Holiday Inn 2007 Annual Report Download

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opportunity, strategy,
investment, targets,
performance, progress,
growth, profits, returns,
dividends, results…
great hotels guests love™
IHG Annual Report and Financial Statements 2007

Table of contents

  • Page 1
    opportunity, strategy, investment, targets, performance, progress, growth, profits, returns, dividends, results...great hotels guests loveâ„¢ IHG Annual Report and Financial Statements 2007

  • Page 2
    ... balance sheet Corporate information and accounting policies Notes to the Group financial statements 45 Group financial statements 46 47 48 49 50 51 52 57 89 Parent company financial statements 90 91 92 93 Statement of Directors' responsibilities Independent auditor's report to the members...

  • Page 3
    ... risk management. We also present a wide range of statutory and governance data and our full financial statements for the year. BUSINESS REVIEW THE BOARD, SENIOR MANAGEMENT AND THEIR RESPONSIBILITIES GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS USEFUL INFORMATION Overview 1

  • Page 4
    ... revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels (not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties). + US dollars. * Operating profit before exceptional items. 2 IHG Annual Report and Financial Statements 2007

  • Page 5
    ... of the InterContinental brand continues to gather pace; we signed 33 new InterContinental hotels around the world in 2007 and ended the year with a record pipeline of 62 hotels. In October 2007 we announced the global relaunch of our Holiday Inn brand family. The relaunch is designed to raise the...

  • Page 6
    ... AND LEASED 41 MANAGED 79 FRANCHISED 13,466 ROOMS 157 HOTELS IN DEVELOPMENT PIPELINE 158 HOTELS 78 MANAGED 80 FRANCHISED 16,825 ROOMS 207 HOTELS IN DEVELOPMENT PIPELINE 37 MILLION MEMBERS WORLDWIDE PRIORITY CLUB REWARDS WEBSITES IN NINE LANGUAGES 4 IHG Annual Report and Financial Statements 2007

  • Page 7
    ... 22 Business overview Market and competitive environment Strategy Operating model Business relationships People Corporate responsibility Group performance Group results Total gross revenues Global hotel and room count Global pipeline The Americas Europe, Middle East and Africa Asia Pacific Central...

  • Page 8
    ... industry is cyclical, averaging between zero and 5% per annum historically. The Group's fee-based profit is partly protected from changes of supply due to its model of third-party ownership of hotels under IHG management and franchise contracts. 6 IHG Annual Report and Financial Statements 2007

  • Page 9
    ... InterContinental hotels (New York, London Park Lane, Paris Le Grand and Hong Kong). Current status and 2007 developments • Relaunch of Holiday Inn brand family; • International launch of Staybridge Suites; and • InterContinental positioning continued to gain ground, with advertising driving...

  • Page 10
    ... Plaza, Holiday Inn, Holiday Inn Express, Hotel Indigo, Staybridge Suites and Candlewood Suites brands. IHG and the IAHI work together to support and facilitate the continued development of IHG's brands and systems, with specific emphasis during 2007 on the relaunch of the Holiday Inn brand family...

  • Page 11
    ... agenda. In 2007, this strategy was manifested in key programmes designed to attract, retain, and inspire employees across the owned and managed hotel portfolio, corporate offices, and reservation centres. These programmes focus on fulfilling expectations, developing skills and leadership, providing...

  • Page 12
    ... of Ethics and Business Conduct consolidates and clarifies expected standards of behaviour and communicates the ethical values of the Group. The code is applicable to all employees and is available on the Company's website at www.ihg.com/corporate 10 IHG Annual Report and Financial Statements 2007

  • Page 13
    ... on the website, www.ihg.com/responsibility, including IHG's online CR Report and in the Annual Review and Summary Financial Statement 2007. CR priorities Building the base for delivery 2007 developments • Established a steering group of senior IHG executives; • Developed a CR strategy in light...

  • Page 14
    ... discontinued operations. Total gross revenues 12 months ended 31 December 2007 $bn 2006 $bn % change InterContinental Crowne Plaza Holiday Inn Holiday Inn Express Other brands Total 3.7 2.8 6.7 3.5 1.1 17.8 3.0 2.3 6.3 3.0 0.6 15.2 23.3 21.7 6.3 16.7 83.3 17.1 One measure of overall IHG hotel...

