(Mark One) | ||
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, | ||
2007 | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Name of each exchange on which registered | |
American Depositary Shares | New York Stock Exchange | |
Ordinary Shares of | New York Stock Exchange* |
* | Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. |
Ordinary Shares of 1329/47 pence each | 294,623,308 |
US GAAP o | International Reporting Standards as issued by the International Standards Accounting Board | Other o |
2
2
3
3
• | “board” refers to the board of directors of InterContinental Hotels Group PLC or, where appropriate, the board of InterContinental Hotels Limited or Six Continents Limited; | |
• | “Britvic” refers to Britannia Soft Drinks Limited for the period up to November 18, 2005, and thereafter, Britannia SD Holdings Limited (renamed Britvic plc on November 21, 2005) which became the holding company of the Britvic Group on November 18, 2005; | |
• | “Britvic Group” refers to Britvic and its subsidiaries from time to time; | |
• | “Company” refers to InterContinental Hotels Group PLC, InterContinental Hotels Limited or Six Continents Limited or their respective board of directors as the context requires; | |
• | “Group” refers to InterContinental Hotels Group PLC and its subsidiaries or, where appropriate, InterContinental Hotels Limited or Six Continents Limited and their subsidiaries as the context requires; | |
• | “Hotels” or “IHG Hotels” refers to the hotels business of the Group; | |
• | “IHG” refers to InterContinental Hotels Group PLC or, where appropriate, its board of directors; | |
• | “IHL” refers to InterContinental Hotels Limited, previously InterContinental Hotels Group PLC, former parent company of the Group and re-registered as a private limited company on June 27, 2005; | |
• | “ | |
• | “Six Continents” refers to Six Continents Limited; previously Six Continents PLC and re-registered as a private limited company on June 6, 2005; | |
• | “Soft Drinks” and “Britvic business” refer to the soft drinks business of InterContinental Hotels Group PLC, which the Company had through its controlling interest in Britvic and which the Company disposed of by way of an initial public offering effective December 14, 2005; and | |
• | “VAT” refers to UK value added tax levied by HM Revenue and Customs on certain goods and services. |
4
4
5
5
6
6
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
7
7
Years ended December 31, | |||||||||||||||||
2006(2) | 2006 | 2005(1) | 2004(1) | ||||||||||||||
$ | £ | £ | £ | ||||||||||||||
(in millions, except per share and ADS amounts) | |||||||||||||||||
Amounts in accordance with IFRS | |||||||||||||||||
Revenue: | |||||||||||||||||
Continuing operations | 1,480 | 805 | 713 | 606 | |||||||||||||
Discontinued operations | 285 | 155 | 1,197 | 1,598 | |||||||||||||
1,765 | 960 | 1,910 | 2,204 | ||||||||||||||
Total operating profit before other operating income and expenses: | |||||||||||||||||
Continuing operations | 369 | 201 | 173 | 120 | |||||||||||||
Discontinued operations | 55 | 30 | 166 | 226 | |||||||||||||
424 | 231 | 339 | 346 | ||||||||||||||
Other operating income and expenses: | |||||||||||||||||
Continuing operations | 50 | 27 | (22 | ) | (49 | ) | |||||||||||
50 | 27 | (22 | ) | (49 | ) | ||||||||||||
�� | |||||||||||||||||
Total operating profit: | |||||||||||||||||
Continuing operations | 419 | 228 | 151 | 71 | |||||||||||||
Discontinued operations | 55 | 30 | 166 | 226 | |||||||||||||
474 | 258 | 317 | 297 | ||||||||||||||
Financial income | 48 | 26 | 30 | 70 | |||||||||||||
Financial expenses | (68 | ) | (37 | ) | (63 | ) | (103 | ) | |||||||||
Profit before tax | 454 | 247 | 284 | 264 | |||||||||||||
Tax | 75 | 41 | (80 | ) | 127 | ||||||||||||
Profit after tax | 529 | 288 | 204 | 391 | |||||||||||||
Gain on disposal of assets, net of tax | 215 | 117 | 311 | 19 | |||||||||||||
Profit available for shareholders | 744 | 405 | 515 | 410 | |||||||||||||
Attributable to: | |||||||||||||||||
Equity holders of the parent | 744 | 405 | 496 | 383 | |||||||||||||
Minority equity interest | — | — | 19 | 27 | |||||||||||||
Profit for the year | 744 | 405 | 515 | 410 | |||||||||||||
Earnings per ordinary share: | |||||||||||||||||
Basic | 191.9p | 104.1p | 95.2p | 53.9p | |||||||||||||
Diluted | 186.9p | 101.5p | 93.1p | 53.3p | |||||||||||||
Years ended December 31, | ||||||||||||||||||||
2007(1) | 2007 | 2006 | 2005(2) | 2004(2) | ||||||||||||||||
$ | £ | £ | £ | £ | ||||||||||||||||
(in millions, except per share and ADS amounts) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Continuing operations | 1,771 | 883 | 786 | 697 | 607 | |||||||||||||||
Discontinued operations | 79 | 40 | 174 | 1,213 | 1,597 | |||||||||||||||
1,850 | 923 | 960 | 1,910 | 2,204 | ||||||||||||||||
Total operating profit before exceptional operating items: | ||||||||||||||||||||
Continuing operations | 474 | 237 | 200 | 175 | 125 | |||||||||||||||
Discontinued operations | 17 | 8 | 31 | 164 | 221 | |||||||||||||||
491 | 245 | 231 | 339 | 346 | ||||||||||||||||
Exceptional operating items: | ||||||||||||||||||||
Continuing operations | 60 | 30 | 27 | (15 | ) | (24 | ) | |||||||||||||
Discontinued operations | — | — | — | (7 | ) | (25 | ) | |||||||||||||
60 | 30 | 27 | (22 | ) | (49 | ) | ||||||||||||||
Total operating profit: | ||||||||||||||||||||
Continuing operations | 534 | 267 | 227 | 160 | 101 | |||||||||||||||
Discontinued operations | 17 | 8 | 31 | 157 | 196 | |||||||||||||||
551 | 275 | 258 | 317 | 297 | ||||||||||||||||
Financial income | 18 | 9 | 26 | 30 | 70 | |||||||||||||||
Financial expenses | (108 | ) | (54 | ) | (37 | ) | (63 | ) | (103 | ) | ||||||||||
Profit before tax | 461 | 230 | 247 | 284 | 264 | |||||||||||||||
Tax: | ||||||||||||||||||||
On profit before exceptional items | (90 | ) | (45 | ) | (53 | ) | (88 | ) | (56 | ) | ||||||||||
On exceptional items | — | — | (6 | ) | — | 22 | ||||||||||||||
Exceptional tax | 60 | 30 | 100 | 8 | 161 | |||||||||||||||
(30 | ) | (15 | ) | 41 | (80 | ) | 127 | |||||||||||||
Profit after tax | 431 | 215 | 288 | 204 | 391 | |||||||||||||||
Gain on disposal of assets, net of tax | 32 | 16 | 117 | 311 | �� | 19 | ||||||||||||||
Profit for the year | 463 | 231 | 405 | 515 | 410 | |||||||||||||||
Attributable to: | ||||||||||||||||||||
Equity holders of the parent | 463 | 231 | 405 | 496 | 383 | |||||||||||||||
Minority equity interest | — | — | — | 19 | 27 | |||||||||||||||
Profit for the year | 463 | 231 | 405 | 515 | 410 | |||||||||||||||
Earnings per ordinary share: | ||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||
Basic | 131.3¢ | 65.6p | 69.1p | 21.9p | 36.3p | |||||||||||||||
Diluted | 127.7¢ | 63.8p | 67.4p | 21.4p | 35.9p | |||||||||||||||
Total operations: | ||||||||||||||||||||
Basic | 144.7¢ | 72.2p | 104.1p | 95.2p | 53.9p | |||||||||||||||
Diluted | 140.7¢ | 70.2p | 101.5p | 93.1p | 53.3p | |||||||||||||||
8
8
Three months | 12 months | 15 months | ||||||||||||||||||||||||||||||||
ended | ended | ended | Year ended | |||||||||||||||||||||||||||||||
Year ended December 31, | December 31, | December 31, | December 31, | September 30, | ||||||||||||||||||||||||||||||
2006(2) | 2006 | 2005(1) | 2004(1) | 2002 | 2003 | 2003(1) | 2002(1) | |||||||||||||||||||||||||||
£ | £ | £ | £ | £ | £ | £ | ||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||
(in millions, except per share and ADS amounts) | ||||||||||||||||||||||||||||||||||
Amounts in accordance with US GAAP | ||||||||||||||||||||||||||||||||||
Income/(loss) before cumulative effect on prior years of change in accounting principle: | ||||||||||||||||||||||||||||||||||
Continuing operations | 928 | 505 | 104 | 257 | 14 | (63 | ) | (49 | ) | 102 | ||||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||||
Income from discontinued operations | — | — | 41 | 62 | 46 | 92 | 138 | 226 | ||||||||||||||||||||||||||
Surplus on disposal | — | — | 210 | 21 | — | — | — | 171 | ||||||||||||||||||||||||||
Total discontinued operations | — | — | 251 | 83 | 46 | 92 | 138 | 397 | ||||||||||||||||||||||||||
Cumulative effect on prior years of: adoption of FAS 142 | — | — | — | — | (712 | ) | — | (712 | ) | — | ||||||||||||||||||||||||
adoption of FAS 123(R) | (35 | ) | (19 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income/(loss) | 893 | 486 | 355 | 340 | (652 | ) | 29 | (623 | ) | 499 | ||||||||||||||||||||||||
Per ordinary share and American Depositary Share(4) | ||||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||||
Income/(loss) before cumulative effect on prior years of change in accounting principle: | ||||||||||||||||||||||||||||||||||
Continuing operations | 238.6 | ¢ | 129.8 | p | 20.0 | p | 36.2 | p | 1.9 | p | (8.6 | )p | (6.7 | )p | 14.0 | p | ||||||||||||||||||
Discontinued operations | — | — | 48.2 | p | 11.7 | p | 6.3 | p | 12.6 | p | 18.9 | p | 54.3 | p | ||||||||||||||||||||
Cumulative effect on prior years of: adoption of FAS 142 | — | — | — | — | (97.1 | )p | — | (97.1 | )p | — | ||||||||||||||||||||||||
adoption of FAS 123(R) | (9.0 | )¢ | (4.9 | )p | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income/(loss) | 229.6 | ¢ | 124.9 | p | 68.2 | p | 47.9 | p | (88.9 | )p | 4.0 | p | (84.9 | )p | 68.3 | p | ||||||||||||||||||
Diluted | ||||||||||||||||||||||||||||||||||
Income/(loss) before cumulative effect on prior years of change in accounting principle: | ||||||||||||||||||||||||||||||||||
Continuing operations | 233.8 | ¢ | 127.2 | p | 19.5 | p | 35.7 | p | 1.9 | p | (8.6 | )p | (6.7 | )p | 13.9 | p | ||||||||||||||||||
Discontinued operations | — | — | 47.1 | p | 11.5 | p | 6.3 | p | 12.6 | p | 18.9 | p | 54.1 | p | ||||||||||||||||||||
Cumulative effect on prior years of: adoption of FAS 142 | — | — | — | — | (97.1 | )p | — | (97.1 | )p | — | ||||||||||||||||||||||||
adoption of FAS 123(R) | (8.8 | )¢ | (4.8 | )p | — | — | — | — | — | — | ||||||||||||||||||||||||
Net income/(loss) | 225.0 | ¢ | 122.4 | p | 66.6 | p | 47.2 | p | (88.9 | )p | 4.0 | p | (84.9 | )p | 68.0 | p | ||||||||||||||||||
9
December 31, | ||||||||||||||||||||
2007(3) | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
$ | £ | £ | £ | £ | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Goodwill and intangible assets | 556 | 277 | 263 | 238 | 206 | |||||||||||||||
Property, plant and equipment | 1,934 | 962 | 997 | 1,356 | 1,926 | |||||||||||||||
Investments and other financial assets | 253 | 126 | 128 | 155 | 122 | |||||||||||||||
Retirement benefit assets | 65 | 32 | — | — | — | |||||||||||||||
Current assets | 710 | 353 | 455 | 707 | 598 | |||||||||||||||
Non-current assets classified as held for sale | 115 | 57 | 50 | 279 | 1,826 | |||||||||||||||
Total assets | 3,633 | 1,807 | 1,893 | 2,735 | 4,678 | |||||||||||||||
Current liabilities | 1,226 | 610 | 643 | 794 | 926 | |||||||||||||||
Long-term debt | 1,748 | 869 | 303 | 410 | 1,156 | |||||||||||||||
Net assets | 98 | 49 | 686 | 1,104 | 1,938 | |||||||||||||||
Share capital | 163 | 81 | 66 | 49 | 723 | |||||||||||||||
IHG shareholders’ equity | 92 | 46 | 678 | 1,084 | 1,821 | |||||||||||||||
Number of Shares in issue at period end (millions) | 295 | 356 | 433 | 622 | ||||||||||||||||
December 31, | ||||||||||||||||
2006(3) | 2006 | 2005 | 2004 | |||||||||||||
$ | £ | £ | £ | |||||||||||||
(in millions) | ||||||||||||||||
Amounts in accordance with IFRS | ||||||||||||||||
Goodwill and intangible assets | 516 | 263 | 238 | 206 | ||||||||||||
Property, plant and equipment | 1,956 | 997 | 1,356 | 1,926 | ||||||||||||
Investments and other financial assets | 251 | 128 | 155 | 122 | ||||||||||||
Current assets | 892 | 455 | 707 | 598 | ||||||||||||
Non-current assets classified as held for sale | 98 | 50 | 279 | 1,826 | ||||||||||||
Total assets | 3,713 | 1,893 | 2,735 | 4,678 | ||||||||||||
Current liabilities(5) | 1,261 | 643 | 794 | 926 | ||||||||||||
Long-term debt(5) | 594 | 303 | 410 | 1,156 | ||||||||||||
Share capital | 129 | 66 | 49 | 723 | ||||||||||||
IHG shareholders’ equity | 1,330 | 678 | 1,084 | 1,821 | ||||||||||||
Number of Shares in issue at period end (millions) | 356 | 433 | 622 | |||||||||||||
December 31, | ||||||||||||||||||||||||
2006(3) | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
$ | £ | £ | £ | £ | £ | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Amounts in accordance with US GAAP | ||||||||||||||||||||||||
Goodwill and intangible assets | 2,401 | 1,224 | 1,395 | 1,384 | 1,587 | 2,702 | ||||||||||||||||||
Property, plant and equipment | 2,605 | 1,328 | 1,685 | 3,454 | 3,916 | 6,552 | ||||||||||||||||||
Investments and other financial assets | 214 | 109 | 141 | 115 | 174 | 189 | ||||||||||||||||||
Current assets | 979 | 499 | 738 | 699 | 978 | 983 | ||||||||||||||||||
Non-current assets classified as held for sale | 84 | 43 | 258 | 300 | — | — | ||||||||||||||||||
Total assets | 6,283 | 3,203 | 4,217 | 5,952 | 6,655 | 10,426 | ||||||||||||||||||
Current liabilities(5) | 1,671 | 852 | 1,161 | 2,021 | 1,496 | 2,109 | ||||||||||||||||||
Long-term debt(5) | 190 | 97 | 36 | 52 | 523 | 622 | ||||||||||||||||||
Share capital | 80 | 41 | 43 | 697 | 739 | 243 | ||||||||||||||||||
IHG shareholders’ equity | 2,938 | 1,498 | 2,015 | 2,796 | 3,380 | 6,221 | ||||||||||||||||||
Number of Shares in issue at period end (millions) | 356 | 433 | 622 | 739 | 734 | |||||||||||||||||||
(1) | US dollar amounts have been translated at the weighted average rate for the year | |
(2) | The year ended 2004 includes Hotels 12 months and Soft Drinks 53 weeks ended December 25, 2004. The year ended 2005 includes Hotels 12 months and Soft Drinks 50 weeks and three days ended December 14, 2005. | |
US dollar amounts have been translated at the Noon Buying Rate on December 31, | ||
10
Pence per ordinary share | $ per ADS | |||||||||||||||||||||||
Interim | Final | Total | Interim | Final | Total | |||||||||||||||||||
Year ended September 30, | ||||||||||||||||||||||||
2002(1) | 12.58 | 29.14 | 41.72 | 0.205 | 0.474 | 0.679 | ||||||||||||||||||
Period ended December 31, 2003 | ||||||||||||||||||||||||
Six Continents(1) | 7.65 | — | 7.65 | 0.119 | — | 0.119 | ||||||||||||||||||
IHG | 4.05 | 9.45 | 13.50 | 0.068 | 0.174 | 0.242 | ||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||||||
2004 | 4.30 | 10.00 | 14.30 | 0.077 | 0.191 | 0.268 | ||||||||||||||||||
2005 | 4.60 | 10.70 | 15.30 | 0.081 | 0.187 | 0.268 | ||||||||||||||||||
2006 | 5.10 | 13.30 | 18.40 | 0.096 | 0.259 | (2) | 0.355 |
Pence per ordinary share | $ per ADS | |||||||||||||||||||||||
Interim | Final | Total | Interim | Final | Total | |||||||||||||||||||
Period ended December 31, 2003 | ||||||||||||||||||||||||
Six Continents(1) | 7.65 | — | 7.65 | 0.119 | — | 0.119 | ||||||||||||||||||
IHG | 4.05 | 9.45 | 13.50 | 0.068 | 0.174 | 0.242 | ||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||||||
2004 | 4.30 | 10.00 | 14.30 | 0.077 | 0.191 | 0.268 | ||||||||||||||||||
2005 | 4.60 | 10.70 | 15.30 | 0.081 | 0.187 | 0.268 | ||||||||||||||||||
2006 | 5.10 | 13.30 | 18.40 | 0.096 | 0.259 | 0.355 | ||||||||||||||||||
2007 | 5.70 | 14.90 | 20.60 | 0.115 | 0.292 | (2) | 0.407 |
(1) | Restated to reflect an equivalent number of shares in InterContinental Hotels Group PLC. | |
(2) | ||
The |
9
Pence per | ||||||||
ordinary share | $ per ADS | |||||||
December 2004 | 72.00 | 1.39 | ||||||
June 2006 | 118.00 | 2.17 |
Pence per | ||||||||
ordinary share | $ per ADS | |||||||
December 2004 | 72.00 | 1.39 | ||||||
June 2006 | 118.00 | 2.17 | ||||||
June 2007 | 200.00 | 4.00 |
Pence per | ||||||||
ordinary share | $ per ADS | |||||||
June 2005 | 165.00 | 2.86 |
11
Month’s | Month’s | |||||||
highest | lowest | |||||||
Month | exchange rate | exchange rate | ||||||
September 2006 | 1.91 | 1.86 | ||||||
October 2006 | 1.91 | 1.86 | ||||||
November 2006 | 1.97 | 1.89 | ||||||
December 2006 | 1.98 | 1.95 | ||||||
January 2007 | 1.99 | 1.93 | ||||||
February 2007 | 1.97 | 1.94 | ||||||
March 2007 (through March 16, 2007) | 1.96 | 1.92 |
Period | Average | |||||||||||||||
end | rate(1) | High | Low | |||||||||||||
Year ended September 30, | ||||||||||||||||
2002 | 1.56 | 1.48 | 1.58 | 1.41 | ||||||||||||
Period ended December 31, | ||||||||||||||||
2003 | 1.78 | 1.63 | 1.78 | 1.54 | ||||||||||||
Year ended December 31, | ||||||||||||||||
2004 | 1.93 | 1.84 | 1.95 | 1.75 | ||||||||||||
2005 | 1.73 | 1.82 | 1.93 | 1.71 | ||||||||||||
2006 | 1.96 | 1.84 | 1.97 | 1.74 | ||||||||||||
2007 (through March 16, 2007) | 1.94 | 1.96 | 1.99 | 1.92 |
Month’s | Month’s | |||||||
highest | lowest | |||||||
Month | exchange rate | exchange rate | ||||||
September 2007 | 2.04 | 1.99 | ||||||
October 2007 | 2.08 | 2.03 | ||||||
November 2007 | 2.11 | 2.05 | ||||||
December 2007 | 2.07 | 1.98 | ||||||
January 2008 | 1.99 | 1.95 | ||||||
February 2008 | 1.99 | 1.94 | ||||||
March 2008 (through March 14, 2008) | 2.03 | 1.99 |
Period | Average | |||||||||||||||
end | rate(1) | High | Low | |||||||||||||
Period ended December 31, | ||||||||||||||||
2003 | 1.78 | 1.63 | 1.78 | 1.54 | ||||||||||||
Year ended December 31, | ||||||||||||||||
2004 | 1.93 | 1.84 | 1.95 | 1.75 | ||||||||||||
2005 | 1.73 | 1.82 | 1.93 | 1.71 | ||||||||||||
2006 | 1.96 | 1.84 | 1.97 | 1.74 | ||||||||||||
2007 | 2.01 | 2.01 | 2.11 | 1.92 | ||||||||||||
2008 (through March 14, 2008) | 2.03 | 2.00 | 2.03 | 1.94 |
(1) | The average of the Noon Buying Rate on the last day of each full month during the period. |
10
12
13
11
12
14
13
15
• | poor investment performance of pension fund | |
• | ||
• | adverse annuity rates (which tend in particular to depend on prevailing interest rates and life expectancy) as these will make it more expensive to secure pensions with an insurance company; and | |
• | other events occurring which make past service benefits more expensive than predicted in the actuarial assumptions by reference to which the Group’s past contributions were assessed. |
ITEM 4. | INFORMATION ON THE COMPANY |
16
14
17
15
Asset disposal program detail | Number of hotels | Proceeds | Net book value | |||||||||
(£ billion) | ||||||||||||
Disposed to date | 174 | 3.0 | 2.9 | |||||||||
Remaining hotels | 25 | — | 1.0 |
Asset disposal program detail | Number of hotels | Proceeds | Net book value | |||||||||
(£ billion) | ||||||||||||
Disposed since April 2003 | 181 | 3.0 | 2.9 | |||||||||
Remaining owned and leased hotels | 18 | — | 0.9 |
18
16
Return of funds program | Timing | Total return | Returned to date(i) | Still to be returned | ||||||||||||
(£ million) | ||||||||||||||||
£501 million special dividend | Paid December 17, 2004 | 501 | 501 | Nil | ||||||||||||
First £250 million share buyback | Completed in 2004 | 250 | 250 | Nil | ||||||||||||
£996 million capital return | Paid July 8, 2005 | 996 | 996 | Nil | ||||||||||||
Second £250 million share buyback | Completed in 2006 | 250 | 250 | Nil | ||||||||||||
£497 million special dividend | Paid June 22, 2006 | 497 | 497 | Nil | ||||||||||||
Third £250 million share buyback | Ongoing | 250 | 244 | 6 | ||||||||||||
£700 million special dividend | Expected second quarter 2 | 007 700 | — | 700 | ||||||||||||
£150 million share buyback | Yet to commence | 150 | — | 150 | ||||||||||||
Total | 3,594 | 2,738 | 856 | |||||||||||||
Return of funds program | Timing | Total return | Returned to date(i) | Still to be returned | ||||||||||||
£501 million special dividend | Paid in December 2004 | £501m | £501m | Nil | ||||||||||||
First £250 million share buyback | Completed in 2004 | £250m | £250m | Nil | ||||||||||||
£996 million capital return | Paid in July 2005 | £996m | £996m | Nil | ||||||||||||
Second £250 million share buyback | Completed in 2006 | £250m | £250m | Nil | ||||||||||||
£497 million special dividend | Paid in June 2006 | £497m | £497m | Nil | ||||||||||||
Third £250 million share buyback | Completed in 2007 | £250m | £250m | Nil | ||||||||||||
£709 million special dividend | Paid in June 2007 | £709m | £709m | Nil | ||||||||||||
£150 million share buyback | Under way | £150m | £58m | £92m | ||||||||||||
Total | £3,603m | £3,511m | £92m | |||||||||||||
(i) | As at March |
17
19
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Revenue(1)(4) | |||||||||||||
Americas | 433 | 384 | 306 | ||||||||||
Europe, the Middle East and Africa | 206 | 200 | 186 | ||||||||||
Asia Pacific | 111 | 87 | 74 | ||||||||||
Central(5) | 55 | 42 | 40 | ||||||||||
Continuing operations | 805 | 713 | 606 | ||||||||||
Americas | 30 | 61 | 189 | ||||||||||
Europe, the Middle East and Africa | 125 | 1,082 | 1,349 | ||||||||||
Asia Pacific | — | 54 | 60 | ||||||||||
Discontinued operations(3) | 155 | 1,197 | 1,598 | ||||||||||
Total | 960 | 1,910 | 2,204 | ||||||||||
Operating profit before other operating income and expenses(1)(2) | |||||||||||||
Americas | 217 | 186 | 149 | ||||||||||
Europe, the Middle East and Africa | 36 | 31 | 11 | ||||||||||
Asia Pacific | 29 | 21 | 17 | ||||||||||
Central(5) | (81 | ) | (65 | ) | (57 | ) | |||||||
Continuing operations | 201 | 173 | 120 | ||||||||||
Americas | 4 | 12 | 24 | ||||||||||
Europe, the Middle East and Africa | 26 | 143 | 195 | ||||||||||
Asia Pacific | — | 11 | 7 | ||||||||||
Discontinued operations(3) | 30 | 166 | 226 | ||||||||||
Total | 231 | 339 | 346 | ||||||||||
Year ended December 31, | ||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||
(£ million) | ||||||||||||||||
Revenue(1) | ||||||||||||||||
Americas | 450 | 422 | 376 | |||||||||||||
Europe, the Middle East and Africa | 245 | 198 | 192 | |||||||||||||
Asia Pacific | 130 | 111 | 87 | |||||||||||||
Central(4) | 58 | 55 | 42 | |||||||||||||
Continuing operations | 883 | 786 | 697 | |||||||||||||
Americas | 31 | 41 | 69 | |||||||||||||
Europe, the Middle East and Africa | 9 | 133 | 1,090 | |||||||||||||
Asia Pacific | — | — | 54 | |||||||||||||
Discontinued operations(3) | 40 | 174 | 1,213 | |||||||||||||
Total | 923 | 960 | 1,910 | |||||||||||||
Operating profit before exceptional operating items(1)(2) | ||||||||||||||||
Americas | 220 | 215 | 186 | |||||||||||||
Europe, the Middle East and Africa | 67 | 37 | 33 | |||||||||||||
Asia Pacific | 31 | 29 | 21 | |||||||||||||
Central(4) | (81 | ) | (81 | ) | (65 | ) | ||||||||||
Continuing operations | 237 | 200 | 175 | |||||||||||||
Americas | 8 | 6 | 12 | |||||||||||||
Europe, the Middle East and Africa | — | 25 | 141 | |||||||||||||
Asia Pacific | — | — | 11 | |||||||||||||
Discontinued operations(3) | 8 | 31 | 164 | |||||||||||||
Total | 245 | 231 | 339 | |||||||||||||
18
20
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(%) | |||||||||||||
Revenue | |||||||||||||
Americas | 45.1 | 20.1 | 13.9 | ||||||||||
Europe, the Middle East and Africa | 21.5 | 10.4 | 8.4 | ||||||||||
Asia Pacific | 11.6 | 4.6 | 3.4 | ||||||||||
Central(5) | 5.7 | 2.2 | 1.8 | ||||||||||
Continuing operations | 83.9 | 37.3 | 27.5 | ||||||||||
Americas | 3.1 | 3.2 | 8.6 | ||||||||||
Europe, the Middle East and Africa | 13.0 | 56.7 | 61.2 | ||||||||||
Asia Pacific | — | 2.8 | 2.7 | ||||||||||
Discontinued operations | 16.1 | 62.7 | 72.5 | ||||||||||
Total | 100.0 | 100.0 | 100.0 | ||||||||||
Operating profit before other operating income and expenses | |||||||||||||
Americas | 93.9 | 69.1 | 43.1 | ||||||||||
Europe, the Middle East and Africa | 15.6 | 11.5 | 3.2 | ||||||||||
Asia Pacific | 12.6 | 7.8 | 4.9 | ||||||||||
Central(5) | (35.1 | ) | (24.1 | ) | (16.5 | ) | |||||||
Continuing operations | 87.0 | 64.3 | 34.7 | ||||||||||
Americas | 1.7 | 4.5 | 6.9 | ||||||||||
Europe, the Middle East and Africa | 11.3 | 27.1 | 56.4 | ||||||||||
Asia Pacific | — | 4.1 | 2.0 | ||||||||||
Discontinued operations | 13.0 | 35.7 | 65.3 | ||||||||||
Total | 100.0 | 100.0 | 100.0 | ||||||||||
Year ended December 31, | ||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||
(%) | ||||||||||||||||
Revenue | ||||||||||||||||
Americas | 48.8 | 44.0 | 19.7 | |||||||||||||
Europe, the Middle East and Africa | 26.5 | 20.6 | 10.0 | |||||||||||||
Asia Pacific | 14.1 | 11.6 | 4.6 | |||||||||||||
Central | 6.3 | 5.7 | 2.2 | |||||||||||||
Continuing operations | 95.7 | 81.9 | 36.5 | |||||||||||||
Americas | 3.3 | 4.3 | 3.6 | |||||||||||||
Europe, the Middle East and Africa | 1.0 | 13.8 | 57.1 | |||||||||||||
Asia Pacific | — | — | 2.8 | |||||||||||||
Discontinued operations | 4.3 | 18.1 | 63.5 | |||||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||||
Operating profit before exceptional operating items | ||||||||||||||||
Americas | 89.8 | 93.1 | 54.9 | |||||||||||||
Europe, the Middle East and Africa | 27.3 | 16.0 | 9.7 | |||||||||||||
Asia Pacific | 12.7 | 12.6 | 6.2 | |||||||||||||
Central | (33.1 | ) | (35.1 | ) | (19.2 | ) | ||||||||||
Continuing operations | 96.7 | 86.6 | 51.6 | |||||||||||||
Americas | 3.3 | 2.6 | 3.5 | |||||||||||||
Europe, the Middle East and Africa | — | 10.8 | 41.6 | |||||||||||||
Asia Pacific | — | — | 3.3 | |||||||||||||
Discontinued operations | 3.3 | 13.4 | 48.4 | |||||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||||
(1) | The results of overseas operations have been translated into sterling at weighted average rates of exchange for the period. In the case of the US dollar, the translation rate is | |
(2) | Operating profit before | |
(3) | Europe, the Middle East and Africa includes discontinued operations for Hotels | |
(4) | ||
Central revenue primarily relates to Holidex (IHG’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions. |
19
21
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(£ million) | ||||||||||||||
Revenue(1)(4) | ||||||||||||||
Hotels | ||||||||||||||
Americas | 433 | 384 | 306 | |||||||||||
Europe, the Middle East and Africa | 206 | 200 | 186 | |||||||||||
Asia Pacific | 111 | 87 | 74 | |||||||||||
Central(5) | 55 | 42 | 40 | |||||||||||
Continuing operations | 805 | 713 | 606 | |||||||||||
Hotels(3) | ||||||||||||||
Americas | 30 | 61 | 189 | |||||||||||
Europe, the Middle East and Africa | 125 | 411 | 643 | |||||||||||
Asia Pacific | — | 54 | 60 | |||||||||||
Soft Drinks | — | 671 | 706 | |||||||||||
Discontinued operations | 155 | 1,197 | 1,598 | |||||||||||
Total | 960 | 1,910 | 2,204 | |||||||||||
Operating profit before other operating income and expenses(1)(2) | ||||||||||||||
Hotels | ||||||||||||||
Americas | 217 | 186 | 149 | |||||||||||
Europe, the Middle East and Africa | 36 | 31 | 11 | |||||||||||
Asia Pacific | 29 | 21 | 17 | |||||||||||
Central(5) | (81 | ) | (65 | ) | (57 | ) | ||||||||
Continuing operations | 201 | 173 | 120 | |||||||||||
Hotels(3) | ||||||||||||||
Americas | 4 | 12 | 24 | |||||||||||
Europe, the Middle East and Africa | 26 | 73 | 118 | |||||||||||
Asia Pacific | — | 11 | 7 | |||||||||||
Soft Drinks | — | 70 | 77 | |||||||||||
Discontinued operations | 30 | 166 | 226 | |||||||||||
Total | 231 | 339 | 346 | |||||||||||
Year ended December 31, | ||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||
(£ million) | ||||||||||||||||
Revenue(1) | ||||||||||||||||
Hotels | ||||||||||||||||
Americas | 450 | 422 | 376 | |||||||||||||
Europe, the Middle East and Africa | 245 | 198 | 192 | |||||||||||||
Asia Pacific | 130 | 111 | 87 | |||||||||||||
Central(4) | 58 | 55 | 42 | |||||||||||||
Continuing operations | 883 | 786 | 697 | |||||||||||||
Hotels(3) | ||||||||||||||||
Americas | 31 | 41 | 69 | |||||||||||||
Europe, the Middle East and Africa | 9 | 133 | 419 | |||||||||||||
Asia Pacific | — | — | 54 | |||||||||||||
Soft Drinks | — | — | 671 | |||||||||||||
Discontinued operations | 40 | 174 | 1,213 | |||||||||||||
Total | 923 | 960 | 1,910 | |||||||||||||
Operating profit before exceptional operating items(1)(2) | ||||||||||||||||
Hotels | ||||||||||||||||
Americas | 220 | 215 | 186 | |||||||||||||
Europe, the Middle East and Africa | 67 | 37 | 33 | |||||||||||||
Asia Pacific | 31 | 29 | 21 | |||||||||||||
Central(4) | (81 | ) | (81 | ) | (65 | ) | ||||||||||
Continuing operations | 237 | 200 | 175 | |||||||||||||
Hotels(3) | ||||||||||||||||
Americas | 8 | 6 | 12 | |||||||||||||
Europe, the Middle East and Africa | — | 25 | 71 | |||||||||||||
Asia Pacific | — | — | 11 | |||||||||||||
Soft Drinks | — | 70 | ||||||||||||||
Discontinued operations | 8 | 31 | 164 | |||||||||||||
Total | 245 | 231 | 339 | |||||||||||||
20
22
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(%) | ||||||||||||||
Revenue | ||||||||||||||
Hotels | ||||||||||||||
Americas | 45.1 | 20.1 | 13.9 | |||||||||||
Europe, the Middle East and Africa | 21.5 | 10.4 | 8.4 | |||||||||||
Asia Pacific | 11.6 | 4.6 | 3.4 | |||||||||||
Central | 5.7 | 2.2 | 1.8 | |||||||||||
Continuing operations | 83.9 | 37.3 | 27.5 | |||||||||||
Hotels | ||||||||||||||
Americas | 3.1 | 3.2 | 8.6 | |||||||||||
Europe, the Middle East and Africa | 13.0 | 21.5 | 29.2 | |||||||||||
Asia Pacific | — | 2.9 | 2.7 | |||||||||||
Soft Drinks | — | 35.1 | 32.0 | |||||||||||
Discontinued operations | 16.1 | 62.7 | 72.5 | |||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Operating profit before other operating income and expenses | ||||||||||||||
Hotels | ||||||||||||||
Americas | 93.9 | 54.9 | 43.1 | |||||||||||
Europe, the Middle East and Africa | 15.6 | 9.1 | 3.2 | |||||||||||
Asia Pacific | 12.6 | 6.2 | 4.9 | |||||||||||
Central | (35.1 | ) | (19.2 | ) | (16.5 | ) | ||||||||
Continuing operations | 87.0 | 51.0 | 34.7 | |||||||||||
Hotels | ||||||||||||||
Americas | 1.7 | 3.6 | 6.9 | |||||||||||
Europe, the Middle East and Africa | 11.3 | 21.5 | 34.1 | |||||||||||
Asia Pacific | — | 3.2 | 2.0 | |||||||||||
Soft Drinks | — | 20.7 | 22.3 | |||||||||||
Discontinued operations | 13.0 | 49.0 | 65.3 | |||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Year ended December 31, | ||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||
(%) | ||||||||||||||||
Revenue | ||||||||||||||||
Hotels | ||||||||||||||||
Americas | 48.8 | 44.0 | 19.7 | |||||||||||||
Europe, the Middle East and Africa | 26.5 | 20.6 | 10.0 | |||||||||||||
Asia Pacific | 14.1 | 11.6 | 4.6 | |||||||||||||
Central | 6.3 | 5.7 | 2.2 | |||||||||||||
Continuing operations | 95.7 | 81.9 | 36.5 | |||||||||||||
Hotels | ||||||||||||||||
Americas | 3.3 | 4.3 | 3.6 | |||||||||||||
Europe, the Middle East and Africa | 1.0 | 13.8 | 22.0 | |||||||||||||
Asia Pacific | — | — | 2.8 | |||||||||||||
Soft Drinks | — | — | 35.1 | |||||||||||||
Discontinued operations | 4.3 | 18.1 | 63.5 | |||||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||||
Operating profit before exceptional operating items | ||||||||||||||||
Hotels | ||||||||||||||||
Americas | 89.8 | 93.1 | 54.9 | |||||||||||||
Europe, the Middle East and Africa | 27.3 | 16.0 | 9.7 | |||||||||||||
Asia Pacific | 12.7 | 12.6 | 6.2 | |||||||||||||
Central | (33.1 | ) | (35.1 | ) | (19.2 | ) | ||||||||||
Continuing operations | 96.7 | 86.6 | 51.6 | |||||||||||||
Hotels | ||||||||||||||||
Americas | 3.3 | 2.6 | 3.5 | |||||||||||||
Europe, the Middle East and Africa | — | 10.8 | 20.9 | |||||||||||||
Asia Pacific | — | — | 3.3 | |||||||||||||
Soft Drinks | — | — | 20.7 | |||||||||||||
Discontinued operations | 3.3 | 13.4 | 48.4 | |||||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||||
(1) | The results of overseas operations have been translated into sterling at weighted average rates of exchange for the period. In the case of the US dollar, the translation rate is | |
(2) | Operating profit before | |
(3) | Hotels discontinued operations were all owned and leased. | |
(4) | ||
Central revenue primarily relates to Holidex (IHG’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions. |
21
23
• | change in demographics — as the population ages and becomes wealthier, increased leisure time and income encourages more travel and hotel visits; | |
• | increase in travel volumes as low cost airlines grow rapidly; | |
• | globalization of trade and tourism; | |
• | increase in affluence and freedom to travel within the Chinese middle class; and | |
• | increase in the preference for branded hotels amongst consumers. |
Branded hotel rooms by region as a percentage of the total market | 2006 | |||
United States | 67 | % | ||
Europe, Middle East and Africa (“EMEA”) | 35 | % | ||
Asia Pacific | 28 | % |
22
24
25
Management | ||||||||||||||||||||||||||||||||
contracts and joint | ||||||||||||||||||||||||||||||||
Owned or leased | ventures | Franchised | Total | |||||||||||||||||||||||||||||
No. of | No. of | No. of | No. of | No. of | No. of | No. of | No. of | |||||||||||||||||||||||||
hotels | rooms | hotels | rooms | hotels | rooms | hotels | rooms | |||||||||||||||||||||||||
2006 | 25 | 8,460 | 512 | 125,214 | 3,204 | 422,572 | 3,741 | 556,246 | ||||||||||||||||||||||||
2005 | 55 | 15,485 | 504 | 121,249 | 3,047 | 400,799 | 3,606 | 537,533 | ||||||||||||||||||||||||
2004 | 166 | 38,420 | 403 | 98,953 | 2,971 | 396,829 | 3,540 | 534,202 |
Management | ||||||||||||||||||||||||||||||||
contracts and joint | ||||||||||||||||||||||||||||||||
Owned or leased | ventures | Franchised | Total | |||||||||||||||||||||||||||||
No. of | No. of | No. of | No. of | No. of | No. of | No. of | No. of | |||||||||||||||||||||||||
hotels | rooms | hotels | rooms | hotels | rooms | hotels | rooms | |||||||||||||||||||||||||
2007 | 18 | 6,396 | 539 | 134,883 | 3,392 | 443,815 | 3,949 | 585,094 | ||||||||||||||||||||||||
2006 | 25 | 8,460 | 512 | 125,214 | 3,204 | 422,572 | 3,741 | 556,246 | ||||||||||||||||||||||||
2005 | 55 | 15,485 | 504 | 121,249 | 3,047 | 400,799 | 3,606 | 537,533 |
23
• | brand performance — to operate a portfolio of brands attractive to both owners and guests that have clear market positions and differentiation in | |
• | excellent hotel returns — to generate higher owner returns through revenue delivery and improved operating efficiency; | |
• | market scale and knowledge — to accelerate profitable growth in the largest markets where the Group currently has scale; and | |
• | aligned |
IHG has set an organic growth target of at least 50,000 to 60,000 net rooms | ||
26
• | a strong brand portfolio across the major markets, | |
• | market coverage — a presence in nearly 100 | |
• | scale — | |
• | IHG global reservation channels delivering | |
• | a loyalty program, Priority Club Rewards, contributing | |
• | a strong web presence — holidayinn.com is one of the industry’s most visited |
24
27
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(£ million) | ||||||||||||||
Continuing revenue(1)(4) | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 115 | 106 | 80 | |||||||||||
Managed | 77 | 65 | 30 | |||||||||||
Franchised | 241 | 213 | 196 | |||||||||||
