IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 The analysis of impairment of goodwill associated with the travel operation in Spain took into account Management’s best estimates regarding the outcome of the pro- cess with AENA, which means, the variability of minimum annual rents due to the recovery of traffic, and introduced the discount rate to uncertainty that may be as- sociated with it. Simulating a hypothetical scenario of the rents payable being those of the original contracts, that is, without any modification of the rents due to the profound changes in traffic, the amount of the impairment to be recognized on the goodwill associated with the travel operation in Spain would be a total loss, as well as an impairment on tangible and intangible non-transferable fixed assets could have to be recognized, which amount to approximately 9 million Euros at 31 December 2020. It should also be noted that on 31 December 2020 the value of the right of use recognized in the consolidated balance sheet associated with these contracts is 152 million Euros and the lease liability is 196 million Euros. If we consider the last income reduction proposal for 2020 and 2021 presented by AENA as described in Note 1, the amount of the loss of goodwill to be recognized could also be total. In addition, we have not identified any additional risks arising from greater volatility in the medium term projections of business evolution with the exception of the travel business in Spain, as described above. Other Assets - Brands, Industrial Property and Other Intangible Assets In the remaining intangible assets, with a defined useful life, the impairment tests performed revealed that the recoverable amount is higher. Valuations were made based on the value in use calculated based on the Discounted Cash Flow (DCF) method and according to the Royalty Relief methodology, de- pending on the type of asset supporting the recoverability of its values. The values reached are sustained by historical performance, expectations of market development and strategic development plans for each business. Industrial property includes: space exploitation rights (entrance rights or surface rights), trademark exploitation rights and concession rights. The group’s main operating rights relate to the franchise rights paid to international brands at the opening of the restaurants operating under the brand: 20 years for Burger King and 10 years for Pizza Hut and KFC, which are renewable by others 10 years by option of the franchisee. On 31 December 2020, the group’s concessions, territorial rights and related life cy- cle are shown below: 359