NH Consolidated financial statements 2006 44 17 CREDITORS UNDER FINANCE LEASES Shown below is the breakdown of the finance leases of the NH Hoteles Group as at 31 December 2006 and 2005: During the year ended on 31 December 2006, the average effective interest rate for the debt was 4.70% (6.24% in 2005). The interest rates were set on the date of the contract. The leases are paid on a fixed basis and no agreement has been made for the contingent rent payments. All lease obligations are nominated in euros. The fair value of the Group's lease obligations is close to their book value. Euros 000s Present value of the Nominal value of the lease instalments lease instalments 2006 2005 2006 2005 Amounts payable under capital leases Facilities Inmobiliaria Sotogrande Less than one year 14 - 16 - Between two and five years 37 - 39 - Furniture Hotel Príncipe de la Paz Less than one year 197 360 200 373 Between two and five years 22 216 22 219 Facilities Hotel Almenara Less than one year 40 39 42 42 Between two and five years 63 100 64 103 Balance falling due in less than 12 months (included in current liabilities) 251 399 258 415 Balance falling due after more than 12 months (included in long-term liabilities) 122 316 125 322 373 715 383 737 Less: future interest expense Facilities Inmobiliaria Sotogrande N/A N/A (3) - Furniture Hotel Príncipe de la Paz N/A N/A (3) (16) Facilities Hotel Almenara N/A N/A (4) (6) Present value of obligations under leases 373 715 373 715

NH Consolidated financial statements 2006 45 18 OTHER LONG-TERM LIABILITIES Shown  below  is  the  breakdown  of  “Other  long-term  liabilities”  of  the  accompanying  consolidated  balance  sheets  as  at  31 December 2006 and 2005 (in thousands of euros): The  line  “Call  and  put  options  for  Jolly  Hotels  operation”  records  the  liability  in  respect  of  a  series  of  contracts  providing purchase options for the benefit of NH Italia, S.r.l. and sale options for the benefit of Joker Partecipazioni, S.r.l. and Banca Intesa, S.p.a. (today Banca Intesa Sanpaolo, S.p.a.), which were signed within the framework of the operation to acquire control of Jolly Hotels, S.p.a. on 29 November 2006, for the purpose of arranging the gradual transfer to the NH Hoteles Group of the stakes held by the aforesaid companies at that date in Jolly Hotels, S.p.a. and which would give the Group control of 74.47% of the share capital of Jolly Hotels, S.p.a. (see Note 10.1). The  line  “Preference  shares  issued  by  subsidiary  companies”  records  the  preference  shares  issued  by  NH  Participaties  NV. outstanding as at 31 December 2006 and 2005 which have, by their nature, been classified as a financial liability. These preference shares earn interest at a fixed annual rate of 5.55% and mature on 1 January 2008. The line “Capital grants” basically records, as at 31 December 2006, a total of 14.64 million euros for the grants received to build the hotels and golf courses of the subsidiary Sotogrande, S.A. in the amount of 3.2 million euros (3.45 million euros as at 31 December  2005),  and  the  capital  grants  received  for  the  Donnafugata,  Baglio  Oneto  and  Parco  Degli  Aragonesi  projects  in progress (6.2 million euros, 2.3 million euros and 2.9 million euros, respectively). The amount recorded in the line “Residencial Marlin, S.L.” represents 50% of the participating loan granted to that company by the minority shareholder of Sotogrande, S.A., which has a 50% holding in said company. This participating loan matures in July 2007 (see Note 10.1). The amount recorded in the line “Los Alcornoques de Sotogrande, S.L.” is for 50% of the participating loan granted to that company by the minority shareholder of Sotogrande, S.A., which has a 50% holding in said company. This participating loan matures in 2009 (see Note 10.1). In 2005 the NH Hoteles Group acquired the remaining 20% of NH Hoteles Deutschland, GmbH and NH Hoteles Austria, GmbH, for 45 million