REG - ITV PLC - Preliminary Results - year ended 31 December 2015 <Origin Href="QuoteRef">ITV.L</Origin> - Part 1

ITVAnnouncement

02/03/2016 07:11

RNS Number : 7134Q
ITV PLC
02 March 2016
Delivering strong growth and building scale
Full year results for the year ended 31st December 2015
Revenue growth across all parts of the business
 Total external revenue up 15% at 2,972m (2014: 2,590m)
 6% growth in Net Advertising Revenue to 1,719m (2014: 1,629m)
 Online, Pay & Interactive up 23% to 188m (2014: 153m)
 Total ITV Studios revenue up 33% to 1,237m (2014: 933m)
 25% growth in Non-NAR to 1,664m (2014: 1,327m)
Sixth consecutive year of double digit profit growth
 Adjusted EBITA up 18% to 865m (2014: 730m)
 Broadcast & Online adjusted EBITA up 16% to 659m (2014: 568m)
 Studios adjusted EBITA up 27% to 206m (2014: 162m)
 Adjusted PBT up 18% to 843m (2014: 712m)
 Adjusted EPS up 20% to 16.5p (2014: 13.8p)
Strong cash flows funding investment and increased shareholder returns
 International content business strengthened by further acquisitions including Talpa Media, Twofour Group and MammothScreen
 Given our strong performance the Board is proposing a final dividend of 4.1p, giving a full year dividend of 6.0p per share, aheadof our previous guidance
 Reflecting ITV's strong cash generation and the Board's confidence in the business, it is also proposing a 10.0p special dividend, equivalent to 400m
Positive outlook for 2016
 Expect another good year in 2016 with continued revenue growth across both businesses
 Over the full year we expect to outperform the television advertising market
 Euros football will impact phasing of ITV Family NAR, with Q1 flat while Q2 should be positive
 Online, Pay & Interactive will again deliver double-digit revenue growth
 ITV Studios will deliver double-digit revenue and profit growth, driven primarily by recent acquisitions
 We continue to see opportunities to invest across the business, organically and through acquisitions
Adam Crozier, ITV plc Chief Executive, said:
"ITV delivered another strong year as we continue to grow and strengthen the business in the UK and internationally. Revenues were up 15% to just under 3bn and for the sixth consecutive year we achieved double digit profit growth, as adjusted EBITA grew 18% to 865m, with all parts of the business performing well.
Our Broadcast and Online business remains strong with advertising revenue up 6% and Online, Pay & Interactive up 23%. While our Family Share of Viewing was down 3% for 2015 we have started this year well with SOV on our main channel up 5% and ITV Family SOV up 2%. We have a strong programme slate for 2016, with 50 hours more drama as well as major rugby and football tournaments. ITV uniquely delivers the mass audiences demanded by advertisers. Continuing to deliver this scale and reach, as well as further strengthening our onscreen performance, remains a key focus for the company and particularly for the new creative leadership in the Broadcast business.
ITV Studios continues to perform strongly both organically and from our recent acquisitions, particularly Talpa. Through our ongoing investment ITV Studios has become a global production business with total revenue up 33% to 1.2bn and with 53% ofrevenues now coming from outside the UK.
We have a very strong international pipeline of new and returning drama including Victoria, Tutankhamun, Houdini and Doyle, Cold Feet, Poldark, Shetland, Aquarius, Endeavour and Vera as well as entertainment formats The Voice, The Voice Kids, Dance Dance Dance, I'm a Celebrity Get Me Out Of Here!, The Chase, Hell's Kitchen and Saturday Night Takeaway. ITVS has already secured a higher proportion of 2016 revenue at this point in the year than in previous years and our good drama slate gives us confidence into 2017.
We'll continue to build scale and to capitalise on the strong demand for high quality content that travels, with a particular focus on investing in creative talent and scripted projects, and working with more channels and platforms in the UK and internationally.
In November we launched the ITV Hub, which is now the digital home for all our channels and services both live and on demand, with live viewing at centre stage. The Hub, which is available on 27 platforms, marks a major step forward in the quality, innovation and ease of use of ITV's online service and has had a really encouraging start. Online demand for our content is growing strongly with people spending 42% more time watching ITV online in 2015 than the previous year. Overall, our Online, Pay & Interactive business is rapidly growing and profitable and is on track to deliver double-digit revenue growth again in 2016.
We will continue to build our expertise in digital media to drive closer engagement with online audiences, develop more targeted and innovative advertising with new initiatives including AdSync+ and ITV AdVentures, and maximise our ability to monetise our content online as well as on pay channels.
For this year we anticipate that the phasing of our television advertising will be very different to 2015 due to the timing of major sporting events. We expect ITV NAR to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive. For the full year we again expect to outperform our estimate of the TV ad market.
ITV's strong performance in 2015 builds on the consistently good results we have delivered since we launched our strategy six years ago. Given these results the Board has proposed a final dividend of 4.1p bringing the full year dividend to 6.0p, up 28%, which is ahead of previous guidance.
As we look to 2016 and beyond we see further significant opportunities for growth across the company organically and through acquisitions and partnerships. Reflecting ITV's ongoing strength and confidence for future growth the Board is proposing a 400m special dividend, equivalent to 10.0p per share. Our strong cash generation and robust financial position gives us the flexibility to invest in growing the business while at the same time delivering returns to our shareholders."
Full year results
Twelve months to 31 December - on an adjusted basis
2015
m
2014
m
Change
m
Change
%
Broadcast & Online revenue
2,146
2,023
123
6
ITV Studios revenue
1,237
933
304
33
Total revenue
3,383
2,956
427
14
Internal supply
(411)
(366)
(45)
(12)
Group external revenue
2,972
2,590
382
15
Broadcast & Online EBITA
659
568
91
16
ITV Studios EBITA
206
162
44
27
EBITA
865
730
135
18
Group EBITA margin
29%
28%
-
-
Profit before tax
843
712
131
18
EPS
16.5p
13.8p
2.7p
20
Ordinary dividend per share
6.0p
4.7p
1.3p
28
Special dividend per share
10.0p
6.25p
-
-

Management look at adjusted results as they reflect the way the business is managed and measured on a day-to-day basis. Adjusted EBITA is before exceptional items and includes the benefit of production tax credits ('adjusted EBITA'). Adjusted profit before tax and EPS primarily remove the effect of amortisation of intangible assets acquired through business combinations and acquisition related costs. A full reconciliation between the adjusted and statutory results is provided in the financial review.
The statutory profit before tax and EPS from the Consolidated Income Statement are as follows:
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
Profit before tax
641
605
36
6
EPS
12.4p
11.6p
0.8p
7
Diluted EPS
12.3p
11.5p
0.8p
7

Statutory EPS grew 7% to 12.4p (2014: 11.6p), which is at a slower rate than adjusted EPS primarily because operating exceptionalitems of 109 million were significantly higher than in 2014. This is as a result of the treatment of employment linked consideration for our acquisitions, primarily for Talpa, which is included within statutory EPS, but excluded from adjusted EPS as in our view these costs are part of capital consideration.
Financial performance
We delivered another strong performance in 2015, with revenue growth across the group as we continue to strengthen the business creatively, commercially and financially. Group external revenues increased 15% to 2,972 million (2014: 2,590 million), reflecting 6% growth in NAR to 1,719 million (2014: 1,629 million) and over 300 million increase in non-NAR to 1,664 million (2014: 1,327 million), up 25%. Broadcast & Online revenues grew 6% to 2,146 million (2014: 2,023 million) and ITV Studios total revenues grew 33% to 1,237 million (2014: 933 million).
Together with our continued focus on cash and costs we delivered another year of double digit profit growth with total adjusted EBITA up 18% to 865 million (2014: 730 million), corresponding to an improved adjusted EBITA margin of 29% (2014: 28%). Adjusted EPS in the year increased 20% to 16.5p (2014: 13.8p) and statutory EPS increased 7% to 12.4p (2014: 11.6p).
The business remains highly cash generative and profit to cash conversion was 91%, even after increased investment in our scripted business. Free cash flow was up 18% to 562 million. We ended the year with net debt of 319 million (2014: net cash 41million) after acquisitions of 406 million (net of cash acquired) including Talpa Media, dividend payments of 459 million and pension deficit contributions of 90 million. At 31st December our reported net debt to adjusted EBITDA was 0.4x.
Reflecting ITV's strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. Thisequates to a full year dividend of 6.0p, up 28%, which is well ahead of earnings growth.
Broadcast & Online
Broadcast & Online delivered another strong performance, with total revenue up 6% to 2,146 million (2014: 2,023 million) driven by 6% growth in NAR and 23% growth in Online, Pay & Interactive.
There was continued good growth across all the major advertising categories and as expected the phasing of UK television advertising was different in 2015 reflecting the timing of major sporting events. Over the full year we increased our estimated share of broadcast to 46.1% (2014: 45.9%) as we once again outperformed our estimate of the UK television advertising market. Itis becoming increasingly difficult to measure the pure spot advertising market as all broadcasters use different definitions, which may include additional sources of revenue such as sponsorship and VOD in their estimates of television advertising.
ITV Family SOV declined 3% in 2015. This reflects a 4% decline in the ITV main channel SOV which was impacted by more competition from the launch of new digital channels in the year, some of our shows not performing as well as we had expected and the relatively strong performance of the BBC. Going forward we remain focused on strengthening our viewing performance and continuing to deliver mass audiences.
Online, Pay & Interactive revenue continued to show strong growth, up 23% to 188 million (2014: 153 million) reflecting further growth in both our online advertising and pay businesses. In November we successfully launched the ITV Hub, the new digital home for our online services, which has had a very encouraging start. Audience demand for VOD continues to grow strongly which helped drive a 14% increase in long form video requests and 42% increase in consumption. There remains strong demand for online advertising which helped drive significant growth in Online revenue. We continue to develop our pay services with Pay revenue benefitting from a full twelve months of revenue from ITV Encore and strong demand for ITV video on demand services.
Schedule costs were up 3% predominantly due to the full year costs of ITVBe and ITV Encore. We maintain a tight control on costs and aim to continue to deliver savings to mitigate inflationary pressure.
Overall Broadcast & Online adjusted EBITA was up 16% to 659 million (2014: 568 million). The continued growth in our highly geared advertising revenue, together with high margin revenue growth in Online, Pay & Interactive, resulted in the adjusted EBITA margin increasing 3% to 31% (2014: 28%).
On 29th February 2016, ITV completed its acquisition of 100% of UTV Ltd, which owns the televisions assets of UTV Plc, for 100million. This will further strengthen ITV's free to air business and enable it to run a more efficient network.
ITV Studios
ITV Studios total revenue grew strongly in 2015, exceeding 1 billion for the first time as we continue to build scale in creative content markets and strengthen our international portfolio of programmes that return and travel. ITV Studios is becoming increasingly international with 53% of ITV Studios total revenue in the year generated outside the UK (2014: 47%).
Total organic revenue, which excludes our current and prior year acquisitions as well as foreign exchange movements, was up 8%with growth across the business and a particularly strong performance from ITV America and Global Entertainment. Our acquisitions continue to come through, with twelve months of Leftfield Entertainment and Talpa Media from 30 April 2015. Theforeign exchange impact was immaterial in the year as the stronger US dollar was offset by our greater exposure to a weakening Euro following the Talpa acquisition.
Studios UK revenue was up 19% to 547 million (2014: 459 million) reflecting 13% growth in internal revenue and 39% growth in external revenue. Organic revenue was up 5%.
ITV America grew strongly in 2015, with revenue up 36% to 320 million (2014: 235 million) as we benefitted from good organic growth, up 15% driven by the delivery of our three US dramas, Best Time Ever and two series of Hell's Kitchen USA, as well as the first full year of Leftfield Entertainment, acquired in May 2014.
Studios Rest of World (RoW) also showed strong growth, up 124% to 213 million (2014: 95 million), with organic revenue up 4%. We have benefitted from Talpa Media which we acquired on 30 April 2015, significantly strengthening our position as a leading international producer.
Global Entertainment revenue increased 9% in the year to 157 million (2014: 144 million). Revenue growth was supported by our strong programme slate including new titles Poldark and Schitt's Creek, as well as US drama Aquarius and the launch of Thunderbirds Are Go!
Overall, we have delivered many creative successes in the year, including two of our US dramas - Aquarius and The Good Witch - being recommissioned. Due to the nature of our business, not all our programmes will return for another series in 2016 but we have a strong portfolio of programmes and formats to distribute internationally and we will continue to invest in our creative pipeline to build upon this.
Reflecting the strong revenue growth across ITV Studios, adjusted EBITA increased 27% to 206 million (2014: 162 million).
Acquisitions
We made a number of acquisitions in 2015. In April we completed the acquisition of Talpa Media in the Netherlands, the creator ofworldwide entertainment formats, including The Voice, The Voice Kids, I Love My Country, Dating In The Dark and Dance Dance Dance. We paid an initial cash consideration of 500 million (362 million) for 100% of Talpa's fully diluted share capital with further payments dependent on Talpa's future performance as well as John de Mol's continued commitment to the business during this time. The total maximum consideration, including the initial payment, is 1.1 billion which is contingent on Talpa continuing to deliver significant profit growth to 2022.
In the UK we made a number of smaller acquisitions. In May we acquired the remaining 75% of Mammoth Screen, one of the UK'sleading scripted production companies, whose successful slate of high end drama includes Poldark, Endeavour and the forthcoming Victoria. In June we completed the acquisition of Boom Supervisory Limited, the holding company of UK based Twofour Group which produces factual entertainment and drama programmes. Also in June we acquired a new label, Cats on the Roof Media which owns a number of creative labels focused on developing entertainment and scripted comedy programmes.
In December Brent Montgomery, the founder of Leftfield, became CEO of ITV America and in order to facilitate the integration ofLeftfield within the US business we acquired the outstanding 20% which we did not own.
The cash cost of all of these acquisitions was 406 million (net of cash acquired).
EPS
Adjusted profit before tax, after financing costs, was up 18% at 843 million (2014: 712 million). The total adjusted tax charge for 2015 was 177 million (2014: 151 million), corresponding to an effective tax rate on adjusted PBT of 21% (2014: 21%) which is broadly in line with the standard UK corporation tax rate of 20.25% (2014: 21.5%).
Overall, adjusted profit after tax was up 19% at 666 million (2014: 561 million). After non-controlling interests of 7 million (2014: 7 million), adjusted basic earnings per share was 16.5p (2014: 13.8p), up 20%.
Statutory EPS is adjusted to reflect the underlying performance of the business providing a more meaningful comparison of how the business is managed and measured on a day-to-day basis. Adjustments include: all operating and non-operating exceptional items primarily acquisition-related costs such as employment linked consideration and professional fees for due diligence; impairment of intangible assets; amortisation of intangible assets acquired through business combinations including formats and customer contracts; net financing cost adjustments; and tax adjustments relating to these items. Amortisation of intangible assets that are required to run our business, including software licences, is not adjusted for. The most significant adjustment relates to the treatment of employment linked consideration for Talpa.
Balance sheet and cash flow
ITV remains highly cash generative reflecting our continued focus on cash and costs. In the period we generated 788 million (2014: 665 million) of cash from adjusted EBITA of 865 million (2014: 730 million), which equates to a strong profit to cash ratio of 91%. This ratio has remained the same despite our increased investment in scripted content and demonstrates our continued disciplined approach.
After payments for interest, tax and pension funding, our free cash flow also remained strong in the period, up 18% to 562million (2014: 478 million). Overall, after dividends, acquisitions and debt repayments we ended the year with net debt of319 million, compared to net debt of 540 million at 30 June 2015 and 41 million net cash at 31 December 2014.
We have a 525 million Revolving Credit Facility in place until 2019 provided by a number of core relationship banks. We also have a 175 million bilateral financing facility and a 75 million invoice discounting facility, both of which are free of financial covenants. At 31 December 2015 these facilities were all undrawn.
In 2015, to fund the acquisition of Talpa Media, we entered into a 12 month 500 million bridge loan facility provided by five of our relationship banks. This was repaid and cancelled in September 2015 when we issued a seven-year 600 million Eurobond at a fixed coupon of 2.125%. The bond will mature on 21 September 2022. The proceeds from the bond were also used to fund the maturing 78 million Eurobond in October 2015.
As we enter the next phase of our strategy our balance sheet strength together with our continued strong free cash flow will enable us to invest in opportunities to grow the business and enhance shareholder value. To preserve our financial flexibility, our policy is to maintain at least 250 million of available liquidity at any point.
Our objective is to run an efficient balance sheet, and to balance investment for further growth with attractive returns to shareholders. Over time we will continue to look to increase our balance sheet leverage and we believe maintaining leverage below 1.5x reported net debt to adjusted EBITDA will optimise our cost of capital, allow us to sustain a progressive dividend policy and enable us to retain flexibility to continue to invest for further growth. As at 31 December 2015 reported net debt to adjusted EBITDA was 0.4x.
Dividend per share
The Board has committed to growing the full year ordinary dividend by at least 20% per annum for three years to 2016, by which time we will achieve a dividend cover of between 2.0 and 2.5x adjusted earnings per share. Reflecting ITV's strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. This equates to a full year dividend of 6.0p, up 28%, which is well ahead of earnings growth and is a significant step forward in taking ITV's dividend cover closer to its policy range.
The Board is also proposing a 10.0p special dividend, worth just over 400 million, which comes after a year of significant investment and reflects ITV's strong cash generation and the Board's confidence in the business. Adjusted for this special distribution ITV's pro forma leverage would be 0.8x reported net debt to EBITDA, which provides flexibility to continue to invest in the business for further growth.
Pension
The aggregate IAS 19 deficit of the defined benefit scheme at 31 December 2015 was 176 million (31 December 2014: 346 million). The reduction reflects lower pension liabilities as a result of rising bond yields over the year, deficit funding contributions of 90 million and the difference between the actual inflation experienced in the period compared to the expected rate. Pensions continue to be paid from the Scheme based on actual requirements.
The last actuarial valuation was undertaken in 2014. On the basis adopted by the Trustee, the combined deficits as at 1 January 2014 amounted to 540 million.
Following completion of the actuarial valuations, the Group has agreed to make deficit funding contributions in order to eliminate the deficits in each section. From 2016 ITV will pay deficit funding contributions of around 80 million, a 10 million reduction on 2015. Going forward these payments will be paid more evenly throughout the year.
2016 full year planning assumptions (including UTV)
 Total network programme budget is expected to be around 1,050 million, weighted to the first half due to the timing of sport, including the Euro Football Championship
 Adjusted interest is expected to be around 25 million, reflecting a full year of the 600 million Eurobond
 Adjusted effective tax rate is expected to be similar to 2015
 Capex is expected to be 50 to 55 million
 Profit to cash conversion is expected to be around 85-90%, reflecting our continued strong cash generation and investment inscripted content
 Total pension deficit funding will be 80 million and will be paid more evenly over the year
 Ordinary dividend will move in line with our cover policy of 2 to 2.5x adjusted EPS
 The translation impact of foreign exchange if rates stay as they currently are, could be 50 million more revenue and 9 million more profit
 Exceptional items are expected to be around 110 million in 2016, again as a result of the treatment of employment linked consideration for our acquisitions which is included within statutory EPS, but excluded from adjusted EPS as in our view it is part of capital consideration
Outlook
We expect to deliver another good performance in 2016 with continued revenue growth across both businesses.
Over the full year we expect to outperform our estimate of the television advertising market but the shape of the market is expected to be different in 2016, driven by the timing of major sporting events. ITV Family NAR is expected to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive.
We remain focused on strengthening our viewing performance and we have started 2016 well, with ITV SOV up 5% and ITV Family SOV up 2%. Online, Pay & Interactive will deliver double-digit revenue growth, driven particularly by Online and Pay as we continue to invest in the ITV Hub and further develop our international pay model. ITV Studios is on track to report double-digital revenue and profit growth, primarily driven by our recent acquisitions.
Overall, we see clear opportunities for investment in all parts of the business, and because of our strong financial position and cash conversion, we are confident in delivering both continued growth and shareholder returns.
Notes to editors
1. Unless otherwise stated, all financial figures refer to the 12 month period ended 31 December 2015, with growth compared to the same period in 2014.
2. Group external revenue
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
ITV Family NAR
1,719
1,629
90
6
Non-NAR revenue
1,664
1,327
337
25
Internal Supply
(411)
(366)
45
12
Group external revenue
2,972
2,590
382
15
3. ITV Family NAR is expected to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which will benefit from the Euros, should be positive. January was down 1%, February down 4%, March up around 5% and April down around 5%. This revenue is pure NAR, excluding the benefit of sponsorship and online revenue. From March 2016, ITV Family NAR includes advertising revenue from the UTV Channel 3 licence. For the full year we again expect to outperform our estimate of the TV advertising market.
4. Broadcast & Online performance indicators
Twelve months to 31 December
2015
2014
Change %
ITV Family SOV
21.2
22.0
(3)
ITV SOV
15.0
15.6
(4)
ITV Family SOCI
34.9
36.2
(4)
ITV SOCI
24.0
25.0
(4)
ITV adult impacts
210bn
220bn
(4)
Total long form video requests (all platforms)
828m
726m
14

SOV data based on BARB/AdvantEdge data and Share of Commercial Impacts (SOCI) data based on BARB/DDS data. SOV data is for individuals and SOCI data is for adults. ITV Family includes: ITV, ITV2, ITV3, ITV4, ITV Encore, ITVBe, CITV, ITV Breakfast, CITV Breakfast and associated "HD" and "+1" channels.
% change is calculated on unrounded SOV and SOCI figures. Total long form video requests across all platforms are based on data from ComScore Digital Analytix, Virgin, BT, iTunes, Amazon Prime Instant Video, Netflix, Sky and Hospedia and include simulcast.
5. The 2015 final and special dividend will be paid on 27 May 2016. The ex-dividend date is 28 April 2016 and the record date is 29April 2016.
6. This announcement contains certain statements that are or may be forward looking with respect to the financial condition, results or operations and business of ITV. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements. These factors include, but are not limited to (i) a major deterioration in the current outlook for UK advertising and consumer demand, (ii) significant change in regulation or legislation, (iii) failure to identify and obtain, or significant loss of, optimal programme rights, and (iv) the loss or failure of transmission facilities or core systems and (v) a significant change in demand for global content.
Undue reliance should not be placed on forward looking statements which speak only as of the date of this document. TheGroupaccepts no obligation to revise publicly or update these forward looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.
For further enquiries please contact:
Investor Relations
Pippa Foulds +44 20 7157 6555 or +44 7778 031097
Media Relations
Mary Fagan +44 20 7157 3965 or +44 7736 786448
Mike Large +44 20 7157 3021 or +44 7768 261528
Strategy and Operations
Chief Executive's Review
In 2015 ITV delivered another strongperformance as we continue to strengthen and grow the business.
We achieved good revenue growth across all parts of the business, with external revenue up 15%, and for the sixth consecutive year we delivered double-digit growth in our key profitmeasures.
ITV's performance in 2015 builds onourconsistent record of strong results since we launched our strategy six years ago. Since 2009 we have increased Group external revenues by 58%, adjusted EBITA by 328%, adjusted earnings per share (EPS) by over 800% and basic EPS by over 400%. We have improved our cash position by turning this profit into cash, which has allowed us to significantly invest in the business while at the sametime returning over 1.1 billion toshareholders to date, withmore proposed for 2016. We will also maintain financial flexibility to continueto invest in the business.
ITV today is a demonstrably better business creatively, commercially and financially. We've made significant progress in reducing our dependence on UK spot advertising and in growing new revenue streams. In 2015, 49% of ITV's total revenues came from sources other than traditional spot advertising.
Our global production business, ITV Studios, continues to grow in the UK andinternationally, both organically andthrough acquisitions in key creative markets, and is now a global player ofscale with over half of its revenues coming from outside the UK. Our Broadcast business is robust and growing as we continue to deliver unrivalled audience reach for advertisers, and further strong growth in Online, Pay& Interactive, which is a material andprofitable part of the business.
We are committed to our original vision of ITV as an owner and producer of world-class content. We are confident that our strategy to maximise our value as an integrated producer broadcaster, making our content famous on multiple platforms before distributing it around the world, is the right long-term path forITV.
We will continue to strengthen the business and grow new revenue streamsboth organically and through acquisitions, as we see investment opportunities across the business. Therewill be an increasing emphasis onbuilding a global pay and distribution business as we seek to deliver and monetise our content on multiple platforms, free and pay.
We remain focused on delivering against our three strategic priorities inthe areas where we can achieve most growth:
maximising
maximise audience and revenue share from free-to-air broadcast andVOD business
growing
grow an international content business
building
build a global pay and distribution business
ITV delivers another strong performance
In 2015 we grew external revenue by 15% to 2,972 million (2014: 2,590 million), reflecting 6% growth in NAR to 1,719million (2014: 1,629 million) and over 300 million growth in non-NAR to 1,664 million (2014: 1,327 million), up 25%. Together with our continued focus on cash and costs we delivered another year of double-digit profit growth withtotal adjusted EBITA up 18% to865million (2014: 730 million), corresponding to an improved adjusted EBITA margin of 29% (2014: 28%). Adjusted EPS in the year increased 20% to 16.5p (2014: 13.8p) and statutory EPS increased 7% to 12.4p (2014: 11.6p).
The business remains highly cash generative and profit to cash conversion was 91%, even after increased investment in our scripted business. Weended the year with net debt of 319million (2014: net cash 41 million) after acquisitions of 406 million (net ofcash acquired), dividend payments of459 million and pension deficit contributions of 90 million.
With a strong balance sheet we are ableto continue to invest in the assets underpinning our strategy, developing our content, our people and our brand. As a people and talent business we alsocontinue to drive high employee engagement and attract a diverse workforce to support the success of ITV. Reflecting ITV's strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. Thisequates to a full year dividend of 6.0p, up 28%, which is well ahead of earnings growth and is a significant step forward in taking ITV's dividend cover closer to itspolicy range.
The Board is also proposing a 400million (10.0p per share) special dividend, which comes after a year ofsignificant investment at ITV and reflects ITV's strong cash generation and the Board's confidence in the business. Following this distribution ITV's leverage remains well below the 1.5x net debt toEBITDA ceiling and gives ITV the flexibility to continue to invest across the business for further growth.
Maximise audience and revenue sharefrom free-to-air broadcast andVOD business
Against the backdrop of a rapidly changing media environment, our Broadcast business has performed consistently well over the last few years and has generated significant profit and cash, supported by our strong programme schedule, tight cost control and a sustained recovery inthe UK advertising market.
In 2015 Broadcast & Online revenues wereup 6% to 2,146 million (2014: 2,023million), with adjusted EBITA up 16% to 659 million (2014: 568 million), which reflects 6% growth in highly geared NAR and 23% growth in high margin Online, Pay & Interactive revenue.
Continued strong advertising growth
In 2015 ITV again outperformed its estimate of the television advertising market. ITV invests over 1 billion annually in programming and has unique scale andreach which is much in demand from advertisers, delivering mass audiences onthe ITV main channel as well as more targeted demographics on the family of channels and on the ITV Hub. This scale and strength of our brand underpins thesuccess of our free-to-air and on demand platforms.
ITV is also driving more value from its brands and for advertisers through partnerships and sponsorship deals, increased consumer interactivity, and bydeveloping new and more targeted advertising initiatives to extend advertising campaigns beyond the television spot, such as AdSync+ and ITVAdVentures.
Focus on strengthening viewing performance
In 2015 ITV Family Share of Viewing (SOV) declined by 3%. While there were many successful programmes in the first half, our viewing performance was impacted by the launch of a number of new free-to-air digital channels, some of ourshows, particularly in the factual genre, not performing as well as we hadexpected and relatively strong competition from BBC. ITV Family ShareofCommercial Impacts (SOCI ) wasdown4%.
We have new creative leadership in place and we remain focused on strengthening our viewing performance to ensure we continue todeliver standout content thatdrives mass audiences for our advertisers. We believe that around 1billion is the right level of investment for our programme budget and we have a strong slate of programmes for 2016 with many new andreturning programmes across all keygenres.
Responsive to a dynamic environment
The market environment in which we operate is constantly changing which provides both opportunities and challenges. Viewers, and particularly the younger generation, are changing the waythey consume content and the digital revolution has dramatically increased thenumber of devices and platforms on which content is viewed. As a result online is one of the fastest growing businesses within ITV and we will continue to invest inthe quality and accessibility of the ITVHub, the new digital home for all our channels and services, as well as seeking new ways to monetise and distribute ourcontent.
However, while online viewing is growing rapidly in the UK, it remains a small proportion of total viewing at 7%, with themajority of television watched live.
Broadcast markets differ internationally and therefore there cannot necessarily bea direct read across. However, what iscommon to all markets is that at the heartof a successful Broadcast business isowning and exploiting the rights to high-quality, 'must have' content. That iswhy growing an international content business remains central to our strategy as an integrated producer broadcaster.
Grow international content business
In 2015, reflecting the strength of our global production labels, ITV Studios delivered good revenue growth both organically and from our acquisitions, with growth across the business. Total revenue was up 33% to 1,237 million (2014: 933 million), of which organic revenue was up 8%, while adjusted EBITAincreased 27% to 206 million (2014: 162 million).
Our vision is to be a scaled international business, owning and exploiting rights inkey genres that travel. In line with this,we continue to strengthen our position as the UK's largest commercial production company, as well as creating an increasingly international business with production bases in America, theNetherlands, France, Germany, the Nordics and Australia. Over half of ITV Studios total revenue is generated outside the UK and we have become atop independent producer across Europe and
the US.
It is clear that there remains strong global demand for high-quality content from both broadcasters and platform owners. We estimate that the global content market is growing at about 5% per annum. Capitalising on this demand, ITV's strategy continues to be to develop, own and manage content withinternational appeal in the key creative markets.
Over the last few years we have built scale in production markets with solid creative track records both organically and through acquisitions. This year we have strengthened our business, with the acquisitions of Talpa Media in the Netherlands and Twofour Group and Mammoth Screen in the UK.
We continue to build scale internationally and develop a larger portfolio of successful series and formats across genres and across their content lifecycle. We will focus on programmes that return and travel internationally, namely drama, entertainment and factual entertainment. We have a good slate ofnew and returning programmes with166 new commissions and 176 recommissions delivered in 2015 and many more in the creative pipeline for 2016 and beyond.
Building a global pay and distribution business
As we grow our investment in content and own more hit shows that can be exported around the world, we are creating new windows to extend the reach of that content and monetise it across more platforms and markets.
Capitalising on growing demand forvideo on demand
Growth in Online, Pay & Interactive remains strong with revenue up 23% to188 million (2015: 153 million) as viewers are changing the way they consume content. We continue to seegood growth in long-form video requests, up 14% while total video consumption, which is the measure of how long viewers are spending online, was up 42%.
In Autumn 2015 we successfully launched our new online service the ITV Hub, through which audiences can access ITV broadcast content both live and on demand. This is a major step forward in the quality, innovation and ease of use of our online service. Live content is central to the Hub and live simulcast viewing isbecoming increasingly popular particularly around sporting events and large entertainment shows, as viewers are using connected devices as a television set. The new service has been very well received with consumption growing strongly since launch. To continue to drive growth in our online audiences and advertising revenues, we will continuously invest in improving the user experience, technology and the reach of the ITV Hub, which is now available on 27 platforms.
Further developing pay opportunities
We have built a fast-growing and profitable pay business in the UK from licensing our channels, including our paychannel ITV Encore, and content to platforms such as Sky and Virgin. Outside the UK we have established a number of smaller pay propositions including Cirkus and ITV Choice.
Going forward we are looking to explore new models for content creation and distribution, through a mix of pay channels and online. We have invested ina number of digital media companies and will continue to develop a greater expertise and scale in monetising our content through a mixed economy oforganic growth, partnerships andacquisitions.
Expanding our global distribution network
Global Entertainment's revenues grew 9% in 2015 to 157 million (2014: 144 million) as we have driven value from the investments we have made in creating and owning content with international appeal. In 2015 we invested 163 million inscripted content, up 60 million and wecontinue to strengthen our portfolio including acquiring third-party content.
As ITV grows in scale, we will further enhance our distribution network, benefitting from our increased rights ownership and from the stronger network relationships we build.
Our acquisitions have also strengthened Global Entertainment's position as a leading international distributor of content and our focus is now on leveraging our creative talent and distribution network to build on these successes and develop new ways topackage and sell our content internationally.
Confident of delivering further goodgrowth in 2016 and beyond
We expect to deliver another good performance in 2016 with continued revenue growth across both businesses.
Over the full year we expect to outperform our estimate of the television advertising market but thephasing of NAR over the year is expectedto be different in 2016, driven by the timing of major sporting events. Weexpect ITV NAR to be flat in Q1, marginally behind the market, against 12% growth in Q1 last year. Q2, which willbenefit from the Euros, should bepositive.
Weremain focused on strengthening our viewing performance and we have started 2016 well, with ITV SOV up 5% and ITV Family SOV up 2%. Online, Pay & Interactive will deliver double digit revenue growth, driven particularly by Online and Pay as we continue to invest in the ITV Hub and further develop our international pay model. ITV Studios is on track to report double-digit revenue and profit growth, primarily driven by our recent acquisitions. 
Overall, we see clear opportunities for investment in all parts of the business. And because of our strong financial position and cash conversion, we are confident in delivering both continued growth and shareholder returns. ITV remains well positioned to drive value from its talented and creative people, our commercial scale, and our global network in the creation and distribution
of content.

Strategic Priority 1
Maximise audience and revenue share from free-to-air broadcast and VOD business
While the media environment in which we operate isconstantly changing our Broadcast business remains robust and adaptable. ITV is the biggest marketing platform in the UK and because of the scale of our commercial channels, we reach around 80% of the television owning population every week. We invest over 1 billion in our programme budget, significantly more than our commercial competitors, and have an unrivalled ability to deliver mass audiences across all demographics. 
As a result, there continues to be a strong demand for advertising on our family ofchannels, which generates significant profit and cash to reinvest across ITV. Additionally, as an integrated producer broadcaster, our broadcast channels alsoprovide an important platform to showcase ITV Studios content and give it a proven track record, beforeexploiting it internationally.
Continued strong advertising growth driven by our uniqueoffering
Since 2009 ITV has maintained its leading position as the only commercial broadcaster consistently able to deliver mass audiences toour advertisers. In 2015 ITV delivered 98% of all audiences over fivemillion and 93% of all audiences over three million.
ITV's unique ability to deliver these mass audiences, as well as more targeted demographics across the family of channels and the ITV Hub, has enabled usto once again grow ITV Family NAR ahead of our estimate of the television advertising market, even though our SOV declined in the year. SOV provides an overall measure of viewing performance, however because advertisers are buying scale and breadth of audience, SOV is not necessarily a direct indicator of advertising performance.
Television remains the most efficient and effective advertising medium foradvertisers to achieve mass simultaneous reach. Although television has seen some price inflation over the last few years, the cost of advertising is similar to 2004 levels and compared to many other advertising media it remains good value, especially given the reach and scale that it delivers. As the viewing and advertising landscape continues to fragment, the scale of audience that television, and particularly ITV delivers, becomes increasingly valuable.
Maximising the value of our airtime
ITV is also focused on maximising the value of its airtime and driving new revenue streams through sponsorship, interactivity and branded content. ITVcan utilise its core assets of its strongbrand and reputation, unique commercial relationships and quality production capability to deliver a wide variety of marketing solutions. To date we have implemented many innovative sponsorship deals including Aunt Bessie's for I'm A Celebrity Get Me Out Of Here! and Land Rover and SSE for theRugby World Cup. We have also produced a number of branded content solutions with our new service ITV AdVentures for Suzuki and National Lottery and we have launched AdSync+, a partnership with RadiumOne to amplify the reach of our television advertising. In 2016 we will also be introducing more targeted advertising.
Ongoing focus on strengthening viewingperformance
Although we had many on-screen successes in 2015, ITV Family's SOV declined by 3% with ITV main channel SOV down 4% and the digital channels SOV down 3%. This performance was a result of the launch of some new free digital channels, a number of our shows not performing as well as we had expected, particularly in the factual genre, and relatively strong competition from the BBC.
However, we enjoyed many real successes in the year - we broadcast the most watched entertainment show in Britain's Got Talent, the most watched soap in Coronation Street, the most watched drama in Downton Abbey and the most watched sporting event with England vs. Wales during the Rugby World Cup. Our daytime schedule improved, including Good Morning Britain, and we also launched a number of new entertainment shows including Mission Survive, Ninja Warrior UK and You'reBack in the Room, as well as driving significant audiences with our returning brands, I'm A Celebrity Get MeOut Of Here!, Britain's Got Talent andThe X Factor. Our drama schedule, which included Code of a Killer, Safe House, Downton Abbey, Home Fires, Unforgotten and the second series ofBroadchurch, continued to deliver large-scale audiences.
To drive viewing and engagement in ourcontent, we are further developing programme apps which continue togrow in popularity. Our digital engagement has grown significantly inthe year, delivering 100 million votes across our big entertainment shows and40 million paid competition entries.
Looking ahead we have new creative leadership in place and we remain very focused on strengthening our viewing performance in 2016. We believe that around 1 billion is the appropriate programme budget for ITV's family ofchannels to ensure we continue todeliver standout content that drives the scale and breadth of audiences that advertisers demand. We have a strong slate of new and returning programmes across the key genres. We have 50 hours more drama, major football and rugby tournaments and will continue to invest in daytime and soaps. Our 2016 schedule includes new programmes such as Victoria, Cold Feet, The Durrells, Maigret, Brief Encounters, Family Guy, American Dad, Drive, Euro 2016 and theRugby Six Nations and returning programmes Vera, Endeavour, Britain's Got Talent, X-Factor, I'm A Celebrity Get Me Out Of Here!, Love Island, Ninja Warrior UK, Long Lost Family, The Chase and the Tour de France. 
Remaining responsive to a changing media environment
The market in which we operate is constantly changing but traditional linear television viewing remains resilientdespite significant changes in the availability and delivery of content. Broadcaster and other VOD is growing rapidly, but it is a gradual process and still only accounts for 7% of total viewing.
On average viewers watch 216 minutes oftelevision a day, which is a similar level to 2004 of 222 minutes. The majority of television viewing is live,which we estimate to be 81%, as television continues to have the power to bring audiences together. Live event television in particular has demonstrated resilience and a growing relevance as viewers increasingly connect through social media and they continue to deliver very significant audiences. Therefore large sporting events, which also deliver valuable demographics, continue to be an important part of our schedule and as well as the Rugby Six Nations we have also recently secured British horseracing from 2017.
Many consumers, particularly younger viewers, are engaging in an increasing amount of content and entertainment via other platforms such as social media and video games, but television viewing continues to dominate the way people like to be entertained.
Broadcast markets differ internationally. The key European markets are structurally different to the US, driven bythe strength of free-to-air television, thelevel of pay penetration and the cost of pay. Therefore while lessons can be learnt from other countries, there can beno direct read-across.
Three attributes lie at the heart of ITV's successful Broadcast proposition: it's first-class distribution and reach across all platforms; owning the rights to high-quality, must have content, for all key audiences; and providing advertisers with creative access to the biggest and most effective marketing platform in the UK.
2016 and beyond
On 29th February 2016 ITV completed its acquisition of 100% of UTV Ltd, thetelevision assets of UTV plc. This further strengthens ITV's free-to-air business and enables it to run a more efficient network.
As we continue to invest in our integrated producer broadcast model, our priority is to strengthen our onscreen performance and we have started 2016 well, with ITV SOV up 5%and ITV Family SOV up 2%. We are also focused on maintaining the scale ofouraudiences because as the viewing and advertising landscape continues tofragment, this becomes increasingly valuable toadvertisers.
Over the full year we again expect tooutperform our estimate of the television advertising market, although the phasing of NAR is expected tobe different in 2016, driven by the timing ofmajor sporting events. We expect ITVNAR to be flat in Q1, marginally behind the market, against 12% growth in Q1 lastyear. Q2,which will benefit from theEuros, should be positive.

