6. GOODWILL The detail of “Goodwill”, which relates to the net goodwill arising from the acquisition of certain companies, is as follows (in thousands of euros). The recoverable amount of the goodwill relating to NH Hoteles Deutschland GmbH and NH Hoteles Austria GMBH was allocated to each cash-generating unit using earnings, investment and working capital projections for the years remaining in the term of the hotel leases. The recoverable amounts of the other amounts of goodwill were allocated to each cash-generating unit using at five-year projections and a methodology similar to that used in the allocation of the goodwill of NH Hoteles Deutschland GmbH and NH Hoteles Austria GmbH. 7. INTANGIBLE ASSETS The detail of “Intangible Assets” and of the changes therein in 2007 and 2006 is as follows (in thousands of euros): The changes in “Goodwill” in 2007 and 2006 in the consolidated balance sheet were as follows (in thousands of euros): 2007 2006 NH Hoteles Deutschland GmbH and NH Hoteles Austria GmbH 108,674 108,674 NH Italia, S.r.l. 5,426 984 Nacional Hispana de Hoteles, S.R.L. de C.V. 3,161 3,218 Other 1,487 1,526 118,748 114,402 COST Rights of beneficial use 31,138 - - (65) - 31,073 - 439 - 31,512 Lease premiums 13,962 742 632 (44) - 15,292 51,755 834 (5,678) 62,203 Concessions, patents and trademarks 30,817 (2) 3,632 (5) (218) 34,224 6,588 1,746 (12.018) 30,540 Computer software 20,388 (10) 2,367 (113) 218 22,850 6,294 7,084 (1,247) 34,981 96,305 730 6,631 (227) - 103,439 64,637 10,103    (18,943)     159,236 ACCUMULATED AMORTISATION Rights of beneficial use (8,588) - (934) - - (9,522) - (968) - (10,490) Lease premiums (4,859) (109) (1,626) - - (6,594) - (2,783) 5,351 (4,026) Concessions, patents and trademarks (10,969) 1 (1,368) 372 - (11,964) - (2,721) 10,118 (4,567) Computer software (12,492) 3 (3,723) 111 - (16,101) (5,695) (3,150) 1,101 (23,845) (36,908) (105) (7,651) 483 - (44,181) (5,695) (9,622) 16,570 (42,928) CARRYING AMOUNT 59,397 59,258 116,308 Balance at 31.12.05 Change in the Scope of Consolidation Additions/C harge for the year   Disposals    Transfers Balance at 31.12.06 Change in the Scope of Consolidation Additions/C harge for the year Disposals Balance at 31.12.07 Net Goodwill Translation Net Goodwill at 31/12/05 Additions Disposals Differences at 31/12/06 NH Hoteles Deutschland GmbH y NH Hoteles Austria GmbH 108,674 - - - 108,674 NH Italia, S.r.l. (Note 2.5.6.) - 984 - - 984 Nacional Hispana de Hoteles, S.R.L. de C.V. 3,176 - - 42 3,218 Other (Note 2.4.6.a) 1,736 - (223) 13 1,526 113,586 984 (223) 55 114,402 Goodwill at Translation Goodwill at 31/12/06 Additions Differences 31/12/07 NH Hoteles Deutschland GmbH y NH Hoteles Austria GmbH 108,674 - - 108,674 NH Italia, Srl (Note 2.5.6.) 984 4,442 - 5,426 Nacional Hispana de Hoteles, S.R.L. de C.V. 3,218 - (57) 3,161 Other 1,526 - (39) 1,487 114,402 4,442 (96) 118,748

7.1 Rights of beneficial use On 28 July 1994, NH Hoteles, S.A. established a right of beneficial use over the NH Plaza de Armas Hotel in Seville owned by Red Nacional de los Ferrocarriles Españoles (RENFE) for a period of 30 years from the agreement date. As consideration, NH Hoteles, S.A. will pay RENFE EUR 30.20 million over the payment schedule that ends in 2014. The Group recognised the full amount agreed upon as the price of the transaction under “Rights of Beneficial Use” and, in order to correctly recognise this amount overtime, charges to profit or loss the amount arising from distributing the cost of the right over the 30-year term of the agreement by amount increasing by 4% each year. Also, “Other Current Liabilities” and “Other Non- Current Liabilities” (see Notes 24 and 18) in the accompanying consolidated balance sheet include the amounts not yet paid, at short and long term, which at 31 December 2007 amounted to EUR 1.49 million and EUR 8.97 million, respectively (31 December 2006: EUR 1.49 million and EUR 10.47 million, respectively). 