Holiday Inn 2013 Annual Report Download

Download and view the complete annual report

Please find the complete 2013 Holiday Inn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 192

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192

Annual Report
and Form 20 -F 2013

Table of contents

  • Page 1
    Annual Report and Form 20-F 2013

  • Page 2
    ... William Bass opened a brewery in Burton-on-Trent in the UK. Bass made its move into the hotel industry in 1988, buying Holiday Inn International. By 2003 the business had changed from domestic brewer to international hospitality retailer: InterContinental Hotels Group PLC. 1946 InterContinental...

  • Page 3
    ...6 Chief Executive Officer's review Strategic Report: 10 Industry overview 12 Industry performance in 2013 14 IHG at a glance 16 Our business model 17 Our preferred brands 18 Our strategy for high-quality growth 20 Winning Model 28 Targeted Portfolio 30 Disciplined Execution 34 Risk management 38 Key...

  • Page 4
    ...separate company listed on the LSE and NYSE. 1983 Crowne Plaza® Hotels & Resorts Launch of the Crowne Plaza brand, focused on business travellers. 1965 Holidex® Launch of HOLIDEX, the world's first computerised hotel reservation system - the first programme to connect directly with travel agents...

  • Page 5
    ... programme as IHG Rewards Club, offering enhanced benefits for members, including free internet access across all our hotels globally. GOVERNANCE GROUP FINANCIAL STATEMENTS 2006 IHG® Academy Launch of IHG Academy, a pioneering collaboration between IHG hotels and offices and education providers...

  • Page 6
    ... helping to set the agenda for the business to succeed both in the short and long term. This will continue to be a priority in 2014 and beyond. Reflecting these commitments, this year, we announced a number changes to the Board. Fee revenue†Driven by 3.8% of RevPAR growth and 1.6% net IHG System...

  • Page 7
    ... consideration the new requirements of the UK Corporate Governance Code and changes to UK legislation, providing all reporting information in a single report. we have worked hard to present both the policy and the reward paid to our Board in an open and accessible way, as well as complying with the...

  • Page 8
    ...their points than IHG, and from July 2013, we also added new benefits, including being the first hotel company to offer free internet to members in all our hotels globally. +2%: $21.6bn†Total gross revenue in IHG's System Revenue up 4% to $1,903m* 6.4m New IHG Rewards Club members added (total...

  • Page 9
    ...into five distinct steps: Dream, Plan, Book, Travel and Share. Our strategy is led by our multi-lingual websites and mobile apps, call centres, global sales force, strong brand portfolio and 77.4 million member loyalty programme. These provide compelling experiences that allow guests to use the most...

  • Page 10
    ... to stay; he opened the first Holiday Inn hotel in Memphis, Tennessee in 1952. Today, the brand offers the perfect mix of business and pleasure for today's comfort-seeking traveller by providing an inviting, familiar atmosphere where guests can relax and enjoy themselves. 1991 Holiday Inn Express...

  • Page 11
    ... Our business model Our preferred brands Our strategy for high-quality growth Winning Model Targeted Portfolio Disciplined Execution Risk management Key performance indicators (KPIs) Performance PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION 10 properties; 3,701 rooms open 1 property...

  • Page 12
    .... In contrast, for hotel brand owners, a managed or franchised model enables quicker rooms growth due to the lower capital investment, but this requires strong relationships with third-party hotel owners. IHG's business model is set out on page 16. 10 IHG Annual Report and Form 20-F 2013 2012

  • Page 13
    ...in room rate and the supply of rooms. The industry is also impacted in the short-term by local market economic or political factors. OVERVIEW STRATEGIC REPORT Long-term drivers and global trends In the long term, growth in the hotel industry is driven by a number of trends: Economic The travel and...

  • Page 14
    ... by occupancy growth, although average daily rate grew marginally (0.2%). The UK provinces, after a relatively protracted period of weakness, performed particularly well. London's RevPAR growth was positive in 2013, despite an unprecedented level of new rooms and 2012 figures elevated by the London...

  • Page 15
    ... Holiday Inn. Information on our preferred brands is set out on pages 17 and 20. PARENT COMPANY FINANCIAL STATEMENTS IHG pipeline As at 31 December 2013, we had 180,461 rooms (1,120 hotels) in the development pipeline (hotels in planning and under construction but not yet opened; a contract...

  • Page 16
    ... in cash flows and profits over the longer term. We do this by staying focused on our Targeted Portfolio and building preferred brands, driven by a deep understanding of guests' needs. IHG's Winning Model, combined with a Targeted Portfolio underpinned by Disciplined Execution, will drive superior...

  • Page 17
    OVERVIEW Europe Revenue 2013 2012 $400m†$436m Greater China Revenue 2013 $236m $230m STRATEGIC REPORT Operating profit before exceptional items 2013 2012 2012 $105m†$112m Operating profit before exceptional items 2013 2012 $82m $81m Group GOVERNANCE $1,903m†Total revenue $668m...

  • Page 18
    ... from the sale of IHG Rewards Club points (see page 50 for further information). The System Fund is managed by IHG for the benefit of hotels in the IHG System with the objective of driving revenues for the hotels. Total income for the System Fund in 2013 was $1.35 billion (2012: $1.25 billion...

  • Page 19
    ...GROUP FINANCIAL STATEMENTS Crowne Plaza® Hotels & Resorts 391 hotels open 94 hotels in the pipeline The brand supports career-focused travellers, putting them in control of their travel experience so they can be on top of their work and at the top of their game. Holiday Inn Express® 2,258 hotels...

  • Page 20
    ... in cash flows and profits over the longer term. We do this by staying focused on our Targeted Portfolio and building preferred brands, driven by a deep understanding of guests' needs. IHG's Winning Model, combined with a Targeted Portfolio underpinned by Disciplined Execution, will drive superior...

  • Page 21
    ... of the market where our scale and revenue delivery systems confer greatest benefits. See page 29. STRATEGIC REPORT GOVERNANCE Highest opportunity segments Managed and franchised model Managed and franchised model We focus our business model on franchising and managing hotels, thereby enabling...

  • Page 22
    ...wanting to stay with us and pay more to do so thereby driving RevPAR and delivering better returns on investment for our owners. For IHG, a hotel brand is a promise of a consistent, relevant and differentiated hospitality experience: • our guests focus on this from a location, product and service...

  • Page 23
    ...measure for our annual incentive plan - see pages 74 to 97. GOVERNANCE GROUP FINANCIAL STATEMENTS Our people Given our franchised and managed business model, IHG does not employ all those who work in IHG hotels. Who are our employees? We employ all those working at our corporate offices and at our...