Strategic Priority 2
Grow international content business
Growing a scaled international content business is central to our strategy as an integrated producer broadcaster. As ITV creates and owns more content, our channels provide a platform to showcase our programmes before distributing them across multiple platforms in the UK and internationally.
Growing global demand for content
The strong global demand for content from broadcasters and platform owners provides asignificant opportunity for ITV Studios. Weestimate that the global content market isgrowing at about 5% per annum, with some genres such as drama growing more quickly than others. To capitalise on this, our strategy remains to develop, own and manage content rights in genres that return and travel internationally, namely drama, entertainment and factual entertainment.
In 2015 we again delivered strong growth withrevenues up 33% to 1,237 million (2014:933 million) and EBITA up 27% to 206m(2014:162 million). This builds on thesignificant growth we have achieved overthe last few years, more than doubling revenues from 600m in 2009 to over 1.2billion in 2015. Thisgrowth has been achieved organically aswell as through a mix ofacquisitions, partnerships, investments andtalent deals.
Building scale in creative markets
ITV Studios has three production divisions - ITV Studios UK, ITV America and ITV Studios Rest ofWorld. The US and UK are the dominant creative markets, with the US the largest exporterof scripted content and the UK the world leader for exported formats.
Over the last few years we have built scale in these key markets, developing a portfolio ofsuccessful series and formats. We have made 16acquisitions since 2012 mainly in the UKandUS and also more recently Talpa Media in the Netherlands. Our original business (excluding all acquisitions we have made) continues to performwell, delivering a 5% compound annual growth rate since 2009, although production businesses do not deliver straight-line revenue growth.
ITV Studios UK performed strongly in 2015 with overall revenues up 19%, with good growth in sales to ITV and to other UK broadcasters. With the acquisition of Mammoth Screen and Twofour Group we have strengthened our production capability across the genres of drama, entertainment, factual entertainment and comedy, as well as helping to drivefurther growth in our off-ITV commissions. We have delivered series such as The Graham Norton Show (BBC1), 24 Hours in A&E (Channel 4), 10,000 BC (Channel 5), and following these recent acquisitions our portfolio includes Poldark (BBC), The Voice (BBC), Educating Cardiff (Channel 4) and Posh Pawn (Channel 4).
ITV Studios UK is also focused on growing its share of original content commissioned on the ITV main channel. In 2015 ITV Studios delivered 60% of the total spend on original commissions on the ITV main channel. This is a similar proportion to 2014 but in terms of revenue, total sales to Broadcast increased by 12%. New commissions delivered to ITV include Thunderbirds Are Go!, Ninja Warrior UK, Home Fires, Unforgotten and Jekyll & Hyde.
ITV America also had a strong year with revenues up 36% as it benefitted from the delivery of major new dramas and ahigh volume of programmes from ourstable portfolio of unscripted series, including Duck Dynasty, Pawn Stars andtwo series of Hell's Kitchen USA.
We saw good growth across ITV Studios Rest of World (RoW) with revenues up124%, where our production bases inAustralia, Germany, France, the Netherlands and the Nordics produce original content as well as local versions of ITV Studios formats. This division benefitted from the significant acquisition of Talpa Media in the year and also delivered a number of new andreturning commissions including I'mA Celebrity Get Me Out Of Here! inDenmark and Australia, The Chase in Norway, Come Dine With Me in Sweden, The Chase, Quizduell and I'm A CelebrityGet Me Out Of Here! in Germany and AMother's Son in France.
In total in 2015 we produced over 7,000hours of content by our 58 labels, supplying over 90 channels. We have delivered good revenue growth across our three production divisions and wehave cemented our position as the number one commercial producer intheUK and have become aleading independent producer in Europe and the US. Over halfof our revenues now come from outside the UKas we are becoming an increasingly international business.
Investing in content with international appeal
To become increasingly international we must continue to expand our portfolio of successful series and formats that return and that can be distributed globally. We have a strong mix of programmes across genres and also across their content life cycle which balances our risk and financial exposure. We continue to invest in our pipeline of ideas to ensure that we are adding to our catalogue of programmes every year.
Demand for drama is growing strongly as standout, original content becomes brand defining for both broadcasters and OTT players in an increasingly competitive global environment. We arelooking to leverage our network relationships and international distribution network, to expand our global scripted business and develop astrong portfolio of international and returning drama.
Reflecting the Group's strong financial position and cash generation, we are now able to finance larger-scale scripted projects through working capital. Theproduction cost is partly funded bythe initial sale of the series to the broadcaster, while the deficit is recovered through distribution revenue from selling the finished product globally to other broadcasters and platforms. We balance our financial exposure through our portfolio approach, with successful international dramas offsetting the risk that we will not recover the full deficit on every show.
During 2015 we have delivered three major drama series in the US, The Good Witch, Aquarius and Texas Rising, of which The Good Witch and Aquarius have been recommissioned. In the UKwehave also delivered or have in production Mr Selfridge s4, Endeavour s3, Poldark s2 and Vera s6 which all haveinternational appeal.
We continue to perform well internationally in the entertainment andfactual entertainment genres. In response to continued demand from networks, we have grown a solid portfolio of high volume, high margin formats including Duck Dynasty, Pawn Stars, Come Dine with Me, I'm A Celebrity Get Me Out Of Here!, Hell's Kitchen USA and The Chase.
Overthe last few years we have strengthened our exposure to this genre with a number of partnerships, including in 2015, Possessed Television and Cats onthe Roof and most significantly Talpa Media, which we acquired in April 2015 which is focused on developing new entertainment formats that attract large audiences and have significant commercial potential. Benefitting from the creative input of John De Mol and his management team, who will continue towork with ITV, Talpahas created 75shows and has aired programmes in more than 180 countries over the last six years, including The Voice, The Voice Kids, I Love My Country, Dating in the Dark and Dance Dance Dance.
2016 and beyond
We have a very strong international pipeline of programmes and brands across genres and across their content life cycle. New programmes include Victoria, Cold Feet, Tutankhamun, Houdini & Doyle, Married by Mom and Dad and Killing Fields and returning programmes which include Aquarius, Thunderbirds Are Go!, Home Fires, TheGood Witch, Poldark, Endeavour, Vera, Coronation Street, Emmerdale, TheVoice, The Voice Kids, Pawn Stars, Come Dine With Me, The Chase, I'mACelebrity Get Me Out Of Here! andCountdown.
ITV Studios is now a global business and going forward we aim to utilise our scale to grow our market share and expand the number of networks and OTT players we work with, particularly in the US. With a strong portfolio of new and returning programmes we will build further scale internationally, both organically and through partnerships and acquisitions, aswe continue to reduce our reliance on the UK market.

Strategic Priority 3
Build a global pay and distribution business
As digital media and consumer behaviour continue to evolve, our ability to create and distribute high-value content in new and efficient ways is of increasing significance. ITV is continually exploring and experimentingwith new ways to distribute our content tobroadcasters and platform owners, both free and pay, while also seekingnew opportunities to extend the reach ofour content for the consumer.

Capitalising on growing demand for VOD through the ITV Hub
Changes in technology and the growing base of connected devices are driving rapid growth in audiences' appetite for VOD and in turn fuelling demand from advertisers forVOD inventory. ITV as a creator and owner of content, particularly sought after drama and entertainment content, is well placed to exploit this growing customer base.
Our Online business has grown rapidly over the last few years and is contributing meaningful revenue to the Group. In November we successfully launched the ITVHub to replace ITV Player and ITV.com across mobile, PC and connected TV, throughwhich audiences can access ITV content on different devices, live orondemand. This is a major step forward in the quality, innovation and ease ofuse of ITV's online services. The biggest change is that live content is now central to the ITV Hub andlive simulcast viewing is becoming increasingly popular particularly around sporting events andlarge entertainment shows, as viewers areusing their connected devices asatelevision set. Simulcast viewing now represents about 30% of viewing on theplatforms on which it is available.
To drive growth in our online audiences and online advertising revenues we havealso been working to increase the distribution of the ITV Hub which is now available on 27 platforms, most recently launching on Amazon Fire, YouView Sony and Freeview Play. Long-form video requests continue to grow strongly up 14% in2015, driven by mobile and connected televisions. Online consumption, which is the measure of how long viewers are spending online, has also increased by 42% reflecting the quality of ITV's content and the improved viewing experience of the ITV Hub.
To date there have been 21 million downloads of our app and to further increase usage we will continually extend and enhance the ITV Hub with improvements in technology and new content, such as premieres, box sets andshort-form content.
Overall the new service has been very well received by both audiences and advertisers, with consumption growing strongly since launch, particularly for live viewing where our audiences enjoy the new 'live swipe' feature on smartphones and tablets and the ITV Hub's improved streaming quality.
Additionally, we are working to maximise the value of our digital data. We have introduced new digital advertising features like AdSync+ as well as dynamically-served advertising on ITV's live simulcast channels on PC and Appleplatforms. With 13 million registered users of the ITV Hub, we are not only able to understand and engage with our audiences better but we are also developing more targeted advertising online in 2016.
Further developing our pay offering inthe UK and internationally
ITV earns revenue from pay television through licensing our channels and content. 2015 pay revenue grew by 38%as we continued to develop our services across multiple platforms.
Our pay business in the UK includes deals with Sky and Virgin for our HD channels and catch-up VOD, an advertising free subscription version of the ITV Hub on iOS and a deal with Sky to make ITV's content available through its connected platforms including Sky Go and Now TV. In 2014 we launched our first pay channel, ITV Encore, which we are strengthening with more exclusive content including original commissions such as The Frankenstein Chronicles and Houdini & Doyle and critically acclaimed acquired series such as The Americans and Jordskott.
Outside the UK we have established anumber of smaller pay propositions including Cirkus, a subscription VOD service that offers the 'Best of British' content to international pay platforms which is available in the Nordics and more recently in Iceland. We also distribute ITV Essentials, an online service for expats, and ITV Choice, a general entertainment channel for emerging markets which was recently launched in South Africa.
As we look to increase ITV brand loyalty, we have already increased our exposure to new types of content including short-form and younger focused long-form programming and new types of distribution. We are widening our digital reach by expanding our presence on YouTube to bring new audiences to our programmes. In 2015 we launched 22new ITV branded channels across a range of our biggest programme brands. We saw usage increase over 400% across the year on the ITV branded channels to deliver over 160million views, the equivalent of over 8 million hours of viewing.
Talpa has a very strong digital presence internationally across its range of formats. Since 2014 it has developed 10successful connected live formats including The Voice, The Voice Kids and Dance Dance Dance, in 40 countries, with 90 apps/sites and 100 YouTube channels, in total delivering over 12 billion views.
We have made investments in the digitalarena as we look to develop our expertise in monetising online audiences. These include: Believe Entertainment Group, a producer of digital-branded short-form entertainment; Zealot, a digital content multi-platform network; Indigenous Media, a producer of scripted digital content; and Channel Mum, thefirst ever online video network dedicated to young mothers.
Looking ahead we will further develop our pay offering both in the UK and internationally exploring opportunities for both pay and online as we seek to monetise our content further. We will look to do this through a mixedeconomy of organic growth, partnerships and acquisitions. We will also increasingly look for opportunities to 'window' our content across our free channels, pay channels and the ITV Hub to derive maximum value for audiences, platformsand advertisers.
Expanding our global distributionnetwork
In 2015 Global Entertainment, the distribution arm of ITV Studios, delivered revenue growth of 9% to 157 million (2014: 144 million) as we have continued to drive value from the investment wehave made in creating and owning the rights to quality content with international appeal.
Our distribution business has a substantial archive of over 40,000 hours of television and film content that we distribute to broadcasters and platform owners around the world. In 2015 wehave continued to enhance our distribution network, benefitting from our increased rights ownership and strong network relationships as ITV Studios has grown in scale.
We have a strong and balanced portfolioof scripted and unscripted programmes and formats, both newandreturning. We continuously strengthen this using ITV's strong cash flow to create and fund new content andacquire third-party rights. ITV Studios creates new programmes in thekey genres ofdrama, entertainment and factual entertainment.
Our scripted content has sold well internationally with programmes suchasPoldark, Aquarius, Texas Rising, Endeavour, Jekyll & Hyde and Mr Selfridge all selling to over 100 countries. Our entertainment and factual entertainment content also continues to sell well with programmes such as Come Dine With Me, The Voice, The Voice Kids, I Love My Country, TheChase, I'm A Celebrity Get Me Out Of Here! and the Price of Beauty.
During the year we have also signed a number of new multi-year and multi-territory deals including a seven year deal for Coronation Street with CBC in Canada. In early 2016 we agreed a multi series and territory deal for Thunderbirds Are Go! with Amazon covering the USand India for first run and UK and Germany for second run. We are now starting to benefit from merchandising around Thunderbirds Are Go! as we look to extend the franchise beyond the television set.
Global Entertainment also invests in thefunding of scripted content with international appeal. ITV has invested around 160 million in the year, up 60million, in scripted programmes such as Texas Rising, Aquarius and The Good Witch, two of which have been recommissioned and they are selling well internationally.
In addition to distributing ITV's own content, we have also acquired the third-party distribution rights to a number of international shows including Schitt's Creek from Canada and Nordic thriller Jordskott.
2016 and beyond
Looking ahead we expect to deliver double-digit growth in our Online, Pay &Interactive revenues as we further develop our ability to distribute and sell our content. We will continue to invest to enhance the ITV Hub and through amixed economy of organic growth, partnerships and acquisitions, we will develop our pay and online services andchannels and explore new ways topackage and sell our content to takeadvantage of demand for quality content in the UK and internationally from consumers, broadcasters and platform owners.
Lastly, we are also continuing to drive the debate around the implementation of retransmission fees in the UK to ensure that we are fairly compensated for our investment in content for the ITVmain channel when it is carried on pay TV platforms.

Performance Dashboard
Demonstrating continued progress against our strategic priorities.
1 Maximise audience and revenue share from free-to-air broadcast and VOD business
2015 performance
 ITV NAR growth of 6%, ahead of our estimate of the TV advertising market
 Share of broadcast up to 46.1% in 2015 (2014: 45.9%)
 ITV Family SOV down 3%
 ITV delivered 98% of commercial audiences over fivemillion and 93% of audiences over three million
 Delivered most watched entertainment drama, soap and sporting event
 ITV2 and ITV3 largest digital channels in the UK
 Innovative sponsorship and brand extension partnerships with advertisers
 Launched AdSync+, a partnership with RadiumOne to amplify the reach of our TV advertising
 Dynamic advertising now served to ITV simulcast content on PC and iOS
 Significant digital engagement with 100 million votes across our big entertainment shows and 40 million paid competition entries
Focus for 2016
 Strengthen on-screen viewing in key demographics
 Further invest in our content, channels and brand to maintain our unique scale
 Grow our share of total television and VOD advertising
 Continue to maximise the value of our programme brands through sponsorship, interactivity and brand extensions
 Developing new and more targeted advertising opportunities
 Developing branded content solutions through our new content creation service ITV AdVentures
 Integration of UTV
Key Performance Indicators
 ITV Family SOV
 ITV Family SOCI
 ITV Family share of broadcast
 Percentage of commercial audiences over three million and over five million

2 Grow international content business
2015 performance
 Good growth across ITV Studios with 8% organic and 33% including theacquisitions
 ITV Studios' share of ITV main channel output at 60%
 46% growth in Off-ITV production revenue in the UK
 Continued investment in creative pipeline with over 7,000 hours of original content produced and delivered
 Completed three acquisitions including Talpa Media, our biggest acquisition todate
 53% of ITV Studios revenue generated outside the UK
 Top indie producer across Europe and the US
 Delivered three US scripted series in the year, two of which have been recommissioned
Focus for 2016
 Build further scale internationally
 Continue to develop IP in key creative markets to exploit growing worldwide demand
 Build a pipeline of programmes across genres and content life cycle
 Develop more 16 to 24 focused content
 Attract and retain key creative talent
 Continue to look at acquisitions, investments and talent deals
Key Performance Indicators
 Number of new commissions for ITV Studios
 Percentage of ITV output from ITV Studios
3 Build a global pay and distribution business
2015 performance
 Successful launch of the ITV Hub
 Long-form video requests up 14%, consumption up 42%
 21 million downloads of app and 13 million registered users
 Launched new original programming on ITV Encore
 New pay deal with Virgin and others including Amazon TVOD and TalkTalk
 Cirkus and ITV Choice now launched in four countries
 Launched many YouTube channels across our programme brands focusing on short-form content, which has driven very significant views
 A leading European distributor of content, with Aquarius, MrSelfridge, Poldark and Hell's Kitchen USA all sold to over 100 countries
 Six formats sold to three or more countries
Focus for 2016
 Further invest in the quality and distribution of the ITV Hub
 Build a network of pay channels and OTT services
 Consider wider partnerships with OTT/VOD players
 Continue to trial direct to consumer pay opportunities
 Develop innovative new content windowing strategy
 Further grow our international distribution network with high-qualitycontent
 Maximise the use of our strong cash flows to finance the production ofhigh-profile dramas that return and travel internationally
 Invest in developing third-party distribution deals
 Secure retransmission fees in the medium term
Key Performance Indicators
 Total long-form video requests
 Number of new commissions for ITV Studios
Key Performance Indicators across all three priorities
Our Key Performance Indicators (KPIs) align our performance and accountability to our strategy of continuing to develop acreative, commercial and global organisation. Five KPIs measure the Group's operational and financial performance across all three priorities:
 Adjusted EBITA 
 Adjusted EPS
 Profit to cash conversion
 Non-NAR revenue
 Employee engagement
Financial and Performance Review
ITV delivered another strong performance in 2015 with growth across the business.
Reflecting our continued investment in quality content, we grew revenue across all parts of the business and reported our sixth consecutive year of double-digit growth in our keyprofit measures, while further improving our adjusted EBITA margin. We remain highly cash generative which, together with our continued focus on costs, places us in a strong position to invest for further growth and enhance shareholder value into 2016 and beyond.
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
NAR
1,719
1,629
90
6
Total non-NAR
1,664
1,327
337
25
Total revenue
3,383
2,956
427
14
Internal supply
(411)
(366)
45
12
Group external revenue
2,972
2,590
382
15
Adjusted EBITA
865
730
135
18
Group adjusted EBITA margin
29%
28%
Adjusted EPS
16.5p
13.8p
2.7p
20
Adjusted diluted EPS
16.3p
13.7p
2.6p
19
Dividend per share
6.0p
4.70p
1.3p
28
Special dividend
10.0p
6.25p
-
-
Net (debt)/cash as at 31 December
(319)
41
(360)
-
The unadjusted profit before tax and EPS from the Consolidated Income Statement are as follows:
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
Profit before tax
641
605
36
6
EPS
12.4p
11.6p
0.8p
7
Diluted EPS
12.3p
11.5p
0.8p
7

Total ITV revenue increased 14% to 3,383 million (2014: 2,956 million), with external revenue up 15% at 2,972 million (2014: 2,590 million). This reflects 6% growth in NARto 1,719million (2014: 1,629 million), and 25% growth in non-NAR revenue to 1,664 million (2014: 1,327 million). Non-NAR now accounts for 49% (2014: 45%) of totalrevenue.
Growth in NAR and high margin Online, Pay & Interactive revenue combined with the growth in ITV Studios and our continued focus on costs, delivered an 18% increase in adjusted EBITA to 865 million (2014: 730 million), resulting in a 1% improvement in the adjusted EBITA margin to 29%. Adjusted EPS grew 20% to 16.5p (2014: 13.8p) while reported EPS grew 7% to 12.4p (2014: 11.6p). Reported EPS grew at a slower rate than adjusted EPS primarily because of the treatment of employment linked consideration for our acquisitions which isincluded within reported earnings. This is explained over thefollowing pages.
We remain focused on balance sheet efficiency and working capital management. Despite increased investment in scripted content, our profit to cash ratio remained strong at 91%. After acquisitions of 406 million (net of cash acquired), dividend payments of 459 million and our deficit pension contributions of 90 million, we ended 2015 with net debt of 319 million (31December 2014: net cash of 41 million). This gives us the financial flexibility to continue to invest in the business.
The Financial and Performance Review focuses on the adjusted results, which, in management's view, reflect the underlying performance of the business, providing a more meaningful comparison of how the business is managed andmeasured ona day-to-day basis.
The key adjustments are to reflect production tax credits in EBITA before exceptional items ('adjusted EBITA') and remove the effect of certain items from adjusted profit before tax andEPS. These include all operating and non-operating exceptional items primarily acquisition-related costs such as: employment linked consideration and professional fees for due diligence; impairment of intangible assets; amortisation ofintangible assets acquired through business combinations including formats and customer contracts; net financing cost adjustments; and tax adjustments relating to these items.
Broadcast & Online
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
NAR
1,719
1,629
90
6
Online, Pay & Interactive revenue
188
153
35
23
SDN external revenue
64
71
(7)
(10)
Other commercial income
175
170
5
3
Broadcast & Online non-NAR revenue
427
394
33
8
Total Broadcast & Online revenue
2,146
2,023
123
6
Total schedule costs
(1,045)
(1,018)
(27)
(3)
Other costs
(442)
(437)
(5)
(1)
Total Broadcast & Online adjusted EBITA
659
568
91
16
Adjusted EBITA margin
31%
28%
Broadcast & Online delivered another strong performance, with total revenue up 6% to 2,146 million (2014: 2,023 million) driven by 6% growth in NAR and 23% growth in Online, Pay&Interactive.
The television advertising market again showed strong growthwith NAR up 6% to 1,719 million (2014: 1,629 million) and continued good growth across all the major advertising categories. The Finance advertising category was driven by traditional banking brands and the Retail and Food sectors remained strong with supermarkets and furniture stores increasing spend. We saw strong growth from technology companies such as Google and Facebook as well asnew digital brands, such as Just Eat and Purple Bricks, all using TV to build brand awareness. Entertainment & Leisure did see a decline which was as a result of significant spend bybookmakers in 2014 around the Football World Cup.
As expected, the phasing of NAR was different in 2015 reflecting the timing of major sporting events. The first quarter saw strong growth of 12% benefitting from an earlier Easter, while the second quarter was flat against a strong Q2 2014 which benefitted from the Football World Cup. The thirdquarter was up 8% with increased spend around the Rugby World Cup with the fourth quarter up 4%. Overall ITV'sunderlying advertising performance was consistently strong inboth the first and second halves of theyear.
Over the full year we increased our estimated share ofbroadcast to 46.1% (2014:45.9%) as we once again outperformed our estimate of the UK television advertising market. It is becoming increasingly difficult to measure the pure spot advertising market as all broadcasters use differentdefinitions, which may include additional sources ofrevenue such as sponsorship and VOD in their estimates oftelevision advertising.
ITV Family SOV declined 3% in 2015. This reflects a 4% decline in the ITV main channel SOV which was impacted by more competition from the launch of new digital channels in the year including Spike and Your TV, some of our shows not performing as well as wehad expected and the relatively strong performance of the BBC. ITV2also contributed to the decline, partly as a result of ourrepositioning of the channel toprovide more targeted audiences for our advertisers. We remain focused on strengthening our viewing performance and continuing to deliver mass audiences.
Online, Pay & Interactive revenue continued to show strong growth, up 23% to 188 million (2014: 153 million) reflecting further growth in both our online advertising and pay businesses. InNovember we successfully launched the ITV Hub, the new digital home for our online services, which has had a very encouraging start. Audience demand for VOD continues to grow strongly which helped drive a 14% increase in long-form video requests and 42% increase in consumption. There remains strong demand for online advertising which helped drive significant growth in online revenue. We continue to develop our pay services with Pay revenue benefitting from afull twelve months of revenue from ITV Encore and strong demand for ITV video on demand services. Interactive revenue was up in the year with daytime competitions performing well. Voting on our programme apps increased exponentially as we introduced a free voting strategy. X Factor delivered 24 million votes and I'm A Celebrity Get Me Out Of Here! delivered total votes of over 56 million.
SDN external revenue, which is generated from licence sales for DTT Multiplex A, decreased 10% to 64 million (2014: 71million). This was as a result of lower renewal fees for existing long-term contracts which expired during the year.
Other commercial income was up 3% to 175 million (2014: 171 million), reflecting growth in sponsorship for the Rugby World Cup and brand extensions through a number of innovative solutions including Land Rover and SSE for the Rugby World Cup and Aunt Bessie's for I'm A CelebrityGet Me Out Of Here! Other commercial income also includes revenue from media sales, which relates to commission earned by ITV on sales of airtime for the non-consolidated licensees, as well as minority revenue from these licensees for ITV content. Asexpected, performance across both revenue streams waslargely unchanged.
Schedule costs were up 3% to 1,045 million (2014: 1,018 million) predominantly due to the full year costs of ITVBe andITV Encore. Sports rights savings on the FA Cup and Champions League were partly offset by the costs of the Rugby World Cup. Going forward we believe that this is around the right level of programme spend although the genre mix will change each year.
Other Broadcast costs increased marginally, up 1% to 442million (2014: 437 million). We maintain a tight control on costs and will continue to deliver savings to mitigate inflationary pressure.
Overall Broadcast & Online adjusted EBITA was up 16% to 659million (2014: 568 million). The continued growth in ourhighly geared advertising revenue, together with high margin revenue growth in Online, Pay & Interactive, resulted in the adjusted EBITA margin increasing 3% to 31% (2014: 28%).
On 29th February 2016, ITV completed its acquisition of 100% of UTV Ltd, which owns the televisions assets of UTV Plc, for 100 million. This will further strengthen ITV's free-to-air business and enable it to run a more efficient network. As part of the transaction ITV has taken on responsibility for the UTV defined benefit pension scheme.
ITV Studios
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
Studios UK
547
459
88
19
Studios US
320
235
85
36
Studios RoW
213
95
118
124
Global Entertainment
157
144
13
9
Total Studios revenue
1,237
933
304
33
Total Studios costs
(1,031)
(771)
(260)
(34)
Total Studios adjusted EBITA*
206
162
44
27
Studios adjusted EBITA margin
17%
17%

* Includes the benefit of production tax credits.
Twelve months to 31 December
2015
m
2014
m
Change
m
Change
%
Sales from ITV Studios to Broadcast & Online
411
366
45
12
External revenue
826
567
259
46
Total Studios revenue
1,237
933
304
33

ITV Studios total revenue grew strongly, exceeding 1billion for the first time as we continue to build scale in creative content markets and strengthen our international portfolio ofprogrammes that return and travel. ITV Studios is becoming increasingly international, and reflecting our growth and increasing scale in key production markets in Europe and the US, 53% of ITV Studios total revenue in the year was generated outside the UK (2014: 47%).
Total organic revenue, which excludes our current and prior year acquisitions as well as foreign exchange movements, wasup 8%. There was growth across the business, with a particularly strong performance from ITV America and Global Entertainment. Our acquisitions continue to come through, with twelve months of Leftfield Entertainment as well as Talpa Media from 30 April 2015 and our UK acquisitions including Twofour Group from 24June 2015. The foreign exchange impact was immaterial as the stronger US dollar was offset by our greater exposure to a weakening Euro following the Talpa acquisition.
Studios UK revenue was up 19% to 547 million (2014: 459million) reflecting 13% growth in internal revenue and 39% growth in external revenue. Organic revenue was up 5%. There were increased programming sales to Broadcast acrossboth drama and entertainment, with new deliveries including The Trials of Jimmy Rose, Unforgotten, Home Fires, Thunderbirds Are Go! andNinja Warrior UK. Successful recommissions On-ITV included Saturday Night Takeaway, TheChase and Judge Rinder. Off-ITV revenue grew strongly with successful deliveries including Poldark and The Graham Norton Show for the BBC and ComeDineWith Me and 24 Hours in A&E for Channel 4.
ITV America grew strongly in 2015, with revenue up 36% to 320 million (2014: 235 million) as we benefitted from good organic growth, up 15% driven by the delivery of our three USdramas, Best Time Ever, a US remake of Saturday Night Takeaway, and two series of Hells Kitchen. ITVAmerica also benefitted from the first full year of LeftfieldEntertainment, acquired inMay 2014. Following this acquisition, we became the largest unscripted independent producer in the US and we now have astrong portfolio of returning series and formats including Hell's Kitchen, Pawn Stars, Duck Dynasty, Marriage Bootcamp, The Real Housewives of New Jersey and The Rich Kids Of Beverly Hills.
Studios RoW also showed strong growth, up 124% to 213million(2014: 95 million), with organic revenue up 4%. We have benefitted from Talpa Media which we acquired on 30 April 2015, significantly strengthening our position as a leading international producer. We also saw good growth in Australia and Denmark from exporting UK formats. 2015 deliveries included I'm A Celebrity Get Me Out Of Here! in Australia and Denmark, TheChase in Germany and Norway, and Hell's Kitchen inFrance.
Global Entertainment revenue increased 9% in the year to157 million (2014: 144 million). Revenue growth was supported by our strongprogramme slate including new titles Poldark andSchitt's Creek, as well as US drama Aquarius and thelaunch of Thunderbirds Are Go!, which has now been sold to 90 countries with key territories such as the US and France launching in 2016. We expect to benefit from merchandising around the series as we continue to extend the franchise beyond the television set.
Reflecting the strong revenue growth across ITV Studios, adjusted EBITA increased 27% to 206 million (2014: 162million). The adjusted EBITA margin remains unchanged at 17% even after significant investment in scripted content. In2015 we invested 163 million in scripted content, up 60million. We are financing our larger-scale scripted projects through our strong underlying cashflows. The production cost is partly funded by the initial sale of the series to a broadcaster, while the deficit is recovered through distribution revenue from selling the finished product globally to other broadcasters and platforms. We balance our financial exposure through our portfolio approach, with successful international dramas offsetting the risk that we will not recover the full deficit on every show.
Overall, we delivered many creative successes in the year, including twoofour US dramas - Aquarius and The Good Witch being recommissioned. Given the nature of our business not allour programmes will return for another series in 2016, forexample Jekyll & Hyde and Best Time Ever, but we have astrong portfolio of programmes and formats and we will continue to invest in our creative pipeline to build upon this. We are on track to deliver good revenue and profit growth in2016, primarily driven by our acquisitions.
Acquisitions
We have built scale in our international content business, focusing our growth in key creative markets that have a track record for creating and owning intellectual property. Since 2012 we have acquired a number of content businesses in theUK, USand creative locations across Europe, developing a strong portfolio of programmes that return and travel. As we have grown in size and expanded our network relationships and distribution capability, this has helped to strengthen our creative talent pool and build our reputation as a leading European producer and the largest unscripted independent production company in the US.
We have strict criteria for evaluating potential acquisitions. Financially, we assess ownership of intellectual property, earnings growth and valuation based on return on capital employed and discounted cash flow. Strategically, we ensure an acquisition target has a strong creative track record and pipeline in content genres that return and travel, namely drama, entertainment and factual entertainment, as well assuccession planning for key individuals inthe business.
We generally structure our deals with earnouts or with put and call options inplace for the remainder of the equity,capping the maximum consideration payable. By basing a significant part of the consideration on future performance in this way,not only can we lock in creative talent and ensure our incentives are aligned, but we also reduce our risk by only paying for the actual, not expected, performance delivered over time. The majority of earnouts or put and call options are dependent on the seller remaining within the business. Where consideration paid or contingent consideration payable in the future is employment linked, it is treated as an expense in our statutory results rather than as capital. All consideration of this type is excluded from adjusted profit after tax and adjusted EPS as, in our view, theseitems are part of capital consideration. 
In April 2015 we completed the acquisition of 100% of TalpaMedia in the Netherlands, the creator of worldwide entertainment formats, including The Voice, The Voice Kids, ILove My Country, Dating InThe Dark and Dance Dance Dance. We paid an initial cash consideration of 500 million (362million) for 100% of Talpa's fully diluted share capital with further payments dependent on Talpa's future performance. The total maximum consideration, including theinitial payment, is up to 1.1 billion which is contingent on Talpa continuing to deliver significant profit growth to 2022 as well as John de Mol's continued commitment to the business during thistime. Under the deal structure, because all future payments and 150 million of theinitial consideration are directly related to John de Mol remaining with the business, these payments are treated as employment costs and therefore on a statutory basis are part of our reported results.However, we exclude them from adjusted profits as anexceptional item, which is consistent with our treatment ofall costs of this type.
We also acquired a minority stake in Monumental Television in April, the UK scripted independent producer founded by Oscar nominated film producers Alison Owen and Debra Hayward. As part of the agreement, Global Entertainment acquired exclusive distribution rights to all of its future television productions.
In May we acquired the remaining 75% of Mammoth Screen, one of the UK's leading scripted production companies, havingheld a 25% investment in the producer since 2007. Itssuccessful slate of high-end drama includes Poldark, Endeavour and the forthcoming Victoria.
In June we completed the acquisition of Boom Supervisory Limited, the holding company of UK based Twofour Group which produces factual entertainment and drama programmes. We paid an initial cash consideration of 55million for 75% of the Group. There is a put and call option for the remaining 25% that can be exercised at the end of 2017 and between the end of 2019 and 2021. Additionally, Twofour has a put and call option to acquire the remaining 49% of its subsidiary Mainstreet Pictures that can be exercised between 2018 and 2023. The total maximum consideration for 100% ofthe business is 280 million with contingent payments dependent on delivering exceptional profit growth to 60million in aggregate over the final two-year payment period and key individuals remaining with the Group.
Also in June we acquired a new label, Cats on the Roof Media which owns a number of creative labels focused on developing entertainment and scripted comedy programmes.
Acquisitions - 2012 to 2015 (undiscounted)
Company
Geography
Genre
Initial
consideration
(m)
Expected future
payments
(m)
Total expected
consideration1
(m)
Expected
payment
period
Total maximum
consideration
(m)
2015
Talpa Media
Netherlands
Entertainment
362
186
548
2015-2019
796
Twofour Group
UK
Fact Ent & Drama
55
10
65
2016-2021
280
Other
UK
Various
15
28
43
2015-2020
81
Total for 2015
432
224
656
1,157
Total for 2012-2014
328
792
407
2016-2021
5882
Total
760
303
1,063
1,745

