Holiday Inn 2006 Annual Report Download - page 96

Adjusted excluding the effect of special items,
gain/loss on disposal of assets and any
relevant tax.
Average daily rate room revenue divided by the number of
room nights sold. Also known as average
room rate.
Basic earnings per share profit available for IHG equity holders
divided by the weighted average number of
ordinary shares in issue during the year.
Capital expenditure cash expended on purchases of property,
plant and equipment and purchases of
intangible assets, associates and other
financial assets.
Cash-generating unit a portfolio of similar assets that are subject
to the same economic and commercial
influences.
Comparable RevPAR a comparison for a grouping of hotels that
have traded in all months in both financial
years being compared. Principally excludes
new hotels, hotels closed for major
refurbishment and hotels sold in either
of the two years.
Contingent liability a liability that is contingent upon the
occurrence of one or more uncertain
future events.
Continuing operations operations not classified as discontinued
and including acquisitions made during
the year.
Currency swap an exchange of a deposit and a borrowing,
each denominated in a different currency,
for an agreed period of time.
Derivatives a financial instrument used to reduce risk,
the price of which is derived from an
underlying asset, index or rate.
Discontinued operations operations that have been sold and assets
classified as held for sale when the results
relate to a separate line of business,
geographical area of operations, or where
there is a co-ordinated plan to dispose of
a separate line of business or geographical
area of operations.
Extended-stay hotel a hotel designed for guests staying for
periods of time longer than a few nights and
tending to have a higher proportion of suites
than normal hotels (e.g. Staybridge Suites,
Candlewood Suites).
Franchisee operator who uses a brand under
licence from the brand owner
(e.g. IHG).
Franchisor brand owner (e.g. IHG) who licenses brands
for use by operators.
Gearing net debt expressed as a percentage of IHG
shareholders’ equity.
Goodwill the difference between the consideration
given for a business and the total of the fair
values of the separable assets and liabilities
comprising that business.
Hedging the reduction of risk, normally in relation to
foreign currency or interest rate movements,
by making offsetting commitments.
Holidex fees charges to hotels under management and
franchise agreements for the use of Holidex,
IHG’s proprietory reservation system.
IFRS International Financial Reporting Standards.
Interest rate swap an agreement to exchange fixed for floating
interest rate streams (or vice versa) on a
notional principal.
Management contract a contract to operate a hotel on behalf of
the hotel owner.
Market capitalisation the value attributed to a listed company by
multiplying its share price by the number
of shares in issue.
Midscale hotel a hotel in the three/four star category
(e.g. Holiday Inn, Holiday Inn Express).
Net debt borrowings less cash and cash equivalents.
Occupancy rate rooms occupied by hotel guests, expressed
as a percentage of rooms that are available.
Operating margin operating profit before other operating
income and expenses expressed as a
percentage of revenue.
Pipeline signed/executed agreements, including
franchises and management contracts, for
hotels which will enter the Group’s system
at a future date.
Revenue per room revenue divided by the number of
available room room nights that are available (can be
(RevPAR) mathematically derived from occupancy
rate multiplied by average daily rate).
Room count number of rooms owned, managed
or franchised by IHG.
Room revenue revenue generated from the sale of
room nights.
Royalty rate the percentage of room revenue that a
franchisee pays to the brand owner for
use of the brand name.
Special items items which are disclosed separately
because of their size or incidence.
Subsidiary undertaking a company in which the Group holds an
equity stake and over which it exercises
control.
System size the number of hotels/rooms owned,
managed or franchised by IHG.
Total gross revenue total room revenue from franchised hotels
and total hotel revenue from managed,
owned and leased hotels.
Total shareholder the theoretical growth in value of a
return (TSR) shareholding over a period, by reference to
the beginning and ending share price, and
assuming that gross dividends, including
special dividends, are reinvested to
purchase additional units of the equity.
Upscale hotel a four/five star full-service hotel
characterised by superior service
(e.g. InterContinental, Crowne Plaza).
UK GAAP United Kingdom generally accepted
accounting practice.
Weighted average the average of the monthly exchange
exchange rate rates, weighted by reference to monthly
operating profit.
Working capital the sum of inventories, receivables and
payables of a trading nature, excluding
financing items such as corporate taxation.
Glossary
94 IHG Annual report and financial statements 2006