433 | 384 | 306 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | 100 | 110 | 116 | |||||||||||
Managed | 71 | 55 | 43 | |||||||||||
Franchised | 35 | 35 | 27 | |||||||||||
206 | 200 | 186 | ||||||||||||
Asia | ||||||||||||||
Owned and leased | 71 | 59 | 50 | |||||||||||
Managed | 36 | 25 | 21 | |||||||||||
Franchised | 4 | 3 | 3 | |||||||||||
111 | 87 | 74 | ||||||||||||
Central(3) | 55 | 42 | 40 | |||||||||||
Total | 805 | 713 | 606 | |||||||||||
Continuing operating profit before other operating income and expenses(1)(2) | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 14 | 14 | 3 | |||||||||||
Managed | 27 | 20 | 6 | |||||||||||
Franchised | 208 | 186 | 167 | |||||||||||
Regional overheads | (32 | ) | (34 | ) | (27 | ) | ||||||||
217 | 186 | 149 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | (5 | ) | (5 | ) | (11 | ) | ||||||||
Managed | 37 | 31 | 24 | |||||||||||
Franchised | 24 | 26 | 21 | |||||||||||
Regional overheads | (20 | ) | (21 | ) | (23 | ) | ||||||||
36 | 31 | 11 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 17 | 11 | 9 | |||||||||||
Managed | 21 | 16 | 14 | |||||||||||
Franchised | 3 | 2 | 2 | |||||||||||
Regional overheads | (12 | ) | (8 | ) | (8 | ) | ||||||||
29 | 21 | 17 | ||||||||||||
Central(3) | (81 | ) | (65 | ) | (57 | ) | ||||||||
Total | 201 | 173 | 120 | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Continuing revenue(1) | ||||||||||||
Americas | ||||||||||||
Owned and leased | 128 | 104 | 98 | |||||||||
Managed | 78 | 77 | 65 | |||||||||
Franchised | 244 | 241 | 213 | |||||||||
450 | 422 | 376 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 121 | 92 | 102 | |||||||||
Managed | 84 | 71 | 55 | |||||||||
Franchised | 40 | 35 | 35 | |||||||||
245 | 198 | 192 | ||||||||||
Asia | ||||||||||||
Owned and leased | 73 | 71 | 59 | |||||||||
Managed | 49 | 36 | 25 | |||||||||
Franchised | 8 | 4 | 3 | |||||||||
130 | 111 | 87 | ||||||||||
Central(3) | 58 | 55 | 42 | |||||||||
Total | 883 | 786 | 697 | |||||||||
Continuing operating profit before exceptional operating items(1)(2) | ||||||||||||
Americas | ||||||||||||
Owned and leased | 20 | 12 | 14 | |||||||||
Managed | 21 | 27 | 20 | |||||||||
Franchised | 212 | 208 | 186 | |||||||||
Regional overheads | (33 | ) | (32 | ) | (34 | ) | ||||||
220 | 215 | 186 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 17 | (4 | ) | (3 | ) | |||||||
Managed | 43 | 37 | 31 | |||||||||
Franchised | 29 | 24 | 26 | |||||||||
Regional overheads | (22 | ) | (20 | ) | (21 | ) | ||||||
67 | 37 | 33 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 18 | 17 | 11 | |||||||||
Managed | 23 | 21 | 16 | |||||||||
Franchised | 3 | 3 | 2 | |||||||||
Regional overheads | (13 | ) | (12 | ) | (8 | ) | ||||||
31 | 29 | 21 | ||||||||||
Central(3) | (81 | ) | (81 | ) | (65 | ) | ||||||
Total | 237 | 200 | 175 | |||||||||
25
28
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(%) | ||||||||||||||
Continuing revenue | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 14.3 | 14.8 | 13.2 | |||||||||||
Managed | 9.6 | 9.1 | 5.0 | |||||||||||
Franchised | 29.9 | 29.9 | 32.3 | |||||||||||
53.8 | 53.8 | 50.5 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | 12.4 | 15.4 | 19.1 | |||||||||||
Managed | 8.8 | 7.8 | 7.1 | |||||||||||
Franchised | 4.4 | 4,9 | 4.5 | |||||||||||
25.6 | 28.1 | 30.7 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 8.8 | 8.3 | 8.2 | |||||||||||
Managed | 4.5 | 3.5 | 3.5 | |||||||||||
Franchised | 0.5 | 0.4 | 0.5 | |||||||||||
13.8 | 12.2 | 12.2 | ||||||||||||
Central | 6.8 | 5.9 | 6.6 | |||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Continuing operating profit before other operating income and expenses | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 7.0 | 8.0 | 2.5 | |||||||||||
Managed | 13.6 | 11.4 | 5.0 | |||||||||||
Franchised | 103.5 | 107.9 | 139.2 | |||||||||||
Regional overheads | (16.0 | ) | (19.7 | ) | (22.5 | ) | ||||||||
108.1 | 107.6 | 124.2 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | (2.5 | ) | (2.9 | ) | (9.2 | ) | ||||||||
Managed | 18.4 | 18.0 | 20.0 | |||||||||||
Franchised | 12.0 | 15.1 | 17.5 | |||||||||||
Regional overheads | (10.0 | ) | (12.2 | ) | (19.2 | ) | ||||||||
17.9 | 18.0 | 9.1 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 8.4 | 6.4 | 7.5 | |||||||||||
Managed | 10.6 | 9.2 | 11.7 | |||||||||||
Franchised | 1.3 | 1.3 | 1.7 | |||||||||||
Regional overheads | (6.0 | ) | (4.8 | ) | (6.7 | ) | ||||||||
14.3 | 12.1 | 14.2 | ||||||||||||
Central | (40.3 | ) | (37.7 | ) | (47.5 | ) | ||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(%) | ||||||||||||
Continuing revenue | ||||||||||||
Americas | ||||||||||||
Owned and leased | 14.5 | 13.2 | 14.1 | |||||||||
Managed | 8.8 | 9.8 | 9.3 | |||||||||
Franchised | 27.6 | 30.7 | 30.6 | |||||||||
50.9 | 53.7 | 54.0 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 13.7 | 11.7 | 14.6 | |||||||||
Managed | 9.5 | 9.0 | 7.9 | |||||||||
Franchised | 4.5 | 4.5 | 5.0 | |||||||||
27.7 | 25.2 | 27.5 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 8.3 | 9.0 | 8.5 | |||||||||
Managed | 5.6 | 4.6 | 3.6 | |||||||||
Franchised | 0.9 | 0.5 | 0.4 | |||||||||
14.8 | 14.1 | 12.5 | ||||||||||
Central | 6.6 | 7.0 | 6.0 | |||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||
Continuing operating profit before exceptional operating items | ||||||||||||
Americas | ||||||||||||
Owned and leased | 8.4 | 6.0 | 8.0 | |||||||||
Managed | 8.9 | 13.5 | 11.4 | |||||||||
Franchised | 89.5 | 104.0 | 106.3 | |||||||||
Regional overheads | (13.9 | ) | (16.0 | ) | (19.4 | ) | ||||||
92.9 | 107.5 | 106.3 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 7.2 | (2.0 | ) | (1.7 | ) | |||||||
Managed | 18.1 | 18.5 | 17.7 | |||||||||
Franchised | 12.2 | 12.0 | 14.8 | |||||||||
Regional overheads | (9.3 | ) | (10.0 | ) | (12.0 | ) | ||||||
28.2 | 18.5 | 18.8 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 7.6 | 8.5 | 6.3 | |||||||||
Managed | 9.7 | 10.5 | 9.1 | |||||||||
Franchised | 1.3 | 1.5 | 1.1 | |||||||||
Regional overheads | (5.5 | ) | (6.0 | ) | (4.5 | ) | ||||||
13.1 | 14.5 | 12.0 | ||||||||||
Central | (34.2 | ) | (40.5 | ) | (37.1 | ) | ||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||
(1) | The results of overseas operations have been translated into sterling at weighted average rates of exchange for the period. In the case of the US dollar, the translation rate is | |
(2) | Operating profit before | |
(3) | Central revenue primarily relates to Holidex (IHG’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions. | |
26
29
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
($ million) | ||||||||||||||
Continuing revenue(1)(4) | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 211 | 195 | 146 | |||||||||||
Managed | 143 | 118 | 55 | |||||||||||
Franchised | 443 | 389 | 357 | |||||||||||
797 | 702 | 558 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | 184 | 201 | 211 | |||||||||||
Managed | 131 | 100 | 78 | |||||||||||
Franchised | 63 | 64 | 50 | |||||||||||
378 | 365 | 339 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 131 | 108 | 91 | |||||||||||
Managed | 65 | 45 | 38 | |||||||||||
Franchised | 8 | 6 | 5 | |||||||||||
204 | 159 | 134 | ||||||||||||
Central(3) | 101 | 77 | 74 | |||||||||||
Total | 1,480 | 1,303 | 1,105 | |||||||||||
Continuing operating profit before other operating income and expenses(1)(2) | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 26 | 25 | 6 | |||||||||||
Managed | 50 | 36 | 12 | |||||||||||
Franchised | 382 | 340 | 304 | |||||||||||
Regional overheads | (59 | ) | (62 | ) | (50 | ) | ||||||||
399 | 339 | 272 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | (9 | ) | (9 | ) | (20 | ) | ||||||||
Managed | 68 | 56 | 43 | |||||||||||
Franchised | 44 | 48 | 38 | |||||||||||
Regional overheads | (36 | ) | (39 | ) | (42 | ) | ||||||||
67 | 56 | 19 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 31 | 20 | 17 | |||||||||||
Managed | 39 | 29 | 25 | |||||||||||
Franchised | 5 | 5 | 3 | |||||||||||
Regional overheads | (23 | ) | (15 | ) | (15 | ) | ||||||||
52 | 39 | 30 | ||||||||||||
Central(3) | (149 | ) | (118 | ) | (102 | ) | ||||||||
Total | 369 | 316 | 219 | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
($ million) | ||||||||||||
Continuing revenue(1) | ||||||||||||
Americas | ||||||||||||
Owned and leased | 257 | 192 | 180 | |||||||||
Managed | 156 | 143 | 118 | |||||||||
Franchised | 489 | 443 | 389 | |||||||||
902 | 778 | 687 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 244 | 169 | 187 | |||||||||
Managed | 167 | 131 | 100 | |||||||||
Franchised | 81 | 63 | 64 | |||||||||
492 | 363 | 351 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 145 | 131 | 108 | |||||||||
Managed | 99 | 65 | 45 | |||||||||
Franchised | 16 | 8 | 6 | |||||||||
260 | 204 | 159 | ||||||||||
Central(3) | 117 | 101 | 77 | |||||||||
Total | 1,771 | 1,446 | 1,274 | |||||||||
Continuing operating profit before exceptional operating items(1)(2) | ||||||||||||
Americas | ||||||||||||
Owned and leased | 40 | 22 | 26 | |||||||||
Managed | 41 | 50 | 36 | |||||||||
Franchised | 425 | 382 | 340 | |||||||||
Regional overheads | (66 | ) | (59 | ) | (62 | ) | ||||||
440 | 395 | 340 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 33 | (7 | ) | (5 | ) | |||||||
Managed | 87 | 68 | 56 | |||||||||
Franchised | 58 | 44 | 48 | |||||||||
Regional overheads | (44 | ) | (36 | ) | (39 | ) | ||||||
134 | 69 | 60 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 36 | 31 | 20 | |||||||||
Managed | 46 | 39 | 29 | |||||||||
Franchised | 6 | 5 | 5 | |||||||||
Regional overheads | (25 | ) | (23 | ) | (15 | ) | ||||||
63 | 52 | 39 | ||||||||||
Central(3) | (163 | ) | (149 | ) | (118 | ) | ||||||
Total | 474 | 367 | 321 | |||||||||
27
30
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(%) | ||||||||||||||
Continuing revenue | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 14.3 | 15.0 | 13.2 | |||||||||||
Managed | 9.7 | 9.0 | 5.0 | |||||||||||
Franchised | 29.9 | 29.9 | 32.3 | |||||||||||
53.9 | 53.9 | 50.5 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | 12.4 | 15.4 | 19.1 | |||||||||||
Managed | 8.8 | 7.7 | 7.1 | |||||||||||
Franchised | 4.3 | 4.9 | 4.5 | |||||||||||
25.5 | 28.0 | 30.7 | ||||||||||||
Asia Pacific | ||||||||||||||
Owned and leased | 8.9 | 8.3 | 8.2 | |||||||||||
Managed | 4.4 | 3.4 | 3.4 | |||||||||||
Franchised | 0.5 | 0.5 | 0.5 | |||||||||||
13.8 | 12.2 | 12.1 | ||||||||||||
Central | 6.8 | 5.9 | 6.7 | |||||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Continuing operating profit before other operating income and expenses | ||||||||||||||
Americas | ||||||||||||||
Owned and leased | 7.0 | 8.1 | 2.7 | |||||||||||
Managed | 13.5 | 10.4 | 5.5 | |||||||||||
Franchised | 103.5 | 98.0 | 138.8 | |||||||||||
Regional overheads | (16.0 | ) | (17.9 | ) | (22.8 | ) | ||||||||
108.0 | 98.6 | 124.2 | ||||||||||||
EMEA | ||||||||||||||
Owned and leased | (2.4 | ) | 5.8 | (9.1 | ) | |||||||||
Managed | 18.4 | 16.4 | 19.6 | |||||||||||
Franchised | 11.9 | 13.5 | 17.4 | |||||||||||
Regional overheads | (9.7 | ) | (11.0 | ) | (19.2 | ) | ||||||||
18.2 | 24.7 | 8.7 | ||||||||||||
Asia | ||||||||||||||
Owned and leased | 8.4 | 5.5 | 7.8 | |||||||||||
Managed | 10.6 | 8.4 | 11.4 | |||||||||||
Franchised | 1.3 | 1.4 | 1.4 | |||||||||||
Regional overheads | (6.2 | ) | (4.3 | ) | (6.9 | ) | ||||||||
14.1 | 11.0 | 13.7 | ||||||||||||
Central | (40.3 | ) | (34.3 | ) | (46.6 | ) | ||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(%) | ||||||||||||
Continuing revenue | ||||||||||||
Americas | ||||||||||||
Owned and leased | 14.5 | 13.3 | 14.1 | |||||||||
Managed | 8.8 | 9.9 | 9.3 | |||||||||
Franchised | 27.6 | 30.6 | 30.5 | |||||||||
50.9 | 53.8 | 53.9 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 13.8 | 11.7 | 14.7 | |||||||||
Managed | 9.4 | 9.0 | 7.9 | |||||||||
Franchised | 4.6 | 4.4 | 5.0 | |||||||||
27.8 | 25.1 | 27.6 | ||||||||||
Asia Pacific | ||||||||||||
Owned and leased | 8.2 | 9.0 | 8.5 | |||||||||
Managed | 5.6 | 4.5 | 3.5 | |||||||||
Franchised | 0.9 | 0.6 | 0.5 | |||||||||
14.7 | 14.1 | 12.5 | ||||||||||
Central | 6.6 | 7.0 | 6.0 | |||||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||
Continuing operating profit before exceptional operating items | ||||||||||||
Americas | ||||||||||||
Owned and leased | 8.4 | 6.0 | 8.1 | |||||||||
Managed | 8.6 | 13.6 | 11.2 | |||||||||
Franchised | 89.7 | 104.0 | 105.9 | |||||||||
Regional overheads | (13.9 | ) | (16.0 | ) | (19.3 | ) | ||||||
92.8 | 107.6 | 105.9 | ||||||||||
EMEA | ||||||||||||
Owned and leased | 7.0 | (1.9 | ) | (1.6 | ) | |||||||
Managed | 18.4 | 18.5 | 17.4 | |||||||||
Franchised | 12.2 | 12.0 | 15.0 | |||||||||
Regional overheads | (9.3 | ) | (9.8 | ) | (12.1 | ) | ||||||
28.3 | 18.8 | 18.7 | ||||||||||
Asia | ||||||||||||
Owned and leased | 7.6 | 8.5 | 6.2 | |||||||||
Managed | 9.7 | 10.6 | 9.0 | |||||||||
Franchised | 1.3 | 1.4 | 1.6 | |||||||||
Regional overheads | (5.3 | ) | (6.3 | ) | (4.6 | ) | ||||||
13.3 | 14.2 | 12.2 | ||||||||||
Central | (34.4 | ) | (40.6 | ) | (36.8 | ) | ||||||
Total | 100.0 | 100.0 | 100.0 | |||||||||
(1) | The results of overseas operations have been translated into sterling at weighted average rates of exchange for the period. In the case of the US dollar, the translation rate is |
31
(2) | Operating profit before | |
(3) | Central revenue primarily relates to Holidex (IHG’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions. | |
28
32
• | adding further locations and improving guest satisfaction for its brands; | |
• | continuing the focus on enrolments in Priority Club Rewards and increasing their share of the total hotel | |
• | ||
• | improving pricing structure. |
29
December 31, 2006 | ||||||||
Brands | Room numbers | Hotels | ||||||
InterContinental | 49,599 | 148 | ||||||
Crowne Plaza | 75,632 | 275 | ||||||
Holiday Inn | 260,470 | 1,395 | ||||||
Holiday Inn Express | 143,582 | 1,686 | ||||||
Staybridge Suites | 10,953 | 97 | ||||||
Candlewood Suites | 14,149 | 130 | ||||||
Hotel Indigo | 893 | 6 | ||||||
Other | 968 | 4 | ||||||
Total | 556,246 | 3,741 |
December 31, 2007 | ||||||||||||
Brands | Room numbers | Hotels | ||||||||||
InterContinental | 50,762 | 149 | ||||||||||
Crowne Plaza | 83,170 | 299 | ||||||||||
Holiday Inn | 256,699 | 1,381 | ||||||||||
Holiday Inn Express | 156,531 | 1,808 | ||||||||||
Staybridge Suites | 13,466 | 122 | ||||||||||
Candlewood Suites | 16,825 | 158 | ||||||||||
Hotel Indigo | 1,501 | 11 | ||||||||||
Other | 6,140 | 21 | ||||||||||
Total | 585,094 | 3,949 | ||||||||||
Americas | Americas | EMEA | EMEA | Asia Pacific | ||||||||||||||||
total | O & L | total | O & L | total | ||||||||||||||||
Average room rate $(1) | 169.83 | 260.63 | 190.85 | 449.58 | 173.22 | |||||||||||||||
Room numbers(2) | 16,624 | 1,914 | 20,012 | 1,288 | 14,126 |
Americas | Americas | EMEA | EMEA | |||||||||||||||||
total | O & L | total | O & L | Asia Pacific | ||||||||||||||||
Average room rate $(1) | 152.75 | 227.59 | 164.11 | 269.15 | 160.73 | |||||||||||||||
Room numbers(2) | 16,525 | 2,271 | 21,423 | 1,288 | 11,651 |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
33
Americas | EMEA | EMEA | Asia Pacific | |||||||||||||
total | total | O & L | total | |||||||||||||
Average room rate $(1) | 115.01 | 150.73 | 117.61 | 100.23 | ||||||||||||
Room numbers(2) | 47,893 | 17,326 | 233 | 17,951 |
Americas | Americas | EMEA | EMEA | |||||||||||||||||
total | O & L | total | O & L | Asia Pacific | ||||||||||||||||
Average room rate $(1) | 111.05 | 85.24 | 130.75 | 111.64 | 95.21 | |||||||||||||||
Room numbers(2) | 42,604 | 293 | 16,440 | 732 | 16,588 |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
30
Americas | Americas | EMEA | Asia Pacific | |||||||||||||
total | O & L | total | total | |||||||||||||
Average room rate $(1) | 95.97 | 96.04 | 119.64 | 81.18 | ||||||||||||
Room numbers(2) | 177,999 | 1,882 | 52,842 | 25,858 |
Americas | Americas | EMEA | EMEA | |||||||||||||||||
total | O & L | total | O & L | Asia Pacific | ||||||||||||||||
Average room rate $(1) | 91.35 | 93.67 | 105.70 | 92.86 | 73.82 | |||||||||||||||
Room numbers(2) | 186,067 | 1,882 | 50,628 | 915 | 23,775 |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
Americas | EMEA | Asia Pacific | ||||||||||
total | total | total | ||||||||||
Average room rate $(1) | 94.10 | 104.73 | 72.75 | |||||||||
Room numbers(2) | 134,551 | 19,380 | 2,600 |
Americas | EMEA | |||||||||||
total | total | Asia Pacific | ||||||||||
Average room rate $(1) | 87.46 | 91.82 | 42.86 | |||||||||
Room numbers(2) | 123,718 | 18,109 | 1,755 |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
34
Americas | ||||
total | ||||
Average room rate $(1) | ||||
Room numbers(2) |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
31
Americas | ||||
total | ||||
Average room rate $(1) | ||||
Room numbers(2) |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
35
Americas | ||||
total | ||||
Average room rate $(1) | ||||
Room numbers(2) |
(1) | For the year ended December 31, | |
(2) | As at December 31, |
Americas | EMEA | Asia Pacific | ||||||||||
(% of total) | ||||||||||||
Room numbers(1) | 71 | 19 | 10 | |||||||||
Hotel level operating profit (before central overheads and other operating income and expenses)(2) | 77 | 13 | 10 |
Americas | EMEA | Asia Pacific | ||||||||||
(% of total) | ||||||||||||
Room numbers(1) | 70 | 19 | 11 | |||||||||
Regional operating profit (before central overheads and exceptional operating items)(2) | 69 | 21 | 10 |
(1) | As at December 31, | |
(2) | For the year ended December 31, |
32
Management contract | |||||||||||||||||||||||||||||||||
Owned or leased | and joint ventures | Franchised | Total | ||||||||||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | ||||||||||||||||||||||||||
United States | |||||||||||||||||||||||||||||||||
InterContinental | 4 | 1,914 | 10 | 4,103 | 3 | 852 | 17 | 6,869 | |||||||||||||||||||||||||
Crowne Plaza | — | — | 14 | 5,439 | 108 | 30,224 | 122 | 35,663 | |||||||||||||||||||||||||
Holiday Inn | 3 | 758 | 26 | 8,639 | 817 | 152,758 | 846 | 162,155 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | 1 | 252 | 1,430 | 115,138 | 1,431 | 115,390 | |||||||||||||||||||||||||
Staybridge Suites | 2 | 233 | 39 | 4,765 | 51 | 5,356 | 92 | 10,354 | |||||||||||||||||||||||||
Candlewood Suites | — | — | 77 | 9,340 | 53 | 4,809 | 130 | 14,149 | |||||||||||||||||||||||||
Hotel Indigo | — | — | 2 | 305 | 4 | 588 | 6 | 893 | |||||||||||||||||||||||||
Total | 9 | 2,905 | 169 | 32,843 | 2,466 | 309,725 | 2,644 | 345,473 | |||||||||||||||||||||||||
36
Management contract | |||||||||||||||||||||||||||||||||
Owned or leased | and joint ventures | Franchised | Total | ||||||||||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | ||||||||||||||||||||||||||
Rest of Americas | |||||||||||||||||||||||||||||||||
InterContinental | 1 | 357 | 11 | 3,498 | 20 | 5,801 | 32 | 9,656 | |||||||||||||||||||||||||
Crowne Plaza | 1 | 293 | 3 | 737 | 29 | 5,911 | 33 | 6,941 | |||||||||||||||||||||||||
Holiday Inn | 2 | 1,124 | 4 | 1,844 | 135 | 20,944 | 141 | 23,912 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | — | — | 75 | 8,328 | 75 | 8,328 | |||||||||||||||||||||||||
Staybridge Suites | — | — | 2 | 335 | 3 | 264 | 5 | 599 | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Hotel Indigo | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | 4 | 1,774 | 20 | 6,414 | 262 | 41,248 | 286 | 49,436 | |||||||||||||||||||||||||
Total Americas | |||||||||||||||||||||||||||||||||
InterContinental | 5 | 2,271 | 21 | 7,601 | 23 | 6,653 | 49 | 16,525 | |||||||||||||||||||||||||
Crowne Plaza | 1 | 293 | 17 | 6,176 | 137 | 36,135 | 155 | 42,604 | |||||||||||||||||||||||||
Holiday Inn | 5 | 1,882 | 30 | 10,483 | 952 | 173,702 | 987 | 186,067 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | 1 | 252 | 1,505 | 123,466 | 1,506 | 123,718 | |||||||||||||||||||||||||
Staybridge Suites | 2 | 233 | 41 | 5,100 | 54 | 5,620 | 97 | 10,953 | |||||||||||||||||||||||||
Candlewood Suites | — | — | 77 | 9,340 | 53 | 4,809 | 130 | 14,149 | |||||||||||||||||||||||||
Hotel Indigo | — | — | 2 | 305 | 4 | 588 | 6 | 893 | |||||||||||||||||||||||||
Total | 13 | 4,679 | 189 | 39,257 | 2,728 | 350,973 | 2,930 | 394,909 | |||||||||||||||||||||||||
United Kingdom | |||||||||||||||||||||||||||||||||
InterContinental | 1 | 447 | — | — | — | — | 1 | 447 | |||||||||||||||||||||||||
Crowne Plaza | — | — | 6 | 1,530 | 9 | 1,938 | 15 | 3,468 | |||||||||||||||||||||||||
Holiday Inn | — | — | 58 | 9,973 | 46 | 6,483 | 104 | 16,456 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | 1 | 120 | 106 | 10,949 | 107 | 11,069 | |||||||||||||||||||||||||
Staybridge Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | 1 | 447 | 65 | 11,623 | 161 | 19,370 | 227 | 31,440 | |||||||||||||||||||||||||
Europe | |||||||||||||||||||||||||||||||||
InterContinental | 1 | 470 | 23 | 7,972 | 3 | 951 | 27 | 9,393 | |||||||||||||||||||||||||
Crowne Plaza | 3 | 732 | 6 | 1,351 | 32 | 7,644 | 41 | 9,727 | |||||||||||||||||||||||||
Holiday Inn | 3 | 915 | 9 | 2,059 | 174 | 26,393 | 186 | 29,367 | |||||||||||||||||||||||||
Holiday Inn Express | 1 | 153 | 9 | 1,005 | 54 | 5,778 | 64 | 6,936 | |||||||||||||||||||||||||
Staybridge Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | 8 | 2,270 | 47 | 12,387 | 263 | 40,766 | 318 | 55,423 | |||||||||||||||||||||||||
37
Management contract | |||||||||||||||||||||||||||||||||
Owned or leased | and joint ventures | Franchised | Total | ||||||||||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | ||||||||||||||||||||||||||
The Middle East and Africa | |||||||||||||||||||||||||||||||||
InterContinental | 1 | 371 | 33 | 10,264 | 4 | 948 | 38 | 11,583 | |||||||||||||||||||||||||
Crowne Plaza | — | — | 11 | 3,041 | 1 | 204 | 12 | 3,245 | |||||||||||||||||||||||||
Holiday Inn | — | — | 18 | 3,360 | 9 | 1,445 | 27 | 4,805 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | — | — | 1 | 104 | 1 | 104 | |||||||||||||||||||||||||
Staybridge Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | 1 | 371 | 62 | 16,665 | 15 | 2,701 | 78 | 19,737 | |||||||||||||||||||||||||
Total EMEA | |||||||||||||||||||||||||||||||||
InterContinental | 3 | 1,288 | 56 | 18,236 | 7 | 1,899 | 66 | 21,423 | |||||||||||||||||||||||||
Crowne Plaza | 3 | 732 | 23 | 5,922 | 42 | 9,786 | 68 | 16,440 | |||||||||||||||||||||||||
Holiday Inn | 3 | 915 | 85 | 15,392 | 229 | 34,321 | 317 | 50,628 | |||||||||||||||||||||||||
Holiday Inn Express | 1 | 153 | 10 | 1,125 | 161 | 16,831 | 172 | 18,109 | |||||||||||||||||||||||||
Staybridge Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | 10 | 3,088 | 174 | 40,675 | 439 | 62,837 | 623 | 106,600 | |||||||||||||||||||||||||
Far East and Australasia (Asia Pacific) | |||||||||||||||||||||||||||||||||
InterContinental | 1 | 495 | 24 | 8,789 | 8 | 2,367 | 33 | 11,651 | |||||||||||||||||||||||||
Crowne Plaza | — | — | 44 | 13,806 | 8 | 2,782 | 52 | 16,588 | |||||||||||||||||||||||||
Holiday Inn | 1 | 198 | 70 | 20,101 | 20 | 3,476 | 91 | 23,775 | |||||||||||||||||||||||||
Holiday Inn Express | — | — | 7 | 1,618 | 1 | 137 | 8 | 1,755 | |||||||||||||||||||||||||
Staybridge Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Candlewood Suites | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Other | — | — | 4 | 968 | — | — | 4 | 968 | |||||||||||||||||||||||||
Total | 2 | 693 | 149 | 45,282 | 37 | 8,762 | 188 | 54,737 | |||||||||||||||||||||||||
38
Management contract | |||||||||||||||||||||||||||||||||
Owned or leased | and joint ventures | Franchised | Total | ||||||||||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | ||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||
InterContinental | 9 | 4,054 | 101 | 34,626 | 38 | 10,919 | 148 | 49,599 | |||||||||||||||||||||||||
Crowne Plaza | 4 | 1,025 | 84 | 25,904 | 187 | 48,703 | 275 | 75,632 | |||||||||||||||||||||||||
Holiday Inn | 9 | 2,995 | 185 | 45,976 | 1,201 | 211,499 | 1,395 | 260,470 | |||||||||||||||||||||||||
Holiday Inn Express | 1 | 153 | 18 | 2,995 | 1,667 | 140,434 | 1,686 | 143,582 | |||||||||||||||||||||||||
Staybridge Suites | 2 | 233 | 41 | 5,100 | 54 | 5,620 | 97 | 10,953 | |||||||||||||||||||||||||
Candlewood Suites | — | — | 77 | 9,340 | 53 | 4,809 | 130 | 14,149 | |||||||||||||||||||||||||
Hotel Indigo | — | — | 2 | 305 | 4 | 588 | 6 | 893 | |||||||||||||||||||||||||
Other | — | — | 4 | 968 | — | — | 4 | 968 | |||||||||||||||||||||||||
Total | 25 | 8,460 | 512 | 125,214 | 3,204 | 422,572 | 3,741 | 556,246 | |||||||||||||||||||||||||
Owned and leased | Managed | Franchised | Total | |||||||||||||||||||||||||||||
Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | |||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||||||
InterContinental | 4 | 1,914 | 23 | 8,313 | 23 | 6,397 | 50 | 16,624 | ||||||||||||||||||||||||
Crowne Plaza | — | — | 19 | 6,620 | 153 | 41,273 | 172 | 47,893 | ||||||||||||||||||||||||
Holiday Inn | 5 | 1,882 | 29 | 9,654 | 918 | 166,463 | 952 | 177,999 | ||||||||||||||||||||||||
Holiday Inn Express | — | — | 1 | 252 | 1,614 | 134,299 | 1,615 | 134,551 | ||||||||||||||||||||||||
Staybridge Suites | 2 | 233 | 41 | 5,142 | 79 | 8,091 | 122 | 13,466 | ||||||||||||||||||||||||
Candlewood Suites | — | — | 78 | 9,410 | 80 | 7,415 | 158 | 16,825 | ||||||||||||||||||||||||
Hotel Indigo | — | — | 2 | 305 | 9 | 1,196 | 11 | 1,501 | ||||||||||||||||||||||||
Total | 11 | 4,029 | 193 | 39,696 | 2,876 | 365,134 | 3,080 | 408,859 | ||||||||||||||||||||||||
EMEA | ||||||||||||||||||||||||||||||||
InterContinental | 3 | 1,288 | 53 | 17,077 | 6 | 1,647 | 62 | 20,012 | ||||||||||||||||||||||||
Crowne Plaza | 1 | 233 | 20 | 5,234 | 51 | 11,859 | 72 | 17,326 | ||||||||||||||||||||||||
Holiday Inn | — | — | 86 | 15,452 | 249 | 37,390 | 335 | 52,842 | ||||||||||||||||||||||||
Holiday Inn Express | 1 | 153 | 12 | 1,310 | 169 | 17,917 | 182 | 19,380 | ||||||||||||||||||||||||
Total | 5 | 1,674 | 171 | 39,073 | 475 | 68,813 | 651 | 109,560 | ||||||||||||||||||||||||
Asia Pacific | ||||||||||||||||||||||||||||||||
InterContinental | 1 | 495 | 28 | 11,256 | 8 | 2,375 | 37 | 14,126 | ||||||||||||||||||||||||
Crowne Plaza | — | — | 50 | 15,833 | 5 | 2,118 | 55 | 17,951 | ||||||||||||||||||||||||
Holiday Inn | 1 | 198 | 78 | 23,242 | 15 | 2,418 | 94 | 25,858 | ||||||||||||||||||||||||
Holiday Inn Express | — | — | 10 | 2,463 | 1 | 137 | 11 | 2,600 | ||||||||||||||||||||||||
Other | — | — | 9 | 3,320 | 12 | 2,820 | 21 | 6,140 | ||||||||||||||||||||||||
Total | 2 | 693 | 175 | 56,114 | 41 | 9,868 | 218 | 66,675 | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||
InterContinental | 8 | 3,697 | 104 | 36,646 | 37 | 10,419 | 149 | 50,762 | ||||||||||||||||||||||||
Crowne Plaza | 1 | 233 | 89 | 27,687 | 209 | 55,250 | 299 | 83,170 | ||||||||||||||||||||||||
Holiday Inn | 6 | 2,080 | 193 | 48,348 | 1,182 | 206,271 | 1,381 | 256,699 | ||||||||||||||||||||||||
Holiday Inn Express | 1 | 153 | 23 | 4,025 | 1,784 | 152,353 | 1,808 | 156,531 | ||||||||||||||||||||||||
Staybridge Suites | 2 | 233 | 41 | 5,142 | 79 | 8,091 | 122 | 13,466 | ||||||||||||||||||||||||
Candlewood Suites | — | — | 78 | 9,410 | 80 | 7,415 | 158 | 16,825 | ||||||||||||||||||||||||
Hotel Indigo | — | — | 2 | 305 | 9 | 1,196 | 11 | 1,501 | ||||||||||||||||||||||||
Other | — | — | 9 | 3,320 | 12 | 2,820 | 21 | 6,140 | ||||||||||||||||||||||||
Total | 18 | 6,396 | 539 | 134,883 | 3,392 | 443,815 | 3,949 | 585,094 | ||||||||||||||||||||||||
33
39
Hotels | Rooms | ||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||
Global hotel and room count at December 31, 2006 | 2006 | 2005 | over 2005 | 2006 | 2005 | over 2005 | |||||||||||||||||||
Analyzed by brand: | |||||||||||||||||||||||||
InterContinental | 148 | 137 | 11 | 49,599 | 46,262 | 3,337 | |||||||||||||||||||
Crowne Plaza | 275 | 235 | 40 | 75,632 | 65,404 | 10,228 | |||||||||||||||||||
Holiday Inn | 1,395 | 1,435 | (40 | ) | 260,470 | 267,816 | (7,346 | ) | |||||||||||||||||
Holiday Inn Express | 1,686 | 1,590 | 96 | 143,582 | 133,554 | 10,028 | |||||||||||||||||||
Staybridge Suites | 97 | 87 | 10 | 10,953 | 9,915 | 1,038 | |||||||||||||||||||
Candlewood Suites | 130 | 112 | 18 | 14,149 | 12,683 | 1,466 | |||||||||||||||||||
Hotel Indigo | 6 | 3 | 3 | 893 | 497 | 396 | |||||||||||||||||||
Other | 4 | 7 | (3 | ) | 968 | 1,402 | (434 | ) | |||||||||||||||||
Total | 3,741 | 3,606 | 135 | 556,246 | 537,533 | 18,713 | |||||||||||||||||||
Analyzed by ownership type: | |||||||||||||||||||||||||
Owned and leased | 25 | 55 | (30 | ) | 8,460 | 15,485 | (7,025 | ) | |||||||||||||||||
Managed | 512 | 504 | 8 | 125,214 | 121,249 | 3,965 | |||||||||||||||||||
Franchised | 3,204 | 3,047 | 157 | 422,572 | 400,799 | 21,773 | |||||||||||||||||||
Total | 3,741 | 3,606 | 135 | 556,246 | 537,533 | 18,713 | |||||||||||||||||||
34
40
Hotels | Rooms | |||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||
Global hotel and room count at December 31 | 2007 | 2006 | over 2006 | 2007 | 2006 | over 2006 | ||||||||||||||||||
Analyzed by brand: | ||||||||||||||||||||||||
InterContinental | 149 | 148 | 1 | 50,762 | 49,599 | 1,163 | ||||||||||||||||||
Crowne Plaza | 299 | 275 | 24 | 83,170 | 75,632 | 7,538 | ||||||||||||||||||
Holiday Inn | 1,381 | 1,395 | (14 | ) | 256,699 | 260,470 | (3,771 | ) | ||||||||||||||||
Holiday Inn Express | 1,808 | 1,686 | 122 | 156,531 | 143,582 | 12,949 | ||||||||||||||||||
Staybridge Suites | 122 | 97 | 25 | 13,466 | 10,953 | 2,513 | ||||||||||||||||||
Candlewood Suites | 158 | 130 | 28 | 16,825 | 14,149 | 2,676 | ||||||||||||||||||
Hotel Indigo | 11 | 6 | 5 | 1,501 | 893 | 608 | ||||||||||||||||||
Other | 21 | 4 | 17 | 6,140 | 968 | 5,172 | ||||||||||||||||||
Total | 3,949 | 3,741 | 208 | 585,094 | 556,246 | 28,848 | ||||||||||||||||||
Analyzed by ownership type: | ||||||||||||||||||||||||
Owned and leased | 18 | 25 | (7 | ) | 6,396 | 8,460 | (2,064 | ) | ||||||||||||||||
Managed | 539 | 512 | 27 | 134,883 | 125,214 | 9,669 | ||||||||||||||||||
Franchised | 3,392 | 3,204 | 188 | 443,815 | 422,572 | 21,243 | ||||||||||||||||||
Total | 3,949 | 3,741 | 208 | 585,094 | 556,246 | 28,848 | ||||||||||||||||||
35
Hotels | Rooms | ||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||
Global pipeline at December 31, 2006 | 2006 | 2005 | over 2005 | 2006 | 2005 | over 2005 | |||||||||||||||||||
Analyzed by brand: | |||||||||||||||||||||||||
InterContinental | 36 | 27 | 9 | 13,211 | 9,353 | 3,858 | |||||||||||||||||||
Crowne Plaza | 60 | 54 | 6 | 17,113 | 13,514 | 3,599 | |||||||||||||||||||
Holiday Inn | 299 | 204 | 95 | 44,774 | 31,035 | 13,739 | |||||||||||||||||||
Holiday Inn Express | 574 | 429 | 145 | 55,520 | 38,066 | 17,454 | |||||||||||||||||||
Staybridge Suites | 120 | 79 | 41 | 12,605 | 8,195 | 4,410 | |||||||||||||||||||
Candlewood Suites | 128 | 83 | 45 | 11,723 | 7,467 | 4,256 | |||||||||||||||||||
Hotel Indigo | 24 | 8 | 16 | 3,045 | 882 | 2,163 | |||||||||||||||||||
Total | 1,241 | 884 | 357 | 157,991 | 108,512 | 49,479 | |||||||||||||||||||
Analyzed by ownership type: | |||||||||||||||||||||||||
Owned and leased | — | 2 | (2 | ) | — | 574 | (574 | ) | |||||||||||||||||
Managed | 139 | 98 | 41 | 41,648 | 27,805 | 13,843 | |||||||||||||||||||
Franchised | 1,102 | 784 | 318 | 116,343 | 80,133 | 36,210 | |||||||||||||||||||
Total | 1,241 | 884 | 357 | 157,991 | 108,512 | 49,479 | |||||||||||||||||||
Hotels | Rooms | |||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||
Global pipeline at December 31 | 2007 | 2006 | over 2006 | 2007 | 2006 | over 2006 | ||||||||||||||||||
Analyzed by brand: | ||||||||||||||||||||||||
InterContinental | 62 | 36 | 26 | 20,013 | 13,211 | 6,802 | ||||||||||||||||||
Crowne Plaza | 118 | 60 | 58 | 36,362 | 17,113 | 19,249 | ||||||||||||||||||
Holiday Inn | 365 | 299 | 66 | 56,945 | 44,774 | 12,171 | ||||||||||||||||||
Holiday Inn Express | 712 | 574 | 138 | 70,142 | 55,520 | 14,622 | ||||||||||||||||||
Staybridge Suites | 157 | 120 | 37 | 17,150 | 12,605 | 4,545 | ||||||||||||||||||
Candlewood Suites | 207 | 128 | 79 | 18,605 | 11,723 | 6,882 | ||||||||||||||||||
Hotel Indigo | 52 | 24 | 28 | 6,565 | 3,045 | 3,520 | ||||||||||||||||||
Other | 1 | — | 1 | 90 | — | 90 | ||||||||||||||||||
Total | 1,674 | 1,241 | 433 | 225,872 | 157,991 | 67,881 | ||||||||||||||||||
Analyzed by ownership type: | ||||||||||||||||||||||||
Managed | 247 | 139 | 108 | 71,814 | 41,648 | 30,166 | ||||||||||||||||||
Franchised | 1,427 | 1,102 | 325 | 154,058 | 116,343 | 37,715 | ||||||||||||||||||
Total | 1,674 | 1,241 | 433 | 225,872 | 157,991 | 67,881 | ||||||||||||||||||
36
41
42
Owned & leased comparable | Managed comparable | Franchised | ||||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | 2006 | 2005 | 2005 | ||||||||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||||
Occupancy | 78.5 | % | 73.5 | % | 5.0 | % pts | 68.7 | % | 67.2 | % | 1.5 | % pts. | 61.7 | % | 59.8 | % | 1.9 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 227.59 | $ | 216.58 | 5.1 | % | $ | 157.11 | $ | 145.82 | 7.7 | % | $ | 117.50 | $ | 106.53 | 10.3 | % | ||||||||||||||||||||
RevPAR | $ | 178.63 | $ | 159.19 | 12.2 | % | $ | 107.89 | $ | 97.96 | 10.1 | % | $ | 72.50 | $ | 63.73 | 13.8 | % | ||||||||||||||||||||
Crowne Plaza | ||||||||||||||||||||||||||||||||||||||
Occupancy | 72.4 | % | 66.1 | % | 6.3 | % pts. | 75.4 | % | 74.5 | % | 1.0 | % pts. | 62.7 | % | 61.5 | % | 1.2 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 85.24 | $ | 73.41 | –16.1 | % | $ | 135.26 | $ | 120.07 | 12.7 | % | $ | 106.38 | $ | 98.39 | 8.1 | % | ||||||||||||||||||||
RevPAR | $ | 61.75 | $ | 48.52 | 27.3 | % | $ | 102.05 | $ | 89.42 | 14.1 | % | $ | 66.74 | $ | 60.53 | 10.3 | % | ||||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||||
Occupancy | 69.2 | % | 70.6 | % | 1.4 | % pts. | 67.7 | % | 69.0 | % | –1.3 | % pts. | 62.5 | % | 61.9 | % | 0.6 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 93.67 | $ | 89.72 | 4.4 | % | $ | 98.56 | $ | 92.33 | 6.7 | % | $ | 90.86 | $ | 85.20 | 6.6 | % | ||||||||||||||||||||
RevPAR | $ | 64.79 | $ | 63.33 | 2.3 | % | $ | 66.76 | $ | 63.76 | 4.7 | % | $ | 56.77 | $ | 52.75 | 7.6 | % | ||||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 74.8 | % | 75.1 | % | –0.3 | % pts. | 68.0 | % | 66.7 | % | 1.4 | % pts. | |||||||||||||||||||||||
Average daily rate | — | — | — | $ | 133.55 | $ | 119.12 | 12.1 | % | $ | 87.36 | $ | 80.52 | 8.5 | % | |||||||||||||||||||||||
RevPAR | — | — | — | $ | 99.91 | $ | 89.51 | 11.6 | % | $ | 59.44 | $ | 53.68 | 10.7 | % | |||||||||||||||||||||||
