Holiday Inn 2006 Annual Report Download - page 66

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Notes to the Group financial statements
11 Held for sale and discontinued operations
Hotels
During the year ended 31 December 2006, the Group sold 32 hotels (2005 112 hotels), continuing the asset disposal programme
commenced in 2003, and an additional 10 hotels and two associates were classified as held for sale. At 31 December 2006, four hotels
(2005 26 hotels) and two associates (2005 nil) were classified as held for sale.
At 31 December 2006, an impairment loss of £3m has been recognised on the remeasurement of a property that had previously been
classified as held for sale. The loss, which reduced the carrying amount of the asset to fair value less costs to sell, has been recognised
in the income statement in gain on disposal of assets. Fair value was determined by an independent property valuation.
2006 2005
Net assets of hotels on disposal £m £m
Property, plant and equipment 648 1,961
Goodwill –20
Net working capital (22) 1
Cash and cash equivalents 31 16
Loans and other borrowings (10) –
Deferred tax (117) (121)
Minority equity interest (13) –
Group’s share of net assets disposed of 517 1,877
Consideration
Current year disposals:
Cash consideration, net of costs paid 628 1,832
Deferred consideration 10 40
Management contract value 30 82
Other (14) (12)
654 1,942
Net assets disposed of (517) (1,877)
Other, including tax and impairment (20) (38)
Gain on disposal of assets, net of tax 117 27
Net cash inflow
Current year disposals:
Cash consideration, net of costs paid 628 1,832
Cash disposed of (31) (16)
Prior year disposal 23 –
620 1,816
Assets and liabilities held for sale
Non-current assets classified as held for sale:
Property, plant and equipment 40 279
Associates 10 –
50 279
Liabilities classified as held for sale:
Deferred tax (2) (34)
Cash flows related to discontinued operations
Operating profit before interest, depreciation and amortisation 34 124
Investing activities (8) (54)
Financing activities (25) (16)
64 IHG Annual report and financial statements 2006