Holiday Inn 2013 Annual Report Download - page 127

6. Finance costs
2013
$m
2012
$m
2011
$m
Financial income
Interest income on deposits 42 1
Unwinding of discount on other financial assets 11 1
53 2
Financial expenses
Interest expense on borrowings 59 37 42
Interest rate swaps fair value transferred from equity –1 4
Finance charge payable under finance leases 19 19 18
78 57 64
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 interest
on theaccumulated balance of cash received in advance of the redemption of points awarded.
7. Tax
Note
2013
$m
2012
(restated1)
$m
20112
(restated1)
$m
Income tax
UK corporation tax at 23.25% (2012 24.50%, 2011 26.50%):
Current period 62 21 28
Benefit of tax reliefs on which no deferred tax previously recognised a(49) – –
Adjustments in respect of prior periods b–(34) (25)
13 (13) 3
Foreign tax: c
Current period 184 170 98
Benefit of tax reliefs on which no deferred tax previously recognised (42) (31) (16)
Adjustments in respect of prior periods b(17) (27) (65)
125 112 17
Total current tax 138 99 20
Deferred tax:
Origination and reversal of temporary differences 122 781
Changes in tax rates (1) (2) (2)
Adjustments to estimated recoverable deferred tax assets (39) (105) (12)
Adjustments in respect of prior periods 610 (9)
Total deferred tax 88 (90) 58
Total income tax charge for the year 226 978
Further analysed as tax relating to:
Profit before exceptional items 175 151 117
Exceptional items (note 5):
Exceptional operating items 6(1) 4
Exceptional tax d45 (141) (43)
226 978
1 Restated for the adoption of IAS I9R ‘Employee Benefits’ (see page 111).
2 See note on ‘Comparatives for 2011’ on page 111.
All items above relate to continuing operations.
a Includes $45m in respect of the utilisation of unrecognised capital losses against the gain on disposal of the InterContinental London Park Lane hotel.
b In 2012, included $37m (2011 $39m) of exceptional credits included at note d below together with other releases relating to tax matters which have been settled or
in respect of which the relevant statutory limitation period has expired.
c Represents corporate income taxes on profit taxable in foreign jurisdictions, a significant proportion of which relates to the Group’s US subsidiaries.
d 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.
Notes to the Group Financial Statements 125
OVERVIEW STRATEGIC REPORT GOVERNANCE
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION