors for engaging in the acquisitions or transfers of treasury stock described in Section A.8.
I.- Agreement reached by the Annual General Meeting held on 29 March 2006.
Authorisation for the derivative acquisition of treasury shares, either directly or through the companies of the Group.
“To authorise the Company in order to allow it, either directly or through any of its subsidiaries, to acquire shares of Antena 3 de Televisión, S.A., through any legal
means, and to subsequently dispose of or redeem them in accordance with the provisions of article 75 and related ones of the Joint Stock Companies Law.
The system to acquire such treasury shares will be as follows:
The nominal value of the shares acquired, added to those already in the hands of Antena 3 de Televisión, S.A. and its subsidiaries, should not exceed five percent of
the share capital.
To allocate to the liabilities side of the balance sheet of the Company a non available reserve equivalent to the amount of the treasury shares compounded in the
asset side. Said reserve will have to be maintained until such time the shares are disposed of or redeemed.
185
The treasury shares acquired must be paid in full.
The acquisition price should not be lower than the nominal price or higher than 5% of the average listing price during the month prior to the purchase, and any
acquisition transactions must comply with the regulations and normal practices of the stock exchange markets.
It is expressly authorised that the shares acquired by the Company or its subsidiaries through this authorisation can be allocated, wholly or partially, to the beneficiaries
of the loyalty and variable remuneration triennial scheme of the managerial staff of Antena 3 Group approved by the Annual General Meeting held on 12th May
2004. It is expressly stated the object of such authorisation for the purposes set out in article 75, paragraph 1, of the Joint Stock Companies Law.
The broadest powers are granted to the Board of Directors to make use of the authorization that is the subject of this resolution and for its full execution and development. The Board of Directors is entitled to delegate such powers in favour of the Executive Committee, the Chief Executive Officer or any other person expressly
empowered by the Board to that effect and with the faculties considered appropriate.
This authorisation will have a term of 18 months from the date on which this General Meeting is held and the portion of the powers granted to the Board of Directors
by the Shareholders’ General Meeting held on 9th March 2005, and not executed, will have no effectiveness”
II.- Resolutions adopted by the Shareholders’ Extraordinary General Meeting held on 29 November 2006, as a result of the Banco Santander’s disposal transaction,
and in order to expressly autnhorise the single acquisition of 5% of the share capital that was held by Banco Santander, as well as its subsequent distribution of the
shares thus acquired as an extraordinary dividend and in the form of treasury stock.
Authorization to the Board of Directors to acquire treasury shares either directly or through companies of the Group.
“To authorize the Company so that, directly or though any of its subsidiaries, it may acquire shares of Antena 3 de Televisión, S.A., through any means accepted
by the law, either in the market or through direct purchases, and to dispose of or subsequently distribute them in accordance with article 75 and other concordant
ones of the Joint Stock Companies Law.
The system to acquire such treasury shares will be as follows:
That the nominal value of the shares acquired, plus those already owned by Antena 3 de Televisión, S.A. and its subsidiaries, does not exceed five percent of the
share capital;
That in the liabilities side of the balance sheet of the Company a non available reserve may be allocated equivalent to the amount of the own shares compounded in
the assets side. This reserve will have to be maintained as long as the shares are not disposed of or redeemed;
That the shares acquired are fully paid up; and that the acquisition price is not lower than the nominal one or higher than Euro18, and the purchase operations must
comply with the rules and common practices of the stock markets.
The Company is expressly authorized to purchase up to a maximum of 11,111,200 own shares, that represent 5% of the capital stock, from the shareholder Banco
Santander Central Hispano, S.A. and/or its subsidiary Macame, S.A., paying for them a price of Euro 18 per share, and to dispose of them through any means allowed
by law or to distribute them, wholly or partially, among the shareholders of the Company, subject to the prior approval of the General Meeting, and in accordance
with the provisions of article 75 and in compliance with the Joint Stock Companies Law and article 38 of the Corporate By-laws.
The broadest powers are granted to the Board of Directors to make use of the authorization that is the subject of this resolution and for its full execution and development. The Board of Directors is entitled to delegate such powers in favour of the Executive Committee, the Chief Executive Officer or any other person expressly
empowered by the Board to that effect and with the faculties considered appropriate.
186
This authorisation will have a term of 18 months from the date on which this General Meeting is held and the portion of the powers granted to the Board of Directors
by the Shareholders’ General Meeting held on 29th March 2006, and not executed, will have no effectiveness.”
Compensation to the shareholders through the distribution of an extraordinary dividend, charged to freely available reserves, in the form of treasury shares of Antena
3 de Televisión, S.A.
“To approve a payment of extraordinary dividends, charged to freely available reserves, through the delivery, to the shareholders, of treasury shares representing the
capital stock of the Company, at a ratio of one share per each 48 shares held with a right to participate in said payment. The payment shall consist of a maximum
of 4,166,700 own shares of the Company, equivalent to a ratio of 1 share per each 48 shares with a right to dividends. The tax revenue or payment, if appropriate,
established by the tax law in force will be an additional part of such dividend and at the expense of A3TV.
The right to be paid the extraordinary dividends charged to freely available reserves, as set out in the previous paragraph, will accrue in favour, according to the
Spanish legislation, of those who are shareholders of the Company at the end of 14th December 2006 and, consequently, those who have purchased their shares
from the Company until that date inclusive shall be entitled to receive said dividend and those who until that date inclusive have sold their shares of the Company
will not be entitled to said right.
In order to facilitate the appropriate execution of the operation, the financial entity appointed to that effect by the Board of Directors (the “Agent”) will have to coordinate and execute with Iberclear and its Participant Entities, the necessary or merely convenient formalities and operations to instrument the payment through the
distribution of treasury shares of the Company to which this resolution refers, in accordance with the procedure and the terms and conditions set out in it, as well as
those that the Board of Directors might develop, when appropriate.
Without prejudice to the above, it is agreed to establish a mechanism aimed at facilitating the execution of the operation to which this resolution refers in connection
with those shareholders who are the holders of a number of shares that is not a multiple of 48, in accordance with the following terms and conditions:
1) The Company will make available to the Agent the total number of own shares to be distributed in accordance with the provisions of this resolution.
2) The Agent, acting in the name and for the account of the Company, will deliver to the entitled shareholders of the Company the relevant full number of shares
of the Company subject to an exact exchange ratio of 1 share per each 48 shares held by the shareholder.
3) In the context of those shareholders of the Company who are holders of a number of shares that exceeds a multiple of 48 or that do not reach such figure of 48
(the shares that, in the first case, constitute such excess or, in the second case, do not reach 48, will be called “Excess Shares”) and considering that for such Excess
Shares they will not be entitled to receive a share of the Company but fractions of share, the Agent will pay in cash the amount equivalent to such fractions of
share of the Company that would have to be delivered to such shareholders in connection with such Excess Shares (the “Compensation for Excess Shares”). The
Agent will hold the aggregate number of own shares delivered by the Company that would have had to be distributed to such Excess Shares, and may dispose
of them once the operation has been concluded.
187
4) The value of the Compensation for Excess Shares will be determined on the basis of the weighted arithmetic mean of the shares of the Company in the Stock
Exchange Interconnection System (Continuous Market) in the three stock exchange business days prior to the date of distribution of the dividend (i.e. 14th December 2006) (the “Arithmetic Mean”). This way, and considering that the number of Excess Shares to be held by each shareholder, if any, will range between a
minimum of 1 and a maximum of 47, the value of the Compensation for Excess Shares to be delivered to each shareholder will be the result of multiplying the
number of Excess Shares of such shareholders by the Arithmetic Mean and of dividing the result by 48, rounded upwards or downwards to the nearest cent. Any
fees or expenses that, in accordance with and in fulfilment of the legislation in force, could charge the entities that participate in Iberclear or the depositors in
connection with the operation will be for the account of the shareholder.
Prior to the execution by Iberclear of the settlement operations that are customary in these types of transaction, the delivery of the shares and of the Compensation
for Excess Shares that might correspond will take place within five business days from 14 December 2006.
The broadest faculties are expressly conferred to the Board of Directors (being the Board of Directors authorized to, in turn, sub-delegate such powers in favour of the
Managing Committee, the Chief Executive Officer or any other person expressly empowered by the Board of Directors) to execute this resolution, including among
them the development of the procedure foreseen and until its eventual amendment for legal, tax or operating reasons, and to carry out any actions necessary or
convenient for the execution of any formalities required for the proper completion of the operation.”
In execution of the aforementioned resolutions, adopted by the Extraordinary Meeting of 29 November 2006, the Company acquired on 1 December 2006 a total of
11,111,200 treasury shares, representing 5% of the share capital. This operation has been described in section a.8 of this report. Prior to this acquisition the company
had sold its entire treasury stock.
According to that which is stipulated in the resolutions adopted, the Company distributed 4,093,978 treasury shares among its shareholders as an extraordinary
dividend and in kind, at a ratio of 1 share for every 48 shares. Furthermore, in December 2006, 1,733,076 shares were sold on the market, which means that the
treasury stock at the close of 2006 had dropped by 5,827,054 shares to 5,284,146 shares, representing 2.503% of the share capital (see section A.8 of this report).
A.10. Indicate, if appropriate, the statutory and bylaw restrictions on the exercise of voting rights, as well as the statutory restrictions on the acquisition or transfer of ownership interests in the share capital:
There are no statutory or bylaw restrictions on the exercise of voting rights carried by the company’s shares, nor are there statutory or bylaw restrictions on the acquisition or transfer of ownership interests in the share capital, other than the special provisions stipulated in the Private Television Law.
188
B. COMPANY MANAGEMENT STRUCTURE
B.1. Board of Directors
B.1.1. Detail the maximum and minimum number of Directors stipulated in the bylaws:
Maximum number of Directors
15
Minimum number of Directors
5
B.1.2. Complete the following table with the Board members:
Name or corporate name of the Director
Office held on the Board Date first appointed Date last appointed Election procedure
JOSÉ MIGUEL ABAD SILVESTRE MEMBER 23-11-2004 23-11-2004 COOPTATION RATIFIED BY AGM
NICOLAS ABEL BELLET DE TAVERNOST MEMBER 29-10-2003 29-10-2003 COOPTATION RATIFIED BY AGM
CHIEF EXECUTIVE OFFICER 16-06-2003 16-06-2003 COOPTATION RATIFIED BY AGM
MAURIZIO CARLOTTI JOSÉ CREUHERAS MARGENAT MEMBER 16-06-2003 16-06-2003 COOPTATION RATIFIED BY AGM
MARCO DRAGO MEMBER 16-06-2003 16-06-2003 COOPTATION RATIFIED BY AGM
ELMAR HEGGEN MEMBER 21-12-2005 21-12-2005 COOPTATION RATIFIED BY AGM
JOSÉ MANUEL LARA BOSCH CHAIRMAN 16-06-2003 16-06-2003 COOPTATION RATIFIED BY AGM
JOSÉ LUIS LÓPEZ DE GARAYO GALLARDO MEMBER 29-10-2003 29-10-2003 COOPTATION RATIFIED BY AGM
PEDRO ANTONIO MARTÍN MARÍN MEMBER 29-08-2003 29-08-2003 COOPTATION RATIFIED BY AGM
PEDRO RAMÓN Y CAJAL AGÜERAS MEMBER 29-08-2003 29-08-2003 COOPTATION RATIFIED BY AGM
Total number of Directors
10
Indicate the resignations from the Board of Directors that took place during the period:
Name or corporate name of the director
Date of resignation
JOSÉ LUIS DÍAZ FERNÁNDEZ 26-12-2006
JOAN DAVID GRIMÀ TERRÉ 26-12-2006
189
B.1.3. Complete the following tables on the Board members and their status:
EXECUTIVE DIRECTORS
Name or corporate name of the director Committee that proposed his appointment Position on the company’s organisational chart
MAURIZIO CARLOTTI CHIEF EXECUTIVE OFFICER
JOSÉ MANUEL LARA BOSCH CHAIRMAN
NONEXECUTIVE SIGNIFICANT-SHAREHOLDER APPOINTED DIRECTORS
Name or corporate name of the director Committee that proposed his appointment Name or corporate name of the significant
shareholder he represents or who
proposed his appointment
JOSÉ MIGUEL ABAD SILVESTRE GRUPO PLANETA- DE AGOSTINI, S.L.