7.2 Lease premiums In 2007 the column “Change in the Scope of Consolidation” amounting to EUR 51.75 million includes mainly the premium paid by Jolly Hotels, S.p.A. (EUR 15.84 million) and NH-Framon Italy Hotel Management, Srl. (EUR 35.91 million) to obtain the various leases of hotels located in Italy. The aforementioned premium is amortised on a straight-line basis over the term of the related leases. 7.3 Concessions, patents and trademarks The column “Change in the Scope of Consolidation” includes, inter alia, the 30-year concession for the “Parco degli Aragonesi” hotel amounting to EUR 5.9 million. 7.4 Computer software The column “Additions/Charge for the Year” includes mainly the costs incurred in 2007 in relation to the project of implementing and standardising the systems of NH-Framon Italy Hotel Management, S.r.l. and Jolly Hotels, S.p.A. The column “Change in the Scope of Consolidation” includes EUR 6.29 million relating to the addition of the computer systems of NH-Framon Italy Hotel Management, Srl. and Jolly Hotels, S.p.A. 8. PROPERTY, PLANT AND EQUIPMENT The detail of “Property, Plant and Equipment” and of the changes therein in 2007 and 2006 is as follows (in thousands of euros): COST Land and buildings 1,240,141 22,754 (60,738) 22,160 (11,541)    1,212,776 1,001,299 (23,655) 17,984 (14,770) 17,411 2,211,045 Plant and machinery 386,003 (355) (13,509) 45,812 (3,584) 414,367 159,833 (4,796) 68,763 (8,039) 11,532 641,660 Other fixtures, tools and furniture 278,010 2,061 (4,266) 31,466 (122) 307,149 135,176 (4,565) 58,620 (12,319) 13,747 497,808 Other items of property, plant and equipment 33,481 (117) (307) 9,168 (500) 41,725 9,020 (975) 4,142 (13,769)   (14,436) 25,707 Property, plant and equipment in the course of construction 36,524 13,409 (1,377) 11,091 (18,815) 40,832 3,834 (1,413) 41,051 (9,764)   (28,254) 46,286 1,974,159 37,752 (80,197) 119,697     (34,562)   2,016,849 1,309,162 (35,404) 190,560 (58,661) - 3,422,506 ACCUMULATED DEPRECIATION Land (130,710) 1,152 23,826 (11,140) 2,941 (113,931) (158,162) 4,416 (8,777) 4,885 - (271,569) Plant and machinery (177,413) 2,758 9,729 (26,263) 700 (190,489) (104,367) 1,845 (41,319) 1,839 - (332,491) Other fixtures, tools and furniture (171,547) 1,461 329 (21,069) 56 (190,770) (89,279) 2,126 (57,093) 6,319 - (328,697) Other items of property, plant and equipment (17,312) 12 1,892 (2,418) 425 (17,401) (796) 483 (1,157) 10,665 - (8,206) (496,982) 5,383 35,776 (60,890) 4,122 (512,591) (352,604) 8,870   (108,346) 23,708 - (940,963) Impairment losses (68,863) - 422 (10,588) 8,415 (70,614) (22,468) (271) (4,143) 19,083 - (78,413) NET CARRYING AMOUNT 1,408,314 1,433,644 2,403,130 Balance at 01.01.06 Change in the Scope of Consolidation Translation Differences  Additions  Disposals Balance at 31.12.06 Change in the Scope of Consolidation Translation Differences  Additions   Disposals Balance at 31.12.07 Transfers

Country Carrying Amount Fair Value Impairment Loss 2007 Impairment Loss 2006 Germany 2,636 2,147 (489) (462) Belgium 16,889 14,400 (2,489) (2,489) Netherlands 47,304 35,593 (11,711) (11,711) South Africa 881 422 (459) (459) Total 67,710 52,562 (15,148) (15,121) In 2007 and 2006 “Change in Scope of Consolidation” includes the effect of the inclusion/exclusion of the items composing the property, plant and equipment of certain companies that were included in or excluded from the Group’s scope of consolidation in each of these years (see Note 2.5.6). “Translation Differences” includes the effect of the change in the exchange rate used to translate the