Consolidated Financial Statements and Consolidated Management ...

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