NICOLAS ABEL BELLET DE TAVERNOST RTL GROUP COMMUNICATION, S.L.U.
JOSÉ CREUHERAS MARGENAT GRUPO PLANETA- DE AGOSTINI, S.L.
MARCO DRAGO GRUPO PLANETA- DE AGOSTINI, S.L.
ELMAR HEGGEN Appointment and Compensation Committee RTL GROUP COMMUNICATION, S.L.U.
190
NONEXECUTIVE INDEPENDENT DIRECTORS
Name or corporate name of the director
Committee that proposed his appointment
Profile
NOMBRAMIENTOS Y RETRIBUCIONES
NOTARY OF THE MADRID ASSOCIATION OF NOTARIES. HE WAS
GARAYO GALLARDO A BOARD MEMBER OF THE BILBAO STOCK EXCHANGE GOVERNING
COMPANY AND A BOARD MEMBER AND DIRECTOR OF THE STOCK JOSÉ LUIS LÓPEZ DE EXCHANGE BROKER DEALER OF THE BANCO CENTRAL AND OF THE BANCO
CENTRAL HISPANO. FROM 1996 THROUGH 2000 HE WAS DIRECTOR
OF THE CABINET OF THE SECRETARY OF STATE FOR PARLIAMENTARY AFFAIRS
PEDRO ANTONIO MARTÍN MARÍN
PRACTICING LAWYER. HE WAS SECRETARY OF STATE FOR
COMMUNICATION AND CURRENTLY IS CHAIRMAN OF MADRID
DEPORTES Y ESPECTÁCULOS, S.A., SECRETARY ON THE BOARD,
OF IBERPISTAS AND BOARD MEMBER OF AVAL MADRID
DON PEDRO RAMÓN Y CAJAL PARTNER OF THE “RAMÓN Y CAJAL ABOGADOS” LAW FIRM,
AGÜERAS AGOVERNMENT LAWYER, MEMBER OF THE MANAGING
BODIES OF INDRA SISTEMS, S.A., HISPASAT, S.A.
AND RENTA 4S.A.4, S.A
OTHER INDEPENDENT DIRECTORS
Name or corporate name of the director
Committee that proposed his appointment
Detail the reasons for which they cannot be regarded as significant-shareholder appointed directors or independent directors:
Indicate any variations which were produced during the period in the type of each director:
Name or corporate name of the director
Date of the change
Former status
Current status
B.1.4. Indicate whether the classification of directors made in the preceding point is in line with the distribution provided for in the Board Regulations:
Yes
191
B.1.5. Indicate the powers delegated to the managing director(s):
Name or corporate name of the director Brief description
MAURIZIO CARLOTTI ALL DELEGABLE POWERS OF THE BOARD OF DIRECTORS
B.1.6. Identify any Board members who hold the office of director or executive at other companies which form part of the listed company’s group:
Name or corporate name of the director MAURIZIO CARLOTTI Corporate name of the group entity
Office
PUBLICIDAD 3, S.A.U.
DIRECTOR EMPOWERED TO ACT SEVERALLY
B.1.7. Detail any directors of your company who are members of the Board of Directors of other companies listed on official securities markets in Spain other
than those of your group, which have been reported to the company:
Name or corporate name of the director Listed entity Office
JOSÉ MANUEL LARA BOSCH BANCO SABADELL S.A. BOARD MEMBER
JOSÉ MANUEL LARA BOSCH COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA, S.A. BOARD MEMBER
INDRA SISTEMAS, S.A. BOARD MEMBER
PEDRO RAMÓN Y CAJAL AGÜERAS B.1.8. Complete the following tables on the aggregate Directors’ compensation paid during the year:
A) At the company covered in this report:
Compensation item Data in thousands of euros
Fixed compensation 930
Variable compensation 10,655
Allowances 993
Attendance fees per the bylaws 0
Stock options and/or other financial instruments 0
Other 0
Total
12,578
192
Other benefits Data in thousands of euros
Advances
0
Loans granted 0
Loans granted 0
Pension funds and plans: contributions 0
Life insurance premiums 6
Guarantees provided by the company in favour of directors 0
B) Compensation for membership of company directors on other Boards of Directors and/or on the senior management team of group companies:
Compensation item Data in thousands of euros
Fixed compensation 0
Variable compensation 0
Allowances 0
Attendance fees per the bylaws 0
Stock options and/or other financial instruments 0
Other 0
Total
0
Other benefits Data in thousands of euros
Advances 0
Loans granted 0
Pension funds and plans: contributions 0
Pension funds and plans: contractual obligations 0
Life insurance premiums 0
Guarantees provided by the company in favour of directors 0
193
C) Total compensation by type of director:
Type of director
Per company Per group
11,825 0
Non-executive significant-shareholder appointed 588 0
Non-executive independent directors 165 0
0
0
12,578 0
Executive directors Other non-executive directors Total
D) Profit attributable to the Parent:
Total directors’ compensation (in thousands of euros)
12,578
Total directors’ compensation attributed to the Parent (expressed in %)
4,098
B.1.9. Identify members of the senior management team who are not also executive directors and indicate the total compensation paid to them during the year:
Name or Corporate Name
GLORIA FERNÁNDEZ LOMANA Office
INFORMATION SERVICES MANAGER
UIS GAYO DEL POZO SECRETARY-GENERAL
SILVIO JOSÉ GONZÁLEZ MORENO GENERAL MANAGER
MIGUEL ÁNGEL LEJARZA ORTIZ TV DIVISION MANAGER SINCE SEPTEMBER 2006
ANTONIO CARLOS MANSO MARCOS CHIEF FINANCIAL OFFICER
EDUARDO OLANO CODESIDO ADVERTISING DIVISION MANAGER
CARMEN RODRÍGUEZ MARTÍN CENTRAL LEGAL ADVISORY SERVICES MANAGER
GIORGIO SBAMPATO ÁNGELES YAGÜE BARRERO DEVELOPMENT AND NEW PROJECTS DIVISION MANAGER
CONTENTS MANAGER UNTIL AUGUST 2006
Total senior management comp. (in thousands of euros)
8,692
194
B.1.10. Indicate on the whole whether there are guarantee or golden parachute clauses for cases of dismissal or changes in control in favour of members of the
senior management team, including executive directors of the company or of its group. Indicate whether these contracts are to be reported and/or approved
by the bodies of the company or of its group:
Number of beneficiaries
Board of Directors
Body authorising the clauses
0
Annual General Meeting
X
YES
NO
Is the Annual General Meeting informed of the clauses?
X
B.1.11. Explain the process for stipulating Directors’ compensation and indicate the relevant clauses of the bylaws in this connection.
The Shareholders’ General Meeting held on 29 March 2006 changed article 34 of the Company’s By-Laws, and according to its current wording establishes that:
“The remuneration of the Board will be of a mixed nature consisting of a fixed sum and a variable sum, this latter in the form of allowances for the attendance to
the meetings of the Board and of its Committees.
For each fiscal year and for the fiscal years set out by the Meeting itself, the Shareholders’ General Meeting will decide the amount of the remuneration either on an
individual basis or fixing a maximum aggregate sum for each remuneration item or for both, and will be able to fix a different remuneration for each Director. Such
resolution of the Meeting will be in force as far as it is not expressly amended by the General Meeting itself.
The remuneration as Director set out in this article will be compatible with the remaining professional or work remuneration of the Directors related to whatever
executive or advisory services that they might render to the Company, other than the supervision and decision taking functions as Directors which will be subject to
the applicable legal system.”
The same General Shareholders’ Meeting adopted the following resolution regarding the remuneration of the Company’s Directors:
“The remuneration of the Directors will be of a mixed nature, a fixed sum and a variable sum. This latter will consist of allowances for the attendance to the meetings
of the Board and its Committees and the maximum amount will be the one agreed by the Shareholders’ General Meeting held on 29 August 2003.
The fixing of the exact amount of the fixed remuneration of the members of the Board of Directors and the Executive Committee, as well as the one corresponding
to allowances for the attendance to each one of the meetings of the different corporate bodies is expressly delegated to the Board of Directors, always respecting
the maximum amounts.
195
The economic remuneration to be perceived by the Directors, as a whole, will be subject to the following limits:
The total of: a) the mixed remuneration perceived by the Directors during each fiscal year, in accordance with the provisions of the two first paragraphs of article 34
of the Corporate By-laws and as agreed from time to time by the Meeting, plus b) the remuneration perceived in consideration of the professional, mercantile or
work relationships of the members of the
Board of Directors, in accordance with the provisions of the third paragraph of article 34 of the Corporate By-laws, irrespective of whether they have been granted
powers or not, and as a result of any functions performed for the Company (either of a general management, other managerial, executive, advisory and consulting
nature or the rendering of any other services, but different from the supervision and decision functions as Directors), may not exceed, in aggregate for all the Directors
and during each year, the sum of EURO THREE MILLION (€ 3,000,000).
Exceptionally, assuming that the number of meetings of the Board or of its Committees to be held during a given fiscal year, plus the remunerations set out in point
1.b) above, reach such maximum figure, no allowances for attendances will be paid for the remaining meetings of the Board or its Committees to be held during
such fiscal year.
Additionally, assuming that the contracts governing the relationships referred to in point 1.b) above include clauses or covenants that, as a consequence of an early
or unilateral termination of the contract by the Company, oblige the Company to honour to the other party any indemnities set out in the contract itself, the total
amount of such indemnities cannot exceed, in the context of all such contracts then in force, the sum of EURO THREE MILLION (€ 3,000,000). Such eventual indemnity, if any, will not affect the limit set out in paragraph 1 above.
Those remunerations, if any, derived from any incentive schemes or variable remuneration expressly approved by the General Meeting will be considered excluded
from the scope of this agreement.”
In accordance with the express delegation of powers to the Board of Directors, contained in the written agreement of the General Meeting, by virtue of which the
Board itself must set the exact amount of the fixed compensation to be paid to its members and the members of the Standing Committee, as well as the allowances
for attending each one of the meeting held by the various committees (respecting the maximum amounts established in the same meeting resolution), the Board of
Directors (after being approved by the Appointment and Compensation Committee), adopted, at its meeting on the 26 April 2006, the resolution described below:
(a) “The approval of an annual fixed compensation of €25,000 for each member of the Board of Directors, and an attendance allowance per Board meeting
of €2,000.
(b) The approval of an annual fixed compensation of €50,000 for each member of the Standing Committee, and attendance allowance of €2,500 for each meeting
of the Standing Committee.
(c) The approval of an attendance allowance of €2,000 for each meeting of the Audit and Steering Committee, without fixed compensation.
(d) The approval of an attendance allowance of €2,000 for each meeting of the Appointment and Compensation Committee, without fixed compensation”.