  • Page 24
    ... tailored specifically for our brands, to assist hotel management and human resources teams hire, train, involve and recognise colleagues. They work to help increase employee retention, performance, guest satisfaction, drive efficiencies and increase revenue for our owners. In 2013, we launched an...

  • Page 25
    ...in 2013, including: • the Holiday Inn brand won the Best Mid-Market Hotel Brand in the World and Asia Pacific by the readers of Business Traveller for the 13th successive year in 2013; • the Holiday Inn brand was ranked Highest in Guest Satisfaction Among Mid-Scale Full Service Hotel Chains in...

  • Page 26
    ... way, the service also allows IHG to drive a low cost of sale without compromising the quality of the channel. IHG® Rewards Club is the world's first and largest hotel loyalty programme, with 77.4 million members globally. It offers industry-leading benefits and increased opportunity for points...

  • Page 27
    ... to help potential guests and IHG Rewards Club members with queries they may have in their travel planning and to make bookings. In 2013, our global call centres answered more than 21 million calls, and accounted for almost $2 billion total rooms revenue to our hotels. Travel agents IHG works with...

  • Page 28
    ... deliver the brand experience to drive results and maximise the profitability of our hotels. At our 2013 annual Owners Conference in Las Vegas, we had over 5,500 owners and General Managers attending and we took the opportunity to inform these key stakeholders about our future strategy and receive...

  • Page 29
    ... for doing business the right way. As the 2014 IHG Owners Association Chairman, I am proud to note that our new ways of working have reaped solid results. Together, we launched a new professional development programme for existing and new Holiday Inn brand family General Managers. Our officers and...

  • Page 30
    ... through Holiday Inn and Holiday Inn Express, opening a total of 818 rooms (5 hotels) and signing 1,404 rooms (9 hotels) into our pipeline. Accordingly, as at 31 December 2013, we had a total of 3,152 open rooms (18 hotels) and 9,088 rooms (45 hotels) in the pipeline. 28 IHG Annual Report and...

  • Page 31
    ... that to be successful in the future, a brand needs to provide a global, local and personal experience to build trust - see page 20 and the 2014 IHG Trends Report available at www.ihgplc.com/trends_report. RevPAR and Guest HeartBeat are KPIs - see pages 38 and 39. GOVERNANCE Guest occasion We have...

  • Page 32
    ... the Philippines supports global reservations, sales and guest relations and loyalty marketing; • over 500 business support roles have been moved to our Business Service Centre in Gurgaon, India, providing centralised accounting services for IHG corporate offices and owned and managed hotels; and...

  • Page 33
    ... helps us deliver profitable growth and create shared value, thereby ensuring that we are preferred by guests, employees and owners in the long term. This is why, for us, our commitment to responsible business practices is an essential part of our Disciplined Execution and underpins our strategy...

  • Page 34
    ...community, human rights, competition, anti-bribery, data privacy and crisis management policies and brand safety standards. Code of Conduct In 2013, we refreshed our Code of Conduct, which is applicable to all Directors, officers and employees and available on the Company's website at www.ihgplc.com...

  • Page 35
    ...31.2 516,586 1,638,160 2,154,746 64.5 1,342,670 3,241,159 4,583,829 32 Global - corporate offices and franchised, managed, owned and leased hotels STRATEGIC REPORT Reporting period commencing on 1 October and ending on 30 September. Global greenhouse gas (GHG) emissions Scope We are required to...

  • Page 36
    ...risk owners and the Global Risk Management team to develop, execute and monitor detailed risk plans and strategies for key risk exposures. The Risk Working Group (RWG) provides a long-term, global and strategic perspective to the risks faced by IHG. Its mandate is to improve cross-functional working...

  • Page 37
    ... fe Hote Leisure Safety l Guest Safety Staff Safety Food Safety Risk Profile Policy & Standards PARENT COMPANY FINANCIAL STATEMENTS Ma Review & Report e nag Ri Ways of Working sk Risk Financing Operate & Control Training & Comms ADDITIONAL INFORMATION Hotels are assessed by various...

  • Page 38
    ... on our service delivery, financial performance and longer-term growth. Channel management and technology platforms Travellers now have access to far more information through comparison websites, search engines and online travel agents. Booking channels and technological systems are a key part of...

  • Page 39
    ... aims to ensure guest and employee safety and the security of hotels and office buildings. IHG has also put in place a crisis management programme to ensure our hotels and corporate offices are prepared for unexpected or unknown events. GOVERNANCE Reputation and brand protection IHG recognises the...

  • Page 40
    ... for all of the brands, in 2013, we refreshed the Holiday Inn Express Standards' manual ready for launch in January 2014. • Launched two General Manager training programmes to assist with General Manager development to deliver on the brand promise (see page 26). 38 IHG Annual Report and Form 20...

  • Page 41
    ... plan (Annual Performance Plan) 2 Long-term incentive plan (Long Term Incentive Plan) For more information see Directors' Remuneration Report pages 74 to 97. Disciplined Execution KPIs Fee margins1 2013 2012 2011 2013 progress • Group fee margins of 43.2%, up 1.3 percentage points on 2012...

  • Page 42
    ... as reported results, excluding those from the InterContinental London Park Lane whilst under IHG ownership, results from managed leased hotels, together with the benefit of $46m liquidated damages receipts in 2013 and a $3m liquidated damages receipt in 2012, revenue and operating profit increased...

  • Page 43
    ... rooms) (2012: 10 Holiday Inn Club Vacations (3,701 rooms) and 37 Holiday Inn Resort properties (8,806 rooms)). PARENT COMPANY FINANCIAL STATEMENTS During 2013, the global IHG System (the number of hotels and rooms which are franchised, managed, owned or leased by the Group) increased by 95 hotels...

  • Page 44
    ... business with pleasure' and 'family time' guest occasion segments; • continue to grow the Holiday Inn Express brand through innovations which meet the needs of the 'smart traveller' target guest; • continue to execute the multi-year programme to strengthen the Crowne Plaza Hotels & Resorts...

  • Page 45
    ... 2013 Hotels Change over 2012 2013 Rooms Change over 2012 STRATEGIC REPORT Analysed by brand InterContinental Crowne Plaza Holiday Inn1 Holiday Inn Express Staybridge Suites Candlewood Suites Hotel Indigo EVEN Hotels Other Total Analysed by ownership type Franchised Managed Owned and leased Total...

  • Page 46
    ... revenue and sales tools, and driving our commercial delivery and people platforms. Highlights for the year ended 31 December 2013 In Europe, the largest proportion of rooms is operated under the franchise business model primarily in the upper midscale segment (Holiday Inn and Holiday Inn Express...