Staybridge Suites | ||||||||||||||||||||||||||||||||||||||
Occupancy | 66.7 | % | 73.7 | % | –7.0 | % pts. | 76.4 | % | 76.8 | % | –0.5 | % pts. | 72.9 | % | 73.2 | % | –0.4 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 91.53 | $ | 73.18 | –25.1 | % | $ | 104.22 | $ | 95.25 | 9.4 | % | $ | 97.34 | $ | 91.23 | 6.7 | % | ||||||||||||||||||||
RevPAR | $ | 61.06 | $ | 53.93 | 13.2 | % | $ | 79.59 | $ | 73.17 | 8.8 | % | $ | 70.92 | $ | 66.80 | 6.2 | % | ||||||||||||||||||||
Candlewood Suites | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 75.7 | % | 75.0 | % | 0.7 | % pts. | 66.1 | % | 69.5 | % | –3.4 | % pts. | |||||||||||||||||||||||
Average daily rate | — | — | — | $ | 66.50 | $ | 61.03 | 8.9 | % | $ | 69.22 | $ | 64.45 | 7.4 | % | |||||||||||||||||||||||
RevPAR | — | — | — | $ | 50.31 | $ | 45.76 | 9.9 | % | $ | 45.72 | $ | 44.77 | 2.1 | % | |||||||||||||||||||||||
Hotel Indigo | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 69.0 | % | 55.9 | % | 13.2 | % pts. | 39.2 | % | 42.4 | % | –3.3 | % pts. | |||||||||||||||||||||||
Average daily rate | — | — | — | $ | 127.05 | $ | 115.19 | 10.3 | % | $ | 86.02 | $ | 84.44 | 1.9 | % | |||||||||||||||||||||||
RevPAR | — | — | — | $ | 87.70 | $ | 64.35 | 36.3 | % | $ | 33.70 | $ | 35.85 | –6.0 | % |
Owned & leased | Managed | Franchised | ||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2007 | 2006 | 2006 | 2007 | 2006 | 2006 | ||||||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||
Occupancy | 83.6 | % | 81.7 | % | 1.9 | %pts | 70.5 | % | 68.0 | % | 2.5 | %pts | 64.7 | % | 64.9 | % | (0.2 | )%pts | ||||||||||||||||||
Average daily rate | $ | 260.63 | $ | 241.21 | 8.05 | % | $ | 172.28 | $ | 161.33 | 6.79 | % | $ | 126.53 | $ | 116.51 | 8.60 | % | ||||||||||||||||||
RevPAR | $ | 217.86 | $ | 196.97 | 10.61 | % | $ | 121.51 | $ | 109.64 | 10.83 | % | $ | 81.87 | $ | 75.64 | 8.24 | % | ||||||||||||||||||
Crowne Plaza | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 74.9 | % | 74.7 | % | 0.2 | %pts | 64.1 | % | 63.0 | % | 1.1 | %pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 142.46 | $ | 133.33 | 6.85 | % | $ | 109.16 | $ | 103.22 | 5.75 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 106.71 | $ | 99.55 | 7.19 | % | $ | 69.96 | $ | 65.00 | 7.63 | % | |||||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||
Occupancy | 72.9 | % | 69.2 | % | 3.7 | %pts | 68.9 | % | 67.6 | % | 1.3 | %pts | 63.1 | % | 63.5 | % | (0.4 | )%pts | ||||||||||||||||||
Average daily rate | $ | 96.04 | $ | 93.67 | 2.53 | % | $ | 106.53 | $ | 100.86 | 5.62 | % | $ | 95.26 | $ | 90.52 | 5.24 | % | ||||||||||||||||||
RevPAR | $ | 70.01 | $ | 64.79 | 8.06 | % | $ | 73.45 | $ | 68.19 | 7.71 | % | $ | 60.12 | $ | 57.44 | 4.67 | % | ||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 75.8 | % | 74.8 | % | 1.0 | %pts | 68.1 | % | 68.7 | % | (0.6 | )%pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 148.58 | $ | 133.55 | 11.25 | % | $ | 93.96 | $ | 87.32 | 7.60 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 112.67 | $ | 99.91 | 12.77 | % | $ | 63.98 | $ | 59.95 | 6.72 | % | |||||||||||||||||||||
Staybridge Suites | ||||||||||||||||||||||||||||||||||||
Occupancy | 73.7 | % | 74.8 | % | (1.1 | )%pts | 74.9 | % | 76.5 | % | (1.6 | )%pts | 73.4 | % | 73.3 | % | 0.1 | %pts | ||||||||||||||||||
Average daily rate | $ | 100.56 | $ | 94.61 | 6.29 | % | $ | 108.83 | $ | 104.53 | 4.11 | % | $ | 101.81 | $ | 96.24 | 5.79 | % | ||||||||||||||||||
RevPAR | $ | 74.12 | $ | 70.73 | 4.79 | % | $ | 81.56 | $ | 79.92 | 2.05 | % | $ | 74.77 | $ | 70.53 | 6.01 | % | ||||||||||||||||||
Candlewood Suites | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 74.5 | % | 75.7 | % | (1.2 | )%pts | 66.3 | % | 69.2 | % | (2.9 | )%pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 69.81 | $ | 66.50 | 4.98 | % | $ | 71.14 | $ | 68.99 | 3.12 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 52.02 | $ | 50.31 | 3.40 | % | $ | 47.19 | $ | 47.71 | (1.09 | )% | |||||||||||||||||||||
Hotel Indigo | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 68.4 | % | 66.3 | % | 2.1 | %pts | 53.2 | % | 41.1 | % | 12.1 | %pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 142.78 | $ | 143.74 | (0.67 | )% | $ | 88.12 | $ | 78.37 | 12.44 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 97.72 | $ | 95.25 | 2.59 | % | $ | 46.89 | $ | 32.25 | 45.40 | % |
37
43
Owned & leased comparable | Managed comparable | Franchised | ||||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | 2006 | 2005 | 2005 | ||||||||||||||||||||||||||||||
EMEA | ||||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||||
Occupancy | 70.6 | % | 69.9 | % | 0.7 | % pts. | 65.4 | % | 60.9 | % | 4.5 | % pts. | 71.3 | % | 68.5 | % | 2.8 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 269.15 | $ | 223.15 | 20.6 | % | $ | 155.76 | $ | 145.66 | 6.9 | % | $ | 173.14 | $ | 141.33 | 22.5 | % | ||||||||||||||||||||
RevPAR | $ | 190.08 | $ | 156.08 | 21.8 | % | $ | 101.92 | $ | 88.71 | 14.9 | % | $ | 123.46 | $ | 96.87 | 27.4 | % | ||||||||||||||||||||
Crown Plaza | ||||||||||||||||||||||||||||||||||||||
Occupancy | 70.4 | % | 68.8 | % | 1.6 | % pts. | 75.2 | % | 73.7 | % | 1.5 | % pts. | 67.3 | % | 64.5 | % | 2.8 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 111.64 | $ | 104.66 | 6.7 | % | $ | 140.25 | $ | 129.91 | 8.0 | % | $ | 126.50 | $ | 119.16 | 6.2 | % | ||||||||||||||||||||
RevPAR | $ | 78.59 | $ | 71.99 | 9.2 | % | $ | 105.53 | $ | 95.74 | 10.2 | % | $ | 85.13 | $ | 76.84 | 10.8 | % | ||||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||||
Occupancy | 70.7 | % | 66.2 | % | 4.5 | % pts. | 73.6 | % | 71.2 | % | 2.4 | % pts. | 65.6 | % | 64.5 | % | 1.1 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 92.86 | $ | 94.18 | –1.4 | % | $ | 111.58 | $ | 106.62 | 4.7 | % | $ | 103.50 | $ | 92.46 | 11.9 | % | ||||||||||||||||||||
RevPAR | $ | 65.66 | $ | 62.37 | 5.3 | % | $ | 82.12 | $ | 75.90 | 8.2 | % | $ | 67.87 | $ | 59.64 | 13.8 | % | ||||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||||
Occupancy | 70.1 | % | 63.9 | % | 6.3 | % pts. | 63.8 | % | 56.6 | % | 7.2 | % pts. | 70.8 | % | 68.8 | % | 2.0 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 78.12 | $ | 79.01 | –1.1 | % | $ | 76.04 | $ | 71.68 | 6.1 | % | $ | 92.62 | $ | 88.39 | 4.8 | % | ||||||||||||||||||||
RevPAR | $ | 54.79 | $ | 50.45 | 8.6 | % | $ | 48.49 | $ | 40.56 | 19.5 | % | $ | 65.59 | $ | 60.85 | 7.8 | % |
Owned & leased comparable | Managed comparable | Franchised | ||||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | 2006 | 2005 | 2005 | ||||||||||||||||||||||||||||||
Asia Pacific | ||||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||||
Occupancy | 72.5 | % | 65.9 | % | 6.6 | % pts. | 71.1 | % | 71.0 | % | 0.1 | % pts. | 70.8 | % | 68.0 | % | 2.8 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 340.73 | $ | 284.50 | 19.8 | % | $ | 146.55 | $ | 140.56 | 4.3 | % | $ | 159.64 | $ | 135.26 | 18.0 | % | ||||||||||||||||||||
RevPAR | $ | 247.07 | $ | 187.39 | 31.8 | % | $ | 104.23 | $ | 99.80 | 4.4 | % | $ | 113.03 | $ | 92.01 | 22.8 | % | ||||||||||||||||||||
Crowne Plaza | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 78.6 | % | 76.8 | % | 1.8 | % pts. | 77.7 | % | 74.6 | % | 31.1 | % pts. | |||||||||||||||||||||||
Average daily rate | — | — | — | $ | 94.52 | $ | 87.95 | 7.5 | % | $ | 98.31 | $ | 91.29 | 7.7 | % | |||||||||||||||||||||||
RevPAR | — | — | — | $ | 74.27 | $ | 67.56 | 9.9 | % | $ | 76.41 | $ | 68.13 | 12.2 | % | |||||||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||||
Occupancy | 78.6 | % | 76.9 | % | 1.7 | % pts. | 76.6 | % | 75.8 | % | 0.8 | % pts. | 69.5 | % | 71.3 | % | –1.8 | % pts. | ||||||||||||||||||||
Average daily rate | $ | 104.63 | $ | 92.06 | 13.7 | % | $ | 75.35 | $ | 69.25 | 8.8 | % | $ | 66.17 | $ | 63.98 | 3.4 | % | ||||||||||||||||||||
RevPAR | $ | 82.24 | $ | 70.76 | 16.2 | % | $ | 57.72 | $ | 52.47 | 10.0 | % | $ | 45.97 | $ | 45.62 | 0.8 | % | ||||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 77.2 | % | 77.8 | % | –0.6 | % pts. | 65.4 | % | 67.3 | % | –1.9 | % pts. | |||||||||||||||||||||||
Average daily rate | — | — | — | $ | 39.38 | $ | 37.44 | 5.2 | % | $ | 53.81 | $ | 52.20 | 3.1 | % | |||||||||||||||||||||||
RevPAR | — | — | — | $ | 30.39 | $ | 29.11 | 4.4 | % | $ | 35.19 | $ | 35.13 | 0.2 | % | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||
Occupancy | — | — | — | 67.1 | % | 70.1 | % | –3.0 | % pts. | — | — | — | ||||||||||||||||||||||||||
Average daily rate | — | — | — | $ | 74.73 | $ | 72.21 | 3.5 | % | — | — | — | ||||||||||||||||||||||||||
RevPAR | — | — | — | $ | 50.17 | $ | 50.64 | –0.9 | % | — | — | — |
�� | ||||||||||||||||||||||||||||||||||||
Owned & leased | Managed | Franchised | ||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2007 | 2006 | 2006 | 2007 | 2006 | 2006 | ||||||||||||||||||||||||||||
EMEA | ||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||
Occupancy | 81.7 | % | 79.2 | % | 2.5 | %pts | 68.4 | % | 65.3 | % | 3.1 | %pts | 67.1 | % | 64.5 | % | 2.6 | %pts | ||||||||||||||||||
Average daily rate | $ | 449.58 | $ | 406.56 | 10.58 | % | $ | 176.96 | $ | 164.13 | 7.82 | % | $ | 281.93 | $ | 242.64 | 16.19 | % | ||||||||||||||||||
RevPAR | $ | 367.30 | $ | 322.17 | 14.01 | % | $ | 121.06 | $ | 107.18 | 12.95 | % | $ | 189.31 | $ | 156.44 | 21.01 | % | ||||||||||||||||||
Crown Plaza | ||||||||||||||||||||||||||||||||||||
Occupancy | 70.9 | % | 70.1 | % | 0.8 | %pts | 78.5 | % | 77.2 | % | 1.3 | %pts | 69.6 | % | 68.6 | % | 1.0 | %pts | ||||||||||||||||||
Average daily rate | $ | 117.61 | $ | 122.04 | (3.63 | )% | $ | 169.52 | $ | 153.74 | 10.26 | % | $ | 141.89 | $ | 135.03 | 5.08 | % | ||||||||||||||||||
RevPAR | $ | 83.43 | $ | 85.60 | (2.54 | )% | $ | 133.01 | $ | 118.71 | 12.05 | % | $ | 98.79 | $ | 92.67 | 6.60 | % | ||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 74.5 | % | 73.9 | % | 0.6 | %pts | 67.6 | % | 66.3 | % | 1.3 | %pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 127.69 | $ | 120.05 | 6.36 | % | $ | 115.87 | $ | 110.27 | 5.08 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 95.07 | $ | 88.73 | 7.15 | % | $ | 78.38 | $ | 73.10 | 7.22 | % | |||||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||
Occupancy | 72.5 | % | 70.1 | % | 2.4 | %pts | 68.3 | % | 63.5 | % | 4.8 | %pts | 73.8 | % | 72.8 | % | 1.0 | %pts | ||||||||||||||||||
Average daily rate | $ | 81.92 | $ | 84.81 | (3.41 | )% | $ | 87.88 | $ | 82.29 | 6.79 | % | $ | 106.19 | $ | 101.78 | 4.33 | % | ||||||||||||||||||
RevPAR | $ | 59.39 | $ | 59.49 | (0.17 | )% | $ | 60.02 | $ | 52.28 | 14.80 | % | $ | 78.34 | $ | 74.04 | 5.81 | % |
Owned & leased | Managed | Franchised | ||||||||||||||||||||||||||||||||||
Change vs | Change vs | Change vs | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2007 | 2006 | 2006 | 2007 | 2006 | 2006 | ||||||||||||||||||||||||||||
Asia Pacific | ||||||||||||||||||||||||||||||||||||
InterContinental | ||||||||||||||||||||||||||||||||||||
Occupancy | 69.9 | % | 72.5 | % | (2.6 | )%pts | 73.8 | % | 70.2 | % | 3.6 | %pts | 73.2 | % | 70.8 | % | 2.4 | %pts | ||||||||||||||||||
Average daily rate | $ | 377.22 | $ | 339.09 | 11.24 | % | $ | 154.45 | $ | 150.48 | 2.64 | % | $ | 184.82 | $ | 157.63 | 17.25 | % | ||||||||||||||||||
RevPAR | $ | 263.77 | $ | 245.88 | 7.28 | % | $ | 114.03 | $ | 105.68 | 7.90 | % | $ | 135.32 | $ | 111.60 | 21.25 | % | ||||||||||||||||||
Crowne Plaza | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 75.7 | % | 75.3 | % | 0.4 | %pts | 84.9 | % | 85.4 | % | (0.5 | )%pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 97.60 | $ | 92.57 | 5.43 | % | $ | 120.67 | $ | 108.69 | 11.02 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 73.87 | $ | 69.67 | 6.03 | % | $ | 102.41 | $ | 92.80 | 10.36 | % | |||||||||||||||||||||
Holiday Inn | ||||||||||||||||||||||||||||||||||||
Occupancy | 76.7 | % | 78.6 | % | (1.9 | )%pts | 76.0 | % | 75.7 | % | 0.3 | %pts | 71.1 | % | 70.8 | % | 0.3 | %pts | ||||||||||||||||||
Average daily rate | $ | 116.17 | $ | 106.32 | 9.26 | % | $ | 81.87 | $ | 75.43 | 8.54 | % | $ | 72.78 | $ | 68.49 | 6.26 | % | ||||||||||||||||||
RevPAR | $ | 89.16 | $ | 83.56 | 6.70 | % | $ | 62.22 | $ | 57.13 | 8.91 | % | $ | 51.72 | $ | 48.48 | 6.68 | % | ||||||||||||||||||
Holiday Inn Express | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 84.9 | % | 82.7 | % | 2.2 | %pts | 55.4 | % | 65.4 | % | (10.0 | )%pts | |||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 75.05 | $ | 67.58 | 11.05 | % | $ | 56.47 | $ | 53.52 | 5.51 | % | |||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 63.68 | $ | 55.88 | 13.96 | % | $ | 31.28 | $ | 35.01 | (10.65 | )% | |||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||
Occupancy | 0 | 0 | 0 | 59.3 | % | 56.4 | % | 2.9 | %pts | 0 | 0 | 0 | ||||||||||||||||||||||||
Average daily rate | 0 | 0 | 0 | $ | 119.27 | $ | 113.80 | 4.81 | % | 0 | 0 | 0 | ||||||||||||||||||||||||
RevPAR | 0 | 0 | 0 | $ | 70.74 | $ | 64.22 | 10.15 | % | 0 | 0 | 0 |
38
44
(a) | Incorporated in Great Britain and registered in England and Wales. | |
Incorporated in the United | ||
(c) | Incorporated in Hong Kong. | |
(d) | Incorporated in France. |
Europe, | ||||||||||||||||
Net book value of land and buildings as | the Middle East | |||||||||||||||
at December 31, 2006 | and Africa | Americas | Asia Pacific | Total | ||||||||||||
(£ million) | ||||||||||||||||
Hotels | 278 | 289 | 172 | 739 | ||||||||||||
Europe, | ||||||||||||||||
Net book value of land and buildings as | the Middle East | |||||||||||||||
at December 31, 2007 | and Africa | Americas | Asia Pacific | Total | ||||||||||||
(£ million) | ||||||||||||||||
Hotels | 318 | 251 | 166 | 735 | ||||||||||||
39
45
• | developments in global environmental policy; | |
• | how | |
• | how | |
• | new projects and developments; and | |
• | performance benchmarking against best practice. |
• | an online tool which will enable IHG to measure its water, waste and energy across the globe was piloted; | |
• | a carbon and environmental footprint, the first by a major hotel group was completed; | |
• | compact fluorescent light bulbs were distributed as replacements for incandescent bulbs. It is estimated that this initiative will result in over $2 million of annual energy savings; and | |
• | a range of environmental initiatives were implemented at IHG’s corporate offices, including recycling and improved waste management. |
40
46
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
41
47
48
42
Loyalty program The hotel loyalty program, |
49
43
50
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
GROUP RESULTS | ||||||||||||
Revenue: | ||||||||||||
Continuing operations | ||||||||||||
Hotels | 883 | 786 | 697 | |||||||||
Discontinued operations | ||||||||||||
Hotels | 40 | 174 | 542 | |||||||||
Soft Drinks | — | — | 671 | |||||||||
Total revenue | 923 | 960 | 1,910 | |||||||||
Operating profit before exceptional operating items: | ||||||||||||
Continuing operations | ||||||||||||
Hotels | 237 | 200 | 175 | |||||||||
Discontinued operations | ||||||||||||
Hotels | 8 | 31 | 94 | |||||||||
Soft Drinks | — | — | 70 | |||||||||
Total operating profit before exceptional operating items | 245 | 231 | 339 | |||||||||
Exceptional operating items | 30 | 27 | (22 | ) | ||||||||
Operating profit | 275 | 258 | 317 | |||||||||
Net financial expenses | (45 | ) | (11 | ) | (33 | ) | ||||||
Profit before tax | 230 | 247 | 284 | |||||||||
Tax | (15 | ) | 41 | (80 | ) | |||||||
Profit after tax | 215 | 288 | 204 | |||||||||
Gain on disposal of assets, net of tax | 16 | 117 | 311 | |||||||||
Profit available for the year | 231 | 405 | 515 | |||||||||
Earnings per ordinary share: | ||||||||||||
Basic | 72.2p | 104.1p | 95.2p | |||||||||
Adjusted | 48.4p | 42.9p | 38.2p | |||||||||
Adjusted — continuing operations | 46.9p | 38.0p | 23.2p | |||||||||
Year ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
GROUP RESULTS | |||||||||
Revenue: | |||||||||
Continuing operations | |||||||||
Hotels | 805 | 713 | |||||||
Discontinued operations | |||||||||
Hotels | 155 | 526 | |||||||
Soft Drinks | — | 671 | |||||||
Total revenue | 960 | 1,910 | |||||||
Operating profit before other operating income and expenses: | |||||||||
Continuing operations | |||||||||
Hotels | 201 | 173 | |||||||
Discontinued operations | |||||||||
Hotels | 30 | 96 | |||||||
Soft Drinks | — | 70 | |||||||
Total operating profit before other operating income and expenses | 231 | 339 | |||||||
Other operating income and expenses | 27 | (22 | ) | ||||||
Operating profit | 258 | 317 | |||||||
Interest | (11 | ) | (33 | ) | |||||
Profit before tax | 247 | 284 | |||||||
Tax | 41 | (80 | ) | ||||||
Profit after tax | 288 | 204 | |||||||
Gain on disposal of assets, net of tax | 117 | 311 | |||||||
Profit available for the year | 405 | 515 | |||||||
Earnings per ordinary share: | |||||||||
Basic | 104.1p | 95.2p | |||||||
Adjusted | 42.9p | 38.2p | |||||||
Adjusted - continuing operations | 37.5p | 22.5p | |||||||
44
51
45
52
Year ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2006 | 2005 | Change | |||||||||||
% | |||||||||||||
(£ million) | |||||||||||||
Revenue: | |||||||||||||
Americas | 433 | 384 | 12.8 | ||||||||||
EMEA | 206 | 200 | 3.0 | ||||||||||
Asia Pacific | 111 | 87 | 27.6 | ||||||||||
Central | 55 | 42 | 31.0 | ||||||||||
805 | 713 | 12.9 | |||||||||||
Operating profit before other operating income and expenses: | |||||||||||||
Americas | 217 | 186 | 16.7 | ||||||||||
EMEA | 36 | 31 | 16.1 | ||||||||||
Asia Pacific | 29 | 21 | 38.1 | ||||||||||
Central | (81 | ) | (65 | ) | 24.6 | ||||||||
201 | 173 | 16.2 | |||||||||||
Year ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | Change | ||||||||||||||
(£ million) | % | |||||||||||||||
Revenue: | ||||||||||||||||
Americas | 450 | 422 | 6.6 | |||||||||||||
EMEA | 245 | 198 | 23.7 | |||||||||||||
Asia Pacific | 130 | 111 | 17.1 | |||||||||||||
Central | 58 | 55 | 5.5 | |||||||||||||
883 | 786 | 12.3 | ||||||||||||||
Operating profit before exceptional operating items: | ||||||||||||||||
Americas | 220 | 215 | 2.3 | |||||||||||||
EMEA | 67 | 37 | 81.1 | |||||||||||||
Asia Pacific | 31 | 29 | 6.9 | |||||||||||||
Central | (81 | ) | (81 | ) | — | |||||||||||
237 | 200 | 18.5 | ||||||||||||||
53
Year ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | Change | ||||||||||||||
($ million) | % | |||||||||||||||
Revenue: | ||||||||||||||||
Owned and leased | 257 | 192 | 33.9 | |||||||||||||
Managed | 156 | 143 | 9.1 | |||||||||||||
Franchised | 489 | 443 | 10.4 | |||||||||||||
902 | 778 | 15.9 | ||||||||||||||
Operating profit before exceptional operating items: | ||||||||||||||||
Owned and leased | 40 | 22 | 81.8 | |||||||||||||
Managed | 41 | 50 | (18.0 | ) | ||||||||||||
Franchised | 425 | 382 | 11.3 | |||||||||||||
506 | 454 | 11.5 | ||||||||||||||
Regional overheads | (66 | ) | (59 | ) | (11.9 | ) | ||||||||||
Total $ million | 440 | 395 | 11.4 | |||||||||||||
Sterling equivalent £ million(i) | 220 | 215 | 2.3 | |||||||||||||
Year ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2006 | 2005 | Change | |||||||||||
% | |||||||||||||
($ million) | |||||||||||||
Revenue: | |||||||||||||
Owned and leased | 211 | 195 | 8.2 | ||||||||||
Managed | 143 | 118 | 21.2 | ||||||||||
Franchised | 443 | �� | 389 | 13.9 | |||||||||
797 | 702 | 13.5 | |||||||||||
Operating profit before other operating income and expenses: | |||||||||||||
Owned and leased | 26 | 25 | 4.0 | ||||||||||
Managed | 50 | 36 | 38.9 | ||||||||||
Franchised | 382 | 340 | 12.4 | ||||||||||
458 | 401 | 14.2 | |||||||||||
Regional overheads | (59 | ) | (62 | ) | (4.8 | ) | |||||||
Total $ million | 399 | 339 | 17.7 | ||||||||||
Sterling equivalent £ million(i) | 217 | 186 | 16.7 | ||||||||||
(i) | The results have been translated into pounds sterling at weighted average rates of exchange for the year. The translation rates are fiscal |
46
47
Year ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2007 | 2006 | Change | ||||||||||
(£ million) | % | |||||||||||
Revenue: | ||||||||||||
Owned and leased | 121 | 92 | 31.5 | |||||||||
Managed | 84 | 71 | 18.3 | |||||||||
Franchised | 40 | 35 | 14.3 | |||||||||
245 | 198 | 23.7 | ||||||||||
Operating profit before exceptional operating items: | ||||||||||||
Owned and leased | 17 | (4 | ) | 525.0 | ||||||||
Managed | 43 | 37 | 16.2 | |||||||||
Franchised | 29 | 24 | 20.8 | |||||||||
89 | 57 | 56.1 | ||||||||||
Regional overheads | (22 | ) | (20 | ) | (10.0 | ) | ||||||
Total £ million | 67 | 37 | 81.1 | |||||||||
Dollar equivalent $ million(i) | 134 | 69 | 94.2 | |||||||||
(i) | The results have been translated into US dollars at weighted average rates of exchange for the year. The translation rates are fiscal 2007: $1 = £0.50 (2006: $1 = £0.54). |
48
Year ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2007 | 2006 | Change | ||||||||||
($ million) | % | |||||||||||
Revenue: | ||||||||||||
Owned and leased | 145 | 131 | 10.7 | |||||||||
Managed | 99 | 65 | 52.3 | |||||||||
Franchised | 16 | 8 | 100.0 | |||||||||
260 | 204 | 27.5 | ||||||||||
Operating profit before exceptional operating items: | ||||||||||||
Owned and leased | 36 | 31 | 16.1 | |||||||||
Managed | 46 | 39 | 17.9 | |||||||||
Franchised | 6 | 5 | 20.0 | |||||||||
88 | 75 | 17.3 | ||||||||||
Regional overheads | (25 | ) | (23 | ) | (8.7 | ) | ||||||
Total $ million | 63 | 52 | 21.2 | |||||||||
Sterling equivalent £ million(i) | 31 | 29 | 6.9 | |||||||||
(i) | The results have been translated into pounds sterling at weighted average rates of exchange for the year. The translation rates are fiscal 2007: £1 = $2.01 (2006 £1 = $1.84). |
49
Year ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2007 | 2006 | Change | ||||||||||
(£ million) | % | |||||||||||
Revenue | 58 | 55 | 5.5 | |||||||||
Gross central costs | (139 | ) | (136 | ) | 2.2 | |||||||
Net central costs £ million | (81 | ) | (81 | ) | — | |||||||
Dollar equivalent $ million(i) | (163 | ) | (149 | ) | 9.4 | |||||||
(i) | The results have been translated into US dollars at weighted average rates of exchange for the year. The translation rates are fiscal 2007: $1 = £0.50 (2006 $1 = £0.54). |
54
50
Year ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2006 | 2005 | Change | |||||||||||
(£ million) | |||||||||||||
% | |||||||||||||
Revenue: | |||||||||||||
Owned and leased | 100 | 110 | (9.1 | ) | |||||||||
Managed | 71 | 55 | 29.1 | ||||||||||
Franchised | 35 | 35 | — | ||||||||||
206 | 200 | 3.0 | |||||||||||
Operating profit before other operating income and expenses: | |||||||||||||
Owned and leased | (5 | ) | (5 | ) | — | ||||||||
Managed | 37 | 31 | 19.4 | ||||||||||
Franchised | 24 | 26 | (7.7 | ) | |||||||||
56 | 52 | 7.7 | |||||||||||
Regional overheads | (20 | ) | (21 | ) | (4.8 | ) | |||||||
Total £ million | 36 | 31 | 16.1 | ||||||||||
Dollar equivalent $ million(i) | 67 | 56 | 19.6 | ||||||||||
55
Year ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2006 | 2005 | Change | |||||||||||
($ million) | |||||||||||||
% | |||||||||||||
Revenue: | |||||||||||||
Owned and leased | 131 | 108 | 21.3 | ||||||||||
Managed | 65 | 45 | 44.4 | ||||||||||
Franchised | 8 | 6 | 33.3 | ||||||||||
204 | 159 | 28.3 | |||||||||||
Operating profit before other operating income and expenses: | |||||||||||||
Owned and leased | 31 | 20 | 55.0 | ||||||||||
Managed | 39 | 29 | 34.5 | ||||||||||
Franchised | 5 | 5 | — | ||||||||||
75 | 54 | 38.9 | |||||||||||
Regional overheads | (23 | ) | (15 | ) | 53.3 | ||||||||
Total $ million | 52 | 39 | 33.3 | ||||||||||
Sterling equivalent £ million(i) | 29 | 21 | 38.1 | ||||||||||
56
Year ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2006 | 2005 | Change | ||||||||||
% | ||||||||||||
(£ million) | ||||||||||||
Revenue | 55 | 42 | 31.0 | |||||||||
Gross central costs | (136 | ) | (107 | ) | 27.1 | |||||||
Net central costs £ million | (81 | ) | (65 | ) | 24.6 | |||||||
Dollar equivalent $ million(i) | (149 | ) | (118 | ) | 26.3 | |||||||
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Total amounts | Less than | After | ||||||||||||||||||
committed | 1 year | 1-3 years | 3-5 years | 5 years | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Long-term debt | 216 | 7 | 209 | — | — | |||||||||||||||
Finance lease obligations(i) | 1,781 | 3 | 16 | 17 | 1,745 | |||||||||||||||
Operating lease obligations | 190 | 27 | 40 | 23 | 100 | |||||||||||||||
Agreed pension scheme contributions | 47 | 27 | 20 | — | — | |||||||||||||||
Capital contracts placed | 24 | 24 | — | — | — | |||||||||||||||
2,258 | 88 | 285 | 40 | 1,845 | ||||||||||||||||
Total amounts | Less than | After | ||||||||||||||||||
committed | 1 year | 1-3 Years | 3-5 years | 5 years | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Long-term debt(i) | 777 | — | 777 | — | — | |||||||||||||||
Finance lease obligations(ii) | 1,729 | 8 | 16 | 16 | 1,689 | |||||||||||||||
Operating lease obligations | 196 | 28 | 35 | 25 | 108 | |||||||||||||||
Agreed pension scheme contributions | 28 | 18 | 10 | — | — | |||||||||||||||
Capital contracts placed | 10 | 10 | — | — | — | |||||||||||||||
2,740 | 64 | 838 | 41 | 1,797 | ||||||||||||||||
(i) | Repayment period classified according to the related facility maturity date. | |
(ii) | Represents the minimum lease payments related to the 99 year lease on the InterContinental Boston. |
61
53
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Initially | Date of next | |||||||||
appointed to | reappointment | |||||||||
Name | Title | the board | by shareholders | |||||||
Andrew Cosslett(3) | Director and Chief Executive | 2005 | 2008 | |||||||
David Kappler(1)(3) | Director and Senior Independent Director | 2004 | 2008 | |||||||
Ralph Kugler(1)(3) | Director | 2003 | 2008 | |||||||
Jennifer Laing(1) | Director | 2005 | 2009 | |||||||
Robert C. Larson(1)(2) | Director | 2003 | 2008 | |||||||
Jonathan Linen(1) | Director | 2005 | 2009 | |||||||
Stevan Porter | Director and President, The Americas | 2003 | 2009 | |||||||
Sir David Prosser(1)(5) | Director | 2003 | — | |||||||
Richard Solomons | Director and Finance Director | 2003 | 2010 | |||||||
David Webster | Chairman | 2003 | 2010 | |||||||
Ying Yeh(1)(4) | Director | 2007 | 2008 |
Initially | Date of next | |||||||||
appointed to | reappointment | |||||||||
Name | Title | the board | by shareholders* | |||||||
Andrew Cosslett | Director and Chief Executive | 2005 | 2008 | |||||||
Richard Hartman(2) | Director and President, EMEA | 2003 | N/A | |||||||
David Kappler(1) | Director and Senior Independent Director | 2004 | 2008 | |||||||
Ralph Kugler(1) | Director | 2003 | 2008 | |||||||
Jennifer Laing(1) | Director | 2005 | 2009 | |||||||
Robert C. Larson(1) | Director | 2003 | 2007 | |||||||
Jonathan Linen(1) | Director | 2005 | 2009 | |||||||
Stevan Porter | Director and President, The Americas | 2003 | 2009 | |||||||
Sir David Prosser(1) | Director | 2003 | 2007 | |||||||
Richard Solomons | Director and Finance Director | 2003 | 2007 | |||||||
David Webster | Chairman | 2003 | 2007 |
(1) | Non-executive independent director. | |
(2) |
Robert C. Larson, | ||
(3) | Andrew Cosslett, David | |
(4) | Ying Yeh is |
62
director in December 2007. | ||
(5) | Sir David Prosser is planning to retire as a director on May 31, 2008. |
Name | Title | Initially appointed | ||||
Tom Conophy | Executive Vice President and Chief Information Officer | 2006 | ||||
Peter Gowers | ||||||
President, Asia Pacific | 2003 | |||||
Kirk Kinsell | President, EMEA | 2007 | ||||
Tracy Robbins | Executive Vice President, Global Human Resources | 2005 | ||||
Tom Seddon | Executive Vice President and Chief Marketing Officer | 2007 | ||||
Richard Winter | Executive Vice President, Corporate Services, | |||||
General Counsel and Company Secretary | 2003 |
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Contract | Unexpired term/ | ||||||||
Directors | date | notice period | |||||||
Andrew Cosslett | 2.3.05 | 12 months | |||||||
Stevan Porter | 4.15.03 | 12 months | |||||||
Richard Solomons | 4.15.03 | 12 months |
67
• | review the Group’s public statements on internal control and corporate governance compliance prior to their consideration by the Board; | |
• | review the Group’s processes for detecting and addressing fraud, misconduct and control weaknesses and to consider the response to any such occurrence, including overseeing the process enabling the anonymous submission of concerns; | |
• | review reports from management, internal audit and external audit concerning the effectiveness of internal control, financial reporting and risk management processes; | |
• | review with management and the external auditor any financial statements required under UK or US legislation before submission to the Board; | |
• | establish, review and maintain the role and effectiveness of the |
59
• | ||
• | pre-approve non-audit work to be carried out by the external auditor and the fees to be paid for that work along with the monitoring of the external auditor’s independence; and | |
• |
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69
Rest of Europe, | ||||||||||||||||||||
the Middle East | ||||||||||||||||||||
United Kingdom | and Africa | United States | Asia Pacific | Total | ||||||||||||||||
2006 | 960 | 3,763 | 4,268 | 2,465 | 11,456 | |||||||||||||||
2005: | ||||||||||||||||||||
Hotels | 4,610 | 6,145 | 6,329 | 1,911 | 18,995 | |||||||||||||||
Soft Drinks(i) | 2,991 | — | — | — | 2,991 | |||||||||||||||
InterContinental Hotels Group | 7,601 | 6,145 | 6,329 | 1,911 | 21,986 | |||||||||||||||
2004: | ||||||||||||||||||||
Hotels | 9,676 | 6,601 | 8,241 | 2,317 | 26,835 | |||||||||||||||
Soft Drinks(i) | 2,824 | — | — | — | 2,824 | |||||||||||||||
InterContinental Hotels Group | 12,500 | 6,601 | 8,241 | 2,317 | 29,659 | |||||||||||||||
EMEA | Americas | Asia Pacific | Central | Total | ||||||||||||||||
2007 | 2,739 | 3,761 | 2,716 | 1,150 | 10,366 | |||||||||||||||
2006 | 4,437 | 3,771 | 2,225 | 1,023 | 11,456 | |||||||||||||||
2005: | ||||||||||||||||||||
Hotels | 10,477 | 5,832 | 1,737 | 949 | 18,995 | |||||||||||||||
Soft Drinks(i) | 2,991 | — | — | — | 2,991 | |||||||||||||||
Total | 13,468 | 5,832 | 1,737 | 949 | 21,986 | |||||||||||||||
(i) | With effect from December 14, 2005, the Group no longer employed any individuals in the Soft Drinks Sector. |
61
70
Ordinary shares | % of shares | |||||||
of 113/7 pence | outstanding | |||||||
Directors | ||||||||
Andrew Cosslett | 111,243 | 0.03 | ||||||
Richard Hartman | 84,114 | 0.02 | ||||||
David Kappler | 1,669 | N/A | ||||||
Ralph Kugler | 1,393 | N/A | ||||||
Jennifer Laing | 1,673 | N/A | ||||||
Robert C. Larson | 6,874 | (1) | N/A | |||||
Jonathan Linen | 8,750 | (1) | N/A | |||||
Stevan Porter | 200,364 | 0.06 | ||||||
Sir David Prosser | 2,863 | N/A | ||||||
Richard Solomons | 186,838 | 0.05 | ||||||
David Webster | 31,975 | 0.01 | ||||||
Officers | ||||||||
Tom Conophy | Nil | N/A | ||||||
Peter Gowers | 93,990 | 0.03 | ||||||
Patrick Imbardelli | 101,723 | 0.03 | ||||||
Tracy Robbins | 11,740 | N/A | ||||||
Richard Winter | 105,637 | 0.03 |
Ordinary shares | % of shares | |||||||
of 1329/47 pence | outstanding | |||||||
Directors | ||||||||
Andrew Cosslett | 240,229 | 0.08 | ||||||
David Kappler | 1,400 | N/A | ||||||
Ralph Kugler | 1,169 | N/A | ||||||
Jennifer Laing | 1,404 | N/A | ||||||
Robert C. Larson(1) | 10,269 | N/A | ||||||
Jonathan Linen(1) | 7,343 | N/A | ||||||
Stevan Porter | 230,303 | 0.08 | ||||||
Sir David Prosser | 2,402 | N/A | ||||||
Richard Solomons | 225,287 | 0.07 | ||||||
David Webster | 31,938 | 0.01 | ||||||
Ying Yeh | Nil | N/A | ||||||
Officers | ||||||||
Tom Conophy | 35,112 | 0.01 | ||||||
Peter Gowers | 139,790 | 0.05 | ||||||
Tracy Robbins | 32,833 | 0.01 | ||||||
Richard Winter | 139,088 | 0.05 | ||||||
Kirk Kinsell | 61,910 | 0.02 | ||||||
Tom Seddon | 24,000 | N/A |
(1) | Held in the form of American Depositary Receipts |
62
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
March 2007 | March 2006 | April 2005 | ||||||||||||||||||||||
Number of | Percent | Number of | Percent | Number of | Percent | |||||||||||||||||||
Identity of person or group | shares/ADSs | of class | shares/ADSs | of class | shares/ADSs | of class | ||||||||||||||||||
Ellerman Corporation Limited | 25,286,950 | 7.13% | (1) | (1) | (1) | (1) | ||||||||||||||||||
Lloyds TSB Group Plc | 13,619,563 | 3.84% | 19,534,651 | 4.51% | 26,773,575 | 4.44% | ||||||||||||||||||
Legal & General Group Plc | 11,927,715 | 3.37% | 13,753,588 | 3.17% | 24,233,225 | 4.02% | ||||||||||||||||||
Barclays PLC | (1) | (1) | (1) | (1) | 20,246,584 | 3.36% | ||||||||||||||||||
AXA SA | (1) | (1) | (1) | (1) | 18,121,201 | 3.00% |
March 2008 | March 2007 | March 2006 | ||||||||||||||||||||||
Number of | Percent | Number of | Percent | Number of | Percent | |||||||||||||||||||
Identity of person or group | shares/ADSs | of class | shares/ADSs | of class | shares/ADSs | of class | ||||||||||||||||||
Ellerman Corporation Limited | 29,921,742 | 10.00 | % | 25,286,950 | 7.13 | % | (1) | (1) | ||||||||||||||||
Morgan Stanley Investment Management Limited | 16,494,690 | 5.60 | % | (1) | (1) | (1) | (1) | |||||||||||||||||
Cedar Rock Capital Limited | 14,923,417 | 5.07 | % | (1) | (1) | (1) | (1) | |||||||||||||||||
Morgan Stanley Institutional Securities Group & Global Wealth Management | 13,551,634 | 4.60 | % | (1) | (1) | (1) | (1) | |||||||||||||||||
Legal & General Group Plc | 12,179,257 | 4.09 | % | 11,927,715 | 3.37 | % | 13,753,588 | 3.17 | % | |||||||||||||||
Lloyds TSB Group Plc | 13,619,563 | 3.84 | % | 13,619,563 | 3.84 | % | 19,534,651 | 4.51 | % |
(1) | No notification of an above 3% shareholding received. |
71
ITEM 8. | FINANCIAL INFORMATION |
63
ITEM 9. | THE OFFER AND LISTING |
72
£ per | ||||||||||||||||
ordinary share | $ per ADS | |||||||||||||||
Year ended September 30 | High | Low | High | Low | ||||||||||||
2002 | 7.83 | 5.41 | 11.73 | 7.49 |
£ per | ||||||||||||||||
ordinary share | $ per ADS | |||||||||||||||
15 months ended December 31 | High | Low | High | Low | ||||||||||||
2003 — October 1 to April 11 Six Continents | 6.35 | 4.61 | 10.08 | 7.49 | ||||||||||||
2003 — April 15 to December 31 IHG | 5.55 | 3.38 | 9.82 | 5.26 | ||||||||||||
Year ended December 31 | ||||||||||||||||
2004 | 6.91 | 4.79 | 13.09 | 8.70 | ||||||||||||
2005 | 8.42 | 6.12 | 14.53 | 11.49 |
£ per | ||||||||||||||||
ordinary share | $ per ADS | |||||||||||||||
