1.- REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

NH Hotel Group, S.A. and Subsidiaries Report
on the Consolidated Financial Statements for 2017

NH HOTEL GROUP, S.A. (hereinafter the Parent Company) was incorporated as a public limited company in Spain on 23 December 1981 under the trade name “Material para Ferrocarriles y Construcciones, S.A.”, which was subsequently changed to “Material y Construcciones, S.A.” (MACOSA) and later to “Corporación Arco, S.A.”

In 1992, Corporación Arco, S.A. took over Corporación Financiera Reunida, S.A. (COFIR), while at the same time adopting the trade name of the company taken over and amending its corporate purpose to the new activity of the Parent Company, which focused on the management of its shareholding portfolio

During the 1998 financial year, Corporación Financiera Reunida, S.A. (COFIR) merged with Grupo Catalán, S.L. and its subsidiaries and Gestión NH, S.A. through the absorption of these companies by the former. Subsequently, Corporación Financiera Reunida, S.A. (COFIR) took over NH Hoteles, S.A., adopted its trade name and broadened its corporate purpose to allow for the direct performance of hotel activities, in which it had already been engaged indirectly through its subsidiaries.

Information on these mergers can be found in the financial statements of the years in which said transactions took place.

The General Shareholders’ Meeting of 21 June 2014 agreed to change the company’s name from “NH Hoteles, S.A.” to “NH Hotel Group, S.A.”

The Group entered into an agreement with Grupo Inversor Hesperia, S.A. (hereinafter “Hesperia”) in 2009 to merge their respective hotel management businesses. As a result, the Group now manages certain hotels owned or operated by Hesperia. On 7 March 2017 a new framework agreement to manage 28 hotels in Spain was signed between NH Hotel Group, S.A. (and its subsidiaries NH Hoteles España, S.A. and Hoteles Hesperia, S.A.) and Grupo Inversor Hesperia, S.A. (“GIHSA”) and certain subsidiaries over a 9-year period. This contract replaces and extends the previous one, signed in 2009 (see Note 7.2).

The Parent Company is the head of a group of subsidiaries engaged in the same activities and that constitute, together with NH Hotel Group, S.A., the NH Hotels Group (hereinafter the “Group” – see Appendices I and II).

At the end of 2017, the Group was operating hotels in 31 countries, with 380 hotels and 58,926 rooms, of which around 74% are located in Spain, Germany, Italy and the Benelux countries.

NH Hotel Group, S.A. has its registered address in Madrid.