euros. At 31 December 2006 the pending payment amount, falling due in 2007, was 15 million euros, which are classified as short-term in the heading “Other current liabilities” (see Note 24). As at 31 December 2005, 30 million euros were still outstanding, 15 million of which were recorded as short-term in the caption “Other current liabilities”. Euros 000s 2006 2005 Call and put options for the Jolly Hotels operation (Note 10.1) 277,405 - Preference shares issued by subsidiaries 28,818 28,122 Capital grant 14,643 3,446 Right of beneficial use Hotel Plaza de Armas (Note 7.1) 10,465 11,960 Residencial Marlin, S.L. (Note 10.1) 9,000 9,000 Los Alcornoques de Sotogrande, S.L. (Note 10.1) 1,400 - Financial instruments (Note 10.2.2) 1,282 4,089 Purchase minority interest Astron (*) - 15,000 Other liabilities 3,143 9,718 346,156 81,335 (*) Purchase minority interests in NH Hoteles Deutschland, GmbH and NH Hoteles Austria, GmbH

NH Consolidated financial statements 2006 46 19 FINANCIAL DERIVATIVES Shown below is the breakdown of financial derivatives on the consolidated balance sheet as at 31 December 2006 and 2005: Interest rate derivatives As at 31 December 2006, the NH Hoteles Group had a number of interest rate derivative contracts which has not been qualified as hedges. Shown below are the main operations contracted and under way as at 31 December 2006 in relation to a serious of derivatives that originally guaranteed a syndicated loan cancelled in 2004: Shown below are the main operations contracted and under way as at 31 December 2005: (*) The 3-month EURIBOR or LIBOR is used, with no margin Euros 000s Amount at 31.12.06 Amount at 31.12.05 Financial Financial Financial Financial Type of derivative asset liability asset liability Interest rate derivatives (Note 10.2) 1,189 1,486 4,089 4,983 Currency derivatives 130 423 - - Compensation Plan based on share price (Note 10.2) 16,094 - 12,788 - Total 17,413 1,909 16,877 4,983 Amount Interest rate derivatives Contracted Notional at 31.12.2006 Rate (*) (Euros) Currency Maturity (Euros) Interest rate swaps Fixed to floating 42,282,545 EUR 15/07/2008 27,677,486 Interest rate swaps Fixed to floating 6,166,207 EUR 15/07/2008 4,036,306 Interest rate swaps Fixed to floating 10,890,725 EUR 01/06/2007 5,989,899 Interest rate swaps Floating to fixed 52,275,481 EUR 15/07/2008 26,908,798 Interest rate swaps Floating to fixed 7,497,794 EUR 15/07/2008 3,924,206 Interest rate swaps Floating to fixed 44,243,299 EUR 15/07/2008 20,319,792 Interest rate swaps Floating to fixed 10,890,725 EUR 01/06/2007 5,445,362 Interest rate swaps Fixed to floating 38,777,952 EUR 15/07/2008 25,797,752 Interest rate collar Floating to fixed 38,591,149 EUR 15/07/2008 37,645,153 Amount Interest rate derivatives Contracted Notional at 31.12.2005 Rate (*) (Euros) Currency Maturity (Euros) Interest rate swaps Fixed to floating 42,282,545 EUR 15/07/2008 30,752,235 Interest rate swaps Fixed to floating 6,166,207 EUR 15/07/2008 4,484,706 Interest rate swaps Fixed to floating 30,189,090 EUR 17/07/2006 22,380,440 Interest rate swaps Fixed to floating 26,801,394 EUR 17/07/2006 26,801,394 Interest rate swaps Fixed to floating 10,890,725 EUR 01/06/2007 7,078,971 Interest rate swaps Floating to fixed 52,275,481 EUR 15/07/2008 29,983,547 Interest rate swaps Floating to fixed 7,497,794 EUR 15/07/2008 4,372,206 Interest rate swaps Floating to fixed 34,874,280 EUR 17/07/2006 21,859,863 Interest rate swaps Floating to fixed 44,243,299 EUR 15/07/2008 27,847,253 Interest rate swaps Floating to fixed 26,801,394 EUR 15/07/2006 19,569,271 Interest rate swaps Floating to fixed 10,890,725 EUR 01/06/2007 6,534,435 Interest rate swaps Fixed to floating 38,777,952 EUR 15/07/2008 28,530,426 Interest rate collar Floating to fixed 38,591,149 EUR 15/07/2008 38,591,149