196
B.1.12. Identify any Board members who are also members of the Board of Directors of companies holding significant ownership interests in the listed company
and/or in entities in its group:
Name or corporate name of the director Name or corporate name of the significant shareholder Office
GRUPO PLANETA- DE AGOSTINI, S.L. DIRECTOR AND GENERAL MANAGER
RTL GROUP COMMUNICATION, S.L.U. MEMBER OF THE OPERATIONS MANAGEMENT COMMITTEE
(RTL GROUP LUXEMBURGO)
JOSÉ MIGUEL ABAD SILVESTRE NICOLAS ABEL BELLET DE TAVERNOST JOSÉ CREUHERAS MARGENAT GRUPO PLANETA- DE AGOSTINI, S.L. DIRECTOR
MARCO DRAGO GRUPO PLANETA- DE AGOSTINI, S.L. DEPUTY CHAIRMAN OF THE BOARD OF DIRECTORS
ELMAR HEGGEN RTL GROUP COMMUNICATION, S.L.U. MEMBER OF THE MANAGEMENT COMMITTEE
DE RTL GROUP LUXEMBURGO
ELMAR HEGGEN RTL GROUP COMMUNICATION, S.L.U. EXECUTIVE DEPUTY CHAIRMAN OF REGIONAL OPERATIONS
AND DEVELOPMENT (RTL GROUP LUXEMBOURG)
JOSÉ MANUEL LARA BOSCH GRUPO PLANETA- DE AGOSTINI, S.L. CHAIRMAN OF THE BOARD OF DIRECTORS
Detail any significant relationships, other than those set forth in the preceding section, of Board members which link them to significant shareholders and/or
entities in their group:
Name or corporate name of the director
B.1.13. Indicate any amendments made to the Board Regulations during the year.
Name or corporate name of the significant shareholder
Description of the relationship
197
B.1.14. Indicate the procedures for appointing, re-electing, appraising and removing Directors. Detail the competent bodies, the steps to be taken and the
criteria to be employed in each procedure.
Directors must be appointed and removed by the Annual General Meeting, except in the case of vacancies covered by cooptation, which shall be the responsibility
of the Board of Directors.
Proposals for the appointment of directors submitted by the Board of Directors to the Annual General Meeting for consideration and resolutions of appointment
adopted by the Board by virtue of the powers of cooptation attributed to it by law must comply with the provisions of the Board Regulations and must be preceded
by the relevant non-binding report by the Appointments and Compensation Committee. However, when the Board does not follow the proposal of the Committee,
it must have sufficient support for its decision, leaving record of its reasons in the minutes.
Those who are to be elected as Non-Executive Directors must be persons of recognised solvency, competence and experience, who are willing to dedicate a sufficient
amount of their time and capacity to the Company. The foregoing must be complied with even more strictly with respect to those who are to be elected to the office
of Independent Director.
To cover the office of Independent Director, the Board of Directors cannot propose or designate persons who currently have or have had over the preceding three
years a stable relationship of some importance with Company management or are related by family, professional or commercial ties to any of the Executive Directors
or to other senior managers of the Company. Nor can the persons designated have a stable relationship with the significant-shareholder Appointed Directors or with
the entities or groups of companies represented by them.
In particular, the following persons may not be proposed or designated as independent directors:
1. persons who currently hold or have held over the preceding two years high level executive posts at the Company or at any of the Company’s subsidiaries, or
persons who currently hold high level executive posts at entities or groups which own significant ownership interests in the Company’s capital.
2. persons who, directly or indirectly over the preceding two years, have made or received payments to or from the Company or any of its subsidiaries, or persons
who are currently making or receiving payments to or from entities or groups who own significant ownership interests in the Company’s capital, which could
jeopardise their independence.
3. persons who currently have or have had other relationships with the Company or with any of its subsidiaries, or with entities or groups who own significant
ownership interests in the Company’s capital, which, in the opinion of the Appointments and Compensation Committee, could be detrimental to their independence.
4. family members (to the fourth degree of kinship) of whomever currently is or has been over the preceding two years an Executive Director or senior manager of
the Company.
Re-election of Directors
Proposals for the re-election of Directors which the Board of Directors decides to submit to the Annual General Meeting shall be subject to a formal preparation
process which must necessarily include a non-binding report issued by the Appointments and Compensation Committee evaluating each proposed Director in terms
of his quality of work and dedication during his term of office.
198
B.1.15. Indicate the cases in which directors are obliged to resign.
Directors must hand in their notice to the Board of Directors and formalise their resignation in the following cases:
1. where they cease to hold the executive offices which gave rise to their appointment as director or where the reasons for which they were appointed cease to exist;
2. where they are subject to any of the statutory conflicts of interest or prohibitions;
3. where they are severely reprimanded by the Appointments and Compensation Committee or by the Audit and Control Committee for being in breach of any of
their obligations as directors.
Other than in the foregoing cases, the Board may not propose the removal of non-executive significant-shareholder appointed directors prior to the end of the term
for which they were appointed, unless there are exceptional and justified grounds for doing so, which should be approved by the Board
following a non-binding report by the Appointment and Compensation Committee.
B.1.16. Explain whether the office of chief executive of the Company falls to the Chairman of the Board. If so, indicate the measures taken to limit the risks of
the accumulation of powers in the hands of one person:
YES
NO
X
199
B.1.17. Are qualified majorities required for any type of decision?:
YES
X
NO
Indicate how resolutions are adopted by the Board of Directors, stating at least the minimum quorum of attendance and the type of majorities for adopting
resolutions:
Adoption of resolutions
Description of the resolution
Quorum
Type of majority
Ordinary resolutions
One half plus one of the Board members Ordinary
attending in person or by proxy;
if there is an uneven number of directors,
the number of directors or proxies in
attendance must be greater than the
number of those not attending
B.1.18. Explain whether there are specific requirements, other than those relating to directors, for being appointed Chairman.
YES
NO
X
Description of requirements
200
B.1.19. Indicate whether the Chairman has a casting vote:
YES
NO
X
Matters for which a casting vote exists
B.1.20. Indicate whether the bylaws or the Board Regulations stipulate a limit on the age of directors:
YES
NO
X
Limit on the age of the Chairman
Limit on the age of the Managing Director
Limit on the age of directors
B.1.21. Indicate whether the bylaws or the Board Regulations stipulate a limited term of office for independent directors:
YES
NO
X
Maximum number of years 0
B.1.22. Indicate whether there are formal procedures for delegating votes to the Board of Directors. If so, give a brief description.
Proxies may be conferred by letter or by any other means capable of ensuring the certainty and validity of the proxy in the opinion of the Chairman.
If possible the proxy letter must include the relevant instructions.
201
B.1.23. Indicate the number of meetings held by the Board of Directors during the year. Also indicate, if appropriate, the times the Board met without the
attendance of the Chairman:
Number of Board meetings
10
Number of Board meetings held without the attendance of the Chairman
0
Indicate the number of meetings held by the various Board committees during the year:
Number of Executive or Standing Committee meetings 10
Number of Audit Committee meetings
6
Number of Appointments and Compensation Committee meetings 3
Number of Strategy and Investments Committee meetings
0
Number of committee meetings
0
B.1.24. Indicate whether the individual and consolidated financial statements submitted to the approval of the Board are previously certified:
YES
NO
X
Identify the person(s), if any, who certified the company’s individual and consolidated financial statements for their preparation by the Board:
202
B.1.25. Explain any mechanisms established by the Board of Directors for preventing the individual and consolidated financial statements prepared by it from
being submitted to the Annual General Meeting with qualifications in the auditor’s report.
The Financial Statements, breakdowns of Financial Statements and additional information included in the individual and consolidated Financial Statements are prepared by the
Company’s Financial Management, which submits them to the Auditors for review according to a working plan that includes the participation of the In-House Auditors. All of the
foregoing is reported to the Audit and Control Committee, which supervises and coordinates the entire process of preparing the financial information and the related checks.
The External Auditor performs its work with cooperation from the Financial Management and In-House Auditors. Reviews are performed in various stages throughout the year
with a view to anticipating the need for information and completing the various tests performed by the auditors according to the aforesaid plan by the closing and preparation
deadlines.
Both In-House Auditors and External Auditors report to the Audit and Control Committee on the performance and progress of their plan, as well as on the various conclusions obtained throughout the year. This enables them to anticipate the resolution of aspects which might have an impact on the auditor’s report and thus avoid possible qualifications.
Prior to their preparation, the Financial Statements are submitted to a review by the Audit and Control Committee which, in turn, proposes the final contents thereof to the
Board of Directors for their preparation.
B.1.26. Detail the measures taken to ensure that the information given to securities markets is transmitted fairly and symmetrically.
The Secretary of the Board of Directors (Secretary and Deputy Secretary) evaluates, in the light of significant circumstances, decisions, events or transactions, the need
to serve notices of events on the market in line with the demands and requirements of current legislation in this connection. Such notices are always served through
the channels and by the deadlines set forth in such legislation.
Information on quarterly and six-monthly results is reported to the Audit and Control Committee before it is made public. This information and its attached notes
and explanations regarding the evolution of the most significant financial magnitudes are submitted by the Financial Management to the Committee for review and
approval. At some of the meetings where this information is presented, the External Auditor has given its opinion on the correct treatment and recording of the
transactions carried out in the related quarter which could, in the Committee’s opinion, be significant due to their reflection in the financial information.
With a view to improving information quality and access, not only the information reported to the National Securities Market Commission but also other financial,
management and business information of use to investors is made available on the Company’s website.
The Investor Relations Area is in charge of liaising with national and international markets, explaining and informing those markets of significant data relating to
its strategy, organisation, transactions and businesses which is necessary for the formation of expectations regarding future performance, thus contributing to the
suitable formation and setting of prices for the securities issued by the Company.
In 2006 a major effort was made to promote a policy of transparency in communication and information targeted at investors and analysts. It included, inter alia,
numerous presentations, audio-conferences with analysts, road-shows on the main financial markets and the holding of Analyst Day, where the managers of the
Company’s main areas presented their operations and the performance of their areas.
203
B.1.27. Is the secretary of the Board a director?:
YES
NO
X
B.1.28. Indicate any mechanisms established by the Company to maintain the independence of the auditors, financial analysts, investment banks and classification agencies.
The Audit and Control Committee is responsible for assessing the auditing services and for ensuring the independence of the auditors. Article 33.5 of the By-Laws
stipulates that one of the duties of the Audit and Control Committee is to receive information from the Auditors regarding issues which could jeopardise their independence and any other issue relating to the performance of the audit, and to receive information and exchange with the Auditors any other communications
provided for in the audit legislation and the technical auditing rules.
The “Internal Rules of Conduct on Issues relating to Securities Markets” describe, inter alia, the actions to be taken in each case to ensure the independence of
investment banks and financial analysts, as well as by the company personnel subject to those Rules in relation to personal or confidential transactions which could
have an impact on the value of the Group on the markets.
The following additional mechanisms have also been established with a view to guaranteeing efficiency and transparency in relations with market agents:
• All information deemed significant is reported simultaneously to the market through the publication of the pertinent relevant event. 20 Relevant Events were
published in 2006.
• Information furnished to the markets is subject to a suitable level of in-house review and quality control.
• In information furnished at meetings with analysis and investors, the pertinent clauses are explicitly stated so as to safeguard the significant information and the
position of the company in relation to decisions which could be adopted by market agents on the basis of such information.
B.1.29. Indicate whether the auditing firm does work for the company and/or its group other than auditing work and, in such case, state the amount of the
fees received for that work and the percentage it represents over the fees billed to the company and/or its group.