Year ended December 31 | High | Low | High | Low | ||||||||||||
2005 | ||||||||||||||||
First quarter | 6.97 | 6.17 | 13.06 | 11.65 | ||||||||||||
Second quarter | 7.06 | 6.12 | 12.99 | 11.49 | ||||||||||||
Third quarter | 7.57 | 7.01 | 13.81 | 12.44 | ||||||||||||
Fourth quarter | 8.42 | 6.88 | 14.53 | 12.04 | ||||||||||||
2006 | ||||||||||||||||
First quarter | 9.01 | 8.07 | 15.83 | 14.40 | ||||||||||||
Second quarter(1) | 10.00 | 8.98 | 21.21 | 16.54 | ||||||||||||
Third quarter | 9.56 | 8.37 | 17.91 | 15.99 | ||||||||||||
Fourth quarter | 12.65 | 9.31 | 26.27 | 17.64 | ||||||||||||
2007 | ||||||||||||||||
First quarter (through March 16, 2007) | 13.15 | 11.82 | 25.86 | 22.80 |
£ per | ||||||||||||
ordinary share | $ per ADS | |||||||||||
15 Months ended December 31 | High | Low | High | Low | ||||||||
2003 — October 1 to April 11 Six Continents | 6.35 | 4.61 | 10.08 | 7.49 | ||||||||
2003 — April 15 to December 31 IHG | 5.55 | 3.38 | 9.82 | 5.26 | ||||||||
Year ended December 31 | ||||||||||||
2004 | 6.91 | 4.79 | 13.09 | 8.70 | ||||||||
2005 | 8.42 | 6.12 | 14.53 | 11.49 |
£ per | ||||||||||||
ordinary share | $ per ADS | |||||||||||
Year ended December 31 | High | Low | High | Low | ||||||||
2006 | ||||||||||||
First quarter | 9.01 | 8.07 | 15.83 | 14.40 | ||||||||
Second quarter(1) | 10.00 | 8.98 | 21.21 | 16.54 | ||||||||
Third quarter | 9.56 | 8.37 | 17.91 | 15.99 | ||||||||
Fourth quarter | 12.65 | 9.31 | 26.27 | 17.64 | ||||||||
2007 | ||||||||||||
First quarter | 13.42 | 12.06 | 30.81 | 27.17 | ||||||||
Second quarter(2) | 14.20 | 12.41 | 32.59 | 24.78 | ||||||||
Third quarter | 13.16 | 9.19 | 26.59 | 18.52 | ||||||||
Fourth quarter | 11.20 | 8.73 | 23.34 | 17.37 | ||||||||
2008 | ||||||||||||
First quarter (through March 14, 2008) | 8.61 | 6.44 | 16.88 | 13.26 |
(1) | Prices adjusted for the share consolidation effective June 12, 2006. Unadjusted prices for the quarter were £10.01 and £8.98 and $18.56 and $15.06, respectively. | |
(2) | Prices adjusted for the share consolidation effective June 4, 2007. Unadjusted prices for the quarter were £14.13 and £12.16 and $28.18 and $24.17 respectively. |
£ per | ||||||||||||||||
ordinary share | $ per ADS | |||||||||||||||
Month ended | High | Low | High | Low | ||||||||||||
September 2006 | 9.47 | 9.15 | 17.91 | 17.35 | ||||||||||||
October 2006 | 10.19 | 9.31 | 19.50 | 17.64 | ||||||||||||
November 2006 | 10.66 | 10.02 | 20.44 | 19.29 | ||||||||||||
December 2006 | 12.65 | 10.18 | 26.27 | 20.37 | ||||||||||||
January 2007 | 13.08 | 11.84 | 25.79 | 23.12 | ||||||||||||
February 2007 | 13.15 | 12.00 | 25.86 | 22.97 | ||||||||||||
March 2007 (through to March 16, 2007) | 12.43 | 11.82 | 24.03 | 22.80 |
64
£ per | ||||||||||||
ordinary share | $ per ADS | |||||||||||
Month ended | High | Low | High | Low | ||||||||
September 2007 | 10.38 | 9.19 | 21.06 | 18.52 | ||||||||
October 2007 | 11.20 | 9.93 | 23.34 | 20.39 | ||||||||
November 2007 | 11.06 | 9.04 | 22.87 | 18.63 | ||||||||
December 2007 | 9.64 | 8.73 | 19.66 | 17.37 | ||||||||
January 2008 | 8.61 | 6.44 | 16.88 | 13.26 | ||||||||
February 2008 | 8.47 | 7.24 | 16.82 | 14.24 | ||||||||
March 2008 (through to March 14, 2008) | 7.96 | 7.62 | 15.85 | 15.15 |
73
ITEM 10. | ADDITIONAL INFORMATION |
65
74
• | the chairman of the meeting; | |
• | at least five shareholders present in person or by proxy and entitled to vote at the meeting; | |
• | any shareholder or shareholders representing in the aggregate not less than one-tenth of the total voting rights of all shareholders entitled to vote at the meeting; or | |
• | any shareholder or shareholders holding shares conferring a right to vote at the meeting on which there have beenpaid-up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all the shares conferring that right. |
66
• | an ordinary resolution, which includes resolutions for the election of directors, the approval of financial statements, the cumulative annual payment of dividends, the appointment of auditors, the increase of authorized share capital or the grant of authority to allot shares; | |
• | a special resolution, which includes resolutions amending the Company’s memorandum and articles of association, disapplying statutory pre-emption rights or changing the Company’s name; and |
75
• | an extraordinary resolution, which includes resolutions modifying the rights of any class of the Company’s shares at a meeting of the holders of such class or relating to certain matters concerning the Company’s winding up. |
• | after the payment of all creditors including certain preferential creditors, whether statutorily preferred creditors or normal creditors; and | |
• | subject to any special rights attaching to any class of shares; |
67
76
68
77
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78
• | certain financial institutions; | |
• | insurance companies; |
79
• | dealers and traders in securities or foreign currencies; | |
• | persons holding ordinary shares or ADSs as part of a hedge, straddle, conversion transaction, integrated transaction or |
70
• | persons whose functional currency for | |
• | partnerships or other entities classified as partnerships for | |
• | persons liable for the alternative minimum tax; | |
• | tax-exempt organizations; | |
• | persons who acquired our ADSs or shares pursuant to the exercise of any employee stock option or otherwise as | |
• | holders that, directly or indirectly, hold 10% or more of the Company’s voting stock. |
71
80
72
81
73
82
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
74
83
Expected to mature before December 31, | ||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | Fair value(i) | |||||||||||||||||||||||||
(£ million, except percentages) | ||||||||||||||||||||||||||||||||
Long-Term Debt: | ||||||||||||||||||||||||||||||||
Fixed Rate lease debt (US dollar) | 3 | 7 | 6 | 6 | 5 | 70 | 97 | 97 | ||||||||||||||||||||||||
Average dollar interest rate | 9.7 | % | 9.7 | % | 9.7 | % | 9.7 | % | 9.7 | % | 9.7 | % | 9.7 | % | ||||||||||||||||||
Variable Rate (various currencies) | 7 | — | 209 | — | — | — | 216 | 216 | ||||||||||||||||||||||||
Average interest rate | 7.5 | % | 5.3 | % | 5.3 | % |
Expected to mature before December 31, | ||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | Fair value(i) | |||||||||||||||||||||||||
(local currency million, except percentages) | ||||||||||||||||||||||||||||||||
Interest Rate Swaps and Forward rate agreements: | ||||||||||||||||||||||||||||||||
Principal (US dollar) | — | 100 | — | — | — | — | 100 | — | ||||||||||||||||||||||||
Fixed rate payable | 4.5 | % | 4.5 | % | ||||||||||||||||||||||||||||
Variable rate receivable | 5.7 | % | 5.7 | % | ||||||||||||||||||||||||||||
Principal (euro) | — | 80 | — | — | — | — | 80 | — | ||||||||||||||||||||||||
Fixed rate payable | 3.0 | % | 3.0 | % | ||||||||||||||||||||||||||||
Variable rate receivable | 4.0 | % | 4.0 | % |
Expected to mature before December 31, | |||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | Thereafter | Total | Fair value(i) | |||||||||||||||||||
(£ million, except percentages) | |||||||||||||||||||||||||
Long-Term Debt: | |||||||||||||||||||||||||
Fixed Rate lease debt (US dollar) | — | — | — | — | 100 | 100 | 126 | ||||||||||||||||||
Average dollar interest rate | 9.7 | % | 9.7 | % | |||||||||||||||||||||
Variable Rate (various currencies) | — | 773 | 4 | — | — | 777 | 777 | ||||||||||||||||||
Average interest rate | 5.9 | % | 8.2 | % | 5.9 | % |
75
Expected to mature before December 31, | |||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | Thereafter | Total | Fair value(i) | |||||||||||||||||||
(local currency million, except percentages) | |||||||||||||||||||||||||
Interest Rate Swaps: | |||||||||||||||||||||||||
Principal (US dollar) | 100 | — | — | — | — | 100 | — | ||||||||||||||||||
Fixed rate payable | 4.7 | % | 4.7 | % | |||||||||||||||||||||
Variable rate receivable | 5.1 | % | 5.1 | % | |||||||||||||||||||||
Principal (euro) | 75 | 75 | — | — | — | 150 | — | ||||||||||||||||||
Fixed rate payable | 3.9 | % | 4.2 | % | 4.0 | % | |||||||||||||||||||
Variable rate receivable | 4.5 | % | 4.5 | % | 4.5 | % | |||||||||||||||||||
Principal (sterling) | 75 | 75 | — | — | — | 150 | (1 | ) | |||||||||||||||||
Fixed rate payable | 6.3 | % | 6.3 | % | 6.3 | % | |||||||||||||||||||
Variable rate receivable | 6.2 | % | 6.3 | % | 6.3 | % |
(i) | Represents the net present value of the expected cash flows discounted at current market rates of interest. |
84
Pay | Receive | |||||||
2006 | 2006 | |||||||
(local currency | (£ million) | |||||||
million) | ||||||||
Sale of US dollars against sterling | (251 | ) | 130 | |||||
Sale of euros against sterling | (70 | ) | 47 | |||||
Sale of Hong Kong dollars against sterling | (690 | ) | 47 |
Pay | Receive | |||||||
2007 | 2007 | |||||||
(local currency | (£ million) | |||||||
million) | ||||||||
Sale of US dollars against sterling | 12.5 | 6 |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
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85
ITEM 16. | [RESERVED] |
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. | CODE OF ETHICS |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Audit Fees | 2.4 | 3.9 | ||||||
Audit Related Fees | 2.1 | 2.7 | ||||||
Tax Fees | 0.7 | 0.6 | ||||||
Total | 5.2 | 7.2 | ||||||
Year ended December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Audit Fees | 2.2 | 2.4 | ||||||
Audit Related Fees | 2.0 | 2.1 | ||||||
Tax Fees | 0.4 | 0.7 | ||||||
Total | 4.6 | 5.2 | ||||||
77
86
ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
(d) Maximum | ||||||||||||||||
(c) Total number | number (or | |||||||||||||||
of shares (or | approximate dollar | |||||||||||||||
(b) Average | units) purchased | value) of shares (or | ||||||||||||||
(a) Total number | price paid | as part of publicly | units) that may yet be | |||||||||||||
of shares (or | per share | announced plans | purchased under the | |||||||||||||
Period of fiscal year | units) purchased | (or unit) | or programs | plans or programs | ||||||||||||
Month 1 (no purchases in this month) | 0 | 0.00 | 0 | 55,178,065.00 | ||||||||||||
Month 2 (no purchases in this month) | 0 | 0.00 | 0 | 55,178,065.00 | ||||||||||||
Month 3 (03.03.06 – 03.28.06) | 3,195,000 | 8.68 | 3,195,000 | 51,983,065.00 | ||||||||||||
Month 4 (04.03.06 – 04.25.06) | 3,327,752 | 9.41 | 3,327,752 | 48,655,313.00 | ||||||||||||
Month 5 (05.19.06 – 05.25.06) | 4,500,000 | 9.18 | 4,500,000 | 44,155,313.00 | ||||||||||||
Month 6 (06.05.06 – 06.03.06) | 1,645,001 | 9.19 | 1,645,001 | 53,805,720.00 | ||||||||||||
Month 7 (07.03.06 – 07.31.06) | 6,522,000 | 9.12 | 6,522,000 | 47,283,720.00 | ||||||||||||
Month 8 (08.01.06 – 08.31.06) | 5,710,000 | 8.62 | 5,710,000 | 41,573,720.00 | ||||||||||||
Month 9 (09.04.06 – 09.29.06) | 1,763,000 | 9.29 | 1,763,000 | 39,810,720.00 | ||||||||||||
Month 10 (10.03.06 – 10.13.06) | 815,000 | 9.53 | 815,000 | 38,995,720.00 | ||||||||||||
Month 11 (no purchases in this month) | 0 | 0.00 | 0 | 38,995,720.00 | ||||||||||||
Month 12 (12.05.06 – 12.11.06) | 932,000 | 10.73 | 932,000 | 38,063,720.00 |
(d) Maximum | ||||||||||||||||
(c) Total number | number (or | |||||||||||||||
of shares (or | approximate dollar | |||||||||||||||
(b) Average | units) purchased | value) of shares (or | ||||||||||||||
(a) Total number | price paid | as part of publicly | units) that may yet be | |||||||||||||
of shares (or | per share | announced plans | purchased under the | |||||||||||||
Period of fiscal year | units) purchased | (or unit) | or programs | plans or programs | ||||||||||||
Month 1 (no purchases in this month) | 0 | 0.00 | 0. | 38,063,720 | ||||||||||||
Month 2 02.21.07 — 02.28.07 | 1,770,739 | 12.27 | 1,770,739 | 36,292,981 | ||||||||||||
Month 3 03.01.07 — 03.01.07 | 280,000 | 11.95 | 280,000 | 36,012,981 | ||||||||||||
Month 4 (no purchases in this month) | 0 | 0.00 | 0 | 36,012,981 | ||||||||||||
Month 5 05.16.07 — 05.25.07 | 186,525 | 12.80 | 186,525 | 35,826,456 | ||||||||||||
Month 6 06.26.07 — 06.28.07 | 260,351 | 12.73 | 260,351 | 44,371,983 | ||||||||||||
Month 7 (no purchases in this month) | 0 | 0.00 | 0 | 44,371,983 | ||||||||||||
Month 8 (no purchases in this month) | 0 | 0.00 | 0 | 44,371,983 | ||||||||||||
Month 9 09.05.07 — 09.28.07 | 2,373,182 | 9.53 | 2,373,182 | 41,998,801 | ||||||||||||
Month 10 10.03.07 — 10.05.07 | 273,788 | 10.18 | 273,788 | 41,725,013 | ||||||||||||
Month 11 11.06.07 — 11.21.07 | 2,255,716 | 9.61 | 2,255,716 | 39,469,297 | ||||||||||||
Month 12 12.17.07 — 12.18.07 | 324,543 | 8.98 | 324,543 | 39,144,754 |
ITEM 18. | FINANCIAL STATEMENTS |
Page | ||||||||
F-1 | ||||||||
F-2 | ||||||||
F-3 | ||||||||
Financial Statements | ||||||||
F-5 | ||||||||
F-6 | ||||||||
F-7 | ||||||||
F-8 | ||||||||
F-10 | ||||||||
F-11 | ||||||||
Schedule for the years ended December 31, 2007, 2006 | ||||||||
S-1 | ||||||||
Exhibit 1 | ||||||||
Exhibit 8 | ||||||||
Exhibit 12.A | ||||||||
Exhibit 12.B | ||||||||
Exhibit 13.A |
ITEM 19. | EXHIBITS |
Exhibit 1 | Memorandum and Articles of Association of IHG | |
Exhibit 4(a)(i) | £1,600 million Facility Agreement dated November 9, 2004 among Bank of Tokyo-Mitsubishi, Ltd., Barclays Capital, Citigroup Global Markets Limited, HSBC Bank plc, JP Morgan plc, Lloyds Bank plc, The Royal Bank of Scotland plc, SG Corporate & Investment Banking and West LB AG (incorporated by reference to Exhibit 4(ii) of InterContinental Hotels Group PLC Annual Report onForm 20-F (File No 1-10409) dated May 3, 2005) | |
Exhibit 4(b)(i) | Amended and Restated Purchase and Sale Agreement dated February 9, 2005 among BHR Texas L.P., InterContinental Hotels Group Resources Inc, Crowne Plaza LAX, LLC, Crowne Plaza Hilton Head Holding Company, Holiday Pacific Partners Limited Partnership, Staybridge Markham and HPT (incorporated by reference to Exhibit 4(b)(ii) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated May 3, 2005) | |
Exhibit 4(b)(ii) | Amended and Restated Stock Purchase Agreement dated February 9, 2005 between Six Continents International Holdings, B.V. and HPT IHG-2 (incorporated by reference to Exhibit 4(b)(v) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated May 3, 2005) | |
Exhibit 4(b)(iii) | Share Purchase Agreement dated March 10, 2005 between IHC London (Holdings) Limited, and LGR Acquisition (currently LRG Acquisition) and LGR Holdings Limited (currently LRG Holdings Limited) (incorporated by reference to Exhibit 4(b)(iv) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated May 3, 2005) |
88
Exhibit 4(b)(iv) | New Zealand Share Sale Deed dated September 1, 2005 between Hale International Limited, Six Continents Limited, HANZ Holdings (New Zealand) Limited and Eureka Funds Management Limited (incorporated by reference to Exhibit 4(b)(v) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) |
79
Exhibit 4(b)(v) | Australia Share and Unit Sale Deed dated September 1, 2005 between Holiday Inns Holdings (Australia) Pty Limited, SPHC Group Pty Limited, HIA(T) Pty Ltd, Six Continents Limited, HANZ (Australia) Pty Limited and Eureka Funds Management Limited (incorporated by reference to Exhibit 4(b)(vi) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 4(b)(vi) | Sale and Purchase Agreement dated September 8, 2005 between BHR Holdings BV and DABICAM SAS relating to the sale of the InterContinental Hotel, | |
Paris (incorporated by reference to Exhibit 4(b)(vi) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 30, 2007) | ||
Exhibit 4(b)(vii) | Britvic Underwriting Agreement dated November 25, 2005 between, inter alia, Britvic, IHG, the directors of Britvic, Citigroup and Deutsche Bank AG (as joint sponsors) and Citigroup, Deutsche Bank AG, Lehman Brothers International (Europe) and Merrill Lynch International (as joint Underwriters) (incorporated by reference to Exhibit 4(b)(vii) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 4(b)(viii) | Sale and Purchase Agreement dated March 10, 2006 among BHR Luxembourg S.à.r.l., Others, Cooperatie Westbridge Europe I.U.A., Others and Westbridge Hospitality Fund L.P. relating to a portfolio of certain companies and businesses in continental Europe (incorporated by reference to Exhibit 4(b)(viii) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 4(b)(ix) | Sale and Purchase Agreement dated July 13, 2006 between BHR Holdings BV and MSREF VI Danube BV relating to the sale of certain companies and businesses in continental Europe and Side Letter dated September 5, | |
30, 2007) | ||
Exhibit 4(c) | Stevan Porter’s service contract dated February 12, 2003 (incorporated by reference to Exhibit 4(c)(iii) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated April 8, 2004) | |
Exhibit 4(c) | Stevan Porter’s letter of appointment dated April 2005, effective from June 27, 2005 on completion of the Scheme of Arrangement and the introduction of the new parent company to the Group (incorporated by reference to Exhibit 4(c)(iv) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 4(c) | Richard Solomons’ service contract dated February 12, 2003 (incorporated by reference to Exhibit 4(c)(iv) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated April 8, 2004) |
89
Exhibit 4(c) | Richard Solomons’ letter of appointment dated April 2005, effective from June 27, 2005 on completion of the Scheme of Arrangement and the introduction of the new parent company to the Group (incorporated by reference to Exhibit 4(c)(vi) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 4(c) | Andrew Cosslett’s service contract dated December 13, 2004 (incorporated by reference to Exhibit 4(c)(v) of InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated May 3, 2005) | |
Exhibit 4(c) | Andrew Cosslett’s letter of appointment dated April 2005, effective from June 27, 2005 on completion of the Scheme of Arrangement and the introduction of the new parent company to the Group (incorporated by reference to Exhibit 4(c)(viii) of the InterContinental Hotels Group PLC Annual Report onForm 20-F (FileNo. 1-10409) dated March 31, 2006) | |
Exhibit 8 | List of Subsidiaries | |
Exhibit 12(a) | Certification of Andrew Cosslett filed pursuant to 17 CFR 240.13a-14(a) | |
Exhibit 12(b) | Certification of Richard Solomons filed pursuant to 17 CFR 240.13a-14(a) |
80
Exhibit 13(a) | Certification of Andrew Cosslett and Richard Solomons furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C.1350 | |
Exhibit 15(a) | Consent of Ernst & Young LLP (included onpage F-4) |
81
90
F-1
F-1
F-2
F-2
F-3
F-3
ERNST & YOUNG LLP |
F-4
F-4
Year ended December 31, | Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||||||
Continuing | Discontinued | Continuing | Discontinued | Continuing | Discontinued | ||||||||||||||||||||||||||||||||
operations | operations | Total | operations | operations | Total | operations | operations | Total | |||||||||||||||||||||||||||||
(£ million, except per ordinary share amounts) | |||||||||||||||||||||||||||||||||||||
Revenue(Note 2) | 805 | 155 | 960 | 713 | 1,197 | 1,910 | 606 | 1,598 | 2,204 | ||||||||||||||||||||||||||||
Cost of sales | (364 | ) | (121 | ) | (485 | ) | (333 | ) | (884 | ) | (1,217 | ) | (300 | ) | (1,177 | ) | (1,477 | ) | |||||||||||||||||||
Administrative expenses | (180 | ) | — | (180 | ) | (150 | ) | (74 | ) | (224 | ) | (140 | ) | (68 | ) | (208 | ) | ||||||||||||||||||||
261 | 34 | 295 | 230 | 239 | 469 | 166 | 353 | 519 | |||||||||||||||||||||||||||||
Depreciation and amortization (Note 2) | (60 | ) | (4 | ) | (64 | ) | (57 | ) | (73 | ) | (130 | ) | (46 | ) | (127 | ) | (173 | ) | |||||||||||||||||||
Other operating income and expenses (Note 5) | 27 | — | 27 | (22 | ) | — | (22 | ) | (49 | ) | — | (49 | ) | ||||||||||||||||||||||||
Operating profit(Note 2) | 228 | 30 | 258 | 151 | 166 | 317 | 71 | 226 | 297 | ||||||||||||||||||||||||||||
Financial income (Note 6) | 26 | — | 26 | 30 | — | 30 | 70 | — | 70 | ||||||||||||||||||||||||||||
Financial expenses (Note 6) | (37 | ) | — | (37 | ) | (54 | ) | (9 | ) | (63 | ) | (103 | ) | — | (103 | ) | |||||||||||||||||||||
Profit before tax | 217 | 30 | 247 | 127 | 157 | 284 | 38 | 226 | 264 | ||||||||||||||||||||||||||||
Tax (Note 7) | 50 | (9 | ) | 41 | (24 | ) | (56 | ) | (80 | ) | 196 | (69 | ) | 127 | |||||||||||||||||||||||
Profit after tax | 267 | 21 | 288 | 103 | 101 | 204 | 234 | 157 | 391 | ||||||||||||||||||||||||||||
Gain on disposal of assets, net of tax charge of £6 million (2005 £38 million: 2004 credit of £4 million) | — | 117 | 117 | — | 311 | 311 | — | 19 | 19 | ||||||||||||||||||||||||||||
Profit for the year | 267 | 138 | 405 | 103 | 412 | 515 | 234 | 176 | 410 | ||||||||||||||||||||||||||||
Attributable to: | |||||||||||||||||||||||||||||||||||||
Equity holders of the parent(i) | 267 | 138 | 405 | 103 | 393 | 496 | 234 | 149 | 383 | ||||||||||||||||||||||||||||
Minority equity interest | — | — | — | — | 19 | 19 | — | 27 | 27 | ||||||||||||||||||||||||||||
Profit for the year | 267 | 138 | 405 | 103 | 412 | 515 | 234 | 176 | 410 | ||||||||||||||||||||||||||||
Earnings per ordinary share:(Note 9) | |||||||||||||||||||||||||||||||||||||
Basic | 68.6p | 35.5p | 104.1p | 19.8p | 75.4p | 95.2p | 32.9p | 21.0p | 53.9p | ||||||||||||||||||||||||||||
Diluted | 66.9p | 34.6p | 101.5p | 19.3p | 73.8p | 93.1p | 32.6p | 20.7p | 53.3p |
Year ended December 31, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||
Before | Exceptional | Before | Exceptional | Before | Exceptional | |||||||||||||||||||||||||||||||
exceptional | items | exceptional | items | exceptional | items | |||||||||||||||||||||||||||||||
For the year ended 31 December 2007 | items | (Note 5) | Total | items | (Note 5) | Total | items | (Note 5) | Total | |||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||
Revenue (Note 2) | 883 | — | 883 | 786 | — | 786 | 697 | — | 697 | |||||||||||||||||||||||||||
Cost of sales | (411 | ) | — | (411 | ) | (355 | ) | — | (355 | ) | (323 | ) | — | (323 | ) | |||||||||||||||||||||
Administrative expenses | (188 | ) | (7 | ) | (195 | ) | (180 | ) | — | (180 | ) | (150 | ) | — | (150 | ) | ||||||||||||||||||||
Other operating income and expenses | 8 | 38 | 46 | 4 | 27 | 31 | 3 | (15 | ) | (12 | ) | |||||||||||||||||||||||||
292 | 31 | 323 | 255 | 27 | 282 | 227 | (15 | ) | 212 | |||||||||||||||||||||||||||
Depreciation and amortization(Note 2) | (55 | ) | (1 | ) | (56 | ) | (55 | ) | — | (55 | ) | (52 | ) | — | (52 | ) | ||||||||||||||||||||
Operating profit (Note 2) | 237 | 30 | 267 | 200 | 27 | 227 | 175 | (15 | ) | 160 | ||||||||||||||||||||||||||
Financial income (Note 6) | 9 | — | 9 | 26 | — | 26 | 30 | — | 30 | |||||||||||||||||||||||||||
Financial expenses (Note 6) | (54 | ) | — | (54 | ) | (37 | ) | — | (37 | ) | (54 | ) | — | (54 | ) | |||||||||||||||||||||
Profit before tax | 192 | 30 | 222 | 189 | 27 | 216 | 151 | (15 | ) | 136 | ||||||||||||||||||||||||||
Tax (Note 7) | (42 | ) | 30 | (12 | ) | (41 | ) | 94 | 53 | (30 | ) | 8 | (22 | ) | ||||||||||||||||||||||
Profit for the year from continuing operations | 150 | 60 | 210 | 148 | 121 | 269 | 121 | (7 | ) | 114 | ||||||||||||||||||||||||||
Profit for the year from discontinued operations (Note 11) | 5 | 16 | 21 | 19 | 117 | 136 | 97 | 304 | 401 | |||||||||||||||||||||||||||
Profit for the year | 155 | 76 | 231 | 167 | 238 | 405 | 218 | 297 | 515 | |||||||||||||||||||||||||||
Attributable to: | ||||||||||||||||||||||||||||||||||||
Equity holders of the parent | 155 | 76 | 231 | 167 | 238 | 405 | 199 | 297 | 496 | |||||||||||||||||||||||||||
Minority equity interest | — | — | — | — | — | — | 19 | — | 19 | |||||||||||||||||||||||||||
155 | 76 | 231 | 167 | 238 | 405 | 218 | 297 | 515 | ||||||||||||||||||||||||||||
Earnings per ordinary share (Note 9) | ||||||||||||||||||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||||||||||||||||
Basic | 65.6p | 69.1p | 21.9p | |||||||||||||||||||||||||||||||||
Diluted | 63.8p | 67.4p | 21.4p | |||||||||||||||||||||||||||||||||
Total operations: | ||||||||||||||||||||||||||||||||||||
Basic | 72.2p | 104.1p | 95.2p | |||||||||||||||||||||||||||||||||
Diluted | 70.2p | 101.5p | 93.1p |
F-5
F-5
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Income and expense recognized directly in equity | |||||||||||||
Gains on valuation of available-for-sale assets | 16 | 31 | — | ||||||||||
Gains on cash flow hedges | 1 | 1 | — | ||||||||||
Exchange differences on retranslation of foreign operations | (30 | ) | 29 | (12 | ) | ||||||||
Actuarial losses on defined benefit pension plans | (2 | ) | (23 | ) | (51 | ) | |||||||
Deficit transferred in respect of previous acquisition | — | — | (6 | ) | |||||||||
(15 | ) | 38 | (69 | ) | |||||||||
Transfers to the income statement | |||||||||||||
On cash flow hedges | (1 | ) | (6 | ) | — | ||||||||
On disposal of foreign operations | 4 | 2 | — | ||||||||||
On disposal of available-for-sale assets | (14 | ) | — | — | |||||||||
(11 | ) | (4 | ) | — | |||||||||
Tax | |||||||||||||
Tax on items above taken directly to or transferred from equity | 4 | (1 | ) | 14 | |||||||||
Deferred tax related to share schemes recognized directly in equity | 26 | 8 | — | ||||||||||
30 | 7 | 14 | |||||||||||
Net income/(expense) recognized directly in equity | 4 | 41 | (55 | ) | |||||||||
Profit for the year | 405 | 515 | 410 | ||||||||||
Total recognized income and expense for the year(i) | 409 | 556 | 355 | ||||||||||
Attributable to: | |||||||||||||
Equity holders of the parent | 409 | 541 | 338 | ||||||||||
Minority equity interest | — | 15 | 17 | ||||||||||
409 | 556 | 355 | |||||||||||
Effects of changes in accounting policy | |||||||||||||
Losses on valuation of available-for-sale assets | — | (10 | ) | — | |||||||||
Gains on cash flow hedges | — | 6 | — | ||||||||||
— | (4 | ) | — | ||||||||||
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Income and expense recognized directly in equity | ||||||||||||
Gains on valuation of available-for-sale assets | 4 | 16 | 31 | |||||||||
(Losses)/gains on cash flow hedges | (1 | ) | 1 | 1 | ||||||||
Exchange differences on retranslation of foreign operations | 10 | (30 | ) | 29 | ||||||||
Actuarial gains/(losses) on defined benefit pension plans | 12 | (2 | ) | (23 | ) | |||||||
25 | (15 | ) | 38 | |||||||||
Transfers to the income statement | ||||||||||||
On cash flow hedges: interest payable | (1 | ) | (1 | ) | (6 | ) | ||||||
On disposal of foreign operations: gain on disposal of assets | — | 4 | 2 | |||||||||
On disposal of available-for-sale assets: other operating income and expenses | (10 | ) | (14 | ) | — | |||||||
(11 | ) | (11 | ) | (4 | ) | |||||||
Tax | ||||||||||||
Tax on items above taken directly to or transferred from equity | (3 | ) | 4 | (1 | ) | |||||||
Tax related to share schemes recognized directly in equity | (2 | ) | 26 | 8 | ||||||||
(5 | ) | 30 | 7 | |||||||||
Net income recognized directly in equity | 9 | 4 | 41 | |||||||||
Profit for the year | 231 | 405 | 515 | |||||||||
Total recognized income and expense for the year | 240 | 409 | 556 | |||||||||
Attributable to: | ||||||||||||
Equity holders of the parent | 240 | 409 | 541 | |||||||||
Minority equity interest | — | — | 15 | |||||||||
240 | 409 | 556 | ||||||||||
Effects of changes in accounting policy | ||||||||||||
Losses on valuation of available-for-sale assets | — | — | (10 | ) | ||||||||
Gains on cash flow hedges | — | — | 6 | |||||||||
— | — | (4 | ) | |||||||||
F-6
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
ASSETS | ||||||||
Property, plant and equipment — (Note 10) | 997 | 1,356 | ||||||
Goodwill — (Note 12) | 109 | 118 | ||||||
Intangible assets — (Note 13) | 154 | 120 | ||||||
Investment in associates — (Note 14) | 32 | 42 | ||||||
Other financial assets — (Note 15) | 96 | 113 | ||||||
Total non-current assets | 1,388 | 1,749 | ||||||
Inventories — (Note 16) | 3 | 3 | ||||||
Trade and other receivables — (Note 17) | 237 | 252 | ||||||
Current tax receivable | 23 | 22 | ||||||
Cash and cash equivalents — (Note 18) | 179 | 324 | ||||||
Other financial assets — (Note 15) | 13 | 106 | ||||||
Total current assets | 455 | 707 | ||||||
Non-current assets classified as held for sale — (Note 11) | 50 | 279 | ||||||
Total assets | 1,893 | 2,735 | ||||||
LIABILITIES | ||||||||
Loans and other borrowings — (Note 20) | (10 | ) | (2 | ) | ||||
Trade and other payables — (Note 19) | (402 | ) | (468 | ) | ||||
Current tax payable | (231 | ) | (324 | ) | ||||
Total current liabilities | (643 | ) | (794 | ) | ||||
Loans and other borrowings — (Note 20) | (303 | ) | (410 | ) | ||||
Employee benefits — (Note 3) | (71 | ) | (76 | ) | ||||
Trade and other payables — (Note 19) | (109 | ) | (107 | ) | ||||
Deferred tax payable — (Note 25) | (79 | ) | (210 | ) | ||||
Total non-current liabilities | (562 | ) | (803 | ) | ||||
Liabilities classified as held for sale — (Note 11) | (2 | ) | (34 | ) | ||||
Total liabilities | (1,207 | ) | (1,631 | ) | ||||
Net assets | 686 | 1,104 | ||||||
EQUITY | ||||||||
Equity share capital | 66 | 49 | ||||||
Capital redemption reserve | 4 | 1 | ||||||
Shares held by employee share trusts | (17 | ) | (22 | ) | ||||
Other reserves | (1,528 | ) | (1,528 | ) | ||||
Unrealized gains and losses reserve | 27 | 23 | ||||||
Currency translation reserve | (3 | ) | 19 | |||||
Retained earnings | 2,129 | 2,542 | ||||||
IHG shareholders’ equity(i) | 678 | 1,084 | ||||||
Minority equity interest —(Note 26) | 8 | 20 | ||||||
Total equity | 686 | 1,104 | ||||||
F-7
Share Capital | Retained earnings and other reserves | ||||||||||||||||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||||||||||
held by | |||||||||||||||||||||||||||||||||||||||||
Number of | Capital | employee | Unrealized | Currency | Total IHG | ||||||||||||||||||||||||||||||||||||
ordinary | Ordinary | Share | redemption | Other | share | gains and | translation | Retained | shareholders’ | ||||||||||||||||||||||||||||||||
shares(i) | shares(i) | premium(ii) | reserve(ii) | reserves(iii) | trusts(iv) | losses(v) | reserve(vi) | earnings | equity | ||||||||||||||||||||||||||||||||
(£ million, except per ordinary share amounts) | |||||||||||||||||||||||||||||||||||||||||
At January 1, 2004 | 739 | 739 | 14 | — | 1,462 | (11 | ) | — | — | 119 | 2,323 | ||||||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | — | (12 | ) | 350 | 338 | ||||||||||||||||||||||||||||||
Share capital consolidation | (75 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issue of ordinary shares | 4 | 4 | 12 | — | — | — | — | — | — | 16 | |||||||||||||||||||||||||||||||
Repurchase of shares | (46 | ) | (46 | ) | — | — | — | — | — | — | (211 | ) | (257 | ) | |||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 46 | — | — | — | — | (46 | ) | — | ||||||||||||||||||||||||||||||
Purchase of own shares by employee share trusts | — | — | — | — | — | (33 | ) | — | — | — | (33 | ) | |||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 22 | — | — | (6 | ) | 16 | ||||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 18 | 18 | |||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (600 | ) | (600 | ) | |||||||||||||||||||||||||||||
At December 31, 2004 | 622 | 697 | 26 | 46 | 1,462 | (22 | ) | — | (12 | ) | (376 | ) | 1,821 | ||||||||||||||||||||||||||||
Effect of implementing IAS 32/39 | — | — | — | — | — | — | 3 | — | (7 | ) | (4 | ) | |||||||||||||||||||||||||||||
At January 1, 2005 | 622 | 697 | 26 | 46 | 1,462 | (22 | ) | 3 | (12 | ) | (383 | ) | 1,817 | ||||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | 20 | 31 | 490 | 541 | |||||||||||||||||||||||||||||||
Issue of ordinary shares | 1 | 1 | 3 | — | — | — | — | — | — | 4 | |||||||||||||||||||||||||||||||
Repurchase of shares | (19 | ) | (22 | ) | — | — | — | — | — | — | (102 | ) | (124 | ) | |||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 22 | — | — | — | — | (22 | ) | — | ||||||||||||||||||||||||||||||
Capital reorganization | (161 | ) | (632 | ) | (29 | ) | (68 | ) | (2,990 | ) | — | — | — | 2,723 | (996 | ) | |||||||||||||||||||||||||
Proceeds from capital reorganization | — | — | — | — | — | 4 | — | — | — | 4 | |||||||||||||||||||||||||||||||
Issue of ordinary shares | 1 | — | 6 | — | — | — | — | — | — | 6 | |||||||||||||||||||||||||||||||
Repurchase of shares | (11 | ) | (1 | ) | — | — | — | — | — | — | (82 | ) | (83 | ) | |||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 1 | — | — | — | — | (1 | ) | — | ||||||||||||||||||||||||||||||
Purchase of own shares by | |||||||||||||||||||||||||||||||||||||||||
employee share trusts | — | — | — | — | — | (29 | ) | — | — | — | (29 | ) | |||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 25 | — | — | (17 | ) | 8 | ||||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 17 | 17 | |||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (81 | ) | (81 | ) | |||||||||||||||||||||||||||||
At December 31, 2005 | 433 | �� | 43 | 6 | 1 | (1,528 | ) | (22 | ) | 23 | 19 | 2,542 | 1,084 | ||||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | 4 | (22 | ) | 427 | 409 | ||||||||||||||||||||||||||||||
Issue of ordinary shares | 4 | 1 | 19 | — | — | — | — | — | 20 | ||||||||||||||||||||||||||||||||
Repurchase of shares | (28 | ) | (3 | ) | — | — | — | — | — | — | (257 | ) | (260 | ) | |||||||||||||||||||||||||||
Share capital consolidation | (53 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 3 | — | — | — | — | (3 | ) | — | ||||||||||||||||||||||||||||||
Purchase of own shares by | |||||||||||||||||||||||||||||||||||||||||
employee share trusts | — | — | — | — | — | (47 | ) | — | — | — | (47 | ) | |||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 52 | — | — | (37 | ) | 15 | ||||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 18 | 18 | |||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (561 | ) | (561 | ) | |||||||||||||||||||||||||||||
At December 31, 2006 | 356 | 41 | 25 | 4 | (1,528 | ) | (17 | ) | 27 | (3 | ) | 2,129 | 678 | ||||||||||||||||||||||||||||
F-6
F-8
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
ASSETS | ||||||||
Property, plant and equipment — (Note 10) | 962 | 997 | ||||||
Goodwill — (Note 12) | 110 | 109 | ||||||
Intangible assets — (Note 13) | 167 | 154 | ||||||
Investment in associates — (Note 14) | 33 | 32 | ||||||
Retirement benefit assets — (Note 3) | 32 | — | ||||||
Other financial assets — (Note 15) | 93 | 96 | ||||||
Total non-current assets | 1,397 | 1,388 | ||||||
Inventories — (Note 16) | 3 | 3 | ||||||
Trade and other receivables — (Note 17) | 235 | 237 | ||||||