1. Including the initial cash consideration and excluding working capital adjustments. All future payments are performance related.
2. The amounts have been updated to reflect the accelerated buyout of the remaining 20% of Leftfield.
In December Brent Montgomery, the CEO of Leftfield, became CEO of ITV America. In order to facilitate the integration of Leftfield within the US business, we acquired the outstanding 20% of Leftfield which we did not own. The original terms under which ITV acquired its initial 80% interest included potential future payments linked to Leftfield's profit growth and put and call options under which ITV would acquire the remaining 20%. Inconsideration for the acquisition of the outstanding 20%, these arrangements have been cancelled and ITV has assumed certain obligations of Brent Montgomery in relation to Leftfield, most notably settlement of the earnouts for its subsidiaries. There was no cash consideration payable at the time by ITV. The maximum consideration payable by ITV for the remaining obligations under the Leftfield acquisition is $100m and is dependent on future performance and is linked to ongoing employment.
The 2015 acquisitions we have made have resulted in a 297million increase in intangible assets, mainly relating toTalpa formats and 102 million of goodwill.
The table above sets out the initial consideration payable onour acquisitions, our expected future payments based onour current view of performance and the total maximum consideration payable which is only payable if exceptional compound earnings growth is delivered.
We closely monitor the forecast performance of each acquisition and where there has been a change in expectations, we adjust our view of potential future commitments through the income statement.
Total expected consideration for all acquisitions since 2012 has increased by 656 million since 2014. This relates to the total expected amount payable for our 2015 acquisitions. This is made up of the initial consideration of 432 million (406 million plus the cash acquired) and expected future payments which are only payable if significant compound earnings growth is delivered.
Net financing costs
Twelve months to 31 December
2015
m
2014
m
Financing costs directly attributable to loans andbonds
(10)
(8)
Cash-related net financing (costs)/income
(3)
2
Cash-related financing costs
(13)
(6)
Amortisation of bonds
-
(1)
Adjusted financing costs
(13)
(7)
Mark-to-market on swaps and foreign exchange
(4)
(9)
Imputed pension interest
(10)
(17)
Losses on buybacks
-
(30)
Other net financial (loss)/income
(4)
12
Net financing costs
(31)
(51)

Adjusted financing costs increased to 13 million (2014: 7million), due to increased borrowing for the acquisition ofTalpa and costsassociated with raising the funding which included the initial 500 million acquisition bridge loan that was repaid in September following the issue of the seven year 600 million Eurobond.
Net financing costs are adjusted to reflect the underlying funding costs of the business providing a more meaningful comparison of how the business is managed and funded on aday-to-day basis. These adjustments include mark-to-market on swaps and foreign exchange, imputed pension interest, losses on debt buybacks and other financial loss/income.
Net financing costs were 20 million lower in 2015 at 31million (2014: 51 million), as the prior year included losses incurred on the repurchase of the remaining 62 million 2019 bilateral loan. This was partially offset by the reduction in other net financial income, which in 2014 related to a reduction in expected future payments for acquisitions as a result of ITV'sassessment of their future performance. The imputed pension charge also decreased as a result of the reduction in pension liabilities.
Profit before tax
Adjusted profit before tax, after financing costs, was up 18%at843 million (2014: 712 million). Profit before tax is adjusted to reflect the impact of production tax credits, net exceptional items, amortisation and impairment of intangible assets and the adjustments to net financing costs, to reflect theunderlying performance of the business. Statutory profit before tax increased by 6%, which is less than the increase in adjusted profit before tax, as a result of the exceptional items describedbelow.
Profit before tax (PBT)
Twelve months to 31 December
2015
m
2014
m
Profit before tax
641
605
Production tax credits
23
-
Exceptional items (net)
103
7
Amortisation and impairment of intangible assets*
58
56
Adjustments to net financing costs
18
44
Adjusted profit before tax
843
712

* In respect of intangible assets arising from business combinations.
Production tax credits are recognised in adjusted PBT as in ourview they relate directly to the production of programmes and reflect the way the business ismanaged and measured onaday-to-day basis. The ability to access these tax credits isfundamental when assessing the viability of investment decisions in high-end drama. ITV considers these to be part of the overall cost of production rather than a corporate tax item. In 2015 significant tax credits were available to us because of our investment in high-end drama in the UK.
Exceptional items are set out in the table below. Operating exceptional items largely relate to acquisition related expenses which are predominantly performance based employment linked consideration, in particular regarding Talpa as discussed earlier. Other operating exceptional items relate to restructuring costs in particular in relation to the US business. Non-operating incomerelates to the gain on the sale of the freehold property in Manchester.
Exceptional items
Twelve months to 31 December
2015
m
2014
m
Operating exceptional items:
Acquisition related expenses
(88)
(6)
Reorganisation and restructuring costs
(13)
(6)
Other, including one-off legal costs
(8)
-
(109)
(12)
Non-operating exceptional items:
6
5
Total exceptional items (net)
(103)
(7)

Amortisation and impairment of intangible assets acquired through business combinations is not included within adjusted earnings. However, amortisation of software licences and development is included as management considers these assets to be core to supporting the operations of the business.
Tax
The total adjusted taxcharge for 2015 was 177 million (2014:151 million), corresponding toaneffective tax rate on adjusted PBT of 21%(2014: 21%) which is broadly in line with thestandard UK corporation tax rate of 20.25% (2014:21.5%). The adjustments made to reconcile the tax charge with the adjusted tax charge are the tax effects of the adjustments made above to reconcile PBT and adjusted PBT.
Twelve months to 31 December
2015
m
2014
m
Tax charge
(139)
(132)
Production tax credits
(23)
-
Charge for exceptional items
(8)
(2)
Charge in respect of amortisation of intangibleassets*
(4)
(12)
Charge in respect of adjustments to net financing costs
(3)
(10)
Other tax adjustments
-
5
Adjusted tax charge
(177)
(151)
Effective tax rate on adjusted profits
21%
21%

* In respect of intangible assets arising from business combinations. Also reflects the cash tax benefit of tax deductions for US goodwill. In 2014, thiswas included in other tax adjustments.
Cash tax paid in the year was 117 million (2014: 85 million), themajority of which is paid in the UK. The 2015 cash figure is net of production tax credits received in the year. The cash tax paid is lower than the total tax charge for 2015 largely due to the tax treatment of allowable pension contributions.
ITV is a responsible business, and we take a responsible attitudeto tax, recognising that it affects all of our stakeholders. Weseek at all times to comply with the law in each of the jurisdictions in which we operate, and to build open and transparent relationships with those jurisdictions' tax authorities. Our tax strategy is in line with that of the business and its commercial activities, and within our overall governance structure, the governance of tax and tax risk is given a high priority by the Board and Audit Committee, including through the operation of the Tax & Treasury Committee.
EPS
Overall, adjusted profit after tax was up 19% at 666 million (2014: 561 million). After non-controlling interests of 7 million (2014: 7 million), adjusted basic earnings per share was 16.5p (2014: 13.8p), up 20%. The weighted average number of shares was broadly in line at 4,006 million (2014: 4,002 million). Dilutedadjusted EPS in 2015 was 16.3p (2014: 13.7p) reflecting aweighted average diluted number of shares of 4,035 million (2014: 4,040 million).
The table below reconciles basic to adjusted EPS and the adjustments are explained in the previous sections.
Twelve months to 31 December 2015
Reported
m
Adjustments
m
Adjusted
m
EBITA*
842
23
865
Exceptional items (operating)
(109)
109
-
Amortisation and impairment ofintangible assets
(67)
58
(9)
Operating profit
666
190
856
Net financing costs
(31)
18
(13)
Gain on sale of non-current assets and subsidiaries (nonoperating exceptional items)
6
(6)
-
Profit before tax
641
202
843
Tax
(139)
(38)
(177)
Profit after tax
502
164
666
Non-controlling interests
(7)
-
(7)
Earnings
495
164
659
Shares (million), weighted average
4,006
4,006
EPS (p)
12.4
16.5

* 23 million adjustment relates to production tax credits.
Dividend per share
The Board has committed to growing the full year ordinary dividend by at least 20% per annum for three years to 2016, bywhich time we will achieve a dividend cover of between 2.0and 2.5x adjusted earnings per share. Reflecting ITV's strong performance in 2015 and in line with its policy, the Board has proposed a final dividend of 4.1p. This equates to afull year dividend of 6.0p, up 28%, which is well ahead of earnings growth and is a significant step forward in taking ITV'sdividend cover closer toits policy range.
The Board is also proposing a 10.0p special dividend, worth justover400 million, which comes after a year of significant investment at ITV and reflects ITV's strong cash generation andthe Board's confidence in the business. Adjusted for this special distribution ITV's pro forma leverage would be 0.8x reported net debt to adjusted EBITDA, which provides flexibility to continue to invest in the business for further growth.
Cash generation
Profit to cash conversion
Twelve months to 31 December
2015
m
2014
m
Adjusted EBITA
865
730
Decrease/(increase) in programme rights and other inventory distribution rights
4
(39)
(Increase)/decrease in receivables
(21)
18
Production tax credits
(13)
-
Decrease in payables
(42)
(48)
Working capital movement
(72)
(69)
Depreciation
27
27
Share-based compensation and pension service costs
17
14
Cash flow generated from operations before exceptional items
837
702
Acquisition of property, plant and equipment and intangible assets
(49)
(37)
Adjusted cash flow
788
665
Profit to cash ratio
91%
91%
Note: Except where disclosed, management views the acquisition of operating property, plant and equipment and intangibles as necessary ongoing investment in the business.
ITV remains highly cash generative reflecting our continued focus on cash and costs. In 2015 there was another working capital outflow as we continued to invest in our creative pipeline. 
In the year we generated 788 million of operational cash (2014: 665 million) from 865 million of adjusted EBITA (2014:730 million), which equates to a strong profit to cash ratio of 91%. The ratio has remained the same despite our increased investment in scripted content and demonstrates our disciplined approach to cash and costs.
Cash spent on the acquisition of property, plant and equipment and intangible assets increased year-on-year asweinvest in infrastructure to support the business.
The difference between the reported and adjusted cash flow in 2015 relates to the cash inflow from production tax credits which ITV considers a working capital item.
Free cash flow
Twelve months to 31 December
2015
m
2014
m
Adjusted cash flow
788
665
Net interest paid
(9)
(11)
Adjusted cash tax
(127)
(85)
Pension funding
(90)
(91)
Free cash flow
562
478
Note: Adjusted cash tax is total cash tax paid excluding receipt of production tax credits which are included within adjusted cashflow.
After payments for interest, tax and pension funding, ourfree cash flow also remained strong in the period, up 18% to 562million (2014: 478 million).
Overall, after dividends, acquisitions and debt repayments weended the year with net debt of 319 million, compared to net debt of 540 million at 30 June 2015 and 41 million net cash at 31 December 2014. Our cash generation was weighted towards the second half of 2015 due to the payment of the special dividend and the significant acquisition ofTalpa, all ofwhich took place in the first half of 2015.
Funding and liquidity
Debt structure and liquidity
We have a 525 million Revolving Credit Facility inplace until2019 provided by a number of core relationship banks. Wealso have a 175 million bilateral financing facility and a 75 million invoice discounting facility, both of which are free of financial covenants. At 31 December 2015 these facilities were all undrawn.
In 2015, to fund the acquisition of TalpaMedia, we entered intoa 12 month 500 million bridge loan facility provided by five of our relationship banks. This was repaid and cancelled inSeptember 2015 when we issued a 7 year 600 million Eurobond at a fixed coupon of 2.125%. The bond will mature on21 September 2022. The proceeds from the bond were alsoused to fund the maturing 78 million Eurobond in October 2015.
As we enter the next phase of our strategy, our balance sheet strength together with our continued strong free cash flow will enable us to invest in opportunities to grow the business and enhance shareholder value. To preserve our financial flexibility, our policy is to maintain at least 250 million of available liquidity at any point.
Leverage
Our objective is to run an efficient balance sheet. Our priority is to invest to drive organic growth and make acquisitions in line with our strategic priorities. We will balance this investment for further growth with attractive returns to shareholders.
Over time we will continue to look to increase our balance sheet leverage and we believe maintaining leverage below 1.5x reported net debt to adjusted EBITDA will optimise our cost of capital, allow us to sustain a progressive dividend policy and enable us to retain flexibility to continue to invest for further growth. As at 31 December 2015, reported net debt to adjusted EBITDA was 0.4x.
We also look at an adjusted measure of net debt, taking intoconsideration all of our financial commitments which reflects how credit rating agencies look at our balance sheet. At 31 December 2015, adjusted net debt was 1,144 million (31December 2014: 765 million) reflecting an increase in expected contingent payments on acquisitions as a result ofthe acquisitions we have made in the year, partly offset byareduction in the pension deficit under IAS 19 and lower undiscounted finance lease commitments which mainly relateto broadcast transmission contracts and property. Asat31 December 2015 adjusted net debt to adjusted EBITDA was 1.3x.
2015
m
2014
m
Net debt at 31 December
(319)
41
Expected contingent payments on acquisitions
(303)
(79)
Pension deficit (IAS 19R)
(176)
(346)
Operating leases
(346)
(381)
Adjusted net debt at 31 December
(1,144)
(765)
Adjusted net debt to adjusted EBITDA
1.3x
1.0x

Financing
We are financed using debt instruments with a range of maturities. During the year we repaid the 78 million Eurobond which matured in October 2015. Borrowings at 31December 2015 were repayable as follows:
Amount repayable
m
Maturity
161 million Eurobond
161
Jan 2017
600 million Eurobond
437
Sep 2022
Finance leases
10
Various
Other debt
5
Various
Total debt repayable on maturity
613

Ratings
We are rated investment grade by two ratings agencies: BBB- by Standard and Poor's and Baa3 by Moody's Investor Services. The factors that are taken into account in assessing our credit rating include our degree of operational gearing, exposure to the economic cycle, as well as business and geographical diversity.
Foreign exchange
As ITV continues to grow internationally, we are increasingly exposed to foreign exchange on our overseas operations. It is our policy not to hedge our exposure to revenues and profits generated overseas, as this is seen as an inherent risk. We do hedge our overseas net assets, where material, and so we have hedged a significant portion of the euro net assets arising from the Talpa acquisition.
ITV is also exposed to foreign exchange risk on transactions weundertake in a foreign currency. Our policy is to hedge a portion of any transaction that is either a firm commitment orhighly probable for up to two years forward. The amount hedged depends on the level of certainty we have on the final size of the transaction.
Finally, ITV is exposed to foreign exchange risk on the re-translation of foreign currency loans and deposits. Our policy isto hedge such exposures where there is an expectation that any changes in the value of these items will result in a realised cash movement over the short to medium term.
Pensions
IAS 19
The aggregate IAS 19 deficit of the defined benefit scheme at31December 2015 was 176 million (31 December 2014: 346million). The reduction reflects lower pension liabilities asaresult of rising bond yields over the year, deficit funding contributions of 90 million and the difference between theactual inflation experienced in the period compared to theexpected rate. Pensions continue to be paid from the Scheme based on actual requirements.
Actuarial valuation
The last actuarial valuation was undertaken in 2014. On the bases adopted by the Trustee, the combined deficits as at 1January 2014 amounted to 540 million.
Deficit funding contributions
The Group's deficit funding contributions in 2015 were 90million (2014: 91million).
Following completion of the actuarial valuations, the Group hasagreed to make deficit funding contributions in order to eliminate the deficits in each section. From 1 January 2016 thecontributions are paid on the following basis:
Section A - 5.0 million per month until 31May 2021
Section B - 0.15 million per month until 28February 2023
Section C - 0.3 million per month until 31July 2021
In addition to these contributions, payments are made into Section A as a result of the SDN and LTC Pension Funding Partnership structures and during 2015 these payments amounted to 13 million.
The new funding structure above results in a 10 million reduction in deficit funding contributions payable in 2016 compared to 2015, which will be paid more evenly throughout theyear.
Ian Griffiths
Group Finance Director
Financial Statements

In this section
The financial statements have been presented in a style that attempts to make them less complex and more relevant to shareholders. We have grouped the note disclosures into five sections: 'Basis of Preparation', 'Results for the Year', 'Operating Assets and Liabilities', 'Capital Structure and Financing Costs' and 'Other Notes'. Each section sets out the accounting policies applied in producing the relevant notes, along with details of any key judgements and estimates used. The purpose of this format is to provide readers with a clearer understanding of what drives financial performance of the Group. The aim of the text in boxes is to provide commentary on each section, or note, in plain English.
Keeping it simple
Notes to the financial statements provide information required by statute, accounting standards or Listing Rules to explain a particular feature of the financial statements. The notes which follow will also provide explanations and additional disclosure to assist readers' understanding and interpretation of the Annual Report and the financial statements.
Consolidated Income Statement
Fortheyearended31December
Note
2015
m
2014
m
Revenue
2.1
2,972
2,590
Operatingcosts
(2,306)
(1,939)
Operatingprofit
666
651
Presentedas:
Earningsbeforeinterest,tax,amortisation(EBITA)beforeexceptionalitems
2.1
842
730
Operating exceptionalitems
2.2
(109)
(12)
Amortisation of intangibleassets
3.3
(67)
(67)
Operatingprofit
666
651
Financingincome
4.4
6
22
Financingcosts
4.4
(37)
(73)
Net financingcosts
4.4
(31)
(51)
Gainonsaleofnon-currentassets(exceptionalitems)
2.2
5
4
Gainonsaleofsubsidiariesandinvestments(exceptionalitems)
2.2
1
1
Profit beforetax
641
605
Taxation
2.3
(139)
(132)
Profit for theyear
502
473
Profit attributableto:
Owners of theCompany
495
466
Non-controllinginterests
4.6.6
7
7
Profit for theyear
502
473
Earnings pershare
Basic earnings pershare
2.4
12.4p
11.6p
Diluted earnings pershare
2.4
12.3p
11.5p

Consolidated Statement of Comprehensive Income
Fortheyearended31December
Note
2015
m
2014
m
Profit for theyear
502
473
Other comprehensiveincome:
Items that are or may be reclassified to profit orloss
Revaluationofavailableforsalefinancialassets
4.6.4
(1)
3
Net loss on cash flowhedges
4.3/4.6.3
-
(4)
Exchangedifferencesontranslationofforeignoperations(netofhedging)
4.6.3
10
22
Items that will never be reclassified to profit orloss
Remeasurementgainsondefinedbenefitpensionschemes
3.7
91
24
Incometaxchargeonitemsthatwillneverbereclassified
2.3
(19)
(3)
Other comprehensive income/(cost) for the year, net of incometax
81
42
Total comprehensive income for theyear
583
515
Total comprehensive income attributableto:
Owners of theCompany
576
508
Non-controllinginterests
4.6.6
7
7
Total comprehensive income for theyear
583
515

Consolidated Statement of Financial Position
As at 31December
Note
2015
m
2014
m
Non-currentassets
Property, plant andequipment
3.2
239
248
Intangibleassets
3.3
1,500
1,129
Investmentsinjointventures,associatesandequityinvestments
3.5
30
14
Derivative financialinstruments
4.3
8
16
Distributionrights
3.1.1
29
13
Deferred taxasset
2.3
-
43
1,806
1,463
Current assets
Programme rights and otherinventory
3.1.2
373
367
Tradeandotherreceivablesduewithinoneyear
3.1.4
531
385
Tradeandotherreceivablesdueaftermorethanoneyear
3.1.4
33
24
Trade and otherreceivables
564
409
Current taxreceivable
13
-
Derivative financialinstruments
4.3
1
11
Cash and cashequivalents
4.1
294
297
1,245
1,084
Currentliabilities
Borrowings
4.2
(11)
(85)
Derivative financialinstruments
4.3
(5)
(12)
Tradeandotherpayablesduewithinoneyear
3.1.5
(786)
(699)
Tradepayablesdueaftermorethanoneyear
3.1.6
(48)
(27)
Trade and otherpayables
(834)
(726)
Current taxliabilities
(69)
(72)
Provisions
3.6
(28)
(17)
(947)
(912)
Net currentassets
298
172
Non-currentliabilities
Borrowings
4.2
(602)
(171)
Derivative financialinstruments
4.3
(6)
(12)
Defined benefit pensiondeficit
3.7
(176)
(346)
Deferred taxliabilities
2.3
(79)
-
Otherpayables
(89)
(38)
Provisions
3.6
(5)
(4)
(957)
(571)
Net assets
1,147
1,064
Attributable to equity shareholders of the parentcompany
Sharecapital
4.6.1
403
403
Sharepremium
4.6.1
174
174
Merger and otherreserves
4.6.2
221
228
Translationreserve
35
25
Available for salereserve
6
7
Retainedearnings
275
177
Total equity attributable to equity shareholders of the parentcompany
1,114
1,014
Non-controllinginterests
33
50
Totalequity
1,147
1,064
TheaccountswereapprovedbytheBoardofDirectorson2March2016andweresignedonitsbehalfby:
IanGriffiths
Group FinanceDirector

Consolidated Statement of Changes in Equity
Attributabletoequityshareholdersoftheparentcompany
Note
Sharecapital
m
Sharepremium
m
Merger andother reserves
m
Translation reserve
m
Available for sale reserve
m
Retainedearnings
m
Total
m
Non- controllinginterests
m
Total equity
m
Balance at 1 January2015
403
174
228
25
7
177
1,014
50
1,064
Total comprehensive income for the year
Profit
-
-
-
-
-
495
495
7
502
Other comprehensiveincome/(cost)
Revaluationofavailableforsale financialassets
-
-
-
-
(1)
-
(1)
-
(1)
Exchange differences on translation offoreignoperations(netofhedging)
-
-
-
10
-
-
10
-
10
Remeasurement gains on definedbenefit pensionschemes
3.7
-
-
-
-
-
91
91
-
91
Reclassification of revaluation reserve on disposalofproperty,plantandequipment
-
-
(4)
-
-
4
-
-
-
Income tax charge on other comprehensiveincome
2.3
-
-
-
-
-
(19)
(19)
-
(19)
Total other comprehensiveincome
-
-
(4)
10
(1)
76
81
-
81
Total comprehensive income for the year
-
-
(4)
10
(1)
571
576
7
583
Transactions with owners, recorded directly inequity
Contributions by and distributions to owners
Equitydividends
-
-
-
-
-
(459)
(459)
(5)
(464)
Movements due toshare-based compensation
4.7
-
-
-
-
-
14
14
-
14
Tax on items taken directly toequity
2.3
-
-
-
-
-
5
5
-
5
Purchaseofownsharesviaemployees' benefittrust
4.7
-
-
-
-
-
(33)
(33)
-
(33)
Total contributions by and distributions toowners
-
-
-
-
-
(473)
(473)
(5)
(478)
Total transactions withowners
-
-
-
-
-
(473)
(473)
(5)
(478)
Changes in non-controllinginterests(a)
3.4
-
-
(3)
-
-
-
(3)
(19)
(22)
Balance at 31 December2015
4.6
403
174
221
35
6
275
1,114
33
1,147
(a)Movementsreportedinmergerandotherreservesincludeaputoptionfortheacquisitionofnon-controllinginterests.
Attributabletoequityshareholdersoftheparentcompany
Note
Sharecapital
m
Sharepremium
m
Merger andother reserves
m
Translation reserve
m
Available for sale reserve
m
Retainedearnings
m
Total
m
Non- controllinginterests
m
Total equity
m
Balance at 1 January2014
403
174
248
7
4
22
858
31
889
Total comprehensive income for theyear
Profit
-
-
-
-
-
466
466
7
473
Other comprehensiveincome/(cost)
Revaluationofavailableforsale financialassets
-
-
-
-
3
-
3
-
3
Net loss on cash flowhedges
-
-
-
(4)
-
-
(4)
-
(4)
Exchange differences on translation offoreignoperations(netofhedging)
-
-
-
22
-
-
22
-
22
Remeasurement gains on definedbenefit pensionschemes
3.7
-
-
-
-
-
24
24
-
24
Income tax charge onother comprehensiveincome
2.3
-
-
-
-
-
(3)
(3)
-
(3)
Total other comprehensiveincome
-
-
-
18
3
21
42
-
42
Total comprehensive income for theyear
-
-
-
18
3
487
508
7
515
Transactions with owners, recorded directly inequity
Contributions by and distributions to owners
Equitydividends
-
-
-
-
-
(313)
(313)
(8)
(321)
Movements due toshare-based compensation
4.7
-
-
-
-
-
14
14
-
14
Purchaseofownsharesviaemployees' benefittrust
4.7
-
-
-
-
-
(33)
(33)
-
(33)
Total contributions by and distributions toowners
-
-
-
-
-
(332)
(332)
(8)
(340)
Total transactions withowners
-
-
-
-
-
(332)
(332)
(8)
(340)
Changes in non-controllinginterests(a)
3.4
-
-
(20)
-
-
-
(20)
20
-
Balance at 31 December2014
4.6
403
174
228
25
7
177
1,014
50
1,064
(a)Movementsreportedinmergerandotherreservesincludeaputoptionfortheacquisitionofnon-controllinginterests.
Consolidated Statement of Cash Flows
Fortheyearended31December
Note
m
2015
m
m
2014
m
Cash flows from operatingactivities
Cashgeneratedfromoperationsbeforeexceptionalitems:
2.1
827
702
Cashflowrelatingtooperatingexceptionalitems:
Operating exceptionalitems
2.2
(109)
(10)
Prepaid employment linkedconsideration
3.4
(109)
-
Increase in exceptionalpayables
60
3
Decreaseinexceptionalprepaymentsandotherreceivables
36
-
Cash outflow from exceptionalitems
(122)
(7)
Cash generated fromoperations
705
695
Defined benefit pension deficitfunding
(90)
(91)
Interestreceived
25
41
Interestpaidonbankandotherloans
(34)
(51)
Interest paid on financeleases
-
(1)
Net taxationpaid
(117)
(85)
(216)
(187)
Net cash inflow from operatingactivities
489
508
Cash flows from investingactivities
Acquisition of subsidiary undertaking, net of cashacquired
3.4
(406)
(214)
Prepaid employment linkedconsideration
3.4
109
-
Net considerationpaid
(297)
(214)
Proceedsfromsaleofproperty,plantandequipment
28
15
Acquisitionofproperty,plantandequipment
(33)
(27)
Acquisition of intangibleassets
(16)
(10)
Acquisition ofinvestments
(14)
(7)
Loansgrantedtoassociatesandjointventures
(2)
(3)
Proceedsfromsaleofsubsidiaries,jointventuresandavailableforsale investments
1
1
Net cash inflow/(outflow) from investingactivities
(333)
(245)
Cash flows from financingactivities
Bankandotherloans-amountsrepaid
(447)
(110)
Bankandotherloans-amountsraised
797
-
Capital element of finance leasepayments
(7)
(21)
Issue of sharecapital
-
-
Equity dividendspaid
(459)
(313)
Dividend paid to minorityinterest
(5)
(8)
Purchaseofownsharesviaemployees'benefittrust
(33)
(33)
Net cash outflow from financingactivities
(154)
(485)
Net increase / (decrease) in cash and cashequivalents
2
(222)
Cash and cash equivalents at 1January
4.1
297
518
Effectsofexchangeratechangesandfairvaluemovements
(5)
1
Cash and cash equivalents at 31December
4.1
294
297

Notes to the Financial Statements 
Section 1: Basis ofPreparation
In thissection
This section sets out the Group's accounting policies that relate to the financial statements as a whole. Where an accountingpolicyisspecifictoonenote,thepolicyisdescribedinthenotetowhichitrelates.Thissectionalsoshows newEUendorsedaccountingstandards,amendmentsandinterpretations,andwhethertheyareeffectivein2015orlater years.WeexplainhowthesechangesareexpectedtoimpactthefinancialpositionandperformanceoftheGroup.
ThefinancialstatementsconsolidatethoseofITVplc('theCompany')anditssubsidiaries(togetherreferredtoasthe'Group')and theGroup'sinterestsinassociatesandjointlycontrolledentities.TheCompanyisdomiciledintheUnitedKingdom.
AsrequiredbyEuropeanUnionlaw(IASRegulationEC1606/2002)theGroup'sfinancialstatementshavebeenpreparedin accordancewithInternationalFinancialReportingStandardsasadoptedbytheEU('IFRS'),andapprovedbytheDirectors.
Thefinancialstatementsareprincipallypreparedonthebasisofhistoricalcost.Whereotherbasesareappliedtheseareidentifiedin the relevant accountingpolicy.
TheparentcompanyfinancialstatementshavebeenpreparedinaccordancewithFinancialReportingStandard101Reduced Disclosure Framework(FRS101).
The financial information in this preliminary announcement represents non-statutory accounts within the meaning of Section 435 of the Companies Act 2006. The auditors have reported on the statutory accounts for the year ended 31 December 2015. Their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. These accounts will be sent to the Registrar of Companies following the Company's Annual General Meeting. A separate dissemination announcement in accordance with the Disclosure and Transparency Rules (DTR) 6.3 will be made when the annual report and audited financial statements are available on the Group's website.
Goingconcern
At 31 December 2015 the Group was in a net debt position. The Group's strong balance sheet and continued generation of significantfreecashflowshasenabledfurtheracquisitionsaswellasthepaymentofaspecialdividend.TheGrouphasalsosought to gain further efficiencies in the balance sheet and maintain the flexibility to invest in the business by issuing a new Eurobond (see section4fordetailsoncapitalstructureandfinancing).
TheGroupcontinuestoreviewforecastsofthetelevisionadvertisingmarkettodeterminetheimpactonITV'sliquidityposition.The Group'sforecastsandprojections,takingaccountofreasonablypossiblechangesintradingperformance,showthattheGroupwill beabletooperatewithinthelevelofitscurrentfunding.
TheGroupalsocontinuestofocusondevelopmentofthenon-advertisingbusiness,andevaluatestheimpactoffurtherinvestment in acquisitions against the strategy and cash headroom of thebusiness.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation foratleasttwelvemonthsfromthedateofthisreport.Accordingly,theGroupcontinuestoadoptthegoingconcernbasisinpreparing its consolidated financial statements.
Subsidiaries,jointventures,associatesandavailableforsaleinvestments
Subsidiaries are entities that are directly or indirectly controlled by the Group. Control exists where the Group has the power to governthefinancialandoperatingpoliciesoftheentityinordertoobtainbenefitsfromitsactivities.Inassessingcontrol,potential votingrightsthatarecurrentlyexercisableorconvertiblearetakenintoaccount.
A joint venture is a joint arrangement in which the Group holds an interest under a contractual arrangement where the Group and oneormoreotherpartiesundertakeaneconomicactivitythatissubjecttojointcontrol.TheGroupaccountsforitsinterestsinjoint ventures using the equity method. Under the equity method the investment in the entity is stated as one line item at cost plus the investor's share of retained post-acquisition profits and other changes in netassets.
Anassociateisanentity,otherthanasubsidiaryorjointventure,overwhichtheGrouphassignificantinfluence.Significantinfluence is the power to participate in, but not control or jointly control, the financial and operating decisions of an entity. These investments are also accounted for using the equitymethod.
InvestmentswheretheGroupconcludesitdoesnothavesignificantinfluencearedeemed'availableforsale'.Theseinvestmentsare heldatfairvalueunlesstheinvestmentisastart-upbusiness,inwhichcaseitisvaluedatcostandassessedforimpairment.
Current/non-currentdistinction
Currentassetsincludeassetsheldprimarilyfortradingpurposes,cashandcashequivalents,andassetsexpectedtoberealisedin, orintendedforsaleorusein,thecourseoftheGroup'soperatingcycle.Allotherassetsareclassifiedasnon-currentassets.
Currentliabilitiesincludeliabilitiesheldprimarilyfortradingpurposes,liabilitiesexpectedtobesettledinthecourseoftheGroup's operating cycle and those liabilities due within one year from the reporting date. All other liabilities are classified as non-current liabilities.
Classification of financialinstruments
ThefinancialassetsandliabilitiesoftheGroupareclassifiedintothefollowingfinancialstatementcaptionsinthestatementof financialpositioninaccordancewithIAS39FinancialInstruments:
 Loansandreceivables-separatelydisclosedascashandcashequivalents(excludinggiltsoverwhichunfundedpension commitments have a charge) and trade and otherreceivables
 Availableforsalefinancialassets-measuredatfairvaluethroughothercomprehensiveincome.Includesgiltsoverwhich unfunded pension commitments have acharge
 Financialassets/liabilitiesatfairvaluethroughprofitorloss-separatelydisclosedasderivativefinancialinstrumentsinassets/ liabilities and included in non-current other payables (contingent consideration)and
 Financialliabilitiesmeasuredatamortisedcost-separatelydisclosedasborrowingsandtradeandotherpayables
JudgementisrequiredwhendeterminingtheappropriateclassificationoftheGroup'sfinancialinstruments.Detailsontheaccounting policiesformeasurementoftheaboveinstrumentsaresetoutintherelevantnote.
Recognition and derecognition of financial assets andliabilities
The Group recognises a financial asset or liability when it becomes a party to the contract. Financial instruments are no longer recognisedinthestatementoffinancialpositionwhenthecontractualcashflowsexpireorwhentheGroupnolongerretainscontrol of substantially all the risks and rewards under theinstrument.
Cash and cashequivalents
Cashandcashequivalentscomprisecashbalances,calldepositswithamaturityoflessthanorequaltothreemonthsfromthedate of acquisition, cash held to meet certain finance lease commitments and gilts in respect of which a charging deed was executed on the unfunded pension commitments of four former Granada executives. The carrying value of cash and cash equivalents is considered to approximate fairvalue.
Foreign currencies
TheprimaryeconomicenvironmentinwhichtheGroupoperatesistheUKandthereforetheconsolidatedfinancialstatementsare presented in pounds sterling('').
WhereGroupcompaniesbasedintheUKtransactinforeigncurrencies,thesetransactionsaretranslatedintopoundssterlingatthe exchangerateonthetransactiondate.Foreigncurrencymonetaryassetsandliabilitiesaretranslatedintopoundssterlingattheyear endexchangerate.Wherethereisamovementintheexchangeratebetweenthedateofthetransactionandtheyearend,aforeign exchangegainorlossisrecognisedintheincomestatement.
Hedgeaccountingisimplementedoncertainforeigncurrencyfirmcommitments,whichallowsfortheeffectiveportionofanyforeign exchangegainsorlossestoberecognisedinothercomprehensiveincome(note4.3).
Whereaforwardcurrencycontractisusedtomanageforeignexchangeriskandhedgeaccountingisnotapplied,anymovementin currency is taken to the incomestatement.
Non-monetaryassetsandliabilitiesmeasuredathistoricalcostaretranslatedintopoundssterlingattheexchangerateonthedateof thetransaction.
The assets and liabilities of Group companies outside of the UK are translated into pounds sterling at the year end exchange rate. Therevenueandexpensesofthesecompaniesaretranslatedintopoundssterlingattheaveragemonthlyexchangerateduringthe year. Where differences arise between these rates, they are recognised in the translation reserve within other comprehensive income.
ExchangedifferencesarisingonthetranslationoftheGroup'sinterestsinjointventuresandassociatesarerecognisedinthe translation reserve within other comprehensiveincome.
OndisposalofasubsidiaryoutsidetheUKoraninterestinajointventureoranassociate,therelatedtranslationreserveisreleased totheincomestatementaspartofthegainorlossondisposal.
Accounting judgements andestimates
The preparation of financial statements requires management to exercise judgement in applying the Group's accounting policies. It alsorequirestheuseofestimatesandassumptionsthataffectthereportedamountsofassets,liabilities,incomeandexpenses. Actual results may differ from theseestimates.
Estimatesandunderlyingassumptionsarereviewedonanongoingbasis,withrevisionsrecognisedintheperiodinwhichthe estimatesarerevisedandinanyfutureperiodsaffected.
Theareasinvolvingahigherdegreeofjudgementorcomplexityaresetoutbelowandinmoredetailintherelatednotes:
 Revenue recognition (note2.1)
 Business combinations (note 3.3 and note3.4)
 AllocationofgoodwillandassetstoCGUsandimpairmentofassets(note3.3)
Inadditiontotheabove,theareasinvolvingthemostsensitiveestimatesandassumptionsthataresignificanttothefinancial statementsaresetoutbelowandinmoredetailintherelatednotes:
 Defined benefit pension schemes, including the related longevity swap (note 3.7)
 Taxation (note 2.3)
NeworamendedEUendorsedaccountingstandards
ThetablebelowrepresentsneworamendedEUendorsedaccountingstandardsrelevanttotheGroup'sresultsthatareeffectivein 2015:
AccountingStandard
Requirement
Impactonfinancialstatements
IAS 19 Employee Benefits
The amendment was to simplify the accounting for contributionsthatareindependentofthenumberofyearsof employeeservice.
The amendment has nothad any impact on theGroup.
Annual Improvements to IFRS 2010 -2012
cycle
Various amendments to simplify various standards including IFRS 2 Share-based payment, IFRS 3 Business Combinations, IFRS 8 Operating Segments, IFRS 13 Fair ValueMeasurement,IAS16Property,PlantandEquipment, IAS 24 Related Party Disclosures and IAS 38 Intangible Assets.
The amendments do not change our accounting and therefore have no impact on the Group's financial position orperformance.
Annual Improvements to IFRS 2011 -2013
cycle
Various amendments to simplify various standards including IFRS1First-timeAdoptionofInternationalFinancialReporting Standards, IFRS 3 Business Combinations, IFRS 13 Fair ValueMeasurement,IAS40InvestmentProperty.
The amendments do not change our accounting and therefore have no impact on the Group's financial position orperformance.
The Directors also considered the impact on the Group of other new and revised accounting standards, interpretations or amendmentsthatarecurrentlyendorsedbutnotyeteffective.Therearenonethatareeffectiveforperiodsbeginningonorafter1 January2015thatareexpectedtohaveasignificantimpactontheGroup'sresults.
IFRS9FinancialInstrumentsiseffective1January2018buthasnotyetbeenendorsedbytheEU.TheDirectorsarecurrently assessing the impact this standard would have on its financial position andperformance.
IFRS 15 Revenue from Contracts with Customers is also effective 1 January 2018 and has also not been endorsed by the EU. The DirectorshaveperformedaninitialassessmentanddonotexpectamaterialimpactonourBroadcastbusiness.Theassessmenton our Studios business isongoing.
IFRS16Leasesiseffective1January2019andhasnotbeenendorsedbytheEU.TheDirectorsarecurrentlyassessingtheimpact this standard would have on its financial position andperformance.

