2014 Registration Document and Annual Financial Report - page 157

4
2014 Review OF THE YEAR
Financial review
Cash Flows
(inmillions of euros)
2013
restated
(1)
2014
Funds from operations before non-recurring transactions
703
769
Renovation and maintenance expenditure
(264)
(262)
Free cash flow
439
507
Recurring development expenditure
(196)
(203)
Recurring free cash flow
243
304
Acquisitions
5
(1,110)
ibis megabrand
(13)
-
Proceeds from disposals of assets
334
128
Dividends
(187)
(137)
Hybrid instrument issuance (net of issue expenses)
-
887
Capital increase/reduction
13
46
Change in operating working capital
136
103
Change in non-operating working capital
(185)
-
Other
(158)
(155)
Cash flow from discontinued operations
2
1
(INCREASE)/DECREASE IN NET DEBT
190
67
(1) Restated for the impact of IFRS11.
Funds from operations
rose to €769 million from €703 million in
2013 thanks to the strong operational performance.
Recurring development expenditure
amounted to €203million, and
hotel
renovation and maintenance expenditure
to €262 million,
representing 4.8% of Group revenue.
Acquisitions
carried out in 2014 amounted to
€1,110 million
,
corresponding primarily to the
Moor Park, Axa Real Estate and
Tritax
property portfolios for a total of 110 hotels.
Proceeds from disposal of assets
totaled
€128 million
, of
which €79 million in disposals of hotel properties, compared with
€331 million in hotel property disposals in 2013.
Financial ratios
In 2014, consolidated
recurring free cash flow
was a record
€304 million (up 25.1%).
Gearing
Consolidated net debt
totaled €159 million at December 31,
2014, a reduction of €67 million year-on-year. The acquisition of
the Moor Park and Axa Real Estate hotel portfolios for €891 million
was financed by the €900 million proceeds from the June 2014
perpetual subordinated notes issue, the total amount of which is
treated as equity under IFRS.
Gearing
was 4.1% at December 31, 2014, compared with 8.2%
at December 31, 2013.
Funds from operations excluding non-recurring
transactions/Adjusted net debt
The
ratio of funds from operations excluding non-recurring
transactions to adjusted net debt
is calculated according to the
method used by the main rating agencies, with net debt adjusted
for the discounting of future minimum lease payments at a rate
of 7%
(1)
. The ratio was 34.2% at December 31, 2014, compared
with 31.1% a year earlier.
Return on capital employed
Return on capital employed (ROCE),
corresponding to EBITDA
expressed as a percentage of fixed assets at cost plus working
capital, amounted to 14.6% in 2014, compared with 14.0% in 2013.
This ratio is also analyzed in the consolidated financial statements.
(1) Rate used by the Standard & Poor’s rating agency. It is analyzed in the consolidated financial statements.
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Registration Document 2014
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