30 18. DEFERRED INCOME As at 31^st December 2004, this caption essentially records a total of 3.64 million euros (3.74 million euros as at 31^st December 2003) for the grants received for building the hotels and golf courses of Sotogrande. Furthermore, as at 31^st December 2003, this caption also recorded 1.28 million euros in deferred income on the sales of time-shares in the Hotel NH Krystal Cancun which was sold on 3^rd February 2004. 19. PROVISIONS FOR CHARGES AND LIABILITIES AND TRADE PROVISIONS Set out below is an analysis of the “Provisions for liabilities and charges” as at 31^st December 2004 and 2003 (thousand euros): 2004 2003 Provision for guarantees 1,202.02 1,202.02 Provision for taxes and liabilities 57,894.96 81,200.64 59,096.98 82,402.66 The “Provision for guarantees” covers against eventual risks of contracts that have already been completed relating to the Controlling Company's previous industrial activity. The "Provision for liabilities" records the estimated amount of possible liabilities of the Group for which the exact amount of the payment or the date on which payment will be made are not precisely known. As at 31^st December 2004, this caption records a total of 26.58 million euros (see note 26 and 27d) for the provision set up in 2003 to hedge against exposure deriving from the current economic situation in Germany and Austria. 20. DEBENTURE AND BOND ISSUES Set out below is an analysis of bonds and debentures outstanding as at 31^st December (thousand euros): 2004 2003 Class Long Term Short Term Long Term Short Term Series B debentures 107.77 22.81 130.58 21.37 Band and debenture interest - 2.57 - 2.99 107.77 25.38 130.58 24.36 This 1955 series B bond issue pays interest at 6.75% a year and is being redeemed in increasing payments and shall be fully redeemed by 2009. This issue is secured by a bank guarantee. 21. ALONG-TERM TRADE CREDITORS Set out below is an analysis of this item as at 31^st December 2004 and 2003 (thousand euros): 2004 2003 Right of beneficial use of Hotel Plaza de Armas (see note 7) 13,455.48 14.950,53 Long-term leases 23,158.79 24,114.75 Residencial Marlin, S.L. 9,000.00 - Other creditors 3,831.32 5,067.03 49,445.59 44,132.31 CONSOLIDATED FINANCIAL STATEMENTS 2004

31 The "Long-term leasing" line essentially records the long-term portion payable on the finance lease on the land and building of the Hotel NH Dusseldorf (see note 7). The line "Residencial Marlin, S.L." records the proportional part of the Subordinate participating loan granted by the partners in Residencial Marlin, S.L. to acquire the plot "Ribera del Marlin" (see note 9c). 22. BANK LOANS Here follows the debt breakdown with credit associations on 31^st December 2004 (in thousand of euros) CONSOLIDATED FINANCIAL STATEMENTS 2004 Maurity Dates Limit Available Drawn Dwon 2004 2005 2006 2007 2008 Remainder Total Mortgage loans 140,379.17 - 140,379.17 - 15,431.96 15,492.30 49.584,04 5,222.48 54,648.39 140,379.17 Fixed interest 52,427.13 - 52,427.13 - 3,322.29 3,446.09 24.091,15 1,577.06 19,990.54 52,427.13 Variable interest 87,952.04 - 87,952.04 - 12,109.67 12,046.21 25.492,89 3,645.42 34,657.85 87,952.04 Non-secured Loans 388,403.18 - 388,403.18 - 4,345.17 43,371.22 83.168,47 83,176.71 174,341.61 388,403.18 Fixed interest 3,160.84 - 3,160.84 - 424.77 447.22 470,39 360.00 1,458.46 3,160.84 Variable interest 385,242.34 - 385,242.34 - 3,920.40 42,924.00 82.698,08 82,816.71 172,883.15 385,242.34 Credit lines 169,614.00 96,928.83 72,685.17 - 15,311.00 22,409.79 34.964,38 - - 72,685.17 Variable interest 169,614.00 96,928.83 72,685.17 - 15,311.00 22,409.79 34.964,38 - - 72,685.17 Interest debt - - 4,312.61 - 4,312.61 - - - - 4,312.61 Debt situation as at 31.12.04 698,396.35 96,928.83 605,780.13 - 39,400.74 81,273.31 167,716.89 88,399.19 228,990.00 605,780.13 Debt situation as at 31.12.03 726,505.97 156,865.01 574,685.54 131,906.87 58,658.91 43,356.97 147,384.02 - 193,378.77 574,685.54 Essentially, these loans relate to EURIBOR and LIBOR, and also a differential.

