Holiday Inn 2013 Annual Report Download - page 126

5. Exceptional items
Note
2013
$m
2012
$m
20111
$m
Exceptional operating items
Administrative expenses:
Litigation a(10) – –
Loyalty programme rebranding costs b(10) – –
Pension settlement loss c(147) – –
Reorganisation costs d–(16) –
Resolution of commercial dispute e––(37)
Pension past service gain f––28
(167) (16) (9)
Share of profits of associates and joint ventures:
Share of gain on disposal of a hotel (note 14) 6– –
Other operating income and expenses:
Gain/(loss) on disposal of hotels (note 11) 166 (2) 37
Write-off of software (note 13) –(18) –
Demerger liability released g–9 –
VAT refund h–– 9
166 (11) 46
Impairment:
Impairment charges:
Property, plant and equipment i––(2)
Other financial assets j––(3)
Reversals of previously recorded impairment:
Property, plant and equipment k–23 23
Associates l–– 2
–23 20
5(4) 57
Tax
Tax on exceptional operating items (6) 1(4)
Exceptional tax m(45) 141 43
(51) 142 39
1 See note on ‘Comparatives for 2011’ on page 111.
All items above relate to continuing operations.
The above items are treated as exceptional by reason of their size or nature.
a Relates to an agreed settlement in respect of a lawsuit filed against the Group in the Greater China region.
b Relates to costs incurred in support of the worldwide rebranding of IHG Rewards Club that was announced 1 July 2013.
c Arises from a buy-in of the Group’s UK funded defined benefit obligations with the insurer, Rothesay Life, on 15 August 2013 (see note 26 for further details).
d Arose from a reorganisation of the Group’s support functions together with a restructuring within the AMEA region.
e Related to the settlement of a prior period commercial dispute in the Europe region.
f Related to the closure of the UK defined benefit pension scheme to future accrual with effect from 1 July 2013.
g Resulted from a release of a liability no longer required which arose on the demerger of the Group from Six Continents PLC.
h Arose in the UK relating to periods prior to 1996.
i Arose in respect of a hotel in Europe following a re-assessment of its recoverable amount, based on fair value less costs tosell.
j Related to an available-for-sale equity investment and arose as a result of a significant and prolonged decline in its fair value below cost.
k In 2012, a previously recorded impairment charge relating to a North American hotel was reversed in full following a re-assessment of its recoverable amount,
based on the market value of the hotel as determined by an independent professional property valuer. Of the impairment reversal in 2011, $11m arose on the
classification of a North American hotel as held for sale and was based on the expected net sales proceeds which were subsequently realised on the disposal of the
hotel. Afurther $12m arose in respect of another North American hotel following a re-assessment of its recoverable amount, based on value in use.
l The impairment reversal arose in the Americas region.
m In 2013, comprises a deferred tax charge of $63m consequent on the disposal of the InterContinental London Park Lane hotel (see note 27), together with charges
and credits of $38m and $19m respectively from associated restructurings (including intra-group dividends) and refinancings, offset by the recognition of $37m
of previously unrecognised tax credits. In 2012, represented the recognition of $104m of deferred tax assets, principally relating to pre-existing overseas tax
losses, whose value had become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release
of $37m of provisions. In 2011, related to a $30m revision of the estimated tax impacts of an internal reorganisation completed in 2010 together with the release
of $13m of provisions.
124 IHG Annual Report and Form 20-F 2013
Notes to the Group Financial Statements continued