various items of property, plant and equipment. The most significant changes in “Property, Plant and Equipment” in 2007 and 2006 were as follows: i) The most significant additions to “Property, Plant and Equipment”, by business unit, in 2007 and 2006 were as follows: A salient feature of 2006 was the refurbishment of the NH Calderón Hotel (EUR 3.5 million) and the Nhow Milano Hotel (EUR 5.4 million) in Milan, the extension of the NH City Hotel (EUR 9.2 million) in Buenos Aires, the investment made in the NH Santa Fe Hotel (EUR 5.3 million) in Mexico City and the improvement and refurbishment work carried out in various restaurants in the Fast Good chain (EUR 4.3 million). Also the most significant additions in 2007 were the refurbishment of the NH Frankfurt Airport Hotel (EUR 2.5 million), the enlargement and refurbishment of the NH Stuttgart Airport Hotel (EUR 3.8 million) and the opening of the NH Berlin Kufürstendam Hotel (EUR 2.5 million) in Germany and, the refurbishment of the NH Krasnapolsky Hotel (EUR 3 million) in Amsterdam, the Netherlands. In Spain the most significant additions relate to the refurbishment of the NH Plaza de Armas Hotel (EUR 3.1 million) in Seville, the NH Eurobuilding Hotel (EUR 3.9 million) in Madrid, the NH Calderón Hotel (EUR 3 million), the opening of the NH Constanza Hotel (EUR 5.8 million) both in Barcelona, and the opening of the new Fast Good chain restaurants (EUR 9 million). The other additions in the two years consist of investments in various hotels of amounts under EUR 2.5 million. ii) The most significant disposal in 2006 related mainly to the furniture and fixtures of the NH Frankfurt Raunheim Hotel, amounting to EUR 1.4 million, located in Frankfurt. The most significant disposals in 2007 relate basically to plant and/or furniture of the NH Zuid Limburg Hotels, amounting to EUR 3.3 million, located in the Netherlands and to the fact that certain of the items of property, plant and equipment relating to the NH Stephanie Hotel (EUR 7.95 million) were depreciated in full. At 31 December 2007, there were items of property, plant and equipment held under finance leases with a cost of EUR 272 thousand and accumulated depreciation of EUR 66 thousand (2006: cost of EUR 2,579 and accumulated depreciation of EUR 587 thousand). The detail at 31 December 2007 and 2006 of the Group's property, plant and equipment in which impairment had been detected is as follows: IMPAIRMENT LOSS ATTRIBUTED TO LAND (thousands of euros): 2007 2006 Spain 68,563    45,305    Benelux 34,270    16,379    Germany 33,114    14,425    Italy 42,193    5,684    Switzerland 574    7,450    Latin America 11,787    29,949    Rest of Europe 59    505    Total 190,560    119,697   

IMPAIRMENT LOSS ATTRIBUTED TO OTHER ITEMS OF PROPERTY, PLANT AND EQUIPMENT (thousands of euros): Country Carrying Amount Fair Value Impairment Loss 2007 Impairment Loss 2006 Germany 9,555 - (9,555) (9,472) Belgium 2,195 832 (1,363) (1,363) Spain 15,488 2,344 (13,144) (13,955) Netherlands 32,768 29,555 (3,213) (17,693) Italy 79,987 57,518 (22,469) - South Africa 1,634 - (1,634) (1,634) Uruguay 7,332 3,146 (4,186) (4,043) Mexico 63,636 59,389 (4,247) (4,247) Brazil 8,390 4,936 (3,454) (3,086) Total 220,985 157,720 (63,265) (55,493) The Group has taken out insurance policies to cover the possible risks to which its property, plant and equipment are subject and the claims that might be filed against it for carrying on its business activities. These policies are considered to adequately cover the related risks. 