Section 2: Results for theYear
In thissection
This section focuses on the results and performance of the Group. On the following pages you will find disclosures explainingtheGroup'sresultsfortheyear,segmentalinformation,exceptionalitems,taxationandearningspershare.
2.1 Profit beforetax
Keeping itsimple
ThissectionanalysestheGroup'sprofitbeforetaxbyreferencetotheactivitiesperformedbytheGroupandananalysisofkey operatingcosts.
Earnings before interest, tax, amortisation (EBITA) and before exceptional items remains the Group's key profit indicator. This reflects the way the business is managed and how the Directors assess the performance of the Group. This section therefore also shows each division's contribution to total revenue andEBITA.
Accounting policies
Revenuerecognition
RevenueisstatedexclusiveofVATandcomprisesthesaleofproductsandservicestothirdparties.Judgementisrequiredwhen determining the appropriate timing and amount of revenue that can be recognised, specifically around whether there is a firm contract and that the service has been provided, and if so, whether there is a fixed or reasonably determinable price that is reasonably certain will becollected.
RevenuefromthesaleofproductsisrecognisedwhentheGrouphastransferredboththesignificantrisksandrewardsofownership and control of the products sold, and the amount of revenue can be measured reliably. Revenue recognition criteria for the Group's key classes of revenue are recognised onthe following bases:
Applicablesegment
Classofrevenue
Recognitioncriteria
Broadcast &Online
Advertising (NAR), Video onDemand (VOD)
on transmission, as audience targets aremet
Broadcast &Online
Sponsorship
across period of transmission of thesponsored programme orseries
Broadcast &Online
Pay
over the term of the contract or accrued in the month for the expected revenue per subscriber or download and trued up on receipt of third-party reports showing revenue share calculation (showing subscribers or number ofdownloads)
Broadcast &Online
Participation (Interactive &Brand Extensions)
as the service is provided or eventoccurs
Studios
Programmeproduction
on delivery of episode and acceptance bythe customer
Studios
Programme distributionrights
whenthecontractissignedandcontentisavailable forexploitation
Studios
Format andlicences
at the point in time when the license is transferred andthecustomerisabletouseandbenefitfromthe licence
Studios
Digital:Archive
on delivery of content (one-off) or over thecontract period in a manner that reflects the flow of content delivered(top-up)

The results for the year aggregate these classes of revenue into four significantcategories:
2015
m
2014
m
Broadcast &Online
NAR
1,719
1,629
Non-NAR
427
394
ITVStudios
Productions
1,045
789
Distribution
192
144
Totalrevenue
3,383
2,956

Segmentalinformation
Operatingsegments,whichhavenotbeenaggregated,aredeterminedinamannerthatisconsistentwithhowthebusinessis managedandreportedtotheBoardofDirectors.TheBoardisregardedasthechiefoperatingdecisionmaker.
TheBoardconsidersthebusinessprimarilyfromanoperatingactivityperspective.Thereportablesegmentsfortheyearsended31 December 2015 and 31 December 2014 are therefore Broadcast & Online and ITV Studios, the results of which are outlined in the followingtables:
Broadcast &Online
2015
m
ITVStudios*
2015
m
Consolidated
2015
m
Total segmentrevenue
2,146
1,237
3,383
Intersegmentrevenue
-
(411)
(411)
Revenue from externalcustomers
2,146
826
2,972
EBITA before exceptionalitems
659
183
842
Shareoflossesofjointventuresandassociatedundertakings
-
-
-
Broadcast &Online 2014
m
ITVStudios*
2014
m
Consolidated
2014
m
Total segmentrevenue
2,023
933
2,956
Intersegmentrevenue
-
(366)
(366)
Revenue from externalcustomers
2,023
567
2,590
EBITA before exceptionalitems
568
162
730
Shareoflossesofjointventuresandassociatedundertakings
-
-
-
* Revenueof389million(2014:255million)wasgeneratedintheUSduringtheyear,andrepresented314million(2014:297million)ofnon-currentassetsatyear end.
Intersegment revenue, which is carried out on arm's length terms, is generated from the supply of ITV Studios programmes to Broadcast&OnlinefortransmissionprimarilyonITV.ThisrevenuestreamisameasurewhichformspartoftheGroup'sstrategic priorityofbuildingastronginternationalcontentbusiness,asbyproducingandretainingrightstothebroadcastshowstheGroup benefitsfurtherfromsubsequentinternationalcontentandformatsales.
In preparing the segment information, centrally managed costs have been allocated between reportable segments on a methodology driven principally by revenue, headcount and building occupancy of each segment. This is consistent with the basis of reporting to the Board ofDirectors.
Broadcast &Online
The Group operates the largest commercial family of channels in the UK and delivers content through traditional television broadcasting. In addition to linear broadcast, the Group delivers its content on multiple platforms including the ITV Hub, pay platforms,orthroughdirectcontentdeals.Content,thatiscommissionedandscheduledbythissegment,isfundedprimarilyby television advertising, where revenue is generated from the sale of audiences for advertising airtime andsponsorship.
Other sources of revenue are from: online advertising, HD digital channels on pay platforms (e.g. Sky and Virgin), SDN revenue (whichgenerateslicencesalesforDTTMultiplexA),andparticipationrevenue(whichincludesinteractivesalesfromcompetitions) and ITV Choice in othercountries.
ITVStudios
ITVStudiosistheGroup'sinternationalcontentbusiness,creatingandproducingprogrammesandformatsthatreturnandtravel, namely drama, entertainment and factualentertainment.
ITV Studios UK is the largest commercial producer in the UK and produces programming for the Group's own channels, accounting for60%ofITVmainchannelspendoncommissionedprogramming.ProgrammingisalsosoldtootherUKbroadcasterssuchasthe BBC, Channel 4 andSky.
ITVAmericaisthelargestunscriptedindependentproducerofcontentintheUSandisgrowingitsscriptedpresencebyincreasing investment in high profile dramas straight toseries.
ITV Studios also operates in five other international locations being Australia, Germany, France, Netherlands (primarily Talpa) and the Nordics, where content is produced for local broadcasters. This content is either locally created IP or formats that have been created elsewhere by ITV, primarily in theUK.
GlobalEntertainmentandTalpaGlobal,ITV'sdistributionbusinesses,licenseITV'sfinishedprogrammesandformatsandthird-party contentinternationally.WithinthisbusinesswealsofinanceproductionsbothonandoffITVtoacquireglobaldistributionrights.
EBITA beforeexceptional items
The Directors assess the performance of the reportable segments based on a measure of EBITA before exceptional items. The Directorsusethismeasurementbasisasitexcludestheeffectofnon-recurringincomeandexpenditure.Amortisationandshareof profit/(losses) of joint ventures and associates are also excluded to reflect more accurately how the business is managed and measured on a day-to-day basis. Net financing costs and tax are not allocated to segments as the funding, cash and tax managementoftheGroupareactivitiescarriedoutbythecentraltreasuryandtaxfunctions.
AreconciliationfromEBITAbeforeexceptionalitemstoprofitbeforetaxisprovidedasfollows:
2015
m
2014
m
EBITA before exceptionalitems
842
730
Operating exceptionalitems
(109)
(12)
Amortisation of intangibleassets
(67)
(67)
Net financingcosts
(31)
(51)
Shareoflossesofjointventuresandassociatedundertakings
-
-
Gainonsaleofnon-currentassets(exceptionalitems)
5
4
Gainonsaleofsubsidiariesandinvestments(exceptionalitems)
1
1
Profit beforetax
641
605

TheGroup'sprincipaloperationsareintheUnitedKingdom.RevenuefromexternalcustomersintheUnitedKingdomis2,275million(2014:2,123million),andtotalrevenuefromexternalcustomersinothercountriesis697million(2014:467million).
There are two media buying agencies (2014: two) acting on behalf of a number of customers that represent the Group's major customers. These agencies are the only customers which individually represent over 10% of the Group's revenue. Revenue of approximately 576 million (2014: 571 million) and 339 million (2014: 312 million) was derived from these customers. This revenue is attributable to the Broadcast & Onlinesegment.
Cash generated fromoperations
Areconciliationfromprofitbeforetaxtocashgeneratedfromoperationsbeforeexceptionalitemsisasfollows:
2015
m
2014
m
Cash flows from operatingactivities
Profit beforetax
641
605
Gainonsaleofsubsidiariesandinvestments(exceptionalitems)
(1)
(1)
Gainonsaleofnon-currentassets(exceptionalitems)
(5)
(4)
Net financingcosts
31
51
Operating exceptionalitems
109
12
Depreciation of property, plant andequipment
27
27
Amortisation of intangibleassets
67
67
Share-based compensation and pension servicecosts
17
14
Decrease/(increase)inprogrammerightsandotherinventory,anddistributionrights
4
(39)
(Increase)/decrease inreceivables
(21)
18
Decrease inpayables
(42)
(48)
Movement in workingcapital
(59)
(69)
Cash generated from operations before exceptionalitems
827
702

Operatingcosts
Staffcosts
Staffcostsbeforeexceptionalitemscanbeanalysedasfollows:
2015
m
2014*
m
Wages andsalaries
318
277
Social security and othercosts
43
44
Share-based compensation (see note4.7)
14
14
Pensioncosts
25
21
Total staffcosts
400
356
Less: staff costs allocated toproductions
(137)
(118)
FTEE staff costs(non-production)
263
238
* Theprioryearclassificationof'staffcostsallocatedtoproductions'hasbeenrevisedtopresentaconsistentandcomparablemethodologytothe2015allocation.ThereisnochangeinthetotalFTEEstaffcostsandnoimpactontheIncomeStatement.

Thenumberoffull-timeequivalentemployees('FTEE')(excludingshort-termcontractorsandfreelancerswhoarepredominantly allocatedtothecostofproductions),calculatedonaweightedaveragebasis,duringtheyearwas:
2015
2014
Broadcast &Online
2,109
2,042
ITV Studios
3,449
2,517
5,558
4,559

Theincreaseinfull-timeequivalentemployeesinITVStudiosisprimarilydrivenbytheacquisitionscompletedin2015.
Details of Directors' emoluments, share options, pension entitlements and long-term incentive scheme interests are set out in the RemunerationReport.ListedDirectors'gainsonshareoptionsfor2015aresetoutintheITVplcentityfinancialstatements.
Depreciation
Depreciationintheyearwas27million(2014:27million),ofwhich14million(2014:15million)relatestoBroadcast&Onlineand13 million (2014: 12 million) to ITVStudios.
Operatingleases
Thetotalundiscountedfutureminimumleasepaymentsundernon-cancellableoperatingleasesaredueforpaymentasfollows:
2015
Transponders
Property
Total
Within oneyear
34
17
51
Later than one year and not later than fiveyears
111
48
159
Later than fiveyears
115
21
136
260
86
346
2014
Transponders
Property
Total
Within oneyear
38
13
51
Later than one year and not later than fiveyears
123
33
156
Later than fiveyears
158
16
174
319
62
381

The Group's operating leases relate to transponder assets, offices and studio properties. The Group holds transmission supply agreementsthatrequiretheuseofspecifictransponderassetsforaperiodofuptotenyearswithpaymentsincreasingovertime,limitedbyspecificRPIcaps.Thesesupplyagreementsareclassifiedasoperatingleases,inaccordancewiththeGroup'spolicyon leases detailed in note3.2.
Propertyleasesrunfortermsrangingfromfivetotwentyyears,dependingontheexpectedoperationaluseofthesite.Leasesmay include break clauses or options to renew (options to renew are not included in the commitments table). Lease payments are generally subject to market review every five years to reflect market rentals, but because of the uncertainty over the amount of any futurechanges,suchchangeshavenotbeenreflectedinthetableabove.Noneoftheleaseagreementsincludecontingentrentals.
Thetotalfutureminimumsubleasepaymentsexpectedtobereceivedundernon-cancellablesubleasesattheyearendare1 million (2014: 2million).
The total operating lease expenditure recognised during the year was 51 million (2014: 49 million) and total sublease payments received were 2 million (2014: 1million).
Auditfees
TheGroupengagesKPMGLLP('KPMG')onassignmentsadditionaltotheirstatutoryauditdutieswheretheirexpertiseand experience with the Group areimportant.
FeespaidtoKPMGanditsassociatesduringtheyeararesetoutbelow:
2015
m
2014
m
FortheauditoftheGroup'sannualaccounts
0.6
0.6
FortheauditofsubsidiariesoftheGroup
0.4
0.2
Audit-related assuranceservices
0.2
0.2
Total audit and audit-related assuranceservices
1.2
1.0
Taxation complianceservices
-
0.2
Taxation advisoryservices
0.1
0.2
Other assurance services
0.3
0.2
Total non-auditServices
0.4
0.6
Total fees paid toKPMG
1.6
1.6

There were no fees payable in 2015 or 2014 to KPMG and associates for the auditing of accounts of any associate of the Group, internalauditservices,servicesrelatingtocorporatefinancetransactionsenteredintoorproposedtobeenteredinto,byoronbehalf of the Group or any of itsassociates.
FeespaidtoKPMGforauditandotherservicestotheCompanyarenotdisclosedinitsindividualaccountsastheGroupaccounts are required to disclose such fees on a consolidatedbasis.

2.2 Exceptional items 
Keeping itsimple
Exceptional items are excluded from management's assessment of profit because by their size or nature they could distort the Group's underlying quality of earnings. They are typically gains or losses arising from events that are not considered part of the core operations of the business (e.g. costs relating to capital transactions, such as professional feesonacquisitions).Theseitemsareexcludedtoreflectperformanceinaconsistentmannerandareinlinewithhowthe businessismanagedandmeasuredonaday-to-daybasis.
Accountingpolicies
Exceptionalitemsasdescribedabovearedisclosedonthefaceoftheincomestatement.
Subsequentrevisionsofestimatesforitemsinitiallyrecognisedasexceptionalarerecordedasexceptionalitemsintheyearthatthe revisionismade.Gainsorlossesondisposalofnon-coreassetsarealsoconsideredexceptionalduetotheirnatureandimpacton the Group's underlying quality ofearnings.
Exceptionalitems
Operating and non-operating exceptional items are analysed asfollows:
(Charge)/credit
Ref.
2015
m
2014
m
Operating exceptionalitems:
Acquisition-relatedexpenses
A
(88)
(6)
Reorganisation and restructuringcosts
B
(13)
(6)
Legal relatedcosts
E
(8)
-
Total net operating exceptionalitems
(109)
(12)
Non-operating exceptionalitems:
Gain on sale of non-currentassets
C
5
4
Gainonsaleandimpairmentofsubsidiariesandinvestments
D
1
1
Total non-operating exceptionalitems
6
5
Total exceptional items beforetax
(103)
(7)
Tax on exceptionalitems
8
2
Total exceptional items net oftax
(95)
(5)

A - Acquisition-relatedexpenses
Acquisition-related expenses of 88 million includes 78 million (2014: 3 million) relating to performance-based, employment linked coststoformerownersmainlyinrelationtoTalpaMedia,andprofessionalfees(mainlyfinancialandlegalduediligence)incurredon theacquisitionscompletedduringtheyearof10million(2014:3million).Seenote3.4forfurtherdetailsonacquisitions.
B-Reorganisationandrestructuringcosts
In201513million(2014:6million)ofcostswereincurredasaresultofaGroup-wideinitiativetosignificantlyreducetheongoing costbase,primarilycomprisedofrestructuringoftheUSbusiness,redundancyandexcessspaceprovisions.
C-Gainonsaleofnon-currentassets
In2015a5milliongainonsaleofnon-currentassetsaroseprimarilyasaresultofthesaleofafreeholdpropertyandrelatedassets inManchester.The2014gainof4millionaroseasaresultofthesaleofafreeholdpropertyinCardiff.
D-Gainonsaleandimpairmentofsubsidiariesandinvestments
The gain of 1 million (2014: 1 million) relates to a historicaldisposal.
E - Legal relatedcosts
8million(2014:nil)provisionforanticipatedcostsofsettlingalegaldispute.
2.3 Taxation 
Keeping itsimple
This section sets out the Group's tax accounting policies, the current and deferred tax charges or credits in the year (whichtogethermakeupthetotaltaxchargeorcreditintheincomestatement),areconciliationofprofitbeforetaxtothe taxchargefortheperiodandthemovementsindeferredtaxassetsandliabilities.
Accountingpolicies
Thetaxchargefortheperiodisrecognisedintheincomestatement,thestatementofcomprehensiveincomeanddirectlyinequity, according to the accounting treatment of the related transaction. The tax charge comprises both current and deferred tax. The calculationoftheGroup'staxchargeinvolvesadegreeofestimationandjudgementinrespectofcertainitemswhosetaxtreatment cannotbefullydetermineduntilaresolutionhasbeenreachedbytherelevanttaxauthority.
Currenttax
Currenttaxistheexpectedtaxpayableorreceivableonthetaxableincomeorlossfortheyearandanyadjustmentinrespectof previousyears.
The Group recognises liabilities for anticipated tax issues based on estimates of the additional taxes that are likely to become due, which require judgement. Amounts are accrued based on management's interpretation of specific tax law and the likelihood of settlement.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferences willimpactthecurrenttaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.
Deferredtax
Deferredtaxarisesduetocertaintemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialreporting purposes and those for taxationpurposes.
The following temporary differences are not providedfor:
 the initial recognition ofgoodwill
 theinitialrecognitionofassetsorliabilitiesthataffectneitheraccountingnortaxableprofitotherthaninabusinesscombinationand
 differencesrelatingtoinvestmentsinsubsidiariestotheextentthattheywillprobablynotreverseintheforeseeablefuture
Theamountofdeferredtaxprovidedisbasedontheexpectedmannerofrealisationorsettlementofthecarryingamountofassets andliabilities.Deferredtaxiscalculatedusingtaxratesthatareenactedorsubstantivelyenactedatthebalancesheetdate.
Adeferredtaxassetisrecognisedonlytotheextentthatitisprobablethatsufficienttaxableprofitwillbeavailabletoutilisethe temporary difference. Recognition of deferred tax assets, therefore, involves judgement regarding the timing and level of future taxableincome.
DeferredtaxassetsandliabilitiesaredisclosednettotheextentthattheyrelatetotaxesleviedbythesameauthorityandtheGroup has the right ofset-off.
Taxation - Incomestatement
Thetotaltaxationchargeintheincomestatementisanalysedasfollows:
2015
m
2014
m
Currenttax:
Current tax charge before exceptionalitems
(125)
(118)
Currenttaxcredit/(charge)onexceptionalitems
6
(2)
(119)
(120)
Adjustments to priorperiods
9
(6)
(110)
(126)
Deferredtax:
Origination and reversal of temporarydifferences
(20)
(9)
Deferred tax credit on exceptionalitems
2
-
Impact of change in the statutory taxrate
(2)
-
(20)
(9)
Adjustments to priorperiods
(9)
3
(29)
(6)
Total taxation charge in the incomestatement
(139)
(132)

Inordertounderstandhow,intheincomestatement,ataxchargeof139million(2014:132million)arisesonaprofitbeforetaxof641million(2014:605million),thetaxationchargethatwouldariseatthestandardrateofUKcorporationtaxisreconciledtothe actual tax charge asfollows:
2015
m
2014
m
Profit beforetax
641
605
Notional taxation charge at UK corporation tax rate of 20.25% (2014: 21.5%) on profit beforetax
(130)
(130)
Non-taxable income/non-deductibleexpenses
(23)
2
Adjustments to priorperiods
-
(3)
Impact of overseas taxrates
(7)
(1)
Impact of changes in taxrates
(2)
-
Production taxcredits
23
-
Total taxation charge in the incomestatement
(139)
(132)

Non-deductibleexpensesareexpensesthatarenotexpectedtobeallowablefortaxpurposes.Similarlynon-taxableincomeis income that will not betaxed.
Adjustmentstopriorperiodsprimarilyarisewhereanoutcomeisobtainedoncertaintaxmatterswhichdiffersfromexpectationsheld when the related provision was made. Where the outcome is more favourable than the provision made, the difference is released, lowering the current year tax charge. Where the outcome is less favourable than our provision, an additional charge to current year tax willoccur.
TheimpactofoverseastaxratesreflectsthefactthatsomeofourprofitsareearnedinterritoriesotherthantheUK,andtaxedat rates different to the UK corporation taxrate.
On 26 October 2015, the UK corporation tax rate was substantively enacted to fall to 19% from 1 April 2017 and 18% from 1 April 2020. The carrying value of UK temporary differences at the balance sheet date has been adjusted accordingly. This has given rise toachargeof1million(2014:nilmillion)ofwhich2millionisrecognisedasachargeintheincomestatementand1masacredit in other comprehensiveincome.
ProductiontaxcreditsareincentivesprovidedtocreativeindustriessuchasUKHigh-EndTelevision(HETV)taxrelief.Theabilityto access these tax credits is fundamental when assessing the viability of investment decisions in the production of high-end drama. Under IFRS certain production tax credits are reported within the total taxation charge in the income statement, however ITV considers them to be working capital in nature, and excludes them from its adjusted tax charge, including them instead within AdjustedEBITA.
Theeffectivetaxrateisthetaxchargeonthefaceoftheincomestatementexpressedasapercentageoftheprofitbeforetax.Inthe years ended 31 December 2015 and 31 December 2014, the effective tax rate is comparable to the standard rate of UK corporation tax. As explained in the Financial and Performance Review, the Group uses an adjusted tax rate to show how tax impacts total adjustedearningsinawaythatismorealignedwiththeGroup'scashtaxposition.
Taxation-Othercomprehensiveincomeandequity
As analysed in the table below, a deferred tax charge of 19 million on actuarial movements on pensions has been recognised in othercomprehensiveincome.Adeferredtaxchargeof2millionhasbeenrecognisedinequityinrespectofsharebasedpayments.
Acurrenttaxcreditof7millionhasalsobeenrecognisedinequityinrelationtosharebasedpayments.
Taxation - Statement of financialposition
Thetablebelowoutlinesthedeferredtaxassets/(liabilities)thatarerecognisedinthestatementoffinancialposition,togetherwith their movements in theyear:
At 1January
2015
m
Recognised
in theincome
statement
m
Recognisedin OCI andequity
m
Businessacquisitions
m
At 31December
2015
m
Property, plant andequipment
(1)
1
-
-
-
Intangibleassets
(15)
(10)
-
(76)
(101)
Programmerights
1
-
-
-
1
Pension schemedeficits
36
(16)
(19)
-
1
Taxlosses
7
(3)
-
-
4
Share-based compensation
14
(1)
(2)
-
11
Other temporarydifferences
1
-
-
4
5
43
(29)
(21)
(72)
(79)
At 1January
2014*
m
Recognised 
in the income
statement*
m
Recognisedin OCI andequity
m
Businessacquisitions
m
At 31December
2014*
m
Property, plant andequipment
(6)
5
-
-
(1)
Intangibleassets
(13)
(2)
-
-
(15)
Programmerights
1
-
-
-
1
Pension schemedeficits
56
(16)
(4)
-
36
Taxlosses
2
5
-
-
7
Share-based compensation
13
-
1
-
14
Other temporarydifferences
(1)
2
-
-
1
52
(6)
(3)
-
43
* Theprioryearmovementsondeferredtaxrelatingtooverseasbusinesseshavebeenreallocatedtotherelevanttemporarydifferencecategories.

At 31 December 2015, total deferred tax assets are 22 million (2014: 55 million) and total deferred tax liabilities are 101 million (2014:12million).Afternettingoffbalanceswithincountries,thereisanetdeferredtaxliabilityof79m(2014:netdeferredtaxasset of 43 million) recognised in the Consolidated Statement of FinancialPosition.
The deferred tax balance relatesto:
 property,plantandequipmenttemporarydifferencesarisingonassetsqualifyingfortaxdepreciation
 temporary differences on intangible assets arising on businesscombinations
 programmerights-temporarydifferencesonintercompanyprofitsonstock
 pensionschemedeficittemporarydifferencesontheIAS19pensiondeficitandadditionalcontributionsresultingfromfunding throughtheSDNandLTVCpensionpartnerships(notrecognisedascontributionsunderIAS19)
 temporarydifferencesarisingfromthetimingoftheuseoftaxlosses
 share-based compensation temporary differences on share schemesand
 other temporary differences on provisions and otheritems
The deferred tax balance associated with the pension deficit has been adjusted to reflect the current tax benefit obtained in the currentyearfollowingtheemployercontributionsof102milliontotheGroup'sdefinedbenefitpensionscheme.Theadjustmentin othercomprehensiveincometothedeferredtaxbalanceprimarilyrelatestotheactuarialgainsrecognisedintheperiod.
Adeferredtaxassetof399million(2014:444million)inrespectofcapitallossesof2,215million(2014:2,221million)hasnot been recognised due to uncertainties as to whether a capital gain will arise in the appropriate form and relevant territory against whichsuchlossescouldbeutilised.Forthesamereasons,deferredtaxassetsinrespectofoverseaslossesof 15 million (2014:14 million) that time expire between 2017 and 2026 have not beenrecognised.
2.4 Earnings per share 
Keeping itsimple
Earnings per share ('EPS') is the amount of post-tax profit attributable to each share.
Basic EPS is calculated on the Group profit for the year attributable to equity shareholders of 495 million (2014: 466 million) divided by 4,006 million (2014: 4,002 million) being the weighted average number of shares in issue during the year.
Diluted EPS reflects any commitments made by the Group to issue shares in the future and so it includes the impact of share options.
Adjusted EPS is presented in order to show the business performance of the Group in a consistent manner and reflect how the business is managed and measured on a day-to-day basis. Adjusted EPS reflects the impact of operating and non-operating exceptional items on Basic EPS. Other items excluded from Adjusted EPS include amortisation and impairment of intangible assets acquired through business combinations; net financing cost adjustments and the tax adjustments relating to these items. Each of these adjustments are explained in detail in the section below.

ThecalculationofBasicEPSandAdjustedEPS,togetherwiththedilutedimpactoneach,issetoutbelow:
Earnings per share2015
Ref.
Basic
m
Diluted
m
ProfitfortheyearattributabletoequityshareholdersofITVplc
495
495
Weightedaveragenumberofordinarysharesinissue-million
4,006
4,006
Dilution due to shareoptions
-
29
Totalweightedaveragenumberofordinarysharesinissue-million
4,006
4,035
Earnings per ordinaryshare
12.4p
12.3p

Adjustedprofitfortheyearremovestheeffectofexceptionalitems,asdescribedinthe'Keepingitsimple'boxabove.Furtherdetail onthecompositionofeachadjustmentiscross-referencedinthefollowingnotes.
Adjusted earnings per share2015
Ref.
Adjusted
m
Diluted
m
ProfitfortheyearattributabletoequityshareholdersofITVplc
495
495
Exceptional items (net oftax)
A
95
95
Profit for the year before exceptionalitems
590
590
Amortisation and impairment of acquired intangibleassets
B
54
54
Adjustments to net financingcosts
C
15
15
Adjustedprofit
659
659
Totalweightedaveragenumberofordinarysharesinissue-million
4,006
4,035
Adjusted earnings per ordinaryshare
16.5p
16.3p

Earnings per share2014
Ref.
Basic
m
Diluted
m
ProfitfortheyearattributabletoequityshareholdersofITVplc
466
466
Weightedaveragenumberofordinarysharesinissue-million
4,002
4,002
Dilution due to shareoptions
-
38
Totalweightedaveragenumberofordinarysharesinissue-million
4,002
4,040
Earnings per ordinaryshare
11.6p
11.5p

Adjusted earnings per share2014
Ref.
Adjusted
m
Diluted
m
ProfitfortheyearattributabletoequityshareholdersofITVplc
466
466
Exceptionalitems
A
5
5
Profit for the year before exceptionalitems
471
471
Amortisation and impairment of acquired intangibleassets
B
44
44
Adjustments to net financingcosts
C
34
34
Other taxadjustments
B
5
5
Adjustedprofit
554
554
Totalweightedaveragenumberofordinarysharesinissue-million
4,002
4,040
Adjusted earnings per ordinaryshare
13.8p
13.7p

Details of the adjustments to earnings are asfollows:
A. RefertoNote2.2forthedetailedcompositionofaftertaximpactofexceptionalitems(bothoperatingandnonoperating)of95 million (2014: 5million).
B. Amortisation and impairment of acquired intangible assets of 58 million (2014: 44 million) is excluded from adjusted profit. It is calculated as total amortisation and impairment of 67 million (2014: 67 million), less amortisation of software licences and development of 9 million (2014: 11 million). A related tax credit of 13 million (2014: 12 million) is also excluded in arriving at the netamount,whichisfurtheradjustedtorecognisethe9millioncashtaxbenefitarisingfromgoodwillonUSacquisitions,whichfor taxpurposesisamortisedovera15yearperiod(2014:5millionshownwithinothertaxadjustments).
C. Gross adjustments of 18 million (2014: 44 million) have been made to net financing costs and relate to mark-to-market movementsonderivativeinstruments,lossesonbuybacksandimputedpensioninterestcharges(seenote4.4fordetails).Thisis reducedbyataxcreditof3million(2014:10million)togiveanetadjustmentof15million(2014:34million).

Section 3: Operating Assets andLiabilities
In thissection
This section shows the assets used to generate the Group's trading performance and the liabilities incurred as a result. On the following pages there are notes covering working capital, non-current assets and liabilities, acquisitions and disposals, provisions and pensions.
Liabilities relating to the Group's financing activities are addressed in Section 4. Deferred tax assets and liabilities are shown in note 2.3.
3.1 Working capital 
Keeping itsimple
WorkingcapitalrepresentstheassetsandliabilitiestheGroupgeneratesthroughitstradingactivity.TheGrouptherefore defines working capital as distribution rights, programme rights and production costs, trade and other receivables and tradeandotherpayables.
CarefulmanagementofworkingcapitalensuresthattheGroupcanmeetitstradingandfinancingobligationswithinits ordinary operatingcycle.
Workingcapitalisadriveroftheprofittocashconversion,akeyperformanceindicatorfortheGroup.TheGroup'starget profittocashratioonarollingthreeyearbasisisatleast90%.Forthosesubsidiariesacquiredduringtheyear,working capitalatthedateofacquisitionisexcludedfromtheprofittocashcalculationsothatonlysubsequentworkingcapital movementsintheperiodownedbyITVarereflectedinthismetric.
Inthefollowingsectionyouwillfindfurtherinformationregardingworkingcapitalmanagementandanalysisofthe elementsofworkingcapital.
3.1.1 Distribution rights
Accountingpolicies
DistributionrightsareprogrammerightstheGroupbuysfromproducerstoderivefuturerevenue,principallythroughlicensingto broadcasters. These are classified as non-current assets as these rights are used to derive long-term economic benefit for the Group.
Distribution rights are recognised initially at cost and charged through operating costs in the income statement over a maximum five yearperiodthatisdependentoneithercumulativesalesandprogrammegenre,orbasedonforecastfuturesales.Advancespaidfor the acquisition of distribution rights are disclosed as distribution rights as soon as they are contracted. These advances are not expensed until the programme is available for distribution. Up to that point they are assessed annually for impairment through the reassessmentofthefuturesalesexpectedtobeearnedfromthattitle.
Thenetbookvalueofdistributionrightsattheyearendareasfollows:
2015
m
2014
m
Distributionrights
29
13

Themovementduringtheyearcomprisesadditionsof43million (2014: 21million)andamountschargedtotheincomestatement of 27 million (2014: 18million).
3.1.2 Programme rights and otherinventory
Accountingpolicies
RightsarerecognisedwhentheGroupcontrolstherespectiverightsandtherisksandrewardsassociatedwiththem.
Programmerightsandproductioncostsnotyetwrittenoffareincludedinthestatementoffinancialpositionatthelowerofcostand net realisablevalue.
Broadcast programmerights
Acquiredprogrammerights(whichincludefilms),andsportsrights,arepurchasedfortheprimarypurposeofbroadcastingonthe ITV network. These are recognised within current assets as payments are made or when the rights are ready for broadcast. The Groupgenerallyexpensestheserightsthroughoperatingcostsoveranumberoftransmissionsreflectingthepatternandvaluein which the right isconsumed.
Commissions, which primarily comprise programmes purchased based on editorial specification and over which the Group has somecontrol,arerecognisedincurrentassetsaspaymentsaremadeandaregenerallyexpensedtooperatingcostsinfullonfirst transmission.Whereacommissionisrepeated,incrementalcostsassociatedwiththebroadcastareincludedinoperatingcosts.
Inassessingnetrealisablevalueforacquiredandcommissionedrights,thenetrealisablevalueassessmentisbasedonestimated airtime value, with consideration given to whether the number of transmissions purchased can be efficiently played out over the licenceperiod.
Studios productioncosts
Production inventory comprises the costs incurred by ITV Studios in producing a programme, where the programme is part way throughtheproductionprocessandnotyetavailablefordeliverytoabroadcaster.Theyarerecognisedwithincurrentassetsatthe productioncostincurred,andareexpensedinoperatingcostsondeliveryofepisodes.
Alsoincludedherearedramasthathavebeencommissionedstraighttoseries.Althoughmoreexpensivethanproducingapilot,this method attracts high profile talent to the production and raises the profile of the series to support its distribution. The production cost is partly funded by the commissioning network licence fee, the remaining production deficit is recovered by future distribution sales, andoncetheproductioniscompleteanyremainingdeficitisclassifiedasaDistributionRight.
Inassessingnetrealisablevalueforprogrammesinproduction,judgementisrequiredwhenconsideringthecontractedsalesprice and estimated costs tocomplete.
TheGroup'sprogrammerightsandotherinventoryattheyearendareshowninthetablebelow:
2015
m
2014
m
Broadcast
Acquired programmerights
111
101
Commissions
61
57
Sportsrights
30
40
ITVStudios
Productioncosts
171
169
373
367

3.1.3 Programmecommitments
These are operating commitments in respect of programming entered into in the ordinary course of business with programme suppliers,sportsorganisationsandfilmdistributorsinrespectofrightstobroadcastontheITVnetwork.Commitmentsinrespectof thesepurchases,whicharenotreflectedinthestatementoffinancialposition,aredueforpaymentasfollows:
2015
m
2014
m
Within oneyear
451
464
Laterthanoneyearandnotmorethanfiveyears
633
462
More than fiveyears
141
58
1,225
984

3.1.4 Trade and otherreceivables
Accountingpolicies
Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the amounts considered recoverable (amortised cost). Where payments are not due for more than one year, they are shown in the financial statementsattheirnetpresentvaluetoreflecttheeconomiccostofdelayedpayment.TheGroupprovidesgoodsandservicesto substantially all its customers on creditterms.
Estimates are used in determining the level of receivables that will not, in the opinion of the Directors, be collected. These estimates include such factors as historical experience, the current state of the UK and overseas economies and industry specific factors. A provisionforimpairmentoftradereceivablesisestablishedwhenthereissufficientevidencethattheGroupwillnotbeabletocollect all amountsdue.
Thecarryingvalueoftradereceivablesisconsideredtoapproximatefairvalue. 
Tradeandotherreceivablescanbeanalysedasfollows:
2015
m
2014
m
Due within oneyear:
Tradereceivables
328
271
Otherreceivables
37
27
Prepaidemploymentlinkedconsideration(seenote3.4)
55
-
Prepayments and accruedincome
111
87
531
385
Due after more than oneyear:
Tradereceivables
8
7
Prepaidemploymentlinkedconsideration(seenote3.4)
18
-
Otherreceivables
7
17
Total trade and otherreceivables
564
409

Prepaidemploymentlinkedconsiderationtotalling73millionrelatestotheacquisitionofTalpaMedia(seenote3.4fordetails).This representstheportionoftheinitialconsiderationthatisrecoverablefromthesellerintheeventheleaveswithintheinitialtwoyears following acquisition and is amortised over thatperiod.
336million(2014:278million)oftotaltradereceivablesthatarenotimpairedareagedasfollows:
2015
m
2014
m
Current
308
263
Up to 30 daysoverdue
17
7
Between 30 and 90 daysoverdue
8
4
Over 90 daysoverdue
3
4
336
278
The balance above is stated net of a provision of 5 million (2014: 7 million) for impairment of trade receivables. Of the provision total,4millionrelatestobalancesoverduebymorethan90days(2014:3million)and1millionrelatestocurrentbalances(2014: 4million).
MovementsintheGroup'sprovisionforimpairmentoftradereceivablescanbeshownasfollows:
2015
m
2014
m
At 1January
7
7
Charged during theyear
3
2
Receivableswrittenoffduringtheyearasuncollectable(utilisationofprovision)
-
-
Unused amountsreversed
(5)
(2)
At 31December
5
7

3.1.5 Tradeandotherpayablesduewithinoneyear
Accountingpolicies
Tradepayablesarerecognisedatthevalueoftheinvoicereceivedfromasupplier.Thecarryingvalueofcurrentandnon-current tradepayablesisconsideredtoapproximatefairvalue.Tradeandotherpayablesduewithinoneyearcanbeanalysedasfollows:
2015
m
2014
m
Tradepayables
65
49
VAT and socialsecurity
71
68
Otherpayables
177
159
Accruals
289
250
Deferredincome
184
173
786
699

3.1.6 Tradepayablesdueaftermorethanoneyear
Tradepayablesdueaftermorethanoneyearcanbeanalysedasfollows:
2015
m
2014
m
Tradepayables
48
27

Thisprimarilyrelatestofilmcreditorsforwhichpaymentisdueaftermorethanoneyear.
3.1.7 Working capitalmanagement
Cashandworkingcapitalmanagementcontinuestobeakeyfocus.Duringtheyearthecashoutflowfromworkingcapitalwas59 million(2014:outflowof69million)derivedasfollows:
2015
m
2014
m
Decrease/(increase)inprogrammerightsandotherinventoryanddistributionrights
4
(39)
(Increase)/decrease inreceivables
(21)
18
Decrease inpayables
(42)
(48)
Working capitaloutflow
(59)
(69)

Theworkingcapitaloutflowfortheyearexcludestheimpactofbalancesacquiredontheacquisitionofsubsidiariesduringtheyear (see note3.4).
3.2 Property, plant andequipment

Keeping itsimple
The following section shows the physical assets used by the Group to operate the business, generating revenues and profits. These assets include office buildings and studios, as well as equipment used in broadcast transmission, programme production and supportactivities.
The cost of these assets is the amount initially paid for them. A depreciation expense is charged to the income statement to reflect annualwearandtearandthereducedvalueoftheassetovertime.Depreciationiscalculatedbyestimatingthenumberofyearsthe Group expects the asset to be used (useful economic life). If there has been a technological change or decline in business performance the Directors review the value of the assets to ensure they have not fallen below their depreciated value. If an asset's valuefallsbelowitsdepreciatedvalueanadditionalone-offimpairmentchargeismadeagainstprofit.
ThissectionalsoexplainstheaccountingpoliciesfollowedbyITVandthespecificestimatesmadeinarrivingatthenetbookvalueof these assets.
Accountingpolicies
Property, plant andequipment
Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandimpairmentlosses.Certainitemsofproperty, plant and equipment that were revalued to fair value prior to 1 January 2004 (the date of transition to IFRS) are measured on the basisofdeemedcost,beingtherevaluedamountlessdepreciationuptothedateoftransition.
Leases
Financeleasesarethosewhichtransfersubstantiallyalltherisksandrewardsofownershiptothelessee.Certainservicecontracts involve the use of specific assets (e.g. transmission equipment) and therefore contain an embeddedlease.
Determining whether a lease is a finance lease requires judgement as to whether substantially all of the risks and benefits of ownership have been transferred to the Group. Estimates used by management in making this assessment include the useful economic life of assets, the fair value of the asset and the discount rate applied to the total payments required under the lease. Assetsheldundersuchleasesareincludedwithinproperty,plantandequipmentanddepreciatedonastraight-linebasisovertheir estimated usefullives.
Outstanding finance lease obligations, which comprise the principal plus accrued interest, are included within borrowings. The financeelementoftheagreementsischargedtotheincomestatementoverthetermoftheleaseonaneffectiveinterestbasis.
Allotherleasesareoperatingleases,therentalsonwhicharechargedtotheincomestatementonastraight-linebasisoverthe lease term (see note 2.1 for further details of operating leasecommitments).
Depreciation
Depreciationisprovidedtowriteoffthecostofproperty,plantandequipmentlessestimatedresidualvalue,onastraight-linebasis over their estimated useful lives. The annual depreciation charge is sensitive to the estimated useful life of each asset and the expectedresidualvalueattheendofitslife.Themajorcategoriesofproperty,plantandequipmentaredepreciatedasfollows:
Assetclass
Depreciationpolicy
Freeholdland
notdepreciated
Freeholdbuildings
up to 60years
Leaseholdimprovements
shorterofresidualleasetermorestimatedusefullife
Vehicles,equipmentandfittings*
3 to 20years
* Equipmentincludesstudioproductionandtechnologyassets.