  • Page 15
    ... 2007 Rooms Change over 2006 Analysed by brand InterContinental 62 Crowne Plaza 118 Holiday Inn 365 Holiday Inn Express 712 Staybridge Suites 157 Candlewood Suites 207 Hotel Indigo 52 Other 1 Total 1,674 Analysed by ownership type Managed 247 Franchised 1,427 Total 1,674 Global pipeline signings...

  • Page 16
    ... year 12 months ended 31 December 2007 Owned and leased InterContinental Managed InterContinental Crowne Plaza Holiday Inn Staybridge Suites Candlewood Suites Franchised Crowne Plaza Holiday Inn Holiday Inn Express 10.6% 10.8% 7.2% 7.7% 2.0% 3.4% 7.6% 4.7% 6.7% 14 IHG Annual Report and Financial...

  • Page 17
    ... REVIEW Americas pipeline Hotels At 31 December 2007 Change over 2006 2007 Rooms Change over 2006 Analysed by brand InterContinental 8 Crowne Plaza 37 Holiday Inn 265 Holiday Inn Express 614 Staybridge Suites 147 Candlewood Suites 207 Hotel Indigo 52 Total 1,330 Analysed by ownership type Managed...

  • Page 18
    ... of £14m at the InterContinental London Park Lane. EMEA managed revenues increased by 18.3% to £84m and operating profit increased by 16.2% to £43m. The growth was driven by management contracts negotiated in 2006 as part of the hotel disposal programme in Europe and strong underlying trading...

  • Page 19
    ...REVIEW BUSINESS REVIEW EMEA pipeline Hotels At 31 December 2007 Change over 2006 2007 Rooms Change over 2006 Analysed by brand InterContinental 24 Crowne Plaza 25 Holiday Inn 51 Holiday Inn Express 76 Staybridge Suites 10 Other 1 Total 187 Analysed by ownership type Managed 70 Franchised 117 Total...

  • Page 20
    Business review continued Asia Pacific Asia Pacific results 12 months ended 31 December 2007 $m 2006 $m % change Revenue Owned and leased Managed Franchised Total Sterling equivalent $m £m 145 99 16 260 130 131 65 8 204 111 31 39 5 75 (23) 52 29 10.7 52.3 100.0 27.5 17.1 16.1 17.9 20.0 ...

  • Page 21
    .... BUSINESS REVIEW BUSINESS REVIEW Asia Pacific pipeline Hotels At 31 December 2007 Change over 2006 2007 Rooms Change over 2006 Analysed by brand InterContinental 30 Crowne Plaza 56 Holiday Inn 49 Holiday Inn Express 22 Total 157 Analysed by ownership type Managed 156 Franchised 1 Total 157...

  • Page 22
    ...levels following payment of the £709m special dividend in June 2007. Financing costs included £10m (2006 £10m) of interest costs associated with Priority Club Rewards where interest is charged on the accumulated balance of cash received in advance of the redemption points awarded. Financing costs...

  • Page 23
    ... Holiday Inn Disney, Paris for £14m before transaction costs, approximately £2m above book value. Under the agreement, IHG retained a five year franchise contract. 181 18 £3.0bn £2.9bn £0.9bn These transactions support IHG's continued strategy of growing its managed and franchised business...

  • Page 24
    ... the Group system or to secure management contracts. For example, the availability of suitable sites, planning and other local regulations or the availability and affordability of finance may all restrict the supply of suitable hotel development opportunities under franchise or management agreements...

  • Page 25
    ... competition in reservation infrastructure The value of the brands of the Group is partly derived from the ability to drive reservations through its proprietary HolidexPlus reservation system, an electronic booking and delivery channel directly linked to travel agents, hotels and internet networks...

  • Page 26
    ... land or locations for the development of new hotels. If the availability of suitable sites becomes limited, this could adversely affect its results of operations. The Group is exposed to risks related to corporate responsibility The reputation of the Group and the value of its brands are influenced...

  • Page 27
    ...Performance graph Contracts of service Policy regarding pensions Policy on non-executive remuneration Directors' emoluments Short Term Deferred Incentive Plan Long Term Incentive Plan Share options Directors' shareholdings Directors' pensions THE BOARD, SENIOR MANAGEMENT AND THE BOARD, SENIOR THEIR...