9. INVESTMENTS IN ASSOCIATES The detail of the investments in companies accounted for using the equity method at 31 December 2007 and 2006 is as follows (in thousands of euros): The most significant financial information relating to the main interests in joint ventures are detailed in Appendix III to the notes to the consolidated financial statements. Jolly Hotels, S.p.A. (*) 34,618 131 - - 747 35,496 - (35,496) - - - Palacio de la Merced, S.A. 1,077 - - - 38 1,115 - - 62 - 1,177 Fonfir1, S.L. 20 - - - - 20 - - - - 20 Harrington Hall Hotel, Ltd. 880 - - - 485 1,365 - - (1,735) 370 - Caribe Puerto Morelos, S.A. de C.V. (*) 16,552 12,492 - - - 29,044 - (29,044) - - - Corporación Hotelera Dominicana, S.A. 33,268 702 (16,707) (1,770) - 15,493 127 - (760) (1,593) 13,267 Corporación Hotelera Oriental, S.A. 4,121 68 (2,060) (224) - 1,905 100 - (7) (213) 1,785 Promociones Marina Morelos, S.A. de C.V. 2,192 2,611 - - - 4,803 2,232 - - - 7,035 Losan Investment, Ltd. - 2,192 - - - 2,192 - - (37) - 2,155 Desarrollos Isla Poniente, S.L. (*) - - - - - - 30,252 - - - 30,252 Desarrollos Isla Blanca, S.L. (*) - - - - - - 19,532 - - (216) 19,316 Inmobiliaria 3 Puente, S.A. de C.V. (*) - - - - - - 1,836 - (2) (29) 1,805 92,728 18,196 (18,767) (1,994) 1,270 91,433 54,079   (64,540)   (2,479) (1,681) 76,812 (*) See Note 2.5.6 Net balance at 31.12.05 Additions   Disposals Translation Differences 2006 Result Net balance at 31.12.06    Additions   Disposals 2007 Result Translation Differences Net balance at 31.12.07

10. NON-CURRENT FINANCIAL ASSETS 10.1  Loans and receivables not held for trading The detail of “Loans and Receivables not Held for Trading” at 31 December 2007 and 2006 is as follows: The detail, by maturity, of the various loans granted and of the agreed-upon interest rate is as follows: In 2006 the line item "Call and Put Options Arising from the Jolly Hotels Transaction" includes the value of certain call options for NH Italia, S.r.l and put options for Joker Partecipazioni, S.r.l. and Intesa Sanpaolo S.p.a, which were entered into within the framework of the takeover bid for Jolly Hotels, S.p.A. (see Note 2.5.6.). The main characteristics of these agreements are as follows: -   Put option for Joker Partecipazioni, S.r.l. and call option for NH Italia, S.r.l. the purpose of which is to transfer to NH Italia, S.r.l, or to Grande Jolly, S.r.l., at the NH Hoteles Group's discretion, the remaining 24.35% ownership interest in the share capital of Jolly Hotels, S.p.a. (once Joker Partecipazioni, S.r.l. had transferred the other 25.7% that it held in Jolly Hotels, S.p.a. in June and July 2007). The amount of the option, equal to EUR 25 per share, totals EUR 121.76 million. This option was exercised on 23 July 2007. -   Put option for Intesa Sanpaolo, S.p.a. and call option for Grande Jolly, S.r.l., the purpose of which is to transfer to Grande Jolly, S.r.l. Banca Intesa, S.p.a.'s holding in Jolly Hotels, S.p.a., representing 4.42% of the share capital. The amount of the option, equal to EUR 25 per share, totals EUR 22.11 million. This option was exercised on 15 November 2007. -   Put option for Joker Partecipazioni, S.r.l. and call option for NH Italia, S.r.l. whereby Joker Partecipazioni, S.r.l. transfers to NH Italia, S.r.l. the 42% holding held by the former in Grande Jolly, S.r.l. (once the 25.7% had been transferred between June and July 2007 and the previous option had been exercised for the remaining 24.35%). The period for exercising the put option runs from 1 June 2007 to 31 December 2010. The call option for NH Italia, S.r.l. may be exercised during the six months following the end of the period for exercising the put option. The amount of the option will be conditional upon the manner in which Joker Partecipazioni, S.r.l. transfers the 25.7% ownership interest in Jolly Hotels, S.p.a. to the NH Group. If it is through purchase and sale and a subsequent capital increase, the option will amount to EUR 87.39 