18 7. INTANGIBLE ASSETS Set out below is an analysis and the movements on the different intangible asset accounts in 2004 and 2003 (thousand euros): i)   Rights of beneficial use On 28^th July 1994, NH Hoteles, S.A. set up a right of beneficial use on the Hotel NH Plaza de Armas in Seville. owned by the “Red Nacional de Ferrocarriles Españoles (RENFE)”, for a period of 30 years as from the date the agreement was signed. The price to be paid for this by NH Hoteles, S.A. to RENFE is 30.20 million euros, in instalments that will be paid up to the year 2014. The Group has recorded under "Rights of beneficial use" all the amount agreed as the price for the operation and, in order to suitably record it in the respective financial periods, it takes the result of spreading the cost of the right over the thirty years of the term of the agreement to Consolidated Profit and Loss, using an amount that increases by 4% every year. In turn, the captions "Other debts" (see note 25) and "Other long-term trade creditors" (see note 21) on the accompanying Consolidated Balance Sheet record the amounts pending payment in the short and long term as at 31^st December 2004, which amount to 1.49 million euros and 13.46 million euros, respectively (1.49 million euros and 14.95 million euros as at 31^st December 2003). ii) Lease premiums In  2003,  the  column  "Retirements"  recorded  a  total  of  16.84  million  euros,  to  write  off  part  of  the  positive  difference  on consolidation that arose on the purchase of the further 49% holding in the company Ahora, S.L., as a result of the transfer from the companies  Gran  Círculo  de  Madrid,  S.A.  and  Casino  Club  de  Golf,  S.L.  to  the  company  Sotogrande,  S.A.  and  the  holding subsequently   taken   by   the   Sociedad   de   Promoción   y   Participación   Empresarial   Caja   Madrid,   S.A.   in   Sotogrande,   S.A. (see note 3) . In 2004, the column "Additions/Appropriations" recorded 7 million euros for the premium paid to obtain the lease contract on the Hotel NH Laguna Palace (Mestre). This premium, which is not part of the lease rents, is being written off on a straight-line basis over the duration of the contract (18 years). CONSOLIDATED FINANCIAL STATEMENTS 2004 Balance as at Additions/ Balance as at Additions/ Balance as at 31.12.02 Charges Diposals Transfers 31.12.03 Charges Disposals 31.12.04 COSTE Rights of beneficial use 30,896.65 78.57 - - 30,975.22 144.42 (62.66) 31,056.98 Lease premiums 26,057.95 - (16,993.05) - 9,064.90 7,162.27 (121.99) 16,105.18 Concessions, patents and licences 30,204.40 1,160.79 - - 31,365.19 187.60 (884.52) 30,668.27 Computer applications 8,799.55 5,026.02 (663.46) - 13,162.11 3,957.60 (88.78) 17,030.93 Patents, trademarks and know-how 104.61 165.95 (270.56) - - - - - Rights to leased assets 14,399.62 1,517.15 - (48.53) 15,868.24 14.50 (24.99) 15,857.75 110,462.78 7,948.48 (17,927.07) (48.53) 100,435.66 11,466.39 (1.182,94) 110.719,11 ACCUMULATED AMORTISATION Rights of beneficial use (5,844.91) (832.48) - - (6,677.39) (998.47) - (7,675.86) Lease premiums (4,857.45) (805.32) - - (5,662.77) (983.89) - (6,646.66) Concessions, patents and licences (9,079.08) (317.16) - - (9,396.24) (957.97) 183,18 (10,171.03) Computer applications (1,668.18) (3,904.57) 663.46 - (4,909.29) (3,022.17) 72.79 (7,858.67) Patents, trademarks and know-how (81.10) - 81.10 - - - - - Rights to leased assets (548.52) (293.10) - 24.67 (816.95) (285.05) 9.10 (1,092.90) (22,079.24) (6,152.63) 744.56 24.67 (27,462.64) (6,247.55) 265.07 (33,445.12) NET BOOK VALUE 88,383.54 72,973.02 77,273.99