YES
X
Amount of work other than auditing work (thousands of euros)
Amount of work other than auditing work / total amount billed by the auditing firm (%) NO
Company Group Total
61 10 71
26.000 9.000 20.536
204
B.1.30. Indicate the number of years that the current auditing firm has uninterruptedly been auditing the financial statements of the company and/or its group.
Also indicate the percentage represented by the number of years audited by the current auditing firm over the total number of years in which the financial
statements have been audited:
Sociedad Grupo
10
10
Sociedad Grupo
Number of years audited by the current auditing firm / number of years the company has been audited (%)
62.220 62.220
Number of uninterrupted years B.1.31. Indicate the holdings reported to the Company which are owned by Company directors in the capital of entities engaging in a type of activity which is
the same as, or similar or supplementary to, that of the corporate purpose both of the Company and of its group. Also indicate the offices they hold or duties
they discharge at those companies:
Name or corporate name of the director NICOLAS ABEL BELLET DE TAVERNOST
Name of the company in which the holding is
Holding % Office or duties
MÉTROPOLE TÉLÉVISION, S.A. (M6) 0.000 CHAIRMAN OF THE BOARD
OF DIRECTORS
ELMAR HEGGEN FREEMANTLE MEDIA, S.A. 0.000 MEMBER
ELMAR HEGGEN SPORTFIVE GMBH 0.000 MEMBER
B.1.32. Indicate whether there is a procedure which may be used by directors to obtain external counselling and, if so, give a brief description:
YES
NO
X
Describe the procedure
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B.1.33. Indicate whether there is a procedure which may be used by directors to obtain the information necessary for preparing meetings of the managing
bodies in a timely manner and, if so, give a brief description:
YES
X
NO
Describe the procedure
Pursuant to article 22 of the Board of Directors’ Regulation, a procedure has been established whereby Board Members receive, sufficiently in advance, all information
relating to matters included in the Agenda for each meeting.
When the summons is performed, Board Members are sent the minutes for the previous meeting, provided it has not been already approved in the meeting itself,
and which must therefore be voted upon in the next meeting.
In all ordinary meetings, the Board is also furnished with up-to-date financial information regarding the Group as a whole and market information centred on analysis
of the share price performance. Furthermore, in-depth information is provided on the main figures for programming and audience results.
If there are points which do not arise as a matter of course in the Agenda, such as drawing up of accounts, approval of budgets, convening of shareholders’ meetings,
etc.– the documents to be subject to scrutiny and voting in the Board shall also be furnished sufficiently in advance.
In monographic or extraordinary meetings the ad hoc information deemed pertinent and that in the hands of the Board Member is drawn up and disseminated always
sufficiently in advance in order to be studied beforehand.
Lastly, Board Members receive a daily report on TV audiences.
B.1.34. Indicate whether liability insurance has been taken out in favour of company directors.
YES
X
NO
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B.2. Committees of the Board of Directors
B.2.1. List the managing bodies:
Name of the managing body Number of members Duties
STANDING COMMITTEE 5
SEE POINT B.2.3. SECTION I)
AUDIT AND CONTROL COMMITTEE
5
SEE POINT B.2.3. SECTION II)
APPOINTMENTS AND COMPENSATION COMMITTEE 5
SEE POINT B.2.3. SECTION III)
B.2.2. Detail all the committees of the Board of Directors and their members:
EXECUTIVE OR STANDING COMMITTEE
Name JOSÉ MANUEL LARA BOSCH Office
CHAIRMAN
MAURIZIO CARLOTTI MEMBER
NICOLAS ABEL BELLET DE TAVERNOST MEMBER
MARCO DRAGO MEMBER
LUIS GAYO DEL POZO NON-MEMBER SECRETARY
CARMEN RODRÍGUEZ MARTÍN NON-MEMBER SECRETARY
AUDIT COMMITTEE
Name ELMAR HEGGEN Office
CHAIRMAN
JOSÉ MIGUEL ABAD SILVESTRE MEMBER
JOSÉ LUIS LÓPEZ DE GARAYO GALLARDO MEMBER
PEDRO RAMÓN Y CAJAL AGÜERAS MEMBER
CARMEN RODRÍGUEZ MARTÍN NON-MEMBER SECRETARY
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APPOINTMENTS AND COMPENSATION COMMITTEE
Name Office
JOSÉ MIGUEL ABAD SILVESTRE MEMBER
NICOLAS ABEL BELLET DE TAVERNOST MEMBER
JOSÉ CREUHERAS MARGENAT MEMBER
PEDRO ANTONIO MARTÍN MARÍN MEMBER
LUIS GAYO DEL POZO NON-MEMBER SECRETARY
STRATEGY AND INVESTMENTS COMMITTEE
Name Office
B.2.3. Give a brief description of the rules governing the organisation and functioning of, as well as the responsibilities attributed to, each of the Board’s
committees.
I) STANDING COMMITTEE:
The Standing Committee exercises any powers delegated to it by the Board of Directors with the affirmative vote of two thirds of the Directors.
It is made up of between 3 and 9 members which shall in all cases include the Chairman of the Board and the Managing Director.
The Chairman and Secretary of the Board shall act as the Standing Committee Chairman and Secretary unless otherwise decided by the Board.
The Committee meets once a month, or whenever the interest of the Company so requires.
Its resolutions are adopted by the majority of its members and the Chairman has the casting vote in the event of a tie.
The appointment and removal of members of this Committee requires the affirmative vote of at least two thirds of the Directors.
II) AUDIT AND CONTROL COMMITTEE:
The Audit and Control Committee is made up of not less than three and not more than five Directors.
Its Chairman is elected for a maximum term of four years and may be re-elected once, after one year has elapsed since the end of his term.
The Board Secretary or one of the Board Deputy Secretaries shall act as the Secretary of the Audit and Control Committee.
It meets once a quarter or whenever three of its members, the Standing Committee or the Managing Director so request.
For a meeting to be validly convened the number of Directors attending in person or by proxy must be larger than the number of Directors not attending.
Resolutions are adopted by majority vote and the Chairman has the casting vote.
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Its duties are:
1. to report to the Annual General Meeting on the issues under its authority;
2. to propose to the Annual General Meeting everything relating to the designation of auditors and their contracting terms;
3. to supervise the in-house auditing services;
4. to know the processes relating to financial information and internal control systems;
5. to maintain the relationship with the auditors;
6. to obtain from the Managing Director the necessary information for the optimum performance of its duties.
III) APPOINTMENTS AND COMPENSATION COMMITTEE:
The Appointments and Compensation Committee is made up of not less than three and not more than 5 Directors, in line with the proportions of the Board.
Its Chairman is designated for a maximum of four years and may only be re-elected once, after one year has elapsed since the end of his term. The Board Secretary or
one of the Board Deputy Secretaries shall act as the Secretary of the Appointments and Compensation Committee.
The Committee meets once a quarter or whenever three of its members, the Standing Committee or the Managing Director so request.
For a meeting to be validly convened the number of directors attending in person or by proxy must be larger than the number of directors not attending.
Resolutions are adopted by a majority vote and the Chairman has the casting vote.
Its duties are::
1. to formulate and report on the guidelines to be followed for the composition of the Board;
2. to issue a previous report on members of the Board and of the Committees;
3. to propose the form and amount of directors’ compensation, whether for holding the office of director or for the discharge of other duties;
4. to report on the rules governing the corporate bodies and very especially on the Board and the Annual General Meeting Regulations;
5. to ensure that the Directors perform their obligations;
6. to know and report to the Board on appointments and compensation of senior managers of the Company;
7. to know and report to the Board on the appointments and compensation of senior managers;
8. to propose to the Board the basic conditions for hiring senior managers and to ensure compliance therewith;
9. to propose to the Board the variable compensation policy for the performance of objectives;
10. to obtain from the Managing Director the information deemed necessary for the performance of its duties;
11. to prepare and keep a record of the status of the Directors and senior managers of the Company and of its Group;
12. to report on compliance with the Board Regulations in matters under its specific authority.
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B.2.4. Indicate any advisory, consulting and, if appropriate, delegation powers held by each of the Committees:
Committee name
Brief description
B.2.5. Indicate the existence of Regulations governing the Committees of the Board of Directors, the place where they are available for consultation and any
amendments made during the year. In turn, indicate whether any annual report on the activities of each Committee was prepared on a voluntary basis.
B.2.6. If there is an Executive Committee, explain the degree of delegation and autonomy available to it when carrying out its functions, for adopting resolutions on the direction and management of the Company.
Formally this Committee has been delegated all legally delegable powers of the Board of Directors. In general practice, the Standing Committee does not adopt
resolutions by itself, but rather submits its proposals of the Board of Directors.
B.2.7. Indicate whether the composition of the Executive Committee reflects the membership on the Board of the various directors in accordance with
their status.
YES
X
NO
If no, explain the composition of the Executive Committee
B.2.8. If there is an Appointments Committee, indicate whether all its members are non-executive directors:
YES
X
NO
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C. RELATED-PARTY TRANSACTIONS
C.1. Detail significant transactions which entail a transfer of resources or obligations between the company or entities in its group
and the company’s significant shareholders:
Name or corporate name of the
significant shareholder
Name or corporate name of the de la sociedad o entidad de su grupo
Nature of the relationship
Type of transaction
GRUPO PLANETA-DE AGOSTINI, S.L. GRUPO PLANETA-DE AGOSTINI, S.L. Amount (thousands of euros)
EDITORIAL PÁGINA CERO, S.A. Commercial Receipt of services
12,638
UNIÓN IBÉRICA DE RADIO, S.L. Commercial Receipt of services
4,501
(ANTES KORT GEDING, S.L.) GRUPO PLANETA-DE AGOSTINI, S.L. PRODIGIUS AUDIOVISUAL, S.A. Contractual Receipt of services
4,035
GRUPO PLANETA-DE AGOSTINI, S.L. DEAPLANETA, S.L. Contractual Receipt of services 3,027
RTL GROUP COMMUNICATION, S.L.U. GRUNDY PRODUCCIONES, S.A. Contractual Receipt of services
1,296
GRUPO PLANETA-DE AGOSTINI, S.L. DEAPLANETA PRODUCCIONES
Contractual Receipt of services
819
CINEMATOGRÁFICAS, S.L.
IP NETWORK, S.A Contractual Receipt of services
218
EDITORIAL PÁGINA CERO, S.A. Commercial Receipt of services
178
SANTANDER INVESTMENT
Contractual Receipt of services
240
RTL GROUP COMMUNICATION, S.L.U. GRUPO PLANETA-DE AGOSTINI, S.L. BANCO SANTANDER CENTRAL HISPANO, S.A.
GRUPO PLANETA-DE AGOSTINI, S.L. SERVICES, S.A. EDITORIAL PÁGINA CERO GALICIA, S.L.
Commercial Receipt of services
106
RTL TELEVISIÓN GMBH
Contractual Receipt of services
100
GRUPO PLANETA-DE AGOSTINI, S.L. CANAL DIRECTO INTERACTIVO, S.L. Contractual Receipt of services
15
GRUPO PLANETA-DE AGOSTINI, S.L. PLANETA JUNIOR ITALIA, S.R.L. Contractual Receipt of services
42
GRUPO PLANETA-DE AGOSTINI, S.L. PLANETA JUNIOR ITALIA, S.R.L. Contractual Receipt of services
5
GRUPO PLANETA-DE AGOSTINI, S.L. SOCIETAT CATALANA DE RADIODIFUSIÓ, S.A.U. Contractual Acquisition of investments
9,861
GRUPO PLANETA-DE AGOSTINI, S.L. EDITORIAL PÁGINA CERO, S.A. Commercial Provision of services
1,998
GRUPO PLANETA-DE AGOSTINI, S.L. PLANETA DIRECTO, S.L.
