Consolidated Financial Statements and Consolidated Management ...

• 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