NH Consolidated financial statements 2006 47 - NH Hoteles, S.A. has contracted a financial derivative (collar with barriers) for 10 million euros whereby the Company at all times receives the 1-month Euribor. This instrument has a settlement date of 18 March 2008. With this hedge, if rates fall below 2.60% the Company would be obliged to pay 3.95%. If the rates hold at between 2.60% and 4.20%, the Company would be at the market rate. If the rates move to between 4.20% and 4.70%, the Company would pay 4.20%. If the rates rise above 4.70%, the Company would be at the market rate. - NH Hoteles, S.A. has contracted a derivative for 5 million euros, whereby the Company at all times receives the 1-month Euribor. This instrument has settlement date of 16 December 2008. With this structure the Group is covered provided the 1-month Euribor is below the barriers. Otherwise it would be hedged at the 12-month Euribor minus 0.15%. The benchmark barriers of 1-month Euribor for this contract are shown below: The changes in the fair value of these interest rate derivatives during 2006 amounted to 0.14 million euros (0.51 million euros in 2005). Currency derivatives The currency derivatives in force at 31 December 2006 have not been qualified as hedging instruments. Of bank loans: Of financial investments These financial instruments were contracted to hedge the possible fluctuations in the US$/euro exchange rate with respect to the payments relating to the investment in Desarrollos Isla Blanca, S.L. (see Note 24). The changes in the fair value of these currency derivatives during 2006 amounted to 0.29 million euros. Barriers 1-month Euribor Fixed rate payable 2.35% 3.35% 3.00% 3.50% 3.15% 3.60% Currency derivatives at 31.12.2006 Nominal Contracted Currency Maturity Currency insurance 13,300,000 USD 22/05/2009 Currency insurance 3,000,000 USD 20/05/2009 Currency insurance 5,000,000 USD 22/05/2009 Currency insurance 5,000,000 USD 22/05/2009 Type Currency Nominal Maturity Currency insurance USD 6,000,000 16/01/2007 Currency insurance USD 5,000,000 12/01/2007 Put option with barrier USD 5,000,000 12/01/2007 Forward extra USD 5,000,000 12/01/2007

NH Consolidated financial statements 2006 48 20 PROVISIONS FOR LIABILITIES AND CHARGES Shown below is the breakdown of the “Provisions for liabilities and charges” as at 31 December 2006 and 2005, together with the main movements recorded during said years (in thousands of euros): Onerous contracts The  NH  Hoteles  Group  has  classified  as  onerous  a  series  of  contracts  of  hotels  operated  under  leases  scheduled  to  expire between 2007 and 2028. The management of these hotels if being positive at gross operating profit (G.O.P.) is loss-making at net operating profit (ebitda) and cancellation of these contracts would imply full payment of the rent for the years pending under the lease. Provisions for pensions and similar obligations The account “Provision for pensions and similar obligations” includes, mainly, the provision set up by the Group to cover the pension plans arranged with its staff, for an amount of 10,482 thousand euros (9,264 thousand euros as at 31 December 2005). Euros 000s First Balance at Application Applications Balance at 31/12/2004 IAS 32 & 39 Allocations (Reductions) Transfers 31/12/2005 Provisions for long-term liabilities and charges: Onerous contracts 23,990 - - - (4,768) 19,222 Provisions for pensions and similar obligations 10,637 - 1,692 - - 12,329 Provision for Compensation Plan based on share price (Note 10.2.2) 2,397 2,178 5,838 (2,397) - 8,016 Other claims 7,672 - 720 (2,461) (2,499) 3,432 44,696 2,178 8,250 (4,858) (7,267) 42,999 Provisions for current liabilities and charges: Onerous contracts 5,101 - - (5,101) 4,768 4,768 Provision for contingencies 28,310 - - (28,310) - - Restructuring plans 3,800 - - (3,800) - - Other claims 3,041 - 158 (2,574) 2,499 3,124 40,252 - 158 (39,785) 7,267 7,892 Total 84,948 2,178 8,408 (44,643) - 50,891 Euros 000s Balance at Additions Applications Balance at 31/12/2005 to scope Allocations (Reductions) Transfers 31/12/2006 Provisions for long-term liabilities and charges: Onerous contracts 19,222 - - - (2,166) 17,056 Provisions for pensions and similar obligations 12,329 276 811 (658) - 12,758 Provision for Compensation Plan based on share price (Nota10.2.2) 8,016 - 5,977 (200) - 13,793 Other claims 3,432 - 3,244 (3) - 6,673 42,999 276 10,032 (861) (2,166) 50,280 Provisions for current liabilities and charges: Onerous contracts 4,768 - - (4,060) 2,166 2,874 Other claims 3,124 - - (346) - 2,778 7,892 - - (4,406) 2,166 5,652 Total 50,891 276 10,032 (5,267) - 55,932