  • Page 47
    ... At 31 December 2013 Hotels Change over 2012 2013 Rooms Change over 2012 GOVERNANCE GROUP FINANCIAL STATEMENTS Analysed by brand InterContinental Crowne Plaza Holiday Inn Holiday Inn Express Staybridge Suites Hotel Indigo Total Analysed by ownership type Franchised Managed Total 2 12 35 43...

  • Page 48
    ... Execute our strategic plans to strengthen our brands and increase our revenue share through operational excellence and outperformance over the next three years. AMEA results 2013 $m 2012 $m 12 months ended 31 December 2013 vs 2012 % change 2011 $m 2012 vs 2011 % change Revenue Franchised Managed...

  • Page 49
    .... AMEA pipeline At 31 December 2013 Hotels Change over 2012 2013 Rooms Change over 2012 STRATEGIC REPORT Analysed by brand InterContinental Crowne Plaza Holiday Inn1 Holiday Inn Express Staybridge Suites Hotel Indigo Total Analysed by ownership type Franchised Managed Total 1 21 14 49 39 6 8 137...

  • Page 50
    ... 2013 vs 2012 % change 2011 $m 2012 vs 2011 % change Maximise scale and strength and establish multi-segment local operating expertise to drive margin and expand our strong portfolio of brands over the next three years. Revenue Franchised Managed Owned and leased Total Percentage of Group Revenue...

  • Page 51
    ... China System in 2013. Greater China pipeline At 31 December 2013 Hotels Change over 2012 2013 Rooms Change over 2012 STRATEGIC REPORT Analysed by brand InterContinental Crowne Plaza Holiday Inn1 Holiday Inn Express Hotel Indigo HUALUXE Other Total Analysed by ownership type Managed Total 1 22...

  • Page 52
    ... December 2012, System Fund income increased by 8.4% to $1,250m primarily as a result of growth in hotel room revenues. The increase in proceeds from the sale of IHG Rewards Club points mainly reflects the strong performance of co-brand credit card schemes. 50 IHG Annual Report and Form 20-F 2013

  • Page 53
    ... included $166m from the sale of the InterContinental London Park Lane on 1 May 2013 and $6m in relation to the sale of a hotel by an associate in The Americas. Exceptional charges included $147m arising from the buy-in of the Group's UK funded pension benefit obligations with the insurer, Rothesay...

  • Page 54
    .... 2013 $m 2012 $m Facilities at 31 December Committed Uncommitted Total 1,074 80 1,154 1,075 96 1,171 The Group had net liabilities of $74m at 31 December 2013 reflecting that its brands are not recognised in the Group statement of financial position. At the end of 2013 the Group was trading...

  • Page 55
    ...over the lease term. 4 Largely relates to US pension obligations. As explained in note 26 to the Group Financial Statements, the Group completed a buy-in of its UK defined benefit obligations on 15 August 2013. As a result of this transaction, the defined benefit section of the UK plan is now fully...

  • Page 56
    ... to strengthen the brand, five guest experience enhancements are currently being tested in selected hotels, including IHG Anywhere Check in, a mobile check-in service for IHG Rewards Club members. 391 properties; 108,891 rooms open 94 properties in the pipeline 54 IHG Annual Report and Form 20...

  • Page 57
    ... Remuneration Accountability Relations with shareholders Directors' Report Directors' Remuneration Report Directors' Remuneration Policy Annual Report on Directors' Remuneration Implementation of Remuneration Policy in 2014 PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Governance 55

  • Page 58
    ... in 2013 by an external facilitator will inform further enhancements to our Board processes. As a dual listed company with a secondary listing on the New York Stock Exchange (NYSE), we are required to file both an Annual Report in the UK, which complies with the UK Corporate Governance Code (Code...

  • Page 59
    ... a number of senior level finance positions including Head of Investor Relations, Head of Global Corporate Finance and Financial Planning & Tax and Head of Hotel Development, Europe. Paul also acted as Interim Chief Executive Officer of the Europe, Middle East and Africa regions. Board contribution...

  • Page 60
    ...range of senior positions throughout his career of over 35 years with American Express. Board contribution: Jonathan has over 25 years' experience working in the financial and branded sectors and is a member of the Remuneration Committee. Other appointments: Currently a Non-Executive Director of Yum...

  • Page 61
    ...Executive Director of AB Volvo, a transportation related products and services company, ABB Ltd, a global leader in power and automation technologies, and Samsonite International S.A., a travel luggage company. GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS Committee membership key...

  • Page 62
    ...: Kenneth joined IHG as Chief Executive, Greater China in April 2013. Prior to joining the Group, he worked for Diageo plc, one of the UK's leading branded companies, for over 19 years and has held senior management positions including serving as Executive Managing Director of Diageo Greater China...

  • Page 63
    ... Reports. There are also three management committees, which together provide a sound governance framework, see page 65. Key responsibilities Board • Leading the strategic direction and long-term objectives and success of the Group, approving strategic plans, and capital and revenue budgets...

  • Page 64
    ..., our guests and the local communities in which we operate. The Board recognises the benefits of diversity throughout our global business. We continue to focus on providing an inclusive environment, in which employees are valued for who they are and what they bring to the Group, and in which...

  • Page 65
    ...management, secretariat updates (including corporate governance), media and investor relations updates and conflicts of interest review. Key areas of focus for the Board in 2013 included: Business strategy Commercial, geographic, technological, human resources Chief Financial Officer's report, 2013...

  • Page 66
    ... regional and central management from various functions across the Group, including Business Reputation and Responsibility, Human Resources, Corporate Affairs, Global Strategy and Corporate Development, Global Internal Audit and Financial Planning and Analysis; and Board performance evaluation IHG...

  • Page 67
    ... terms of reference can be found on the Company's website at www.ihgplc.com/investors under corporate governance/ committees or from the Company Secretary's office on request. Executive Committee The Executive Committee considers and manages a range of strategic and business issues facing the Group...

  • Page 68
    ... on the Group's Half-Year Results • Received an overview of the System Fund accounting and IHG Rewards Club points liability • Considered and recommended the third quarter interim management statement to the Board • Received the annual update on the Group's tax position, strategy and focus...

  • Page 69
    ...of the business, with a particular focus on the integrity of the internal financial controls and risk management systems. David Kappler, Chairman of the Audit Committee 17 February 2014 STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION...

  • Page 70
    ...Green Engage as a brand standard across the IHG system • Considered the corporate responsibility communications plan and progress made on delivering it • Discussed the Group's approach to and policy on human rights 24 May Committee membership Jennifer Laing Chairman Members Luke Mayhew, Dale...

