Consolidated Financial Statements and Consolidated Management ...

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The details of the provision’s calculation at 31 December 2011 are as follows: Thousand euros Old shares New shares Total Amount of shares hedged by the plan 3.79 2.53 6.32 Transfer price 13.35 2.25 8.91 Required provision 50.60 5.68 56.28 Listing December 2011 - - 2.18 Share price at end of December 2011 - - 13.77 Provision to allocate - - 42.51 Updated financial flows - - 0.88 Total provision - - 43.39 Sensitivity analysis of NH Hoteles share price Changes in the fair value of the NH Hoteles share price derivative contracted by the Group depend mainly on changes in the shares’ listing, but also on the evolution of the euro interest rate curve and on dividend estimates made by market agents. The net fair value of this derivative amounted to minus 43,389,000 euros at 31 December 2011 (minus 35,359,000 euros at 31 December 2010). A breakdown of the sensitivity analysis on the fair values of the derivatives contracted by the Group is shown below: Thousand euros Sensitivity on Results 2011 2010 +10% (rise in the share price) 1,377 2,145 -10% (fall in the share price) (1,377) (2,145) The sensitivity analysis shows that the negative fair value of the derivatives falls with increases in the share price, while their negative fair value increases with falls in the share price. 20. PROVISIONS FOR LIABILITIES AND CHARGES The breakdown of the “Provisions for liabilities and charges” item at 31 December 2011 and 2010, together with the main movements recorded in those years were as follows: Thousand euros Balance at Applications/ Balance at Allowances Assignments 31/12/09 Reductions 31/12/10 Provisions for contingencies and extraordinary costs: Onerous agreements 18,977 11,777 (10,912) (14,529) 5,313 Provisions for pensions and similar obligations 22,297 956 (3,029) - 20,224 Provision for Share-Based Remuneration Scheme (Note 20) 267 - (131) - 136 Other claims 12,573 3,357 (1,497) - 14,433 54,114 16,090 (15,569) (14,529) 40,106 Provisions for contingencies and running costs: Onerous agreements 10,756 - (10,756) 5,129 5,129 10,756 - (10,756) 5,129 5,129 Total 64,870 16,090 (26,325) (9,400) 45,235 Balance at 31/12/10 Allowances Thousand euros Applications/ Reductions Assignments Changes in consolidation boundary (Note 2.5.5) Balance at 31/12/11 Provisions for contingencies and extraordinary costs: Onerous agreements 5,313 354 (3,392) (1,241) - 1,034 Provisions for pensions and similar obligations 20,224 995 (3,431) - - 17,788 Provision for Remuneration Scheme linked to the listed value of shares (Note 19) 136 - (136) - - - Other claims 14,433 4,142 (2,027) - (4,524) 12,024 40,106 5,491 (8,986) (1,241) (4,524) 30,846 Provisions for contingencies and current expenses: Onerous agreements 5,129 - (5,129) 1,241 - 1,241 5,129 - (5,129) 1,241 - 1,241 Total 45,235 5,491 (14,115) - (4,524) 32,087 90 REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Onerous agreements The NH Hoteles Group has classified as onerous a series of hotel rental agreements set to terminate between 2012 and 2029. Although positive in terms of gross operating profit (G.O.P), the operation of these hotels produces a net operating profit deficit (EBITDA) and the termination of such agreements could involve payment in full of the rent for the remaining years. Provisions for pensions and similar obligations The “Provisions for pensions and similar obligations” item mainly includes the provision allocated by the Group to cover the pension plans agreed with its workforce amounting to 15,470,000 euros (17,591,000 euros at 31 December 2010). This item includes the T.F.R. (Trattamento di fine rapporto), or amount paid to all workers in Italy at the moment they leave the company for any reason whatsoever. This is another remuneration element, subject to deferred payment and allocated annually in proportion to fixed and variable remuneration both in kind and in cash, which is valued on a regular basis. The annual amount to be reserved is equivalent to the remuneration amount divided by 13.5. The annual cumulative fund is reviewed at a fixed interest rate of 1.5% plus 75% of the increase in the consumer price index (CPI). The projected unit credit method is used to calculate the obligations associated with this pension plan. The breakdown of the main hypotheses used to calculate actuarial liabilities is as follows: 2011 2010 Discount rates 5.75% 5.75% Expected annual rate of salary rise 2.50% 2.50% Expected return from assets allocated to the plan 4.75%-5.75% 4.75%-5.75% No plan reductions or settlements came about in 2011. No actuarial gains and losses have been significant in any case. 21. TAX NOTE Balances with Public Administrations The balance of tax receivables at 31 December 2011 and 2010 were as follows: Thousand euros 2011 2010 Deferred tax assets Tax credits 83,124 71,882 Tax assets due to asset impairment 28,407 29,674 Tax withholdings of workforce 1,220 920 Derivative financial instruments 11,845 9,436 Other prepaid taxes 10,340 7,662 134,936 119,574 Thousand euros 2011 2010 Short term taxes receivable Company Tax 4,355 3,640 Value Added Tax 31,117 36,346 Tax on Estimated Capital Gain 416 390 Other Tax receivables 8,075 7,032 Total 43,963 47,408 The balances of the “Deferred tax assets” item mainly correspond to the tax withholdings that arose as a consequence of the depreciation of certain assets, and from the activation of negative tax bases. The movements of the “Deferred tax assets” item in 2011 and 2010 are as follows: Thousand euros 2011 2010 Opening balance 119,574 105,290 Asset impairment (1,267) 823 Additions due to derivative instruments 2,409 3,929 Tax credits 11,242 25,763 Others 2,978 (16,231) Total 134,936 119,574 Additions due to tax credits are mainly due to the negative tax bases generated by the Group’s companies, all of which were contributed by the Spanish business unit. The Company’s directors have decided to book the deferred tax assets indicated above, as it has been deemed that their recovery is probable, taking into account the forecasts on the Company’s future results and certain tax planning actions. REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 91
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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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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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For the purposes of this definition
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