million, and if it is carried out through a capital increase with a non-monetary contribution, it will amount to EUR 133.54 million, which is the amount at which the option was recognised. On 1 February 2007, Jolly Hotels, S.p.A. was included in the Group's scope of consolidation since effective control had been acquired, and the total ownership interest, both direct and indirect, began to be consolidated in full. "Subordinated Loans to Companies Owning Hotels Operated by the Group under Leases" includes certain loans granted by the NH Hoteles Group to companies that own hotel buildings in countries such as Germany, Austria and Luxembourg, which are operated by the Group under lease arrangements. Of the total amount of EUR 66.67 million recognised at 31 December 2007, EUR 63 million relate to subordinated loans granted to the owners of hotels in Germany and Austria, the related rent of which has been refinanced. The rent refinancing transaction had the following impacts on the Group: -  Lease cost savings for a cumulative amount EUR 9.83 million between 2005 and 2007. -  The rent of the hotels subject to these refinancing arrangements is not tied to changes in inflation or in any other index. -  The aforementioned subordinated loans earn annual fixed interest of 3% (EUR 1.9 million and EUR 1.6 million in 2007 and 2006, respectively). Maturity Balance at 31.12.2007 2008 2009 2010 2011 2012 Subsequent Years Alverage Interest Rate 79,324 9,000 1,400 112 112 112 68,588 3%-6.78% 2007 2006 Call and put options arising from the Jolly Hotels transaction (Note 18) - 277,405 Subordinated loans to companies owning hotels operated by the Group under leases (*) 66,674 57,782 Loans to employees (Note 27) 14,320 14,720 Loans to joint ventures (Note 27) (*) 10,400 10,400 Advances on leases 10,254 5,766 Advances on projects - 3,500 Accounts receivabl from joint ventures (Note 27) 4,469 5,399 Loan to associates (Note 27) (*) 2,250 2,250 Long-term deposits and guarantees 14,270 12,537 Other 9,888 7,692 132,525 397,451 (*) See the detail of these loans below.

-   The new leases include an option to purchase the related buildings, exercisable, as a general rule, in the tenth and fifteenth years from the entry into force thereof. -   These leases were considered to be operating leases on the basis of two opinions issued by independent experts of renowned prestige. The positive difference between the market value, assuming this to be the purchase value in view of the closeness in time of the purchase and sale transactions, of the aforementioned buildings and the estimated price at which the aforementioned rights could be exercised at 31 December 2007 amounted to approximately EUR 7.33 million (31 December 2006: EUR 6.07 million). The line "Advances on Leases" includes the advances granted to the owners of certain hotels operated under leases for the purchase by them of decorative objects and furniture which are then discounted from future rent payments. 10.2  Other non-current financial assets The breakdown of “Other Non-Current Financial Assets” at 31 December 2007 and 2006 is as follows: In February 2007 the Parent executed the sale of the shares of Parque Temático de Madrid, S.A. This transaction gave rise to a gain of EUR 1.99 million, which is recognised under “Net Gains on Disposal of Non-Current Assets” in the consolidated income statement of the NH Hoteles Group (see Note 26.1) On 23 June 2006, an ownership interest of 4% in Varallo Comercial, S.A. was acquired, which owns two properties located in La Altagracia (Dominican Republic), upon which two hotel complexes (one of 660 rooms and the other of 375 rooms) will foreseeably be built and which will be operated by NH Hoteles. 