Current tax receivable | 54 | 23 | ||||||
Cash and cash equivalents — (Note 18) | 52 | 179 | ||||||
Other financial assets — (Note 15) | 9 | 13 | ||||||
Total current assets | 353 | 455 | ||||||
Non-current assets classified as held for sale — (Note 11) | 57 | 50 | ||||||
Total assets (Note 2) | 1,807 | 1,893 | ||||||
LIABILITIES | ||||||||
Loans and other borrowings — (Note 20) | (8 | ) | (10 | ) | ||||
Trade and other payables — (Note 19) | (390 | ) | (402 | ) | ||||
Current tax payable | (212 | ) | (231 | ) | ||||
Total current liabilities | (610 | ) | (643 | ) | ||||
Loans and other borrowings — (Note 20) | (869 | ) | (303 | ) | ||||
Retirement benefit obligations — (Note 3) | (55 | ) | (71 | ) | ||||
Trade and other payables — (Note 19) | (139 | ) | (109 | ) | ||||
Deferred tax payable — (Note 25) | (82 | ) | (79 | ) | ||||
Total non-current liabilities | (1,145 | ) | (562 | ) | ||||
Liabilities classified as held for sale — (Note 11) | (3 | ) | (2 | ) | ||||
Total liabilities (Note 2) | (1,758 | ) | (1,207 | ) | ||||
Net assets | 49 | 686 | ||||||
EQUITY | ||||||||
Equity share capital | 81 | 66 | ||||||
Capital redemption reserve | 5 | 4 | ||||||
Shares held by employee share trusts | (41 | ) | (17 | ) | ||||
Other reserves | (1,528 | ) | (1,528 | ) | ||||
Unrealized gains and losses reserve | 19 | 27 | ||||||
Currency translation reserve | 6 | (3 | ) | |||||
Retained earnings | 1,504 | 2,129 | ||||||
IHG shareholders’ equity | 46 | 678 | ||||||
Minority equity interest — (Note 26) | 3 | 8 | ||||||
Total equity | 49 | 686 | ||||||
F-7
Retained earnings and other reserves | ||||||||||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||||||||||
Share Capital | held by | Unrealized | ||||||||||||||||||||||||||||||||||||||
Number of | Capital | employee | gains and | Currency | Total IHG | |||||||||||||||||||||||||||||||||||
ordinary | Ordinary | Share | redemption | Other | share | losses | translation | Retained | shareholders’ | |||||||||||||||||||||||||||||||
shares(i) | shares(i) | premium(ii) | reserve(ii) | reserves(iii) | trusts(iv) | reserve(v) | reserve(vi) | earnings | equity | |||||||||||||||||||||||||||||||
(£ million, except per ordinary share amounts) | ||||||||||||||||||||||||||||||||||||||||
At January 1, 2005 | 622 | 697 | 26 | 46 | 1,462 | (22 | ) | 3 | (12 | ) | (383 | ) | 1,817 | |||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | 20 | 31 | 490 | 541 | ||||||||||||||||||||||||||||||
Issue of ordinary shares | 1 | 1 | 3 | — | — | — | — | — | — | 4 | ||||||||||||||||||||||||||||||
Repurchase of shares | (19 | ) | (22 | ) | — | — | — | — | — | — | (102 | ) | (124 | ) | ||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 22 | — | — | — | — | (22 | ) | — | |||||||||||||||||||||||||||||
Capital reorganization | (161 | ) | (632 | ) | (29 | ) | (68 | ) | (2,990 | ) | — | — | — | 2,723 | (996 | ) | ||||||||||||||||||||||||
Proceeds from capital reorganization | — | — | — | — | — | 4 | — | — | — | 4 | ||||||||||||||||||||||||||||||
Issue of ordinary shares | 1 | — | 6 | — | — | — | — | — | — | 6 | ||||||||||||||||||||||||||||||
Repurchase of shares | (11 | ) | (1 | ) | — | — | — | — | — | — | (82 | ) | (83 | ) | ||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 1 | — | — | — | — | (1 | ) | — | |||||||||||||||||||||||||||||
Purchase of own shares by employee share trusts | — | — | — | — | — | (29 | ) | — | — | — | (29 | ) | ||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 25 | — | — | (17 | ) | 8 | |||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 17 | 17 | ||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (81 | ) | (81 | ) | ||||||||||||||||||||||||||||
At December 31, 2005 | 433 | 43 | 6 | 1 | (1,528 | ) | (22 | ) | 23 | 19 | 2,542 | 1,084 | ||||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | 4 | (22 | ) | 427 | 409 | |||||||||||||||||||||||||||||
Issue of ordinary shares | 4 | 1 | 19 | — | — | — | — | — | — | 20 | ||||||||||||||||||||||||||||||
Repurchase of shares | (28 | ) | (3 | ) | — | — | — | — | — | — | (257 | ) | (260 | ) | ||||||||||||||||||||||||||
Share capital consolidation | (53 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 3 | — | — | — | — | (3 | ) | — | |||||||||||||||||||||||||||||
Purchase of own shares by employee share trusts | — | — | — | — | — | (47 | ) | — | — | — | (47 | ) | ||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 52 | — | — | (37 | ) | 15 | |||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 18 | 18 | ||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (561 | ) | (561 | ) | ||||||||||||||||||||||||||||
At December 31, 2006 | 356 | 41 | 25 | 4 | (1,528 | ) | (17 | ) | 27 | (3 | ) | 2,129 | 678 | |||||||||||||||||||||||||||
Total recognized income and expense for the year | — | — | — | — | — | — | (8 | ) | 9 | 239 | 240 | |||||||||||||||||||||||||||||
Issue of ordinary shares | 4 | — | 16 | — | — | — | — | — | — | 16 | ||||||||||||||||||||||||||||||
Repurchase of shares | (8 | ) | (1 | ) | — | — | — | — | — | — | (80 | ) | (81 | ) | ||||||||||||||||||||||||||
Share capital consolidation | (57 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Transfer to capital redemption reserve | — | — | — | 1 | — | — | — | — | (1 | ) | — | |||||||||||||||||||||||||||||
Purchase of own shares by employee share trusts | — | — | — | — | — | (69 | ) | — | — | — | (69 | ) | ||||||||||||||||||||||||||||
Release of own shares by employee share trusts | — | — | — | — | — | 45 | — | — | (40 | ) | 5 | |||||||||||||||||||||||||||||
Equity-settled share-based cost | — | — | — | — | — | — | — | — | 30 | 30 | ||||||||||||||||||||||||||||||
Equity dividends paid | — | — | — | — | — | — | — | — | (773 | ) | (773 | ) | ||||||||||||||||||||||||||||
At December 31, 2007 | 295 | 40 | 41 | 5 | (1,528 | ) | (41 | ) | 19 | 6 | 1,504 | 46 | ||||||||||||||||||||||||||||
F-8
(i) | The Company was incorporated and registered in England and Wales with registered number 5134420 on May 21, 2004 as a limited company under the Companies Act 1985 with the name Hackremco (No. 2154) Limited. On March 24, 2005 Hackremco (No. 2154) Limited changed its name to New InterContinental Hotels Group Limited. On April 27, 2005 New InterContinental Hotels Group Limited re-registered as a public limited company and changed its name to New InterContinental Hotels Group PLC. On June 27, 2005 New InterContinental Hotels Group PLC changed its name to InterContinental Hotels Group PLC. |
On April 21, 2005 the authorized share capital was increased to £50,100 by the creation of one redeemable preference share of £50,000. The redeemable preference share so created was allotted and treated as paid up in full on this date. | ||
On May 20, 2005 the authorized share capital of the Company was increased from £50,100 to £10,000,050,000 by the creation of 9,999,999,900 ordinary shares of £1 each. On May 20, 2005 all of the ordinary shares of £1 each were consolidated into ordinary shares of £6.25 each. | ||
On June 27, 2005 the capital reorganization (by means of a scheme of arrangement under Section 425 of the Companies Act 1985) was completed. Under the arrangement, shareholders received 11 new ordinary shares and £24.75 cash in exchange for every 15 existing ordinary shares held on June 24, 2005. The entire issued share capital of InterContinental Hotels Group PLC was transferred to New InterContinental Hotels Group PLC at fair market value, in exchange for the issue of 443 million fully paid ordinary shares of 10 pence each, which were admitted to the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange on that date. In accordance with the merger relief provisions of Sections 131 and 133 of the Companies Act 1985, the 443 million shares are recorded only at nominal value. | ||
On June 30, 2005 £6.15 on every £6.25 ordinary share was canceled, thereby reducing the nominal value of each ordinary share to 10 pence. | ||
On September 8, 2005 the redeemable preference share was redeemed at par value. The redeemable preference share did not carry any right to receive dividends nor to participate in the profits of the Company. | ||
During 2004 and 2005, the Company undertook to return funds of up to £750 million to shareholders by way of three consecutive £250 million share repurchase program, the third of which | ||
On June 1, 2006, shareholders approved a share capital consolidation on the basis of seven new ordinary shares for every eight existing ordinary shares. This provided for all the authorized ordinary shares of 10 pence each (whether issued or unissued) to be consolidated into new ordinary shares of 113/7 pence each. The share capital consolidation became effective on June 12, 2006. | ||
On June 1, 2007, shareholders approved a share capital consolidation on the basis of 47 new ordinary shares for every 56 existing ordinary shares. This provided for all the authorized ordinary shares of 113/7 pence each (whether issued or unissued) to be consolidated into new ordinary shares of 1329/47 pence each. The share capital consolidation became effective on June 4, 2007. | ||
Whilst the authorized share capital includes one redeemable preference share of £50,000, following its redemption in September 2005, this redeemable preference share has not been re-issued. | ||
The authority given to the Company at the | ||
At December 31, |
(ii) | The share premium account and capital redemption reserve are not distributable. | |
(iii) | Other reserves comprises the revaluation reserve previously recognized under UK GAAP and | |
(iv) | The shares held by employee share trusts comprises £41.1 million (2006 £16.8 million, | |
(v) | The |
(vi) | The currency translation reserve records the movement in exchange differences arising from the translation of the financial statements of foreign operations and exchange differences on foreign currency borrowings and derivative instruments that provide a hedge against net investments in foreign operations. On adoption of IFRS, cumulative exchange differences were deemed to be |
F-9
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Profit for the year | 405 | 515 | 410 | ||||||||||
Adjustments for: | |||||||||||||
Net financial expense | 11 | 33 | 33 | ||||||||||
Income tax (credit)/charge | (41 | ) | 80 | (127 | ) | ||||||||
Gain on disposal of assets, net of tax | (117 | ) | (311 | ) | (19 | ) | |||||||
Other operating income and expenses | (27 | ) | 22 | 49 | |||||||||
Depreciation and amortization | 64 | 130 | 173 | ||||||||||
Equity settled share-based cost, net of payments | 14 | 12 | 12 | ||||||||||
Other gains and losses | — | — | 4 | ||||||||||
Operating cash flow before movements in working capital | 309 | 481 | 535 | ||||||||||
Decrease in inventories | — | — | 1 | ||||||||||
Increase in receivables | (31 | ) | — | (13 | ) | ||||||||
Increase/(decrease) in provisions and other payables | 10 | (32 | ) | 50 | |||||||||
Employee benefit contributions, net of cost | — | (26 | ) | (58 | ) | ||||||||
Cash flow from operations | 288 | 423 | 515 | ||||||||||
Interest paid | (33 | ) | (59 | ) | (91 | ) | |||||||
Interest received | 24 | 29 | 72 | ||||||||||
Tax paid | (49 | ) | (91 | ) | (35 | ) | |||||||
Net cash from operating activities | 230 | 302 | 461 | ||||||||||
Cash flow from investing activities | |||||||||||||
Purchases of property, plant and equipment — Hotels | (87 | ) | (107 | ) | (143 | ) | |||||||
Purchases of intangible assets — Hotels | (23 | ) | (19 | ) | (33 | ) | |||||||
Purchases of other financial assets — Hotels | (8 | ) | (10 | ) | (11 | ) | |||||||
Acquisition of subsidiary, net of cash acquired | (6 | ) | — | — | |||||||||
Disposal of assets, net of cash disposed of — Hotels | 620 | 1,816 | 101 | ||||||||||
Proceeds from other financial assets — Hotels | 124 | 10 | 5 | ||||||||||
Purchases of property, plant and equipment — Soft Drinks | — | (47 | ) | (70 | ) | ||||||||
Disposal of business, net of cash disposed of — Soft Drinks | — | 220 | — | ||||||||||
Net cash from investing activities | 620 | 1,863 | (151 | ) | |||||||||
Cash flow from financing activities | |||||||||||||
Proceeds from the issue of share capital | 20 | 10 | 16 | ||||||||||
Purchase of own shares | (260 | ) | (207 | ) | (257 | ) | |||||||
Payment to shareholders as a result of the capital reorganisation on June 27, 2005 | — | (996 | ) | — | |||||||||
Purchase of own shares by employee share trusts | (47 | ) | (29 | ) | (33 | ) | |||||||
Proceeds on release of own shares by employee share trusts | 19 | 16 | 16 | ||||||||||
Dividends paid to shareholders | (561 | ) | (81 | ) | (600 | ) | |||||||
Dividends paid to minority interests | (1 | ) | (177 | ) | (26 | ) | |||||||
(Decrease)/increase in borrowings | (172 | ) | (442 | ) | 258 | ||||||||
Costs associated with new facilities | — | — | (5 | ) | |||||||||
Financial expense on early settlement of debt | — | — | (17 | ) | |||||||||
Net cash from financing activities | (1,002 | ) | (1,906 | ) | (648 | ) | |||||||
Net movement in cash and cash equivalents in the year | (152 | ) | 259 | (338 | ) | ||||||||
Cash and cash equivalents at beginning of the year | 324 | 72 | 411 | ||||||||||
Exchange rate effects | 7 | (7 | ) | (1 | ) | ||||||||
Cash and cash equivalents at end of the year | 179 | 324 | 72 | ||||||||||
F-9
F-10
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Profit for the year | 231 | 405 | 515 | |||||||||
Adjustments for: | ||||||||||||
Net financial expense | 45 | 11 | 33 | |||||||||
Income tax charge/(credit) | 15 | (41 | ) | 80 | ||||||||
Exceptional operating items before depreciation | (31 | ) | (27 | ) | 22 | |||||||
Gain on disposal of assets, net of tax | (16 | ) | (117 | ) | (311 | ) | ||||||
Depreciation and amortization | 58 | 64 | 130 | |||||||||
Equity-settled share-based cost, net of payments | 24 | 14 | 12 | |||||||||
Other non-cash items | (2 | ) | — | — | ||||||||
Operating cash flow before movements in working capital | 324 | 309 | 481 | |||||||||
Increase in trade and other receivables | (15 | ) | (31 | ) | — | |||||||
Increase/(decrease) in trade and other payables | 26 | 10 | (32 | ) | ||||||||
Retirement benefit contributions, net of charge | (33 | ) | — | (26 | ) | |||||||
Cash flow from operations | 302 | 288 | 423 | |||||||||
Interest paid | (42 | ) | (33 | ) | (59 | ) | ||||||
Interest received | 9 | 24 | 29 | |||||||||
Tax paid on operating activities | (37 | ) | (43 | ) | (80 | ) | ||||||
Net cash from operating activities | 232 | 236 | 313 | |||||||||
Cash flow from investing activities | ||||||||||||
Purchases of property, plant and equipment — Hotels | (57 | ) | (87 | ) | (107 | ) | ||||||
Purchases of intangible assets — Hotels | (20 | ) | (23 | ) | (19 | ) | ||||||
Purchases of associates and other financial assets — Hotels | (16 | ) | (8 | ) | (10 | ) | ||||||
Acquisition of subsidiary, net of cash acquired | — | (6 | ) | — | ||||||||
Disposal of assets, net of costs and cash disposed of — Hotels | 49 | 620 | 1,816 | |||||||||
Proceeds from associates and other financial assets — Hotels | 57 | 124 | 10 | |||||||||
Purchases of property, plant and equipment — Soft Drinks | — | — | (47 | ) | ||||||||
Disposal of business, net of cash disposed of — Soft Drinks | — | — | 220 | |||||||||
Tax paid on disposals | (32 | ) | (6 | ) | (11 | ) | ||||||
Net cash from investing activities | (19 | ) | 614 | 1,852 | ||||||||
Cash flow from financing activities | ||||||||||||
Proceeds from the issue of share capital | 16 | 20 | 10 | |||||||||
Purchase of own shares | (81 | ) | (260 | ) | (207 | ) | ||||||
Payment to shareholders as a result of the capital reorganisation on June 27, 2005 | — | — | (996 | ) | ||||||||
Purchase of own shares by employee share trusts | (69 | ) | (47 | ) | (29 | ) | ||||||
Proceeds on release of own shares by employee share trusts | 10 | 19 | 16 | |||||||||
Dividends paid to shareholders | (773 | ) | (561 | ) | (81 | ) | ||||||
Dividends paid to minority interests | — | (1 | ) | (177 | ) | |||||||
Increase/(decrease) in borrowings | 553 | (172 | ) | (442 | ) | |||||||
Net cash from financing activities | (344 | ) | (1,002 | ) | (1,906 | ) | ||||||
Net movement in cash and cash equivalents in the year | (131 | ) | (152 | ) | 259 | |||||||
Cash and cash equivalents at beginning of the year | 179 | 324 | 72 | |||||||||
Exchange rate effects | 4 | 7 | (7 | ) | ||||||||
Cash and cash equivalents at end of the year | 52 | 179 | 324 | |||||||||
F-10
Note 1 — | Corporate |
F-11
F-11
Buildings | lesser of 50 years and unexpired term of lease; and | |
Fixtures, fittings and equipment | ||
F-12
F-12
F-13
F-13
F-14
F-14
F-15
F-15
F-16
• | has a continuing managerial involvement to the degree associated with asset ownership; | |
• | has transferred the significant risks and rewards associated with asset ownership; and | |
• | can reliably measure and will actually receive the proceeds. |
F-16
• | Impairment — the Company determines whether goodwill is impaired on an annual basis or more frequently if there are indicators of impairment. Other non-current assets, including property, plant and equipment, are tested for impairment if there are indicators of impairment. Impairment 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. | |
• | ||
• | Tax — provisions for tax accruals require judgments on the interpretation of tax legislation, developments in tax case law and the potential outcomes of tax audits and appeals. In addition, deferred tax assets are recognized for unused tax attributes to the extent that it is probable that taxable profit will be available against which they can be utilized. Judgment is required as to the amount that can be recognized based on the likely amount and timing of future taxable profits, taking into account expected tax planning. |
F-17
• | Loyalty program — the future redemption liability included in trade and other payables is estimated using actuarial methods based on statistical formulae that project the timing of future point redemptions based on historical levels to give eventual redemption rates and points values. | |
• | Trade receivables — | |
• | Other — the Company also makes estimates and judgments in the valuation of management and franchise agreements acquired on asset disposals, the valuation of financial assets classified as available-for-sale, the outcome of legal proceedings and claims and in the valuation of share-based payment costs. |
IFRS | Effective from | |
IFRS 8 | Operating Segments Effective from January 1, 2009 | |
Effective from | ||
IAS 27R | Consolidated and Separate Financial Statements Effective from July 1, 2009. | |
IFRIC 11 | Group and Treasury Share Transactions Effective from March 1, 2007 | |
IFRIC 13 | Customer Loyalty Programmes Effective from July 1, 2008. |
F-17
Note 2 — | Segmental Information |
F-18
F-19
F-18
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 128 | 121 | 73 | — | 322 | |||||||||||||||
Managed | 78 | 84 | 49 | — | 211 | |||||||||||||||
Franchised | 244 | 40 | 8 | — | 292 | |||||||||||||||
Central | — | — | — | 58 | 58 | |||||||||||||||
Continuing operations | 450 | 245 | 130 | 58 | 883 | |||||||||||||||
Discontinued operations — owned and leased | 31 | 9 | — | — | 40 | |||||||||||||||
481 | 254 | 130 | 58 | 923 | ||||||||||||||||
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 20 | 17 | 18 | — | 55 | |||||||||||||||
Managed | 21 | 43 | 23 | — | 87 | |||||||||||||||
Franchised | 212 | 29 | 3 | — | 244 | |||||||||||||||
Regional and central | (33 | ) | (22 | ) | (13 | ) | (81 | ) | (149 | ) | ||||||||||
Continuing operations | 220 | 67 | 31 | (81 | ) | 237 | ||||||||||||||
Discontinued operations — owned and leased | 8 | — | — | — | 8 | |||||||||||||||
228 | 67 | 31 | (81 | ) | 245 | |||||||||||||||
Exceptional operating items | 9 | 10 | 8 | 3 | 30 | |||||||||||||||
Operating profit | 237 | 77 | 39 | (78 | ) | 275 | ||||||||||||||
Continuing | Discontinued | Total | ||||||||||
(£ million) | ||||||||||||
Operating profit | 267 | 8 | 275 | |||||||||
Net finance costs | (45 | ) | — | (45 | ) | |||||||
Profit before tax | 222 | 8 | 230 | |||||||||
Tax | (12 | ) | (3 | ) | (15 | ) | ||||||
Profit after tax | 210 | 5 | 215 | |||||||||
Gain on disposal of assets, net of tax | — | 16 | 16 | |||||||||
Profit for the year | 210 | 21 | 231 | |||||||||
F-20
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Segment assets | 614 | 613 | 334 | 83 | 1,644 | |||||||||||||||
Non-current assets classified as held for sale | 57 | — | — | — | 57 | |||||||||||||||
671 | 613 | 334 | 83 | 1,701 | ||||||||||||||||
Unallocated assets: | ||||||||||||||||||||
Current tax receivable | 54 | |||||||||||||||||||
Cash and cash equivalents | 52 | |||||||||||||||||||
Total assets | 1,807 | |||||||||||||||||||
Segment liabilities | (280 | ) | (237 | ) | (67 | ) | — | (584 | ) | |||||||||||
Liabilities classified as held for sale | (3 | ) | — | — | — | (3 | ) | |||||||||||||
(283 | ) | (237 | ) | (67 | ) | — | (587 | ) | ||||||||||||
Unallocated liabilities: | ||||||||||||||||||||
Current tax payable | (212 | ) | ||||||||||||||||||
Deferred tax payable | (82 | ) | ||||||||||||||||||
Loans and other borrowings | (877 | ) | ||||||||||||||||||
Total liabilities | (1,758 | ) | ||||||||||||||||||
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||
Capital expenditure(i) | 29 | 20 | 20 | 23 | 92 | |||||||||||||||
Additions to: | ||||||||||||||||||||
Property, plant and equipment | 16 | 14 | 14 | 10 | 54 | |||||||||||||||
Intangible assets | 4 | 5 | 3 | 13 | 25 | |||||||||||||||
Depreciation and amortization(ii) | 16 | 18 | 11 | 11 | 56 | |||||||||||||||
Reversal of previously recorded impairment | — | — | 3 | — | 3 | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Capital expenditure(i) | 1 | — | — | — | 1 | |||||||||||||||
Depreciation and amortization(ii) | 1 | 1 | — | — | 2 |
Asia | Total | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Group | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 115 | 100 | 71 | — | 286 | ||||||||||||||||
Managed | 77 | 71 | 36 | — | 184 | ||||||||||||||||
Franchised | 241 | 35 | 4 | — | 280 | ||||||||||||||||
Central | — | — | — | 55 | 55 | ||||||||||||||||
Continuing operations | 433 | 206 | 111 | 55 | 805 | ||||||||||||||||
Discontinued operations — owned and leased | 30 | 125 | — | — | 155 | ||||||||||||||||
463 | 331 | 111 | 55 | 960 | |||||||||||||||||
Total | |||||||||||||||||||||
Americas | EMEA | Asia Pacific | Central | Group | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 14 | (5 | ) | 17 | — | 26 | |||||||||||||||
Managed | 27 | 37 | 21 | — | 85 | ||||||||||||||||
Franchised | 208 | 24 | 3 | — | 235 | ||||||||||||||||
Regional and central | (32 | ) | (20 | ) | (12 | ) | (81 | ) | (145 | ) | |||||||||||
Continuing operations | 217 | 36 | 29 | (81 | ) | 201 | |||||||||||||||
Discontinued operations — owned and leased | 4 | 26 | — | — | 30 | ||||||||||||||||
221 | 62 | 29 | (81 | ) | 231 | ||||||||||||||||
Continuing | Discontinued | Group | |||||||||||
(£ million) | |||||||||||||
Group | |||||||||||||
Hotels | 201 | 30 | 231 | ||||||||||
Other operating income and expenses | 27 | — | 27 | ||||||||||
Operating profit | 228 | 30 | 258 | ||||||||||
Net finance costs | (11 | ) | — | (11 | ) | ||||||||
Profit before tax | 217 | 30 | 247 | ||||||||||
Tax | 50 | (9 | ) | 41 | |||||||||
Profit after tax | 267 | 21 | 288 | ||||||||||
Gain on disposal of assets, net of tax | — | 117 | 117 | ||||||||||
Profit for the year | 267 | 138 | 405 | ||||||||||
F-19
Asia | Total | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Group | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Segment assets | 647 | 583 | 338 | 73 | 1,641 | ||||||||||||||||
Non-current assets classified as held for sale | 40 | 10 | — | — | 50 | ||||||||||||||||
687 | 593 | 338 | 73 | 1,691 | |||||||||||||||||
Unallocated assets: | |||||||||||||||||||||
Current tax receivable | 23 | ||||||||||||||||||||
Cash and cash equivalents | 179 | ||||||||||||||||||||
Total assets | 1,893 | ||||||||||||||||||||
Segment liabilities | 295 | 234 | 53 | — | 582 | ||||||||||||||||
Liabilities classified as held for sale | 2 | — | — | — | 2 | ||||||||||||||||
297 | 234 | 53 | — | 584 | |||||||||||||||||
Unallocated liabilities: | |||||||||||||||||||||
Current tax payable | 231 | ||||||||||||||||||||
Deferred tax payable | 79 | ||||||||||||||||||||
Loans and other borrowings | 313 | ||||||||||||||||||||
Total liabilities | 1,207 | ||||||||||||||||||||
Asia | Total | |||||||||||||||||||||
Americas | EMEA | Pacific | Central | Group | ||||||||||||||||||
(£ million) | ||||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||
Capital expenditure(i) | 34 | 50 | 17 | 15 | 116 | |||||||||||||||||
Additions to: | ||||||||||||||||||||||
Property, plant and equipment | 116 | 53 | 9 | 4 | 182 | |||||||||||||||||
Intangible assets | 10 | 31 | 1 | 11 | 53 | |||||||||||||||||
Depreciation and amortization(ii) | 18 | 19 | 10 | 13 | 60 | |||||||||||||||||
Reversal of previously recorded impairment | — | (2 | ) | — | — | (2 | ) | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||||
Capital expenditure(i) | 1 | 7 | — | — | 8 | |||||||||||||||||
Additions to property, plant and equipment | — | 4 | — | — | 4 | |||||||||||||||||
Depreciation and amortization(ii) | 1 | 3 | — | — | 4 | |||||||||||||||||
Impairment of assets held for sale | 3 | — | — | — | 3 |
(i) | Comprises purchases of property, plant and equipment, intangible assets and other financial assets and acquisitions of subsidiaries as included in the consolidated cash flow statement. | |
(ii) | Included in the £58 million of depreciation and amortization is £20 million relating to administrative expenses and £38 million relating to cost of sales. |
F-21
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 104 | 92 | 71 | — | 267 | |||||||||||||||
Managed | 77 | 71 | 36 | — | 184 | |||||||||||||||
Franchised | 241 | 35 | 4 | — | 280 | |||||||||||||||
Central | — | — | — | 55 | 55 | |||||||||||||||
Continuing operations | 422 | 198 | 111 | 55 | 786 | |||||||||||||||
Discontinued operations — owned and leased | 41 | 133 | — | — | 174 | |||||||||||||||
463 | 331 | 111 | 55 | 960 | ||||||||||||||||
Americas | EMEA | Asia Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 12 | (4 | ) | 17 | — | 25 | ||||||||||||||
Managed | 27 | 37 | 21 | — | 85 | |||||||||||||||
Franchised | 208 | 24 | 3 | — | 235 | |||||||||||||||
Regional and central | (32 | ) | (20 | ) | (12 | ) | (81 | ) | (145 | ) | ||||||||||
Continuing operations | 215 | 37 | 29 | (81 | ) | 200 | ||||||||||||||
Discontinued operations — owned and leased | 6 | 25 | — | — | 31 | |||||||||||||||
221 | 62 | 29 | (81 | ) | 231 | |||||||||||||||
Exceptional operating items | 25 | 2 | — | — | 27 | |||||||||||||||
Operating profit | 246 | 64 | 29 | (81 | ) | 258 | ||||||||||||||
Continuing | Discontinued | Total | ||||||||||
(£ million) | ||||||||||||
Operating profit | 227 | 31 | 258 | |||||||||
Net finance costs | (11 | ) | — | (11 | ) | |||||||
Profit before tax | 216 | 31 | 247 | |||||||||
Tax | 53 | (12 | ) | 41 | ||||||||
Profit after tax | 269 | 19 | 288 | |||||||||
Gain on disposal of assets, net of tax | — | 117 | 117 | |||||||||
Profit for the year | 269 | 136 | 405 | |||||||||
F-22
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Segment assets | 647 | 583 | 338 | 73 | 1,641 | |||||||||||||||
Non-current assets classified as held for sale | 40 | 10 | — | — | 50 | |||||||||||||||
687 | 593 | 338 | 73 | 1,691 | ||||||||||||||||
Unallocated assets: | ||||||||||||||||||||
Current tax receivable | 23 | |||||||||||||||||||
Cash and cash equivalents | 179 | |||||||||||||||||||
Total assets | 1,893 | |||||||||||||||||||
Segment liabilities | (295 | ) | (234 | ) | (53 | ) | — | (582 | ) | |||||||||||
Liabilities classified as held for sale | (2 | ) | — | — | — | (2 | ) | |||||||||||||
(297 | ) | (234 | ) | (53 | ) | — | (584 | ) | ||||||||||||
Unallocated liabilities: | ||||||||||||||||||||
Current tax payable | (231 | ) | ||||||||||||||||||
Deferred tax payable | (79 | ) | ||||||||||||||||||
Loans and other borrowings | (313 | ) | ||||||||||||||||||
Total liabilities | (1,207 | ) | ||||||||||||||||||
Asia | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Total | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||
Capital expenditure(i) | 34 | 49 | 17 | 15 | 115 | |||||||||||||||
Additions to: | ||||||||||||||||||||
Property, plant and equipment | 116 | 53 | 9 | 4 | 182 | |||||||||||||||
Intangible assets | 10 | 31 | 1 | 11 | 53 | |||||||||||||||
Depreciation and amortization(ii) | 15 | 17 | 10 | 13 | 55 | |||||||||||||||
Reversal of previously recorded impairment | — | 2 | — | — | 2 | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Capital expenditure(i) | 1 | 8 | — | — | 9 | |||||||||||||||
Additions to property, plant and equipment | — | 4 | — | — | 4 | |||||||||||||||
Depreciation and amortization(ii) | 4 | 5 | — | — | 9 | |||||||||||||||
Impairment of assets held for sale | 3 | — | — | — | 3 |
(i) | Comprises purchases of property, plant and equipment, intangible assets and other financial assets and acquisitions of subsidiaries as included in the consolidated cash flow statement. | |
(ii) | Included in the £64 million of depreciation and amortization is £21 million relating to administrative expenses and £43 million relating to cost of sales. |
F-23
F-20
Asia | Total | |||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 98 | 102 | 59 | — | 259 | |||||||||||||||
Managed | 65 | 55 | 25 | — | 145 | |||||||||||||||
Franchised | 213 | 35 | 3 | — | 251 | |||||||||||||||
Central | — | — | — | 42 | 42 | |||||||||||||||
Continuing operations | 376 | 192 | 87 | 42 | 697 | |||||||||||||||
Discontinued operations — owned and leased | 69 | 419 | 54 | — | 542 | |||||||||||||||
445 | 611 | 141 | 42 | 1,239 | ||||||||||||||||
Continuing | Discontinued | Group | ||||||||||
(£ million) | ||||||||||||
Group | ||||||||||||
Hotels | 697 | 542 | 1,239 | |||||||||
Soft Drinks | — | 671 | 671 | |||||||||
Total revenue | 697 | 1,213 | 1,910 | |||||||||
Total | ||||||||||||||||||||
Americas | EMEA | Asia Pacific | Central | Hotels | ||||||||||||||||
(£ million) | ||||||||||||||||||||
Hotels | ||||||||||||||||||||
Owned and leased | 14 | (3 | ) | 11 | — | 22 | ||||||||||||||
Managed | 20 | 31 | 16 | — | 67 | |||||||||||||||
Franchised | 186 | 26 | 2 | — | 214 | |||||||||||||||
Regional and central | (34 | ) | (21 | ) | (8 | ) | (65 | ) | (128 | ) | ||||||||||
Continuing operations | 186 | 33 | 21 | (65 | ) | 175 | ||||||||||||||
Discontinued operations — owned and leased | 12 | 71 | 11 | — | 94 | |||||||||||||||
198 | 104 | 32 | (65 | ) | 269 | |||||||||||||||
Continuing | Discontinued | Total | ||||||||||
(£ million) | ||||||||||||
Group | ||||||||||||
Hotels | 175 | 94 | 269 | |||||||||
Soft Drinks | — | 70 | 70 | |||||||||
175 | 164 | 339 | ||||||||||
Exceptional operating items | (15 | ) | (7 | ) | (22 | ) | ||||||
Operating profit | 160 | 157 | 317 | |||||||||
Net finance costs | (24 | ) | (9 | ) | (33 | ) | ||||||
Profit before tax | 136 | 148 | 284 | |||||||||
Tax | (22 | ) | (58 | ) | (80 | ) | ||||||
Profit after tax | 114 | 90 | 204 | |||||||||
Gain on disposal of assets, net of tax | — | 311 | 311 | |||||||||
Profit for the year | 114 | 401 | 515 | |||||||||
Asia | Total | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 106 | 110 | 59 | — | 275 | ||||||||||||||||
Managed | 65 | 55 | 25 | — | 145 | ||||||||||||||||
Franchised | 213 | 35 | 3 | — | 251 | ||||||||||||||||
Central | — | — | — | 42 | 42 | ||||||||||||||||
Continuing operations | 384 | 200 | 87 | 42 | 713 | ||||||||||||||||
Discontinued operations — owned and leased | 61 | 411 | 54 | — | 526 | ||||||||||||||||
445 | 611 | 141 | 42 | 1,239 | |||||||||||||||||
Continuing | Discontinued | Group | |||||||||||
(£ million) | |||||||||||||
Group | |||||||||||||
Hotels | 713 | 526 | 1,239 | ||||||||||
Soft Drinks | — | 671 | 671 | ||||||||||
Total revenue | 713 | 1,197 | 1,910 | ||||||||||
Total | |||||||||||||||||||||
Americas | EMEA | Asia Pacific | Central | Hotels | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 14 | (5 | ) | 11 | — | 20 | |||||||||||||||
Managed | 20 | 31 | 16 | — | 67 | ||||||||||||||||
Franchised | 186 | 26 | 2 | — | 214 | ||||||||||||||||
Regional and central | (34 | ) | (21 | ) | (8 | ) | (65 | ) | (128 | ) | |||||||||||
Continuing operations | 186 | 31 | 21 | (65 | ) | 173 | |||||||||||||||
Discontinued operations — owned and leased | 12 | 73 | 11 | — | 96 | ||||||||||||||||
198 | 104 | 32 | (65 | ) | 269 | ||||||||||||||||
F-21
Continuing | Discontinued | Group | |||||||||||
(£ million) | |||||||||||||
Group | |||||||||||||
Hotels | 173 | 96 | 269 | ||||||||||
Soft Drinks | — | 70 | 70 | ||||||||||
173 | 166 | 339 | |||||||||||
Other operating income and expenses | (22 | ) | — | (22 | ) | ||||||||
Operating profit | 151 | 166 | 317 | ||||||||||
Net finance costs | (24 | ) | (9 | ) | (33 | ) | |||||||
Profit before tax | 127 | 157 | 284 | ||||||||||
Tax | (24 | ) | (56 | ) | (80 | ) | |||||||
Profit after tax | 103 | 101 | 204 | ||||||||||
Gain on disposal of assets, net of tax | — | 311 | 311 | ||||||||||
Profit for the year | 103 | 412 | 515 | ||||||||||
* | Other than for Soft Drinks which reflects the 50 weeks and three days ended December 14. |
F-24
Asia | Total | Soft | ||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Total | ||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||
Segment assets | 689 | 987 | 346 | 88 | 2,110 | — | 2,110 | |||||||||||||||||||||
Non-current assets classified as held for sale | 21 | 258 | — | — | 279 | — | 279 | |||||||||||||||||||||
710 | 1,245 | 346 | 88 | 2,389 | — | 2,389 | ||||||||||||||||||||||
Unallocated assets: | ||||||||||||||||||||||||||||
Current tax receivable | 22 | — | 22 | |||||||||||||||||||||||||
Cash and cash equivalents | 324 | — | 324 | |||||||||||||||||||||||||
Total assets | 2,735 | — | 2,735 | |||||||||||||||||||||||||
Segment liabilities | (340 | ) | (261 | ) | (50 | ) | — | (651 | ) | — | (651 | ) | ||||||||||||||||
Liabilities classified as held for sale | (1 | ) | (33 | ) | — | — | (34 | ) | — | (34 | ) | |||||||||||||||||
(341 | ) | (294 | ) | (50 | ) | — | (685 | ) | — | (685 | ) | |||||||||||||||||
Unallocated liabilities: | ||||||||||||||||||||||||||||
Current tax payable | (324 | ) | — | (324 | ) | |||||||||||||||||||||||
Deferred tax payable | (210 | ) | — | (210 | ) | |||||||||||||||||||||||
Loans and other borrowings | (412 | ) | — | (412 | ) | |||||||||||||||||||||||
