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FINANCIAL STATEMENTS 2003 MANAGEMENT1 CONSOLIDATED35 BOARD REPORT FINANCIAL STATEMENTS PARENT81 CORPORATE93 COMPANY GOVERNANCE contents 109RESOLUTIONS119 GENERAL INFORMATION q Management Board Report 2 Business Review 8 Milestones 10 Analysis of 2003 Results 17 Strategic Vision, Investment Strategy and Outlook 21 Significant Events since the Beginning of 2004 22 Sensitivity Analysis for 2004 23 Employee Information, Human Resources indicators 26 Environmental Report 29 Risk Factors 32 Switch to IAS/IFRS 34 Report of the Supervisory Board management board report I 1 BUSINESS REVIEW With 158,000 people in 140 countries, Accor is the European leader and a global operator in its two core businesses, Hotels and Services. It also operates in travel agencies, casinos, restaurants and onboard train services. q HOTELS With 3,894 hotels and 453,403 rooms in 85 countries at December conference centers and Libertel hotels, located primarily in Paris. 31, 2003, Accor enjoys a unique position in the global hospitality Our unique positioning is also derived from the global presence of industry. our brands. The largest hospitality group in Europe, with a network Present across all market segments, Accor is a leading operator of 2,133 hotels and 230,954 rooms accounting for 51% of the in Upscale hotels (Sofitel), in the midscale segment (Novotel, room base at December 31, 2003, Accor deploys its expertise Mercure and Suitehotel) and in economy lodging, with the Ibis, everywhere around the world, with 1,246 hotels (30% of the room Etap Hotel, Formule 1, Red Roof Inns and Motel 6 chains. We also base) located in North America, 156 hotels (5%) in Latin America offer leisure and resort lodging at 200 establishments in 33 countries and Caribbean, 143 hotels (5%) in Africa and the Middle East, and with Accor Vacances, Coralia Club and Accor Thalassa. Other 216 hotels (9%) in Asia and the Pacific. hospitality brands include Parthenon flat hotels in Brazil, Atria GEOGRAPHICAL BREAKDOWN OF THE HOTEL PORTFOLIO AT DECEMBER 31, 2003 France Europe North Latin America/ Africa Asia/ Total (excl. France) America Caribbean Middle East Pacific Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of countries Sofitel 38 6,730 48 9,106 11 3,542 19 2,791 31 6,282 32 7,858 179 36,309 52 Novotel 120 15,300 160 28,675 6 1,835 21 3,513 20 3,930 61 14,015 388 67,268 57 Mercure 287 26,627 264 35,768 82 10,340 37 5,623 56 7,881 726 86,239 45 Ibis 338 29,778 244 29,666 31 4,684 15 1,874 23 3,948 651 69,950 36 Etap Hotel 211 16,176 75 6,481 1 119 287 22,776 11 Formule 1 285 21,108 44 3,180 2 699 24 1,667 16 1,297 371 27,951 12 Red Roof Inns 349 38,209 349 38,209 1 Motel 6 880 92,468 880 92,468 2 Other 15 1,880 4 479 1 385 15 3,397 28 6,092 63 12,233 23 Total 1,294 117,599 839 113,355 1,246 136,054 156 22,412 143 22,892 216 41,091 3,894 453,403 85 Total in % 33% 26% 22% 25% 32% 30% 4% 5% 4% 5% 6% 9% 100% 100% 2 I management board report BREAKDOWN OF THE HOTEL PORTFOLIO BY TYPE OF OPERATION AT DECEMBER 31, 2003 Owned Leased Managed Franchised Total Breakdown Number Number Number Number Number Number Number Number Number Number in % of number of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of rooms Sofitel 28 4,537 44 9,852 79 16,283 28 5,637 179 36,309 8% Novotel 67 9,873 154 23,679 92 19,874 75 13,842 388 67,268 15% Mercure 54 5,427 202 28,108 198 24,640 272 28,064 726 86,239 19% MANAGEMENT BOARD REPORT Ibis 120 13,242 265 33,071 57 8,110 209 15,527 651 69,950 15% q Etap Hotel 77 5,657 95 8,361 8 699 107 8,059 287 22,776 5% Formule 1 220 16,289 135 10,555 1 103 15 1,004 371 27,951 6% Red Roof Inns 97 11,871 154 17,637 98 8,701 349 38,209 9% Motel 6 232 25,645 491 55,817 1 59 156 10,947 880 92,468 20% Other 7 1,363 13 1,862 39 8,291 4 717 63 12,233 3% Total 902 93,904 1,553 188,942 475 78,059 964 92,498 3,894 453,403 100% Total in % 23% 21% 40% 42% 12% 17% 25% 20% 100% 100% Another feature of our unique positioning concerns the diversity of with 63% of rooms being owned or leased, while another 17% are our hotel operating structures. Most properties are operated directly, operated under management contracts and 20% are franchised. GEOGRAPHICAL BREAKDOWN OF THE HOTEL PORTFOLIO BY TYPE OF OPERATION AT DECEMBER 31, 2003 Owned Leased Managed