  • Page 28
    ..., Asia Pacific Region and Vice President, Eastman Kodak Company. Also a Non-Executive Director of AB Volvo. Prior to joining Kodak in 1997 she was, for 15 years, a diplomat with the US Foreign Service in Hong Kong and Beijing. US citizen. Age 59. 26 IHG Annual Report and Financial Statements 2007

  • Page 29
    ... the Group in 1999. Following appointments as Executive Vice President, Global Brand Services in 2003, and as Chief Marketing Officer in 2005, he was appointed President, Asia Pacific in November 2007. Now has responsibility for the business development and performance of all the hotel brands and...

  • Page 30
    ...31 December 2007. Certain information required for disclosure in this report is provided in other appropriate sections of the full Annual Report and Financial Statements 2007. These include the Business Review, the Corporate Governance and Remuneration Reports, and the Group financial statements and...

  • Page 31
    ... ended 31 December 2007. When the managed and franchised estate is included, approximately 315,000 people work for IHG's brands across the globe. Further information regarding the Group's employment policies, including its obligations under equal opportunities legislation, its commitment to employee...

  • Page 32
    ... operation of the monitoring processes set out above to support the Board's annual statement on internal control; and • reports from the external auditor. The Board has conducted a review of the effectiveness of the system of internal control during the year ended 31 December 2007, taking account...

  • Page 33
    ...in the Combined Code. The updating of all Directors' skills and knowledge is a progressive exercise. This is accomplished at Board and strategy meetings, through presentations and visits to hotels and other business premises, and through contact with employees at all levels. Corporate governance 31

  • Page 34
    ... into the Group's business. During 2007, visits to operating premises, including hotels across the brand portfolio, were undertaken. In addition, the training requirements of the Non-Executive Directors are kept under review. Company Secretary All Directors have access to the advice and services of...

  • Page 35
    ..., chaired by the Group's Financial Controller, and comprising the Company Secretary and other senior executives, reports to the Chief Executive and the Finance Director, and to the Audit Committee. Its duties include ensuring that information required to be disclosed in reports pursuant to UK and US...

  • Page 36
    .../investors under corporate governance/committees or from the Company Secretary's office on request. The terms and conditions of appointment of Non-Executive Directors are also available on request. Richard Winter Company Secretary 18 February 2008 34 IHG Annual Report and Financial Statements 2007

  • Page 37
    ... chartered management accountant and until April 2004 was Chief Financial Officer of Cadbury Schweppes plc. He also chairs the Audit Committee of another UK FTSE 100 company. The Committee's principal responsibilities are to: • review the Group's public statements on internal control and corporate...

  • Page 38
    ... on tax withholding obligations in relation to employee share plans. Towers Perrin, an external consultancy, also advised the Committee on reward structures and levels applicable in the markets relevant to the 36 IHG Annual Report and Financial Statements 2007 2 Policy on remuneration of Executive...

  • Page 39
    ... policy applying to other executives in their geographic location. In assessing levels of pay and benefits, IHG analyses those offered by different groups of comparator companies. These groups are chosen having regard to participants': • size - turnover, profits and the number of people employed...

  • Page 40
    ... sales required to meet personal tax liabilities) from the Group's remuneration plans while the value of their holding is less than twice their base salary or three times in the case of the Chief Executive. 2.4 Policy on external appointments The Company recognises that its Directors may be invited...

  • Page 41
    ... of the Group on the same terms as their original service agreements. 2 Richard Hartman retired in September 2007, at which point his rolling contract with 12 months' notice expired. 2.7 Policy regarding pensions Andrew Cosslett, Richard Solomons and other senior UK-based employees participate on...

  • Page 42
    ... of these roles. Non-Executive Directors' fee levels were last established by the Board on 1 January 2007. Having taken into account the global nature, scale and complexity of the Group's business, and current competitive fee levels, the following annual fee rates apply: Role Chairman Senior...

  • Page 43
    5 Long-term reward Short Term Deferred Incentive Plan (STDIP) - now called the Annual Bonus Plan Messrs Cosslett, Hartman, Porter and Solomons participated in the STDIP during the year ended 31 December 2007, and are expected to receive an award on 25 February 2008. Directors' pre-tax interests ...