  • Page 71
    ... of the Board, on Board succession planning for both Executive and Non-Executive Directors. During 2013, the Committee worked with senior management to review and strengthen the talent pool within the business and the appointment of Paul Edgecliffe-Johnson as Chief Financial Officer demonstrates the...

  • Page 72
    ...Auditors Standards. Following the 2013 Review, the Audit Committee concluded that the Group's systems of internal controls and risk management, including internal audit activities, were operating effectively. Financial reporting controls The key financial controls across all our business units have...

  • Page 73
    ...known to management, IHG is not directly or indirectly owned or controlled by another company or by any governments. OVERVIEW STRATEGIC REPORT As at 17 February 2014, the Company had been notified of the following significant holdings in its ordinary shares under the UK Disclosure and Transparency...

  • Page 74
    ...may only be amended by special resolution. The Articles are available on the Company's website at www.ihgplc.com/investors under corporate governance and a summary is provided on pages 169 to 170. Shares Share issues and buybacks An ongoing $500m share buyback programme is currently in place, which...

  • Page 75
    ... in cash and enter into a long-term management contract on the hotel. The hotel had a net book value of $90m at 31 December 2013. Going concern An overview of the business activities of IHG, including a review of the key business risks that the Group faces is given in the Strategic Report on pages...

  • Page 76
    ... and the quality of financial performance over the period, including sustainable growth and the efficient use of cash and capital. 2013 2012 2011 Operating profit before exceptional items Full-year dividend per share (excluding any special dividends and capital returns) Three-year total TSR...

  • Page 77
    ...GOVERNANCE GROUP FINANCIAL STATEMENTS STRATEGIC REPORT Content of the 2013 Directors' Remuneration Report 76 77 78-86 87-96 97 Governance Strategic context Directors' Remuneration Policy Annual Report on Directors' Remuneration Implementation of Remuneration Policy in 2014 PARENT COMPANY FINANCIAL...

  • Page 78
    ... Cescau (Chairman of the Board) attended all but the September meeting. Richard Solomons (Chief Executive Officer) and Tracy Robbins (Executive Vice President, Human Resources and Group Operations Support) attended all meetings. Jennifer Laing attended the February and May meetings and Dale Morrison...

  • Page 79
    ...annual and long-term incentive plans as shown below: STRATEGIC REPORT GOVERNANCE Value creation: Superior shareholder returns Winning Model Superior owner proposition 5 4 3 1 2 Targeted Portfolio Preferred brands delivered through our people Attractive markets Effective channel management Build...

  • Page 80
    ... non-financial metrics. Aligns individuals and teams with key strategic priorities. Aligns short-term annual performance with strategy to generate long-term returns to shareholders. Reviewed annually with targets set in line with key strategic priorities. Includes facility to use regional or global...

  • Page 81
    ... corporate UK and US employee population until the target positioning is achieved. Maximum annual award is 200% of salary. The results of an individual's annual performance appraisal give an overall personal performance rating, which is taken into account when reviewing salary levels. GOVERNANCE...

  • Page 82
    ... Compensation Plan); and • for non-UK and non-US executives, the InterContinental Hotels Group International Savings and Retirement Plan, and other local plans. A cash allowance in lieu of pension contributions is offered. Until 30 June 2013, IHG operated an executive defined benefit section...

  • Page 83
    ... and Pension 100% 39% 25% 100% 0 2014 (on-target) 2014 (maximum) 2014 (minimum) 38% 25% 2014 (maximum) 2014 (on-target) Kirk Kinsell¹, President, The Americas £000 3000 £2,760 Tracy Robbins, Executive Vice President, Human Resources and Group Operations Support £000 3000 PARENT COMPANY...

  • Page 84
    ... on the part of Executive Directors. This feature helps ensure alignment between executive reward and shareholder returns. 2. Other uses of discretion The Committee reserves certain discretions in relation to the outcomes for Executive Directors under the Company's incentive plans. These operate in...

  • Page 85
    ...). This excludes any remuneration that constitutes compensation for incentives forgone and any relocation and expatriate or international assignment costs. OVERVIEW STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Governance 83

  • Page 86
    ...Remuneration Report continued Directors' Remuneration Policy continued Policy on payment for loss of office Contractual notice period and pay in lieu All current Executive Directors have a rolling service contract with a notice period from the company of 12 months. As an alternative, the Company may...

  • Page 87
    ...for corporate employees are typically based on a combination of individual performance and the Group's earnings before interest and tax (EBIT). Market-competitive specialist plans apply in certain areas such as corporate reservations, sales and hotel development. Incentive plans for General Managers...

  • Page 88
    ... the Board and exceeded where market Executive Directors; the conditions so warrant. Chairman's fees are set by the Committee. • IHG pays the cost of providing benefits as required. • Fees are reviewed annually and fixed for 12 months from 1 January. • Consideration is given to: - business...

  • Page 89
    ... vote at the 2014 AGM. OVERVIEW Single total figure of remuneration - Executive Directors (audited information) STRATEGIC REPORT Value (£000) 5000 £4,881 Pension benefit LTIP APP deferred shares APP cash Benefits Salary 4000 £3,332 £3,149 3000 £3,259 GOVERNANCE £2,246 £2,088 2000...

  • Page 90
    ... are taxable, such as travel and accommodation to attend Board meetings away from home locations. 5 Kirk Kinsell received expatriate benefits relating to his international assignment prior to taking up his Board appointment as President, The Americas, on 13 June 2011. This included tax equalisation...

  • Page 91
    ... into account corporate strategic objectives at global and regional levels with a focus on year-on-year improvement in guest service scores and the quality of IHG branded hotels. Our Employee Engagement survey scores are already high against benchmarks both globally and in our priority markets, such...

  • Page 92
    ... ending 31 December 2013. Pension benefit: the value of Company contributions to pension plans and any cash allowances paid in lieu of pension contributions. For 2012, the figure for Richard Solomons shows the increase in his pension value as a member of the executive defined benefit section of the...

  • Page 93
    ... these Accounts; the 2012 Accounts included values calculated on an actuarial basis, which was in line with regulations applicable at the time. £ GOVERNANCE Accrued value of annual pension if retired at 31 December 2013 Accrued value of annual pension at 31 December 2013, assuming retirement at...

  • Page 94
    ...Scheme interests awarded during 2013 (audited information) During 2013, awards relating to shares were granted under the 2013/15 LTIP. Awards were made to each Executive Director over shares with a value of 205% of salary using an average share price over the three business days immediately prior to...