32 i) Set out below is an analysis of the mortgage loans, be they syndicated or not (in thousand euros): Balance as at 31.12.04 Net book value of Asset, mortgaged Fixed interest Variable interest Total the asset mortgaged NH Ciutat de Reus - 758.67 758.67 2,551.31 NH Sotogrande - 9,941.83 9,941.83 12,716.46 NH Málaga - 5,769.72 5,769.72 10,315.19 NH Calderón - 7,922.43 7,922.43 29,955.42 NH Calderón - 9,288.40 9,288.40 - Commercial Promises Hotel NH Eurobuilding - 150.40 150.40 1,090.39 NH Lagasca - 16,000.00 16,000.00 17,545.24 NH Principe de la Paz - 8,802.16 8,802.16 12,505.90 NH Alcalá 7,212.14 - 7,212.14 12,574.84 Total Spain 7,212.14 58,633.61 65,845.75 99,254.75 NH Columbia - 702.55 702.55 9,810.71 Total Uruguay - 702.55 702.55 9,810.71 Hilton Guadalajara y NH Méjico City (a) - 21,515.40 21,515.40 86,399.74 Hilton Monterrey - 1,687.39 1,687.39 6,236.32 Hilton Juarez - 1,063.09 1,063.09 5,634.05 Total Mexico - 24,265.88 24,265.88 98,270.11 Hotel NH Krasnapolsky 26,343.28 - 26,343.28 80,440.55 Hotel NH Groningen - 4,350.00 4,350.00 5,539.50 Hotel NH Jan Tabak 2,478.79 - 2,478.79 8,215.43 Total Netherlands 28,822.07 4,350.00 33,172.07 94,195.48 NH Regensburg 8,501.59 - 8,501.59 9,624.12 Total Germany 8,501.59 - 8,501.59 9,624.12 NH Fribourg 7,891.33 - 7,891.33 7,579.51 Total Switzerland 7,891.33 - 7,891.33 7,579.51 TOTAL 52,427.13 87,952.04 140,379.17 318,734.68 (a) See point ii) ii) The line "Variable interest rate loans secured by mortgages" includes a Syndicated Loan, for which the Banco Bilbao Vizcaya Argentaria is the agent, for an amount, as at 31^st December 2004, of 21.52 million euros. This loan was granted in December 2002 to Nacional Hispana de Hoteles, S.R.L. de C.V. The aim of the loan is to refinance the debt of that company with another financial institution, amounting to 72.4 million US dollars, and made for a reduction in the debt of 11.9 million euros. On 3^rd February 2004, after getting the final permission from the financial institutions who hold the syndicated loan, the Hotel NH Krystal Cancun has been sold for 28 million dollars. In said operation, the buyer has taken over 20 million euros of the debt relating to the syndicated loan, which has meant that the loan has been reduced by said amount. This loan is being repaid in six-monthly, increasing instalments until the year 2007. The interest rate is linked to three-month LIBOR plus a spread that depends on the cover for the country risk. iii) The line "Non-Secured Loans", variable interest, includes a Syndicated Loan granted to NH Hoteles, S.A. by 25 European banks, on 23^rd June 2004, for 350 million euros. CONSOLIDATED FINANCIAL STATEMENTS 2004

33 As at 31^st December 2004, said loan was fully drawn down. It is being used to refinance the NH Group's debt. This loan expires on 23^th June 2010 and pays annual interest at one-month EURIBOR plus a spread that varies between 0.90% and 0.60% depending on the Net financial debt/EBITDA ratio. Repayments are to be made in five instalments. The first will be made in July 2006. This loan requires that certain financial ratios be complied with. As at 31^st December 2004, none of these are in a position that is likely to trigger off a declaration of early termination by the lending entities. iv) Furthermore, the line "Loans secured by mortgages", variable interest, includes a Syndicated Loan through Banco Bilbao Vizcaya Argentaria granted to NH Hoteles, S.A. for a maximum of 42.07 million euros, to be used to finance the acquisition, via a Takeover Bid, of Promociones Eurobuilding, S.A. (a company that was absorbed in 2002 by NH Hoteles, S.A.). As at 31^st December 2004, 31.98 million euros were still outstanding. The interest on this loan is charged at EURIBOR plus a spread and the loan will be repaid gradually starting in 2001 and ending in 2011. The Controlling Company has signed a number of "collar" interest rate contracts, for a total of 103 million euros, which guarantee the maximum interest rate that the Company shall pay provided that the interest rate does not fall to a minimum. These contracts expire in 2006. 23. OTHER LONG-TERM CREDITORS Set out below is an analysis of the balance of “Other long-term creditors” (thousand euros): 2004 2003 Long-term guarantee deposits received 603.15 562.81 Long-term deferred tax 66,581.42 77,561.63 67,184.57 78,124.44 The balance of "Deferred long-term tax" arises basically as a result of the deferral due to reinvesting capital gains generated on sales of hotels and companies. 24. TRADE CREDITORS Set out below is an analysis of "Trade creditors" as at 31^st December 2004 and 2003 (thousand euros): 2004 2003 Trade creditors 91,848.89 91,344.30 Advance payments 25,991.63 29,992.43 Other creditors 1,957.66 2,604.73 119,798.18 123,941.46 The caption "Trade creditors" records the accounts payable as a result of the Group's normal trading activities. The line "Advances from trade debtors" includes mainly advance payments made by trade debtors of Sotogrande, S.A., amounting to 21.16 million euros (21.96 million euros as at 31^st December 2003). CONSOLIDATED FINANCIAL STATEMENTS 2004