Consolidated Financial Statements and Consolidated Management ...

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7.1. Rights of use On 28 July 1994, NH Hoteles, S.A. was granted a right of use on Hotel NH Plaza de Armas in Seville, which is owned by Red Nacional de los Ferrocarriles Españoles (RENFE), for a thirty-year period commencing on the date the agreement was executed. NH Hoteles, S.A. will pay RENFE the amount of 30.20 million euros in accordance with a payment schedule which concludes in 2014. The Group has reflected the entire amount agreed upon as the transaction’s price in the “Rights of use” item. In order to correctly accrue this price, the result of spreading out the cost over the thirty year term of the agreement is assigned to the consolidated comprehensive profit and loss statement in accordance with an increasing instalment with a percentage annual growth of 4%. Additionally, the outstanding short and long term amounts, 1.49 million euros and 2.99 million euros respectively at 31 December 2011 (1.49 million euros and 4.49 million euros at 31 December 2010), are reflected in the “Other current liabilities” and “Other non-current liabilities” items of the consolidated balance sheet attached. 7.2. Rental agreement premiums There were no significant movements in 2011. 7.3. Software applications The most significant inclusions in 2011 came about in the corporate services located in Spain as a result of the investments made in the development of computer application. 8. TANGIBLE FIXED ASSETS The breakdown and movements under this heading during 2011 and 2010 were as follows (thousands of euros): COST Land and buildings Plant and machinery Balance at 31.12.09 Change in consolidation boundary Currency translation differences Inclusions Assignments Balance at 31.12.10 Change in consolidation boundary Currency translation differences Inclusions Writeoffs Writeoffs Assignments Balance at 31.12.11 2,166,673 (177,203) 24,329 9,430 (54,233) 52,958 2,021,954 (116,404) (5,939) 240,998 (184,303) - 1,956,306 783,315 (7,224) (12,181) 48,363 (20,490) 2,102 793,885 (7,805) (1,741) 23,982 (18,592) - 789,729 Other fixtures, tools and furniture 521,593 (13,569) 5,619 11,048 (20,007) 4,709 509,393 (3,557) (1,746) 18,611 (11,443) 11,344 522,602 Other fixed assets 14,512 (60) 2,842 998 (3,320) (615) 14,357 - (20) 1,197 (1,500) (11,344) 2,690 Fixed assets in progress 75,760 12,633 445 6,137 (4,880) (59,154) 30,941 - (562) 9,381 (6,907) - 32,853 3,561,853 (185,423) 21,054 75,976 (102,930) - 3,370,530 (127,766) (10,008) 294,169 (222,745) - 3,304,180 CUMULATIVE DEPRECIATION Buildings (305,167) 32,578 (16,776) (32,620) 21,108 5,058 (295,819) 33,513 2,083 (31,617) 14,648 4,190 (273,002) Plant and machinery Other fixtures, tools and furniture (403,146) 7,077 9,794 (43,357) 19,445 (4,495) (414,682) 1,679 1,025 (39,771) 13,533 (28,334) (466,550) (389,036) 11,153 (907) (33,586) 19,708 (568) (393,236) 2,823 906 (33,508) 6,747 15,106 (401,162) Other fixed assets (11,341) 97 - (2,003) 1,482 5 (11,760) - 207 (914) 273 9,038 (3,156) (1,108,690) 50,905 (7,889) (111,566) 61,743 - (1,115,497) 38,015 4,221 (105,810) 35,201 - (1,143,870) Impairment (67,070) - - (10,394) 21,738 - (55,726) 5,201 - (15,626) 14,653 - (51,498) NET BOOK VALUE 2,386,093 2,199,307 2,108,812 In 2011 and 2010, the “Change in consolidation boundary” column reflects the effect of the inclusions/write offs of tangible fixed asset elements belonging to certain companies that were included /excluded from the Group’s consolidation during this year (see Note 2.5.5). The “Translation differences” column reflects the effect of changes in the exchange rate used in the conversion of the different tangible fixed asset items. The most significant movements in this heading during the 2011 and 2010 were as follows: i) The most significant additions to this heading during 2011 and 2010 broken down by business units were as follows: Thousand euros 2011 2010 Central Europe 243,756 11,528 Benelux 14,649 11,004 Spain 14,159 9,753 Italy 12,284 32,529 Latin America 7,942 9,850 Rest of Europe 1,379 1,312 294,169 75,976 78 REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
• The most significant addition in Germany corresponds to the acquisition of five hotels (98.6 million euros) through the Artos transaction, which can be summarised as follows: The Group completed a transaction which consisted of exercising a purchase option it held on ten hotels which were operated under a leasing scheme in Central Europe (eight located in Germany and two in Austria). At the same time, the Group sold five hotels to the INVESCO investment fund, with which it entered into a new operating lease agreement without a purchase option. According to this agreement, the rent became variable with a guaranteed minimum, the initial amount of which is similar to the amount the Group had been paying. The purchase price amounted to 230 million euros. This figure was reached by assuming all the liabilities of the hotels to be purchased for said amount, of which 50 million euros