Impairmentofassets
Property, plant and equipment that is subject to depreciation is reviewed for impairment whenever events or changes in circumstancesindicatethatthecarryingamountmaynotberecoverable.Indicatorsofimpairmentmayincludechangesin technology and businessperformance.
Property, plant andequipment
Property,plantandequipmentcanbeanalysedasfollows:
Freeholdland andbuildings
Improvementstoleasehold
landandbuildings
Vehicles,equipment
andfittings
Total
m
Long
m
Short
m
Owned
m
Finance
leases
m
m
Cost
At 1 January2014
137
69
17
221
16
460
Additions
-
-
-
26
-
26
Reclassification of propertyfittings
-
(2)
-
2
-
-
Disposals andretirements
(17)
-
-
(12)
-
(29)
At 31 December2014
120
67
17
237
16
457
Additions
-
-
1
37
-
38
Disposals andretirements
(31)
(1)
-
(10)
-
(42)
At 31 December2015
89
66
18
264
16
453
Depreciation
At 1 January2014
23
11
15
138
14
201
Charge for theyear
1
2
-
24
-
27
Disposals andretirements
(7)
-
-
(12)
-
(19)
At 31 December2014
17
13
15
150
14
209
Charge for theyear
1
2
-
24
-
27
Disposals andretirements
(12)
(1)
-
(9)
-
(22)
At 31 December2015
6
14
15
165
14
214
Net bookvalue
At 31 December2015
83
52
3
99
2
239
At 31 December2014
103
54
2
87
2
248
Additions in the year includes 6 million (2014: 5 million) relating to assets owned by subsidiaries acquired during the year.
Included within property, plant and equipment are assets in the course of construction of 16 million (2014: 10 million).
During the year, the Group disposed of the Quay Street site and related assets in Manchester for 23 million, representing a gain on sale of 5 million. In 2014, the Group sold a freehold property in Cardiff for proceeds of 15 million, representing a gain on sale of 5 million. In 2013 the Group acquired the freehold for the London Television Centre for 58 million, although the Directors' view is that fair value of the property would be significantly higher.
Capitalcommitments
Thereare2millionofcapitalcommitmentsat31December2015 (2014: 2million).

3.3 Intangible assets

Keeping itsimple
Thefollowingsectionshowsthenon-physicalassetsusedbytheGrouptogeneraterevenueandprofits.
These assets include formats and brands, customer contracts and relationships, contractual arrangements, licences, software development,filmlibrariesandgoodwill.ThecostoftheseassetsistheamountthattheGrouphaspaidor,wheretherehasbeena businesscombination,thefairvalueofthespecificintangibleassetsthatcouldbesoldseparatelyorwhicharisefromlegalrights.In thecaseofgoodwill,itscostistheamounttheGrouphaspaidinacquiringabusinessoverandabovethefairvalueoftheindividual assets and liabilities acquired. The value of goodwill is 'intangible' value that comes from, for example, a uniquely strong market position and the outstanding productivity of itsemployees.
The value of intangible assets, with the exception of goodwill, reduces over the number of years the Group expects to use the asset, the useful economic life, via an annual amortisation charge to the income statement. Where there has been a technological change or decline in business performance the Directors review the value of assets, including goodwill, to ensure they have not fallen below theiramortisedvalue.Shouldanasset'svaluefallbelowitsamortisedvalueanadditionalone-offimpairmentchargeismadeagainst profit.
ThissectionexplainstheaccountingpoliciesappliedandthespecificjudgementsandestimatesmadebytheDirectorsinarrivingat thenetbookvalueoftheseassets.
Accounting policies
Goodwill
Goodwill represents the future economic benefits that arise from assets that are not capable of being individually identified and separatelyrecognised.ThegoodwillrecognisedbytheGrouphasallarisenasaresultofbusinesscombinations.Goodwillisstated atitsrecoverableamountbeingcostlessanyaccumulatedimpairmentlossesandisallocatedtothebusinesstowhichitrelates.
Duetochangesinaccountingstandardsgoodwillhasbeencalculatedusingthreedifferentmethodsdependingonthedatethe relevant business waspurchased.
Method 1: All business combinations that have occurred since 1 January 2009 were accounted for using the acquisition method. Underthismethod,goodwillismeasuredasthefairvalueoftheconsiderationtransferred(includingtherecognitionofanypartofthe business not yet owned (non-controlling interests)), less the fair value of the identifiable assets acquired and liabilities assumed, all measured at the acquisition date. Any contingent consideration expected to be transferred in the future will be recognised at fair value at the acquisition date and recognised within other payables. Contingent consideration classified as an asset or liability that is a financialinstrumentismeasuredatfairvaluewithchangesinfairvaluerecognisedintheincomestatement.Thedeterminationoffair value is based on discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discountrate.
Wherelessthan100%ofasubsidiaryisacquired,andcallandputoptionsaregrantedovertheremaininginterest,anon-controlling interest is initially recognised in equity at fair value, which is established based on the value of the put option. A call option is recognisedasaderivativefinancialinstrument,carriedatfairvalue.Theputoptionisrecognisedasaliabilitywithinotherpayables, carried at the present value of the put option exercise price, and a corresponding charge is included in merger and other reserves. Anysubsequentremeasurementoftheputoptionliabilityisrecognisedwithinfinanceincomeorcost.
Subsequentadjustmentstothefairvalueofnetassetsacquiredcanonlybemadewithin12monthsoftheacquisitiondate,andonly if fair values were determined provisionally at an earlier reporting date. These adjustments are accounted for from the date of acquisition.
Acquisitionsofnon-controllinginterestsareaccountedforastransactionswithownersandthereforenogoodwillisrecognisedasa result of such transactions. Transaction costs incurred in connection with those business combinations, such as legal fees, due diligence fees and other professional fees, are expensed asincurred.
Method 2: All business combinations that occurred between 1 January 2004 and 31 December 2008 were accounted for using the purchase method in accordance with IFRS 3 Business Combinations (2004). Goodwill on those combinations represents the differencebetweenthecostoftheacquisitionandthefairvalueoftheidentifiablenetassetsacquiredanddidnotincludethevalueof the non-controlling interest. Transaction costs incurred in connection with those business combinations, such as legal fees, due diligence fees and other professional fees, were included in the cost ofacquisition.
Method3:Forbusinesscombinationspriorto1January2004,goodwillisincludedatitsdeemedcost,whichrepresentstheamount recorded under UK GAAP at that time less accumulated amortisation up to 31 December 2003. The classification and accounting treatment of business combinations occurring prior to 1 January 2004, the date of transition to IFRS, has not been reconsidered as permitted under IFRS1.
Other intangibleassets
Intangibleassetsotherthangoodwillarethosethataredistinctandcanbesoldseparatelyorwhicharisefromlegalrights.
WithinITVtherearetwotypesofotherintangibleassets:thoseassetsdirectlypurchasedbytheGroupforday-to-dayoperational purposes(suchassoftwarelicencesanddevelopment)andintangibleassetsidentifiedaspartofanacquisitionofabusiness.
Intangible assets acquired directly by the Group are stated at cost less accumulated amortisation. Those separately identified intangibleassetsacquiredaspartofanacquisitionorbusinesscombinationareshownatfairvalueatthedateofacquisitionless accumulatedamortisation.
The main intangible assets the Group has valued are formats, brands, licences, contractual arrangements, customer contracts and relationships andlibraries.
Eachclassofintangibleasset'svaluationmethodoninitialrecognition,amortisationmethodandestimatedusefullifeissetoutinthe tablebelow:
Classofintangibleasset
Valuation method
Amortisationmethod
Estimatedusefullife
Formatsand brands
Applyingaroyaltyratetotheexpectedfuturerevenue overthelifeofthebrand.
Straight-line
8 to 14years
Customer contracts and relationships
Expected future cash flows from those contracts and relationships existing at the date of acquisition areestimated.Ifapplicable,acontributorychargeis deductedfortheuseofotherassetsneededtoexploit the cash flow. The net cash flow is then discounted back to presentvalue.
Straight-line or reducing balance asappropriate
up to 6 years for customercontracts
5 to 10years for customer relationships
Contractual arrangements
Expected future cash flows from those contracts existingatthedateofacquisitionareestimated.
Ifapplicable,acontributorychargeisdeductedforthe useofotherassetsneededtoexploitthecashflow.
Thenetcashflowisthendiscountedbacktopresent value.
Straight-line
up to 10 years depending onthe contractterms
Licences
Start-up basis of expected future cash flows existing at the date of acquisition. If applicable, a contributory chargeisdeductedfortheuseofotherassetsneeded to exploit the cash flow. The net cash flow is then discounted back to presentvalue.
Straight-line
11 to 17 years depending onterm oflicence
Libraries andother
Initiallyatcostandsubsequentlyatcostless accumulatedamortisation.
Sum of digitsor straight line as appropriate
up to 20years
Software licences anddevelopment
Initiallyatcostandsubsequentlyatcostless accumulatedamortisation.
Straight-line
1 to 5years

Determining the fair value of intangible assets arising on acquisition requires judgement. The Directors make estimates regarding the timingandamountoffuturecashflowsderivedfromexploitingtheassetsbeingacquired.TheDirectorsthenestimateanappropriate discount rate to apply to the forecast cash flows. Such estimates are based on current budgets and forecasts, extrapolated for an appropriate period taking into account growth rates, operating costs and the expected useful lives of assets. Judgements are also maderegardingwhether,andforhowlong,licenceswillberenewed;thisdrivesouramortisationpolicyforthoseassets.
TheDirectorsestimatetheappropriatediscountrateusingpre-taxratesthatreflectcurrentmarketassessmentsofthetimevalueof moneyandtherisksspecifictotheassetsorbusinessesbeingacquired.
Amortisation
Amortisationischargedtotheincomestatementovertheestimatedusefullivesofintangibleassetsunlesssuchlivesarejudgedto beindefinite.Indefinitelifeassets,suchasgoodwill,arenotamortisedbutaretestedforimpairmentateachyearend.
Impairment
Goodwillisnotsubjecttoamortisationandistestedannuallyforimpairmentandwhencircumstancesindicatethatthecarryingvalue may beimpaired.
Otherintangibleassetsaresubjecttoamortisationandarereviewedforimpairmentwhenevereventsorchangesincircumstances indicatethattheamountcarriedinthestatementoffinancialpositionislessthanitsrecoverableamount.
Determining whether the carrying amount of intangible assets has any indication of impairment requires judgement. Any impairment is recognised inthe income statement.
Animpairmenttestisperformedbyassessingtherecoverableamountofeachasset,orforgoodwill,thecash-generatingunit(or group of cash-generating units) related to the goodwill. Total assets (which includes goodwill) are grouped at the lowest levels for which there are separately identifiable cash flows ('cash-generating unit' or'CGU').
Therecoverableamountisthehigherofanasset'sfairvaluelesscoststosellandvalueinuse.Thevalueinuseisbasedonthe present value of the future cash flows expected to arise from theasset.
The Group applies cautious assumptions for impairment testing. Estimates are used in deriving these cash flows and the discount rate. Such estimates reflect current market assessments of the risks specific to the asset and the time value of money. The estimation process is complex due to the inherent risks and uncertainties associated with long-term forecasting. If different estimates of the projected future cash flows or a different selection of an appropriate discount rate or long-term growth rate were made, these changes could materially alter the projected value of the cash flows of the asset, and as a consequence materially different amounts would be reported in the financialstatements.
Impairmentlossesinrespectofgoodwillarenotreversed.Inrespectofassetsotherthangoodwill,animpairmentlossisreversedif there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extentthattheasset'scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation oramortisation, if no impairment loss had beenrecognised.
Intangibleassets
Intangibleassetscanbeanalysedasfollows:
Goodwill
m
Formats andbrands
m
Customer contractsand relationships
m
Contractual arrangements
m
Licences
m
Libraries andother
m
Software licences and development
Total
m
Cost
At 1 January2014
3,467
179
352
10
121
81
78
4,288
Additions
146
21
30
-
-
16
11
224
Foreignexchange
14
1
3
-
-
-
-
18
At 31 December2014
3,627
201
385
10
121
97
89
4,530
Additions
102
273
23
-
-
1
15
414
Foreignexchange
15
7
3
-
-
1
-
26
At 31 December2015
3,744
481
411
10
121
99
104
4,970
Amortisation andimpairment
At 1 January2014
2,654
159
326
2
83
50
60
3,334
Charge for theyear
-
18
21
3
7
7
11
67
At 31 December2014
2,654
177
347
5
90
57
71
3,401
Charge for theyear
-
27
17
2
4
8
9
67
Foreignexchange
-
1
1
-
-
-
-
2
At 31 December2015
2,654
205
365
7
94
65
80
3,470
Net bookvalue
At 31 December2015
1,090
276
46
3
27
34
24
1,500
At 31 December2014
973
24
38
5
31
40
18
1,129

Allintangibleassetadditionsintheyear,excludingsoftware,areduetotheacquisitionoffourproductioncompanies,asdetailedin note 3.4 (2014: three production companiesacquired).
Goodwill impairmenttests
ThecarryingamountofGoodwillforeachCGUisrepresentedasfollows:
2015
m
2014
m
Broadcast &Online
342
342
SDN
76
76
ITV Studios
672
555
1,090
973

TherehasbeennoimpairmentchargeforanyCGUduringtheyear(2014:nil).
Whenassessingimpairment,therecoverableamountofeachCGUisbasedonvalueinusecalculations.Thesecalculationsrequire theuseofestimates,specifically:pre-taxcashflowprojections;long-termgrowthrates;andapre-taxmarketdiscountrate.
CashflowprojectionsarebasedontheGroup'scurrentfiveyearplan.Beyondthefiveyearplantheseprojectionsareextrapolated using an estimated long-term growth rate of 2% (2014: 2%). The growth rate used is consistent with the long-term average growth ratesforboththeindustryandthecountryinwhichtheyarelocatedandisappropriatebecausethesearelong-termbusinesses.
The discount rate has been revised for each CGU to reflect the latest market assumptions for the risk-free rate, the equity risk premiumandthenetcostofdebt.Thereiscurrentlynoreasonablypossiblechangeindiscountratethatwouldreducetheheadroom in any CGU tozero.
Broadcast &Online
ThegoodwillinthisCGUaroseasaresultoftheacquisitionofbroadcastingbusinessessince1999,thelargestofwhichwasthe mergerofCarltonandGranadain2004toformITVplc,whichwastreatedasanacquisitionofCarltonforaccountingpurposes.
ThemainassumptionsonwhichtheforecastcashflowprojectionsforthisCGUarebasedinclude:theshareofthetelevision advertisingmarket;shareofcommercialimpacts;programmeandothercosts;andthepre-taxmarketdiscountrate.
The key assumption in assessing the recoverable amount of Broadcast & Online goodwill is the size of the television advertising market. In forming its assumptions about the television advertising market, the Group has used a combination of long-term trends, industryforecastsandin-houseestimates,whichplacegreateremphasisonrecentexperience.Noimpairmentwasidentified.Also aspartoftheimpairmentreview,asensitivityofupto -15% wasappliedto2016,againwithnoimpairmentidentified.TheDirectors believethatcurrentlynoreasonablypossiblechangeintheseassumptionswouldreducetheheadroominthisCGUtozero.
Apre-taxmarketdiscountrateof9.7%(2014:10.6%)hasbeenusedindiscountingtheprojectedcashflows.
SDN
Goodwill was recognised when the Group acquired SDN (the licence operator for DTT Multiplex A) in 2005. It represented the wider strategicbenefitsoftheacquisitionspecifictotheGroup,principallytheenhancedabilitytopromoteFreeviewasaplatform,business relationshipswiththechannelswhichareonMultiplexAandadditionalcapacityavailablefrom2010.
The main assumptions on which the forecast cash flows are based are: income to be earned from medium-term contracts; the marketpriceofavailablemultiplexvideostreamsintheperioduptoandbeyonddigitalswitchover;andthepre-taxmarketdiscount rate. These assumptions have been determined by using a combination of current contract terms, recent market transactions and in-houseestimatesofvideostreamavailabilityandpricing.Noimpairmentwasidentified.
As part of the impairment review sensitivity was applied to the main assumptions with no impairment identified (2016: -5% growth, 2017: -10% growth).TheDirectorsbelievethatcurrentlynoreasonablypossiblechangeintheincomeandavailabilityassumptions would reduce the headroom in this CGU tozero.
Apre-taxmarketdiscountrateof 11.5% (2014:12.6%)hasbeenusedindiscountingtheprojectedcashflows.
ITVStudios
ThegoodwillforITVStudioshasarisenasaresultoftheacquisitionofproductionbusinessessince1999.Significantbalanceswere createdfromtheacquisitionbyGranadaofUnitedNewsandMedia'sproductionbusinessesin2000andthemergerofGranadaand Carltonin2004toformITVplc.ITVStudiosgoodwillalsoincludesallofthegoodwillarisingfromrecentacquisitionsin2012to2015, withthelargestacquisitionadditiontogoodwillbeingLeftfieldin2014,followedbyTalpaandTwofourin2015.
The key assumptions on which the forecast cash flows were based include revenue (including international revenue and the ITV Studios share of ITV output, growth in commissions and hours produced), margin growth and the pre-tax market discount rate. These assumptions have been determined by using a combination of extrapolation of historical trends within the business, industry estimatesandin-houseestimatesofgrowthratesinallmarkets.Noimpairmentwasidentified. 
As part of the impairment review sensitivity was applied to the main assumptions with no impairment identified (2016: -5% growth, 2017: -10% growth).TheDirectorsbelievethatcurrentlynoreasonablypossiblechangeintheincomeandavailabilityassumptions would reduce the headroom in this CGU tozero.
Apre-taxmarketdiscountrateof10.1%(2014:11.7%)hasbeenusedindiscountingtheprojectedcashflows.
FollowingtheacquisitionsmadebyITVStudiosin2015,theDirectorsconsideredhowassetsandresourcesaresharedacrossthe Studios division and the level of integration within the management structure for the purposes of reporting and strategic decision- making.TheyconcludedthatasingleITVStudiosCGUcontinuestoremainappropriate.
3.4 Acquisitions

Keeping itsimple
ThefollowingsectionoutlineswhattheGrouphasacquiredintheyear.
All of the deals are structured so that a large part of the payment made to the sellers is determined based on future performance ('consideration').ThisisdonesothattheGroupcanbothalignincentivesforgrowth,whilereducingrisksothattotalconsideration reflects actual performance, notexpected.
IFRS accounting standards require some of this consideration to be included in the purchase price used in determining goodwill ('contingent consideration'). Examples of contingent consideration include top-up payments and recoupable performance adjustments.Anyremainingconsiderationisrequiredtoberecognisedasaliabilityorexpenseoutsideofacquisitionaccounting(put option liabilities and employment-linked contingent payments known as 'earnout'payments).
The Group considers the income statement impact of all consideration to be capital in nature and are therefore excluded from adjustedprofit.Therefore,foreachacquisitionbelow,thedistinctionbetweenthetypesofconsiderationhasbeenexplainedindetail.
Acquisitions
During the period, the Group completed four acquisitions, all of which have been included in the results of the ITV Studios operating segment.EachofthebusinessesfitwiththestrategyofgrowingtheGroup'scontentbusinessandtoworkwithotherpartsoftheITV Studios segment to exploit that content globally. The following section provides a summary of the materialacquisitions.
Talpa MediaB.V.
On 30 April 2015 the Group acquired 100% controlling interests in Talpa Media B.V. and its subsidiaries. Talpa Media is the entertainmentshowproducerbehindTheVoice,TheVoiceKids,ILoveMyCountry,DatingInTheDarkandDanceDanceDance. The Group consolidates 100% of the earnings of thebusiness.
Keyterms:
Cashconsiderationof362million(500million)waspaidatacquisitionandthemaximumtotalconsiderationfor100%ofthe business, including the initial payment, is 796 million (1,100 million,undiscounted).
The deal structure allows for a further 434 million (600 million) payable after two, five and eight years, on the achievement of stretchingperformancetargetsforthebusinessintheyearsfollowingacquisition.Fortheseamountstobepayableinthefuture,the deal requires the seller to remain with the business during the earnout period. Further, if the seller leaves within the first two years followingacquisition,asignificantportionoftheinitialconsiderationwouldberefundedtoITV.
Structuring the deal in this way helped manage risks in terms of initial capital outlay and created a joint incentive between ITV and the seller to grow the business, however IFRS requires any payment that links a seller to remaining in the business as an employmentcost.TheGroupconsidersthesepaymentsascapitalinnature,andthereforeexpensesinrelationtothesepayments areexcludedfromadjustedprofitsasanexceptionalitem.
Acquisitionaccounting:
Intangibles,beingthevalueplacedonformats,brands,customercontracts,non-competearrangementsandlibraries,of276million (382 million) were identified and goodwill was valued at 41 million (57 million). Goodwill represents the value placed on the opportunitytodiversifyandgrowthecontentandformatsproducedbytheGroup.Thegoodwillarisingonacquisitionisnotexpected to be deductible for tax purposes. Other fair value adjustments have been made to the opening balance sheet, though none of them are individuallysignificant.
TwofourGroup
On24June2015theGroupacquiredBoomSupervisoryLimited,theholdingcompanyofTwofourGroup.TwofourGroupowns51% of Mainstreet Pictures. Twofour Group is an independent production business with a range of scripted and unscripted programmes including The Jump, Educating Series (Educating Essex, Educating Yorkshire), Hotel Inspector, Taking New York and Ibiza Weekender.
Keyterms:
The Group purchased the Twofour Group for a cash consideration of 55 million, subsequently the sellers subscribed to 25% of the share capital of the acquiring company. A put and call option has been granted over this 25% in Twofour Group; these options both beingexercisableoverthenextthreetofiveyears.Thetransactionhasbeenaccountedforonananticipatedacquisitionbasisanda non-controlling interest has not been recognised. The maximum total consideration for 100% of the business, including the initial payment, is 280 million (undiscounted). These payments are dependent on future performance of the business and linked to ongoing employment. The Group considers these payments as capital in nature, and therefore expenses in relation to these paymentsareexcludedfromadjustedprofitsasanexceptionalitem.
Provisional acquisitionaccounting:
Intangibles, being the value placed on formats, brands, customer contracts, non-compete arrangements and libraries, of 18 million wereidentifiedandgoodwillwasvaluedat50million.Goodwillrepresentsthevalueplacedontheopportunitytodiversifyandgrow thecontentandformatsTheGroupiscurrentlyintheprocessofcompletingthevaluationsforthenetassetsacquiredwiththe businesses.TheGroupexpectstofinalisethevaluationsofacquiredassetsandliabilitiesinthefirsthalfof2016.
Goodwill represents the value placed on the opportunity to diversify and grow the content and formats produced by the Group. The goodwillarisingonacquisitionisnotexpectedtobedeductiblefortaxpurposes.Otherfairvalueadjustmentshavebeenmadetothe opening balance sheet, though none of them are individuallysignificant.
Other 2015acquisitions
TheGroupmadeaninitialpaymentof15millionfortwosmalleracquisitions,CatsontheRoofMediaLtdandMammothScreenLtd, withaviewthattheseacquisitionswillstrengthenandcomplementITV'sexistingpositionasaproducerformajortelevisionnetworks intheUK.ThemaximumadditionalconsiderationthattheGroupcouldpayis66million(undiscounted).
Goodwill,whichrepresentsthevalueplacedontheopportunitytogrowthecontentproducedbytheGroup,hasbeenprovisionally valuedat11million.Thegoodwillarisingontheseacquisitionsarenotexpectedtobedeductiblefortaxpurposes.
Acquisitions in2014
Leftfield Entertainment was acquired for an initial consideration (net of cash acquired) of 214 million ($360 million) for 80% of the membership interests in May 2014. The remaining 20% equity interest was acquired in December 2015. In consideration for the acquisition of the minority interest the Group assumed certain obligations of the seller, most notably earnout arrangements for its subsidiaries.Noadditionalcashconsiderationwaspayabletothesellerasaresultofthepurchaseoftheremainingminorityinterest.
ThetotalmaximumadditionalconsiderationpayablebyITVfortheacquisitionof100%ofthemembershipinterestofLeftfield Entertainment, including the additional assumed earnout obligations, is 65 million ($100 million) and is dependent on future performance and is linked to ongoingemployment.
Intangibleassetsof65million($109million)wereidentifiedin2014,beingthevalueplacedonbrands,customercontracts,non- compete arrangements andlibraries.
The Group also acquired 51% of the membership interest in DiGa Vision, a US-based producer and 100% of the controlling interest in United Productions, a company based in Denmark. The total initial consideration (net of cash acquired) was 5 million and the maximumadditionalamountpayableis32million(undiscounted).Thefinalpayoutisdependentonfutureperformanceandislinked to ongoingemployment.
Intangiblesof2millionwereidentified,largelyreflectingthevalueplacedonbrands,customercontractsandcontractual arrangements.
Effect ofacquisition
The acquisitions noted above had the following impact onthe Group assets and liabilities:
 Recognisedvaluesonacquisition
m
TalpaMedia
Twofour
Other
2015Total
2014 Total
Considerationtransferred:
Initialconsideration(netofcashacquired)(NoteA)
347
49
10
406
214
Less: consideration classified as prepaid employment linked consideration (NoteB)
(109)
-
-
(109)
(29)
Totalconsideration
238
49
10
297
185
Fair value of net assetsacquired:
Property, plant andequipment
2
4
-
6
5
Intangibleassets
276
18
3
297
67
Deferred taxliabilities
(66)
(5)
-
(71)
-
Trade and otherreceivables
78
15
8
101
32
Trade and otherpayables
(93)
(33)
(12)
(138)
(45)
Fair value of netassets
197
(1)
(1)
195
59
Non-controlling interest measured at fair value (NoteC)
-
-
-
-
20
Goodwill
41
50
11
102
146
Otherinformation:
Presentvalueoftheliabilityonoptions
-
-
-
-
20
Presentvalueatacquisitionoftheearnoutpayment (NoteD)
186
10
27
223
4
Contributions to the Group'sperformance:
From date ofacquisition
Revenue
121
42
22
185
62
EBITA before exceptionals (NoteE)
25
2
2
29
14
Proforma - January toDecember
Revenue
193
80
33
306
88
EBITA before exceptionals (NoteF)
45
3
1
49
20

NoteA:Considerationforallacquisitionsisnetofcashacquiredandestimateddebtandworkingcapitalsettlements.CashacquiredduringtheyearcomprisesTalpa
22million,Twofour6millionandOther5million.
Note B: Total consideration is net of employment linked consideration of 109 million. IFRS 3 (R) requires the employment linked consideration to be treated as remuneration. This amount is repayable to the Group should the seller terminate the service agreement withinthefirsttwoyearsfollowingcompletion.Theremainingbalanceisshownwithintradeandotherreceivablesandisexpensedovertwo years.
NoteC:Non-controllinginterestariseswheretheGroupacquireslessthan100%oftheequityinterestinabusiness,butobtainscontrol.
NoteD:Thisrepresentsthepresentvalueofearnoutsasatacquisition.
NoteE:AdjustingforexceptionalcostsrelatingtoemploymentlinkedconsiderationreducesthecontributiontotheGroup'sprofitaftertax fortheperiodfromthedateofacquisitiontoalossof35millionforTalpa,aprofitof1millionforTwofourandnilonotheracquisitions.
NoteF:AdjustingforexceptionalcostsrelatingtoemploymentlinkedconsiderationreducesthecontributiontotheGroup'sprofitaftertaxon afullyearproformabasistoalossof38millionforTalpa,aprofitof1millionforTwofourandalossof1milliononotheracquisitions.
3.5 Investments

Keeping itsimple
TheGroupholdsnon-controllinginterestsinanumberofdifferententities.Accountingfortheseinvestments, and the Group's share of any profits and losses, depends on the level of control or influence the Group is granted via its interest. The three principal types of non-consolidated investments are: joint arrangements (jointventuresorjointoperations),associatesandavailableforsaleinvestments.
AjointventureisaninvestmentwheretheGrouphasjointcontrol,withoneormorethirdparties.Anassociate is an entity over which the Group has significant influence (i.e. power to participate in the investee's financial andoperatingdecisions).Anyotherinvestmentisanavailableforsaleinvestment.
Accountingpolicies
For joint ventures and associates the Group applies equity accounting. Under this method, it recognises the investment in the entity at cost and subsequently adjusts this for its share of profits or losses, which are recognised in the income statement within non-operating items and included in adjusted profit. Available for saleinvestmentsareheldatfairvalueunlesstheinvestmentisastart-upbusiness,inwhichcaseitisvalued at cost and assessed forimpairment.
Thecarryingvalueofallinvestmentsareshownasnon-currentassetsontheStatementofFinancialPosition. The 16 million increase in the year comprises 14 million in relation to the acquisition of associates and availableforsaleinvestmentsand2millionoffundingtoexistingjointventures.
3.6 Provisions

Keeping itsimple
AprovisionisrecognisedbytheGroupwhereanobligationexistsrelatingtoeventsinthepastanditis probable that cash will bepaid to settle it.
AprovisionismadewheretheGroupisnotcertainhowmuchcashwillberequiredtosettlealiability,soan estimateisrequired.Themainestimatesrelatetothecostofholdingpropertiesthatarenolongerinuseby the Group, the likelihood of settling legal claims and contracts the Group has entered into that are now unprofitable.
Accountingpolicies
A provision is recognised in the statement of financial position when the Group has a present legal or constructiveobligationarisingfrompastevents,itisprobablecashwillbepaidtosettleitandtheamountcan be estimated reliably. Provisions are determined by discounting the expected future cash flows by a rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a financing cost in the income statement. The value of the provision is determined based on assumptions and estimates in relation to the amount and timing of actual cash flows which are dependent on futureevents.
Provisions
Themovementsinprovisionsduringtheyearareasfollows:
Contractprovisions
m
Propertyprovisions
m
Legal andother
provisions
m
Total
m
At 1 January2015
3
3
15
21
Additions
5
-
10
15
Utilised
(2)
-
-
(2)
Released
-
(1)
-
(1)
At 31 December2015
6
2
25
33
Provisionsof28millionareclassifiedascurrentliabilities(2014: 17 million).Unwindofthediscountisnilin 2015 and2014.
Contract provisions comprise onerous commitments on transmission infrastructure that are expected to be utilised over the remaining contract period and onerous technology servicescontracts which will notbeutilised.
Legal and Other provisions totalling 25 million (2014: 15 million) primarily relate to potential liabilities that may arise as a result of Boxclever having been placed into administrative receivership, most of which relate to pension arrangements. In 2011 the Determinations Panel of the Pensions Regulator determined that Financial SupportDirections(FSDs)shouldbeissuedagainstcertainGroupcompanies,whichwould
requiretheGroup toputinplacefinancialsupportfortheBoxcleverScheme.TheGroupischallengingthisintheUpperTribunal. The reference process is ongoing and aside from procedural issues there were no substantive case developments in the period. The Directors have obtained leading counsel's opinion and extensive legal advice inconnectionwiththeproceedingsandcontinuetobelievethatthe
provisionheldisappropriate.Theincrease inprovisionsduringtheyearwasprimarilyduetoanticipatedcostsofsettlingotherlegalmatters.
3.7 Pensions

Keeping itsimple
In this note we explain the accounting policies governing the Group's pension scheme, followed by analysis of thecomponentsofthenetdefinedbenefitpensiondeficit,includingassumptionsmade,andwheretherelated movements have been recognised in the financial statements. In addition, we have placed text boxes to explainsomeofthetechnicaltermsusedinthedisclosure.
WhataretheGroup'spensionschemes?
Therearetwotypesofpensionschemes.A'DefinedContribution'schemethatisopentoITVemployees,and anumberof'DefinedBenefit'schemesthathavebeenclosedtonewmemberssince2006.
WhatisaDefinedContributionscheme?
The 'Defined Contribution' scheme is where the Group makes fixed payments into a separate fund on behalf ofthoseemployeesthathaveelectedtoparticipateinsavingfortheirretirement.ITVhasnofurtherobligation to the participating employee and the risks and rewards associated with this type of scheme are assumed by themembersratherthantheGroup.Itisthemembers'responsibilitytomakeinvestmentdecisionsrelatingto their retirementbenefits.
WhatisaDefinedBenefitscheme?
In a 'Defined Benefit' scheme, members receive cash payments during retirement, the value of which is dependent on factors such as salary and length of service. The Group manages the necessary investment, mortality and inflation risks in order to meet these obligations. In the event of poor returns the Group needs to address this through a combination of increased levels of contribution or by making adjustments to the scheme. Schemes can be funded, where regular cash contributions are made by the employer into a fund whichisinvested,or
unfunded,wherenoregularmoneyorassetsarerequiredtobeputasidetocoverfuture payments.
TheGroupmakescontributionstothescheme,aseparatetrustee-administeredfundthatisnotconsolidated in these financial statements, but is reflected on the defined benefit pension deficit line on the consolidated statement of financial position. It is the responsibility of the Trustee to manage and invest the assets of the Scheme and its funding position. The Trustee, appointed according to the terms of the Scheme's documentation, is required to act in the best interest of the members and is responsible for managing and investing the assets of the scheme and its fundingposition.
Accountingpolicies
Defined contributionscheme
ObligationsundertheGroup'sdefinedcontributionschemesarerecognisedasanoperatingcostintheincomestatementas incurred. For 2015, total contributions expensed were 16 million (2014: 14million).
Defined benefitscheme
The Group's obligation in respect of the Defined Benefit Scheme (the 'Scheme') is calculated by estimating the amount of future retirementbenefitthateligibleemployees('members')haveearnedinreturnfortheirservices.Thatbenefitpayableinthefutureis discounted to today's value and then the fair value of scheme assets contributed by the Group is deducted to measure the net pensiondeficit.
The liabilities of the Scheme are measured by discounting the best estimate of future cash flows to be paid using the 'projected unit' method.Thismethodisanaccruedbenefitsvaluationmethodthatmakesallowanceforprojectedearningsofmembersinthefuture up toretirement.
Thesecalculationsarecomplexandareperformedbyaqualifiedactuary.Therearemanyjudgementsandestimatesnecessaryto calculate the Group's estimated liabilities, the main assumptions are set out later in this section. Movements in assumptions during the year are called 'actuarial gains and losses' and these are recognised in the period in which they arise through the statement of comprehensiveincome.
The latest triennial valuation of the Scheme was undertaken as at 1 January 2014 by an independent actuary appointed by the TrusteeoftheSchemeandagreedinearly2016.Thenexttriennialvaluationwillbeasat1January2017andisexpectedtobe agreedin2018.Thiswilldrivesubsequentcontributionrates.
AnunfundedschemeinrelationtopreviousDirectorsisaccountedforunderIAS19andtheGroupisresponsibleformeetingthe pension obligations as they fall due. It is securitised by assets held outside of the ITV Pension Scheme in the form of gilts and included within cash and cash equivalents (see note4.1).
Thedefinedbenefitpensiondeficit
Thenetpensiondeficitat31December2015was 176 million(2014:346million).
ThenetassetsandliabilitiesoftheSchemearerecognisedintheconsolidatedstatementoffinancialpositionandshownwithin non-currentliabilities.Thetotalsrecognisedinthecurrentandpreviousyearsare:
2015
m
2014
m
Total defined benefit schemeobligations
(3,446)
(3,687)
Total defined benefit schemeassets
3,270
3,341
Net pensiondeficit
(176)
(346)

TheremainingsectionsprovidefurtherdetailofthevalueoftheScheme'sassetsandliabilities,howtheseareaccountedforandthe impact on the incomestatement.