Contractual Provision of services
1,600
GRUPO PLANETA-DE AGOSTINI, S.L. DEAPLANETA, S.L. Contractual Provision of services
1,535
GRUPO PLANETA-DE AGOSTINI, S.L.
UNIÓN IBÉRICA DE RADIO, S.L.
Contractual Provision of services
1,146
VOX FILM- UND FERNSEH GMBH & CO KG
Contractual Provision of services
674
SAV SOCIEDAD ANÓNIMA DEL VÍDEO
Contractual Provision of services
479
METROPOLE PRODUCTION, S.A. Contractual Provision of services
249
EDITORIAL PLANETA, S.A. Contractual Provision of services
165
RTL GROUP COMMUNICATION, S.L.U. RTL GROUP COMMUNICATION, S.L.U. GRUPO PLANETA-DE AGOSTINI, S.L. RTL GROUP COMMUNICATION, S.L.U. GRUPO PLANETA-DE AGOSTINI, S.L. (sigue)
211
GRUPO PLANETA-DE AGOSTINI, S.L. CENTRO DE ESTUDIOS CEAC, S.L. Commercial Provision of services
122
GRUPO PLANETA-DE AGOSTINI, S.L.
AUDIOVISUAL ESPAÑOLA 2000, S.A.
Contractual Provision of services
68
GRUPO PLANETA-DE AGOSTINI, S.L.
EDITORIAL PÁGINA CERO NORTE, S.L.
Commercial Provision of services
20
GRUPO PLANETA-DE AGOSTINI, S.L. EDITORIAL PÁGINA CERO GALICIA, S.L. Commercial Provision of services
9
BANCO SANTANDER Contractual Provision of services
9
RTL TELEVISIÓN GMBH
Contractual Provision of services
2
BANCO SANTANDER
Contractual Financing agreements:
MACAME, S.A. CENTRAL HISPANO, S.A.
RTL GROUP COMMUNICATION, S.L.U. BANCO SANTANDER CENTRAL HISPANO, S.A.
CENTRAL HISPANO, S.A.
BANCO SANTANDER CENTRAL HISPANO, S.A.
BANCO SANTANDER
Contractual CENTRAL HISPANO, S.A.
30,000
loans
Financing agreements: 5,000
others C.2. Detail significant transactions which entail a transfer of resources or obligations between the company or entities in its group
and the company’s directors or managers:
Name or corporate name of the directors or managers
Name or corporate name of the company or entity in its group
Nature of operation Type of operation Amount (thousands of euros)
C.3. Detail significant transactions carried out by the company with other companies belonging to the same group, provided that they
are not eliminated in the process of preparing the consolidated financial statements and do not form part of the ordinary course of
the Company’s business as regards their subject-matter and conditions:
Corporate name of the entity in the company’s group
Brief description of the transaction
Amount (thousands of euros)
C.4. Identify, if appropriate, the status of conflicts of interest involving the company’s directors, as provided under Article 127 ter of
the Spanish Corporations Law.
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C.5. Detail the mechanisms established to detect, determine and resolve potential conflicts of interest between the company and/or its
group, and its directors, managers or significant shareholders.
The mechanisms established by the Group to detect, determine and resolve potential conflicts of interest with its Directors, managers or significant shareholders may
be classified into two types:
• General: mechanisms implemented by the Group to guarantee that transactions relating to the business are carried out at market prices. The most significant
are: segregation of functions, suitable level of delegation in the approval of transactions, which goes from the Area Sub-manager to the General Manager, depending on the amount. As a general procedure, at least three offers are solicited from different suppliers for each service contracted (other than those relating
to programming) or purchase made.
• Specific: mechanisms implemented by the Group in addition to the foregoing, used by the Financial Management with a view to keeping the Audit and Control
Committee informed periodically and prior to its final approval of any type of transaction carried out with individuals or legal entities related to the Group (such
being construed as direct shareholders or companies related thereto, Group Directors and managers).
D. RISK CONTROL SYSTEMS
D.1. General description of the risk policy of the company and/or its group, detailing and assessing the risks covered by the system,
together with support that those systems are suitable to the profile of each type of risk.
Antena 3 Group has established a Risk Management System designed to cover the following objectives:
• To guarantee uniformity in the definition, identification and measurement of risks at all Antena 3 Group companies.
• To update existing controls and measure their degree of effectiveness on an ongoing basis.
• Enables the carrying out of actions geared towards:
a) improving the internal control model on an ongoing basis.
b) developing a series of tools and indicators to facilitate the ongoing assessment and improvement of the model developed.
• To serve as a means of communication for the business areas of the various Group companies regarding the policies and procedures to follow and regarding the
compliance thereof.
• To ensure compliance with all regulations and laws in force in the area of all businesses and transactions of Group companies.
• To serve as an efficient decision-making tool for Senior Management.
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The Risk Management System was implemented for the entire Antena 3 Group, carrying out the following actions:
1. Global assessment of the degree of exposure to risks.
2. Identification and documentation of the processes developed in the Group and the risks associated with each one.
3. Risk assessment and measurement.
4. Identification and evaluation of the Group’s existing controls and proposal of new control procedures.
1. Global assessment
Each year risks are assessed globally with a view to valuing the degree of exposure, importance and potential occurrence of material risks which could have a significant impact on income, internal control or even on the continuity of the business.
This assessment is carried out prior to the identification of total risks by area and process, and has a twofold objective:
• To provide an updated overall view of the general risk setting to which the Company is exposed, thus allowing significant changes taking place in the industry, in
particular, those relating to the regulation or structure of Group businesses and transactions, to be introduced into the model and their impact to be measured
quickly;
• To prioritise subsequent analyses of the specific risks of each process (business and support).
2. Identification and documentation of the processes developed in the Group and the risks associated with each one.
A reference process map was prepared, identifying, classifying and describing all Antena 3 de Televisión, S.A. processes. The following is a list of the main processes
identified in the Group, which served as a basis for the definition of second level processes for each one:
• knowledge of the advertising market, of the audience and of its trends;
• development of the corporate strategy;
• design of the programming grid;
• marketing and sale;
• program contracting and production and purchase of rights;
• program broadcasting;
• management of human resources;
• management of information and technology;
• administration and finances;
• management of the general infrastructure;
• management of external relations and communication;
• management of risks, transparency and compliance with regulations.
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All key risks were also identified and assigned to each process using various risk models from the industries in which the group companies operate (public television,
radio, advertising, etc.) and classifying the risks as follows:
• Risks of the setting
• Risks associated with processes
• Operating risks
• Management risks
• Technological / Information processes risks
• Integrity risk
• Financial risks
• Information risks for
- operational
- financial and
- strategic decision-making
3. Assessment and measurement of risks
The GROUP RISKS MAP is developed and adjusted by measuring the impact of each risk and the probability of its materialising. In other words:
• Importance: degree of negative impact on income or on the continuity of the business if the risk were to occur.
• Probability: degree of exposure / probability of the risk materialising, regardless of whether or not the controls are sufficient and reduce the risk to acceptable
levels.
This identification and classification of the risks detected according to their importance and their probability gave rise to the RISKS MAP, a tool which is maintained
and updated periodically, with the participation of all areas and offices of the Group companies.
The documentation of risk evaluation and measurement was made a priority within the Group Risk Management System, since it serves as the basis for the implementation of effective and proportional controls of the importance of each risk and of its probability.
This classification and evaluation, together with the control actions and procedures, is, naturally, submitted to analysis and review by the external auditors, who
then report their conclusions to the Audit and Control Committee.
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The most significant risks of the Group relate to the following areas:
• Risks of the setting
These risks derive from external factors which may lead to changes in the Company’s strategy and objectives. The following risks were identified in relating to setting:
risks deriving from changes in regulations, changes in competition; risks in relationships with shareholders, financial markets and others.
The Antena 3 Group has a multidisciplinary working team specialising in the analysis of these risks and their impact on strategy, which proposes actions and controls
for measuring the potential impact of each risk and the reaction thereto.
Antena 3 Group’s Strategic Plan includes the calculation of these risks, which is one of the bases for defining the measures to be taken to offset said risks and minimise the possible impact on value created for shareholders.
• Operating risks
For the main processes, identification is summarised as follows:
Revenues for the sale of advertising space and commercial policy: The Group avails itself of significant and reliable information for analysing changes in the
demand of the industry and anticipates them by developing integral communication plans for customers which make it possible to broadcast advertising in both
traditional and more innovative forms.
Ongoing analyses are performed on the surroundings and on the audiovisual industry, which include information on competition, legal aspects, economic trends,
demographic or socio-cultural changes, changes in viewer habits, audience ratings, etc., which make it possible to define a commercial strategy based on ongoing
interrelation with the market and with the programming and content objectives included on the broadcasting grid.
On the other hand, all control procedures were established with respect to negotiating processes, burden of the advertising purchase on the systems, verification
of the broadcast, valuation of advertising slots, billing and collection, with a view to avoiding a loss of revenue and ensuring compliance with the policies and
standards of the sales area.
Program production: Each and every one of the production projects are analysed, approved and developed according to a programming strategy and based on
an exhaustive analysis of expectations, audience objectives and commercial returns.
In order to minimise the negative impact of the possibility of programs not functioning satisfactorily in terms of audience and commercials, inherent in the programming activity, pilot programs are produced and viewer and advertiser expectations are studied with a view to tailoring the final product as much as possible
to these needs. Standards are also established for contracting conditions and terms to be used by those in charge with a view to avoiding unforeseen losses and
contingencies.
Acquisition of broadcasting rights: broadcasting rights, which generally have a multi-year projection and validity, are acquired after the required studies of ge-
neral trends and specific programming projections, suitability of the products, broadcasting capacity, pricing trends and authorised budgets.
This entails specific rules and a suitable segregation of functions in negotiation, the approval of acquisitions and framework agreements with distributors and the
management of this type of product.
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Purchases and contracting in general: in the area of processes and their controls, it is important to note the modifications and improvements made to the proce-
dure for outsourcing services, work carried on by companies for the Group, as well as in the asset purchase and investment process. The Group has designed an
application for processing outsourcing and investment proposals which permits the electronic organisation and documentation of procedures for filling out outsourcing applications and their authorisation, making them more transparent and clearer, eliminating the circulation of hard copy with confidential and sensitive
information, anticipating knowledge regarding purchases and investments so as to prepare a better plan, quantifying undertakings given in contracting processes
more quickly, classifying in an orderly manner all purchase processes and contracts still to be authorised or executed and, in short, which makes it possible to have
an overview of the flow of documents and the controls applied to them.
• Occupational health and safety risks
The Company has an occupational risk prevention service which covers not only risks deriving from facilities but also those deriving from the various jobs.
The prevention service depends on the Office for Prevention and Medical Services, which is in charge of defining occupational risks, classifying them by job and
establishing the control measures necessary for reducing them. It also performs periodical evaluations to determine whether the control measures defined by the
Area are applied.
• Risks relating to technology and information systems
Technological risks include most notably those relating to information systems (since the various activities of Antena 3 de Televisión, S.A. are highly dependent on
IT systems) and those relating to broadcasting the signal (guaranteeing that the technical conditions of the signal comply with the parameters established in the
technical provisions applicable to the broadcasting medium).