NH Consolidated financial statements 2006 49 The method used to calculate the value of the obligations relating to this pension plan was the projected credit unit method. Set out below are the main assumptions used when calculating the actuarial liability: 21 TAX MATTERS Shown below is the composition of the tax accounts receivable as at 31 December 2006 and 2005: The “Deferred tax assets” caption records, mainly, the capitalisation of tax loss carryforwards, as well as the advance taxes arising as a result of impairment in the value of certain assets. Shown below is the movement recorded in 2006 in the caption of deferred tax assets: 2006 2005 Discount rates 4.00% 4.50% Forecast annual rate of wage increases 2.50% 2.50% Forecast return on the assets earmarked for the plan 3.75% 4.25% Euros 000s 2006 2005 Deferred tax assets Tax credits 1,707 3,916 Tax assets on asset impairment 13,367 16,008 Staff-related advance taxes 3,273 3,501 Other deferred tax assets 16,292 12,443 Total 34,639 35,868 Short-term tax receivables Corporation Tax 424 5,479 Value Added Tax 8,494 4,352 Withholdings and payments on account 5,896 1,466 Tax on Presumed Profits 1,378 1,356 Other receivables from tax authorities 2 874 Total 16,194 13,527 Euros 000s Opening balance 35,868 Capitalization of tax credits 163 Additions due to inclusions in scope of consolidation 242 Other additions 1,444 Cancellation of tax credits (2,931) Application of tax losses carryforwards (147) Closing balance 34,639

NH Consolidated financial statements 2006 50 Shown below is the composition of breakdown of the tax accounts payable as at 31 December 2006 and 2005: The balance of “Deferred tax liabilities” mainly records the restatement of certain assets in the Group made chiefly as part of the changeover to IFRS. Shown below is the movement recorded in the caption of deferred taxes during 2006: Corporation Tax expense The companies that make up the NH Hoteles Group are grouped together geographically and file their tax returns in accordance with the law in force in the relevant countries. Corporation  tax  is  calculated  on  the  basis  of  the  accounting  or  book  profit  obtained  in  accordance  with  general  accepted accounting principles accepted in each country, which is not necessarily the same as the figure for taxable income used as the tax assessment base. Shown is the reconciliation between book income and taxable income for purposes of the corporation tax (in thousands of euros): The various foreign subsidiaries calculate corporation tax expense according to the laws and tax rates prevailing in each country. Euros 000s Opening balance 124,438 Application for reinvestment (3,286) Cancellation for exclusions from scope of consolidation (3,021) Other cancellations (19,006) Closing balance 99,125 Euros 000s 2006 2005 Deferred tax liabilities Revaluations of assets 98,775 123,211 Financial derivatives 350 1,227 Total 99,125 124,438 Short-term tax payables Corporation Tax 7,883 7,217 Value Added Tax 4,971 7,057 Personal Income Tax 5,156 5,760 Tax on Income from Capital 293 504 Social Security 5,759 4,782 Other taxes 2,487 1,467 Total 26,549 26,787 Book income (after taxes and before minority interests) 61,550 Corporation tax 25,395 Book income (before taxes and minority interests) 86,945 Permanent differences (7,170) Timing differences 4,054 Consolidation adjustments 16,516 Previous taxable income 100,345 Setoff of tax loss carryforwards (421) Tax base 99,924