Defined benefitscheme obligations

Keeping itsimple
Whatcausemovementsinthedefinedbenefitpensionobligations?
Theareasthatimpactthedefinedbenefitobligation(thepensionschemeliabilities)positionattheyearendareasfollows:
 Currentservicecost-thecosttotheGroupofthefuturebenefitsearnedbymembersthatrelatestothemembers'serviceinthe currentyear.Thisischargedtooperatingcostsintheincomestatement.
 Interest cost - the pension obligations payable in the future are discounted to the present value at year end. A discount factor is used to determine the current value today of the future cost. The interest cost is the unwinding of one year's movement in the present value of the obligation. It is broadly determined by multiplying the discount rate at the beginning of the period by the updatedpresentvalueoftheobligationduringtheperiod.Thediscountrateisakeyassumptionexplainedlaterinthissection.This interestcostisrecognisedthroughnetfinancingcostsintheincomestatement(seenote4.4).
 Actuarialgainsorlosses-therearebroadlytwocausesofactuarialmovements.'Experience'adjustments,whicharisewhen comparing assumptions made when estimating the liabilities and what has actually occurred, and adjustments resulting from changes in actuarial assumptions e.g. movements in corporate bond yields. Key assumptions are explained in detail later in this section.Actuarialgainsorlossesarerecognisedthroughothercomprehensiveincome.
 Benefitspaid-anycashbenefitspaidoutbytheSchemewillreducetheobligation.
ThemovementinthepresentvalueoftheGroup'sdefinedbenefitobligationisanalysedbelow:
2015
m
2014
m
Defined benefit obligation at 1January
3,687
3,315
Current servicecost
8
7
Interestcost
126
144
Actuarial (gain) /loss
(217)
366
Benefitspaid
(158)
(145)
Defined benefit obligation at 31December
3,446
3,687
Oftheabovetotaldefinedbenefitobligationat31December2015,46millionrelatestounfundedschemes (2014: 48million).See note 4.1 fordetails.

AssumptionsusedtoestimatetheSchemeobligations

Keeping itsimple
WhatarethemainassumptionsusedtoestimatetheSchemeobligations?
The main assumptionsare:
 future salarylevels
 future pensionable salarylevels
 an estimate of increases inpension payments
 the life expectancy ofmembers
 theeffectofinflationonallthesefactors
 thediscountrateusedtoestimatethepresentdayfairvalueoftheseobligations
Howdowedeterminetheappropriateassumptions?
The Group takes independent actuarial advice relating to the appropriateness of the assumptionsused.
IFRSrequiresthatweestimateadiscountratebyreferencetohighqualityfixedincomeinvestmentsintheUKthatmatchthe estimated term of the pensionobligations.
Theinflationassumptionhasbeensetbylookingatthedifferencebetweentheyieldsonfixedandindex-linkedGovernmentbonds. Theinflationassumptionisusedasabasisfortheremainingfinancialassumptions,exceptwherecapshavebeenimplemented.
ThediscountratehasthereforebeenobtainedusingtheyieldsavailableonAAratedcorporatebondswhichmatchprojectedcash flows. The Group's estimate of the weighted average term of the liabilities is 15 years (2014: 15 years). 
The principal assumptions used inthe Scheme's valuations at the year end were:
2015
2014
Discount ratefor:
Past serviceliabilities
3.80%
3.50%
Future serviceliabilities
4.00%
3.70%
Inflation assumptionfor:
Past serviceliabilities
3.00%
3.00%
Future serviceliabilities
3.10%
3.05%
Rate of pensionable salaryincreases
0.90%
0.90%
Rateofincreaseinpensionpayment(LPI15%pensionincreases)
2.90%
2.90%
Rateofincreasetodeferredpensions(CPI)
2.00%
2.00%

1. Limited PriceIndex.

Thetablebelowreflectspublishedmortalityinvestigationdatainconjunctionwiththeresultsofinvestigationsintothemortality experienceofSchememembers.Theassumedlifeexpectationsonretirementare:
2015
2015
2014
2014
Retiring today atage
60
65
60
65
Males
28.0
23.2
27.9
23.1
Females
30.6
25.7
30.5
25.6
Retiring in 20 years atage
60
65
60
65
Males
30.0
25.0
29.9
24.9
Females
32.6
27.6
32.5
27.5

Keeping itsimple
WhichassumptionshavethebiggestimpactonestimatingtheSchemeliabilities?
Itisimportanttonotethatcomparativelysmallchangesintheassumptionsusedmayhaveasignificanteffectontheconsolidated income statement and statement of financial position. This 'sensitivity' to change is analysed below to demonstrate how small changesin
assumptionscanhavealargeimpactontheestimationoftheScheme'sliabilities.
Thesensitivitiesregardingtheprincipalassumptionsusedtomeasurethedefinedbenefitobligationaresetoutbelow:
Assumption
Changeinassumption
Impactondefinedbenefitobligation
Discountrate
Increase/decrease by0.1%
Decrease/increase by 50 million / 55million
Rate of inflation (Retail PriceIndex)
Increase/decrease by0.1%
Increase/decrease by 15 million / 15million
Rate of inflation (Consumer PriceIndex)
Increase/decrease by0.1%
Increase/decrease by 10 million /10 million
Lifeexpectations
Increase by oneyear
Increase by 90million

Theanalysisaboveconsiderstheimpactofthesinglechangeintheassumptionwhilekeepingtheotherassumptionsunchanged, except for inflation. The inflation sensitivities allow for consequential changes to all pension increases linked to the relevant index. The sensitivity analyses have been determined by extrapolating the impact on the defined benefit obligation at the year end with changes in key assumptions that might reasonablyoccur.
In practice, changes in one assumption may be accompanied by offsetting changes in another assumption (although this is not alwaysthecase).ChangesintheassumptionsmayoccuratthesametimeaschangesinthemarketvalueofSchemeassets,which mayormaynotoffsetthechangesinassumptions.
The sensitivity analysis for the impact of life expectations on the defined benefit liability does not include the potential offsetting benefitofthelongevityswapclassifiedasaSchemeasset.Itisestimatedthata75millionbenefitwouldariseonthevalueofthe longevityswapfromaoneyearincreaseinthemarket-basedassumptionofmortality.(Pleaserefertothe'Keepingitsimple'boxin thefollowingsectionforfurtherinformationonthelongevityswap).

Totaldefinedbenefitschemeassets

Keepingitsimple
TheSchemeholdsassetsacrossanumberofdifferentclasseswhicharemanagedbytheTrustee,whoconsultswiththeGroupon changes to its investmentpolicy.
WhatarethepensionSchemeassets?
At31December2015theScheme'sassetswereinvestedinadiversifiedportfoliothatconsistedprimarilyofequityanddebt securities.Thetablesbelowsetoutthemajorcategoriesofassets.
Financialinstrumentsareinplaceinordertoprovideprotectionagainstchangesinmarketfactors(interestratesandinflation)which couldacttoincreasethenetpensiondeficit.ThesefinancialinstrumentsareclassifiedasSchemeassets.
One such instrument is the longevity swap which the Scheme transacted in 2011 to obtain protection against the effect of increases inthelifeexpectationofthemajorityofpensionermembersatthatdate.Undertheswap,theTrusteeagreedtomakepre-determined paymentsinreturnforpaymentstomeetthespecifiedpensionobligationsastheyfalldue,irrespectiveofhowlongthemembersand their dependants live. The difference in the present values of these two streams of payments is reflected in the Scheme assets. The swap had a nil valuation at inception and, using market-based assumptions, is subsequently adjusted for changes in the market life expectancy and market discountrates.
HowdowemeasurethepensionSchemeassets?
Definedbenefitschemeassetsaremeasuredattheirfairvalueandcanchangeduetothefollowing:
 Interestincomeonschemeassets-thisisdeterminedbymultiplyingthefairvalueoftheSchemeassetsbythediscountrate,both takenasofthebeginningoftheyear.Thisisrecognisedthroughnetfinancingcostsintheincomestatement.
 ReturnonassetsarisefromdifferencesbetweentheactualreturnandinterestincomeonSchemeassetsandarerecognised through other comprehensiveincome.
 Employer'scontributionsarepaidintotheSchemetobemanagedandinvested.
 BenefitsandadministrativeexpensespaidoutbytheSchemeswilllowerthefairvalueoftheScheme'sassets
Themovementinthefairvalueofthedefinedbenefitscheme'sassetsisanalysedbelow:
2015
m
2014
m
Fair value of Scheme assets at 1January
3,341
2,870
Interest income on Schemeassets
116
128
(Loss)/returnonassets,excludinginterestincome
(126)
390
Employercontributions
102
103
Benefitspaid
(158)
(145)
Administrative expensespaid
(5)
(5)
Fair value of Scheme assets at 31December
3,270
3,341
TheactualreturnontheScheme'sassets,beingthesumoftheinterestincomeonSchemeassetsandreturnonSchemeassets,for theyearended31December2015wasadecreaseof10million (2014: increaseof518million).
HowaretheScheme'sassetsinvested?
At31December2015theScheme'sassetswereinvestedinadiversifiedportfoliothatconsistedprimarilyofequityanddebt securities.ThefairvalueoftheScheme'sassetsareshowninthefollowingtablebymajorcategory:
Marketvalue
2015
m
Marketvalue
2014
m
Quotedequities
651
654
Quotedbonds*
2,219
2,329
Total quotedassets
2,870
2,983
Property
55
51
Infrastructure
68
77
Hedgefunds/alternatives
196
183
Insurancepolicies
40
42
Cash and cashequivalents
86
50
Other
20
22
Longevity swap fairvalue
(65)
(67)
Total unquotedassets
400
358
Total Schemeassets
3,270
3,341

* Quotedbondsincludeinterestrateandinflationswaps.

Includedintheaboveareoverseasassetsof1,198million (2014: 1,218 million),comprisedofequitiesof564million (2014:569million)andbondsof634million(2014:649million).
Whenselectingthemixofassetstohold,andconsideringtheirrelatedrisksandreturns,theTrusteewillweighupthevariabilityof returnsagainstthetargetlong-termrateofreturnontheoverallportfolio.
Keeping itsimple
WhatwastheimpactofmovementsontheScheme'sassetsandliabilities?
ThesectionsabovedescribehowtheSchemeobligationsandassetsarecomprisedandmeasured.Thefollowingsectionsetsout theimpactofvariousmovementsandexpensesontheSchemeontheGroup'sfinancialstatement.
Amountsrecognisedthroughtheincomestatement
Amounts recognised through the income statement are asfollows:
2015
m
2014
m
Amount charged to operatingcosts:
Current servicecost
(8)
(7)
Scheme administrationexpenses
(5)
(5)
(13)
(12)
Amount charged to net financingcosts:
Net interest on defined benefitobligation
(10)
(16)
Total charged in the consolidated incomestatement
(23)
(28)

Amountsrecognisedthroughtheconsolidatedstatementofcomprehensiveincome
The amounts recognised through the consolidated statement of comprehensive income/(cost)are:
2015
m
2014
m
Remeasurementgainsand(losses):
(Loss)/Returnonschemeassetsexcludinginterestincome
(126)
390
Actuarialgains/(losses)onliabilitiesarisingfromchangein:
- inflationexperience
48
-
- financialassumptions
169
(402)
- updated valuationdata
-
36
217
(366)
Totalrecognisedintheconsolidatedstatementofcomprehensiveincome
91
24

The217millionactuarialgainontheScheme'sliabilitieswasprincipallyduetoanincreaseinbondyieldsovertheyear,whichhas resultedinadecreaseintheliabilities.The126millionlossontheScheme'sassetsprimarilyresultsfromdecreasesinthemarket values of gilts and swaps, which has led to assets underperformingexpectations.

Addressingthenetpensiondeficit 
Keeping itsimple
The Group works closely with the Trustee to agree appropriate levels of funding for the Scheme. This involves agreeing a Schedule of Contributions at each triennial valuation, which specifies the contribution rates for the employer and scheme members and the datethesecontributionsaredue.Arecoveryplansettingoutthestepsthatwillbetakentoaddressafundingshortfallisalsoagreed.
In the event that the Group's defined benefit scheme is in a net liability position, the Directors must take steps to manage the size of thedeficit.Apartfromthefundingagreementsmentionedabove,thiscouldinvolvepledgingadditionalassetstotheScheme,aswas the case in the SDN and London Television Centre ('LTVC') pension funding partnerships (explained below).
The levels of ongoing contributions to the Scheme are based on the current service costs (as assessed by the Scheme Trustee) and the expected future cash flows of the Scheme. Normal employer contributions in 2016 for current service are expected to be in the region of 12 million (2015: 11 million) and deficit funding contributions in 2016 are expected to be 66 million (2015: 76 million), assuming current contribution rates continue as agreed with theTrustee.
UndertheSDNpensionpartnership,setupin2010,theGrouphasagreedtomakepaymentsof11millionfor12yearsfrom 2011. The LTVC partnership,establishedinMarch2014,commitstheGrouptoanannualpaymentof2millionin2016,increasingby5% per annum until2038.
IFRIC 14 clarifies how the asset ceiling should be applied, in particular, how local minimum funding rules work. The Group has determinedthatithasanunconditionalrighttoarefundofsurplusassetsiftheSchemesarerunoffuntilthelastmemberdies,on whichbasisIFRIC14doesnotcauseanychangeinthebalancesheetdisclosuresbeforetax.

Section 4: Capital Structure and Financing Costs
In thissection
ThissectionoutlineshowtheGroupmanagesitscapitalstructureandrelatedfinancingcosts,includingitsbalancesheet liquidityandaccesstocapitalmarkets.
The Directors determine the appropriate capital structure of ITV, specifically, how much is raised from shareholders (equity)andhowmuchisborrowedfromfinancialinstitutions(debt)inordertofinancetheGroup'sactivitiesbothnow and in the future. Maintaining capital discipline and balance sheet efficiency remains important to the Group, as seen through the issuance of a new Eurobond during the year. Any potential courses of action will take into account the Group'sliquidityneeds,flexibilitytoinvestinthe
business,pensiondeficitinitiativesandimpactoncreditratings.
TheDirectorsconsidertheGroup'scapitalstructureanddividendpolicyatleasttwiceayearaheadofannouncingresults anddosointhecontextofitsabilitytocontinueasagoingconcern,toexecutethestrategyandtoinvestinopportunities togrowthebusinessandenhanceshareholdervalue.
ATaxandTreasurycommitteeactingunderdelegatedauthorityfromtheBoard,approvescertainfinancialtransactions andmonitorscompliancewiththeGroup'staxandtreasurypolicies.

4.1 Net cash/(debt)
Keeping it simple
Netcash/(debt)istheGroup'skeymeasureusedtoevaluatetotalcashresourcesnetofthecurrentoutstandingdebt.
AdjustednetdebtisalsomonitoredbytheGroupandmorecloselyreflectshowcreditagenciesseetheGroup'sgearing.Toarriveat theadjustednetdebtamount,weaddourtotalundiscountedexpectedcontingentpaymentsonacquisitions,ourIAS19 pensiondeficit
andourundiscountedoperatingleasecommitments.Afullanalysisanddiscussionofadjustednetdebtisincludedin the Financial and Performance Review.
Thetablesbelowanalysemovementsinthecomponentsofnetcashduringtheyear:
1January
2015
m
Net cashflow
and acquisitions
m
Currency
and non-cash movements
m
31December
2015
m
Cash
234
3
1
238
Cashequivalents
63
(6)
(1)
56
Total cash and cashequivalents
297
(3)
-
294
Loansandfacilitiesduewithinoneyear
(78)
73
-
(5)
Financeleasesduewithinoneyear
(7)
7
(6)
(6)
Loans and facilities due after oneyear
(161)
(433)
(4)
(598)
Finance leases due after oneyear
(10)
-
6
(4)
Totaldebt
(256)
(353)
(4)
(613)
Net cash /(debt)
41
(356)
(4)
(319)
1January
2014
m
Net cashflow
and acquisitions
m
Currency
and non-cash movements
m
31December
2014
m
Cash
438
(199)
(5)
234
Cashequivalents
80
(17)
-
63
Total cash and cashequivalents
518
(216)
(5)
297
Loansandfacilitiesduewithinoneyear
(41)
41
(78)
(78)
Financeleasesduewithinoneyear
(21)
21
(7)
(7)
Loans and facilities due after oneyear
(301)
62
78
(161)
Finance leases due after oneyear
(17)
-
7
(10)
Totaldebt
(380)
124
-
(256)
Currencycomponentofswapsheldagainsteuro denominatedbonds
26
(26)
-
-
Netcash
164
(118)
(5)
41

Cash and cashequivalents
Included within cash equivalents is 10 million (2014: 16 million), the use of which is restricted to meeting finance lease commitmentsunderprogrammesaleandleasebacks(seenote4.2),andgiltsof38million(2014:39million)inrespectofwhicha charging deed was executed on the unfunded pension commitments of four former Granada executives. Legal action has commenced to try and remove thecharge.
Loansandfacilitiesduewithinoneyear
InOctober2015theunsecured78millionEurobondmatured,resultinginanetpaymentbytheGroupof76million,after settlement of the Group's related outstanding interest rateswaps.
At various periods during the year the Group drew down on the Revolving Credit Facility ('RCF') to meet short-term funding requirements.Allshort-termdrawingswererepaidbytheendoftheyear.ThemaximumdrawdownoftheRCFduringtheyearwas500million(362million)inApriltofundtheacquisitionofTalpaMedia.ThemaximumdrawdownontheRCFduring2014was321 million to fund the 2014acquisitions.
Loansandloannotesdueafteroneyear
In September 2015 the Group issued a seven year 600 million Eurobond at a fixed coupon of 2.125% which will mature in September2022.Thebondrefinancedthe12monthbridgeloanfacilityof500millionthatwasusedtorepaythe RCF, whichinitially funded the purchase of Talpa Media inApril.
TheGroupalsohasanunsecured 161 millionEurobondwhichmaturesinJanuary 2017 andhasacouponof6.125%.

4.2 Borrowings and financeleases
Keeping itsimple
TheGroupborrowsmoneyfromfinancialinstitutionsintheformofbonds,bankfacilitiesandotherfinancialinstruments.Theinterest payableontheseinstrumentsisshowninthenetfinancingcostsnoteinnote4.4.
ThereareBoard-approvedpoliciesinplacetomanagetheGroup'sfinancialrisks.Macroeconomicmarketrisks,whichimpact currencytransactionsandinterestrates,arediscussedinnote4.3.Creditandliquidityrisksarediscussedbelow.
 Creditrisk:theriskoffinanciallosstotheGroupifacustomerorcounterpartyfailstomeetitscontractualobligationsand
 Liquidityrisk:theriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue
TheGroupisrequiredtodisclosethefairvalueofitsdebtinstruments.ThefairvalueistheamounttheGroupwouldpayathirdparty to transfer the liability. It is calculated based on the present value of future principal and interest cash flows, discounted at the market rateofinterestatthereportingdate.Thiscalculationoffairvalueisconsistentwithinstrumentsvaluedunderlevel2innote4.5.
Accounting policies
Borrowings
Borrowings are recognised initially at fair value less directly attributable transaction costs, with subsequent measurement at amortised cost using the effective interest rate method. Under the amortised cost method the difference between the amount initially recognised and the redemption value is recorded in the income statement over the period of the borrowing on an effective interest basis.
Finance leases
Historically,ITVhasenteredintosaleandleasebackagreementsinrelationtocertainprogrammetitles.Relatedoutstandingsale and leaseback obligations, which comprise the principal and accrued interest, are included within borrowings. The finance related element of the agreement is charged to the income statement over the term of the lease on an effective interest basis. Sale and leasebackobligationsaresecuredagainstanequivalentcashbalanceheldwithincashandcashequivalents.
Managing credit and liquidityrisk
Creditrisk
TheGroup'smaximumexposuretocreditriskisrepresentedbythecarryingamountofderivativefinancialassets(seenote4.3), trade receivables (see note 3.1.4), and cash and cash equivalents (note4.1).
Trade and otherreceivables
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The majority of trade receivablesrelatetoairtimesalescontractswithadvertisingagenciesandadvertisers.Creditinsurancehasbeentakenoutagainst thesecompaniestominimisetheimpactontheGroupintheeventofapossibledefault.
Cash
The Group operates investment guidelines with respect to surplus cash that emphasise preservation of capital. The guidelines set outproceduresandlimitsoncounterpartyriskandmaturityprofileofcashplaced.Counterpartylimitsforcashdepositsarelargely based upon long-term ratings published by the major credit rating agencies and perceived state support. Deposits longer than 12 months require the approval of theBoard.
Borrowings
ITVisratedasinvestmentgradebyMoody'sand S&P. ITV'screditratings,thecostofcreditdefaultswaphedgingandtheabsolute levelofinterestratesarekeydeterminantsinthecostofnewborrowingsforITV.
Liquidityrisk
TheGroup'sfinancingpolicyistofunditselfforthemediumtolong-termbyusingdebtinstrumentswitharangeofmaturitiesandto ensureaccesstoappropriateshort-termbankfacilitieswithaminimumof250millionofundrawnfacilitiesavailableatalltimes.
Long-term funding comes from the UK and European Capital markets, while any short to medium-term debt requirements are provided through bank credit facilities totalling 775 million (see below). Management monitors rolling forecasts of the Group's liquidity reserve (comprising undrawn bank facilities and cash and cash equivalents) on the basis of expected cash flows. This monitoringincludesfinancialratiostoassesspossiblefuturecreditratingsandheadroomandtakesintoaccounttheaccessibilityof cash and cashequivalents.
The Group has available funds through a Revolving Credit Facility ('RCF') with a group of relationship banks. This 525 million facility is committed with leverage and interest cover financial covenants and matures in 2019. In addition, the Group has 250 million of financialcovenantfreefinancingwhichrunsforthreetosevenyears.Allofthesefacilitieswereundrawnat31December2015 (2014: nodrawings).
Fair value versus bookvalue
The tables below provide fair value information for the Group'sborrowings:
Bookvalue
Fairvalue
Maturity
2015
m
2014
m
2015
m
2014
m
Loans due within oneyear
Other short-termloans
Various
5
-
5
-
Loans due in more than oneyear
161 millionEurobond
Jan2017
161
161
168
173
600 millionEurobond
Sept2022
437
-
445
-
Loans settled or matured in theperiod
78 millionEurobond
Oct2015
-
78
-
81
603
239
618
254

Finance leases
The following table analyses when finance lease liabilities are due forpayment:
Minimum
lease payments
m
Interest
m
2015
Principal
m
Minimumlease payments
m
Interest
m
2014
Principal
m
In one year orless
6
-
6
8
1
7
In more than one year butnot more than fiveyears
4
-
4
10
-
10
10
-
10
18
1
17

Finance leases principally comprise programmes under sale and leaseback arrangements. The net book value of tangible assets held under finance leases at 31 December 2015 was 1 million (2014: 1million).

4.3 Managing market risks: derivative financialinstruments
Keeping it simple
What is aderivative?
A derivative is a type of financial instrument typically used to manage risk. A derivative's value changes over time in response to underlying
variablessuchasexchangeratesorinterestratesandisenteredintoforafixedperiod.Ahedgeiswhereaderivativeis used to manage exposure in an underlyingvariable.
TheGroupisexposedtocertainmarketrisks.InaccordancewithBoardapprovedpolicies,whicharesetoutinthisnote,theGroup manages these risks by using derivative financial instruments to hedge the underlyingexposures.
Whydoweneedthem?
The key market risks facing the Groupare:
 Currency risk arisingfrom:
i. translationrisk,thatis,theriskintheperiodofadversecurrencyfluctuationsinthetranslationofforeigncurrencyprofits,assets and liabilities ('balance sheet risk') and non-functional currency monetary assets and liabilities ('income statement risk')and
Ii. transactionrisk,thatis,theriskthatcurrencyfluctuationswillhaveanegativeeffectonthevalueoftheGroup'snon-functional currency trading cash flows. A non-functional currency transaction is a transaction in any currency other than the reporting currency of thesubsidiary.
 InterestraterisktotheGrouparisesfromsignificantchangesininterestratesonborrowingsissuedatorswappedtofloatingrates.
How do we usethem?
TheGroupmainlyemploysthreetypesofderivativefinancialinstrumentswhenmanagingitscurrencyandinterestraterisk:
 Foreignexchangeswapcontractsarederivativeinstrumentsusedtohedgeincomestatementtranslationriskarisingfromshort term intercompany loans denominated in aforeign currency
 Forwardforeignexchangecontractsarederivativeinstrumentsusedtohedgetransactionrisksotheyenablethesaleorpurchase offoreigncurrencyataknownfixedrateonanagreedfuturedateand
 Interestrateswapsarederivativeinstrumentsthatexchangeafixedrateofinterestforafloatingrate,orviceversa,oronetypeof floatingrateforanother,andareusedtomanageinterestraterisk
AnalysisofthederivativesusedbytheGrouptohedgeitsexposureandthevariousmethodsusedtocalculatetheirrespectivefair values are detailed in thissection.
Accountingpolicies
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair value with the movement recorded in the income statement, except where derivatives qualify for cash flow hedge accounting. In this case, the effective portion of a cash flow hedge is recognised in other comprehensive income and presented in the hedging reserve within equity.Thecumulativegainorlossislaterreclassifiedtotheincomestatementinthesameperiodastherelevanthedgedtransaction isrealised.Derivativeswithpositivefairvaluesarerecordedasassetsandnegativefairvaluesasliabilities.
Determining FairValue
The fair value of forward foreign exchange contracts is determined by using the difference between the contract exchange rate and thequotedforwardexchangerateatthereportingdate.ThefairvalueofinterestrateswapsistheestimatedamountthattheGroup would receive or pay to terminate the swap at the reporting date, taking into account current interest rates and our current creditworthiness,aswellasthatofourswapcounterparties.
Third-partyvaluationsareusedtofairvaluetheGroup'sinterestratederivatives.Thevaluationtechniquesuseinputssuchas interest rate yield curves and currency prices/yields, volatilities of underlying instruments and correlations betweeninputs.
Howdowemanageourcurrencyandinterestraterisk?
Currencyrisk
AstheGroupexpandsitsinternationaloperations,theperformanceofthebusinessbecomesincreasinglysensitivetomovementsin foreignexchangerates,primarilywithrespecttotheUSdollarandtheeuro.
The Group's foreign exchange policy is to use forward foreign exchange contracts to hedge material non-functional currency denominatedcostsorrevenueatthetimeofcommitmentforuptofiveyearsforward.TheGroupalsohedgesaproportionofhighly probable non-functional currency denominated costs or revenue on a rolling 18 month basis (see 'Keeping it simple box' for explanation of non-functional currency transactions).
The Group ensures that its net exposure to foreign currency denominated cash balances is kept to a minimal level by using foreign currencyswapstoexchangebalancesbackintosterlingorbybuyingorsellingforeigncurrenciesatspotrateswhennecessary.
TheGroupalsoutilisesforeignexchangeswapsbothtomanageforeigncurrencycashflowtimingdifferencesandtohedgeforeign currency denominated monetaryitems.
TheGroup'snetinvestmentsinoverseassubsidiariesmaybehedgedwherethecurrencyexposureisconsideredtobematerial.In 2015 the Group designated a portion of its euro borrowings into a net investment hedge against its euro denominated assets following the acquisition of TalpaMedia.
The following table highlights the Group's sensitivity to translation risk resulting from a 10% strengthening/weakening in sterling against the US dollar and euro, assuming all other variables are heldconstant:
2015-post- taxprofit
2015 -equity
    2014 -post- taxprofit
2014 -equity
USdollar
10 million
63million
8million
34million
Euro
8million
41million
8million
29million

Interest raterisk
TheGroup'sinterestratepolicyistoallowfixedrategrossdebttovarybetween20%and100%oftotalgrossdebttoaccommodate floating rate borrowings under the revolving creditfacility.
At31December2015theGroup'sfixedratedebtrepresented99%oftotalgrossdebt(2014:100%).Consequentlya 1% movement ininterestratesonnegligablefloatingvariableratedebtwouldnotimpactthepost-taxprofitfortheyear.
Forfinancialassetsandliabilitiesclassifiedatfairvaluethroughprofitorloss,themovementsintheyearrelatingtochangesinfair value and interest are notseparated.
Whatisthevalueofourderivativefinancialinstruments?
Thefollowingtableshowsthefairvalueofderivativefinancialinstrumentsanalysedbytypeofcontract.Interestrateswapfairvalues exclude accruedinterest.
At31December2015
Assets
m
Liabilities
m
Current
Cash flowhedges
-
(4)
Foreignexchangeforwardcontractsandswaps-fairvaluethroughprofitorloss
1
(1)
Interestrateswaps-fairvaluethroughprofitorloss
-
-
Non-current
Interestrateswaps-fairvaluethroughprofitorloss
8
(6)
9
(11)
At 31 December2014
Assets
m
Liabilities
m
Current
Cash flowhedges
-
(3)
Interestrateswaps-fairvaluethroughprofitorloss
11
(9)
Non-current
Cash flowhedges
-
(1)
Interestrateswaps-fairvaluethroughprofitorloss
16
(11)
27
(24)

Interest rateswaps
On issuing the 2017 Eurobond, the Group entered into a portfolio of fixed to floating interest rate swaps and then subsequently overlaidaportfoliooffloatingtofixedinterestrateswapswiththeresultthatinterestwas100%fixedontheseborrowings.Thetiming ofenteringintotheseswapslockedinaninterestbenefitfortheGroup,resultinginanetmark-to-marketgainontheportfolio.
Cash flowhedges
The Group applies hedge accounting for certain foreign currency firm commitments and highly probably cash flows where the underlying cash flows are payable within the next two years. In order to fix the sterling cash outflows associated with the commitments - which are mainly denominated in AUD or euros - the Group has taken out forward foreign exchange contracts for the same foreign currency amount and maturity date as the expected foreign currency outflow. The amount recognised in other comprehensive income during the period all relates to the effective portion of the revaluation loss associated with these contracts. Therewaslessthan1million (2014: nil)ineffectivenesstakentotheincomestatementand6millioncumulativeloss (2014: nil) recycled to the income statement in theyear.
Net investmenthedges
TheGroupuseseurodenominateddebttopartiallyhedgeagainstthechangeinthesterlingvalueofitseurodenominatednetassets due to movements in foreign exchange rates. The fair value of debt in a net investment hedge was 141 million (2014: nil). A foreign exchange loss of 2 million (2014: nil) relating to the net investment hedges has been netted off within exchange differences on translation of foreign operations as presented on the consolidated statement of comprehensiveincome.

Undiscounted financialliabilities
Keeping itsimple
TheGroupisrequiredtodisclosetheexpectedtimingsofcashoutflowsforeachofitsfinancialliabilities(includingderivatives).The amounts disclosed in the table are the contractual undiscounted cash flows (including interest), so will not always reconcile with the amounts disclosed on the statement of financialposition.
At31December2015
Carryingvalue
m
Total contractual cashflows
m
Lessthan
1year
m
Between 1 and 2years
m
Between 2 and 5years
m
Over 5years
m
Non-derivative financialliabilities
Borrowings
(613)
(703)
(30)
(184)
(28)
(461)
Trade and otherpayables
(834)
(834)
(786)
(34)
(14)
-
Other payables -non-current
(4)
(4)
-
(1)
(2)
(1)
Other payables - commitmentson acquisitions
(85)
(303)
(12)
(108)
(183)
-
Derivative financialinstruments
Cash flowhedges
Inflow
66
66
49
17
-
-
Outflow
(70)
(70)
(53)
(17)
-
-
Foreign exchange forward contractsand swaps
Inflow
147
147
144
3
-
-
Outflow
(147)
(147)
(144)
(3)
-
-
Interest rateswaps
Inflow
8
22
9
13
-
-
Outflow
(6)
(12)
(6)
(6)
-
-
(1,538)
(1,838)
(829)
(320)
(227)
(462)
At 31 December2014
Carryingvalue
m
Total contractual cashflows
m
Lessthan 1year
m
Between 1 and 2years
m
Between 2 and 5years
m
Over 5years
m
Non-derivative financialliabilities
Borrowings
(256)
(357)
(100)
(16)
(175)
(66)
Trade and otherpayables
(726)
(726)
(699)
(23)
(4)
-
Other payables -non-current
(4)
(4)
-
(3)
(1)
-
Other payables - commitmentson acquisitions
(34)
(96)
-
(9)
(81)
(6)
Derivative financialinstruments
Cash flowhedges
Inflow
88
88
52
36
-
-
Outflow
(92)
(92)
(54)
(38)
-
-
Foreign exchange forward contractsand swaps
Inflow
19
19
17
2
-
-
Outflow
(19)
(19)
(17)
(2)
-
-
Interest rateswaps
Inflow
26
47
26
8
13
-
Outflow
(19)
(27)
(16)
(5)
(6)
-
(1,017)
(1,167)
(791)
(50)
(254)
(72)

4.4 Net financingcosts

Keeping itsimple
ThissectiondetailstheinterestincomegeneratedontheGroup'scashandotherfinancialassetsandtheinterestexpenseincurred on borrowings and other financialliabilities.
Inreporting'adjustedprofit',theGroupadjustsnetfinancingcoststoexcludeunrealisedmark-to-marketmovementsoninterestrate and foreign exchange derivatives, gains/losses on bond buybacks, net pension interest, interest and fair value movements in acquisition-related liabilities and other financingcosts.
OurrationaleforadjustmentsmadetofinancingcostsissetoutintheFinancialandPerformanceReview.
Accountingpolicies
Netfinancingcostscompriseinterestincomeonfundsinvested,gains/lossesonthedisposaloffinancialinstruments,changesinthe fair value of financial instruments, interest expense on borrowings and finance leases, unwinding of the discount on provisions, unwinding of the discount on liabilities to non-controlling interest, foreign exchange gains/losses, and imputed interest on pension assetsandliabilities.Interestincomeandexpenseisrecognisedasitaccruesinprofitorloss,usingtheeffectiveinterestmethod.
Net financingcosts
Netfinancingcostscanbeanalysedasfollows:
2015
m
2014
m
Financingincome:
Interestincome
3
4
Changeinfairvalueofinstrumentsclassifiedatfairvaluethroughprofitorloss
3
-
Foreign exchangegain
-
1
Other financeincome
-
17
6
22
Financingcosts:
Interestexpenseonfinancialliabilitiesmeasuredatamortisedcost
(17)
(19)
Netpensioninterest(seenote3.7)
(10)
(17)
Losses on earlysettlement
-
(30)
Foreign exchangeloss
(2)
-
Other financeexpense
(8)
(7)
(37)
(73)
Net financingcosts
(31)
(51)

InterestonfinancialliabilitiesrelatestotheinterestincurredontheGroup'sborrowingsintheyear.
Thelossesonearlysettlementintheprioryearof30millionwereincurredasaresultoftherepurchaseoftheremaining62million 2019 bilateralloan.
Other finance income in the prior year primarily relates to acquisition-related contingent liabilities. This is where estimates of the futureperformanceagainststretchtargetsisreassessed,resultinginadjustmentstotherelatedputoptionliabilities.Otherfinance expense includes the amortisation of facility commitment and upfrontfees.