  • Page 44
    ...'s award was pro-rated to reflect his contractual service during the applicable performance period. 8 The Company finished in fourth place in the TSR group and achieved CAGR of 3.1%. Accordingly, 55.3% of the award will vest on 20 February 2008. 42 IHG Annual Report and Financial Statements 2007

  • Page 45
    ... Plan. Ordinary shares under option Options held at 1 Jan 2007 Granted during the year Lapsed during the year Exercised during the year Options held at 31 Dec 2007 Weighted average option price (p) Directors Andrew Cosslett B Total Richard Hartman B Total Stevan Porter A B Total Richard Solomons...

  • Page 46
    ... in the InterContinental Hotels Group International Savings and Retirement Plan (IS&RP), which is a Jersey-based defined contribution plan to which the Company contributes. Stevan Porter has retirement benefits provided via the 401(k) Retirement Plan for employees of Six Continents Hotels Inc. (401...

  • Page 47
    ...'s report to the members Group income statement Group statement of recognised income and expense Group cash flow statement Group balance sheet Corporate information and accounting policies Notes to the Group financial statements 1 Exchange rates 2 Segmental information 3 Staff costs and Directors...

  • Page 48
    ... and cash flows of the Group for that period. The Directors consider that in preparing the Group financial statements on pages 48 to 88 inclusive, the Group has used appropriate accounting policies, applied in a consistent manner and supported by reasonable and prudent judgements and estimates, and...

  • Page 49
    ..., Group cash flow statement, Group balance sheet, corporate information and accounting policies and the related notes 1 to 35. These Group financial statements have been prepared under the accounting policies set out therein. We have reported separately on the parent company financial statements of...

  • Page 50
    ... £m 2006 For the year ended 31 December 2007 Note 2 Total £m Total £m Revenue Cost of sales Administrative expenses Other operating income and expenses Depreciation and amortisation Operating profit Financial income Financial expenses Profit before tax Tax Profit for the year from continuing...

  • Page 51
    GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE For the year ended 31 December 2007 2007 £m 2006 £m Income and expense recognised directly in equity Gains on valuation of available-for-sale assets (Losses)/gains on cash flow hedges Exchange differences on retranslation of foreign operations ...

  • Page 52
    ... GROUP CASH FLOW STATEMENT For the year ended 31 December 2007 2007 £m 2006 £m Profit for the year Adjustments for: Net financial expense Income tax charge/(credit) Exceptional operating items before depreciation Gain on disposal of assets, net of tax Depreciation and amortisation Equity-settled...

  • Page 53
    ... STATEMENTS GROUP FINANCIAL STATEMENTS 28 28 28 28 28 28 28 29 81 5 (41) (1,528) 19 6 1,504 46 3 49 Signed on behalf of the Board Richard Solomons 18 February 2008 Notes on pages 52 to 88 form an integral part of these financial statements. Group cash flow statement and Group balance sheet...

  • Page 54
    ... on the Group's financial statements. The principal accounting policies of the Group are set out below. Basis of consolidation The Group financial statements comprise the financial statements of the parent company and entities controlled by the Company. All inter-company balances and transactions...

  • Page 55
    ... other operating income and expenses. GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS Financial assets are tested for impairment at each balance sheet date. If an available-for-sale financial asset is impaired, the difference between original cost and fair value is transferred from equity to...

  • Page 56
    ... the balance sheet date or where they are drawn on a facility with more than 12 months to expiry. Retirement benefits Defined contribution plans Payments to defined contribution schemes are charged to the income statement as they fall due. Defined benefit plans Plan assets are measured at fair value...

  • Page 57
    ... under long-term contracts with the hotel owner. The Group charges franchise royalty fees as a percentage of room revenue. Revenue is recognised when earned and realised or realisable under the terms of the agreement. Share-based payments The cost of equity-settled transactions with employees is...

  • Page 58
    ... testing requires an estimate of future cash flows and the choice of a suitable discount rate and, in the case of hotels, an assessment of recoverable amount based on comparable market transactions. Retirement and other post-employment benefits - the cost of defined benefit pension plans and...

  • Page 59
    ... region into three distinct business models which offer different growth, return, risk and reward opportunities: Franchised Where Group companies neither own nor manage the hotel, but license the use of a Group brand and provide access to reservation systems, loyalty schemes and know-how. The...

