2006 Results 4 NH Annual Report 2006 25

The hotel activity of NH Hoteles showed significant improvement in 2006, with a 30.6% increase in the net profit over the previous year. This result was obtained thanks to a 13.4% increase in the hotel's income, up to € 1,021 M. The improvement of occupancy and an increase in the ADR (average price) of 8.7% contributed to the sales growth. The RevPar (income per available room) rose by 9.7%. The EBITDA (operating profit) of the hotel activity rose to € 161 M and recorded a rise of 27.2% over 2005. Sales for the chain increased up to € 1,090 M, including Sotogrande, and the net profit of the consolidated group remained stable at € 62 M. The net profit was diluted by a smaller contribution from Sotogrande’s income, which is explained by the sale of large plot of land in 2005.   In Germany, the EBITDA showed highly positive growth in comparable hotels, reaching € 7 M against a loss of € 2 M the prior period, due to increasing demand, management, a focus on maximising ADR and lease cost control of 14 hotels. Income at comparable hotels in Germany reached € 198 M, 12% more than last year. During 2006, the RevPar improved by 12% in comparable hotels in Germany. In Spain stands out the significant recovery of the business, with increased income in comparable hotels of 6.4% and 15% in the EBITDA. The comparable RevPar in Spain grew 8.4% with an average rise in price of 6.9%. The RevPar in Benelux held positive growth in comparable hotels and grew 10.2% over the last year. The ADR contributed to 95% of that growth. The income reached in Benelux in comparable hotels sits at € 237 M and the EBITDA, with an increase of 18.7%, reaches € 78 M.   The business unit of Switzerland, Austria, Hungary and Romania recorded a considerable increase in its income from 14.7% and an EBITDA of € 2 M, which shows the solidness provided by the recent additions of countries from the Eastern Europe to the NH Hoteles portfolio. Regarding the Revpar, comparable hotels recorded growth of 11.6%. It is worth noting a pronounced increase in occupancy of 5.71%, until reaching an average occupancy of 75.7% in comparable hotels. The RevPar in Latin America maintained very favourable growth the entire year, with an increase of 16.30% in comparable terms. The positive growth of the business is highlighted by the rising ADR, occupancy and RevPar in the entire business unit, which is reflected in the 32.1% increase in the EBITDA, in comparable hotels. The real estate activities of Sotogrande recorded sales of € 69 M, 16.9% less than the previous year, and an EBITDA of € 27 M. The lower contribution from the Sotogrande income is mainly due to the sale in the past year of a large plot of land for a value of € 35 M and the growing sale of houses and apartments against the plots of land. This should be taken into consideration when comparing the data to that at this year. On December 31, 2006, the confirmed pending sales to be posted amounted to € 74 M with a margin of € 29 M. The following tables show that hotel activity have evolved very favourably from January to December, in comparison to 2005. NH Annual Report 2006 26 P y G Hotel Activity 2006            €M 2005            €M % Change Hotel Income 1,021.57 901.22 13.4% EBITDA of Hotel Activity 161.80 127.19 27.2% Net Profit of Hotel Activity 45.99 35.22 30.6% Evolution to Dec 31/06 Increase in Sales Increase in EBITDA Total Comparable Hotel Activity 9.7% 26.4% B.U. Spain 6.4% 15.0% B.U. Benelux 8.1% 18.7% B.U. Switzerland, Austria & Hungary 12.2% 605.7% B.U. Germany 12.0% 428.8% B.U. Latin America 21.8% 32.1% (*) At a constant consolidation perimeter

NH Annual Report 2006 27 •  EBITDA 2005 •  EBITDA 2006 Spain Benelux Germany Austria, Switzerland, Hungary Latin America Total -10 20 50 80 110 +15% +18% +€9m +€3m +32% 140 170 +26.4% * * COMPARABLE HOTELS EBITDA EVOLUTION AT 2005-2006 BY BUSINESS UNIT COMPARABLE REVPAR EVOLUTION AT 2005-2006 BY BUSINESS UNIT •  RevPar 2005 •  RevPar 2006 Spain Benelux Germany Austria, Switzerland, Hungary Latin America Total 0 20 40 60 80 +8.3% +10.1% +12% +11.6% +16.3% +10.4% • RevPar Growth with 80% via ADR • ADR Growth of € 6.2 • 26.4% increase in EBITDA • Comparable Hotels Room of the NH Puerta de la Catedral Salamanca – Spain * The Business Units of Germany and Austria, Switzerland and Hungary showed a negative EBITDA in 2005

NH Annual Report 2006 28 PROFIT AND LOSS ACCOUNT AS A DECEMBER - NH HOTELES As of December 31, 2006 (M Euros) As of December 31, 2005 (M Euros) 06/05 Change Income from Hotel Operations 1,005.58 897.45 12.0% Income from Real Estate Operations 69.37 83.44 (16.9%) Other Non-Recurring Income 15.99 3.77 324.1% INCOME 1,090.94 984.66 10.8% Real Estate cost of sales (32.26) (16.89) 91.0% Staff cost (344.09) (316.04) 8.9% Other Operating Expenses (332.41) (299.29) 11.1% Other Non-Recurring Expenses (9.10) (2.10) 333.3% GROSS OPERATING PROFIT 373.08 350.34 6.5% Leases payments and property taxes (184.19) (169.49) 8.7% EBITDA 188.89 180.85 4.4% Depreciation (75.00) (68.82) 9.0% EBIT 113.89 112.03 1.7% Interest income (expense) (29.79) (23.13) 28.8% Income from minority equity interests 1.28 (0.65) (296.9%) EBT 85.38 88.25 (3.3%) Corporate Tax (24.09) (17.85) 35.0% INCOME before minorities 61.29 70.41 (13.0%) Minority Interests 1.16 (8.17) (114.2%) NET INCOME 62.45 62.24 0.3% NH Plaza de Armas Seville - Spain

NH Hoteles is experiencing a positive RevPar trend The RevPar growth experienced in 2006 confirms our expectations of a recovery at all Business Units NH Annual Report 2006 29 RevPar Germany and Austria 30 € 35 € 40 € 45 € 50 € 2001 2002 2003 2004 2005 2006 RevPar 50 € 55 € 60 € 65 € 70 € 2001 2002 2003 2004 2005 2006 RevPar 50 € 55 € 60 € 65 € 2001 2002 2003 2004 2005 2006 RevPar 30 € 35 € 40 € 45 € 2001 2002 2003 2004 2005 2006 Benelux Spain Latin America