4.5 Fair value hierarchy

Keeping itsimple
ThefinancialinstrumentsincludedontheITVstatementoffinancialpositionaremeasuredateitherfairvalueoramortisedcost.The measurement of this fair value can in some cases be subjective, and can depend on the inputs used in the calculations. ITV generally uses external valuations using market inputs or market values (e.g. external share prices). The different valuation methods are called 'hierarchies' and are describedbelow.
Level1
Fairvaluesaremeasuredusingquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.
Level2
Fairvaluesaremeasuredusinginputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheassetorliability either directly orindirectly.
Interest rate swaps and options are accounted for at their fair value based upon termination prices. Forward foreign exchange contractsareaccountedforatthedifferencebetweenthecontractexchangerateandthequotedforwardexchangerateatthe reporting date.
Level3
Fairvaluesaremeasuredusinginputsfortheassetorliabilitythatarenotbasedonobservablemarketdata.Thetablesbelowsetout thefinancialinstrumentsincludedontheITVstatementoffinancialpositionat'fairvalue'.
Fairvalue
31December
2015
m
Level1
31December
2015
m
Level2
31December
2015
m
Level3
31December
2015
m
Assets measured at fairvalue
Available for sale financialinstruments
Availableforsalegilts(seenote4.1)
38
38
-
-
Availableforsaleinvestments(seenote3.5)
11
-
-
11
Financialassetsatfairvaluethroughprofitorloss
Foreign exchange forward contracts andswaps
1
-
1
-
Interest rateswaps
8
-
8
-
58
38
9
11
Fairvalue
31December
2015
m
Level1
31December
2015
m
Level2
31December
2015
m
Level3
31December
2015
m
Liabilities measured at fairvalue
Financialliabilitiesatfairvaluethroughprofitorloss
Contingentconsideration
(3)
-
-
(3)
Foreign exchange forward contracts andswaps
(1)
-
(1)
-
Interest rateswaps
(6)
-
(6)
-
Financialliabilitiesatfairvaluethroughreserves
Cash flowhedges
(4)
-
(4)
-
(14)
-
(11)
(3)
Fairvalue
31December
2014
m
Level1
31December
2014
m
Level2
31December
2014
m
Level3
31December
2014
m
Assets measured at fairvalue
Available for sale financialinstruments
Availableforsalegilts(seenote4.1)
39
39
-
-
Financialassetsatfairvaluethroughprofitorloss
Contingentconsideration
32
-
-
32
Interest rateswaps
27
-
27
-
98
39
27
32
Fairvalue
31December
2014
m
Level1
31December
2014
m
Level2
31December
2014
m
Level3
31December
2014
m
Liabilities measured at fairvalue
Financialliabilitiesatfairvaluethroughprofitorloss
Contingentconsideration
(3)
-
-
(3)
Interest rateswaps
(20)
-
(20)
-
Financialliabilitiesatfairvaluethroughreserves
Cash flowhedges
(4)
-
(4)
-
(27)
-
(24)
(3)

Refertonote4.3forhowwevalueinterestrateswapsandforwardforeigncurrencycontracts.
Contingent consideration is the Group's only financial instrument classified as Level 3 in the fair value hierarchy. As noted in the accounting policy section of note 3.3, the key assumptions taken into consideration when measuring this acquisition-related liability aretheperformanceexpectationsoftheacquisitionandadiscountratethatreflectsthesizeandnatureofthenewbusiness.There isnoreasonablechangeindiscountrateorperformancetargetsthatwouldgiverisetoamaterialchangeintheliabilityatyearend.
Thetablebelowsummarisesthekeymovementinthecontingentconsiderationduringtheyear.
Asset2015
m
Liability 2015
m
Asset2014
m
Liability2014
m
At 1January
32
(3)
-
(7)
Acquisitions (see note3.4)
-
-
30
(1)
Changes in non-controllinginterests
(32)
-
-
-
Changesinestimates(incomestatement)
-
-
-
5
Currencytranslation
-
-
2
-
At 31 December
-
(3)
32
(3)
Current
-
(2)
-
-
Non-current
-
(1)
32
(3)
At 31 December
-
(3)
32
(3)
Changesinestimates,includingtheunwindofinterestandfairvaluemovements,arerecognisedinnetfinancingcosts.

4.6 Equity
Keeping itsimple
This section explains material movements recorded in shareholders' equity that are not explained elsewhere in the financial statements.Themovementsinequityandthebalanceat31December2015arepresentedintheconsolidatedstatementofchanges inequity.
Accounting policies
Availableforsalereserve
Availableforsaleassetsarestatedatfairvalue,withanygainorlossrecogniseddirectlyintheavailableforsalereserveinequity, unlessthelossisapermanentimpairment,whenitisthenrecordedintheincomestatement.
Dividends
DividendsarerecognisedthroughequityontheearlieroftheirapprovalbytheCompany'sshareholdersortheirpayment.
4.6.1 Share capital andshare premium
TheGroup'ssharecapitalat31December2015of403million (2014: 403million)andsharepremiumof174million (2014: 174 million) is the same as that of ITV plc. Details of this are given in the ITV plc Company financial statements section of this Annual Report.
4.6.2 Mergerandotherreserves
Merger and other reserves at 31 December 2015 include the followingreserves:
2015
m
2014
m
Merger reserves
98
119
Capitalreserves
112
112
Capital redemptionreserves
36
36
Revaluationreserves
2
6
Putoptionliabilitiesarisingonacquisitionofnewsubsidiaries
(27)
(45)
Total
221
228

Themovementinthemergerreserveandputoptionisinrelationtotheacquisitionoftheremainingnon-controllinginterestof LeftfieldEntertainment.
4.6.3 Translationreserve
The translation reservecomprises:
 allforeignexchangedifferencesarisingonthetranslationoftheaccountsof,andinvestmentsin,foreignoperationsand
 thegainsorlossesontheportionofcashflowhedgesthathavebeendeemedeffective(seenote4.3)
4.6.3 Availableforsalereserve
Theavailableforsalereservecomprisesallmovementsarisingontherevaluationofgiltsaccountedforasavailableforsale.
4.6.5 Retainedearnings
TheretainedearningsreservecomprisesprofitfortheyearattributabletoownersoftheCompanyof495million(2014:466million) and other items recognised directly through equity as presented in the consolidated statement of changes in equity. Other items include the credit for the Group's share-based compensation schemes and the charge for the purchase of ITV shares via the ITV Employees' Benefit Trust, which are described in note4.7.
TheDirectorsofITVplcproposeafinaldividendof4.1ppershareandaspecialdividendof10.0ppershare.
4.6.6 Non-controllinginterests
The movement for the yearcomprises:
 thefairvalueofthenon-controllinginterestacquiredintheyearof19millionrelatestotheacquisitionoftheremaining20%in Leftfield Entertainment (2014: 20million);
 theshareofprofitsattributabletonon-controllinginterestsof7million (2014: 7million);and
 thedistributionsmadetonon-controllinginterestsof5million (2014: 8million).

4.7 Share-basedcompensation
Keeping itsimple
TheGrouputilisesshareawardschemesaspartofitsemployeeremunerationpackages,andthereforeoperatesanumberof share-based compensation schemes, namely the Deferred Share Award (DSA), Performance Share Plan (PSP), Long Term Incentive Plan (LTIP) and Save As You Earn (SAYE)schemes.
Atransactionwillbeclassedasshare-basedcompensationwheretheGroupreceivesservicesfromemployeesandpaysforthese in shares or similar equity instruments. If the Group incurs a liability based on the price or value of the Group's shares then this will also fall under a share-basedtransaction.
Adescriptionofeachtypeofshare-basedpaymentarrangementthatexistedatanytimeduringtheperiodaresetoutintheAnnual Remuneration Report.
Accountingpolicies
ForeachoftheGroup'sshare-basedcompensationschemes,thefairvalueoftheequityinstrumentgrantedismeasuredatgrant dateandspreadoverthevestingperiodviaachargetotheincomestatementwithacorrespondingincreaseinequity.
Thefairvalueoftheshareoptionsandawardsismeasuredusingeithermarketpriceatgrantdateor,fortheSaveAs You Earn scheme (SAYE), aBlack-Scholesmodel,takingintoaccountthetermsandconditionsoftheindividualscheme.
Vesting conditions are limited to service conditions and performance conditions. For performance-based schemes, the relevant Group performance measures are projected to the end of the performance period in order to determine the number of options expected to vest. The estimate is then used to determine the option fair value, discounted to present value. The Group revises its estimatesofthenumberofoptionsthatareexpectedtovest,includinganestimateofforfeituresateachreportingdate.Theimpactof therevisiontooriginalestimates,ifany,arerecognisedintheincomestatement,withacorrespondingadjustmenttoequity.
Exercises of share options granted to employees can be satisfied by market purchase or issue of new shares. No new shares may beissuedtosatisfyexercisesunderthetermsoftheDSA.Duringtheyearallexercisesweresatisfiedbyusingsharespurchasedin themarketandheldintheITVEmployees'BenefitTrust.
Share-based compensation charges totalled 14 million in 2015 (2014: 14million).
Share optionsoutstanding
ThetablebelowsummarisesthemovementsinthenumberofshareoptionsoutstandingfortheGroupandtheirweightedaverage exerciseprice:
Number ofoptions
('000)
2015
Weightedaverage exerciseprice
(pence)
Number ofoptions
('000)
2014
Weightedaverage exerciseprice
(pence)
Outstanding at 1January
51,933
32.97
67,676
14.52
Granted during the year - nilpriced
6,744
-
8,594
-
Granted during the year -other
4,615
198.94
5,999
162.86
Forfeited during theyear
(30)
143.65
(1,381)
28.67
Exercised during theyear
(19,477)
16.65
(27,860)
9.02
Expired during theyear
(3,618)
18.77
(1,095)
12.94
Outstanding at 31December
40,193
55.63
51,933
32.97
Exercisable at 31December
610
53.17
1,129
14.47

Theaveragesharepriceduring2015was254.24pence(2014:198.01pence).
Oftheoptionsstilloutstanding,therangeofexercisepricesandweightedaverageremainingcontractuallifeoftheseoptionscanbe analysed asfollows:
Rangeofexerciseprices(pence)
Weightedaverage exerciseprice
(pence)
Number ofoptions
('000)
2015
Weightedaverageremaining contractuallife
(years)
Weightedaverage exerciseprice
(pence)
Number ofoptions
('000)
2014
Weightedaverageremaining contractuallife
(years)
Nil
-
25,910
1.79
-
36,522
1.75
20.00 -49.99
-
-
-
35.61
1,120
0.53
50.00 -69.99
67.24
991
0.98
67.37
5,123
1.11
70.00 -99.99
73.58
301
0.92
73.58
303
1.90
100.00 -109.99
102.59
1,672
1.14
102.59
1,733
2.16
110.00 - 119.99
-
-
-
-
-
-
120.00 -149.99
131.44
1,175
1.52
131.44
1,251
2.52
150.00 -199.99
172.58
8,089
2.22
-
-
-
200.00 -249.99
206.83
2,054
2.52
163.72
5,881
2.80

Assumptions
DSA,LTIPandPSPoptionsarevalueddirectlybyreferencetothesharepriceatdateofgrant.TheoptionsfortheSAYEscheme,an HMRCapprovedSAYEscheme,arevaluedusingtheBlack-Scholesmodel,usingtheassumptionsbelow:
Schemename
Date ofgrant
Shareprice
at grant (pence)
Exerciseprice
(pence)
Expected volatility
%
Expectedlife
(years)
Grossdividend
yield
%
Risk-free
rate
%
Fair value (pence)
3Year
3 April 2014
195.50
159.68
32.00
3.25
2.15
1.27
53.78
5Year
3 April 2014
195.50
159.68
38.00
5.25
2.15
1.94
70.41
3Year
10 Sept2014
212.40
165.33
29.00
3.25
1.98
1.30
61.14
5Year
10 Sept2014
212.40
165.33
34.00
5.25
1.98
1.81
74.29
3Year
2 April 2015
251.00
192.52
26.00
3.25
2.27
0.74
65.85
5Year
2 April 2015
251.00
192.52
32.00
5.25
2.27
1.14
80.81
3Year
16Sept2015
249.60
206.83
25.00
3.25
2.28
0.97
55.71
5Year
16 Sept2015
249.60
206.83
30.00
5.25
2.28
1.38
72.02

Employees' BenefitTrust
The Group has investments in its own shares as a result of shares purchased by the ITV Employees' Benefit Trust ('EBT'). TransactionswiththeGroup-sponsoredEBTareincludedinthesefinancialstatementsandprimarilyconsistoftheEBT'spurchases ofsharesinITVplc,whichareaccountedforasareductiontoretainedearnings.
ThetablebelowshowsthenumberofITVplcsharesheldintheEBTat31December2015andthepurchases/(releases)fromthe EBTmadeintheyeartosatisfyawardsundertheGroup'sshareschemes:
Scheme
Shares heldat
Number ofshares
(released)/purchased
Nominalvalue
1 January2015
22,482,747
2,248,275
DSAreleases
(2,589,150)
PSPreleases
(5,580,025)
SAYEreleases
(5,313,414)
Sharespurchased
7,949,693
31 December2015
16,949,851
1,694,985

ThetotalnumberofsharesheldbytheEBTat31December2015represents0.42% (2014: 0.56%)ofITV'sissuedsharecapital.The marketvalueofownsharesheldat31December2015is47million(2014:48million).
The shares will be held in the EBT until such time as they may be transferred to participants of the various Group share schemes. RightstodividendshavebeenwaivedbytheEBTinrespectofsharesheldwhichdonotrelatetorestrictedsharesundertheDSA.In accordance with the Trust Deed, the Trustees of the EBT have the power to exercise all voting rights in relation to any investment (including shares) held within thattrust.

Section 5: OtherNotes
5.1 Related partytransactions
Keeping itsimple
TherelatedpartiesidentifiedbytheDirectorsincludejointventures,associatedundertakings,fixedassetinvestmentsandkey managementpersonnel.
ToenableusersofourfinancialstatementstoformaviewabouttheeffectsofrelatedpartyrelationshipsontheGroup,wedisclose theGroup'stransactionswiththoserelatedpartiesduringtheyearandanyassociatedyearendtradingbalances.
Transactionswithjointventuresandassociatedundertakings
Transactions with joint ventures and associated undertakings during the yearwere:
2015
m
2014
m
Sales to jointventures
9
7
Sales to associatedundertakings
13
10
Purchases from jointventures
24
26
Purchases from associatedundertakings
65
59

The transactions with joint ventures primarily relate to sales and purchases of digital multiplex services with Digital 3&4 Limited. Purchases from associated undertakings primarily relate to the purchase of news services from ITN.
All transactions with associated undertakings and joint ventures arise in the normal course of business on an arm's length basis. None of the balances are secured.
The amounts owed by and to these related parties at the year end were:
2015
m
2014
m
Amounts owed by jointventures
3
-
Amounts owed by associatedundertakings
66
48
Amounts owed to jointventures
2
-
Amounts owed to associatedundertakings
5
5
Amounts owed by pensionscheme
-
1

BalancesowedbyassociatedundertakingslargelyrelatetoproductionfundingadvancedtoTomorrowITVStudios. 
AmountspaidtotheGroup'sretirementbenefitplansaresetoutinnote3.7.
Transactions with key managementpersonnel
KeymanagementconsistsofITVplcExecutiveandNon-executiveDirectorsandtheITVManagementBoard.Keymanagement personnel compensation is asfollows:
2015
m
2014
m
Short-term employeebenefits
9
9
Share-based compensation
6
5
15
14

5.2 Contingentliabilities

Keeping itsimple
A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a provision where uncertainty may exist regarding the outcome of future events.
There are contingent liabilities in respect of certain litigation and guarantees, broadcasting issues, and in respect of warranties given inconnectionwithcertaindisposalsofbusinesses.NoneoftheseitemsareexpectedtohaveamaterialeffectontheGroup'sresults or financialposition.
5.3 Subsequentevents
Keeping itsimple
Where the Group receives information in the period between 31 December 2015 and the date of this report about conditions related to certain events that existed at 31 December 2015, we update our disclosures that relate to those conditions in light of the new information. Such events can be categorised as adjusting or non-adjusting depending on whether the condition existed at 31 December2015.Ifnon-adjusting
eventsarematerial,non-disclosurecouldinfluencetheeconomicdecisionsthatusersmakeonthe basis of the financial statements. Accordingly, for each material category of non-adjusting event after the reporting period we disclose in this section the nature of the event and an estimate of its financial effect, or a statement that such an estimate cannot be made.
On19October2015theGroupannouncedthatithadagreedtoacquired100%ofthesharecapitalofUTVLimitedforatotalcash consideration of 100 million, subject to regulatory and UTV Media plc shareholder approval. Final approvals were obtained by 18 February 2016 and the acquisition completed on 29 February 2016. The transaction was financed through existing cash and debt facilities.
5.4 Subsidiaries exempt fromaudit
Keeping itsimple
CertainsubsidiariesoftheGroupcantakeanexemptionfromhavinganaudit.Strictcriteriamustbemetforthisexemptiontobe taken,anditmustbeagreedtobytheDirectorsofthatsubsidiaryentity.
Listed below are subsidiaries controlled and consolidated by the Group, where the Directors have taken the exemption from having anauditofitsfinancialstatementsfortheyearended31December2015.ThisexemptionistakeninaccordancewithCompaniesAct s479A.
CompanyNumber
CompanyName
01891539
Broad Street FilmsLimited
02285229
CampaniaLimited
5078683
Carbon MediaLimited
4159249
Carlton Content HoldingsLimited
1692483
Carlton FinanceLimited
03984490
Carlton Food NetworkLimited
3053908
Carlton Programmes DevelopmentLimited
3210452
Carlton Screen Advertising (Holdings)Limited
3307790
Carltonco103
2625225
Carltonco FortyInvestments
3210363
CarltoncoNinety-Six
2852812
Cosgrove Hall FilmsLimited
3209058
DTVLimited
00290076
Granada GroupLimited
3962410
GranadaLimited
03106798
Granada MediaLimited
05344772
Granada Screen (2005)Limited
00733063
GranadaTelevisionOverseasLimited
01127149
ITV BreathlessLimited
04209918
ITV CillaLimited
06914987
ITV (HC)Limited
08534385
ITV LucanLimited
03916436
ITV News ChannelLimited
09499040
ITV TennisonLimited
05518785
Juice Music UKLimited
04201477
Morning TVLimited
ITV plc Company Financial Statements
Company BalanceSheet
As at 31December
Note
2015
m
2015
m
Restated*2014
m
Restated*2014
m
Non-currentassets
Investments in subsidiaryundertakings
iii
1,861
1,705
Derivative financialinstruments
9
17
Deferred taxasset
2
2
1,872
1,724
Current assets
Amounts owed by subsidiaryundertakings
3,864
1,441
Derivative financialinstruments
6
14
Otherreceivables
16
20
Cash and cashequivalents
126
145
4,012
1,620
Currentliabilities
Borrowings
v
-
(78)
Amounts owed to subsidiaryundertakings
(3,760)
(1,795)
Accruals and deferredincome
(21)
(19)
Derivative financialinstruments
(6)
(12)
(3,787)
(1,904)
Net current assets/(liabilities)
225
(284)
Total assets less currentliabilities
2,097
1,440
Non-currentliabilities
Borrowings
v
(598)
(161)
Derivative financialinstruments
(6)
(12)
(604)
(173)
Net assets
1,493
1,267
Capital andreserves
Sharecapital
vi
403
403
Sharepremium
vii
174
174
Otherreserves
vii
36
36
Retainedearnings
vii
880
654
Totalequity
1,493
1,267

* 2014hasbeenrestatedaspartofthetransitiontoFRS101.Seenotexii.

TheaccountswereapprovedbytheBoardofDirectorson2March2016andweresignedonitsbehalfby:
IanGriffiths
Director

Company Statement of Changes inEquity
Note
ShareCapital
m
SharePremium
m
Other Reserves
m
RetainedEarnings
m
Total
m
Balance at 1 January2015
403
174
36
654
1,267
Total comprehensive income for theyear
Profit
-
-
-
671
671
Total comprehensive income for theyear
-
-
-
671
671
Transactions with owners recorded directly inequity
Contributions by and distributions toowners
Equitydividends
-
-
-
(459)
(459)
Movements due to share basedcompensation
-
-
-
14
14
Total contributions by and distributions toowners
-
-
-
(445)
(445)
Total transactions withowners
-
-
-
(445)
(445)
Balance at 31 December2015
vii /viii
403
174
36
880
1,493
Note
ShareCapital
m
SharePremium
m
Other Reserves
m
RetainedEarnings
m
Total
m
Balance at 1 January2014
403
174
36
995
1,608
Effect of changes to FRS101
-
-
-
2
2
Restated balance at 1 January2014
403
174
36
997
1,610
Total comprehensive income for theyear
Profit
-
-
-
(44)
(44)
Total comprehensive income for theyear
-
-
-
(44)
(44)
Transactions with owners recorded directly inequity
Contributions by and distributions toowners
Equitydividends
-
-
-
(313)
(313)
Movements due to share basedcompensation
-
-
-
14
14
Total contributions by and distributions toowners
-
-
-
(299)
(299)
Total transactions withowners
-
-
-
(299)
(299)
Balance at 31 December2014
vii /viii
403
174
36
654
1,267
Notes to the ITV plc Company Financial Statements
i Accountingpolicies
Basis ofpreparation
TheCompanytransitionedfromoldUKGAAPtoFinancialReportingStandard101ReducedDisclosureFramework(FRS101)forall periods presented. The Company's transition date is 1 January 2014. This is the first year adoption of FRS101. There were no materialamendmentsontheadoptionofFRS101.Seenotexiforfurtherinformation.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. The Company is a qualifying entity as it is a member of the ITV plc Group where ITV plc, the ultimate parent prepares publicly available consolidated financialstatements.
ExemptionsApplied
The Company istaking advantage of the following disclosure exemptions under FRS101.
 Presentation of a Statement of CashFlows
 Disclosure of key management personnel compensation
 Disclosure of related party transactions between wholly-owned subsidiaries and parents within agroup
 DisclosuresrequiredunderIFRS2ShareBasedPaymentsinrespectofgroupsettledsharebasedpayments
 Disclosures required by IFRS 7 Financial Instrument:Disclosure
 Certain disclosures required under IFRS 13 Fair ValueMeasurement
 Disclosure of information in relation to new standards not yetapplied
Aspermittedbysection408(3)oftheCompaniesAct2006,aseparateincomestatementdealingwiththeresultsoftheparent company has not beenpresented.
Subsidiaries
SubsidiariesareentitiesthataredirectlyorindirectlycontrolledbytheCompany.ControlexistswheretheCompanyhasthepowerto govern the financial and operating policies of the entity so as to obtain benefits from its activities. The investment in the Company's subsidiaries is recorded at cost. Annual share-based payment compensation costs are recharged to the subsidiaries through the profit and lossaccount.
Foreign currencytransactions
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Foreign currency monetary assets and liabilities at the balance sheet date are translated into sterling at the rate of exchange ruling at that date.Foreignexchangedifferencesarisingontranslationarerecognisedintheprofitandlossaccount.Non-monetaryassetsand liabilitiesmeasuredathistoricalcostaretranslatedintosterlingattherateofexchangeonthedateofthetransaction.
Borrowings
Borrowings are recognised initially at fair value including directly attributable transaction costs, with subsequent measurement at amortisedcostusingtheeffectiveinterestratemethod.Thedifferencebetweeninitialfairvalueandtheredemptionvalueisrecorded intheprofitandlossaccountovertheperiodoftheliabilityonaneffectiveinterestbasis.
Derivatives and other financialinstruments
TheCompanyusesalimitednumberofderivativefinancialinstrumentstohedgeitsexposuretofluctuationsininterestandother foreignexchangerates.TheCompanydoesnotholdorissuederivativeinstrumentsforspeculativepurposes.
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair value with the movement recorded in the profit and loss account within net financing costs, except where derivatives qualify for cash flow hedge accounting. In this case, the effective portion of cash flow hedge is recognised in retained profits within equity. The cumulative gain orlossislater
reclassifiedtotheprofitandlossaccountinthesameperiodastherelevanthedgedtransactionisrealised.Derivatives withpositive
fairvaluesarerecordedasassetsandnegativefairvaluesasliabilities.
Thefairvalueofforeigncurrencyforwardcontractsisdeterminedbyusingthedifferencebetweenthecontractexchangerateand the quoted forward exchange rate at the balance sheetdate.
ThefairvalueofinterestrateswapsistheestimatedamountthattheCompanywouldreceiveorpaytoterminatetheswapatthe balancesheetdate,takingintoaccountcurrentinterestratesandthecurrentcreditworthinessofswapcounterparties.
Third-partyvaluationsareusedtofairvaluetheCompany'sderivatives.Thevaluationtechniquesuseinputssuchasinterestrate yield curves and currency prices/yields, volatilities of underlying instruments and correlations between inputs. For financial assets andliabilitiesclassifiedatfairvaluethroughprofitorlossthefairvaluechangeandinterestincome/expensearenotseparated.
Deferredtax
Thetaxchargefortheperiodisrecognisedintheincomestatementordirectlyinequityaccordingtotheaccountingtreatmentofthe relatedtransaction.
Deferred tax arises due to certain temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and those for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlementofthecarryingamountofassetsandliabilities.Adeferredtaxassetisrecognisedonlytotheextentthatitisprobablethat sufficient taxable profit will be available to utilise the temporary difference. Recognition of deferred tax assets, therefore involves judgement regarding timing and level of future taxableincome.
Share-basedcompensation
TheCompanyutilisesshareawardschemesaspartofitsemployeeremunerationpackages,andthereforeoperatesanumberof share-based compensation schemes, namely the Deferred Share Award (DSA), Performance Share Plan (PSP), Long Term Incentive Plan (LTIP) and Save As You Earn (SAYE)schemes.
A transaction will be classed as share-based compensation where the Company receives services from employees and pays for theseinsharesorsimilarequityinstruments.IftheCompanyincursaliabilitybasedonthepriceorvalueofthesharesthenthiswill also fall under a share-basedtransaction.
The fair value of the equity instrument granted is measured at grant date and spread over the vesting period via a charge to the incomestatementwithacorrespondingincreaseinequity.Thefairvalueoftheshareoptionsandawardsismeasuredusingeither marketpriceatgrantdateor,fortheSaveAs You Earnscheme(SAYE),aBlack-Scholesmodel,takingintoaccountthetermsand conditions of the individualscheme.
Vesting conditions are limited to service conditions and performance conditions. For performance-based schemes, the relevant performance measures are projected to the end of the performance period in order to determine the number of options expected to vest.Theestimateisthenusedtodeterminetheoptionfairvalue,discountedtopresentvalue.TheCompanyrevisesitsestimatesof thenumberofoptionsthatareexpectedtovest,includinganestimateofforfeituresateachreportingdate.Theimpactoftherevision tooriginalestimates,ifany,arerecognisedintheincomestatement,withacorrespondingadjustmenttoequity.
Exercises of share options granted to employees can be satisfied by market purchase or issue of new shares. No new shares may beissuedtosatisfyexercisesunderthetermsoftheDSA.Duringtheyearallexercisesweresatisfiedbyusingsharespurchasedin themarketandheldintheITVEmployees'BenefitTrust.
Theweightedaveragesharepriceofshareoptionsexercisedduringtheyearwas16.65p(2014:9.02p).Theoptionsoutstandingat theyearendhaveanexercisepriceintherangeofnilto206.83pandaweightedaveragecontractuallifeof1year(2014:1year).
Dividends
DividendsarerecognisedthroughequityontheearlieroftheirapprovalbytheCompany'sshareholdersortheirpayment.

ii Employees
Two (2014:two)DirectorsofITVplcwereemployeesoftheCompanyduringtheyear,bothofwhomremainattheyearend.The costs relating to these Directors are disclosed in the RemunerationReport.

iii Investments in subsidiaryundertakings
Thebalanceat31December2015was1,861million(2014:1,705 million).
During the year, the Company set up a subsidiary investment, ITV (Europe) Holdings BV for 146 million in exchange for 10 1 ordinaryshares.TheCompanyalsoincreaseditsinvestmentinITVInvestmentsLimitedby5millioninexchangefor11ordinary share.TheCompanyincreaseditsinvestmentinCarltonCommunicationsLimitedby5millioninexchangefor11ordinaryshare.

iv Amounts owed (to)/from subsidiary undertakings
The Company operates an intra-group cash pool policy with certain 100% owned UK subsidiaries. The pool applies to bank accounts where there is an unconditional right of set off and involves the daily closing cash position for participating subsidiaries whether positive or negative, being cleared to nil via daily bank transfers to/from ITV plc. These daily transactions create a correspondingintercompanycreditorordebtor
whichcanresultinsignificantmovementsinamountsowedtoandfromsubsidiary undertakings in the Company balancesheet.
v Borrowings
Loansrepayableinlessthanoneyear
InOctober2015theunsecured78millionEurobondmatured,resultinginanetpaymentbythecompanyof76million,after settlement of the related outstanding interest rateswaps.
Loansrepayableaftermorethanoneyear
Theunsecured161millionEurobondmaturesinJanuary2017andhasacouponof6.125%.
At various periods during the year the Company drew down on the Revolving Credit Facility ('RCF') to meet short-term funding requirements.Allshort-termdrawingswererepaidbytheendoftheyear.ThemaximumdrawdownoftheRCFduringtheyearwas500million(362million)inApriltofundtheacquisitionofTalpaMedia.ThemaximumdrawdownontheRCFduring2014was321 million to fund the 2014acquisitions.
Loansrepayableaftermorethanoneyear
In September 2015 the Company issued a seven year 600 million Eurobond at a fixed coupon of 2.125% which will mature in September2022.Thebondrefinancedthe12monthbridgeloanfacilityof500millionthatwasusedtorepaythe RCF, whichinitially funded the purchase of Talpa Media inApril.

vi Managing market risks: derivative financialinstruments
Whatisthevalueofourderivativefinancialinstruments?
Assets 2015
Liabilities
2015
Current
Cash FlowHedges
3
(4)
Foreignexchangeforwardcontractsandswaps-fairvaluethroughprofitorloss
3
(2)
InterestRateSwaps-fairvaluethroughprofitorloss
-
-
Non-current
InterestRateSwaps-fairvaluethroughprofitorloss
9
(6)
15
(12)
Assets 2014
Liabilities
2014
Current
Cash FlowHedges
2
(2)
Foreignexchangeforwardcontractsandswaps-fairvaluethroughprofitorloss
1
(1)
InterestRateSwaps-fairvaluethroughprofitorloss
11
(9)
Non-current
Cash FlowHedges
1
(1)
InterestRateSwaps-fairvaluethroughprofitorloss
16
(11)
31
(24)

TheCompanymainlyemploysthreetypesofderivativefinancialinstrumentswhenmanagingitscurrencyandinterestraterisk:
 Foreignexchangeswapcontractsarederivativeinstrumentsusedtohedgeincomestatementtranslationriskarisingfromshort term intercompany loans denominated in a foreigncurrency.
 Forwardforeignexchangecontractsarederivativeinstrumentsusedtohedgetransactionrisksotheyenablethesaleorpurchase offoreigncurrencyataknownfixedrateonanagreedfuturedate.
 Interestrateswapsarederivativeinstrumentsthatexchangeafixedrateofinterestforafloatingrateorvice-versaoronetypeof floatinginterestrateforanotherandareusedtomanageinterestraterisk.
Interest rateswaps
On issuing the 2017 Eurobond, the Company entered into a portfolio of fixed to floating interest rate swaps and then subsequently overlaidaportfoliooffloatingtofixedinterestrateswapswiththeresultthatinterestwas100%fixedontheseborrowings.Thetiming ofenteringintotheseswapslockedinaninterestbenefitfortheCompany,resultinginanetmark-to-marketgainontheportfolio.
Cash flowhedges
The Company applies hedge accounting for certain foreign currency firm commitments and highly probably cash flows where the relevantcashflowsarepayablewithinthenexttwoyears.Inordertofixthesterlingcashoutflowsassociatedwiththecommitments- which are mainly denominated in AUD or euros - the Company has taken out forward foreign exchange contracts for the same foreigncurrencyamountandmaturitydateastheexpectedforeigncurrencyoutflow.Theamountrecognisedinothercomprehensive income during the period all relates to the effective portion of the revaluation loss associated with these contracts. There was less than 1 million (2014: nil) ineffectiveness taken to the income statement and 6 million cumulative loss (2014: nil) recycled to the income statement in theyear.
Undiscounted financialliabilities
TheCompanyisrequiredtodisclosetheexpectedtimingsofcashoutflowsforeachofitsderivativefinancialliabilities.Theamounts disclosed in the table are the contractual undiscounted cash flows (including interest), so will not always reconcile with the amounts disclosed on the statement of financialposition.
At31December2015
Carryingvalue
m
Total Contractual cashflows
m
Less than1
year
m
Between 1 and 2years
m
Between 2 and 5years
m
Over 5years
m
Non-current andcurrent
Cash flowhedges
Inflow
3
136
102
34
-
-
Outflow
(4)
(136)
(102)
(34)
-
-
Foreign exchange forward contractsand swaps-fairvaluethroughprofitorloss
Inflow
3
253
248
5
-
-
Outflow
(2)
(252)
(247)
(5)
-
-
InterestRateSwaps-fairvaluethrough profit orloss
Inflow
9
22
9
13
-
-
Outflow
(6)
(12)
(6)
(6)
-
-
3
11
4
7
-
-
At 31 December2014
Carryingvalue
m
TotalContractual
cashflows
m
Less than1
year
m
Between 1 and 2years
m
Between 2 and 5years
m
Over 5years
m
Non-current andcurrent
Cash FlowHedges
Inflow
3
174
100
74
-
-
Outflow
(3)
(174)
(100)
(74)
-
-
Foreign exchange forward contractsand swaps-fairvaluethroughprofitorloss
Inflow
1
209
205
4
-
-
Outflow
(1)
(209)
(205)
(4)
-
-
InterestRateSwaps-fairvaluethrough profit orloss
Inflow
27
47
26
8
13
-
Outflow
(20)
(27)
(16)
(5)
(6)
-
7
20
10
3
7
-

vii Share capital
Authorised2015 &2014
m
Allotted,issued and fullypaid 2015 &2014
m
Authorised ordinary shares of 10 penceeach
8,000,000,000
800
Allotted,issuedandfullypaidordinarysharesof10penceeach
4,025,409,194
403
Total
800
403

TheCompany'sordinarysharesgiveshareholdersequalrightstovote,receivedividendsandtotherepaymentofcapital.

viii Equity
Theretainedearningsreserveincludesprofitaftertaxfortheyearof 671 million(2014:44millionloss)whichincludesdividendsof700millionfromsubsidiariesin2015 (2014: nil).Theretainedearningsreservesof880millionarealldistributable. 
The Directors of the Company propose a final dividend of 4.1p per share and a special dividend of 10.0p per share. 
Otherreservesof36million(2014:36million)relatetoshare-buybacksinpriorperiods.

ix Contingentliabilities
UnderaGroupregistration,theCompanyisjointlyandseverallyliableforVATat31December2015of59million (31 December 2014:58million).TheCompanyhasguaranteedcertainfinanceandoperatingleaseobligationsofsubsidiaryundertakings.
Therearecontingentliabilitiesinrespectofcertainlitigationandguarantees,broadcastingissues,andinrespectofwarrantiesgiven in connection with certain disposals of businesses. None of these items are expected to have a material effect on the Company's results or financialposition.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its Group, theCompanyconsidersthesetobeinsurancearrangements,andaccountsforthemassuch.Inthisrespect,theCompanytreatsthe guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under theguarantee.

x Capital and othercommitments
There are no capital commitments at 31 December2015 (2014: none).

xi Related partytransactions
Transactions with key managementpersonnel
Key management consists of ITV plc ExecutiveDirectors.
Keymanagementpersonnelcompensation,onanaccountingbasis,isasfollows:
2015
m
2014
m
Short-term employeebenefits
3
3
Share-based compensation
3
2
6
5

Totalemolumentsandgainsonshareoptionsreceivedbykeymanagementpersonnelintheyearwere:
2015
m
2014
m
Emoluments
3
3
Gains on exercise of shareoptions
3
2
Gainsonreleaseofrestrictedshareawards
3
3
9
8

xii Transition to FRS 101 Reduced DisclosureFramework
Forallperiodsuptoandincluding31December2014,theCompanyprepareditsfinancialstatementsinaccordancewithpreviously extant United Kingdom generally accepted accounting practice (UK GAAP). These financial statements for the year ended 31 December2015,arethefirsttheCompanyhaspreparedinaccordancewithFinancialReportingStandard101ReducedDisclosure Framework (FRS101). Accordingly the Company has prepared these financial statements to comply with FRS101 for periods beginning on or after 1 January 2014 and the significant accounting policies meeting those requirements are described in the relevantnotes.
In preparing these financial statements, the Company has started from an opening balance sheet as at 1 January 2014, the Company's date of transition to FRS101 and made those changes in accounting policies and other restatements required for the first-time adoption of FRS101. As such this note explains the principal adjustments made by the Company in restating its balance sheetasat1January2014prepared
underpreviouslyextantUKGAAPanditspreviouslypublishedUKGAAPfinancialstatements for the year ended 31 December2014.
OntransitiontoFRS101,theCompanyhasappliedtherequirementsofIFRS1firsttimeadoptionofInternationalFinancial ReportingStandards.
Under FRS 101 deferred tax is recognised on temporary differences between the estimated future tax deductions for share-based compensationandtherelatedcumulativeshare-basedcompensationexpense. To theextentthattheestimatedfuturetaxdeductions exceedthecumulativeexpense,theexcessdeferredtaxisrecogniseddirectlyinequity.