Total liabilities | (1,631 | ) | — | (1,631 | ) | |||||||||||||||||||||||
Asia | Total | Soft | ||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Total | ||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||||||||
Capital expenditure(i) | 17 | 19 | 28 | 13 | 77 | — | 77 | |||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||
Property, plant and equipment | 7 | 15 | 30 | 6 | 58 | — | 58 | |||||||||||||||||||||
Intangible assets | 27 | 51 | 9 | 7 | 94 | — | 94 | |||||||||||||||||||||
Depreciation and amortization(ii) | 16 | 13 | 8 | 15 | 52 | — | 52 | |||||||||||||||||||||
Impairment of property, plant and equipment | — | 7 | — | — | 7 | — | 7 | |||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||
Capital expenditure(i) | 11 | 44 | 4 | — | 59 | 47 | 106 | |||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||
Property, plant and equipment | 9 | 33 | 4 | — | 46 | 36 | 82 | |||||||||||||||||||||
Intangible assets | — | — | — | — | — | 7 | 7 | |||||||||||||||||||||
Depreciation and amortization(ii) | 4 | 26 | 3 | — | 33 | 45 | 78 |
* | Other than for Soft Drinks which reflects the 50 weeks and three days ended December 14. |
(i) |
Asia | Total | Soft | Total | ||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Group | |||||||||||||||||||||||
(£ million) | |||||||||||||||||||||||||||||
Segment assets | 689 | 987 | 346 | 88 | 2,110 | — | 2,110 | ||||||||||||||||||||||
Non-current assets classified as held for sale | 21 | 258 | — | — | 279 | — | 279 | ||||||||||||||||||||||
710 | 1,245 | 346 | 88 | 2,389 | — | 2,389 | |||||||||||||||||||||||
Unallocated assets: | |||||||||||||||||||||||||||||
Current tax receivable | 22 | — | 22 | ||||||||||||||||||||||||||
Cash and cash equivalents | 324 | — | 324 | ||||||||||||||||||||||||||
Total assets | 2,735 | — | 2,735 | ||||||||||||||||||||||||||
Segment liabilities | 340 | 261 | 50 | — | 651 | — | 651 | ||||||||||||||||||||||
Liabilities classified as held for sale | 1 | 33 | — | — | 34 | — | 34 | ||||||||||||||||||||||
341 | 294 | 50 | — | 685 | — | 685 | |||||||||||||||||||||||
Unallocated liabilities: | |||||||||||||||||||||||||||||
Current tax payable | 324 | — | 324 | ||||||||||||||||||||||||||
Deferred tax payable | 210 | — | 210 | ||||||||||||||||||||||||||
Loans and other borrowings | 412 | — | 412 | ||||||||||||||||||||||||||
Total liabilities | 1,631 | — | 1,631 | ||||||||||||||||||||||||||
F-22
Asia | Total | Soft | Total | |||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Group | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||||||||||
Capital expenditure(i) | 22 | 19 | 28 | 13 | 82 | — | 82 | |||||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||||
Property, plant and equipment | 12 | 15 | 30 | 6 | 63 | — | 63 | |||||||||||||||||||||||
Intangible assets | 27 | 51 | 9 | 7 | 94 | — | 94 | |||||||||||||||||||||||
Depreciation and amortization(ii) | 19 | 15 | 8 | 15 | 57 | — | 57 | |||||||||||||||||||||||
Impairment of property, plant and equipment | — | 7 | — | — | 7 | — | 7 | |||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||
Capital expenditure(i) | 6 | 44 | 4 | — | 54 | 47 | 101 | |||||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||||
Property, plant and equipment | 4 | 33 | 4 | — | 41 | 36 | 77 | |||||||||||||||||||||||
Intangible assets | — | — | — | — | — | 7 | 7 | |||||||||||||||||||||||
Depreciation and amortization(ii) | 1 | 24 | 3 | — | 28 | 45 | 73 |
Comprises purchases of property, plant and equipment, intangible assets and other financial assets and acquisitions of subsidiaries as included in the cash flow statement. |
(ii) | Included in the £130 million of depreciation and amortization is £23 million relating to administrative expenses and £107 million relating to cost of sales. |
F-25
Asia | Total | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 80 | 116 | 50 | — | 246 | ||||||||||||||||
Managed | 30 | 43 | 21 | — | 94 | ||||||||||||||||
Franchised | 196 | 27 | 3 | — | 226 | ||||||||||||||||
Central | — | — | — | 40 | 40 | ||||||||||||||||
Continuing operations | 306 | 186 | 74 | 40 | 606 | ||||||||||||||||
Discontinued operations — owned and leased | 189 | 643 | 60 | — | 892 | ||||||||||||||||
495 | 829 | 134 | 40 | 1,498 | |||||||||||||||||
Continuing | Discontinued | Group | |||||||||||
(£ million) | |||||||||||||
Group | |||||||||||||
Hotels | 731 | 767 | 1,498 | ||||||||||
Soft Drinks | — | 706 | 706 | ||||||||||
Total revenue | 731 | 1,473 | 2,204 | ||||||||||
F-23
Asia | Total | ||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | |||||||||||||||||
(£ million) | |||||||||||||||||||||
Hotels | |||||||||||||||||||||
Owned and leased | 3 | (11 | ) | 9 | — | 1 | |||||||||||||||
Managed | 6 | 24 | 14 | — | 44 | ||||||||||||||||
Franchised | 167 | 21 | 2 | — | 190 | ||||||||||||||||
Regional and central | (27 | ) | (23 | ) | (8 | ) | (57 | ) | (115 | ) | |||||||||||
Continuing operations | 149 | 11 | 17 | (57 | ) | 120 | |||||||||||||||
Discontinued operations — owned and leased | 24 | 118 | 7 | — | 149 | ||||||||||||||||
173 | 129 | 24 | (57 | ) | 269 | ||||||||||||||||
Continuing | Discontinued | Group | |||||||||||
(£ million) | |||||||||||||
Group | |||||||||||||
Hotels | 120 | 149 | 269 | ||||||||||
Soft Drinks | — | 77 | 77 | ||||||||||
120 | 226 | 346 | |||||||||||
Other operating income and expenses | (49 | ) | — | (49 | ) | ||||||||
Operating profit | 71 | 226 | 297 | ||||||||||
Net finance costs | (33 | ) | — | (33 | ) | ||||||||
Profit before tax | 38 | 226 | 264 | ||||||||||
Tax | 196 | (69 | ) | 127 | |||||||||
Profit after tax | 234 | 157 | 391 | ||||||||||
Gain on disposal of assets, net of tax | — | 19 | 19 | ||||||||||
Profit available for shareholders | 234 | 176 | 410 | ||||||||||
F-24
Asia | Total | Soft | Total | ||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Group | |||||||||||||||||||||||
(£ million) | |||||||||||||||||||||||||||||
Segment assets | 583 | 1,202 | 437 | 86 | 2,308 | 458 | 2,766 | ||||||||||||||||||||||
Non-current assets classified as held for sale | 424 | 1,402 | — | — | 1,826 | — | 1,826 | ||||||||||||||||||||||
1,007 | 2,604 | 437 | 86 | 4,134 | 458 | 4,592 | |||||||||||||||||||||||
Unallocated assets: | |||||||||||||||||||||||||||||
Current tax receivable | 14 | — | 14 | ||||||||||||||||||||||||||
Cash and cash equivalents | 60 | 12 | 72 | ||||||||||||||||||||||||||
Total assets | 4,208 | 470 | 4,678 | ||||||||||||||||||||||||||
Segment liabilities | 300 | 290 | 28 | — | 618 | 291 | 909 | ||||||||||||||||||||||
Liabilities classified as held for sale | 24 | 124 | — | — | 148 | — | 148 | ||||||||||||||||||||||
324 | 414 | 28 | — | 766 | 291 | 1,057 | |||||||||||||||||||||||
Unallocated liabilities: | |||||||||||||||||||||||||||||
Current tax payable | 248 | 13 | 261 | ||||||||||||||||||||||||||
Deferred tax payable | 246 | (12 | ) | 234 | |||||||||||||||||||||||||
Loans and other borrowings | 1,185 | 3 | 1,188 | ||||||||||||||||||||||||||
Total liabilities | 2,445 | 295 | 2,740 | ||||||||||||||||||||||||||
Asia | Total | Soft | Total | |||||||||||||||||||||||||||
Americas | EMEA | Pacific | Central | Hotels | Drinks | Group | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||||||||||
Capital expenditure(i) | 43 | 14 | 15 | 12 | 84 | — | 84 | |||||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||||
Property, plant and equipment | 32 | 16 | 10 | — | 58 | — | 58 | |||||||||||||||||||||||
Intangible assets | 4 | — | 1 | 12 | 17 | — | 17 | |||||||||||||||||||||||
Depreciation and amortization(ii) | 11 | 14 | 6 | 15 | 46 | — | 46 | |||||||||||||||||||||||
Impairment of property, plant and equipment | 14 | 30 | 4 | — | 48 | — | 48 | |||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||
Capital expenditure(i) | 17 | 81 | 5 | — | 103 | 70 | 173 | |||||||||||||||||||||||
Additions to: | ||||||||||||||||||||||||||||||
Property, plant and equipment | 17 | 81 | 5 | — | 103 | 56 | 159 | |||||||||||||||||||||||
Intangible assets | — | — | — | — | — | 16 | 16 | |||||||||||||||||||||||
Depreciation and amortization(ii) | 18 | 56 | 7 | — | 81 | 46 | 127 |
F-25
Note 3 — | Staff costs and Directors’ emoluments |
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Wages and salaries | 301 | 465 | 570 | ||||||||||
Social security costs | 38 | 61 | 66 | ||||||||||
Pension and other post-retirement benefits: | |||||||||||||
Defined benefit plans | 6 | 19 | 21 | ||||||||||
Defined contribution plans | 11 | 15 | 12 | ||||||||||
356 | 560 | 669 | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Costs: | ||||||||||||
Wages and salaries | 292 | 301 | 465 | |||||||||
Social security costs | 31 | 38 | 61 | |||||||||
Pension and other post-retirement benefits: | ||||||||||||
Defined benefit plans | 4 | 6 | 19 | |||||||||
Defined contribution plans | 12 | 11 | 15 | |||||||||
339 | 356 | 560 | ||||||||||
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(Number) | ||||||||||||
Hotels | 11,456 | 18,995 | 26,835 | |||||||||
Soft Drinks | — | 2,991 | 2,824 | |||||||||
11,456 | 21,986 | 29,659 | ||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(Number) | ||||||||||||
Americas | 3,761 | 3,771 | 5,832 | |||||||||
EMEA | 2,739 | 4,437 | 10,477 | |||||||||
Asia Pacific | 2,716 | 2,225 | 1,737 | |||||||||
Central | 1,150 | 1,023 | 949 | |||||||||
Hotels | 10,366 | 11,456 | 18,995 | |||||||||
Soft Drinks | — | — | 2,991 | |||||||||
10,366 | 11,456 | 21,986 | ||||||||||
F-26
F-26
Pension plans | ||||||||||||||||||||||||||||||||||||||||||||||||
Post- | ||||||||||||||||||||||||||||||||||||||||||||||||
employment | ||||||||||||||||||||||||||||||||||||||||||||||||
UK | US | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
Recognized in administrative expenses | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||||||||||||||
Current service costs | 5 | 19 | 18 | — | — | — | — | — | — | 5 | 19 | 18 | ||||||||||||||||||||||||||||||||||||
Past service costs | — | — | 1 | — | — | — | — | — | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||
Interest cost on benefit obligation | 13 | 30 | 27 | 5 | 6 | 5 | 1 | 1 | 1 | 19 | 37 | 33 | ||||||||||||||||||||||||||||||||||||
Expected return on plan assets | (14 | ) | (32 | ) | (27 | ) | (4 | ) | (5 | ) | (4 | ) | — | — | — | (18 | ) | (37 | ) | (31 | ) | |||||||||||||||||||||||||||
4 | 17 | 19 | 1 | 1 | 1 | 1 | 1 | 1 | 6 | 19 | 21 | |||||||||||||||||||||||||||||||||||||
Recognized in other operating income and expense | ||||||||||||||||||||||||||||||||||||||||||||||||
Plan curtailment | — | (7 | ) | — | — | — | — | — | — | — | — | (7 | ) | — | ||||||||||||||||||||||||||||||||||
Post- | ||||||||||||||||||||||||||||||||||||||||||||||||
Pension plans | employment | |||||||||||||||||||||||||||||||||||||||||||||||
UK | US and other | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
Recognized in administrative expenses | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||||||||||||||
Current service costs | 5 | 5 | 19 | — | — | — | — | — | — | 5 | 5 | 19 | ||||||||||||||||||||||||||||||||||||
Interest cost on benefit obligation | 15 | 13 | 30 | 5 | 5 | 6 | 1 | 1 | 1 | 21 | 19 | 37 | ||||||||||||||||||||||||||||||||||||
Expected return on plan assets | (17 | ) | (14 | ) | (32 | ) | (5 | ) | (4 | ) | (5 | ) | — | — | — | (22 | ) | (18 | ) | (37 | ) | |||||||||||||||||||||||||||
3 | 4 | 17 | — | 1 | 1 | 1 | 1 | 1 | 4 | 6 | 19 | |||||||||||||||||||||||||||||||||||||
Recognized in other operating income and expense | ||||||||||||||||||||||||||||||||||||||||||||||||
Plan curtailment | — | — | (7 | ) | — | — | — | — | — | — | — | — | (7 | ) | ||||||||||||||||||||||||||||||||||
Pension plans | ||||||||||||||||||||||||||||||||||||||||||||||||
Post-employment | ||||||||||||||||||||||||||||||||||||||||||||||||
UK | US | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
Actuarial gains and losses | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||||||||||||||
Actual return on scheme assets | 21 | 79 | 41 | 6 | 4 | 5 | — | — | — | 27 | 83 | 46 | ||||||||||||||||||||||||||||||||||||
Less: expected return on scheme assets | (14 | ) | (32 | ) | (27 | ) | (4 | ) | (5 | ) | (4 | ) | — | — | — | (18 | ) | (37 | ) | (31 | ) | |||||||||||||||||||||||||||
7 | 47 | 14 | 2 | (1 | ) | 1 | — | — | — | 9 | 46 | 15 | ||||||||||||||||||||||||||||||||||||
Other actuarial gains and losses | (12 | ) | (67 | ) | (60 | ) | — | (3 | ) | (5 | ) | 1 | 1 | (1 | ) | (11 | ) | (69 | ) | (66 | ) | |||||||||||||||||||||||||||
(5 | ) | (20 | ) | (46 | ) | 2 | (4 | ) | (4 | ) | 1 | 1 | (1 | ) | (2 | ) | (23 | ) | (51 | ) | ||||||||||||||||||||||||||||
Deficit transferred in respect of previous acquisition | — | — | (6 | ) | — | — | — | — | — | — | — | — | (6 | ) | ||||||||||||||||||||||||||||||||||
Pension plans | Post-employment | |||||||||||||||||||||||||||||||||||||||||||||||
UK | US and other | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
Actuarial gains and losses | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||||||||||||||
Actual return on plan assets | 14 | 21 | 79 | 5 | 6 | 4 | — | — | — | 19 | 27 | 83 | ||||||||||||||||||||||||||||||||||||
Less: expected return on plan assets | (17 | ) | (14 | ) | (32 | ) | (5 | ) | (4 | ) | (5 | ) | — | — | — | (22 | ) | (18 | ) | (37 | ) | |||||||||||||||||||||||||||
(3 | ) | 7 | 47 | — | 2 | (1 | ) | — | — | — | (3 | ) | 9 | 46 | ||||||||||||||||||||||||||||||||||
Other actuarial gains and losses | 15 | (12 | ) | (67 | ) | — | — | (3 | ) | — | 1 | 1 | 15 | (11 | ) | (69 | ) | |||||||||||||||||||||||||||||||
12 | (5 | ) | (20 | ) | — | 2 | (4 | ) | — | 1 | 1 | 12 | (2 | ) | (23 | ) | ||||||||||||||||||||||||||||||||
Pension plans | |||||||||||||||||||||||||||||||||
Post- | |||||||||||||||||||||||||||||||||
employment | |||||||||||||||||||||||||||||||||
UK | US | benefits | Total | ||||||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||||||
(£ million) | |||||||||||||||||||||||||||||||||
Fair value of scheme assets | 269 | 250 | 56 | 62 | — | — | 325 | 312 | |||||||||||||||||||||||||
Present value of benefit obligations | (298 | ) | (274 | ) | (89 | ) | (103 | ) | (9 | ) | (11 | ) | (396 | ) | (388 | ) | |||||||||||||||||
Employee benefits liability | (29 | ) | (24 | ) | (33 | ) | (41 | ) | (9 | ) | (11 | ) | (71 | ) | (76 | ) | |||||||||||||||||
Comprising: | |||||||||||||||||||||||||||||||||
Funded plans | (6 | ) | (2 | ) | (9 | ) | (14 | ) | — | — | (15 | ) | (16 | ) | |||||||||||||||||||
Unfunded plans | (23 | ) | (22 | ) | (24 | ) | (27 | ) | (9 | ) | (11 | ) | (56 | ) | (60 | ) | |||||||||||||||||
(29 | ) | (24 | ) | (33 | ) | (41 | ) | (9 | ) | (11 | ) | (71 | ) | (76 | ) | ||||||||||||||||||
Pension plans | ||||||||||||||||||||||||||||||||
UK | US and other | Post-employment benefits | Total | |||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||
Schemes in surplus | ||||||||||||||||||||||||||||||||
Fair value of plan assets | 304 | — | 7 | — | — | — | 311 | — | ||||||||||||||||||||||||
Present value of benefit obligations | (274 | ) | — | (5 | ) | — | — | — | (279 | ) | — | |||||||||||||||||||||
Retirement benefit assets | 30 | — | 2 | — | — | — | 32 | — | ||||||||||||||||||||||||
Schemes in deficit | ||||||||||||||||||||||||||||||||
Fair value of plan assets | — | 269 | 65 | 56 | — | — | 65 | 325 | ||||||||||||||||||||||||
Present value of benefit obligations | (23 | ) | (298 | ) | (87 | ) | (89 | ) | (10 | ) | (9 | ) | (120 | ) | (396 | ) | ||||||||||||||||
Retirement benefit obligations | (23 | ) | (29 | ) | (22 | ) | (33 | ) | (10 | ) | (9 | ) | (55 | ) | (71 | ) | ||||||||||||||||
Total fair value of plan assets | 304 | 269 | 72 | 56 | — | — | 376 | 325 | ||||||||||||||||||||||||
Total present value of benefit obligations | (297 | ) | (298 | ) | (92 | ) | (89 | ) | (10 | ) | (9 | ) | (399 | ) | (396 | ) | ||||||||||||||||
F-27
F-27
Pension plans | ||||||||||||||||||||||||||||||||||||
Post-employment | ||||||||||||||||||||||||||||||||||||
UK | US | benefits | ||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
(%) | ||||||||||||||||||||||||||||||||||||
Wages and salaries increases | 4.6 | 4.3 | 4.3 | — | — | — | 4.0 | 4.0 | 4.0 | |||||||||||||||||||||||||||
Pensions increases | 3.1 | 2.8 | 2.8 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Discount rate | 5.0 | 4.7 | 5.3 | 5.8 | 5.5 | 5.8 | 5.8 | 5.5 | 5.8 | |||||||||||||||||||||||||||
Inflation rate | 3.1 | 2.8 | 2.8 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Healthcare cost trend rate assumed for next year | 10.0 | 9.0 | 9.5 | |||||||||||||||||||||||||||||||||
Ultimate rate that the cost trend rate trends to | 5.0 | 4.5 | 4.5 |
Pension plans | ||||||||||||||||||||||||||||||||||||
UK | US | Post-employment benefits | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||
(%) | ||||||||||||||||||||||||||||||||||||
Wages and salaries increases | 4.9 | 4.6 | 4.3 | — | — | — | 4.0 | 4.0 | 4.0 | |||||||||||||||||||||||||||
Pensions increases | 3.4 | 3.1 | 2.8 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Discount rate | 5.5 | 5.0 | 4.7 | 5.8 | 5.8 | 5.5 | 5.8 | 5.8 | 5.5 | |||||||||||||||||||||||||||
Inflation rate | 3.4 | 3.1 | 2.8 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Healthcare cost trend rate assumed for next year | 10.0 | 10.0 | 9.0 | |||||||||||||||||||||||||||||||||
Ultimate rate that the cost trend rate trends to | 5.0 | 5.0 | 4.5 |
Pension plans | ||||||||||||||||||||||||
UK | US | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
(years) | ||||||||||||||||||||||||
Current pensioners at 65 — male(i) | 23 | 23 | 21 | 18 | 18 | 17 | ||||||||||||||||||
Current pensioners at 65 — female(i) | 26 | 26 | 24 | 20 | 20 | 22 | ||||||||||||||||||
Future pensioners at 65 — male(ii) | 24 | 24 | 22 | 18 | 18 | 17 | ||||||||||||||||||
Future pensioners at 65 — female(ii) | 27 | 27 | 25 | 20 | 20 | 22 |
(i) | Relates to assumptions based on longevity (in years) following retirement at the balance sheet date. | |
(ii) | Relates to assumptions based on longevity (in years) relating to an employee retiring in 2027. |
UK | US | |||||||||||||||
Higher/ | Increase/ | Higher/ | Increase/ | |||||||||||||
(lower) | (decrease) | (lower) | (decrease) | |||||||||||||
pension cost | in liabilities | pension cost | in liabilities | |||||||||||||
(£ million) | ||||||||||||||||
Discount rate — 0.25% decrease | 0.4 | 15.6 | — | 2.4 | ||||||||||||
Discount rate — 0.25% increase | (0.4 | ) | (14.7 | ) | — | (2.3 | ) | |||||||||
Inflation rate — 0.25% increase | 0.9 | 14.6 | — | — | ||||||||||||
Inflation rate — 0.25% decrease | (0.9 | ) | (13.8 | ) | — | — | ||||||||||
Mortality rate — one year increase | 0.6 | 6.8 | — | 2.7 |
F-28
Pension plans | ||||||||||||||||||||||||
UK | US | |||||||||||||||||||||||
Post-retirement mortality (years) | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||
Current pensioners at 65 – male(i) | 23 | 21 | 21 | 18 | 17 | 17 | ||||||||||||||||||
Current pensioners at 65 – female(i) | 26 | 24 | 24 | 20 | 22 | 22 | ||||||||||||||||||
Future pensioners at 65 – male(ii) | 24 | 22 | 22 | 18 | 17 | 17 | ||||||||||||||||||
Future pensioners at 65 – female(ii) | 27 | 25 | 25 | 20 | 22 | 22 |
Post- | ||||||||||||||||||||||||||||||||
Pension plans | employment | |||||||||||||||||||||||||||||||
UK | US and other | benefits | Total | |||||||||||||||||||||||||||||
Movement in benefit obligation | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | 298 | 274 | 89 | 103 | 9 | 11 | 396 | 388 | ||||||||||||||||||||||||
Current service cost | 5 | 5 | — | — | — | — | 5 | 5 | ||||||||||||||||||||||||
Members’ contributions | 1 | 1 | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||
Interest expense | 15 | 13 | 5 | 5 | 1 | 1 | 21 | 19 | ||||||||||||||||||||||||
Benefits paid | (7 | ) | (7 | ) | (5 | ) | (6 | ) | (1 | ) | (1 | ) | (13 | ) | (14 | ) | ||||||||||||||||
Reclassification(i) | — | — | 5 | — | — | — | 5 | — | ||||||||||||||||||||||||
Actuarial (gain)/ loss arising in the year | (15 | ) | 12 | — | — | — | (1 | ) | (15 | ) | 11 | |||||||||||||||||||||
Exchange adjustments | — | — | (2 | ) | (13 | ) | 1 | (1 | ) | (1 | ) | (14 | ) | |||||||||||||||||||
Benefit obligation at end of year | 297 | 298 | 92 | 89 | 10 | 9 | 399 | 396 | ||||||||||||||||||||||||
Comprising: | ||||||||||||||||||||||||||||||||
Funded plans | 274 | 275 | 70 | 65 | — | — | 344 | 340 | ||||||||||||||||||||||||
Unfunded plans | 23 | 23 | 22 | 24 | 10 | 9 | 55 | 56 | ||||||||||||||||||||||||
297 | 298 | 92 | 89 | 10 | 9 | 399 | 396 | |||||||||||||||||||||||||
Post- | ||||||||||||||||||||||||||||||||
Pension plans | employment | |||||||||||||||||||||||||||||||
UK | US and other | benefits | Total | |||||||||||||||||||||||||||||
Movement in plan assets | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 269 | 250 | 56 | 62 | — | — | 325 | 312 | ||||||||||||||||||||||||
Company contributions | 27 | 4 | 10 | 1 | 1 | 1 | 38 | 6 | ||||||||||||||||||||||||
Members’ contributions | 1 | 1 | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||
Benefits paid | (7 | ) | (7 | ) | (5 | ) | (6 | ) | (1 | ) | (1 | ) | (13 | ) | (14 | ) | ||||||||||||||||
Reclassification(i) | — | — | 7 | — | — | — | 7 | — | ||||||||||||||||||||||||
Expected return on assets | 17 | 14 | 5 | 4 | — | — | 22 | 18 | ||||||||||||||||||||||||
Actuarial (loss)/gain arising in the year | (3 | ) | 7 | — | 2 | — | — | (3 | ) | 9 | ||||||||||||||||||||||
Exchange adjustments | — | — | (1 | ) | (7 | ) | — | — | (1 | ) | (7 | ) | ||||||||||||||||||||
Fair value of plan assets at end of year | 304 | 269 | 72 | 56 | — | — | 376 | 325 | ||||||||||||||||||||||||
(i) | Relates to |
Pension plans | ||||||||||||||||||||||||||||||||
Post- | ||||||||||||||||||||||||||||||||
employment | ||||||||||||||||||||||||||||||||
UK | US | benefits | Total | |||||||||||||||||||||||||||||
Movement in benefit obligation | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | 274 | 600 | 103 | 88 | 11 | 11 | 388 | 699 | ||||||||||||||||||||||||
Current service cost | 5 | 19 | — | — | — | — | 5 | 19 | ||||||||||||||||||||||||
Past service cost | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Members’ contributions | 1 | 2 | — | — | — | 1 | 2 | |||||||||||||||||||||||||
Interest expense | 13 | 30 | 5 | 6 | 1 | 1 | 19 | 37 | ||||||||||||||||||||||||
Benefits paid | (7 | ) | (11 | ) | (6 | ) | (6 | ) | (1 | ) | (1 | ) | (14 | ) | (18 | ) | ||||||||||||||||
Plan curtailment | — | (7 | ) | — | — | — | — | — | (7 | ) | ||||||||||||||||||||||
Deficit transferred in respect of previous acquisition | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Actuarial loss/(gain) arising in the year | 12 | 67 | — | 3 | (1 | ) | (1 | ) | 11 | 69 | ||||||||||||||||||||||
Separation of Soft Drinks | — | (426 | ) | — | — | — | — | — | (426 | ) | ||||||||||||||||||||||
Exchange adjustments | — | — | (13 | ) | 12 | (1 | ) | 1 | (14 | ) | 13 | |||||||||||||||||||||
Benefit obligation at end of year | 298 | 274 | 89 | 103 | 9 | 11 | 396 | 388 | ||||||||||||||||||||||||
F-29
F-28
2006 | 2005 | 2004 | ||||||||||||||||||||||
Long-term | Long-term | Long-term | ||||||||||||||||||||||
rate of | rate of | rate of | ||||||||||||||||||||||
return | return | return | ||||||||||||||||||||||
expected | Value | expected | Value | expected | Value | |||||||||||||||||||
(%) | (£ million) | (%) | (£ million) | (%) | (£ million) | |||||||||||||||||||
UK Schemes | ||||||||||||||||||||||||
Equities | 7.9 | 128 | 7.5 | 125 | 8.0 | 272 | ||||||||||||||||||
Bonds | 4.6 | 123 | 4.2 | 110 | 4.9 | 173 | ||||||||||||||||||
Other | 7.9 | 18 | 7.5 | 15 | 8.0 | 25 | ||||||||||||||||||
Total market value of assets | 269 | 250 | 470 | |||||||||||||||||||||
US Schemes | ||||||||||||||||||||||||
Equities | 9.5 | 34 | 9.6 | 38 | 9.6 | 34 | ||||||||||||||||||
Fixed income | 5.5 | 22 | 5.5 | 24 | 5.5 | 22 | ||||||||||||||||||
Total market value of assets | 56 | 62 | 56 | |||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Long-term | Long-term | Long-term | ||||||||||||||||||||||
rate of | rate of | rate of | ||||||||||||||||||||||
return | return | return | ||||||||||||||||||||||
expected | Value | expected | Value | expected | Value | |||||||||||||||||||
(%) | (£ million) | (%) | (£ million) | (%) | (£ million) | |||||||||||||||||||
UK pension plans | ||||||||||||||||||||||||
Equities | 7.9 | 109 | 7.9 | 128 | 7.5 | 125 | ||||||||||||||||||
Bonds | 4.8 | 179 | 4.6 | 123 | 4.2 | 110 | ||||||||||||||||||
Other | 7.9 | 16 | 7.9 | 18 | 7.5 | 15 | ||||||||||||||||||
Total market value of assets | 304 | 269 | 250 | |||||||||||||||||||||
US pension plans | ||||||||||||||||||||||||
Equities | 9.5 | 39 | 9.5 | 34 | 9.6 | 38 | ||||||||||||||||||
Fixed income | 5.5 | 26 | 5.5 | 22 | 5.5 | 24 | ||||||||||||||||||
Total market value of assets | 65 | 56 | 62 | |||||||||||||||||||||
Pension plans | ||||||||||||||||||||||||||||||||
Post- | ||||||||||||||||||||||||||||||||
employment | ||||||||||||||||||||||||||||||||
UK | US | benefits | Total | |||||||||||||||||||||||||||||
Movement in benefit obligation | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 250 | 470 | 62 | 56 | — | — | 312 | 526 | ||||||||||||||||||||||||
Company contributions | 4 | 45 | 1 | 2 | 1 | 1 | 6 | 48 | ||||||||||||||||||||||||
Members’ contributions | 1 | 2 | — | — | — | — | 1 | 2 | ||||||||||||||||||||||||
Assets transferred in respect of previous acquisition | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Benefits paid | (7 | ) | (11 | ) | (6 | ) | (6 | ) | (1 | ) | (1 | ) | (14 | ) | (18 | ) | ||||||||||||||||
Expected return on assets | 14 | 32 | 4 | 5 | — | — | 18 | 37 | ||||||||||||||||||||||||
Actuarial gain/(loss) arising in the year | 7 | 47 | 2 | (1 | ) | — | — | 9 | 46 | |||||||||||||||||||||||
Separation of Soft Drinks | — | (335 | ) | — | — | — | — | — | (335 | ) | ||||||||||||||||||||||
Exchange adjustments | — | — | (7 | ) | 6 | — | — | (7 | ) | 6 | ||||||||||||||||||||||
Fair value of plan assets at end of year | 269 | 250 | 56 | 62 | — | — | 325 | 312 | ||||||||||||||||||||||||
F-29
UK Pension plans | 2006 | 2005 | 2004 | 2003 | ||||||||||||
(£ million) | ||||||||||||||||
Fair value of scheme assets | 269 | 250 | 470 | 353 | ||||||||||||
Present value of benefit obligations | (298 | ) | (274 | ) | (600 | ) | (477 | ) | ||||||||
Deficit in the scheme | (29 | ) | (24 | ) | (130 | ) | (124 | ) | ||||||||
Experience adjustments arising on plan liabilities | (12 | ) | (67 | ) | (60 | ) | ||||||||||
Experience adjustments arising on plan assets | 7 | 47 | 14 |
US Pension plans | 2006 | 2005 | 2004 | 2003 | ||||||||||||
(£ million) | ||||||||||||||||
Fair value of scheme assets | 56 | 62 | 56 | 48 | ||||||||||||
Present value of benefit obligations | (89 | ) | (103 | ) | (88 | ) | (91 | ) | ||||||||
Deficit in the scheme | (33 | ) | (41 | ) | (32 | ) | (43 | ) | ||||||||
Experience adjustments arising on plan liabilities | — | (3 | ) | (5 | ) | |||||||||||
Experience adjustments arising on plan assets | 2 | (1 | ) | 1 |
US Post-employment benefits | 2006 | 2005 | 2004 | 2003 | ||||||||||||
(£ million) | ||||||||||||||||
Present value of benefit obligations | (9 | ) | (11 | ) | (11 | ) | (11 | ) | ||||||||
Experience adjustments arising on plan liabilities | 1 | 1 | (1 | ) |
UK pension plans | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||
(£ million) | ||||||||||||||||||||
Fair value of plan assets | 304 | 269 | 250 | 470 | 353 | |||||||||||||||
Present value of benefit obligations | (297 | ) | (298 | ) | (274 | ) | (600 | ) | (477 | ) | ||||||||||
Surplus/(deficit) in the plans | 7 | (29 | ) | (24 | ) | (130 | ) | (124 | ) | |||||||||||
Experience adjustments arising on plan liabilities | 15 | (12 | ) | (67 | ) | (60 | ) | |||||||||||||
Experience adjustments arising on plan assets | (3 | ) | 7 | 47 | 14 |
US pension plans | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||
(£ million) | ||||||||||||||||||||
Fair value of plan assets | 65 | 56 | 62 | 56 | 48 | |||||||||||||||
Present value of benefit obligations | (87 | ) | (89 | ) | (103 | ) | (88 | ) | (91 | ) | ||||||||||
Deficit in the plans | (22 | ) | (33 | ) | (41 | ) | (32 | ) | (43 | ) | ||||||||||
Experience adjustments arising on plan liabilities | — | — | (3 | ) | (5 | ) | ||||||||||||||
Experience adjustments arising on plan assets | — | 2 | (1 | ) | 1 |
US post-employment benefits | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||
(£ million) | ||||||||||||||||||||
Present value of benefit obligations | (10 | ) | (9 | ) | (11 | ) | (11 | ) | (11 | ) | ||||||||||
Experience adjustments arising on plan liabilities | — | 1 | 1 | (1 | ) |
F-30
• | ||
• | ||
• | ||
• | ||
• |
F-30
restructuring of the Short Term Incentive Plan and the Short Term Deferred Incentive Plan into a single plan, renamed the Annual Bonus Plan; and | ||
• | a change to the Total Shareholder Return (“TSR”) performance measure linked to the Performance Restricted Share Plan, which has been renamed the Long Term Incentive Plan. |
F-31
• | size — turnover, profits and the number of people employed; | |
• | diversity and complexity of businesses; | |
• | geographical spread of businesses; and | |
• | relevance to the hotel industry. |
F-31
F-32
• | the increase in IHG’s Total Shareholder Return (“TSR”) over the performance period relative to | |
• |
* | Following the delisting of |
• | 50% of the award will | |
• |
F-32
F-33
b) | Directors’ contracts |
Contract | (1) | |||||||
Unexpired term/ | ||||||||
Director | effective date | notice period | ||||||
Andrew Cosslett | 02.03.05 | 12 months | ||||||
Richard Hartman(2) | 04.15.03 | |||||||
Stevan Porter | 04.15.03 | 12 months | ||||||
Richard Solomons | 04.15.03 | 12 months |
Each of the Executive Directors signed a letter of appointment, effective from completion of the June 2005 capital | ||
Richard Hartman |
F-33
F-34
Role | Fee | |||
Chairman | £390,000 | |||
Senior Independent Director & Chairman of Audit Committee | £95,000 | |||
Chairman of Remuneration Committee | £80,000 | |||
Other Non-Executive Directors | £60,000 |
Total emoluments excluding pensions | ||||||||||||||||||||
Base salaries | Performance | Jan 1, 2007 to | Jan 1, 2006 to | |||||||||||||||||
and fees | payments(1) | Benefits(2) | Dec 31, 2007 | Dec 31, 2006 | ||||||||||||||||
(£ thousands) | ||||||||||||||||||||
Executive Directors | ||||||||||||||||||||
Andrew Cosslett | 732 | 519 | 25 | 1,276 | 1,268 | |||||||||||||||
Richard Hartman(3) | 398 | 201 | 247 | 846 | 1,005 | |||||||||||||||
Stevan Porter(4) | 416 | 253 | 8 | 677 | 726 | |||||||||||||||
Richard Solomons | 468 | 285 | 18 | 771 | 806 | |||||||||||||||
Non-Executive Directors | ||||||||||||||||||||
David Webster | 390 | — | 2 | 392 | 354 | |||||||||||||||
David Kappler | 95 | — | — | 95 | 80 | |||||||||||||||
Ralph Kugler(5) | 60 | — | — | 60 | 50 | |||||||||||||||
Jennifer Laing | 60 | — | — | 60 | 50 | |||||||||||||||
Robert C Larson | 60 | — | — | 60 | 50 | |||||||||||||||
Jonathan Linen | 60 | — | — | 60 | 50 | |||||||||||||||
Sir David Prosser | 80 | — | — | 80 | 65 | |||||||||||||||
Sir Howard Stringer(6) | — | — | — | — | 43 | |||||||||||||||
Ying Yeh(7) | 5 | — | — | 5 | — | |||||||||||||||
Former Directors(8) | — | — | 1 | 1 | 1 | |||||||||||||||
Total | 2,824 | 1,258 | 301 | 4,383 | 4,548 | |||||||||||||||
Total emoluments | ||||||||||||||||||||
excluding pensions | ||||||||||||||||||||
Base | ||||||||||||||||||||
salaries | Performance | 1.1.06 to | 1.1.05 to | |||||||||||||||||
and fees | payments1 | Benefits2 | 12.31.06 | 12.31.05 | ||||||||||||||||
£000 | £000 | £000 | £000 | £000 | ||||||||||||||||
Executive Directors | ||||||||||||||||||||
Andrew Cosslett | 688 | 549 | 31 | 1,268 | 663 | |||||||||||||||
Richard Hartman | 503 | 203 | 299 | 1,005 | 798 | |||||||||||||||
Stevan Porter3 | 427 | 290 | 9 | 726 | 429 | |||||||||||||||
Richard Solomons | 440 | 351 | 15 | 806 | 423 | |||||||||||||||
Non-executive Directors | ||||||||||||||||||||
David Webster4 | 350 | — | 4 | 354 | 522 | |||||||||||||||
David Kappler5 | 80 | — | — | 80 | 80 | |||||||||||||||
Ralph Kugler6 | 50 | — | — | 50 | 50 | |||||||||||||||
Jennifer Laing6 | 50 | — | — | 50 | 18 | |||||||||||||||
Robert C. Larson6 | 50 | — | — | 50 | 50 | |||||||||||||||
Jonathan Linen6 | 50 | — | — | 50 | 4 | |||||||||||||||
Sir David Prosser7 | 65 | — | — | 65 | 65 | |||||||||||||||
Sir Howard Stringer8 | 43 | — | — | 43 | 50 | |||||||||||||||
Former directors9 | — | — | 1 | 1 | 917 | |||||||||||||||
Total | 2,796 | 1,393 | 359 | 4,548 | 4,069 | |||||||||||||||
Performance | ||
Benefits incorporate all tax assessable benefits arising from the individual’s employment. For Messrs Cosslett, Hartman and Solomons, this relates in the main to the provision of a fully expensed company car and private healthcare cover. In addition, | ||
Richard Hartman retired as a Director on September 25, 2007. | ||
(4) | Emoluments for Stevan Porter include | |
Sir Howard Stringer resigned as a Director on November 10, 2006. | ||
Ying Yeh was appointed as a Director on December 1, 2007. | ||
(8) | Sir Ian Prosser retired as a Director on December 31, 2003. However, he had an ongoing healthcare benefit of |
F-35
F-34
STDIP | STDIP | Value | ||||||||||||||||||||||||||||||||||||||||||
shares awarded | Market | shares vested | Market | based on | ||||||||||||||||||||||||||||||||||||||||
STDIP | during the | price per | during the | price per | STDIP | share price | ||||||||||||||||||||||||||||||||||||||
shares held | year 1.1.06 to | Award | share at | year 1.1.06 | Vesting | share at | Value at | shares held | Planned | of 1262.0p | ||||||||||||||||||||||||||||||||||
at 1.1.06 | 12.31.06 | date | award | to 12.31.06 | date | vesting | vesting | at 12.31.06 | vesting date | at 12.31.06 | ||||||||||||||||||||||||||||||||||
£ | £ | |||||||||||||||||||||||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||||||||||||||||||
Andrew Cosslett | 39,916 | 1 | 4.1.05 | 617.5p | 39,916 | 4.3.06 | 942p | 376,009 | — | |||||||||||||||||||||||||||||||||||
39,916 | 1 | 4.1.05 | 617.5p | 39,916 | 4.1.07 | 503,740 | ||||||||||||||||||||||||||||||||||||||
105,276 | 3,7 | 3.8.06 | 853.67p | 32,168 | 3.8.07 | 405,961 | ||||||||||||||||||||||||||||||||||||||
32,167 | 3.8.08 | 405,948 | ||||||||||||||||||||||||||||||||||||||||||
32,168 | 3.8.09 | 405,961 | ||||||||||||||||||||||||||||||||||||||||||
Total | 136,419 | 1,721,610 | ||||||||||||||||||||||||||||||||||||||||||
Richard Hartman | 29,447 | 2 | 3.16.05 | 654p | 29,447 | 3.16.06 | 891.58p | 262,544 | — | |||||||||||||||||||||||||||||||||||
