IBERSOL Annual Report and Consolidated Accounts 2017

Consolidated Financial Statements (3) the Deferred Income item includes the following amounts Dec. 2017 Dec. 2016 Contracts with suppliers (1) 409.457 325.633 Franchising rights 2.211 5.211 Investment subvention 272.980 318.441 Other 7.184 8.069 691.832 657.354 (1) The value of contracts with suppliers corresponds to revenue obtained from suppliers up to 31 December and for subsequent periods. 24. EXTERNAL SERVICES AND SUPPLIES External services and supplies in the years ending on 31 December 2017 and 2016 are broken down as follows: 2017 2016 Subcontracts 1.182.399 - Electricity, water, fuel and other fluids 13.547.336 10.399.741 Rents and rentals 67.885.000 26.408.792 Condominium 4.561.439 3.873.759 Communications 1.220.255 596.727 Insurance 857.083 544.080 Short-lasting tools and utensils and office materials 1.810.399 1.516.094 Royalties 13.823.833 10.755.451 Travel and accommodations and merchandise transport 2.370.731 1.917.857 Services fees 799.559 1.045.655 Conservation and repairs 8.377.923 5.752.461 Advertising and propaganda 16.046.275 9.236.340 Cleaning, hygiene and comfort 3.775.178 2.540.421 Specialised works 10.000.643 6.797.765 Other ESS' 3.244.124 2.494.539 149.502.177 83.879.682 Costs increase is primarily associated with increased activity (+66%) as a result of organic growth and especially the purchase of Eat Out in the last quarter of 2016 (Note 5.2.1). Addi- tional increases are the result of: “Rents and Rentals” for the annual contribution (in 2016, only two months) of the Travel segment of EOG characterized by incomes much higher than the retail average; “Advertising” for a greater effort in marketing campaigns and adhesion to the Continent Card. And subcontracts (amount detached in 2017) by the expenses resulting from the increase in the activity of Catering. 268