  • Page 95
    ... Plan. No price was paid for the grant of these options. The performance conditions that applied to these options were satisfied when they became exercisable. No executive share options have been granted since 2005. GROUP FINANCIAL STATEMENTS Options vested but unexercised Director 31 December 2013...

  • Page 96
    ... of executives below Executive Committee level, who are subject to the same performance measures as the Chief Executive Officer. The percentage change for UK employees shown is the budget for the 2013 annual pay review and promotions/market adjustments during 2013. Based on taxable benefits for...

  • Page 97
    ... on executive remuneration matters in 2013. This was in the form of an agreed fee for support in preparation of papers and attendance at meetings, with work on additional items charged at hourly rates. PwC also provided tax and other consulting services to the Company during the year. The terms of...

  • Page 98
    ...-Executive Director on 1 June 2013. 5 Graham Allan resigned as Non-Executive Director on 15 June 2012. 6 Benefits include taxable travel and accommodation expenses to attend Board meetings away from home location; under concessionary HM Revenue & Customs rules, non-UK based Non-Executive Directors...

  • Page 99
    ... values calculated using an exchange rate of $1=£0.64 are: 2013 - £494,635; and 2014 - £507,096. The overall budget for salary increases for IHG corporate employees in the UK and US, and the overall increase in the Executive Directors' salaries for 2014 is as follows: UK corporate employees...

  • Page 100
    ... hotels, launched in 1997, is IHG's extended-stay brand for business and leisure travellers who spend an extended time away from home and prefer a warm, home-like and community environment. 196 properties; 21,518 rooms open 80 properties in the pipeline 98 IHG Annual Report and Form 20-F 2013

  • Page 101
    ... Group statement of comprehensive income Group statement of changes in equity Group statement of financial position Group statement of cash flows Accounting policies Notes to the Group Financial Statements PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION 312 properties; 29,778 rooms open...

  • Page 102
    ... by the EU, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group; and • the Annual Report, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Group together with...

  • Page 103
    ... carrying value of deferred tax assets for trading losses; • The accounting for the purchase of a qualifying insurance policy by the UK defined benefit pension plan; and • The accounting for the disposal of the InterContinental London Park Lane hotel. STRATEGIC REPORT OVERVIEW Our application...

  • Page 104
    ... the revenue cycle and the allocation of expenditures related to the marketing, advertising and loyalty point programmes (the System Fund) As outlined in the Strategic Report on page 16, the System Fund is a key part of the Group's business model. In auditing the accounting for the System Fund cash...

  • Page 105
    ... standards of the Public Company Accounting Oversight Board (United States), the accompanying Group statement of financial position of InterContinental Hotels Group PLC as of 31 December 2013 and 2012, and the related Group income statement, Group statement of comprehensive income, Group statement...

  • Page 106
    ... ended 31 December 2013 Total $m Total $m Total $m Revenue Cost of sales Administrative expenses Share of profits of associates and joint ventures Other operating income and expenses Depreciation and amortisation Impairment Operating profit Financial income Financial expenses Profit before tax...

  • Page 107
    ... to profit on hotel disposal Items that will not be reclassified to profit or loss: Re-measurement gains/(losses) on defined benefit plans, net of related tax charge of $20m (2012 credit of $5m, 2011 credit of $19m) Tax related to pension contributions Total other comprehensive income/(loss...

  • Page 108
    ... on defined benefit plans Total other comprehensive income Total comprehensive income for the year Issue of ordinary shares Repurchase of shares Purchase of own shares by employee share trusts Release of own shares by employee share trusts Equity-settled share-based cost Tax related to share schemes...

  • Page 109
    ... benefit plans Tax related to pension contributions Total other comprehensive income Total comprehensive income for the year Issue of ordinary shares Repurchase of shares Transfer to capital redemption reserve Transaction costs relating to shareholder returns Purchase of own shares by employee share...

  • Page 110
    ...to profit or loss: Re-measurement losses on defined benefit plans Total other comprehensive loss Total comprehensive income for the year Issue of ordinary shares Purchase of own shares by employee share trusts Release of own shares by employee share trusts Equity-settled share-based cost Tax related...

  • Page 111
    Group statement of financial position 31 December 2013 Note 2013 $m 2012 $m OVERVIEW ASSETS Property, plant and equipment Goodwill Intangible assets Investment in associates and joint ventures Retirement benefit assets Other financial assets Non-current tax receivable Deferred tax assets Total non...

  • Page 112
    ...the issue of share capital Purchase of own shares Purchase of own shares by employee share trusts Dividends paid to shareholders Dividend paid to non-controlling interests Transaction costs relating to shareholder returns Issue of long-term bonds Decrease in other borrowings Net cash from financing...

  • Page 113
    ... rate used to measure the defined benefit obligation. The impact of this change in accounting policy on the current and prior year Financial Statements, which have been restated, is as follows: Group income statement 2013 $m 2012 $m 2011 $m PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION...

  • Page 114
    Accounting policies continued The functional currency of the parent company remains sterling since this is a non-trading holding company located in the United Kingdom that has sterling denominated share capital and whose primary activity is the payment and receipt of interest on sterling denominated...

  • Page 115
    ... not been designated as hedging instruments or relate to the ineffective portion of hedges are recognised immediately in the income statement. OVERVIEW STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Group Financial Statements 113

  • Page 116
    ... of discounts, provided in the normal course of business and recognised when services have been rendered. The following is a description of the composition of revenues of the Group. Franchise fees - received in connection with the license of the Group's brand names, usually under long-term contracts...

  • Page 117
    ... Rewards Club loyalty programme and the global reservation system. The Fund is planned to operate at breakeven with any short-term timing surplus or deficit carried in the Group statement of financial position within working capital. PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Group...

  • Page 118
    ... had a net book value of $80m at 31 December 2013, is included in note 12. Pensions and other post-employment benefit plans - accounting for pensions and other post-employment benefit plans requires the Group to make assumptions including, but not limited to, discount rates, rates of inflation, life...

  • Page 119
    ..., human resources and corporate services; revenue arises principally from technology fee income. Central liabilities include the loyalty programme liability and the cumulative short-term System Fund surplus. Each of the geographical regions derives its revenues from either franchising, managing or...

  • Page 120
    ... and $51m relating to cost of sales. Americas $m Europe $m AMEA $m Greater China $m Central $m Group $m Reconciliation of capital expenditure Capital expenditure per management reporting Management contract acquired on disposal of hotel Other financial assets relating to pensions Timing differences...

  • Page 121
    ...5) Operating profit Net finance costs Profit before tax Tax Profit for the year 1 Restated 605 (4) 601 (54) 547 (9) 538 for the adoption of IAS I9R 'Employee Benefits' (see page 111). GROUP FINANCIAL STATEMENTS All items above relate to continuing operations. PARENT COMPANY FINANCIAL STATEMENTS...