Company Balance Sheet
Asoriginally reportedunderUK GAAPat
1 January2014
m
FRS101
m
Restatedat 1 January2014
m
Asoriginally reportedunderUK GAAPat
31 December2014
m
FRS101
m
Restatedat 31 December2014
m
Non-currentassets
Investments in subsidiaryundertakings
1,648
-
1,648
1,705
-
1,705
Derivative financialinstruments
41
-
41
17
-
17
Deferred taxasset
-
2
2
-
2
2
1,689
2
1,691
1,722
2
1,724
Current assets
Amounts owed by subsidiaryundertakings
1,280
-
1,280
1,441
-
1,441
Derivative financialinstruments
32
-
32
14
-
14
Otherreceivables
26
-
26
20
-
20
Cash at bank and cashequivalents
319
-
319
145
-
145
1,657
-
1,657
1,620
-
1,620
Currentliabilities
Borrowings
(41)
-
(41)
(78)
-
(78)
Amounts owed to subsidiaryundertakings
(1,342)
-
(1,342)
(1,795)
-
(1,795)
Accruals and deferredincome
(22)
-
(22)
(19)
-
(19)
Derivative financialinstruments
(5)
-
(5)
(12)
-
(12)
(1,410)
-
(1,410)
(1,904)
-
(1,904)
Net current assets/(liabilities)
247
-
247
(284)
-
(284)
Total assets less currentliabilities
1,936
2
1,938
1,438
2
1,440
Non-currentliabilities
Borrowings
(301)
-
(301)
(161)
-
(161)
Derivative financialinstruments
(27)
-
(27)
(12)
-
(12)
(328)
-
(328)
(173)
-
(173)
Net assets
1,608
2
1,610
1,265
2
1,267
Capital andreserves
Sharecapital
403
-
403
403
-
403
Sharepremium
174
-
174
174
-
174
Otherreserves
36
-
36
36
-
36
Retainedearnings
995
2
997
652
2
654
Totalequity
1,608
2
1,610
1,265
2
1,267

Subsidiary undertakings andinvestments
Principalsubsidiaryundertakings
TheprincipalsubsidiaryundertakingsoftheCompanyat31December2015,allofwhicharewhollyowned(directlyorindirectly)and incorporated and registered where stated,are:
Name
Countryofincorporationor establishment
PrincipalActivities
Interest
%
Holding
CarltonCommunicationsLimited(1)
UnitedKingdom
HoldingCompany
Ordinary, RedeemablePreference
100
ITVBroadcastingLimited
UnitedKingdom
Broadcastoftelevisionprogrammes
Ordinary
100
ITVConsumerLimited
UnitedKingdom
Developmentofplatforms,broadband,transactional andmobileservices
Ordinary
100
ITVDigitalChannelsLimited
UnitedKingdom
Operationofdigitaltelevisionchannels
Ordinary
100
ITVGlobalEntertainmentLimited
UnitedKingdom
Rightsownershipanddistributionoftelevision programmesandfilms
Ordinary
100
ITVNetworkLimited
UnitedKingdom
Schedulingandcommissioningoftelevisionprogrammes
Guarantee
100
ITVRightsLimited
UnitedKingdom
Rightsownership
Ordinary
100
ITV ServicesLimited
UnitedKingdom
ProvisionofservicesforothercompanieswithintheGroup
Ordinary, CumulativePreference
100
ITVStudiosLimited
UnitedKingdom
Productionoftelevisionprogrammes
Ordinary
100
ITV2Limited
UnitedKingdom
Operationofdigitaltelevisionchannels
Ordinary
100
SDNLimited
UnitedKingdom
OperationofFreeviewMultiplexA
Ordinary
100
Talpa MediaB.V.
Netherlands
Productionoftelevisionprogrammes
Ordinary
100
ITVStudios,Inc.
UnitedStates
Productionoftelevisionprogrammes
Common
100
LeftfieldEntertainment,LLC
UnitedStates
Productionoftelevisionprogrammes
Membership
100

Subsidiaryundertakings
Name
Country of incorporationor establishment
Interest
%
Holding
12Yard(North)ProductionsLimited
UnitedKingdom
Ordinary
100
12 YardLimited
UnitedKingdom
Ordinary
100
12YardProductions(Investments)Limited
UnitedKingdom
Ordinary
100
12YardProductionsLimited
UnitedKingdom
Ordinary
100
A.C.E.(1988)Limited
UnitedKingdom
Ordinary
100
ActionTimeHoldings
UnitedKingdom
Ordinary
100
AngliaTelevision(Music)Limited
UnitedKingdom
Ordinary
100
AngliaTelevisionEntertainment
UnitedKingdom
Ordinary
100
Anglia TelevisionGroup
UnitedKingdom
Ordinary
100
Anglia TelevisionHoldings
UnitedKingdom
Ordinary
100
Anglia TelevisionLimited
UnitedKingdom
Ordinary
100
BigTalkInvestmentsLimited
UnitedKingdom
Ordinary
100
BigTalkJLLimited
UnitedKingdom
Ordinary
100
BigTalkPicturesLimited
UnitedKingdom
Ordinary
100
BigTalkProductionsLimited
UnitedKingdom
Ordinary
100
BroadStreetFilmsLimited
UnitedKingdom
Ordinary
100
CampaniaLimited
UnitedKingdom
Ordinary, Cumulative RedeemablePreference
100
CarbonMediaLimited
UnitedKingdom
Ordinary
100
CarltonActiveLimited
UnitedKingdom
Ordinary
100
CarltonBroadcastingHoldings
UnitedKingdom
Ordinary
100
CarltonBroadcastingLimited
UnitedKingdom
Ordinary
100
CarltonCinemaLimited
UnitedKingdom
Ordinary
100
CarltonContentHoldings Limited
UnitedKingdom
Ordinary
100
CarltonEntertainment
UnitedKingdom
Ordinary
100
CarltonFilmDistributorsLimited
UnitedKingdom
Ordinary
100
CarltonFilmsLimited
UnitedKingdom
Ordinary
100
CarltonFinanceLimited
UnitedKingdom
Ordinary
100
CarltonFoodNetworkLimited
UnitedKingdom
Ordinary
100
CarltonProductionsLimited
UnitedKingdom
Ordinary
100
CarltonProgrammesDevelopmentLimited
UnitedKingdom
Ordinary
100
CarltonScreenAdvertising(Holdings)Limited
UnitedKingdom
Ordinary
100
Carltonco103
UnitedKingdom
Ordinary
100
Carltonco99Limited
UnitedKingdom
Ordinary
100
CarltoncoEighty-OneLimited
UnitedKingdom
Ordinary,Deferred
100
CarltoncoFiftyLimited
UnitedKingdom
Ordinary,Preference
100
CarltoncoFortyInvestments
UnitedKingdom
Ordinary
100
CarltoncoForty-FiveLimited
UnitedKingdom
Ordinary
100
CarltoncoNinety-Six
UnitedKingdom
Ordinary, Cumulative RedeemablePreference
100
Carltonco SeventeenLimited
UnitedKingdom
Ordinary
100
CastlefieldPropertiesLimited
UnitedKingdom
Ordinary
100
Cat'sontheRoofMediaLimited
UnitedKingdom
Ordinary
100
CentralProductionsLimited
UnitedKingdom
Ordinary
100
CentralTelevision Limited
UnitedKingdom
Ordinary
100
ChannelTelevisionHoldingsLimited
UnitedKingdom
Ordinary
100
CosgroveHallFilmsLimited
UnitedKingdom
Ordinary
100
DTVLimited
UnitedKingdom
Ordinary
100
ElectronicRentalsGroup
UnitedKingdom
Ordinary
100
EQPicturesLimited
UnitedKingdom
Ordinary
100
FilmLabNorthLimited
UnitedKingdom
Ordinary
100
FirstIndependentFilms
UnitedKingdom
Ordinary
100
GenesisFilmProductionsLimited
UnitedKingdom
Ordinary
100
GILLimited
UnitedKingdom
Ordinary
100
GranadaAVSolutionsLimited
UnitedKingdom
Ordinary
100
GranadaFilm
UnitedKingdom
Ordinary
100
GranadaFilmProductionsLimited
UnitedKingdom
Ordinary
100
GranadaGroupLimited
UnitedKingdom
Ordinary, Convertible Preference
100
GranadaLimited
UnitedKingdom
Ordinary
100
GranadaMediaGroupLimited
UnitedKingdom
Ordinary
100
GranadaMediaLimited
UnitedKingdom
Ordinary,Part Preference
100
GranadaNomineesLimited
UnitedKingdom
Ordinary
100
GranadaProductionsLimited
UnitedKingdom
Ordinary
100
GranadaProperties
UnitedKingdom
Ordinary
100
GranadaScreen(2005) Limited
UnitedKingdom
Ordinary
100
GranadaTelevisionInternational
UnitedKingdom
Ordinary
100
Granada TelevisionLimited
UnitedKingdom
Ordinary
100
GranadaTelevisionOverseasLimited
UnitedKingdom
Ordinary
100
GranadaTelevisionProductionsLimited
UnitedKingdom
Ordinary
100
GranadaUKRentalandRetailLimited
UnitedKingdom
Ordinary, Cumulative Preference
100
InteractiveTelephonyLimited
UnitedKingdom
Ordinary
100
InternationalTelevisionEnterprisesLondonLimited
UnitedKingdom
Ordinary, Redeemable Preference
100
ITCDistribution
UnitedKingdom
Ordinary
100
ITCEntertainmentGroupLimited
UnitedKingdom
Ordinary
100
ITCEntertainmentHoldingsLimited
UnitedKingdom
Ordinary
100
ITV(HC)Limited(1)
UnitedKingdom
Ordinary
100
ITV(Scotland)Limited
UnitedKingdom
Ordinary
100
ITVBeowulfLimited
UnitedKingdom
Ordinary
100
ITVBorderLimited
UnitedKingdom
Ordinary
100
ITVBreakfastBroadcastingLimited
UnitedKingdom
Ordinary
100
ITVBreakfastLimited
UnitedKingdom
Ordinary
100
ITVBreathlessLimited
UnitedKingdom
Ordinary
100
ITVCentralLimited
UnitedKingdom
Ordinary
100
ITVChannelsLimited
UnitedKingdom
Ordinary
100
ITVCillaLimited
UnitedKingdom
Ordinary
100
ITVCradleLimited
UnitedKingdom
Ordinary
100
ITVDigitalHoldingsLimited
UnitedKingdom
Ordinary
100
ITVGlobalContentLimited
UnitedKingdom
Ordinary
100
ITVHoldingsLimited
UnitedKingdom
Ordinary
100
ITVHomeFiresLimited
UnitedKingdom
Ordinary
100
ITVInternationalChannels(Asia)Limited
UnitedKingdom
Ordinary
100
ITVInvestmentsLimited(1)
UnitedKingdom
Ordinary
100
ITV J&HLimited
UnitedKingdom
Ordinary
100
ITVJerichoLimited
UnitedKingdom
Ordinary
100
ITV JRLimited
UnitedKingdom
Ordinary
100
ITVLewisLimited
UnitedKingdom
Ordinary
100
ITVLTVC(Scotland)Limited
UnitedKingdom
Ordinary
100
ITVLucanLimited
UnitedKingdom
Ordinary
100
ITVMeridianLimited
UnitedKingdom
Ordinary
100
ITVMoorsideLimited
UnitedKingdom
Ordinary
100
ITVMrSelfridgeLimited
UnitedKingdom
Ordinary
100
ITVNewco1Limited(1)
UnitedKingdom
Ordinary
100
ITVNewsChannelLimited
UnitedKingdom
Ordinary,Preference
100
ITV NPLimited
UnitedKingdom
Ordinary
100
ITVPensionSchemeLimited
UnitedKingdom
Ordinary,Deferred
100
ITVPlayLimited
UnitedKingdom
Ordinary
100
ITVProductionsLimited
UnitedKingdom
Ordinary
100
ITVProperties(Developments)Limited
UnitedKingdom
Ordinary
100
ITVShetlandLimited
UnitedKingdom
Ordinary
100
ITVSpiritLimited
UnitedKingdom
Ordinary
100
ITVSportChannelLimited
UnitedKingdom
Ordinary
100
ITVStudios(Israel)Limited
UnitedKingdom
Ordinary
100
ITVSupplementaryPensionSchemeLimited
UnitedKingdom
Ordinary
100
ITV TennisonLimited
UnitedKingdom
Ordinary
100
ITVTextSantaLimited
UnitedKingdom
Ordinary
100
ITVTFGHoldingsLimited
UnitedKingdom
Ordinary
100
ITVThunderbirdsLimited
UnitedKingdom
Ordinary
100
ITV TutLimited
UnitedKingdom
Ordinary
100
ITVVenturesLimited
UnitedKingdom
Ordinary
100
ITVWales&WestGroupLimited
UnitedKingdom
Ordinary
100
ITVWales&WestLimited
UnitedKingdom
Ordinary
100
ITVWorldwideLimited
UnitedKingdom
Ordinary
100
ITV3Limited
UnitedKingdom
Ordinary
100
ITV4Limited
UnitedKingdom
Ordinary
100
JuiceMusicUKLimited
UnitedKingdom
Ordinary
100
Leftfield(UK)Limited
UnitedKingdom
Ordinary
100
LinkElectronicsLimited
UnitedKingdom
Ordinary
100
LondonNewsNetwork
UnitedKingdom
Ordinary
100
LondonWeekendTelevisionLimited
UnitedKingdom
Ordinary,
100
LWT (Holdings)Limited
UnitedKingdom
Ordinary,Special Deferred
100
LWTProductionsLimited
UnitedKingdom
Ordinary
100
MammothScreen(AR)Limited
UnitedKingdom
Ordinary
100
MammothScreen(ATTWN)Limited
UnitedKingdom
Ordinary
100
MammothScreen(BOTD)Limited
UnitedKingdom
Ordinary
100
MammothScreen(Bouquet)Limited
UnitedKingdom
Ordinary
100
MammothScreen(BW)Limited
UnitedKingdom
Ordinary
100
MammothScreen(End2)Limited
UnitedKingdom
Ordinary
100
MammothScreen(End3)Limited
UnitedKingdom
Ordinary
100
MammothScreen(Falcon)Limited
UnitedKingdom
Ordinary
100
MammothScreen(Monroe)Limited
UnitedKingdom
Ordinary
100
MammothScreen(NE)Limited
UnitedKingdom
Ordinary
100
MammothScreen(NI)Limited
UnitedKingdom
Ordinary
100
MammothScreen(PE)Limited
UnitedKingdom
Ordinary
100
MammothScreen(Pol2)Limited
UnitedKingdom
Ordinary
100
MammothScreen(Poldark)Limited
UnitedKingdom
Ordinary
100
MammothScreen(QV)Limited
UnitedKingdom
Ordinary
100
MammothScreen(RM)Limited
UnitedKingdom
Ordinary
100
MammothScreen(WH)Limited
UnitedKingdom
Ordinary
100
MammothScreenLtd
UnitedKingdom
Ordinary
100
MeridianMusicServicesLimited
UnitedKingdom
Ordinary
100
MillbankStudios
UnitedKingdom
Ordinary
100
ModernLoveFilmsLimited
UnitedKingdom
Ordinary
100
MorningTVLimited
UnitedKingdom
Ordinary
100
MovingPictureCompanyFilmsLimited
UnitedKingdom
Ordinary
100
MusicServices
UnitedKingdom
Ordinary
100
NewProvidenceProductionsLimited
UnitedKingdom
Ordinary
100
PartridgeFilms
UnitedKingdom
Ordinary
100
PartridgeHoldings
UnitedKingdom
Ordinary
100
PartridgeProductions
UnitedKingdom
Ordinary
100
PickwickPackagingLimited
UnitedKingdom
Ordinary
100
Planet24
UnitedKingdom
Ordinary
100
Planet24ProductionsLimited
UnitedKingdom
Ordinary
100
PlanetWildProductionsLimited
UnitedKingdom
Ordinary
100
Pro-Vision FacilitiesLimited
UnitedKingdom
Ordinary
100
RainbowMusicPublishingLimited
UnitedKingdom
Ordinary
100
SoTelevisionDevelopmentsLimited
UnitedKingdom
Ordinary
100
So TelevisionLimited
UnitedKingdom
Ordinary
100
SelecTVCable
UnitedKingdom
Ordinary
100
SightseersFilmLimited
UnitedKingdom
Ordinary
100
SignpostLimited
UnitedKingdom
Ordinary
100
SOM(ITV)Limited
UnitedKingdom
Ordinary
100
SurvivalAnglia
UnitedKingdom
Ordinary
100
Television MusicLimited
UnitedKingdom
Ordinary
100
TheCITVChannelLimited
UnitedKingdom
Ordinary
100
TheGardenProductionsLimited
UnitedKingdom
Ordinary
100
TheLondonStudiosLimited
UnitedKingdom
Ordinary
100
VODMember(ITVA)Limited
UnitedKingdom
Ordinary
100
VODMember(ITVB)Limited
UnitedKingdom
Ordinary
100
Tyne Tees TelevisionHoldings
UnitedKingdom
Ordinary
100
Tyne Tees TelevisionLimited
UnitedKingdom
Ordinary, Deferred Ordinary
100
UnitedBroadcasting&EntertainmentLimited
UnitedKingdom
Ordinary
100
UnitedBroadcasting
UnitedKingdom
Ordinary,Special
100
UnitedBroadcastingHoldings
UnitedKingdom
Ordinary
100
UnitedBroadcastingSouth
UnitedKingdom
Ordinary
100
WestcountryTelevisionLimited
UnitedKingdom
Ordinary
100
WildlifeFilmProductions
UnitedKingdom
Ordinary
100
Yorkshire TelevisionLimited
UnitedKingdom
Ordinary, Deferred Ordinary
100
Yorkshire-TyneTeesProductionsLimited
UnitedKingdom
Ordinary
100
Yorkshire-TyneTeesTelevisionEnterprisesLimited
UnitedKingdom
Ordinary
100
Yorkshire-Tyne Tees TelevisionHoldings
UnitedKingdom
Ordinary
100
ZMusicPublishingLimited
UnitedKingdom
Ordinary
100
ZebedeeProductionsLimited
UnitedKingdom
Ordinary
100
ArtistServicesCablePtyLtd
Australia
Ordinary
100
ArtistServicesInvestments PtyLimited
Australia
Ordinary
100
ArtistServicesProductions PtyLtd
Australia
Ordinary
100
GranadaMediaInternational(Australia)PtyLtd
Australia
Ordinary
100
GranadaMediaInvestments(Australia)PtyLtd
Australia
Ordinary
100
GranadaProductionsPtyLtd
Australia
Ordinary
100
ITVStudiosAustraliaFactual PtyLimited
Australia
Ordinary
100
ITVStudiosAustraliaPtyLimited
Australia
Ordinary
100
LeftfieldAustraliaPtyLtd.
Australia
Ordinary
100
TotallyFullFrontalProductionsPtyLimited
Australia
Ordinary
100
GranadaDecemberEightLimited
CaymanIslands
Ordinary
100
GranadaDecemberNineLimited
CaymanIslands
Ordinary,Preference
100
ITVHoldings(Cayman)Limited
CaymanIslands
Ordinary
100
UnitedProductionApS
Denmark
Ordinary
100
ITVStudiosFinlandOy
Finland
Ordinary
100
ITVStudios,FranceSAS
France
Ordinary
100
ITVStudiosGermanyGmbH
Germany
Ordinary
100
ITVStudiosGermanyHoldingsGmbH
Germany
Ordinary
100
NewtopiaGmbH
Germany
Ordinary
100
NewWavesEntertainmentGmbH
Gemany
Ordinary
100
TalpaGermanyGmbH&CoKG
Germany
Ordinary
100
TalpaGermanyVerwaltungsGmbH
Germany
Ordinary
100
ElecrentInsuranceLimited
Guernsey
Ordinary
100
ITVGlobalEntertainment (HongKong) Limited
HongKong
Ordinary
100
TalpaChinaLimited
HongKong
Ordinary
100
CarltonHomeEntertainmentIrelandLimited
Ireland
Ordinary
100
ChannelTelevision Limited
Jersey
Ordinary
100
CreativeChannelLimited
Jersey
Ordinary
100
ITVLondonPropertiesLimited
Jersey
Ordinary
100
ITVProperties(Jersey)Limited
Jersey
Ordinary
100
ITV (Europe) HoldingsB.V. (1)
Netherlands
Ordinary
100
ITV EnterprisesB.V.
Netherlands
Ordinary
100
ITV Finance (Europe)B.V.
Netherlands
Ordinary
100
GlobalMusic&TalentAgencyB.V.
Netherlands
Ordinary
100
MasmediaB.V.
Netherlands
Ordinary
100
Talpa ContentB.V.
Netherlands
Ordinary
100
TalpaFictieLimited
Netherlands
Ordinary
100
TalpaGermanyHoldingB.V.
Netherlands
Ordinary
100
Talpa GlobalB.V.
Netherlands
Ordinary
100
Talpa Non-SpotB.V.
Netherlands
Orrdinary
100
Talpa ProductiesB.V.
Netherlands
Ordinary
100
UtopiaB.V.
Netherlands
Ordinary
100
WardourStreetFilmsB.V.
Netherlands
Ordinary
100
ITVStudiosNordicAB
Sweden
Ordinary
100
ITVStudiosNorwayAS
Norway
Ordinary
100
12YardHoldings,Inc.
UnitedStates
Common
100
Anglia Television,Inc.
UnitedStates
Common
100
AstrumProductions,Inc.
UnitedStates
Common
100
CardinalProductionsofOhio,Inc.
UnitedStates
Common
100
CarltonMediaCompany,Inc.
UnitedStates
Common
100
ElectricFarmEntertainmentHoldings,Inc.
UnitedStates
Common
100
GranadaAmerica,Inc.
UnitedStates
Common
100
GranadaCrackerUSProductions
UnitedStates
Common
100
GranadaTelevisionInternational,Inc.
UnitedStates
Common
100
HamdonEntertainment,Inc.
UnitedStates
Common
100
ITCDistribution,LLC.
UnitedStates
Common
100
ITCEntertainmentGroup,Inc.
UnitedStates
Common
100
ITCFilms,LLC.
UnitedStates
Common
100
ITCProductions,LLC.
UnitedStates
Common
100
ITVBelieveHolding,Inc.
UnitedStates
Common
100
ITVDigaHolding,Inc.
UnitedStates
Common
100
ITVGlobalEntertainment,Inc.
UnitedStates
Common
100
ITVGurneyHolding,Inc.
UnitedStates
Common
100
ITVHNHolding,Inc.
UnitedStates
Common
100
ITVInternationalCorporation
UnitedStates
Common
100
ITVLeftfieldHolding,Inc.
UnitedStates
Common
100
ITVPopcoHolding,Inc.
UnitedStates
Common
100
ITVThinkfactoryHolding,Inc.
UnitedStates
Common
100
ITVTomorrowHolding,Inc.
UnitedStates
Common
100
ITVUSHoldings,Inc.
UnitedStates
Common
100
ITVUSProductions,Inc.
UnitedStates
Common
100
JBEntertainmentHoldingCompany,Inc.
UnitedStates
Common
100
KirkstallRoadEnterprises,Inc.
UnitedStates
Common
100
LWTEnterprises,Inc.
UnitedStates
Common
100
OverthePondProductions,Inc.
UnitedStates
Common
100
QuayStreetEnterprises,Inc.
UnitedStates
Common
100
RedOrangeProductions,LLC.
UnitedStates
Common
100
So Television US,Inc.
UnitedStates
Ordinary
100
TalpaMediaUSA,Inc.
UnitedStates
Common
100
UpperGroundEnterprises,Inc.
UnitedStates
Ordinary
100
ZinnaProductions
UnitedStates
Common
100

Key:
(1) SubsidiarydirectlyownedbyITVplc
Joint Ventures andInvestments
Name
Country
Interest
%
AbsolutelyRightsLimited
UnitedKingdom
CumulativeRedeemable Preference
20
ThatMitchellandWebbCompanyLimited
UnitedKingdom
OrdinaryC
20
DTVServicesLimited
UnitedKingdom
Ordinary
20
MonumentalTelevisionLimited
UnitedKingdom
OrdinaryA
24.92
ChannelMumLimited
UnitedKingdom
OrdinaryA
25
ClearcastLimited
UnitedKingdom
Ordinary
25
ISANUKLimited
UnitedKingdom
Ordinary
25
ThinkboxTVLimited
UnitedKingdom
Ordinary
28.58
CirkusLimited
UnitedKingdom
OrdinaryD
29.41
MalacaraLimited
UnitedKingdom
Ordinary
36.75
HarlequinAgencyLimited
UnitedKingdom
Ordinary
75
Media4CreativeLimited
UnitedKingdom
Ordinary
35.32
Media4EnterprisesLimited
UnitedKingdom
Ordinary
35.32
PinkRoseBudLimited
UnitedKingdom
OrdinaryA
37.5
MainstreetArlingtonProductionsLimited
UnitedKingdom
Ordinary
38.25
Mainstreet PicturesLimited
UnitedKingdom
OrdinaryA
38.25
BaitStudioLimited
UnitedKingdom
Ordinary
41.25
ClothCatAnimationLimited
UnitedKingdom
Ordinary
41.25
ThudMedia
UnitedKingdom
Ordinary
41.25
BoneKickersLimited
UnitedKingdom
Ordinary
50
BoxCleverTechnologyLimited
UnitedKingdom
Ordinary
50
BritishFilm-MakersLimited
UnitedKingdom
OrdinaryB
50
ColumbiaTristarCarltonProductionsLimited
UnitedKingdom
OrdinaryB
50
Gameface ProductionsLimited
UnitedKingdom
OrdinaryA
50
NohoFilmandTelevisionLimited
UnitedKingdom
OrdinaryA
50
StandardMusicLimited
UnitedKingdom
Ordinary
50
TalpaMediaUKLtd
UnitedKingdom
OrdinaryA
50
TelevisionMediaMarketingLimited
UnitedKingdom
OrdinaryA
50
PossessedLimited
UnitedKingdom
OrdinaryB
51
OSF(Wales)Limited
UnitedKingdom
Ordinary
46.27
OxfordScientificFilmsLimited
UnitedKingdom
Ordinary,OrdinaryB
46.27
AdnoddauZoomCyf
UnitedKingdom
Ordinary
75
BoomCymruTVLtd
UnitedKingdom
Ordinary
75
BoomPicturesLimited
UnitedKingdom
Ordinary
75
TwoFourGroupHoldingsLimited
UnitedKingdom
Ordinary A, Ordinary B, Ordinary C, Ordinary D, PreferredA,PreferredB, PreferredC
75
BulbFilmsLimited
UnitedKingdom
Ordinary
75
Calon/BoomerangJVLimited
UnitedKingdom
Ordinary
37.5
CynhyrchiadauAlFrescoProductionsCyf
UnitedKingdom
Ordinary
75
CynhyrchiadauBoomerangCyf
UnitedKingdom
Ordinary
75
DoubleDoubleLimited
UnitedKingdom
Ordinary
75
FfilmiauApolloCyf
UnitedKingdom
Ordinary
75
FflicCyf
UnitedKingdom
Ordinary
75
GorillaTVGroupLimited
UnitedKingdom
Ordinary
75
GorillaTVLimited
UnitedKingdom
Ordinary
75
IndusFilmsLimited
UnitedKingdom
Ordinary
75
Teledu ApolloCyf
UnitedKingdom
Ordinary
75
TwofourBroadcastLimited
UnitedKingdom
Ordinary
75
TwofourGroupLimited
UnitedKingdom
Ordinary
75
SecondActProductionsLimited
UnitedKingdom
OrdinaryA
74.07
3sixtymediaLimited
UnitedKingdom
OrdinaryA,OrdinaryB
80
GCFilmsPtyLimited
Australia
Ordinary
49
ThinkfactoryProductionsCanadaLtd
Canada
Common
65
ITVHoldings(Cayman)Limited
CaymanIslands
Ordinary
66.67
Talpa NordicApS
Denmark
Ordinary
51
ImagoTVFilmundFernsehproduktionGmbH
Germany
Ordinary1A,2A,2C,3A
80
TheLabTelevision2013LimitedPartnership
Israel
Ordinary
50
Talpa ItaliaSrl
Italy
Ordinary
50
RangersProductionsSRL
Mexico
Common
65
IdentityMansionB.V,
Netherlands
Ordinary
25
TalpaArabiaHoldingLtd(VAE)
UAE
Ordinary
90
MaximumMediaProductionFZ-LLC(VAE)
UAE
Ordinary
90
TalpaMiddleEastFS-LLC(VAE)
UAE
Ordinary
90
EightBellsProductions,LLC
UnitedStates
Common
60
What'stheBusiness,LLC
UnitedStates
Common
60
FTProductions,LLC
UnitedStates
Common
61.5
Shirina,LLC
UnitedStates
Common
63.25
CrewReadyEverywhere,LLC
UnitedStates
Common
65
Hatfield andMcCoy Productions,LLC
UnitedStates
Common
65
HighballMusicGroup,LLC
UnitedStates
Common
65
LG Films,LLC
UnitedStates
Common
65
MarriageBootCampRealityStars,LLC
UnitedStates
Common
65
MDQuartet,LLC
UnitedStates
Common
65
SignalPostFacilities,LLC
UnitedStates
Common
65
SoundandStageStudios,LLC
UnitedStates
Common
65
TexasRangers,LLC
UnitedStates
Common
65
ThinkfactoryMedia,LLC
UnitedStates
Common
65
WebLegal,LLC
UnitedStates
Common
65
WestsideFilmPartners,LLC
UnitedStates
Common
65
Loud Television,LLC
UnitedStates
Common
75
NextStepProductions,LLC
UnitedStates
Common
75
OutpostEntertainment,LLC
UnitedStates
Common
80

Memberships and Companies Limited byGuarantee
MembershipandGuarantee
Country
Interest
%
ITVNetherlandsCooperatief W.A.
Netherlands
Membership
100
ITVLTVCScottishLimitedPartnership
UnitedKingdom
Partnership
100
ITVScottishLimitedPartnership
UnitedKingdom
Partnership
100
DTTMultiplexOperatorsLimited
UnitedKingdom
Guarantee
25
DigitalProductionPartnershipLimited
UnitedKingdom
Guarantee
50
Producer'sRightsAgencyLimited
UnitedKingdom
Guarantee
50
AppalachianRentals,LLC
UnitedStates
Membership
100
BluegrassProductions,LLC
UnitedStates
Membership
100
ChadAlanProductions,LLC
UnitedStates
Membership
100
DoubleDownFilms,LLC
UnitedStates
Membership
100
DoubleDownFilmsHoldings,LLC
UnitedStates
Membership
100
Franconia Productions,LLC
UnitedStates
Membership
100
GatorProductions,LLC
UnitedStates
Membership
100
LeftfieldEntertainmentCA,LLC
UnitedStates
Membership
100
Leftfield LA,LLC
UnitedStates
Membership
100
LeftfieldPicturesofNY Holdings,LLC
UnitedStates
Membership
100
LeftfieldPicturesofNY,LLC
UnitedStates
Membership
100
LeftfieldVentures,LLC
UnitedStates
Membership
100
MovingPicturesServices,Inc.
UnitedStates
Membership
100
OaklawnPacificProperties,LLC
UnitedStates
Membership
100
OutofPlayProductions,LLC
UnitedStates
Membership
100
OzarkPictures,LLC
UnitedStates
Membership
100
SirensMedia,LLC
UnitedStates
Membership
100
SirensProject1203,LLC
UnitedStates
Membership
100
SirensProject1213,LLC
UnitedStates
Membership
100
SirensProject1216,LLC
UnitedStates
Membership
100
SirensProject1217,LLC
UnitedStates
Membership
100
SirensProject1218,LLC
UnitedStates
Membership
100
SirensProject1219,LLC
UnitedStates
Membership
100
SirensProject1223,LLC
UnitedStates
Membership
100
SirensProject1224,LLC
UnitedStates
Membership
100
SirensProject1226,LLC
UnitedStates
Membership
100
SirensProject1227,LLC
UnitedStates
Membership
100
SirensProject1301,LLC
UnitedStates
Membership
100
SirensProject1303,LLC
UnitedStates
Membership
100
SirensProject1309,LLC
UnitedStates
Membership
100
SirensProject1316,LLC
UnitedStates
Membership
100
SirensProject1326,LLC
UnitedStates
Membership
100
SirensProject1408,LLC
UnitedStates
Membership
100
SirensProject1410,LLC
UnitedStates
Membership
100
Sirens Television Development,LLC
UnitedStates
Membership
100
Sunshine Productions Holdings,LLC
UnitedStates
Membership
100
SunshineProductions,LLC
UnitedStates
Membership
100
Sunshine Productions Holdings,LLC
UnitedStates
Membership
100
SunshineProductions,LLC
UnitedStates
Membership
100
WorkShopofNY,LLC
UnitedStates
Membership
100
Jaffe/Braunstein Entertainment,LLC
UnitedStates
Membership
51
HighNoonEast,LLC
UnitedStates
Membership
60
HighNoonGroup,LLC
UnitedStates
Membership
60
HighNoonProductions,LLC
UnitedStates
Membership
60
HighNoonWest,LLC
UnitedStates
Membership
60
FeedingTimeProductions,LLC
UnitedStates
Membership
61.5
GurneyProductionsLLC
UnitedStates
Membership
61.5
HollywoodCamerasandLighting,LLC
UnitedStates
Membership
61.5
RICMA,LLC
UnitedStates
Membership
61.5
BratBrigade,LLC
UnitedStates
Membership
63.25
DeepGothamPost,LLC
UnitedStates
Membership
63.25
DigaHoldings,LLC
UnitedStates
Membership
63.25
DigaProductionStudios,LLC
UnitedStates
Membership
63.25
Diga,LLC
UnitedStates
Membership
63.25
FilmProductionsRentals,LLC
UnitedStates
Membership
65
ThinkfactoryGroup,LLC
UnitedStates
Membership
65
1016Productions,LLC
UnitedStates
Membership
75
6565ProductionsStudios2,LLC
UnitedStates
Membership
75
6565ProductionsStudios3,LLC
UnitedStates
Membership
75
6565ProductionsStudios4,LLC
UnitedStates
Membership
75
6565ProductionsStudios,LLC
UnitedStates
Membership
75
AllinPost,LLC
UnitedStates
Membership
75
CheeseStringStudios,LLC
UnitedStates
Membership
75
InRealityProductions,LLC
UnitedStates
Membership
75
EastOliveProductions,LLC
UnitedStates
Membership
75
Twofour America,LLC
UnitedStates
Membership
75
TwofourBroadcastMedia,LLC
UnitedStates
Membership
75

Principaljointventures,associatedundertakingsandinvestments
TheCompanyindirectlyheldat31December2015thefollowinginterestsinsignificantjointventures,associatesandinvestments.
Name
Interest inordinary share capital2015
%
Interest inordinary share capital2014
%
Principalactivity
JointVentures
Freesat(UK)Limited
50.0
50.0
Provisionofastandardandhighdefinitionenableddigitalsatelliteproposition
Digital3&4Limited
50.0
50.0
OperatestheChannel3&4digitalterrestialmultiplex
Associates
IndependentTelevisionNewsLimited(ITN)
40.0
40.0
SupplyofnewsservicestobroadcastersintheUKandelsewhere
Availableforsaleinvestments
TomorrowITVStudiosLLC(1)
-
-
Productionofscriptedcontent
Key:
(1) 25% preferredinterest

This information is provided by RNS
The company news service from the London Stock Exchange
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