29,447 | 2 | 3.16.05 | 654p | 29,447 | 3.16.07 | 371,622 | ||||||||||||||||||||||||||||||||||||||
29,447 | 2 | 3.16.05 | 654p | 29,447 | 3.16.08 | 371,622 | ||||||||||||||||||||||||||||||||||||||
64,518 | 4,7 | 3.8.06 | 853.67p | 19,714 | 3.8.07 | 248,791 | ||||||||||||||||||||||||||||||||||||||
19,714 | 3.8.08 | 248,791 | ||||||||||||||||||||||||||||||||||||||||||
19,713 | 3.8.09 | 248,779 | ||||||||||||||||||||||||||||||||||||||||||
Total | 118,035 | 1,489,605 | ||||||||||||||||||||||||||||||||||||||||||
Stevan Porter | 26,978 | 2 | 3.16.05 | 654p | 26,978 | 3.16.06 | 891.58p | 240,530 | 8 | — | ||||||||||||||||||||||||||||||||||
26,978 | 2 | 3.16.05 | 654p | 26,978 | 3.16.07 | 340,463 | ||||||||||||||||||||||||||||||||||||||
26,978 | 2 | 3.16.05 | 654p | 26,978 | 3.16.08 | 340,463 | ||||||||||||||||||||||||||||||||||||||
67,557 | 5,7 | 3.8.06 | 853.67p | 20,643 | 3.8.07 | 260,515 | ||||||||||||||||||||||||||||||||||||||
20,642 | 3.8.08 | 260,503 | ||||||||||||||||||||||||||||||||||||||||||
20,642 | 3.8.09 | 260,503 | ||||||||||||||||||||||||||||||||||||||||||
Total | 115,883 | 1,462,447 | ||||||||||||||||||||||||||||||||||||||||||
Richard Solomons | 29,020 | 2 | 3.16.05 | 654p | 29,020 | 3.16.06 | 891.58p | 258,737 | — | |||||||||||||||||||||||||||||||||||
29,020 | 2 | 3.16.05 | 654p | 29,020 | 3.16.07 | 366,233 | ||||||||||||||||||||||||||||||||||||||
29,021 | 2 | 3.16.05 | 654p | 29,021 | 3.16.08 | 366,246 | ||||||||||||||||||||||||||||||||||||||
67,296 | 6,7 | 3.8.06 | 853.67p | 20,563 | 3.8.07 | 259,506 | ||||||||||||||||||||||||||||||||||||||
20,562 | 3.8.08 | 259,493 | ||||||||||||||||||||||||||||||||||||||||||
20,563 | 3.8.09 | 259,506 | ||||||||||||||||||||||||||||||||||||||||||
Total | 119,729 | 1,510,984 | ||||||||||||||||||||||||||||||||||||||||||
Value | ||||||||||||||||||||||||||||||||||||||||||||
based on | ||||||||||||||||||||||||||||||||||||||||||||
STDIP shares | STDIP shares | share | ||||||||||||||||||||||||||||||||||||||||||
awarded | Market | vested | Market | STDIP | price of | |||||||||||||||||||||||||||||||||||||||
during | price | during | price | shares | 884.0 pence | |||||||||||||||||||||||||||||||||||||||
STDIP shares | the year | per share | the year | per share | Value | held at | Planned | at Dec 31, | ||||||||||||||||||||||||||||||||||||
held at | Jan 1, 2007 | Award | at award | Jan 1, 2007 to | Vesting | at vesting | at vesting | Dec 31, | vesting | 2007 | ||||||||||||||||||||||||||||||||||
Directors | Jan 1, 2007 | to Dec 31, 2007 | date | (pence) | Dec 31, 2007 | date | (pence) | (£) | 2007 | date | (£) | |||||||||||||||||||||||||||||||||
Andrew Cosslett | 39,916(1 | ) | 4.1.05 | 617.5 | 39,916 | 4.1.07 | 1260.0 | 502,942 | — | |||||||||||||||||||||||||||||||||||
32,168(3 | ) | 3.8.06 | 853.67 | 32,168 | 3.8.07 | 1239.6 | 398,755 | — | ||||||||||||||||||||||||||||||||||||
32,167(3 | ),(8) | 3.8.06 | 853.67 | 28,877 | 3.8.08 | 255,273 | ||||||||||||||||||||||||||||||||||||||
32,168(3 | ),(8) | 3.8.06 | 853.67 | 28,878 | 3.8.09 | 255,282 | ||||||||||||||||||||||||||||||||||||||
62,575(4 | ),(8),(9) | 2.26.07 | 1235 | 55,870 | 2.26.10 | 493,891 | ||||||||||||||||||||||||||||||||||||||
Total | 113,625 | 1,004,446 | ||||||||||||||||||||||||||||||||||||||||||
Richard Hartman | 29,447(2 | ) | 3.16.05 | 653.67 | 29,447 | 3.16.07 | 1210.5 | 356,456 | — | |||||||||||||||||||||||||||||||||||
29,447(2 | ) | 3.16.05 | 653.67 | 29,447 | 3.16.08 | 260,312 | ||||||||||||||||||||||||||||||||||||||
19,714(3 | ) | 3.8.06 | 853.67 | 19,714 | 3.8.07 | 1239.6 | 244,375 | — | ||||||||||||||||||||||||||||||||||||
19,714(3 | ),(8) | 3.8.06 | 853.67 | 17,698 | 3.8.08 | 156,451 | ||||||||||||||||||||||||||||||||||||||
19,713(3 | ),(8) | 3.8.06 | 853.67 | 17,696 | 3.8.09 | 156,433 | ||||||||||||||||||||||||||||||||||||||
51,281(5 | ),(9) | 2.26.07 | 1235 | 51,281 | 2.26.10 | 453,325 | ||||||||||||||||||||||||||||||||||||||
Total | 116,122 | 1,026,521 | ||||||||||||||||||||||||||||||||||||||||||
Stevan Porter | 26,978(2 | ) | 3.16.05 | 653.67 | 26,978 | 3.16.07 | 1210.5 | 326,569(10 | ) | — | ||||||||||||||||||||||||||||||||||
26,978(2 | ) | 3.16.05 | 653.67 | 26,978 | 3.16.08 | 238,486 | ||||||||||||||||||||||||||||||||||||||
20,643(3 | ) | 3.8.06 | 853.67 | 20,643 | 3.8.07 | 1239.6 | 255,891(10 | ) | — | |||||||||||||||||||||||||||||||||||
20,642(3 | ),(8) | 3.8.06 | 853.67 | 18,531 | 3.8.08 | 163,815 | ||||||||||||||||||||||||||||||||||||||
20,642(3 | ),(8) | 3.8.06 | 853.67 | 18,530 | 3.8.09 | 163,806 | ||||||||||||||||||||||||||||||||||||||
33,352(6 | ),(8),(9) | 2.26.07 | 1235 | 29,778 | 2.26.10 | 263,238 | ||||||||||||||||||||||||||||||||||||||
Total | 93,817 | 829,345 | ||||||||||||||||||||||||||||||||||||||||||
Richard Solomons | 29,020(2 | ) | 3.16.05 | 653.67 | 29,020 | 3.16.07 | 1210.5 | 351,287 | — | |||||||||||||||||||||||||||||||||||
29,021(2 | ) | 3.16.05 | 653.67 | 29,021 | 3.16.08 | 256,546 | ||||||||||||||||||||||||||||||||||||||
20,563(3 | ) | 3.8.06 | 853.67 | 20,563 | 3.8.07 | 1239.6 | 254,899 | — | ||||||||||||||||||||||||||||||||||||
20,562(3 | ),(8) | 3.8.06 | 853.67 | 18,459 | 3.8.08 | 163,178 | ||||||||||||||||||||||||||||||||||||||
20,563(3 | ),(8) | 3.8.06 | 853.67 | 18,459 | 3.8.09 | 163,178 | ||||||||||||||||||||||||||||||||||||||
40,048(7 | ),(8),(9) | 2.26.07 | 1235 | 35,757 | 2.26.10 | 316,092 | ||||||||||||||||||||||||||||||||||||||
Total | 101,696 | 898,994 | ||||||||||||||||||||||||||||||||||||||||||
This special award was made to Andrew Cosslett as part of his overall recruitment terms. The shares were to vest in equal portions on the first and second anniversary of the award date, subject to his continued employment until that time. The | ||
This award was based on financial year 2004 performance where the performance measures were related to earnings per share (“EPS”), earnings before interest and tax (“EBIT”) and personal performance. Total | ||
This award was based on financial year 2005 performance where the performance measures were related to EPS, EBIT and personal performance. Total shares held include matching shares. | ||
(4) | This award was based on financial year 2006 performance and the bonus target was 50% of base salary. Andrew Cosslett was awarded | |
This award was based on financial year |
F-35
F-36
(6) | This award was based on financial year 2006 performance and the bonus target was 50% of base salary. Stevan Porter was awarded 50% for EPS performance and 33.8% for Americas EBIT performance. Stevan Porter’s total bonus was therefore 83.8% of his base salary. One matching share was awarded for every two bonus shares earned. | |
This award was based on financial year | ||
Under the financial year 2006 STDIP, paid in 2007, 80% of the bonus award was paid in shares and deferred for a full three-year period. Participants could also defer the remaining 20% of bonus on the same terms. |
(10) | The value of Stevan Porter’s shares at vesting includes |
F-37
F-36
Maximum | ||||||||||||||||||||||||||||||||||||||||||||
PRSP | PRSP | |||||||||||||||||||||||||||||||||||||||||||
shares | shares | Maximum | Expected | |||||||||||||||||||||||||||||||||||||||||
Maximum | awarded | vested | Maximum | value based | value | |||||||||||||||||||||||||||||||||||||||
PRSP | during | Market | during | Market | Actual/ | PRSP | on share | based on | ||||||||||||||||||||||||||||||||||||
shares | the year | price per | the year | price per | planned | shares | price of | share price | ||||||||||||||||||||||||||||||||||||
held at | 1.1.06 to | Award | share at | 1.1.06 to | share at | Value at | vesting | held at | 1262.0p at | of 1262.0p | ||||||||||||||||||||||||||||||||||
1.1.06 | 12.31.06 | date | award | 12.31.06 | vesting | vesting | date | 12.31.06 | 12.31.06 | at 12.31.06 | ||||||||||||||||||||||||||||||||||
£ | £ | £ | ||||||||||||||||||||||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||||||||||||||||||
Andrew Cosslett | 68,216 | 1 | 4.1.05 | 617.5p | 29,196 | 858p | 250,502 | 3.3.06 | — | |||||||||||||||||||||||||||||||||||
136,432 | 2 | 4.1.05 | 617.5p | — | 2.21.07 | 136,432 | 1,721,772 | 1,074,386 | 8 | |||||||||||||||||||||||||||||||||||
276,200 | 3 | 6.29.05 | 706p | — | 2.20.08 | 276,200 | 3,485,644 | |||||||||||||||||||||||||||||||||||||
200,740 | 4 | 4.3.06 | 941.5p | — | 2.18.09 | 200,740 | 2,533,339 | |||||||||||||||||||||||||||||||||||||
Total | 613,372 | 7,740,755 | ||||||||||||||||||||||||||||||||||||||||||
Richard Hartman | 167,900 | 1 | 6.18.03 | 445p | 71,861 | 858p | 616,567 | 3.3.06 | — | |||||||||||||||||||||||||||||||||||
165,130 | 2 | 6.24.04 | 549.5p | — | 2.21.07 | 165,130 | 2,083,941 | 1,300,380 | 8 | |||||||||||||||||||||||||||||||||||
214,870 | 3 | 6.29.05 | 706p | — | 2.20.08 | 214,870 | 2,711,660 | |||||||||||||||||||||||||||||||||||||
146,110 | 4 | 4.3.06 | 941.5p | — | 2.18.09 | 146,110 | 1,843,909 | |||||||||||||||||||||||||||||||||||||
Total | 526,110 | 6,639,510 | ||||||||||||||||||||||||||||||||||||||||||
Stevan Porter | 170,710 | 1 | 6.18.03 | 445p | 73,063 | 858p | 626,881 | 7 | 3.3.06 | — | ||||||||||||||||||||||||||||||||||
142,290 | 2 | 6.24.04 | 549.5p | — | 2.21.07 | 142,290 | 1,795,700 | 1,120,517 | 8 | |||||||||||||||||||||||||||||||||||
174,900 | 3 | 6.29.05 | 706p | — | 2.20.08 | 174,900 | 2,207,238 | |||||||||||||||||||||||||||||||||||||
132,240 | 4 | 4.3.06 | 941.5p | — | 2.18.09 | 132,240 | 1,668,869 | |||||||||||||||||||||||||||||||||||||
Total | 449,430 | 5,671,807 | ||||||||||||||||||||||||||||||||||||||||||
Richard Solomons | 165,160 | 1 | 6.18.03 | 445p | 70,688 | 858p | 606,503 | 3.3.06 | — | |||||||||||||||||||||||||||||||||||
144,990 | 2 | 6.24.04 | 549.5p | — | 2.21.07 | 144,990 | 1,829,774 | 1,141,779 | 8 | |||||||||||||||||||||||||||||||||||
176,550 | 3 | 6.29.05 | 706p | — | 2.20.08 | 176,550 | 2,228,061 | |||||||||||||||||||||||||||||||||||||
128,470 | 4 | 4.3.06 | 941.5p | — | 2.18.09 | 128,470 | 1,621,292 | |||||||||||||||||||||||||||||||||||||
Total | 450,010 | 5,679,127 | ||||||||||||||||||||||||||||||||||||||||||
Former Directors | ||||||||||||||||||||||||||||||||||||||||||||
Richard North | 259,545 | 1,5 | 6.18.03 | 445p | 111,085 | 858p | 953,109 | 3.3.06 | — | |||||||||||||||||||||||||||||||||||
144,993 | 2,5 | 6.24.04 | 549.5p | — | 2.21.07 | 144,993 | 1,829,812 | 1,141,803 | 8 | |||||||||||||||||||||||||||||||||||
Total | 144,993 | 1,829,812 | ||||||||||||||||||||||||||||||||||||||||||
Sir Ian Prosser | 65,410 | 1,6 | 6.18.03 | 445p | 27,995 | 858p | 240,197 | 3.3.06 | — | |||||||||||||||||||||||||||||||||||
Total | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total | 27,561,011 | |||||||||||||||||||||||||||||||||||||||||||
Maximum | Expected | |||||||||||||||||||||||||||||||||||||||||||
Maximum | LTIP shares | value | value | |||||||||||||||||||||||||||||||||||||||||
LTIP shares | vested | based on | based on | |||||||||||||||||||||||||||||||||||||||||
awarded | during | share | share | |||||||||||||||||||||||||||||||||||||||||
during | Market | the year | Market | Maximum | price of | price of | ||||||||||||||||||||||||||||||||||||||
Maximum | the year | price | Jan 1, 2007 | price | Actual/ | LTIP shares | 884.0 pence | 884.0 pence | ||||||||||||||||||||||||||||||||||||
LTIP shares | Jan 1, 2007 | per share | to | per share | Value | planned | held at | at Dec 31, | at Dec 31, | |||||||||||||||||||||||||||||||||||
held at | to Dec 31, | Award | at award | Dec 31, | at vesting | at vesting | vesting | Dec 31, | 2007 | 2007 | ||||||||||||||||||||||||||||||||||
Directors | Jan 1, 2007 | 2007 | date | (pence) | 2007 | (pence) | (£) | date | 2007 | (£) | (£) | |||||||||||||||||||||||||||||||||
Andrew Cosslett | 136,432(1 | ) | 4.1.05 | 617.5 | 85,133 | 1249 | 1,063,311 | 2.21.07 | — | |||||||||||||||||||||||||||||||||||
276,200(2 | ) | 6.29.05 | 706 | — | 2.20.08 | 276,200 | 2,441,608 | 1,350,010(8 | ) | |||||||||||||||||||||||||||||||||||
200,740(3 | ) | 4.3.06 | 941.5 | — | 2.18.09 | 200,740 | 1,774,542 | |||||||||||||||||||||||||||||||||||||
159,506(4 | ) | 4.2.07 | 1256 | — | 2.17.10 | 159,506 | 1,410,034 | |||||||||||||||||||||||||||||||||||||
Total | 636,446 | 5,626,184 | ||||||||||||||||||||||||||||||||||||||||||
Richard Hartman | 165,130(1 | ) | 6.24.04 | 549.5 | 103,041 | 1249 | 1,286,982 | 2.21.07 | — | |||||||||||||||||||||||||||||||||||
214,870(2 | ) | 6.29.05 | 706 | — | 2.20.08 | 196,964(5 | ) | 1,741,162 | 962,863(8 | ) | ||||||||||||||||||||||||||||||||||
146,110(3 | ) | 4.3.06 | 941.5 | — | 2.18.09 | 85,230(5 | ) | 753,434 | ||||||||||||||||||||||||||||||||||||
113,731(4 | ) | 4.2.07 | 1256 | — | 2.17.10 | 28,432(5 | ) | 251,339 | ||||||||||||||||||||||||||||||||||||
Total | 310,626 | 2,745,935 | ||||||||||||||||||||||||||||||||||||||||||
Stevan Porter | 142,290(1 | ) | 6.24.04 | 549.5 | 88,788 | 1249 | 1,108,962(6 | ) | 2.21.07 | — | ||||||||||||||||||||||||||||||||||
174,900(2 | ) | 6.29.05 | 706 | — | 2.20.08 | 174,900 | 1,546,116 | 855,003(8 | ) | |||||||||||||||||||||||||||||||||||
132,240(3 | ) | 4.3.06 | 941.5 | — | 2.18.09 | 132,240 | 1,169,002 | |||||||||||||||||||||||||||||||||||||
92,667(4 | ) | 4.2.07 | 1256 | — | 2.17.10 | 92,667 | 819,177 | |||||||||||||||||||||||||||||||||||||
Total | 399,807 | 3,534,295 | ||||||||||||||||||||||||||||||||||||||||||
Richard Solomons | 144,990(1 | ) | 6.24.04 | 549.5 | 90,473 | 1249 | 1,130,008 | 2.21.07 | — | |||||||||||||||||||||||||||||||||||
176,550(2 | ) | 6.29.05 | 706 | — | 2.20.08 | 176,550 | 1,560,702 | 863,069(8 | ) | |||||||||||||||||||||||||||||||||||
128,470(3 | ) | 4.3.06 | 941.5 | — | 2.18.09 | 128,470 | 1,135,675 | |||||||||||||||||||||||||||||||||||||
102,109(4 | ) | 4.2.07 | 1256 | — | 2.17.10 | 102,109 | 902,644 | |||||||||||||||||||||||||||||||||||||
Total | 407,129 | 3,599,021 | ||||||||||||||||||||||||||||||||||||||||||
Former Directors | ||||||||||||||||||||||||||||||||||||||||||||
Richard North | 144,993(1 | ),(7) | 6.24.04 | 549.5 | 90,475 | 1249 | 1,130,033 | 2.21.07 | — | |||||||||||||||||||||||||||||||||||
Total | — | |||||||||||||||||||||||||||||||||||||||||||
This award was based on performance to December 31, |
F-37
The Company finished in third place in the TSR group and achieved ROCE growth of 98.2%. Accordingly, 62.4% of the award vested on February 21, 2007. | ||
(2) | This award is based on performance to December 31, 2007 where the performance measure relates to both the Company’s TSR against a group of seven other comparator companies and the cumulative annual growth rate (“CAGR”) of rooms in the IHG system relative to a group of five other comparator companies. The number of shares released is graded, according to a) where the Company finished in the TSR comparator group, with 50% of the award being released for first or second position and 10% of the award being released for median position; and b) relative CAGR with 50% of the award being released for 3.4% (upper quartile) CAGR and 10% of the award being released for 2.4% (median) CAGR. |
F-38
F-38
(3) | This award is based on performance to December 31, 2008 where the performance measure relates to both the Company’s TSR against a group of eight other comparator companies and the relative CAGR of rooms in the IHG system. | |
(4) | This award is based on performance to December 31, 2009 where the performance measure relates to both the Company’s TSR against a group of eight other comparator companies and the compound annual growth rate in earnings per share (“EPS”) over the performance period. | |
(5) | Richard Hartman’s awards were pro-rated to reflect his contractual service during the applicable performance periods. | |
(6) | The value of Stevan Porter’s shares at vesting includes £129,378 that was chargeable to UK income tax. | |
(7) | Richard North’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 vested on February 20, 2008. |
Ordinary shares under option | ||||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||
Options held at | Granted | Lapsed | Exercised | Options | average | |||||||||||||||||||||||
1.1.06 or date | during the | during the | during the | held at | option | Option | ||||||||||||||||||||||
Directors | of appointment | year | year | year | 12.31.06 | price | price | |||||||||||||||||||||
(pence) | (pence) | |||||||||||||||||||||||||||
Andrew Cosslett | ||||||||||||||||||||||||||||
157,300 | 619.83 | |||||||||||||||||||||||||||
157,300 | 1 | |||||||||||||||||||||||||||
Total | 157,300 | — | — | — | 157,300 | 619.83 | ||||||||||||||||||||||
Richard Hartman | 952,832 | 458.66 | ||||||||||||||||||||||||||
136,795 | 349.13 | |||||||||||||||||||||||||||
105,332 | 422.81 | |||||||||||||||||||||||||||
122,261 | 434.22 | |||||||||||||||||||||||||||
250,684 | 438.00 | |||||||||||||||||||||||||||
337,760 | 1 | 538.37 | ||||||||||||||||||||||||||
Total | 952,832 | — | — | 615,072 | 337,760 | 538.37 | ||||||||||||||||||||||
Stevan Porter | 576,513 | 490.34 | ||||||||||||||||||||||||||
254,883 | 3 | 438.00 | ||||||||||||||||||||||||||
321,630 | 1 | 531.82 | ||||||||||||||||||||||||||
Total | 576,513 | — | — | 254,883 | 321,630 | 531.82 | ||||||||||||||||||||||
Richard Solomons | 574,365 | 2 | 494.24 | |||||||||||||||||||||||||
239,726 | 438.00 | |||||||||||||||||||||||||||
334,639 | 1,2 | 531.10 | ||||||||||||||||||||||||||
Total | 574,365 | — | — | 239,726 | 334,639 | 531.10 | ||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||
Ordinary shares under option | average | |||||||||||||||||||||||||||
Granted | Lapsed | Exercised | Options | option | Option | |||||||||||||||||||||||
Options held | during | during | during | held at | price | price | ||||||||||||||||||||||
Directors | at Jan 1, 2007 | the year | the year | the year | Dec 31, 2007 | (pence) | (pence) | |||||||||||||||||||||
Andrew Cosslett | 157,300 | |||||||||||||||||||||||||||
B | 157,300 | 619.83 | ||||||||||||||||||||||||||
Total | 157,300 | — | — | — | 157,300 | 619.83 | ||||||||||||||||||||||
Richard Hartman | 337,760 | |||||||||||||||||||||||||||
218,950 | 494.17 | |||||||||||||||||||||||||||
B | 118,810 | 619.83 | ||||||||||||||||||||||||||
Total | 337,760 | — | — | 218,950 | 118,810 | 619.83 | ||||||||||||||||||||||
Stevan Porter | 321,630 | |||||||||||||||||||||||||||
A | 225,260 | 494.17 | ||||||||||||||||||||||||||
B | 96,370 | 619.83 | ||||||||||||||||||||||||||
Total | 321,630 | — | — | — | 321,630 | 531.82 | ||||||||||||||||||||||
Richard Solomons | 334,639 | |||||||||||||||||||||||||||
A | 230,320 | 494.17 | ||||||||||||||||||||||||||
B | 100,550 | 619.83 | ||||||||||||||||||||||||||
C | 3,769 | 420.50 | ||||||||||||||||||||||||||
Total | 334,639 | — | — | — | 334,639 | 531.10 | ||||||||||||||||||||||
Where options are | ||
B | Where options are not yet exercisable at December 31, 2007. Executive share options granted in 2005 are exercisable | |
Sharesave options granted in 2003. | ||
F-39
F-39
December 31, 2006 | January 1, 20061 | |||||||
InterContinental Hotels Group PLC | InterContinental Hotels Group PLC | |||||||
ordinary shares of 113/7 pence3 | ordinary shares of 10 pence | |||||||
Executive Directors | ||||||||
Andrew Cosslett | 42,063 | 7,332 | ||||||
Richard Hartman | — | 70,117 | ||||||
Stevan Porter | 114,446 | 64,589 | ||||||
Richard Solomons | 104,247 | 60,339 | ||||||
Non-executive Directors | ||||||||
David Kappler | 1,669 | 1,908 | ||||||
Ralph Kugler | 572 | 654 | ||||||
Jennifer Laing | 872 | — | ||||||
Robert C Larson | 6,874 | 2 | 7,857 | 2 | ||||
Jonathan Linen | 8,750 | 2 | — | |||||
Sir David Prosser | 2,863 | 3,273 | ||||||
David Webster | 31,975 | 31,823 |
December 31, 2007 | January 1, 2007 | |||||||
InterContinental Hotels Group PLC | InterContinental Hotels Group PLC | |||||||
ordinary shares of 1329/47 pence(2) | ordinary shares of 113/7 pence(1) | |||||||
Executive Directors | ||||||||
Andrew Cosslett | 133,101 | 42,063 | ||||||
Stevan Porter | 168,162 | 114,446 | ||||||
Richard Solomons | 156,810 | 104,247 | ||||||
Non-Executive Directors | ||||||||
David Kappler | 1,400 | 1,669 | ||||||
Ralph Kugler | 1,169 | 572 | ||||||
Jennifer Laing | 1,404 | 875 | ||||||
Robert C Larson | 10,269(3 | ) | 6,874(3 | ) | ||||
Jonathan Linen | 7,343(3 | ) | 8,750(3 | ) | ||||
Sir David Prosser | 2,402 | 2,863 | ||||||
David Webster | 31,938 | 31,975 | ||||||
Ying Yeh | — | — |
These share interests were in InterContinental Hotels Group PLC | ||
These shareholdings are all beneficial interests and include shares held by Directors’ spouses and other connected persons. None of the Directors has a beneficial interest in the shares of any subsidiary. | ||
(3) | Held in the form of American Depositary Receipts. |
F-40
F-40
Increase/ | ||||||||||||||||||||||||||||||||
(decrease) in | ||||||||||||||||||||||||||||||||
transfer value | Increase/ | Increase/ | ||||||||||||||||||||||||||||||
Directors’ | Transfer value of | over the year, | (decrease) in | (decrease) | Accrued | |||||||||||||||||||||||||||
contributions | accrued benefits | less Directors’ | accrued | in accrued | pension at | |||||||||||||||||||||||||||
Age at | in the year(1) | Jan 1, 2007 | Dec 31, 2007 | contributions | pension(2) | pension(3) | Dec 31, 2007(4) | |||||||||||||||||||||||||
Directors | Dec 31, 2007 | (£) | (£) | (£) | (£) | (£ pa) | (£ pa) | (£ pa) | ||||||||||||||||||||||||
Andrew Cosslett | 52 | 34,400 | 595,300 | 1,184,200 | 554,500 | 27,100 | 25,300 | 70,900 | ||||||||||||||||||||||||
Richard Hartman | 61 | — | 1,935,400 | 1,812,600 | (122,800 | ) | (19,300 | ) | (23,300 | ) | 75,400(5 | ) | ||||||||||||||||||||
Richard Solomons | 46 | 22,000 | 1,470,500 | 2,371,600 | 879,100 | 24,900 | 18,700 | 168,700 |
Increases in | ||||||||||||||||||||||||||||||||
transfer value | ||||||||||||||||||||||||||||||||
Transfer value | over the | |||||||||||||||||||||||||||||||
Directors’ | of accrued benefits | year, less | Increase | Increase | Accrued | |||||||||||||||||||||||||||
Age at | contributions | Directors’ | in accrued | in accrued | pension at | |||||||||||||||||||||||||||
12.31.06 | in the year | 1.1.06 | 12.31.06 | contributions | pension | pension | 12.31.06 | |||||||||||||||||||||||||
£ | £ | £ | ||||||||||||||||||||||||||||||
(note 1) | (note 2) | (note 3) | (note 4) | |||||||||||||||||||||||||||||
£ | £ pa | £ pa | £ pa | |||||||||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||||||
Andrew Cosslett | 51 | 28,300 | 266,900 | 595,300 | 300,100 | 24,200 | 23,600 | 43,800 | ||||||||||||||||||||||||
Richard Hartman | 60 | 1,300 | 1,848,200 | 1,935,400 | 85,900 | 8,100 | 5,600 | 94,700 | ||||||||||||||||||||||||
Richard Solomons | 45 | 19,500 | 1,227,100 | 1,470,200 | 223,900 | 24,500 | 21,000 | 143,800 |
Contributions paid in the year by the Directors under the terms of the plans. Contributions | ||
The absolute increase or decrease in accrued pension during the year. | ||
The increase or decrease in accrued pension during the year, excluding any increase for inflation, on the basis that increases or decreases to accrued pensions are applied at October 1. | ||
Accrued pension is that which would be paid | ||
(5) | When Richard Hartman |
Director’s contribution to | Company’s contribution to | |||||||||||||||||
DCP | 401(k) | DCP | 401(k) | |||||||||||||||
£ | £ | £ | £ | |||||||||||||||
Stevan Porter | 43,300 | 6,000 | Stevan Porter | 80,900 | 4,900 | |||||||||||||
Director’s contribution to | Company contribution to | |||||||||||||||
DCP | 401(k) | DCP | 401(k) | |||||||||||||
(£) | (£) | (£) | (£) | |||||||||||||
Stevan Porter | 105,000 | 5,600 | 74,700 | 4,500 |
Note 4 — | Auditor’s Remuneration paid to Ernst & Young LLP |
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Audit fees | 0.9 | 1.0 | ||||||
Audit fees in respect of subsidiaries | 1.4 | 2.1 | ||||||
Tax fees | 0.7 | 0.6 | ||||||
Fees in respect of reporting under Sarbanes Oxley Act | 1.0 | — | ||||||
Interim review fees | 0.2 | 0.2 | ||||||
Other services pursuant to legislation | 0.1 | 0.8 | ||||||
Corporate finance fees | 0.1 | 1.8 | ||||||
Other | 0.8 | 0.7 | ||||||
5.2 | 7.2 | |||||||
F-41
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Audit fees | 0.8 | 0.9 | 1.0 | |||||||||
Audit fees in respect of subsidiaries | 1.3 | 1.4 | 2.1 | |||||||||
Tax fees | 0.4 | 0.7 | 0.6 | |||||||||
Fees in respect of reporting under Sarbanes Oxley Act | 0.6 | 1.0 | — | |||||||||
Interim review fees | 0.2 | 0.2 | 0.2 | |||||||||
Other services pursuant to legislation | 0.1 | 0.1 | 0.8 | |||||||||
Corporate finance fees | — | 0.1 | 1.8 | |||||||||
Other | 1.2 | 0.8 | 0.7 | |||||||||
4.6 | 5.2 | 7.2 | ||||||||||
F-41
Note 5 — | Exceptional Items |
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Continuing operations | ||||||||||||
Exceptional operating items | ||||||||||||
Gain on sale of associate investments* | 11 | — | — | |||||||||
Gain on sale of investments in FelCor Lodging Trust, Inc.* | — | 25 | — | |||||||||
Gain on sale of other financial assets* | 18 | — | — | |||||||||
Reversal of previously recorded impairment* | 3 | 2 | — | |||||||||
Office reorganizations(i) | (2 | ) | — | — | ||||||||
Restructuring costs*(ii) | — | — | (13 | ) | ||||||||
Property damage*(iii) | — | — | (9 | ) | ||||||||
Employee benefits curtailment gain*(iv) | — | — | 7 | |||||||||
30 | 27 | (15 | ) | |||||||||
Tax | ||||||||||||
Tax charge on exceptional operating items | — | (6 | ) | — | ||||||||
Exceptional tax credit(v) | 30 | 100 | 8 | |||||||||
30 | 94 | 8 | ||||||||||
60 | 121 | (7 | ) | |||||||||
Discontinued operations | ||||||||||||
Exceptional operating items | ||||||||||||
Impairment of property, plant and equipment(vi) | — | — | (7 | ) | ||||||||
Gain on disposal of assets | ||||||||||||
Gain on disposal of assets | 20 | 123 | 349 | |||||||||
Tax charge | (4 | ) | (6 | ) | (38 | ) | ||||||
16 | 117 | 311 | ||||||||||
16 | 117 | 304 | ||||||||||
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Other operating income and expenses | ||||||||||||
Gain on sale of investment(i) | 25 | — | — | |||||||||
Reversal of previously recorded impairment(ii) | 2 | — | — | |||||||||
Impairment of property, plant and equipment(iii) | — | (7 | ) | (48 | ) | |||||||
Restructuring costs(iv) | — | (13 | ) | (11 | ) | |||||||
Property damage(v) | — | (9 | ) | — | ||||||||
Employee benefits curtailment gain(vi) | — | 7 | — | |||||||||
Reversal of previously recorded provisions(vii) | — | — | 20 | |||||||||
Provision for investment in associates(viii) | — | — | (16 | ) | ||||||||
Provision for investment in other financial assets | — | — | (2 | ) | ||||||||
Write back of provision for investment in other financial assets | — | — | 8 | |||||||||
27 | (22 | ) | (49 | ) | ||||||||
Financing | ||||||||||||
Financial income(ix) | — | — | 22 | |||||||||
Financial expenses(x) | — | — | (16 | ) | ||||||||
Financial expense on early settlement of debt(xi) | — | — | (17 | ) | ||||||||
— | — | (11 | ) | |||||||||
Tax | ||||||||||||
Tax (charge)/credit on other operating income and expenses | (6 | ) | — | 22 | ||||||||
Special tax credit(xii) | 100 | 8 | 161 | |||||||||
94 | 8 | 183 | ||||||||||
Gain on disposal of assets | ||||||||||||
Gain on disposal of assets | 123 | 349 | 15 | |||||||||
Tax (charge)/credit | (6 | ) | (38 | ) | 4 | |||||||
117 | 311 | 19 | ||||||||||
(i) | ||
(ii) |
F-42
Restructuring costs relate to the delivery of the further restructuring of the Hotels business. | ||
(iii) | Damage to properties resulting from fire and natural disasters. | |
(iv) | A curtailment gain arising as a result of the sale of UK hotel properties. | |
(vi) | Property, plant and equipment were written down by £7 million in 2005 following an impairment review of the hotel estate. |
F-42
Note 6 — | Finance costs |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Financial income | ||||||||||||
Interest on tax refunds | — | — | 22 | |||||||||
Interest income | 21 | 28 | 48 | |||||||||
Fair value gains | 5 | 2 | — | |||||||||
26 | 30 | 70 | ||||||||||
Financial expenses | ||||||||||||
Financial expense on early settlement of debt | — | — | 17 | |||||||||
Costs of closing out currency swaps and refinancing the Company’s debt | — | — | 16 | |||||||||
Interest expense — Hotels | 33 | 51 | 70 | |||||||||
Interest expense — Soft Drinks | — | 9 | — | |||||||||
Finance charge payable under finance leases | 4 | — | — | |||||||||
37 | 60 | 103 | ||||||||||
Fair value charge | — | 3 | — | |||||||||
37 | 63 | 103 | ||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Financial income | ||||||||||||
Interest income | 8 | 21 | 28 | |||||||||
Fair value gains | 1 | 5 | 2 | |||||||||
9 | 26 | 30 | ||||||||||
Financial expenses | ||||||||||||
Interest expense — Hotels | 45 | 33 | 51 | |||||||||
Interest expense — Soft Drinks | — | — | 9 | |||||||||
Finance charge payable under finance leases | 9 | 4 | — | |||||||||
54 | 37 | 60 | ||||||||||
Fair value charge | — | — | 3 | |||||||||
54 | 37 | 63 | ||||||||||
F-43
F-43
Note 7 — |
Year ended | Year ended | Year ended | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||||
2006 | 2005 | 2004 | |||||||||||||
(£ million) | |||||||||||||||
UK corporation tax at 30% (2005 30%: 2004 30%): | |||||||||||||||
Current period | 16 | 11 | 23 | ||||||||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (10 | ) | — | — | |||||||||||
Adjustments in respect of prior periods | (4 | ) | (6 | ) | (48 | ) | |||||||||
2 | 5 | (25 | ) | ||||||||||||
Foreign tax: | |||||||||||||||
Current period | 72 | 149 | 62 | ||||||||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (1 | ) | (2 | ) | (9 | ) | |||||||||
Adjustments in respect of prior periods | (94 | ) | (19 | ) | (82 | ) | |||||||||
(23 | ) | 128 | (29 | ) | |||||||||||
Total current tax | (21 | ) | 133 | (54 | ) | ||||||||||
Deferred tax: | |||||||||||||||
Origination and reversal of temporary differences | 27 | (3 | ) | 18 | |||||||||||
Changes in tax rates | (4 | ) | (2 | ) | (11 | ) | |||||||||
Adjustments to estimated recoverable deferred tax assets | (13 | ) | 1 | 12 | |||||||||||
Adjustments in respect of prior periods | (24 | ) | (11 | ) | (96 | ) | |||||||||
Total deferred tax | (14 | ) | (15 | ) | (77 | ) | |||||||||
Total income tax on profit for the year | (35 | ) | 118 | (131 | ) | ||||||||||
Further analyzed as tax relating to: | |||||||||||||||
Profit before special items | 53 | 88 | 56 | ||||||||||||
Special items (Note 5): | |||||||||||||||
Other operating income and expenses: | |||||||||||||||
Gain on sale of investment | 6 | — | — | ||||||||||||
Impairment of property, plant and equipment | — | — | (14 | ) | |||||||||||
Restructuring costs | — | — | (8 | ) | |||||||||||
Provision for investment in other financial assets | — | — | 3 | ||||||||||||
Financing: | |||||||||||||||
Financial expense on early settlement of debt | — | — | (5 | ) | |||||||||||
Other | — | — | 2 | ||||||||||||
Special tax credit(i) | (100 | ) | (8 | ) | (161 | ) | |||||||||
Tax (credit)/charge | (41 | ) | 80 | (127 | ) | ||||||||||
Gain on disposal of assets | 6 | 38 | (4 | ) | |||||||||||
(35 | ) | 118 | (131 | ) | |||||||||||
The total tax (credit)/charge can be further analyzed as relating to: | |||||||||||||||
Profit on continuing operations | (50 | ) | 24 | (196 | ) | ||||||||||
Profit on discontinued operations | 9 | 56 | 69 | ||||||||||||
Gain on disposal of assets | 6 | 38 | (4 | ) | |||||||||||
(35 | ) | 118 | (131 | ) | |||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
UK corporation tax at 30% (2006 30%, 2005 30%): | ||||||||||||
Current period | 23 | 16 | 11 | |||||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (1 | ) | (10 | ) | — | |||||||
Adjustments in respect of prior periods | (16 | ) | (4 | ) | (6 | ) | ||||||
6 | 2 | 5 | ||||||||||
Foreign tax: | ||||||||||||
Current period | 100 | 72 | 149 | |||||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (8 | ) | (1 | ) | (2 | ) | ||||||
Adjustments in respect of prior periods | (50 | ) | (94 | ) | (19 | ) | ||||||
42 | (23 | ) | 128 | |||||||||
Total current tax | 48 | (21 | ) | 133 | ||||||||
Deferred tax: | ||||||||||||
Origination and reversal of temporary differences | (34 | ) | 27 | (3 | ) | |||||||
Changes in tax rates | (2 | ) | (4 | ) | (2 | ) | ||||||
Adjustments to estimated recoverable deferred tax assets | 3 | (13 | ) | 1 | ||||||||
Adjustments in respect of prior periods | 4 | (24 | ) | (11 | ) | |||||||
Total deferred tax | (29 | ) | (14 | ) | (15 | ) | ||||||
Total income tax charge/(credit) on profit for the year | 19 | (35 | ) | 118 | ||||||||
Further analyzed as tax relating to: | ||||||||||||
Profit before exceptional items | 45 | 53 | 88 | |||||||||
Exceptional items (Note 5): | ||||||||||||
Exceptional operating items | — | 6 | — | |||||||||
Exceptional tax credit(i) | (30 | ) | (100 | ) | (8 | ) | ||||||
Gain on disposal of assets | 4 | 6 | 38 | |||||||||
19 | (35 | ) | 118 | |||||||||
The total tax charge/(credit) can be further analyzed as relating to: | ||||||||||||
Profit on continuing operations | 12 | (53 | ) | 22 | ||||||||
Profit on discontinued operations | 3 | 12 | 58 | |||||||||
Gain on disposal of assets | 4 | 6 | 38 | |||||||||
19 | (35 | ) | 118 | |||||||||
(i) | Represents the release of provisions which are |
F-44
F-44
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(%) | ||||||||||||
UK corporation tax at standard rate | 30.0 | 30.0 | 30.0 | |||||||||
Permanent differences | 5.6 | 3.7 | 1.3 | |||||||||
Net effect of different rates of tax in overseas businesses | 1.8 | 3.5 | 2.9 | |||||||||
Effect of changes in tax rates | (1.0 | ) | (1.0 | ) | (0.3 | ) | ||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (3.3 | ) | (3.0 | ) | (0.1 | ) | ||||||
Effect of adjustments to estimated recoverable deferred tax assets | 1.3 | (0.2 | ) | 0.1 | ||||||||
Adjustment to tax charge in respect of prior periods | (11.0 | ) | (6.9 | ) | (4.5 | ) | ||||||
Other | 0.4 | 0.4 | (0.1 | ) | ||||||||
Exceptional items and gain on disposal of assets | (16.3 | ) | (36.1 | ) | (10.7 | ) | ||||||
7.5 | (9.6 | ) | 18.6 | |||||||||
Note 8 — |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
% | ||||||||||||
UK corporation tax at standard rate | 30.0 | 30.0 | 30.0 | |||||||||
Permanent differences | 3.7 | 1.3 | 1.5 | |||||||||
Net effect of different rates of tax in overseas businesses | 3.5 | 2.9 | 6.3 | |||||||||
Effect of changes in tax rates | (1.0 | ) | (0.3 | ) | (3.9 | ) | ||||||
Benefit of tax reliefs on which no deferred tax previously recognized | (3.0 | ) | (0.1 | ) | (1.1 | ) | ||||||
Effect of adjustments to estimated recoverable deferred tax assets | (0.2 | ) | 0.1 | 4.3 | ||||||||