As in the case of other public television service operators, a single company has been contracted to provide the services of carrying, supporting and disseminating
the television signal. Any failure in these services could have a negative impact on the Company’s activity. Nonetheless, independent of the guarantees provided
under the contract for services, no lasting incidences with significant adverse effects have been recorded to date throughout the years of the relationship.
With respect to risks deriving from information systems, strict physical and logical security measures, as well as contingency and business continuity plans, have
been established with a view to facing unforeseen events from various sources and of various natures.
There is an IT security department in charge of defining the applicable procedures, which periodically performs various security audits with a view to verifying
compliance with the model.
Security measures have also been stipulated for the technical means of broadcasting the signal to ensure their compliance with the established parameters. For
this reason there are double sets of equipment on both of which preventive tests are carried out on a monthly basis. There are also maintenance contracts for all
the necessary broadcasting equipment, as well as for other production and information systems equipment.
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• Financial risks
The main financial risk of the Group is that of the evolution of the exchange rate, since a significant percentage of the purchase of broadcasting rights is made
in US dollars.
The currency exchange risk is managed from the Cash and Banks Division of Antena 3. Depending on the payment schedule drawn up on the basis of the information furnished by the different areas involved, the relevant hedging is established through forward currency purchases or by using transactions with derivatives
which lead to closed risk scenarios.
• Integrity risks
Antena 3 de Televisión S.A. has sufficient and effective control procedures to minimise the probability of fraud, illegal conduct and unauthorised uses of assets,
as well as to avoid the quantitative and qualitative effect they could have on resources, the reputation and the image of the Group’s trademarks.
• Risks deriving from information used in decision-making
These risks may be classified as operational, financial and strategic depending on the impact that could arise from using incomplete, distorted or erroneous information when making decisions in relation to those aspects.
The Antena 3 Group has mechanisms for measuring the most significant indicators and magnitudes of the business, with a view to making quick and efficient
decisions on all business processes and on quantifiable aspects relating to its strategy and to its financial structure and capacity.
With respect to the protection of assets, the Group’s policy is to take out insurance policies to provide sufficient coverage for the possible risks to which the various
assets are subject. Transportation, business interruption, civil liability in various areas, life, accident and health risks are also covered by insurance.
The Group’s risks are identified and classified, and the processes inherent therein are analysed, by all the areas developing the Group’s business and support processes,
which, in turn are coordinated by the Internal Audit Office and Process Control Office. The Audit and Control Committee supervises each project’s progress, as well
as the conclusions obtained.
The Audit and Control Committee is in charge of supervising the in-house audit services and ascertaining the processes relating to financial information and internal
control systems.
4. Assessment of the controls performed in the Group and proposal for improvements and new control procedures.
The controls (many of which are described in the preceding section) implemented by the Group to mitigate all risks detected are evaluated on an ongoing basis.
Once the existing controls are known and documented, the following actions are taken:
• testing the controls applied to determine whether they operate efficiently;
• designing new control and monitoring procedures;
• making improvements to the control and monitoring procedures currently applied.
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This work is also carried out with the cooperation of all those in charge of the areas and/or Companies in the Antena 3 Group. They are thus informed of the risks
identified and evaluated, as well as of the controls detected in each of the processes in which they play an active role.
The following benefits have been obtained through carrying out these actions:
• to improve the documentation of existing controls and introduce new controls where appropriate or necessary;
• to improve the documentation of risks and controls;
• to enhance maintenance of the Risk Management System in close connection with the processes and with those responsible for them;
• to establish quick and simple communication and reporting procedures;
• to integrate the entire system in a corporate application which aids the meeting of all the foregoing objectives.
The External Auditor reviewed the Antena 3 Group’s Risk Model with a view to assessing both the methodology employed and the design and effectiveness of the
controls, and reported their findings and proposed actions to the Audit and Control Committee.
Work is currently being done of the implementation of a support tool for the entire Group which permits the effective documentation of certain controls currently
existing at the Company, as well as development of the functionalities necessary for making it possible to leave a more complete record that the control activities
were carried out.
This tool is to include a system of indicators which are designed to allow the evolution of risks to be monitored and which include a system of alarms where necessary,
to prioritise the review of controls.
D.2. Indicate the control systems established to assess, mitigate or reduce the main risks associated with the company and its group.
The Group’s main identification and control procedures are described in each of the foregoing sections in which the risks are classified.
D.3. If any of the risks affecting the company and/or its group should have materialised, indicate the circumstances giving rise to the
risk and whether the established control systems worked properly.
D.4. Indicate whether there is any committee or other governing body in charge of establishing and supervising the control devices
and, if so, list its duties.
D.5. Identification and description of the processes for complying with the various regulations affecting the company and/or its group.
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E. ANNUAL GENERAL MEETING
E.1. List the quorums for convening the Annual General Meeting set forth in the Bylaws. Describe how they are different from the system of minimums set forth in the Spanish Corporations Law (Ley de Sociedades Anónimas or “LSA”).
The quorums for convening the Annual General Meeting are no different from those set forth in the LSA.
The quorum required for convening the Annual or Special Annual General Meeting on first call is 25% of the voting capital. On second call, the meeting will be validly
convened regardless of the capital owned by the shareholders attending it.
In special cases the minimum quorum on first call is 50% of the voting capital; on second call 25% is sufficient. Nonetheless, if the shareholders attending the meeting
represent less than 50% of the voting capital, resolutions shall require the affirmative vote of shareholders present in person or by proxy who represent two thirds
of the capital.
E.2. Explain the system for adopting corporate resolutions. Describe how it is different from the system set forth in the LSA
Resolutions of the Annual General Meeting are adopted by majority vote and the system is no different from that set forth in the LSA.
E.3. List any rights of shareholders in relation to Annual General Meetings which are different from those set forth in the LSA
Shareholders have the same rights as those recognised to them in the LSA.
E.4. Indicate, if appropriate, the measures taken to encourage shareholders to participate in Annual General Meetings.
All shareholders entitled to attend are sent a letter informing them of the holding of the meeting and of its agenda. The attendance, delegation and voting Card is
also enclosed in this letter.
Shareholders may raise questions, given opinions and suggestions on the website.
E.5. Indicate whether the office of Chairman of the Annual General Meeting is held by the Chairman of the Board of Directors. Detail
any measures taken to guarantee the independence and suitable functioning of the Shareholders’ Meeting:
YES
X
NO
Detail measures
The application of the provisions of the Annual General Meeting Regulations guarantees the independence and suitable functioning of the Annual General Meeting. The
Company’s website also serves as a channel through which shareholders are provided with information.
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E.6. Indicate any amendments made to the Annual General Meeting Regulations during the year.
In the General Meeting of Shareholders held on 29 March 2006, the decision was taken to amend article 9 of the Regulation of the General Shareholders’ Meeting
in light of the new version of Article 97 of the Spanish Corporations Law and the previous adaptation of article 18 of the Company By-Laws.
Its current wording is as follows:
“Article 9.- Summons.
Unless specified otherwise by Law, General Meetings must be summoned by the Board of Directors through a notice inserted in the Official Gazette of the Mercantile
Registry and in one of the largest newspapers of the province where the Company headquarters are located at least one month before the date fixed for the holding
of the meeting, or the term set out by the Law or the By-Laws for special circumstances.
The notice will include all the mentions stipulated by Law, as the case may be, and, in any event, will provide the date, place and time of the meeting in first call and
all the matters to be dealt with. If appropriate, the date of the second call can also be included and said date will be twenty four hours after the date fixed for the
first meeting. In the notice, the Board will ensure that it sets out the likely date that the Meeting will be held, whether on first or second call.
Without prejudice to the provisions of this article, as soon as the Board of Directors knows the likely date that the Meeting will be held, it shall notify same via the
Company’s website.”
E.7. Provide information on the attendance of the General Meetings held during the year to which this report refers::
Information on Attendance
Date of the Annual General Meeting % attending in person % by proxy
% voting by mail
Total %
29-03-2006 0.124 75.087 0.000 75.211
29-11-2006 0.148 71.507 0.000 71.655
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E.8. Briefly indicate the resolutions adopted by the General Meetings held during the year to which this report refers, and percentage
of votes by which each resolution was adopted.
Resolutions adopted by the General Shareholders’ Meeting held on 29 March 2006.
1. Approval of the Annual Accounts (Annual Report, Balance Sheet and Profit and Loss Account) and the Management Report of Antena 3 de Televisión, S.A. and
its consolidated group of companies, corresponding to year 2005, as formulated by the Board of Directors, and to approve the management of the Board of
Directors of Antena 3 de Televisión, S.A. during fiscal year 2005.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.786% of the capital.
2. Application of profits for 2005: distribution of dividend. Results corresponding to fiscal year 2005 represented a profit of EURO 207,472,000 which will be distri-
buted as follows:
• The sum of EURO 178,594.000 will be allocated to the payment of dividends, of which EURO 63,333,840 that correspond to the interim dividend paid on 23
September 2005 have been already distributed and the remaining EURO 95,556,000 correspond to the maximum amount allocated to the complementary dividend for fiscal year 2005, for an amount of EURO 0.43 per share which will be paid to shareholders on April 26th 2006.
• The remaining sum for a minimum amount of EURO 28,878,000 will be applied to voluntary reserves of the Company.
• The sum distributed as interim dividend plus the amount allocated to complementary dividend constitute the whole dividend for fiscal year 2005. Consequently,
the resolution adopted by the Board of Directors of the Company with respect to the distribution of interim dividends is ratified.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 100% of the capital.
3. Amendment of Company By-Laws: The decision was taken to amend articles 18, 30 and 34 of the By-Laws, which are thereby expressed as follows:
“Article 18.- SUMMONS
General Meetings must be summoned through a notice inserted in the Official Gazette of the Mercantile Registry and in one of the largest newspapers of the
province at least one month before the date fixed for the holding of the meeting, or the term set out by the Law or the By-laws for special circumstances.
The notice will include the date of the meeting in first call and all the matters to be dealt with. If appropriate, the date of the second call can also be included
and such date will be twenty four hours after the date fixed for the first meeting.
However, the Meeting will be considered summoned and validly constituted to discuss any subject provided that the whole capital stock is present and the attendants unanimously accept to hold the Meeting.
Any issues not included in the Agenda cannot be discussed at a General Meeting.
Shareholders who represent at least five percent of the capital stock may request publication of a complement of the summons of the Shareholders’ General
Meeting, including one or more points in the Agenda. This right must be exercised through an official notice that must be received at the official address within
five days after the publication of the summons.
The complement of the summons must be published at least fifteen days before the dated fixed for the holding of the Meeting.
If the complement of the summons is not published within the term legally established, this will entail the nullity of the Meeting.”
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.308% of the capital.
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“Article 30.- TERM OF OFFICE OF THE DIRECTORS
The members of the Board of Directors will hold their office for a term of six years from their respective appointment. The Directors may be re-elected indefinitely.”
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 95.271% of the capital.
“Article 34.- REMUNERATION
The remuneration of the Board will be of a mixed nature consisting of a fixed sum and a variable sum, this latter in the form of allowances for the attendance to
the meetings of the Board and of its Committees.
For each fiscal year and for the fiscal years set out by the Meeting itself, the Shareholders’ General Meeting will decide the amount of the remuneration either
on an individual basis or fixing a maximum aggregate sum for each remuneration item or for both, and will be able to fix a different remuneration for each Director.
Such resolution of the Meeting will be in force as far as it is not expressly amended by the General Meeting itself.
The remuneration as Director set out in this article will be compatible with the remaining professional or work remuneration of the Directors related to whatever
executive or advisory services that they might render to the Company, other than the supervision and decision taking functions as Directors which will be subject
to the applicable legal system.”