19 iii)  Rights over assets acquired under finance leases: The main assets under finance leases which are used by the companies of the Group as at 31^st December 2004 are as follows: Thousand euros Instalments paid Term Year Original Prior Current Instalments Value of the Contract (years) elapsed cost years year outsanding purchase option Land and building Hotel NH Dusseldorf 20 5 14,316.17 5,357.91 1,127.98 23,694.96 6,493.24 Furniture Hotel Principe de la Paz 4.2 1.55 1,530.70 240.63 373.28 964.27 31.11 iv) Computer applications In 2004, the column "Additions/Appropriations" mainly records the costs incurred in the project to set up a new computer system in the Group during 2004 and 2003. 8. TANGIBLE FIXED ASSETS Set out below is an analysis and the movements on the different intangible asset accounts in 2004 and 2003 (thousand euros): In 2004 and 2003 the column "Change in scope of consolidation" records the inclusion/retirement of tangible fixed assets of certain companies that were included/excluded in the consolidated group during each of these years (see note 2b). In 2003 the column "Change in fully consolidated companies" included the balances of the tangible fixed assets of Hoteles y Gestión Sotogrande, S.A. (11.94 million euros) and Club Deportivo Sotogrande, S.L. (3.87 million euros). These two companies were brought into the scope of consolidation via Sotogrande, S.A. on 1^st January 2003. CONSOLIDATED FINANCIAL STATEMENTS 2004 Change in the Change in the Balance as at scope of Conversion Balance as at scope of Conversion Balance as at 31.12.02 consolidation differences Additions Disposals 31.12.03 consolidation differences Additions Disposals 31.12.04 COST Land and buildings 1,156,051.99 11,951.79 (58,654.13) 32,412.82 (122,863.61) 1,018,898.86 (48,992.43) (14,607.76) 15,574.85 805.90 971.679,42 Technical plant and machinery 295,275.88 1,203.20 (5,147.13) 41,583.42 (22,990.07) 309,925.30 (4,078.03) (3,044.74) 34,532.07 7,069.24 344,403.84 Other plant, tools and furniture 232,708.16 733.10 (4,332.92) 15,722.48 (12,941.10) 231,889.72 (3,289.61) 177.40 29,869.88 (2,622.28) 256,025.11 Other investments 17,090.33 164.33 (832.95) 9,776.83 - 26,198.54 (65.89) (1,012.52) 1,771.77 (6,653.49) 20,238.41 Fixed asset under 28,694.76 80.69 63.11 23,345.27 (26,895.46) 25,288.38 - (100.25) 28,747.25 (28,100.32) 25,835.06 construction 1,729,821.12 14,133.11 (68,904.02) 122,840.82 (185,690.24) 1,612,200.80 (56,425.96) (18,587.87) 110,495.82 (29.500,95)   1,618,181.84 ACCUMULATED DEPRECIATION Constructions (142,922.88) (4,263.51) 14,394.74 (9,663.23) 12,921.25 (129,533.63) 26,304.54 4,915.14 (15,109.15) 179.66 (113,243.44) Technical plant and machinery (128,947.41) (2,759.91) 2,534.95 (16,908.49) 9,260.46 (136,820.40) 3,985.81 449.79 (28,222.41) 952.49 (159,654.72) Other plant, tools and furniture (127,342.61) (1,373.65) 2,381.13 (20,773.47) 12,941.10 (134,167.50) 3,107.84 244.43 (16,525.48) 1,921.50 (145,419.21) Other investments (8,380.40) (405.70) 21.04 (3,371.76) - (12,136.82) 65.89 234.44 (2,536.96) 2,290.51 (12,082.94) (407,593.30) (8,802.77) 19,331.86 (50,716.95) 35,122.81 (412,658.35) 33,464.08 5,843.80 (62,394.00) 5,344.16    (430,400.31) NET BOOK VALUE 1,322,227.82 1,199,542.45 1,187,781.53

20 In 2004, the column "Change in scope of consolidation" records mainly the retirement of tangible fixed assets of the Hotel NH Krystal Cancún. The column "Differences on translation" records the effect of the change in the exchange rate used for translating the different tangible fixed asset captions, as well as the effect of restating the balance sheets of certain companies to adjust for inflation. The most significant movements in Tangible fixed assets during 2004 and 2003 are as follows: i)   In 2003 the most significant additions were mainly land and buildings, technical plant and/or furniture at the Hotel NH Príncipe de la Paz (13.33 million euros) in Aranjuez (Madrid), the Hotel NH Palacio de Oriol (1.88 million euros) in Bilbao, the Hotel NH Alanda (9.70 million euros) in Marbella, the Club House at the Golf Course “La Reserva” (5.00 million euros) in Sotogrande (Cadiz), the Hotel NH Cristal (1.48 million euros) in Alicante, the Hotel NH Frankfurt City (2.6 million euros), the Hotel NH Aukamm Wiesbaden (1.1 million euros) and the Hotel NH Lagasca (17.30 million euros) in Madrid. In 2004, the most significant additions were essentially on tangible fixed assets at the Hotel NH Laguna Palace (7.69 million euros) in Mestre (Italy), the Spa at the Hotel NH Eurobuilding (4.28 million euros) in Madrid, the hotels NH City Center (3.71 million euros) and the Hotel NH Grand Place (2.54 million euros) both in Brussels (Belgium). Worthy of mention in the Netherlands are the Hotel NH Marquette (3.50 million euros), the Hotel NH Koningshof (2.10 million euros) in Veldhoven, the hotels NH Schiphol Airport (1.27 million euros) and NH Barbizon Palace (1.17 million euros) both in Amsterdam, and the Hotel NH Leeuwenhorst (1.12 million euros) in Noordwijkerhout. It also includes the additions at the Hotel NH Almería (1.66 million euros), the Club House at the “La Reserva” Golf Course (4.01 million euros) and the Hotel NH Sotogrande (8.36 million euros) both in Sotogrande (Cadiz), the Hotel NH Califa (1.43 million euros) in Cordoba, the Hotel NH Cartagena (1.42 million euros), the Hotel NH Geneva Airport (2.80 million euros) in Geneva (Switzerland), the Hotel NH Palacio de Oriol (1.94 million euros) in Santurce (Bilbao) and the Hotel NH Central (1.71 million euros) in Seville. ii)  The most significant retirements in 2003 were for the most part for land and buildings, technical plant and/or furniture of the Hotel Princesa Sofía (48.56 million euros), the Hotel NH Pedralbes (0.98 million euros) and of the Hotel NH Sant Angelo (4.76 million euros) all in Barcelona. Also worthy of mention are the sale of the Hotel NH Lord Charles (8.45 million euros) in South Africa, the Hotel NH Champery (2.17 million euros) in Switzerland, the Hotel NH Crowne Plaza (29.99 million euros) in Brussels and the Hotel NH Waldorf (3.96 million euros) in Amberes (Belgium). The most significant retirements in 2004 were for the most part for land and buildings, technical plant and/or furniture of the Hotel NH Villacarlos (5.05 million euros) in Valencia, and the hotel NH Docklands (1.26 million euros). in Belgium. 9. INVESTMENTS Set out below is an analysis of the Group's investments as at 31^st December 2004 and 2003 (thousand euros): 2004 2003 Holdings consolidated using the equity method 36,833.76 37,383.52 Holdings in other companies, net 12,813.04 10,672.50 Other long-term debtors 43,421.35 30,783.02 Long-term guarantee deposits 7,342.23 6,228.34 100,410.38 85,067.38 a) HOLDINGS CONSOLIDATED USING THE EQUITY METHOD Set out below are  the movements in 2004 and 2003 in the caption "Holdings consolidated using the equity method" (thousand euros): (*) Relates to the previous year's results, as there are no audited Financial Statements as at 31^st December of present year. CONSOLIDATED FINANCIAL STATEMENTS 2004 Net balance Dividends Profit/(loss) Other Net balance Profit/(loss) Net balance as at 31.12.02 received 2003 movements as at 31.12.03 2004 as at 31.12.04 Jolly Hotels, S.p.A. 36,004.89 (150.89) 818.60 ^(*) - 36,672.60 (597.61)^(*) 36,074.99 Palacio de la Merced, S.A. 677.53 - 13.42 - 690.95 48.07 739.02 Fonfir 1, S.L. 349.07 - 1.59 (330.69) 19.97 (0.22) 19.75 37,031.49 (150.89) 833.61 (330.69) 37,383.52 (549.76) 36,833.76

