Corporate operations 5 NH Annual Report 2006 31

Capital Increase In November 2006, the Board of Directors of NH Hoteles announced the approval of a Capital Increase through issuing a maximum of 16,371,971 new shares (€ 2 par value and an issue premium of € 13.27), to reinforce the Company’s strategic plan.   After the subscription period, in March 2007, NH Hoteles received mass support from its shareholders in the Capital Increase and the 16,371,971 new shares were subscribed in their entirety during the Preferred Subscription Period (1st round) and the Additional Award Period (2nd round). The success of the Capital Increase is reflected in the excess demand for securities, which would have allowed an expansion 2 times greater than that proposed by NH Hoteles to be performed.   Taking into consideration that the Capital Increase was done with a preferred subscription right and that demand much higher than the offer for shares took place, we must point out the great support from the shareholders, both for recent acquisitions performed in Italy (Jolly Hotels and Framon) and its strategic development plan. Public Tender Offer on the minority Shareholders of Jolly Hotels Grande Jolly, with a majority stake held by NH Hoteles, submitted the prospectus for the Public Tender Offer on the minority shareholders of Jolly Hotels before the CONSOB (Regulating Body of the Italian Stock Market) in line with what is provided for in the operations for acquisition of the Jolly Hotels Italian chain. NH Hoteles submitted the prospectus of the Public Tender Offer on the entirety of the shares in the possession of minority shareholders (5,104,578 shares that equal 25.6% of Jolly Hotels). The price for each share under the Offer was € 25, which in compliance with the European Regulations, coincides with the price paid to the partners of Grande Jolly, such that equal treatment was guaranteed for all shareholders. After completing the Public Tender Offer on March 18, 2007, NH Hoteles, through Grande Jolly held 83.11% control of Jolly Hotels. Framon Acquisition During 2006, NH Hoteles signed an agreement to take control of the fifth largest hotel company in Italy. Framon has a strong presence in Siciliy, in addition to strategic positioning in the main cities of the Italian peninsula. Framon provided NH Hoteles with 1,254 rooms.   Public Tender Offer for 100% of Sotogrande In the last period, NH Hoteles launched a Public Tender Offer to purchase shares for 20.939% of the capital of Sotogrande that it did not control, through the swapping of securities at a ratio of one new share of NH Hoteles for each share of Sotogrande. After reaching a share swap agreement with Caja Madrid, which held 17.2% of the real estate company, and extending a swap offer to the rest of the shareholders, NH Hoteles took over 97.72% of Sotogrande. NH Annual Report 2006 32

NH Annual Report 2006 33 NH Hoteles IBEX 35 -120 100 120 140 200 2005 2006 160 180 2007 (until April) Source: Bloomberg PERCENTAGE REVALUATION OF NH HOTELES AND IBEX 35 • 10% C.F. Caja Madrid • 6.7% GSS III Hurricane (Morgan Stanley) • 5.6% Bancaja • 5% Hoteles Participados • 5% Ponte Gadea • 3% NH Management Team and Employees • 64.7% Rest of the capital 5% 10% 3% 5% 64.7% 6.7% 5.6% SHAREHOLDER COMPOSITION AT NH HOTELES (15/04/2007) Those shareholders that are represented at the Board of Directors have been considered to be stable shareholders of NH Hoteles.