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.296% of the capital.
4. Establishing the remunerations of the Company Directors. The remuneration of the Directors will be of a mixed nature, a fixed sum and a variable sum. This latter
will consist of allowances for the attendance to the meetings of the Board and its Committees and the maximum amount will be the one agreed by the Shareholders’ General Meeting held on 29th August 2003.
The fixing of the exact amount of the fixed remuneration of the members of the Board of Directors and the Executive Committee, as well as that corresponding
to allowances for the attendance to each one of the meetings of the different corporate bodies is expressly delegated to the Board of Directors, always respecting
the maximum amounts.
The economic remuneration to be perceived by the Directors, as a whole, will be subject to the following limits:
1. The total of: a) the mixed remuneration perceived by the Directors during each fiscal year, in accordance with the provisions of the two first paragraphs of article
34 of the Corporate By-Laws and as agreed from time to time by the Meeting, plus b) the remuneration perceived in consideration of the professional, mercantile
or work relationships of the members of the Board of Directors, in accordance with the provisions of the third paragraph of article 34 of the Corporate By-Laws,
irrespective of whether they have been granted powers or not, and as a result of any functions performed for the Company (either of a general management,
other managerial, executive, advisory and consulting nature or the rendering of any other services, but different from the supervision and decision functions as
Directors), may not exceed, in aggregate for all the Directors and during each year, the sum of EURO THREE MILLION (€ 3,000,000).
Exceptionally, assuming that the number of meetings of the Board or of its Committees to be held during a given fiscal year, plus the remunerations set out in
point 1.b) above, reach such maximum figure, no allowances for attendances will be paid for the remaining meetings of the Board or its Committees to be held
during such fiscal year.
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2. Additionally, assuming that the contracts governing the relationships referred to in point 1.b) above include clauses or covenants that, as a consequence of an
early or unilateral termination of the contract by the Company, oblige the Company to honour to the other party any indemnities set out in the contract itself, the
total amount of such indemnities cannot exceed, in the context of all such contracts then in force, the sum of EURO THREE MILLION (€ 3,000,000). Said possible
indemnity, if any, will not affect the limit set out in paragraph 1 above.
3. Those remunerations, if any, derived from any incentive schemes or variable remuneration expressly approved by the General Meeting will be considered ex-
cluded from the scope of this agreement.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.996% of the capital.
5. Amendment of the Regulations of the Shareholders’ General Meeting as called for by the new text of article 97 of the Joint Stock Companies Law, and of the
previous adaptation of article 18 of the Corporate By-Laws: Ads (article 9), which was expressed as follows:
“Article 9.- Summons
Unless otherwise stated by the Law, General Meetings must be summoned by the Board of Directors through a notice inserted in the Official Gazette of the
Mercantile Registry and in one of the largest newspapers of the province of the official address of the Company, at least one month before the date fixed for the
holding of the meeting, or the term set out by the Law or the By-Laws for special circumstances.
Notices will include all the requisites set out by the Law, as appropriate, and in any event will indicate the date, the place and the time of the meeting in first
call and all the matters to be dealt with. The notice can also include the date, if appropriate, for the holding of the Meeting in second call which will be at least
twenty four hours after the date fixed for the first meeting.
The Board will try to insert the date foreseen to hold the Meeting in first or second call in the notice.
Any issues not included in the Agenda cannot be discussed at a General Meeting.
Without prejudice to the provisions of this article, as soon as the Board of Directors knows the date foreseen to hold the Meeting, it will notify said date in the
corporate web site of the Company.”
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 100% of the capital.
6. To unanimously ratify in his office the nominee Director for the statutory term of six years from the date of his appointment, Mr. Elmar Heggen, shareholder of
the Company appointed by the Board itself through co-optation at the proposal of the shareholder RTL Group Communications, S.L.U., in the meeting held on 21
December 2005 to fill the existing vacancy as a result of the resignation on that same day of the nominee Director of the same shareholder Mr. Thomas Rabe.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.993% of the capital.
7. To authorize the Company in order to allow it, either directly or through any of its subsidiaries, to acquire shares of Antena 3 de Televisión, S.A., through any legal
means, and to subsequently dispose of or redeem them in accordance with the provisions of article 75 and related ones of the Joint Stock Companies Law.
The system to acquire such treasury shares will be as follows:
• The nominal value of the shares acquired, added to those already in the hands of Antena 3 de Televisión, S.A. and its subsidiaries, should not exceed five percent
of the capital stock.
• To allocate to the liabilities side of the balance sheet of the Company a non available reserve equivalent to the amount of the treasury shares compounded in the
asset side. Such reserve will have to be maintained until such time the shares are disposed of or redeemed.
• The shares acquired should be fully paid up.
• The acquisition price should not be lower than the nominal price or higher than 5% of the average listing price during the month prior to the purchase, and any
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acquisition transactions must be adjusted to the regulations and normal practices of the stock exchange markets.
It is expressly authorized that the shares acquired by the Company or its subsidiaries through this authorization can be allocated, wholly or partially, to the beneficiaries of the loyalty and variable remuneration triennial scheme of the managerial staff of Antena 3 Group approved by the Ordinary General Meeting held on
12th May 2004. It is expressly stated the object of such authorization for the purposes set out in article 75, paragraph 1, of the Joint Stock Companies Law.
The broadest powers are granted to the Board of Directors to make use of the authorization that is the subject matter of this resolution and for its full execution
and development. The Board of Directors is entitled to delegate such powers to the Executive Committee, the Chief Executive Officer or any other person expressly empowered by the Board to that effect and with the faculties considered appropriate.
Such authorization will have a term of 18 months from the date of the holding of this General Meeting and the portion of the powers granted to the Board of
Directors by the Shareholders’ General Meeting held on 9th March 2005, and if not executed, will have no effectiveness.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 100% of the capital.
8. To re-appoint Deloitte, S.L., in accordance with the provisions of article 204 of the Joint Stock Companies Law, and article 153 of the Regulations of the Mercantile
Registry, as auditors to verify the annual accounts of Antena 3 de Televisión, S.A. and its group of consolidated companies during a term of one year, i.e. 2006,
the current fiscal year.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.998% of the capital.
9. Delegation of faculties to execute, construe, and correct the resolutions adopted by the Shareholders’ General Meeting, to delegate the faculties granted to the
Board of Directors by the Meeting, and to grant powers to convert such resolutions into a public deed.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 100% of the capital.
Resolutions adopted by the General Shareholders’ Meeting held on 29 November 2006.
1. To reduce the capital stock of the Company by a sum of Euro 8,333,400, equivalent to 5% of the capital stock, through the amortization of 11,111,200 shares,
with a nominal value of Euro 0.75, owned by the shareholder MACAME, S.A., in accordance with the provisions of article 164.3 of the Joint Stock Companies
Law, subject to the following terms and conditions:
• The object of the reduction, in accordance with article 163.1 of the Joint Stock Companies Law, is to refund the contributions of the shareholder MACAME, S.A.
• The refund price per share will be that obtained by applying a price of Euro 18 per share to such shares.
• The reduction will take place to the charge of profits and free reserves of the Company, in accordance with the provisions of article 167.1.3 of the Joint Stock Companies Law.
To establish reserves for an amount of Euro 8,333,400, equal to the nominal value of the shares to be amortized. Such reserves will only be used subject to the
same requisites as those required for the reduction of the capital stock, in accordance with the provisions of article 167.1.3 of the Joint Stock Companies Law.
The execution of this resolution related to the reduction of the capital stock shall take place before 31st December 2006, at the latest, and such resolution will
have no effect if it has not been implemented on such date.
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By virtue of the above, to amend the wording of article 5 of the Corporate By-Laws, which will literally read as follows:
“The capital stock is fixed at EURO ONE HUNDRED AND FIFTY EIGHT MILLION THREE HUNDRED AND THIRTY FOUR THOUSAND SIX HUNDRED (Euro 158,334,600)
and is represented by a single series of 211,112,800 shares with a nominal value of EURO SEVENTY FIVE CENTS (Euro 0.75) each, registered, fully subscribed and
paid up. The shares will be represented by book entries.”
To delegate the necessary powers in favour of the Board of Directors, with specific faculties to delegate in any of its members and in the Secretary and the Deputy
Secretary of the Board of Directors, so that any of them, jointly and severally, may carry out any formalities necessary for the execution and development of this
resolution, even construing, complementing and rectifying it as far as necessary for its registration with the Mercantile Registry and with any other appropriate
public registry including, without limitation, the following:
i) To refund the shares amortized on the date fixed before 31st December 2006, and to establish the reserve agreed in the second paragraph of this resolution,
including the necessary accounting entries.
ii) To carry out any actions deemed necessary for the execution of this resolution within the scope of the financial markets and, especially, those required to exclu-
de the amortized shares from the listing either before the Society of Management of the Systems of Record, Compensation and Liquidation of Values, S.A. and
its participant entities, the National Securities Market Commission, the Stock Exchanges where the shares are listed or before any other public or private body as
well as the Mercantile Registry.
III) To execute any public or private documents deemed necessary or convenient (including any documents related to the construction, clarification, rectification
of errors and defects), including the publication of the ads legally required, for the proper compliance.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.998% of the capital.
The shareholder MACAME, S.A. has abstained from voting on this resolution. This means that the resolution adopted with the vote in favour of the majority
established for this vote also includes the favourable opinion of the majority of the shares not affected by the reduction.
The second vote, comprising solely the shares affected by the reduction, owned by MACAME, S.A, accounting for 5% of Antena 3 de Televisión’s share capital,
was favourable. Therefore, pursuant to legal provisions in force, the resolution was approved, with the majorities indicated, by the Shareholders’ Meeting, by the
affected shares owned by MACAME, S.A. and by the rest of the unaffected shares.
2. To amend the wording of article 38 of the Corporate By-Laws in order to foresee and expressly authorize the eventual distribution in kind of the corporate net
worth (either through the distribution of dividends or through the refund of contributions in the case of a reduction of capital) which will from now on read as
follows:
“Article 38.- ALLOCATION OF RESULTS
From the profits obtained each year, once the allocation to legal reserves and any other allocations legally established have been covered, the Meeting may apply
the amount deemed appropriate to voluntary reserves, to fund the provision for investments and any other allocations allowed by the Law. The rest, if any, will
be distributed as dividends among the shareholders on a pro rata basis to the capital paid up for each share.
The General Meeting may agree, wholly or partially, the distribution of dividends in kind, always provided that the goods or securities that are the subject matter
of the distribution are homogeneous and accepted to negotiation by an official market at the time of the effectiveness of the resolution related to the distribution; this latter requisite will be also understood as fulfilled when the company offers the appropriate guarantees of liquidity or guarantees the obtaining of such
liquidity within a maximum term of one year. The goods or securities that are the subject matter of the distribution cannot be distributed for a value lower than
the value shown in the balance sheet of the Company.
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The regulation described in the previous paragraph will also be applicable to the refund of contributions in the case of a reduction of the capital stock.
The payment of interim dividends will be subject to the provisions set out by Law.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.994% of the capital.
3. To authorize the Company so that, directly or though any of its subsidiaries, it may acquire shares of Antena 3 de Televisión, S.A., through any means accepted by
the Law, either in the market or through direct purchases, and to dispose of or subsequently distribute them in accordance with article 75 and other concordant
ones of the Joint Stock Companies Law.
The conditions for the acquisition of such shares will be the following:
• That the nominal value of the shares acquired, plus those already owned by Antena 3 de Televisión, S.A. and its subsidiaries, does not exceed five percent of the
capital stock.