corresponded to the financing granted by NH Hoteles Group itself. The price obtained from the sale of the five hotels amounted to 168 million euros, which generated net capital gains of 32.29 million euros and also led to a temporary increase of 12 million euros in net borrowing. • The most significant addition in the Benelux had to do with to the refurbishment and equipping of the NH Krasnapolsky Hotel (9.8 million euros) in Amsterdam. • The most significant additions in Spain in 2011 corresponded to the refurbishment of the NH Eurobuilding (3.8 million euros) and the NH Arazazu (8 hundred euros) hotels, along with equipping and refurbishing the NH Ribera del Manzanares (0.6 million euros) and the NH Palacio de Tepa (0.5 million euros) hotels. • In Italy, the most significant additions in 2011 were connected with the refurbishment of the NH President Hotel (4 million euros) in Milan, the NH Firenze Hotel (2 million euros) in Florence, the NH Leonardo Da Vinci Hotel (0.7 million euros) in Rome and the NH Milanofiori Hotel (0.7 million euros) in Milan. ii) Apart from the sale of the five hotels mentioned in the preceding section, the most significant write offs in 2011 came about in the Netherlands and Italy: • The most significant write offs in the Netherlands were the sale of the NH Krasnapolsky Hotel with a net book value of 10.55 million euros, which generated a net profit of 0.12 million euros, and the sale of the NH Genk Hotel with a net book value of 3.1 million euros, which generated a net profit of 0.9 million euros. • The most significant write-off in Italy came about with the sale of the NH Ligure Hotel in Turin with a net book value of 21.7 million euros, which generated a net profit before minority interests of 0.55 million euros. The net book value of this hotel included an impairment provision of 0.64 million euros. • In Spain, most of the assets linked to Fast Good were written off at a net book value of 0.06, which included an impairment provision of 6.4 million. The Group has made an asset impairment provision allowance for hotel assets, located mainly in Sotogrande, for 15,626,000 euros this year. Furthermore, a provision allowance of 14,653,000 euros for hotel assets located in Italy made in prior years was reversed. At 31 December 2011, the Group had tangible fixed asset elements with a net book value of 586.8 million euros (782.02 million euros in 2010) to guarantee several mortgage loans (see Note 16). The Group has taken out insurance policies to cover any possible risks to which the different elements of its tangible fixed assets are subject, and to cover any possible claims that may be filed against it in the course of its activities. It is understood that such policies sufficiently cover the risks to which the Group is exposed. Firm purchase undertakings amounted to 17.02 million euros at 31 December 2011. These investments will be made between 2012 and 2013. 9. REAL ESTATE INVESTMENTS The movements under this heading of the consolidated balance sheet in 2011 and 2010 were as follows: Balance at 31/12/09 Allowances Assignments (Note 12) Thousand Euros Balance at 31/12/10 Inclusions Balance at 31/12/11 COST Buildings 7,002 - 4,887 11,889 16 11,905 Advances and tangible fixed assets in process 792 - (792) - - - 7,794 - 4,095 11,889 16 11,905 Cumulative depreciation Buildings (2,123) (290) - (2,413) (385) (2,798) (2,123) (290) - (2,413) (385) (2,798) Impairment - (1,612) - (1,612) (720) (2,332) Net book 5,671 7,864 6,775 The most significant investments included in this item of the consolidated balance sheet through Sotogrande were as follows: - Premise D.02 Sotogrande Marina - Premise E.07 Sotogrande Marina - Finca Hípica Valderrama - International School - Terrazas Ribera del Marlin - Ribera del Marlin public car park REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 79
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Lamps which create a special atmosp
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ANNUAL REPORT 2011 CONSOLIDATED FIN
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10. INVESTMENTS VALUED USING THE EQ
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INDEPENDENT AUDITORS’ REPORT ON C
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End customers, who are even more de
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Revenue from Real Estate Activity,
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The level of consolidated net finan
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SUBSEQUENT DISCLOSURES The process
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A.3. Complete the following tables
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B. STRUCTURE OF THE COMPANY’S COR
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B.1.7. Identify, as applicable, the
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Process for determining the remuner
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For the purposes of this definition
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