11. INVENTORIES The detail of “Inventories” at 31 December 2007 and 2006 is as follows (in thousands of euros): The Group currently owns approximately 1,737,000 square metres of land in Sotogrande (Cádiz). The land’s development status is governed by the San Roque General Zoning Plan, approved by the Cádiz Provincial Urban Development Committee on 2 November 1987, in which the land owned by the Group was classified mainly as “programmed” developable land. The average cost of the developed and undeveloped land at 31 December 2007 amounted to EUR 23 per square metre and EUR 12 per square metre, respectively. Also, there are appraisals undertaken by independent valuers which evidence that the market value of this land is higher than its carrying amount. 10.2.1 Non-current investment securities The detail of “Investments Carried at Cost” is as follows: 2007 2006 Investments carried at cost 4,861 28,463 Held-for-trading financial assets (Note 19) 3,425 17,402 8,286 45,865 Company Location 31.12.07 31.12.06 Desarrollos Isla Blanca, S.L. (*) Spain - 19,532 Parque Temático de Madrid, S.A. Spain - 8,789 NH Finance, S.A. (*) Luxembourg - 2,623 Varallo Comercial, S.A. Dom. Rep 2,212 2,174 Hanuman Investment, S.L. (*) Spain - 2,162 Mil Novecientos Doce, S.A. de C.V. Mexico 1,026 - Other investments 1,903 2,254 Impairment loss of Parque Temático de Madrid - (8,789) Other impairment losses (280) (282) 4,861 28,463 (*) See Note 2.5.6 2007 2006 Developed land 39,152 30,681 Undeveloped land 10,734 18,972 Work in progress 29,696 49,507 Finished construction work 27,680 2,993 Ancillary materials and other 11,051 7,520 118,313 109,673

12. TRADE RECEIVABLES “Trade Receivables” includes various accounts receivable arising in the course of the Group's operations. The detail of this heading at 31 December is as follows (in thousands of euros): 2007 2006 Trade receivables for services 172,068 119,445 Trade receivables for property sales 9,319 18,317 181,387 137,762 Less- Allowance for doubtful debts (16,415) (10,874) 164,972 126,888 In general, these accounts receivable are not interest earning and mature within 90 days. There are no restrictions as to their use. The changes in the allowance for doubtful debts in the years ended 31 December 2007 and 2006 were as follows (in thousands of euros): 13. CURRENT FINANCIAL ASSETS 13.1  Held-to-maturity investments The detail of “Held-to-Maturity Investments” in the accompanying consolidated balance sheet at 31 December 2007 and 2006 is as follows: “Short-Term Deposits” relates to the placement in a short-term interest earning deposit of the cash amount of the capital increase of EUR 200 million at NH Italia, S.r.l. on 27 December 2006 undertaken to finance a portion of the acquisition of Jolly Hotels, S.p.a. At 31 December 2007 and 2006, both the fixed-income securities and the short-term deposits matured at less than one year and earned average interest at a market rate. 13.2  Held-for-trading financial assets The detail of “Held-for-Trading Financial Assets” in the accompanying consolidated balance sheet at 31 December 2007 and 2006 is as follows: The aging of the past-due financial assets that were not considered to constitute doubtful debts at 31 December 2007 is as follows: 2007 2006 Balance at 1 January 10,874 11,228 Translation differences 68 (49) Inclusions in scope of consolidation 2,328 - Charge for the year 3,463 1,475 Amounts used (318) (1,780) Balance at 1 December 16,415 10,874 2007 2006 Fixed-income securities 16,054 7,586 Short-term deposits - 200,000 16,054 207,586 2007 2006 Equity securities 133 417 Interest rate swap (Note 19) 277 11 Allowance for decline in value of equity securities (73) (45) 337 383 Thousands of Euros Less than 30 days 50,872 31-60 days 11,788 More than 61 days 6,486 69,146