21 The  Group's  holding  in  Jolly  Hotels,  S.p.A.  includes  a  positive  difference  on  consolidation  of  approximately  21  million  euros. Although no specific work has been done relating to its assignation, as no detailed information is available, the Administrators of the Controlling Company consider that all these capital gains are all assignable as land. Therefore, no depreciation is charged in this regard. b) HOLDINGS IN OTHER COMPANIES Holdings in other companies records holdings which are not consolidated in these Consolidated Accounts. These holdings are as set out below (monetary figures in thousand euros): % Holding of the Investment Company Address Group as at 31.12.04 31.12.04 31.12.03 Iber-Interbrokers, S.L. Barcelona 75.00 2.65 2.66 Cofir, S.L. Madrid 100.00 60.10 60.10 G.V.G.T. Asociados, S.L. Barcelona 10.00 270.46 270.46 Hanuman Investment, S.L. Tenerife 50.00 2,161.55 2,161.55 Parque Temático de Madrid, S.A. Madrid 4.36 8,789.02 8,789.02 Sociedad Deportiva de Tenis, S.A. Cádiz 24.30 101.77 135.23 S.A.D. Sotogrande, S.A Cádiz 7.60 115.39 110.43 NH Hoteles Alcorcón, S.A. Madrid 50.00 2,631.70 2,631.70 Desarro Inmobiliario Santa Fé México, S.A. de C.V. México D.F. 50.00 2,664.41 - Other investments 721.34 454.89 17,518.39 14,616.04 Provisión Parque Temático de Madrid, S.A. (4,423.21) (3,659.76) Other provisions (282.14) (283.78) 12,813.04 10,672.50 During 2003, the Controlling Company sold its entire holding in the company Hoteles y Gestión, S.A. for 1.9 million euros. On 1^st July 2004, the company “Desarrollo Inmobiliario Santa Fé México, S.A. de C.V.” was set up as a joint venture between Nacional Hispana Hoteles S.R.L de C.V. and a local partner for developing a hotel in Santa Fé (Mexico D.F.). Set out below is the movement in the provision for decline in value for holdings in other companies during 2004 and 2003 (thousand euros): 2004 2003 Balance as at 1^st January (3,943.54) (1,121.49) Charge (764.72) (2,822.05) Application 2.91 - Balance as at 31^st December (4,705.35) (3,943.54) CONSOLIDATED FINANCIAL STATEMENTS 2004

22 C) OTHER LONG-TERM DEBTORS Set out below is an analysis of other long-term debtors as at 31^st December 2004 and 2003 (in thousand euros): 2004 2003 Advance lease and rent payments 8,072.14 8,617.94 Fomento de San Sebastián 186.64 236.94 Residencial Marlin, S.L. 9,000.00 - Loans to staff 14,320.00 14,320.00 Advances against projects 5,334.00 2,500.00 Other 6,508.57 5,108.14 43,421.35 30,783.02 The line "Residencial Marlin, S.L." records the proportional part of the Subordinate Participating Loan granted to said company by the subsidiary company Sotogrande, S.A. to acquire the plot "Ribera del Marlin" (see note 21). The line "Advance rent payments" record advances paid to the owners of certain hotels in Germany that are operated under leases so that said owners could buy decoration items and furniture. They are discounted from future lease payments. The caption "Loans to staff" includes the loans made to top managers who joined the Group in order to buy shares in the Controlling Company. These loans, totalling 14.32 million euros, are appropriately secured. They expired in January 2004 and the borrower may renew  the  term  every  year  up  to  9^th  January  2006.  As  at  the  date  these  Consolidated  Annual  Accounts  were  drawn  up,  all  the borrowers had exercised their right to extend the loans. The line "Advances on projects" records the advance payments made relating to a future operation in Italy (2.7 million euros) and two projects to be developed in Spain (2.63 million euros), all through its subsidiary company Sotogrande, S.A. 10. GOODWILL ON CONSOLIDATION The balance recorded under this caption is for the net goodwill that has appeared on the purchase of certain companies. Set out below is an analysis of this balance (thousand euros): 2004 2003 Latina de Gestión Hotelera, S.A. 138.24 191.52 Nacional Hispana Hoteles, S.R.L. de C.V. 2,798.30 3,202.86 NH Rallye, S.A. 99.19 115.72 NH Participaties, N.V. 306.98 327.48 Aymerich Golf Management, S.L. 194.92 222.84 NH Deutschland, GmbH y NH Hoteles Austria,GmbH 118,562.18 125,302.50 NH Pamplona, S.A. 558.10 591.76 122,657.91 129,954.68 CONSOLIDATED FINANCIAL STATEMENTS 2004