  • Page 60
    Notes to the Group financial statements continued 2 SEGMENTAL INFORMATION (CONTINUED) Year ended 31 December 2007 Americas £m EMEA £m Asia Pacific £m Central £m Group £m Revenue Owned and leased Managed Franchised Central Continuing operations Discontinued operations - owned and leased 128 78...

  • Page 61
    2 SEGMENTAL INFORMATION (CONTINUED) Year ended 31 December 2007 Americas £m EMEA £m Asia Pacific £m Central £m Group £m Assets and liabilities Segment assets Non-current assets classified as held for sale Unallocated assets: Current tax receivable Cash and cash equivalents Total assets Segment...

  • Page 62
    ...(145) 200 31 231 27 258 Group £m Operating profit Net finance costs Profit before tax Tax Profit after tax Gain on disposal of assets, net of tax Profit for the year 227 (11) 216 53 269 - 269 31 - 31 (12) 19 117 136 258 (11) 247 41 288 117 405 60 IHG Annual Report and Financial Statements 2007

  • Page 63
    2 SEGMENTAL INFORMATION (CONTINUED) Year ended 31 December 2006 Americas £m EMEA £m Asia Pacific £m Central £m Group £m Assets and liabilities Segment assets Non-current assets classified as held for sale Unallocated assets: Current tax receivable Cash and cash equivalents Total assets Segment...

  • Page 64
    Notes to the Group financial statements continued 3 STAFF COSTS AND DIRECTORS' EMOLUMENTS 2007 £m 2006 £m Staff Costs: Wages and salaries Social security costs Pension and other post-retirement benefits: Defined benefit plans (note 24) Defined contribution plans 292 31 4 12 339 2007 301 38 6 11...

  • Page 65
    ... using the effective interest rate method. Included within interest expense is £10m (2006 £10m) payable to the Group's loyalty programme relating to interest on the accumulated balance of cash received in advance of the redemption of points awarded. Notes to the Group financial statements 63

  • Page 66
    ... unrecognised losses. 2007 % 2006 % Reconciliation of tax charge/(credit) on total profit, including gain on disposal of assets UK corporation tax at standard rate Permanent differences Net effect of different rates of tax in overseas businesses Effect of changes in tax rates Benefit of tax...

  • Page 67
    ... meaningful comparison of the Group's performance. GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS 2007 Continuing operations Total Continuing operations 2006 Total Basic earnings per share Profit available for equity holders (£m) Basic weighted average number of ordinary shares (millions...

  • Page 68
    ... review of hotel assets based on current market conditions. No impairment charge, or subsequent reversal, was required at 31 December 2006. The carrying value of land and buildings held under finance leases at 31 December 2007 was £104m (2006 £93m). 66 IHG Annual Report and Financial Statements...

  • Page 69
    ... and equipment Net working capital Cash and cash equivalents Loans and other borrowings Deferred tax Minority equity interest Group's share of net assets disposed of Consideration Current year disposals: Cash consideration, net of costs paid Deferred consideration Management contract value Other Net...

  • Page 70
    ... risks specific to the CGUs. Growth rates are based on management expectations and industry growth forecasts. The growth rates used to determine cash flows beyond five years do not exceed the average long-term growth rate for the relevant markets. 68 IHG Annual Report and Financial Statements 2007

  • Page 71
    ... period, the terminal value of future cash flows is calculated based on a perpetual growth rate of approximately 2.7% (2006 3.0%). The rate used to discount the forecast cash flows is 10.0% (2006 10.5%). Asia Pacific managed and franchised operations The Group prepares cash flow forecasts derived...

  • Page 72
    ..., including those within trade and other payables, are held on the balance sheet at fair value. Fair value is estimated using discounted future cash flows taking into consideration interest and exchange rates prevailing at the balance sheet date. 70 IHG Annual Report and Financial Statements 2007

  • Page 73
    ...and other receivables approximates their carrying value. The maximum exposure to credit risk for trade and other receivables, excluding prepayments, at the balance sheet date by geographic region is: 2007 £m 2006 £m Americas Europe, Middle East and Africa Asia Pacific The aging of trade and other...

  • Page 74
    ... during the year is as follows: 2007 £m 2006 £m At 1 January Provided Amounts written off Exchange and other adjustments At 31 December (43) (12) 6 1 (48) (47) (16) 15 5 (43) 18 CASH AND CASH EQUIVALENTS 2007 £m 2006 £m Cash at bank and in hand Short-term deposits 26 26 52 30 149 179...