• That in the liabilities side of the balance sheet of the Company a non available reserve may be allocated equivalent to the amount of the own shares compounded
in the assets side. This reserve will have to be maintained as long as the shares are not disposed of or amortized.
• That the shares acquired are fully paid up; and
• That the acquisition price is not lower than the nominal one or higher than Euro 18, and the purchase operations must abide by the rules and customs of the
stock markets.
The Company is expressly authorized to purchase up to a maximum of 11,111,200 own shares, that represent 5% of the capital stock, from the shareholder Banco Santander Central Hispano, S.A. and/or its subsidiary Macame, S.A., paying for them a price of Euro 18 per share, and to dispose of them through any means
accepted by the Law or to distribute them, wholly or partially, among the shareholders of the Company, subject to the prior approval of the General Meeting,
and all in accordance with the provisions of article 75 and concordant ones of the Joint Stock Companies Law and article 38 of the Corporate By-Laws.
The Board of Directors has been granted the broadest powers to use the authorization that is the subject matter of this resolution and to fully execute and implement it, with powers to delegate such faculties in favour of the Managing Committee, the Chief Executive Officer or any other person expressly empowered
by the Board to that effect, as far as deemed appropriate.
This authorization will have a term of 18 months from the date of holding of this General Meeting, and, as far as not executed, the authorization granted to the
Board of Directors by the Shareholders Ordinary General Meeting held on 29th March 2006 will have no effect.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 86.022% of the capital.
4. To approve a distribution of extraordinary dividends, to the charge of the freely available reserves, through the delivery, to the shareholders, of treasury shares repre-
senting the capital stock of the Company, at a ratio of one share per each 48 shares hold by them with a right to participate in such distribution. The distribution
will consist of a maximum of 4,166,700 own shares of the Company, equivalent to a ratio of 1 share per each 48 shares with a right to dividends. The fiscal income
or payment, if any, established by the tax legislation in force will be an additional part of such dividend and for the account of Antena 3 de Televisión, S.A.
The right to perceive the distribution of extraordinary dividends to the charge of the freely available reserves, as set out in the previous paragraph, will accrue in
favour, according to the Spanish legislation, of those who are shareholders of the Company at the end of 14th December 2006 and, consequently, those who
have purchased their shares from the Company until that date inclusive will be entitled to receive such dividend and those who until that date inclusive have sold
their shares of the Company will not be entitled to such right.
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In order to facilitate the appropriate execution of the operation, the financial entity appointed to that effect by the Board of Directors (the “Agent”) will have
to co-ordinate and execute with Iberclear and its Participant Entities, the necessary or merely convenient formalities and operations to instrument the payment
through the distribution of own shares of the Company to which this resolution refers, all in accordance with the procedure and the terms and conditions set out
in it, as well as those that the Board of Directors might develop, if any.
Without prejudice to the above, it is agreed to establish a mechanism aimed at facilitating the execution of the operation to which this resolution refers in connection with those shareholders who are the holders of a number of shares that is not a multiple of 48, in accordance with the following terms and conditions:
1) The Company will make available to the Agent the total number of own shares to be distributed in accordance with the provisions of this resolution.
2) The Agent, acting in the name and for the account of the Company, will deliver to the entitled shareholders of the Company the relevant full number of shares
of the Company subject to an exact swap ratio of 1 share per each 48 shares held by the shareholder.
3) In the context of those shareholders of the Company who are holders of a number of shares that exceeds a multiple of 48 or that do not reach such figure
of 48 (the shares that, in the first case, constitute such excess or, in the second case, do not reach 48, will be called “Excess Shares”) and considering that for
such Excess Shares they will not be entitled to receive a share of the Company but fractions of share, the Agent will pay in cash the amount equivalent to such
fractions of share of the Company that would have to be delivered to such shareholders in connection with such Excess Shares (the “Compensation for Excess
Shares”). The Agent will hold the aggregate number of own shares delivered by the Company that would have had to be distributed to such Excess Shares, and
may dispose of them once the operation has been concluded.
4) The value of the Compensation for Excess Shares will be determined on the basis of the weighted arithmetic mean of the shares of the Company in the Stock
Exchange Interconnection System (Continuous Market) in the three stock exchange business days prior to the date of distribution of the dividend (i.e. 14th December 2006) (the “Arithmetic Mean”). This way, and considering that the number of Excess Shares to be held by each shareholder, if any, will range between a
minimum of 1 and a maximum of 47, the value of the Compensation for Excess Shares to be delivered to each shareholder will be the result of multiplying the
number of Excess Shares of such shareholders by the Arithmetic Mean and of dividing the result by 48, rounded upwards or downwards to the nearest cent. Any
fees or expenses that, in accordance with and in fulfilment of the legislation in force, could charge the entities that participate in Iberclear or the depositors in
connection with the operation will be for the account of the shareholder.
After the execution by Iberclear of the settlement operations that are customary in this type of transactions, the delivery of the shares and of the Compensation
for Excess Shares that might correspond will take place within five stock exchange business days from 14 December 2006.
The broadest faculties are expressly conferred to the Board of Directors (being the Board of Directors authorized to, in turn, sub-delegate such powers in favour
of the Managing Committee, the Chief Executive Officer or any other person expressly empowered by the Board of Directors) to execute this resolution, including among them the development of the procedure foreseen and until its eventual amendment for legal, tax or operating reasons, and to carry out any actions
necessary or convenient for the execution of any formalities required for the proper completion of the operation.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.997% of the capital.
5. Delegation of powers to the Board of Directors to execute, construe and rectify the resolutions adopted by the Shareholders General Meeting, as well as to de-
legate the powers granted by the Meeting to the Board of Directors, and to grant faculties to convert such resolutions into a public deed.
Approved with a vote of shareholders attending the meeting in person or by proxy who represented 99.998% of the capital.
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E.9. Indicate, if appropriate, the number of shares necessary for attending the Annual General Meeting and whether the bylaws stipulate any restrictions in this connection.
Shareholders who own shares representing at least a par value of €300 (currently 400 shares) and have them registered in their name in the relevant book entry
register at least five days prior to the date on which the Annual General Meeting is to be held, may attend the Meeting.
The By-Laws stipulate no other requirement for attending the Annual General Meeting.
E.10. Indicate and support the company’s policies on the delegation of votes at the Annual General Meeting.
Shareholders entitled to attend the Annual General Meeting are sent a card on which to delegate their vote at the Meeting.
The call notice contains the instructions for shareholders wishing to delegate their vote, cast it absentee or group their shares together.
Vote fractioning is admitted so that the financial intermediaries who appear authorised as shareholders, but who act on behalf of different clients, may issue their
votes as per the instructions of said clients.
E.11. Indicate whether the Company is aware of the policy of the institutional investors regarding whether or not to participate in the
Company’s decisions:
YES
NO
X
Describe the policy
E.12. Indicate the address and the way to access the information on corporate governance on your website.
The Company’s website is antena3tv.es and the website includes a specific page called “Information for Shareholders and Investors”.
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F. DEGREE OF COMPLIANCE WITH GOOD GOVERNANCE RECOMMENDATIONS
Indicate the degree of the Company’s compliance with existing corporate governance recommendations or, as the case may be, any failure to follow those
recommendations.
If any recommendations are not complied with, explain the recommendations, rules, practices or guidelines applied by the Company.
Until the single document referred to in ORDER ECO/3722/2003 of 26 December is prepared, the recommendations set forth in the Olivencia Report and the
Aldama Report should be taken as a reference when completing this section.
The Olivencia Report sets forth a total of 23 recommendations, the contents of which are incorporated into the Board Regulations, the only exception being the
maximum age limit on those holding the office of Director. Nonetheless, none of the Board members are older than 75 years of age, which is the age established as
a reference.
The recommendations of the Aldama Report were also considered when preparing the current self-regulation texts which include: the By-Laws, the Board
Regulations, the Annual General Meeting Regulations and the Internal Rules of Conduct on Matters Relating to Securities Markets.
As far as the Corporate Governance Single Document of Recommendations (approved by the Board of the Securities Market Commission on 22 May 2006) is
concerned, the Company is analysing the improvements which need to be implemented, taking into account that this resolution fixed the 2007 Annual Corporate
Governance Report – which must be submitted in the first half of 2008 – as a time frame for listed companies.
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G. OTHER INFORMATION OF INTEREST
If you deem there to be any significant principle or aspect relating to the Good Governance practices applied by your company, which has not been dealt with
in this report, please mention it below and explain its content.
This section may include any other information, clarification or specification relating to the foregoing sections of this report, provided that it is significant and
not repetitive.
In particular, indicate whether the company is subject to legislation other than Spanish legislation on matters of corporate governance and, if so, include any
information it is obliged to supply other than that which is required in this report.
As reported to the National Securities Market Commission on 12 May 2004, the Annual General Meeting of the Company held on that same date approved the
three-year variable compensation plan and loyalty bonus for the managers of the Antena 3 Group.
With a view to enforcing this decision of the Annual General Meeting, after obtaining the opinion of the Appointments and Compensation Committee and following
the adoption of the pertinent resolutions by the appropriate governing bodies, a preliminary application of the plan, which was reported to the National Securities
Market Commission on 4 January 2005, was put into place this year, targeted at two groups of directors and managers who were included in the relevant categories,
for each of which uniform conditions were established.
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The significant aspects relating to the execution of this plan as of 31 December 2006 were as follows:
1 Beneficiaries of the plan. A total of 31 beneficiaries, all belonging to the two categories established in the plan, i.e., managers and professionals related to the
Antena 3 Group under an employment contract or a contract for services (whether or not directors). At 31 December 2006 there were a total of 27 beneficiaries
at Antena 3 de Televisión, S.A.
2 Aggregate amount of the plan: the execution of the plan at 2006 year-end was equal to 86.0% of the maximum possible incentive approved by the Annual
General Meeting, which percentage derives from the sum of:
a. 1.72% of the result of multiplying the difference between EUR 120,000,000 and the consolidated EBITDA of the Antena 3 Group at 31 December 2006,
according to the audited financial statements, multiplied by 11.6. The maximum approved by the Annual General Meeting for this item is 2%.
b. 0.860% of the difference between EUR 1,392,000,000 and the average price of the Company on the Stock Market during the month of December 2006, up
to a maximum of EUR 2,000,000,000. The maximum approved by the Annual General Meeting for this item is 1%.
3 Ways to apply the plan to the different groups:
a. Through 10 July 2009: Group with mixed variable compensation, which includes the payment of 30% of the total in July 2007 and the remaining 70% in July
2009. This group includes a total of 13 beneficiaries, 10 of which are at Antena 3 de Televisión, S.A., and the amount allocated is equal to 75% of the aforesaid
86%.
b. Through 10 July 2007: Group with only variable cash compensation. This group includes a total of 18 beneficiaries, 17 of which are at Antena 3 de Televisión,
S.A., and the amount allocated is equal to 11% of the aforesaid 86%.
The total liabilities accruing to date, derived from the best estimates of the cost of this plan, are equal to EUR 56,935,000 and it has been calculated considering the
permanency in the Group of the beneficiaries until the end of the plan in June, 2007 or June, 2009, according to the cases.
This annual corporate governance report was approved by the Company’s Board of Directors at its meeting held on 28 February 2007
ANTENA 3 TELEVISION
ANTENA 3 TELEVISION
AV. ISLA GRACIOSA, 13
SAN SEBASTIÁN DE LOS REYES
MADRID . SPAIN
2006 ANNUAL REPORT
2006 ANNUAL REPORT
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