  • Page 122
    ... China $m Central $m Group $m Other segmental information Capital expenditure (see below) Non-cash items: Depreciation and amortisation1 Reversal of previously recorded impairment Write-off of software Demerger liability released Share-based payments cost Share of profit of associates and joint...

  • Page 123
    ...impairment Share-based payments cost Share of profit of associates and joint ventures 1 Restated 2 Included 84 23 - (25) - - 15 24 2 - - - 14 16 3 - - (1) 8 16 - - - - 72 20 - - 25 - 193 99 5 (25) 25 (1) PARENT COMPANY FINANCIAL STATEMENTS for the adoption of IAS I9R 'Employee Benefits' (see...

  • Page 124
    ... to the location of the hotel and other revenue is attributed to the country of origin. In addition to the United Kingdom, revenue relating to an individual country is separately disclosed when it represents 10% or more of total revenue. 31 December 2013 $m 31 December 2012 $m 31 December 2011...

  • Page 125
    ... Group has employees who work directly on behalf of the System Fund and whose costs are borne by the Fund as disclosed in note 34. In line with IHG's business model, IHG also employs 578 (2012 587, 2011 577) General Managers who work in the managed hotels and whose costs of $135m (2012 $132m, 2011...

  • Page 126
    ... Group Financial Statements continued 5. Exceptional items Note 2013 $m 2012 $m 20111 $m Exceptional operating items Administrative expenses: Litigation Loyalty programme rebranding costs Pension settlement loss Reorganisation costs Resolution of commercial dispute Pension past service gain Share...

  • Page 127
    ...42 4 18 64 STRATEGIC REPORT Interest income and expense relate to financial assets and liabilities held at amortised cost, calculated using the effective interest rate method. Included within interest expense is $2m (2012 $2m, 2011 $1m) payable to the IHG Rewards Club loyalty programme relating to...

  • Page 128
    ...for a number of years thereafter due to expenses and associated tax losses attributable principally to employment matters, in particular additional shortfall contributions made to the UK pension plan in the years 2007 to 2013. Tax risks, policies and governance Information concerning the Group's tax...

  • Page 129
    ...296 157.1 GOVERNANCE GROUP FINANCIAL STATEMENTS 465 (57) 4 (43) 369 289 127.7 369 296 124.7 for the adoption of IAS I9R 'Employee Benefits' (see page 111). note on 'Comparatives for 2011' on page 111. 2013 millions 2012 millions 2011 millions Diluted weighted average number of ordinary shares is...

  • Page 130
    ... the Group income statement. No borrowing costs were capitalised during the current or prior year. Following the sale of the InterContinental London Park Lane hotel there are no longer charges (2012 $89m) over the Group's property, plant and equipment. The table below analyses the net book value of...

  • Page 131
    ... (see note 5) in March 2011 on classification as held for sale. 2013 $m 2012 $m 2011 $m OVERVIEW Consideration Current year disposals: Cash consideration, net of costs paid Management contract value Net assets disposed of Exchanges losses recycled from currency translation reserve Gain/(loss) on...

  • Page 132
    ...of the Group income statement and all cumulative impairment losses relate to the Americas managed cash-generating unit (CGU) (see below). Goodwill has been allocated to CGUs for impairment testing as follows: Cost 2013 $m 2012 $m 2013 $m Net book value 2012 $m AMEA franchised and managed operations...

  • Page 133
    ... are internally developed. Borrowing costs of $0.2m (2012 $0.3m) were capitalised during the year in respect of software projects. The weighted average remaining amortisation period for management contracts is 24 years (2012 19 years). PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION...

  • Page 134
    ... of the sale, the Group received a $17m cash distribution from the associate, being the Group's share of the net disposal proceeds. Associates 2013 $m 2012 $m 2011 $m 2013 $m Joint ventures 2012 $m 2011 $m 2013 $m 2012 $m Total 2011 $m Related party transactions Revenue from associates and joint...

  • Page 135
    ... designated as loans and receivables and are held at amortised cost. Trade receivables are non-interest-bearing and are generally on payment terms of up to 30 days. The fair value of trade and other receivables approximates their carrying value. ADDITIONAL INFORMATION Notes to the Group Financial...

  • Page 136
    ... settled within an average of 45 days. Other payables include $649m (2012 $623m) relating to the future redemption liability of the Group's loyalty programme, of which $120m (2012 $108m) is classified as current and $529m (2012 $515m) as non-current. 134 IHG Annual Report and Form 20-F 2013

  • Page 137
    ... during 2013 largely relates to actions brought against the Group in the Greater China region and during 2012 in the Americas region. GOVERNANCE 21. Financial risk management Overview The Group's treasury policy is to manage financial risks that arise in relation to underlying business needs...

  • Page 138
    ... concern. The capital structure consists of net debt, issued share capital and reserves totalling $1,071m at 31 December 2013 (2012 $1,382m). The structure is managed to maintain an investment grade credit rating, to provide ongoing returns to shareholders and to service debt obligations, whilst...

  • Page 139
    ... (488) STRATEGIC REPORT Less than 1 year $m Between 1 and 2 years $m Between 2 and 5 years $m More than 5 years $m GOVERNANCE Total $m 31 December 2012 Non-derivative financial liabilities: Secured bank loans £250m 6% bonds 2016 £400m 3.875% bonds 2022 Finance lease obligations Trade and...

  • Page 140
    ... bonds were issued on 28 November 2012 and are repayable on 28 November 2022. Interest is payable annually on 28 November in each year commencing 28 November 2013 to the maturity date. The bonds were initially priced at 98.787% of face value and are unsecured. 138 IHG Annual Report and Form 20...

  • Page 141
    ... are used to manage sterling surplus cash and reduce euro and US dollar borrowings whilst maintaining operational flexibility. The foreign exchange swaps have been designated as net investment hedges. GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Notes to the...

  • Page 142
    ... on the recorded fair value that are not based on observable market data. 2013 Level 1 $m Level 2 $m Level 3 $m Total $m Level 1 $m Level 2 $m Level 3 $m 2012 Total $m Assets Equity securities available-for-sale: Quoted equity shares Unquoted equity shares Derivatives Liabilities £250m 6% bonds...

  • Page 143
    ... at a risk adjusted long term interest rate. The interest rate used to discount the cash flows at 31 December 2013 was 8.4% (2012 7.4%). Unquoted equity shares are fair valued using the International Private Equity and Venture Capital Valuation Guidelines either by applying an average price-earnings...

