Holiday Inn 2003 Annual Report Download - page 14

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2 PRO FORMA ADJUSTMENTS
The following adjustments have been made to IHG
operating profit:
• reversal of cost recoveries from MAB;
• reversal of notional interest credit on the portion of the
pension pre-payment that relates to MAB; and
• exclusion of all exceptional items.
3 INTEREST CHARGE
The unaudited pro forma interest charge has been calculated
to reflect the post Separation capital structure of the Group as
if it had been in place at 1 October 2001, using interest rate
differentials applicable under the post Separation borrowing
agreements and excluding facility fee amortisation.
4 TAXATION
The unaudited pro forma tax charge is based on a rate of tax
for IHG of 25.0% (2002 27.4%) applied to unaudited pro forma
profit before taxation.
5 EARNINGS PER SHARE
The unaudited pro forma earnings per share calculation is
based on unaudited pro forma profit divided by 734 million
shares, being the issued share capital of InterContinental
Hotels Group PLC on Separation.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
1 BASIS OF PREPARATION OF UNAUDITED
PRO FORMA FINANCIAL INFORMATION
The statutory results for the year reflect activity for the
15 months ended 31 December 2003 including the
discontinued operations of MAB for the period up until
Separation. Given the scale of these events the statutory
accounts do not readily facilitate an understanding of IHG on
a stand alone basis. We have, therefore, prepared unaudited
pro forma financial information which show the results for IHG
as if it had been independent for the 12 months ended 31
December 2003 and 2002, operating under the financing and
taxation structure put in place at the time of the Separation.
The unaudited pro forma financial information comprises
the results of those businesses that form IHG following the
Separation. Because of the nature of unaudited pro forma
financial information, they cannot give a complete picture of
the financial position of the Group. The information is provided
as guidance only; it is not audited.
Significant changes were made to the financing structure of
the Group as part of the Separation making the Group results
difficult to compare year-on-year as they include the results
of MAB up to Separation. The unaudited pro forma financial
information therefore represents the Group results as reported
but after excluding the results of MAB and after having been
adjusted to reflect the changes made to the financing and
taxation structure as part of the Separation, on the assumption
that this structure had been in place since 1 October 2001. The
unaudited pro forma financial information has been prepared
using accounting policies consistent with those used in the
Group financial statements.
The IHG unaudited pro forma financial information does not
comprise statutory accounts within the meaning of Section 240
of the Companies Act 1985. The audited IHG financial
statements, including MAB to Separation are shown on pages
28 to 55.
OPERATING AND FINANCIAL REVIEW
12 InterContinental Hotels Group 2003