Franchised Total Breakdown Number Number Number Number Number Number Number Number Number Number in % of number of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of hotels of rooms of rooms France 385 31,721 367 43,720 88 8,436 454 33,722 1,294 117,599 26% Europe (excl. France) 125 14,782 440 56,375 49 7,576 225 34,622 839 113,355 25% North America 334 39,233 652 75,786 6 1,387 254 19,648 1,246 136,054 30% Latin America/Caribbean 25 4,132 22 3,748 94 12,733 15 1,799 156 22,412 5% Other countries 33 4,036 72 9,313 238 47,927 16 2,707 359 63,983 14% Total 902 93,904 1,553 188,942 475 78,059 964 92,498 3,894 453,403 100% Total in % 23 % 21% 40% 42% 12% 17% 25% 20% 100% 100% We believe that supporting our global brand presence across all product and country risk profile, is critical to maintaining a balanced market segments, with appropriate operating structures for each hotel portfolio capable of mitigating cyclical exposure. management board report I 3 A portfolio structure to meet demand for Midscale and Economic lodging As our prestige hotel brand, SOFITEL is positioned as the Europe’s largest economy hotel network, IBIS offers a full range of ambassador of the French art de vivre around the world. It is now 24-hour services and innovative food solutions that vary depending a truly international network, in the world’s leading cities as well as on the region and the season. 80% of Ibis hotels have received in outstanding tourist destinations. From paragons of ultramodern ISO 9001 certification for their round-the-clock services. architecture and designs to legendary palaces, each hotel projects CUSTOMERS: 55% BUSINESS – 45% LEISURE its own personality. The brand’s reputation has also been enhanced by the chain’s many gourmet restaurants. CUSTOMERS: 60% BUSINESS – 40% LEISURE Located mainly in the Midwest, Northeast and South of the United States, RED ROOF INNS are a highly standardized product, delivering consistent quality at affordable prices. NOVOTEL is the standard in highly comfortable midscale lodging, CUSTOMERS: 55% BUSINESS – 45% LEISURE with an international network of contemporary hotels offering the same service quality around the world to business and leisure customers. A pioneer in the family segment, Novotel allows children to stay for free in their parents’ rooms. ETAP HOTEL provides cost-effective lodging for business and CUSTOMERS: 65% BUSINESS – 35% LEISURE leisure customers, mainly in Europe. Featuring single, double and triple rooms, all with bath, the chain’s hotels are located in large metropolitan areas, usually in city centers, along major roadways or near airports. Europe’s second biggest integrated hotel chain, MERCURE CUSTOMERS: 60% BUSINESS – 40% LEISURE features traditional establishments whose decoration and atmosphere reflect the culture of their city or region. The brand is also known for its “Grands Vins Mercure” wine list. Upscale: 8% Present across the United States and Canada, CUSTOMERS: 55% BUSINESS – 45% LEISURE MOTEL 6 is known for providing value for money in low-cost lodging. It is ranked number one in the economy hotel segment by D.K. Shifflet & Associates, the leading US travel/tourism market research and consulting firm. CUSTOMERS: 30% BUSINESS 70% LEISURE Midscale: 37% Economy: 55% As a % of total rooms at December 31, 2003 The most recent addition to the Accor family, the ten SUITEHOTEL The benchmark in truly low-cost hotels, FORMULE 1 offers offer a new lodging concept, comprised of functional, modular, functional rooms with basic comforts for up to three people. 30-sq. m suites. CUSTOMERS: 55% BUSINESS – 45% LEISURE CUSTOMERS: 78% BUSINESS – 22% LEISURE 4 I management board report Markets and Competition Accor ranks fourth worldwide, based on total number of rooms. HOSPITALITY COMPANIES, BY SIZE WORLDWIDE MANAGEMENT BOARD REPORT Rank Company Number of hotels Number of rooms q 1Cendant 6,513 536,097 2 Intercontinental 3,300 520,000 3 Marriott International 2,718 490,564 4 Accor 3,894 453,403 5 Choice 4,664 373,722 Source: Accor, Company data, February 2004 Our competitors share two characteristics: they are all well Five Accor brands rank among the top ten in the 15-nation established in the US market and they prefer to operate through EU market.

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