  • Page 144
    ... to the Group Financial Statements continued 26. Retirement benefits UK UK retirement and death in service benefits are provided for eligible Group employees in the UK principally by the InterContinental Hotels UK Pension Plan, which is HM Revenue & Customs registered. The defined benefit section of...

  • Page 145
    ... determine the benefit obligations are: PARENT COMPANY FINANCIAL STATEMENTS Pension plans UK 2013 % 2012 % 2011 % 2013 % 2012 % US 2011 % 2013 % Post-employment benefits 2012 % 2011 % Wages and salaries increases Pensions increases Discount rate Inflation rate Healthcare cost trend rate assumed...

  • Page 146
    ... costs trend rate would increase the accumulated post-employment benefit obligations as at 31 December 2013 by $2.8m (2012 $2.6m, 2011 $2.9m) and a one percentage point decrease would decrease the obligations by $2.3m (2012 $2.3m, 2011 $2.7m). Pension plans UK 2013 $m 2012 (restated1) $m 2013...

  • Page 147
    ... comprehensive income during the year. Pension plans UK US and other 2013 $m 2012 $m Post-employment benefits 2013 $m 2012 $m 2013 $m Total 2012 $m 2013 $m 2012 $m ADDITIONAL INFORMATION Estimated future benefit payments Within one year Between one and five years After five years Average duration...

  • Page 148
    ...disposal of the InterContinental London Park Lane hotel as the proceeds are not expected to be reinvested by the relevant subsidiaries. The Group has unrecognised deferred tax assets as follows: 2013 $m 2012 $m Revenue losses Capital losses Total losses1 Employee benefits Foreign tax credits Other2...

  • Page 149
    ... (2012 2,698,714, 2011 3,257,364) shares were awarded to employees under the plan. The plan provides for the grant of 'nil cost options' to participants as an alternative to conditional share awards. Executive Share Option Plan For options granted, the option price is not less than the market value...

  • Page 150
    ... on the plan. The following tables set out information about awards granted in 2013, 2012 and 2011: APP LTIP 2013 Monte Carlo Simulation and Binomial 1,913.0p 2.59% 0.27% 28% 3.0 Valuation model Weighted average share price Expected dividend yield Risk-free interest rate Volatility1 Term (years...

  • Page 151
    ... GROUP FINANCIAL STATEMENTS The above awards do not vest until the performance and service conditions have been met. Number of shares thousands Range of option prices pence Weighted average option price pence Executive Share Option Plan Outstanding at 1 January 2011 Exercised Lapsed or cancelled...

  • Page 152
    ... Hotels Group PLC. On 7 August 2012, the Company announced a $1bn return of funds to shareholders comprising a $500m special dividend with share consolidation and a $500m share repurchase programme. The share consolidation was approved on 8 October 2012 at a General Meeting (GM) of the Company...

  • Page 153
    ... of 1.2m (2012 1.8m, 2011 1.5m) InterContinental Hotels Group PLC ordinary shares held by employee share trusts, with a market value at 31 December 2013 of $39.8m (2012 $50m, 2011 $26m). Other reserves Comprises the merger and revaluation reserves previously recognised under UK GAAP, together with...

  • Page 154
    ... of reporting, the Group does not believe that the outcome of these matters will have a material effect on the Group's financial position. 33. Related party disclosures 2013 $m 2012 $m 2011 $m Total compensation of key management personnel Short-term employment benefits Post-employment benefits...

  • Page 155
    ... the accounting policies set out on pages 115 and 116 of the Financial Statements. The following information is relevant to the operation of the Fund: 2013 $m 2012 $m 2011 $m OVERVIEW Income1: Assessment fees and contributions received from hotels Proceeds from sale of IHG Rewards Club points Key...

  • Page 156
    ... On 15 April 2003, InterContinental Hotels Group PLC became a standalone hotel company, listed on the London and New York stock exchanges. 2004 Hotel Indigo® Hotel Indigo is our boutique brand. Each hotel reflects the local culture, character and history of the neighbourhood and therefore, just...

  • Page 157
    ...Financial Statements OVERVIEW STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS Contents 156 Parent company balance sheet 157 Notes to the Parent Company Financial Statements 161 Independent Auditor's Report PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Parent Company Financial...

  • Page 158
    ... account is presented for InterContinental Hotels Group PLC as permitted by Section 408 of the Companies Act 2006. Profit on ordinary activities after taxation amounts to £1,487m (2012 £610m). Notes on pages 157 to 160 form an integral part of these Financial Statements. 156 IHG Annual Report...

  • Page 159
    ...to the Parent Company Financial Statements 1. Accounting policies Basis of accounting The Financial Statements are prepared under the historical cost convention and on a going concern basis. They have been drawn up to comply with applicable accounting standards in the United Kingdom (UK GAAP). These...

  • Page 160
    ... to the Parent Company Financial Statements continued 2. Directors 2013 2012 Number of Directors 13 11 2013 £m 2012 £m Directors' emoluments Base salaries, fees, performance payments and benefits Pension benefits under defined contribution plan 5.5 0.2 6.1 0.1 Detailed information on...

  • Page 161
    ... 2015 GOVERNANCE weighted average option price was 512.3p for shares exercised under the Executive Share Option Plan. 7. Movements in reserves Share premium account £m Capital redemption reserve £m Share-based payments reserve £m Profit and loss account £m GROUP FINANCIAL STATEMENTS At...

  • Page 162
    ... to the Parent Company Financial Statements continued 8. Reconciliation of movements in shareholders' funds 2013 £m 2012 £m Earnings available for shareholders Dividends Issue of ordinary shares Repurchase of shares Transaction costs relating to shareholder returns Share-based payments capital...

  • Page 163
    ... Hotels Group PLC for the year ended 31 December 2013 which comprise the parent company balance sheet and the related notes 1 to 9. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally...

  • Page 164
    ..., EVEN Hotels offer a fresh perspective on travel to wellness-minded travellers, and stakes a claim for IHG in the wellness space. The first two EVEN hotels will open in 2014. 2012 HUALUXE® Hotels & Resorts Launched in March 2012, the brand is the world's first international hotel brand designed...

  • Page 165
    ... hotel company, we renamed the programme to IHG® Rewards Club. Contents Group information 164 History and developments 164 Risk Factors 167 Executive Committee members' shareholdings 168 Description of securities other than equity securities 169 Articles of Association 170 Working Time Regulations...

  • Page 166
    ... affects room rates and/or occupancy levels and other income-generating activities. This may result in deterioration of results of operations and potentially reduce the value of properties in affected economies. The owners or potential owners of hotels franchised or managed by the Group face...

  • Page 167
    ... standards, or the significant regulations applicable to hotel operations, pursuant to its franchise and management contracts, there may be further adverse impact upon brand reputation or customer perception and therefore the value of the Group's brands. STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL...

  • Page 168
    ...Group's strategic business plans could be undermined by failure to build resilient corporate culture, failure to recruit or retain key personnel, unexpected loss of key senior employees, failures in the Group's succession planning and incentive plans, or a failure to invest in the development of key...

  • Page 169
    ... related to such properties. STRATEGIC REPORT GOVERNANCE Executive Committee members' shareholdings Shares held by Executive Committee members (excluding the Executive Directors) as at 31 December 2013 Executive Committee Member GROUP FINANCIAL STATEMENTS Number of shares held outright 2013 2012...

  • Page 170
    ...and Annual Report on Form 20-F, ongoing SEC compliance and listing requirements, investor relations programmes and advertising and public relations expenditure. Indirect payments As part of its service to the Company, the ADR Depositary has agreed to waive fees for the standard costs associated with...

  • Page 171
    ... body corporate; (e) relating to an employee benefit in which the Director will share equally with other employees; and (f) relating to liability insurance that the Company is empowered to purchase for the benefit of Directors of the Company in respect of actions undertaken as Directors (or officers...

  • Page 172
    ... is paid to the external market in order to ensure that terms of employment are appropriate. The Group believes the Group companies will be able to conduct their relationships with trade unions and employees in a satisfactory manner. Material contracts The following contracts have been entered into...

  • Page 173
    .... IHG's share of the sale proceeds (before transaction costs) were £301.5 million in cash, £61 million of which was used to provide security over UK pension liabilities which were previously secured against the hotel. £750 Million Euro Medium Term Note Programme In 2012, the Group updated its...

  • Page 174
    ...place on 31 August 2012. Yaoda sought approximately $46 million relating to the alleged loss of value of the hotel, costs of compliance with the brand standards, lost revenue at the hotel, costs and general damages. Pursuant to the dispute mechanism specified under the management contract, IHC filed...

  • Page 175
    ... dividends received from other US corporations. For foreign tax credit limitation purposes, dividends will generally be income from sources outside the US. STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION Additional Information 173

  • Page 176
    ...of an ADS, provided that the ADS and any separate instrument or written agreement of transfer are executed and remain at all times outside the UK. UK legislation does however provide for stamp duty (in the case of transfers) or SDRT to be payable at the rate of 1.5 per cent on the amount or value of...

  • Page 177
    ... procedures were effective. PARENT COMPANY FINANCIAL STATEMENTS Summary of significant corporate governance differences from NYSE listing standards The Group's statement of compliance with the principles and provisions specified in the UK Corporate Governance Code issued by the Financial Reporting...

  • Page 178
    ... is applicable to all Directors, officers and employees, and further information on the Code of Conduct is available on the Company's website at www.ihgplc.com/investors under corporate governance. No waivers have been granted under the Code of Conduct. Compliance certification Each Chief Executive...

  • Page 179
    ... of IAS I9R 'Employee Benefits' (see page 111). Group statement of financial position data 31 December 2013 2012 2011 ($m, except number of shares) 2010 2009 Goodwill and intangible assets Property, plant and equipment Investments and other financial assets Retirement benefit assets Non-current...

  • Page 180
    ... information continued Dividend history The table below sets forth the amounts of ordinary dividends on each ordinary share and special dividends, in respect of each financial year indicated. Ordinary dividend Interim dividend Final dividend Total dividend Special dividend pence 2013 2012 2011...

  • Page 181
    ... value) of shares (or units) that may yet be purchased under the plans or programmes OVERVIEW Period of financial year (a) Total number of shares (or units) purchased (b) Average price paid per share (or unit) Month 1 (no purchases this month) Month 2 Month 3 (no purchases this month) Month...

  • Page 182
    ...profile by type as at 31 December 2013 Percentage of issued share capital See chart 5.99 90.59 1.00 2.26 0.16 100 Category of shareholdings Private individuals Nominee companies Limited and public limited companies Other corporate bodies Pension funds, insurance companies and banks Total Number of...

  • Page 183
    ... Articles can be obtained via the website at www.ihgplc.com/investors under corporate governance or from the Company's registered office. Calls cost 8p per minute plus network extras. Lines are open from 08.30 to 17.30 Monday to Friday, excluding UK public holidays. 3 Lines are open from 08.00 to 16...

  • Page 184
    ....co.uk 1 For those with hearing difficulties a text phone is available on 0871 384 22552 for UK callers with compatible equipment. Calls cost 8p per minute plus network extras. Lines are open from 8.30am to 5.30pm Monday to Friday, excluding UK public holidays. 2 182 IHG Annual Report and...

  • Page 185
    ...'s dated 6 December 2013, commencing on 1 January 2014 Tracy Robbins' service contract dated 9 August 2011 (incorporated by reference to Exhibit 4(c)(i) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10409) dated 29 March 2012) Tom Singer's service contract dated 26...

  • Page 186
    ...- Retirement benefits Group Financial Statements: Note 28 - Share-based payments Corporate Governance Strategic Report: Winning Model - Preferred brands delivered through our people Group Financial Statements: Note 3 - Staff costs and Directors' emoluments Group Information: Working Time Regulations...

  • Page 187
    ...: Management's report on internal control over financial reporting Corporate Governance: Audit Committee Report Strategic Report: Disciplined Execution - Commitment to responsible business practices Shareholder Information: Summary of significant corporate governance differences from NYSE listing...

  • Page 188
    ...General Meeting. AMEA Asia, Middle East and Africa. APP Annual Performance Plan. Articles the articles of association of the Company for the time being in force. average daily rate or average room rate rooms revenue divided by the number of room nights sold. basic earnings per ordinar y share profit...

  • Page 189
    ... Hotels UK Pension Plan. IFRS International Financial Reporting Standards as adopted by the EU and issued by the IASB. IHG System Hotels operating under franchise and management agreements together with IHG owned and leased hotels. IHG System size the number of hotels/rooms franchised, managed...

  • Page 190
    ...The main factors that could affect the business and financial results are described in the Strategic Report of the Annual Report and Form 20-F 2013. Holiday Inn received the highest numerical score among mid-scale full service hotels in the proprietary J.D. Power 2011-2013 North America Hotel Guest...

  • Page 191

  • Page 192
    InterContinental Hotels Group PLC Broadwater Park, Denham, Buckinghamshire UB9 5HR United Kingdom Tel +44 (0) 1895 512 000 Fax +44 (0) 1895 512 101 Web www.ihgplc.com Make a booking at www.ihg.com