16. Non-current assets held for sale and liabilities associated with non-current assets held for sale

The composition of the balance under the heading “Non-current assets held for sale” in the accompanying consolidated balance sheets, broken down by the origin of the assets, is as follows:

Download Excel

Non-Current Assets Held-for-Sale and Liabilities Associated [Breakdown by type of Asset]	Millions of Euros
	2012	2011	2010
Business sale agreement - Assets	1,536	-	-
Of which: discontinued operations	1,150	-	-
Other assets from:
Property, plants and equipment	168	195	252
Buildings for own use	125	130	188
Operating leases	43	65	64
Foreclosures and recoveries	3,062	2,191	1,513
Foreclosures	2,895	2,048	1,427
Recoveries from financial leases	167	143	86
Accrued amortization (*)	(47)	(60)	(79)
Impairment losses	(474)	(236)	(157)
Total Non-Current Assets Held-for-Sale	4,245	2,090	1,529
Business sale agreement - Liabilities	387
Of which: discontinued operations	318	-	-
Liabilities associated with non-current assets held for sale	387	-	-

(*) Until classified as non-current assets held for sale

The changes in the balances under this heading in 2012, 2011 and 2010 are as follows:

Download Excel

Non-Current Assets Held-for-Sale Changes in the year 2012	Millions of Euros
	Real Estate			Other assets (**)	Total
	Foreclosed Assets		From Own Use Assets (*)
	Foreclosed Assets through Auction Proceeding	Recovered Assets from Finance Leases
Cost (1)
Balance at the beginning	2,048	178	100	-	2,325
Additions	1,044	61	99	-	1,204
Contributions by Group companies incorporation	451	29	-	-	480
Retirements (sales and other decreases)	(614)	(66)	(107)	-	(787)
Transfers, other movements and exchange differences	(35)	(34)	30	1,536	1,497
Balance at the end	2,895	167	121	1,536	4,719
Impairment (2)
Balance at the beginning	187	32	17	-	236
Additions	499	19	5	-	523
Contributions by Group companies incorporation	124	-	-	-	124
Retirements (sales and other decreases)	(98)	(14)	(2)	-	(114)
Transfers, other movements and exchange differences	(295)	5	(5)	-	(296)
Balance at the end	417	42	15	-	474
Balance at the end of Net carrying value (1)-(2)	2,478	125	106	1,536	4,245

(*) Until classified as non-current assets held for sale (**) Business sale agreement (Note 3) Download Excel

Non-Current Assets Held-for-Sale Changes in the year 2011	Millions of Euros
	Foreclosed Assets		From Own Use Assets (*)	Total
	Foreclosed Assets through Auction Proceeding	Recovered Assets from Finance Leases
Cost (1)
Balance at the beginning	1,427	86	173	1,686
Additions	1,326	91	99	1,516
Contributions by Group companies incorporation	17	3	-	19
Retirements (sales and other decreases)	(670)	(31)	(140)	(841)
Transfers, other movements and exchange differences	(53)	29	(32)	(55)
Balance at the end	2,048	178	100	2,325
Impairment (2)
Balance at the beginning	122	16	20	157
Additions	384	21	4	408
Retirements (sales and other decreases)	(90)	(5)	(1)	(97)
Transfers, other movements and exchange differences	(229)	-	(5)	(233)
Balance at the end	187	32	17	236
Balance at the end of Net carrying value (1)-(2)	1,861	146	83	2,090

