17. Investments in entities accounted for using the equity method
The breakdown of the balances of “Investments in entities accounted for using the equity method” in the accompanying consolidated balance sheets is as follows:
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| Investments in Entities Accounted for Using the Equity Method | Millions of Euros | ||
|---|---|---|---|
| 2012 | 2011 | 2010 | |
| Associate entities | 6,469 | 5,567 | 4,247 |
| Jointly controlled entities | 326 | 276 | 300 |
| Total | 6,795 | 5,843 | 4,547 |
17.1 Associates
The following table shows the carrying amount of the most significant of the Group’s investments in associates:
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| Investments in Entities Accounted for Using the Equity Method | Millions of Euros | ||
|---|---|---|---|
| 2012 | 2011 | 2010 | |
| Grupo CITIC | 5,965 | 5,387 | 4,022 |
| Metrovacesa (*) | 317 | - | - |
| Tubos Reunidos, S.A. | 54 | 51 | 51 |
| BBVA Elcano Empresarial II, S.C.R.R.S., S.A. | 24 | 23 | 37 |
| BBVA Elcano Empresarial, S.C.R.R.S., S.A. | 24 | 23 | 37 |
| Rest of associate | 85 | 83 | 100 |
| Total | 6,469 | 5,567 | 4,247 |
Appendix IV shows the details of the associates as of December 31, 2012.
The following is a summary of the gross changes in 2012, 2011 and 2010 under this heading in the accompanying consolidated balance sheets:
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| Associates Entities. Changes in the Year Breakdown of Goodwill | Millions of Euros | ||
|---|---|---|---|
| 2012 | 2011 | 2010 | |
| Balance at the beginning | 5,567 | 4,247 | 2,614 |
| Acquisitions and capital increases | 10 | 425 | 1,210 |
| Disposals | (16) | (20) | (9) |
| Transfers and others | 908 | 915 | 432 |
| Balance at the end | 6,468 | 5,567 | 4,247 |
| Of which: |
|
|
|
| Goodwill | 1,683 | 1,700 | 1,574 |
| CITIC Group | 1,683 | 1,696 | 1,570 |
| Rest | - | 4 | 4 |
The changes in 2012 correspond mainly to CNCB earnings. The reclassification of the investment in Metrovacesa, S.A. from the heading "Available-for-sale financial assets" is also included in 2012.
The changes in 2011 in the line item “Acquisitions and capital increases” in the above table correspond to the capital increase made by the Group in CNCB to maintain its percentage stake, at a cost of €425 million. The changes in the entry “Transfers and other” correspond mainly to the CNCB earnings (see Note 41), together with the positive movements in exchange rates.
Agreement with the CITIC Group
The BBVA Group’s investment in the CITIC Group includes the investment in Citic International Financial Holdings Limited (CIFH) and China Citic Bank Corporation Limited (CNCB). As of December 31, 2012, BBVA had a 29.68% stake in CIFH and 15% in CNCB.
The BBVA Group has several agreements with the CITIC Group that are considered of strategic importance for both: for BBVA, because financial activity could be developed in continental China through this alliance and, for CNCB, because it allows CITIC to develop its international business. The BBVA Group has the status of “sole strategic investor” in CNCB.
17.2 Investments in jointly-controlled entities
The breakdown of the balance under this heading in the accompanying consolidated balance sheets is as follows:
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| Jointly Controlled Entities | Millions of Euros | ||
|---|---|---|---|
| 2012 | 2011 | 2010 | |
| Corporación IBV Participaciones Empresariales S.A. | 135 | 78 | 71 |
| Occidental Hoteles Management, S.L. | 67 | 68 | 88 |
| Fideicomiso F/403853-5 BBVA Bancomer SºS ZIBAT | 22 | 20 | 22 |
| I+D Mexico, S.A. | 15 | 16 | 22 |
| Fideicomiso F/70413 Mirasierra | 14 | 12 | 14 |
| Fideicomiso F/402770-2 Alamar | 11 | 10 | 11 |
| Fideicomiso F/403112-6 Dos lagos | 10 | 10 | 11 |
| Altitude Software SGPS, S.A. | 9 | 10 | 10 |
| Las Pedrazas Golf, S.L. | 2 | 7 | 10 |
| Rest | 41 | 45 | 41 |
| Total | 326 | 276 | 300 |
| Of which |
|
|
|
| Goodwill | 9 | 9 | 9 |
If the jointly-controlled entities accounted for using the equity method had been accounted for by the proportionate consolidation method, the effect on the Group’s main consolidated figures as of December 31, 2012, 2011 and 2010 would have been as follows:
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| Jointly Controlled Entities. Effect on the Group's main figures | Millions of Euros | ||
|---|---|---|---|
| 2012 | 2011 | 2010 | |
| Assets | 1,180 | 1,025 | 1,062 |
| Liabilities | 891 | 703 | 313 |
| Net operating income | (35) | 28 | 15 |
Details of the jointly-controlled entities accounted for using the equity method as of December 31, 2012 are shown in Appendix IV.
17.3 Associates and jointly-controlled entities accounted for by the equity method
The following table provides relevant information of the balance sheets and income statements of associates and jointly-controlled entities accounted for using the equity method as of December 31, 2012, 2011 and 2010, respectively.
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| Associates and Jointly Controlled Entities Financial Main figures (*) |
Millions of Euros | |||||
|---|---|---|---|---|---|---|
| 2012 (*) | 2011 (*) | 2010 (*) | ||||
|
|
Associates | Jointly Controlled Entities | Associates | Jointly Controlled Entities | Associates | Jointly Controlled Entities |
| Current Assets | 37.424 | 116 | 28.789 | 249 | 19.979 | 279 |
| Non-current Assets | 22.817 | 957 | 18.598 | 694 | 17.911 | 780 |
| Current Liabilities | 49.036 | 313 | 39.326 | 152 | 32.314 | 179 |
| Non-current Liabilities | 11.205 | 760 | 8.061 | 790 | 5.576 | 879 |
| Net sales | 1.453 | 105 | 1.121 | 158 | 855 | 168 |
| Operating Income | 748 | (32) | 575 | 28 | 450 | 15 |
| Net Income | 526 | (44) | 424 | (5) | 339 | 1 |
Information applying the corresponding ownership and without the corresponding standardization and consolidation adjustments.
17.4 Notifications about acquisition of holdings
Appendix V provides notifications on acquisitions and disposals of holdings in associates or jointly-controlled entities, in compliance with Article 155 of the Corporations Act and Article 53 of the Securities Market Act 24/1988.
17.5 Impairment
As described in Note 2.2.8, the cash-generating units to which goodwill has been allocated are periodically tested for impairment by including the allocated goodwill in their carrying amount. This analysis is performed at least annually and always if there is any indication of impairment. The valuation of the goodwill of the CITIC Group has been reviewed by independent experts (other than the Group’s accounts auditor) by applying different valuation methods on the basis of each asset and liability.
As of December 31, 2012, there is no impairment on the goodwill of jointly-controlled entities and associates recognized by the Group as of that date, except for the insignificant impairment estimated on the goodwill of the companies BBVA Elcano I and BBVA Elcano II, each for €2 million. No impairment losses on the goodwill of jointly-controlled entities and associates were recognized in 2011 and 2010.