  • Page 75
    ... and forward rate agreements. One of the primary objectives of the Group's treasury risk management policy is to mitigate the adverse impact of movements in interest rates and foreign exchange rates. Market risk exposure The US dollar is the predominant currency of the Group's revenue and cash flows...

  • Page 76
    ... share capital and reserves. The structure is managed to minimise the Group's cost of capital, to provide ongoing returns 74 IHG Annual Report and Financial Statements 2007 to shareholders and to service debt obligations, whilst maintaining maximum operational flexibility. Surplus cash is either...

  • Page 77
    .... 2007 £m 2006 £m Equity securities available-for-sale Loans and receivables: Cash and cash equivalents Other financial assets Trade and other receivables, excluding prepayments Derivatives 46 52 56 209 - 363 57 179 48 214 4 502 GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS Interest...

  • Page 78
    ... value of cash and cash equivalents approximates book value due to the short maturity of the investments and deposits. Equity securities available-for-sale and derivatives are held on the balance sheet at fair value as set out in note 15. The fair value of other financial assets approximates book...

  • Page 79
    ...defined benefit plans are: Pension plans UK 2007 £m 2006 £m 2007 £m US and other 2006 £m Post-employment benefits 2007 £m 2006 £m 2007 £m GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS Total 2006 £m Recognised in administrative expenses Current service cost Interest cost on benefit...

  • Page 80
    ... benefit pension scheme in Hong Kong. Assumptions The principal financial assumptions used by the actuaries to determine the benefit obligation are: Pension plans UK 2007 % 2006 % 2007 % US 2006 % Post-employment benefits 2007 % 2006 % Wages and salaries increases Pensions increases Discount rate...

  • Page 81
    ... The value of plan assets is sensitive to market conditions, particularly equity values. Changes in assumptions used for determining retirement benefit costs and obligations may have a material impact on the income statement and the balance sheet. The main assumptions are the discount rate, the rate...

  • Page 82
    ... Group financial statements continued 24 RETIREMENTS BENEFITS (CONTINUED) The combined assets of the principal plans and expected rate of return are: 2007 Long-term rate of return expected % Long-term rate of return expected % 2006 Value £m Value £m UK pension plans Equities Bonds Other Total...

  • Page 83
    ... terms. The plan, when operational, will comply with Section 423 of the US Internal Revenue Code of 1986. The option to purchase ADSs may be offered only to employees of designated subsidiary companies. The option price may not be less than the lesser of either 85% of the fair market value of an ADS...

  • Page 84
    ... financial statements continued 25 SHARE-BASED PAYMENTS (CONTINUED) The Group recognised a cost of £30m (2006 £18m) in operating profit related to equity-settled share-based payment transactions during the year. The aggregate consideration in respect of ordinary shares issued under option schemes...

  • Page 85
    ... Lapsed or cancelled Outstanding at 31 December 2007 Fair value of awards granted during the year 2007 2006 Weighted average remaining contract life (years) At 31 December 2007 At 31 December 2006 The above awards do not vest until the performance conditions have been met. Sharesave Plan Number of...

  • Page 86
    ... to the Group financial statements continued 25 SHARE-BASED PAYMENTS (CONTINUED) Summarised information about options outstanding at 31 December 2007 under the share option schemes is as follows: Options outstanding Weighted average remaining contract life years Weighted average option price pence...

  • Page 87
    ... Share capital consolidation Issued under option schemes Repurchased and cancelled under repurchase programmes At 31 December 2007 a b c b 433 (53) 4 (28) 356 (57) 4 (8) 295 43 - 1 (3) 41 - - (1) 40 GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS a On 1 June 2006, shareholders approved...

  • Page 88
    .... The fair value of cash flow hedging instruments outstanding at 31 December 2007 was a £2m liability (2006 £1m asset). Currency translation reserve This reserve records the movement in exchange differences arising from the translation of the financial statements of foreign operations and exchange...

  • Page 89
    ... FINANCIAL STATEMENTS 31 CAPITAL AND OTHER COMMITMENTS 2007 £m 2006 £m Contracts placed for expenditure on property, plant and equipment not provided for in the financial statements 10 24 On 24 October 2007, the Group announced a worldwide relaunch of its Holiday Inn brand family. In support...