(*) Until classified as non-current assets held for sale Download Excel

Non-Current Assets Held-for-Sale Changes in the year 2010	Millions of Euros
	Foreclosed Assets		From Own Use Assets (*)	Total
	Foreclosed Assets through Auction Proceeding	Recovered Assets from Finance Leases
Cost (1)
Balance at the beginning	748	64	406	1,217
Additions	1,407	106	-	1,513
Contributions by Group companies incorporation	-	-	-	-
Retirements (sales and other decreases)	(671)	(64)	(282)	(1,017)
Transfers, other movements and exchange differences	(56)	(19)	49	(27)
Balance at the end	1,427	86	173	1,686
Impairment (2)
Balance at the beginning	124	10	33	167
Additions	198	11	12	221
Retirements (sales and other decreases)	(32)	(3)	(9)	(44)
Transfers, other movements and exchange differences	(169)	(2)	(16)	(188)
Balance at the end	122	16	20	157
Balance at the end of Net carrying value (1)-(2)	1,306	70	153	1,529

(*) Until classified as non-current assets held for sale

16.1 From tangible assets for own use

The main changes in the balance under the heading “Non-current assets held for sale – From: Property, plant and equipment - buildings for own use” took place in the years 2011 and 2010. These changes corresponded basically to the sales of properties in Spain in which the Bank simultaneously signed long-term operating leases with the buyers of the properties (10, 15, 20, 25 or 30 years, which were renewable under certain conditions).

The amount of the annual initial income from the properties under these operating leases reached €128 million, though this income is updated annually based on the conditions established in said contracts. In 2012, 2011 and 2010, the amounts registered in the accompanying consolidated income statements under this heading amounted to €147 million, €138 million and €113 million, respectively (see Note 46.2.).

In the aforementioned sales agreements, purchase options on behalf of the Bank were included upon the termination of the respective operating lease contracts; the exercise price of the option will be determined by an independent expert on a case-by-case basis. As a result, the Bank considered these sales as firm sales and registered the profits for this item under market conditions of €67 million and €273 million, under the headings “Gains (losses) in non-current assets held for sale not classified as discontinued operations" in the accompanying consolidated income statements for 2011 and 2010 (see Note 52).

The current value of the future minimum payments the Bank will incur in the effective period of the operating lease contracts, as of December 31, 2012, is €111 million in 1 year, €362 million between 2 and 5 years and €652 million in more than 5 years.

16.2 From foreclosures or recoveries

As of December 31, 2012, 2011 and 2010, the balance under the heading "Non-current assets held for sale - Foreclosures or recoveries" was made up of €2,254, €1,703 and €1,105 million of assets for residential use, €325, €290 and €214 million of assets for tertiary use (industrial, commercial or offices) and €23 million, €14 million and €10 million of assets for agricultural use, respectively.

As of December 31, 2012, 2011 and 2010, mean maturity of the assets through foreclosures or recoveries was 2 or 3 years.

In 2012, 2011 and 2010, some of the sales of these assets were financed by Group entities. The amount of the loans granted to the buyers of these assets in those years was €169 million, €163 million and €193 million, respectively, with a mean percentage financed of 93%, 93% and 90%, respectively, of the price of sale.

As of December 31, 2012, 2011 and 2010, the amount of gains from the sale of assets financed by Group entities (and, therefore, not recognized in the consolidated income statements) reached €28 million, €30 million and €32 million, respectively.

16.3 Assets and liabilities associated with discontinued operations

The breakdown of assets and liabilities associated with discontinued operations in 2012, 2011 and 2010 is shown below:

Download Excel

Assets and liabilities associated with discontinued operations	Millions of Euros
	2012	2011	2010
ASSETS:
Financial liabilities held for trading	31	21	15
Financial assets designated at fair value through profit or loss	644	555	577
Available-for-sale financial assets	20	18	8
Loans and receivables	173	135	182
Investments	-	9	9
Tangible assets and intangible assets	87	82	87
Tax assets	83	65	47
Other assets	113	40	35
TOTAL ASSETS	1,150	926	961
Of which: Afore Bancomer	355	257	245
LIABILITIES:
Financial liabilities at amortised cost	43	35	31
Provisions	41	38	35
Tax liabilities	178	113	118
Other liabilities	56	37	30
TOTAL LIABILITIES	318	223	215
Of which: Afore Bancomer	94	60	56