  • Page 90
    Notes to the Group financial statements continued 33 RELATED PARTY DISCLOSURES Key management personnel comprises the Board and Executive Committee. Total compensation of key management personnel Short-term employment benefits Post-employment benefits Equity compensation benefits 2007 £m 2006 £m ...

  • Page 91
    ... supporting the parent company balance sheet for 2007. 90 91 92 Parent company financial statements Statement of Directors' responsibilities Independent auditor's report to the members Parent company balance sheet Notes to the parent company financial statements 1 Accounting policies 2 Employees...

  • Page 92
    ... relation to the Company financial statements. The Directors are responsible for preparing the parent company financial statements and Remuneration Report in accordance with applicable United Kingdom law and United Kingdom Generally Accepted Accounting Practice (UK GAAP). The Directors are required...

  • Page 93
    ... Hotels Group PLC for the year ended 31 December 2007 which comprise the Company balance sheet and related notes 1 to 10. These parent company financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the Remuneration Report...

  • Page 94
    ...Called up share capital Share premium account Capital redemption reserve Profit and loss account Equity shareholders' funds 3 2,767 207 (2,631) (2,424) - 343 2,767 29 (1,624) (1,595) (102) 1,070 41 25 4 1,000 1,070 4 5 6 7 8 8 8 40 41 5 257 343 Signed on behalf of the Board Richard Solomons...

  • Page 95
    ... is more than 12 months from the balance sheet date or where they are drawn on a facility with more than 12 months to expiry. 2 EMPLOYEES AND DIRECTORS 2007 2006 Average number of employees (Non-Executive Directors) 7 2007 £m 8 2006 £m Staff costs 1 1 Detailed information on the emoluments...

  • Page 96
    ...the Company at the Annual General Meeting on 1 June 2007 to purchase its own shares was still valid at 31 December 2007. A resolution to renew the authority will be put to shareholders at the Annual General Meeting on 30 May 2008. 8 MOVEMENTS IN RESERVES Share premium account £m Capital redemption...

  • Page 97
    ... a glossary of terms used in the Annual Report and Financial Statements 2007 and some analyses of our share ownership at the end of 2007. We also provide a range of information designed to be helpful to shareholders, and contact details for the Company and for a number of service providers. 96 97...

  • Page 98
    ... Subsidiary undertaking System size Total gross revenue Exceptional items Extended-stay hotel Total Shareholder Return (TSR) Franchisee Franchisor Goodwill UK GAAP Weighted average exchange rate Working capital Hedging Holidex fees 96 IHG Annual Report and Financial Statements 2007

  • Page 99
    ... December 2007 by type Number of shareholders Percentage of total shareholders Ordinary shares Percentage of issued share capital Category of holdings Private individuals Nominee companies Limited and public limited companies Other corporate bodies Pension funds, insurance companies and banks Total...

  • Page 100
    ... associated with the special dividend paid in June 2007. Dividend Reinvestment Plan The Company offers a Dividend Reinvestment Plan (DRIP). This provides the opportunity for shareholders to use their cash dividends to buy more IHG shares. For further information about the DRIP, please contact...

  • Page 101
    ... the US and files with the SEC an Annual Report on Form 20-F. The Form 20-F can be found on the Company's website www.ihg.com/investors under shareholder services/adr or by visiting the SEC's website at www.sec.gov/edgar.shtml Financial calendar Payment of special interim dividend of 200p per share...

  • Page 102
    ... Auditors Ernst & Young LLP Investment bankers Citi Solicitors Linklaters Telephone calls to these numbers are currently charged at 8p per minute if using a BT landline. Other telephone service providers may charge different rates. 100 IHG Annual Report and Financial Statements 2007

  • Page 103
    ...risks associated with funding the defined benefits under its pension plans. The main factors that could affect the business and financial results are described in the Business Review of the Annual Report and Financial Statements 2007 and also in any Annual Report of InterContinental Hotels Group PLC...

  • Page 104
    InterContinental Hotels Group PLC 67 Alma Road, Windsor, Berkshire SL4 3HD Telephone +44 (0) 1753 410 100 Fax +44 (0) 1753 410 101 make a booking at www.ihg.com