Adjustment to tax charge in respect of prior periods | (6.9 | ) | (4.5 | ) | (22.6 | ) | ||||||
Other | 0.4 | (0.1 | ) | 0.6 | ||||||||
Special items and gain on disposal of assets | (36.1 | ) | (10.7 | ) | (61.9 | ) | ||||||
(9.6 | ) | 18.6 | (46.8 | ) | ||||||||
Year ended December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||
(pence per share) | (£ million) | |||||||||||||||||||||||||||||||
Paid during the year: | ||||||||||||||||||||||||||||||||
Final (declared in previous year) | 13.3 | 10.7 | 10.0 | 47 | 46 | 61 | ||||||||||||||||||||||||||
Interim | 5.7 | 5.1 | 4.6 | 17 | 18 | 20 | ||||||||||||||||||||||||||
Special interim | 200.0 | 118.0 | — | 709 | 497 | — | ||||||||||||||||||||||||||
219.0 | 133.8 | 14.6 | 773 | 561 | 81 | |||||||||||||||||||||||||||
Proposed for approval at the Annual General Meeting (not recognized as a liability at December 31): | ||||||||||||||||||||||||||||||||
Final | 14.9 | 13.3 | 10.7 | 44 | 47 | 46 | ||||||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||
(pence per share) | (£ million) | ||||||||||||||||||||||||
Paid during the year: | |||||||||||||||||||||||||
Final (declared in previous year) | 10.70 | 10.00 | 9.45 | 46 | 61 | 70 | |||||||||||||||||||
Interim | 5.10 | 4.60 | 4.30 | 18 | 20 | 29 | |||||||||||||||||||
Special interim | 118.00 | — | 72.00 | 497 | — | 501 | |||||||||||||||||||
133.80 | 14.60 | 85.75 | 561 | 81 | 600 | ||||||||||||||||||||
Final | 13.30 | 10.70 | 10.00 | 47 | 46 | 62 | ||||||||||||||||||
Note 9 — | Earnings per ordinary share |
F-45
Year ended | Year ended | Year ended | ||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Continuing | Continuing | Continuing | ||||||||||||||||||||||
operations | Total | operations | Total | operations | Total | |||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Profit available for equity holders (£ million) | 267 | 405 | 103 | 496 | 234 | 383 | ||||||||||||||||||
Basic weighted average number of ordinary shares (millions) | 389 | 389 | 521 | 521 | 710 | 710 | ||||||||||||||||||
Basic earnings per share (pence) | 68.6 | 104.1 | 19.8 | 95.2 | 32.9 | 53.9 | ||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||
Profit available for equity holders (£ million) | 267 | 405 | 103 | 496 | 234 | 383 | ||||||||||||||||||
Diluted weighted average number of ordinary shares (millions) (see below) | 399 | 399 | 533 | 533 | 718 | 718 | ||||||||||||||||||
Diluted earnings per share (pence) | 66.9 | 101.5 | 19.3 | 93.1 | 32.6 | 53.3 | ||||||||||||||||||
2006 | 2005 | 2004 | |||||||||||
(millions) | |||||||||||||
Diluted weighted average of ordinary shares is calculated as: | |||||||||||||
Basic weighted average number of ordinary shares | 389 | 521 | 710 | ||||||||||
Dilutive potential ordinary shares — employee share options | 10 | 12 | 8 | ||||||||||
399 | 533 | 718 | |||||||||||
Year ended | Year ended | Year ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2006 | 2005 | 2004 | |||||||||||||||||||||||
Continuing | Continuing | Continuing | |||||||||||||||||||||||
operations | Total | operations | Total | operations | Total | ||||||||||||||||||||
(£ million) | |||||||||||||||||||||||||
Adjusted earnings per share | |||||||||||||||||||||||||
Profit available for equity holders | 267 | 405 | 103 | 496 | 234 | 383 | |||||||||||||||||||
Less adjusting items (Note 5): | |||||||||||||||||||||||||
Other operating income and expenses | (27 | ) | (27 | ) | 22 | 22 | 49 | 49 | |||||||||||||||||
Financing | — | — | — | — | 11 | 11 | |||||||||||||||||||
Tax on other operating income and expenses | 6 | 6 | — | — | (22 | ) | (22 | ) | |||||||||||||||||
Special tax credit | (100 | ) | (100 | ) | (8 | ) | (8 | ) | (161 | ) | (161 | ) | |||||||||||||
Gain on disposal of assets, net of tax | — | (117 | ) | — | (311 | ) | — | (19 | ) | ||||||||||||||||
Adjusted earnings | 146 | 167 | 117 | 199 | 111 | 241 | |||||||||||||||||||
Basic weighted average number of ordinary shares (millions) | 389 | 389 | 521 | 521 | 710 | 710 | |||||||||||||||||||
Adjusted earnings per share (pence) | 37.5 | 42.9 | 22.5 | 38.2 | 15.6 | 33.9 | |||||||||||||||||||
Diluted weighted average number of ordinary shares (millions) | 399 | 399 | 533 | 533 | 718 | 718 | |||||||||||||||||||
Adjusted diluted earnings per share (pence) | 36.6 | 41.8 | 21.9 | 37.3 | 15.5 | 33.6 | |||||||||||||||||||
F-45
F-46
Land | Fixtures, | ||||||||||||||||
and | fittings and | Plant and | |||||||||||||||
buildings | equipment | machinery | Total | ||||||||||||||
(£ million) | |||||||||||||||||
Year ended December 31, 2005 | |||||||||||||||||
Cost: | |||||||||||||||||
At January 1, 2005 | 1,421 | 985 | 182 | 2,588 | |||||||||||||
Exchange and other adjustments | 34 | 13 | — | 47 | |||||||||||||
Additions | 15 | 107 | 18 | 140 | |||||||||||||
Net transfers to non-current assets classified as held for sale | (163 | ) | (150 | ) | — | (313 | ) | ||||||||||
Disposals | (152 | ) | (333 | ) | (200 | ) | (685 | ) | |||||||||
Impairment | — | (7 | ) | — | (7 | ) | |||||||||||
At December 31, 2005 | 1,155 | 615 | — | 1,770 | |||||||||||||
Depreciation: | |||||||||||||||||
At January 1, 2005 | (132 | ) | (425 | ) | (105 | ) | (662 | ) | |||||||||
Exchange and other adjustments | — | (14 | ) | — | (14 | ) | |||||||||||
Provided | (11 | ) | (88 | ) | (17 | ) | (116 | ) | |||||||||
Net transfers to non-current assets classified as held for sale | 10 | 58 | — | 68 | |||||||||||||
On disposals | 32 | 156 | 122 | 310 | |||||||||||||
At December 31, 2005 | (101 | ) | (313 | ) | — | (414 | ) | ||||||||||
Net book value at December 31, 2005 | 1,054 | 302 | — | 1,356 | |||||||||||||
Year ended December 31, 2006 | |||||||||||||||||
Cost: | |||||||||||||||||
At January 1, 2006 | 1,155 | 615 | — | 1,770 | |||||||||||||
Exchange and other adjustments | (73 | ) | (42 | ) | — | (115 | ) | ||||||||||
Additions | 104 | 82 | — | 186 | |||||||||||||
Transfers to non-current assets classified as held for sale | (363 | ) | (118 | ) | — | (481 | ) | ||||||||||
Disposals | (2 | ) | (31 | ) | — | (33 | ) | ||||||||||
At December 31, 2006 | 821 | 506 | — | 1,327 | |||||||||||||
Depreciation: | |||||||||||||||||
At January 1, 2006 | (101 | ) | (313 | ) | — | (414 | ) | ||||||||||
Exchange and other adjustments | 7 | 23 | — | 30 | |||||||||||||
Provided | (7 | ) | (41 | ) | — | (48 | ) | ||||||||||
Transfers to non-current assets classified as held for sale | 17 | 55 | — | 72 | |||||||||||||
On disposals | 2 | 28 | — | 30 | |||||||||||||
At December 31, 2006 | (82 | ) | (248 | ) | — | (330 | ) | ||||||||||
Net book value at December 31, 2006 | 739 | 258 | — | 997 | |||||||||||||
Year ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Continuing | Continuing | Continuing | ||||||||||||||||||||||
operations | Total | operations | Total | operations | Total | |||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Profit available for equity holders (£ million) | 210 | 231 | 269 | 405 | 114 | 496 | ||||||||||||||||||
Basic weighted average number of ordinary shares (millions) | 320 | 320 | 389 | 389 | 521 | 521 | ||||||||||||||||||
Basic earnings per share (pence) | 65.6 | 72.2 | 69.1 | 104.1 | 21.9 | 95.2 | ||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||
Profit available for equity holders (£ million) | 210 | 231 | 269 | 405 | 114 | 496 | ||||||||||||||||||
Diluted weighted average number of ordinary shares (millions) | 329 | 329 | 399 | 399 | 533 | 533 | ||||||||||||||||||
Diluted earnings per share (pence) | 63.8 | 70.2 | 67.4 | 101.5 | 21.4 | 93.1 | ||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||
(millions) | ||||||||||||
Diluted weighted average of ordinary shares is calculated as: | ||||||||||||
Basic weighted average number of ordinary shares | 320 | 389 | 521 | |||||||||
Dilutive potential ordinary shares — employee share options | 9 | 10 | 12 | |||||||||
329 | 399 | 533 | ||||||||||
Year ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Continuing | Continuing | Continuing | ||||||||||||||||||||||
operations | Total | operations | Total | operations | Total | |||||||||||||||||||
Adjusted earnings per share | ||||||||||||||||||||||||
Profit available for equity holders (£ million) | 210 | 231 | 269 | 405 | 114 | 496 | ||||||||||||||||||
Less adjusting items (Note 5): | ||||||||||||||||||||||||
Exceptional operating items (£ million) | (30 | ) | (30 | ) | (27 | ) | (27 | ) | 15 | 15 | ||||||||||||||
Tax on exceptional operating items (£ million) | — | — | 6 | 6 | — | — | ||||||||||||||||||
Exceptional tax credit (£ million) | (30 | ) | (30 | ) | (100 | ) | (100 | ) | (8 | ) | (8 | ) | ||||||||||||
Impairment of property, plant and equipment (£ million) | — | — | — | — | — | 7 | ||||||||||||||||||
Gain on disposal of assets, net of tax (£ million) | — | (16 | ) | — | (117 | ) | — | (311 | ) | |||||||||||||||
Adjusted earnings (£ million) | 150 | 155 | 148 | 167 | 121 | 199 | ||||||||||||||||||
Basic weighted average number of ordinary shares (millions) | 320 | 320 | 389 | 389 | 521 | 521 | ||||||||||||||||||
Adjusted earnings per share (pence) | 46.9 | 48.4 | 38.0 | 42.9 | 23.2 | 38.2 | ||||||||||||||||||
Adjusted earnings (£ million) | 150 | 155 | 148 | 167 | 121 | 199 | ||||||||||||||||||
Diluted weighted average number of ordinary shares (millions) | 329 | 329 | 399 | 399 | 533 | 533 | ||||||||||||||||||
Adjusted diluted earnings per share (pence) | 45.6 | 47.1 | 37.1 | 41.8 | 22.7 | 37.3 | ||||||||||||||||||
F-46
Note 10 — | Property, Plant and Equipment |
�� | ||||||||||||
Land | Fixtures, | |||||||||||
and | fittings and | |||||||||||
buildings | equipment | Total | ||||||||||
(£ million) | ||||||||||||
Year ended December 31, 2006 | ||||||||||||
Cost: | ||||||||||||
At January 1, 2006 | 1,155 | 615 | 1,770 | |||||||||
Additions | 104 | 82 | 186 | |||||||||
Transfers to non-current assets classified as held for sale | (363 | ) | (118 | ) | (481 | ) | ||||||
Disposals | (2 | ) | (31 | ) | (33 | ) | ||||||
Exchange and other adjustments | (73 | ) | (42 | ) | (115 | ) | ||||||
At December 31, 2006 | 821 | 506 | 1,327 | |||||||||
Depreciation: | ||||||||||||
At January 1, 2006 | (101 | ) | (313 | ) | (414 | ) | ||||||
Provided | (7 | ) | (41 | ) | (48 | ) | ||||||
Transfers to non-current assets classified as held for sale | 17 | 55 | 72 | |||||||||
On disposals | 2 | 28 | 30 | |||||||||
Exchange and other adjustments | 7 | 23 | 30 | |||||||||
At December 31, 2006 | (82 | ) | (248 | ) | (330 | ) | ||||||
Net book value at December 31, 2006 | 739 | 258 | 997 | |||||||||
Year ended December 31, 2007 | ||||||||||||
Cost: | ||||||||||||
At January 1, 2007 | 821 | 506 | 1,327 | |||||||||
Additions | 5 | 49 | 54 | |||||||||
Reclassifications | 15 | (20 | ) | (5 | ) | |||||||
Net transfers to non-current assets classified as held for sale | (38 | ) | (44 | ) | (82 | ) | ||||||
Disposals | (7 | ) | (19 | ) | (26 | ) | ||||||
Exchange and other adjustments | 3 | 3 | 6 | |||||||||
At December 31, 2007 | 799 | 475 | 1,274 | |||||||||
Depreciation: | ||||||||||||
At January 1, 2007 | (82 | ) | (248 | ) | (330 | ) | ||||||
Provided | (6 | ) | (33 | ) | (39 | ) | ||||||
Net transfers to non-current assets classified as held for sale | 17 | 15 | 32 | |||||||||
Reversal of impairment | — | 3 | 3 | |||||||||
On disposals | 7 | 18 | 25 | |||||||||
Exchange and other adjustments | — | (3 | ) | (3 | ) | |||||||
At December 31, 2007 | (64 | ) | (248 | ) | (312 | ) | ||||||
Net book value at December 31, 2007 | 735 | 227 | 962 | |||||||||
F-47
F-47
Note 11 — |
F-48
Year ended December 31, | |||||||||||||
2006 | 2005 | 2004 | |||||||||||
Net assets of hotels on disposal | |||||||||||||
(£ million) | |||||||||||||
Property, plant and equipment | 648 | 1,961 | 100 | ||||||||||
Goodwill | — | 20 | — | ||||||||||
Net working capital | (22 | ) | 1 | (1 | ) | ||||||||
Cash and cash equivalents | 31 | 16 | — | ||||||||||
Loans and other borrowings | (10 | ) | — | — | |||||||||
Deferred tax | (117 | ) | (121 | ) | (5 | ) | |||||||
Minority equity interest | (13 | ) | — | (11 | ) | ||||||||
Company’s share of net assets disposed of | 517 | 1,877 | 83 | ||||||||||
Consideration | |||||||||||||
Current year disposals: | |||||||||||||
Cash consideration, net of cost paid | 628 | 1,832 | 101 | ||||||||||
Deferred consideration | 10 | 40 | — | ||||||||||
Management contract value | 30 | 82 | — | ||||||||||
Other | (14 | ) | (12 | ) | (3 | ) | |||||||
654 | 1,942 | 98 | |||||||||||
Net assets disposed of | (517 | ) | (1,877 | ) | (83 | ) | |||||||
Other, including tax and impairment | (20 | ) | (38 | ) | 4 | ||||||||
Gain on disposal of assets, net of tax | 117 | 27 | 19 | ||||||||||
Net cash inflow | |||||||||||||
Current year disposals: | |||||||||||||
Cash consideration, net of costs paid | 628 | 1,832 | 101 | ||||||||||
Cash disposed of | (31 | ) | (16 | ) | — | ||||||||
Prior year disposal | 23 | — | — | ||||||||||
620 | 1,816 | 101 | |||||||||||
Assets and liabilities held for sale | |||||||||||||
Non-current assets classified as held for sale: | |||||||||||||
Property, plant and equipment | 40 | 279 | 1,826 | ||||||||||
Associates | 10 | — | — | ||||||||||
50 | 279 | 1,826 | |||||||||||
Liabilities classified as held for sale: | |||||||||||||
Deferred tax | (2 | ) | (34 | ) | (148 | ) | |||||||
Cash flows related to discontinued operations | |||||||||||||
Operating profit before interest, depreciation and amortization | 34 | 124 | 203 | ||||||||||
Investing activities | (8 | ) | (54 | ) | (78 | ) | |||||||
Financing activities | (25 | ) | (16 | ) | (3 | ) | |||||||
F-49
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Net assets of hotels sold | ||||||||||||
Property, plant and equipment | 35 | 648 | 1,961 | |||||||||
Goodwill | — | — | 20 | |||||||||
Net working capital | 1 | (22 | ) | 1 | ||||||||
Cash and cash equivalents | — | 31 | 16 | |||||||||
Loans and other borrowings | — | (10 | ) | — | ||||||||
Deferred tax | — | (117 | ) | (121 | ) | |||||||
Minority equity interest | (6 | ) | (13 | ) | — | |||||||
Company’s share of net assets disposed of | 30 | 517 | 1,877 | |||||||||
Consideration | ||||||||||||
Current year disposals: | ||||||||||||
Cash consideration, net of costs paid | 47 | 628 | 1,832 | |||||||||
Deferred consideration | — | 10 | 40 | |||||||||
Management contract value | 3 | 30 | 82 | |||||||||
Other | — | (14 | ) | (12 | ) | |||||||
50 | 654 | 1,942 | ||||||||||
Net assets disposed of | (30 | ) | (517 | ) | (1,877 | ) | ||||||
Provision against deferred consideration | — | (10 | ) | — | ||||||||
Other, including impairment of held for sale asset | — | (4 | ) | — | ||||||||
Tax | (4 | ) | (6 | ) | (38 | ) | ||||||
Gain on disposal of assets, net of tax(i) | 16 | 117 | 27 | |||||||||
Net cash inflow | ||||||||||||
Current year disposals: | ||||||||||||
Cash consideration, net of costs paid | 47 | 628 | 1,832 | |||||||||
Cash disposed of | — | (31 | ) | (16 | ) | |||||||
Prior year disposals | 2 | 23 | — | |||||||||
49 | 620 | 1,816 | ||||||||||
Assets and liabilities held for sale | ||||||||||||
Non-current assets classified as held for sale: | ||||||||||||
Property, plant and equipment | 57 | 40 | 279 | |||||||||
Associates | — | 10 | — | |||||||||
57 | 50 | 279 | ||||||||||
Liabilities classified as held for sale: | ||||||||||||
Deferred tax | (3 | ) | (2 | ) | (34 | ) | ||||||
(i) | Reported within discontinued operations. |
F-48
Year ended | ||||
December 31, | ||||
2005 | ||||
(£ million) | ||||
Net liabilities of Soft Drinks on disposal | ||||
Property, plant and equipment | 234 | |||
Goodwill | 18 | |||
Software | 25 | |||
Inventories | 36 | |||
Trade and other receivables | 141 | |||
Cash and cash equivalents | 1 | |||
Current liabilities | (162 | ) | ||
Borrowings | (341 | ) | ||
Employee benefits | (91 | ) | ||
Deferred tax | 8 | |||
Minority equity interest | 66 | |||
Company’s share of net liabilities disposed of | (65 | ) | ||
Consideration | ||||
Cash consideration, net of costs paid | 221 | |||
Other | (2 | ) | ||
219 | ||||
Net liabilities disposed of | 65 | |||
Gain on disposal of assets, net of tax | 284 | |||
Net cash inflow | ||||
Cash consideration, net of costs paid | 221 | |||
Cash disposed of | (1 | ) | ||
220 | ||||
Year ended | ||||||||||||
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Cash flows related to discontinued operations | ||||||||||||
Operating profit before interest, depreciation and amortization | — | 115 | 123 | |||||||||
Investing activities | — | (47 | ) | (70 | ) | |||||||
Financing activities | — | 162 | (25 | ) |
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Cash flows attributable to discontinued operations | ||||||||||||
Hotels | ||||||||||||
Operating profit before interest, depreciation and amortization | 10 | 40 | 127 | |||||||||
Investing activities | (1 | ) | (9 | ) | (59 | ) | ||||||
Financing activities | — | (25 | ) | (16 | ) | |||||||
Soft Drinks | ||||||||||||
Operating profit before interest, depreciation and amortization | — | — | 115 | |||||||||
Investing activities | — | — | (47 | ) | ||||||||
Financing activities | — | — | 162 | |||||||||
F-49
F-50
Year ended | ||||||||||||
December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Results of discontinued operations | ||||||||||||
Revenue | 40 | 174 | 1,213 | |||||||||
Cost of sales | (30 | ) | (134 | ) | (897 | ) | ||||||
Administrative expenses | — | — | (74 | ) | ||||||||
10 | 40 | 242 | ||||||||||
Depreciation and amortization | (2 | ) | (9 | ) | (78 | ) | ||||||
Operating profit before exceptional operating items | 8 | 31 | 164 | |||||||||
Exceptional operating items | — | — | (7 | ) | ||||||||
Operating profit | 8 | 31 | 157 | |||||||||
Financial expenses | — | — | (9 | ) | ||||||||
Profit before tax | 8 | 31 | 148 | |||||||||
Tax | (3 | ) | (12 | ) | (58 | ) | ||||||
Profit after tax | 5 | 19 | 90 | |||||||||
Gain on disposal of assets, net of tax (Note 5) | 16 | 117 | 311 | |||||||||
Profit for the year from discontinued operations | 21 | 136 | 401 | |||||||||
Attributable to: | ||||||||||||
Equity holders of the parent | 21 | 136 | 382 | |||||||||
Minority equity interest | — | — | 19 | |||||||||
21 | 136 | 401 | ||||||||||
2007 | 2006 | 2005 | ||||||||||
Pence | Pence | Pence | ||||||||||
per share | per share | per share | ||||||||||
Earnings per share from discontinued operations | ||||||||||||
Basic | 6.6 | 35.0 | 73.3 | |||||||||
Diluted | 6.4 | 34.1 | 71.7 |
At | |||||||||
December 31, | |||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
At January 1 | 118 | 152 | |||||||
Acquisition of subsidiary (note 31) | 2 | — | |||||||
Disposals | — | (44 | ) | ||||||
Exchange and other adjustments | (11 | ) | 10 | ||||||
At December 31 | 109 | 118 | |||||||
Note 12 — | Goodwill |
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
At January 1 | 109 | 118 | ||||||
Acquisition of subsidiary (Note 31) | — | 2 | ||||||
Exchange and other adjustments | 1 | (11 | ) | |||||
At December 31 | 110 | 109 | ||||||
F-50
At December 31, | ||||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
The Americas managed operations | 72 | 82 | ||||||
Asia Pacific managed and franchised operations | 37 | 36 | ||||||
109 | 118 | |||||||
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Americas managed operations | 70 | 72 | ||||||
Asia Pacific managed and franchised operations | 40 | 37 | ||||||
110 | 109 | |||||||
F-51
F-51
Management | Other | ||||||||||||||||
Software | contracts | intangibles | Total | ||||||||||||||
(£ million) | |||||||||||||||||
Year ended December 31, 2005 | |||||||||||||||||
Cost: | |||||||||||||||||
At January 1, 2005 | 52 | — | 22 | 74 | |||||||||||||
Additions | 14 | 82 | 5 | 101 | |||||||||||||
Disposals | (32 | ) | — | (1 | ) | (33 | ) | ||||||||||
Exchange and other adjustments | 4 | 2 | 2 | 8 | |||||||||||||
At December 31, 2005 | 38 | 84 | 28 | 150 | |||||||||||||
Amortization: | |||||||||||||||||
At January 1, 2005 | (13 | ) | — | (7 | ) | (20 | ) | ||||||||||
Provided | (9 | ) | (3 | ) | (2 | ) | (14 | ) | |||||||||
On disposals | 7 | — | — | 7 | |||||||||||||
Exchange and other adjustments | (2 | ) | — | (1 | ) | (3 | ) | ||||||||||
At December 31, 2005 | (17 | ) | (3 | ) | (10 | ) | (30 | ) | |||||||||
Net book value at December 31, 2005 | 21 | 81 | 18 | 120 | |||||||||||||
Year ended December 31, 2006 | |||||||||||||||||
Cost: | |||||||||||||||||
At January 1, 2006 | 38 | 84 | 28 | 150 | |||||||||||||
Additions | 10 | 30 | 13 | 53 | |||||||||||||
Acquisition of subsidiary (note 32) | 1 | 7 | — | 8 | |||||||||||||
Disposals | — | — | (2 | ) | (2 | ) | |||||||||||
Exchange and other adjustments | (6 | ) | (4 | ) | (3 | ) | (13 | ) | |||||||||
At December 31, 2006 | 43 | 117 | 36 | 196 | |||||||||||||
Amortization: | |||||||||||||||||
At January 1, 2006 | (17 | ) | (3 | ) | (10 | ) | (30 | ) | |||||||||
Provided | (9 | ) | (4 | ) | (3 | ) | (16 | ) | |||||||||
Exchange and other adjustments | 3 | — | 1 | 4 | |||||||||||||
At December 31, 2006 | (23 | ) | (7 | ) | (12 | ) | (42 | ) | |||||||||
Net book value at December 31, 2006 | 20 | 110 | 24 | 154 | |||||||||||||
Note 13 — | Intangible assets |
Management | Other | |||||||||||||||
Software | contracts | intangibles | Total | |||||||||||||
(£ million) | ||||||||||||||||
Year ended December 31, 2006 | ||||||||||||||||
Cost: | ||||||||||||||||
At January 1, 2006 | 38 | 84 | 28 | 150 | ||||||||||||
Additions | 10 | 30 | 13 | 53 | ||||||||||||
Acquisition of subsidiary (note 31) | 1 | 7 | — | 8 | ||||||||||||
Disposals | — | — | (2 | ) | (2 | ) | ||||||||||
Exchange and other adjustments | (6 | ) | (4 | ) | (3 | ) | (13 | ) | ||||||||
At December 31, 2006 | 43 | 117 | 36 | 196 | ||||||||||||
Amortization: | ||||||||||||||||
At January 1, 2006 | (17 | ) | (3 | ) | (10 | ) | (30 | ) | ||||||||
Provided | (9 | ) | (4 | ) | (3 | ) | (16 | ) | ||||||||
Exchange and other adjustments | 3 | — | 1 | 4 | ||||||||||||
At December 31, 2006 | (23 | ) | (7 | ) | (12 | ) | (42 | ) | ||||||||
Net book value at December 31, 2006 | 20 | 110 | 24 | 154 | ||||||||||||
Year ended December 31, 2007 | ||||||||||||||||
Cost: | ||||||||||||||||
At January 1, 2007 | 43 | 117 | 36 | 196 | ||||||||||||
Additions | 13 | 5 | 7 | 25 | ||||||||||||
Reclassifications | 5 | — | — | 5 | ||||||||||||
Disposals | — | — | (1 | ) | (1 | ) | ||||||||||
Exchange and other adjustments | (1 | ) | 2 | — | 1 | |||||||||||
At December 31, 2007 | 60 | 124 | 42 | 226 | ||||||||||||
Amortization: | ||||||||||||||||
At January 1, 2007 | (23 | ) | (7 | ) | (12 | ) | (42 | ) | ||||||||
Provided | (9 | ) | (6 | ) | (4 | ) | (19 | ) | ||||||||
Disposals | — | — | 1 | 1 | ||||||||||||
Exchange and other adjustments | 1 | — | — | 1 | ||||||||||||
At December 31, 2007 | (31 | ) | (13 | ) | (15 | ) | (59 | ) | ||||||||
Net book value at December 31, 2007 | 29 | 111 | 27 | 167 | ||||||||||||
F-52
F-52
Note 14 — | Investments in associates |
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Share of associates’ balance sheet | ||||||||
Current assets | 2 | 4 | ||||||
Non-current assets | 50 | 93 | ||||||
Current liabilities | (5 | ) | (9 | ) | ||||
Non-current liabilities | (15 | ) | (46 | ) | ||||
Net assets | 32 | 42 | ||||||
Share of associates’ revenue and profit | ||||||||
Revenue | 22 | 18 | ||||||
Net profit | 2 | 1 | ||||||
Related party transactions | ||||||||
Revenue from related parties | 4 | 3 | ||||||
Amounts owed by related parties | 1 | 2 | ||||||
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Non-current | ||||||||
Equity securities available-for-sale | 48 | 41 | ||||||
Other | 48 | 72 | ||||||
96 | 113 | |||||||
Current | ||||||||
Equity securities available-for-sale | 9 | 104 | ||||||
Derivatives | 4 | 2 | ||||||
13 | 106 | |||||||
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Share of associates’ balance sheet | ||||||||
Current assets | 3 | 2 | ||||||
Non-current assets | 52 | 50 | ||||||
Current liabilities | (8 | ) | (5 | ) | ||||
Non-current liabilities | (14 | ) | (15 | ) | ||||
Net assets | 33 | 32 | ||||||
Share of associates’ revenue and profit | ||||||||
Revenue | 16 | 22 | ||||||
Net profit | 1 | 2 | ||||||
Related party transactions | ||||||||
Revenue from related parties | 3 | 4 | ||||||
Amounts owed by related parties | 1 | 1 | ||||||
Note 15 — | Other Financial Assets |
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Non-current | ||||||||
Equity securities available-for-sale | 46 | 48 | ||||||
Other | 47 | 48 | ||||||
93 | 96 | |||||||
Current | ||||||||
Equity securities available-for-sale | — | 9 | ||||||
Derivatives | — | 4 | ||||||
Other | 9 | — | ||||||
9 | 13 | |||||||
F-53
F-53
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Finished goods | 1 | 2 | ||||||
Consumable stores | 2 | 1 | ||||||
3 | 3 | |||||||
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
At January 1, | (21 | ) | (16 | ) | ||||
Provided and charged to gain on disposal of assets | — | (10 | ) | |||||
Recoveries | 2 | 3 | ||||||
Disposals | 3 | — | ||||||
Amounts written off against the financial asset | 12 | 1 | ||||||
Exchange and other adjustments | — | 1 | ||||||
At December 31, | (4 | ) | (21 | ) | ||||
Note 16 — | Inventories |
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Finished goods | 1 | 1 | ||||||
Consumable stores | 2 | 2 | ||||||
3 | 3 | |||||||
Note 17 — | Trade and other receivables |
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Trade receivables | 180 | 163 | ||||||
Other receivables | 29 | 51 | ||||||
Prepayments | 26 | 23 | ||||||
235 | 237 | |||||||
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Trade receivables | 163 | 160 | ||||||
Other receivables | 51 | 66 | ||||||
Other prepayments | 23 | 26 | ||||||
237 | 252 | |||||||
F-54
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Americas | 115 | 105 | ||||||
Europe, the Middle East and Africa | 70 | 78 | ||||||
Asia Pacific | 24 | 31 | ||||||
209 | 214 | |||||||
At December 31, 2007 | At December 31, 2006 | |||||||||||||||||||||||
Gross | Provision | Net | Gross | Provision | Net | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Not past due | 141 | (1 | ) | 140 | 118 | — | 118 | |||||||||||||||||
Past due 1 to 30 days | 37 | (1 | ) | 36 | 62 | (1 | ) | 61 | ||||||||||||||||
Past due 31 to 180 days | 39 | (8 | ) | 31 | 49 | (16 | ) | 33 | ||||||||||||||||
More than 181 days | 40 | (38 | ) | 2 | 28 | (26 | ) | 2 | ||||||||||||||||
257 | (48 | ) | 209 | 257 | (43 | ) | 214 | |||||||||||||||||
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Cash at bank and in hand | 30 | 34 | ||||||
Short-term deposits | 149 | 290 | ||||||
179 | 324 | |||||||
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
At January 1, | (43 | ) | (47 | ) | ||||
Provided | (12 | ) | (16 | ) | ||||
Amounts written off | 6 | 15 | ||||||
Exchange and other adjustments | 1 | 5 | ||||||
At December 31, | (48 | ) | (43 | ) | ||||
Note 18 — | Cash and cash equivalents |
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Cash at bank and in hand | 26 | 30 | ||||||
Short-term deposits | 26 | 149 | ||||||
52 | 179 | |||||||
F-55
F-54
Note 19 — | Trade and other payables |
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Current | ||||||||
Trade payables | 49 | 47 | ||||||
Other tax and social security payable | 19 | 26 | ||||||
Other payables | 172 | 190 | ||||||
Accruals | 148 | 139 | ||||||
Derivatives | 2 | — | ||||||
390 | 402 | |||||||
Non-current | ||||||||
Other payables | 139 | 109 | ||||||
At | At | |||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(£ million) | ||||||||
Current | ||||||||
Trade payables | 47 | 84 | ||||||
Other tax and social security payable | 26 | 12 | ||||||
Other payables | 190 | 174 | ||||||
Accruals | 139 | 186 | ||||||
Derivatives | — | 6 | ||||||
Provisions (Note 24) | — | 6 | ||||||
402 | 468 | |||||||
Non-current | ||||||||
Other payables | 109 | 107 | ||||||
Provisions (Note 24) | — | — | ||||||
109 | 107 | |||||||
At December 31, 2006 | At December 31, 2005 | |||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Secured bank loans | 4 | 3 | 7 | 2 | 36 | 38 | ||||||||||||||||||
Finance leases | 3 | 94 | 97 | — | — | — | ||||||||||||||||||
Unsecured bank loans | 3 | 206 | 209 | — | 374 | 374 | ||||||||||||||||||
Other unsecured borrowings | — | — | — | — | — | — | ||||||||||||||||||
Total borrowings | 10 | 303 | 313 | 2 | 410 | 412 | ||||||||||||||||||
Note 20 — |
At December 31, 2007 | At December 31, 2006 | |||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Secured bank loans | — | 3 | 3 | 4 | 3 | 7 | ||||||||||||||||||
Finance leases | 8 | 92 | 100 | 3 | 94 | 97 | ||||||||||||||||||
Unsecured bank loans | — | 774 | 774 | 3 | 206 | 209 | ||||||||||||||||||
Total borrowings | 8 | 869 | 877 | 10 | 303 | 313 | ||||||||||||||||||
Denominated in the following currencies: | ||||||||||||||||||||||||
Pounds sterling | — | 275 | 275 | — | 102 | 102 | ||||||||||||||||||
US dollars | 8 | 425 | 433 | 10 | 145 | 155 | ||||||||||||||||||
Euro | — | 121 | 121 | — | 54 | 54 | ||||||||||||||||||
Other | — | 48 | 48 | — | 2 | 2 | ||||||||||||||||||
8 | 869 | 877 | 10 | 303 | 313 | |||||||||||||||||||
F-56
F-55
At | ||||||||
December 31, | ||||||||
2006 | ||||||||
Minimum | Present | |||||||
lease | value of | |||||||
payments | payments | |||||||
(£ million) | ||||||||
Less than one year | 3 | 3 | ||||||
Between one and five years | 33 | 24 | ||||||
More than five years | 1,745 | 70 | ||||||
1,781 | 97 | |||||||
Less amount representing finance charges | (1,684 | ) | — | |||||
97 | 97 | |||||||
At December 31, 2007 | At December 31, 2006 | |||||||||||||||
Minimum | Present | Minimum | Present | |||||||||||||
lease | value of | lease | value of | |||||||||||||
payments | payments | payments | payments | |||||||||||||
(£ million) | ||||||||||||||||
Less than one year | 8 | 8 | 3 | 3 | ||||||||||||
Between one and five years | 32 | 24 | 33 | 24 | ||||||||||||
More than five years | 1,689 | 68 | 1,745 | 70 | ||||||||||||
1,729 | 100 | 1,781 | 97 | |||||||||||||
Less amount representing finance charges | (1,629 | ) | — | (1,684 | ) | — | ||||||||||
100 | 100 | 97 | 97 | |||||||||||||
At December 31, 2007 | At December 31, 2006 | |||||||||||||||||||||||
Utilized | Unutilized | Total | Utilized | Unutilized | Total | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Committed | 777 | 377 | 1,154 | 213 | 944 | 1,157 | ||||||||||||||||||
Uncommitted | — | 25 | 25 | 3 | 36 | 39 | ||||||||||||||||||
777 | 402 | 1,179 | 216 | 980 | 1,196 | |||||||||||||||||||
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Unutilized facilities expire: | ||||||||
within one year | 75 | 86 | ||||||
after one but before two years | 327 | — | ||||||
after two years | — | 894 | ||||||
402 | 980 | |||||||
Note 21 — |
At December 31, 2006 | At December 31, 2005 | |||||||||||||||||||||||
Utilized | Unutilized | Total | Utilized | Unutilized | Total | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Committed | 213 | 944 | 1,157 | 412 | 751 | 1,163 | ||||||||||||||||||
Uncommitted | 3 | 36 | 39 | — | 14 | 14 | ||||||||||||||||||
216 | 980 | 1,196 | 412 | 765 | 1,177 | |||||||||||||||||||
At December | |||||||||
31, | |||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
Unutilized facilities expire: | |||||||||
within one year | 86 | 39 | |||||||
after one year but before two years | — | — | |||||||
after two years | 894 | 726 | |||||||
980 | 765 | ||||||||
Financial |
F-57
F-56
F-58
F-57
F-59
Note 22 — |
Less than | Between 1 and | Between 2 and | More than | |||||||||||||||||
December 31, 2007 | 1 year | 2 years | 5 years | 5 years | Total | |||||||||||||||
(£ million) | ||||||||||||||||||||
Secured bank loans | 1 | 1 | 4 | — | 6 | |||||||||||||||
Finance lease obligations | 8 | 8 | 24 | 1,689 | 1,729 | |||||||||||||||
Unsecured bank loans | 781 | — | — | — | 781 | |||||||||||||||
Trade and other payables | 388 | 64 | 50 | 55 | 557 | |||||||||||||||
Derivatives | 6 | — | — | — | 6 | |||||||||||||||
Less than | Between 1 and | Between 2 and | More than | |||||||||||||||||
December 31, 2006 | 1 year | 2 years | 5 years | 5 years | Total | |||||||||||||||
(£ million) | ||||||||||||||||||||
Secured bank loans | 4 | 1 | 5 | — | 10 | |||||||||||||||
Finance lease obligations | 3 | 8 | 25 | 1,745 | 1,781 | |||||||||||||||
Unsecured bank loans | 214 | — | — | — | 214 | |||||||||||||||
Trade and other payables | 402 | 47 | 36 | 53 | 538 | |||||||||||||||
Derivatives | 57 | — | — | — | 57 | |||||||||||||||
At | At | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Equity securities available-for-sale | 46 | 57 | ||||||
Loans and receivables: | ||||||||
Cash and cash equivalents | 52 | 179 | ||||||
Other financial assets | 56 | 48 | ||||||
Trade and other receivables excluding prepayments | 209 | 214 | ||||||
Derivatives | — | 4 | ||||||
363 | 502 | |||||||
F-60
Repricing analysis | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Effective | carrying | Less than | 6 months | More than | |||||||||||||||||||||
As at December 31, 2006 | interest rate | amount | 6 months | -1 year | 1-2 years | 5 years | |||||||||||||||||||
(%) | (£ million) | ||||||||||||||||||||||||
Cash and cash equivalents | 0.0-5.2 | (179 | ) | (179 | ) | — | — | — | |||||||||||||||||
Secured bank loans (floating) | 8.5 | 7 | 7 | — | — | — | |||||||||||||||||||
Obligations under finance leases | 9.7 | 97 | — | — | — | 97 | |||||||||||||||||||
Unsecured bank loans: | |||||||||||||||||||||||||
Euro floating rate | 4.0 | 54 | 54 | — | — | — | |||||||||||||||||||
— effect of euro interest rate swaps* | (1.0 | ) | (54 | ) | — | 54 | — | ||||||||||||||||||
US dollar floating rate | 5.7 | 53 | 53 | — | — | — | |||||||||||||||||||
— effect of US dollar interest rate swaps* | (1.2 | ) | (51 | ) | — | 51 | — | ||||||||||||||||||
Sterling floating rate | 5.6 | 102 | 102 | — | — | — | |||||||||||||||||||
Net debt | 134 | (68 | ) | — | 105 | 97 | |||||||||||||||||||
Foreign exchange contracts | (4 | ) | (4 | ) | — | — | — | ||||||||||||||||||
130 | (72 | ) | — | 105 | 97 | ||||||||||||||||||||
Repricing analysis | ||||||||||||||||||||||||
Total | Between | Between | ||||||||||||||||||||||
Effective | carrying | Less than | 6 months | 1 and 2 | More than | |||||||||||||||||||
As at December 31, 2007 | interest rate | amount | 6 months | and 1 year | years | 5 years | ||||||||||||||||||
(%) | (£ million) | |||||||||||||||||||||||
Cash and cash equivalents | 0.0-5.9 | (52 | ) | (52 | ) | — | — | — | ||||||||||||||||
Secured bank loans | 8.2 | 3 | 3 | — | — | — | ||||||||||||||||||
Finance lease obligations* | 9.7 | 100 | — | — | — | 100 | ||||||||||||||||||
Unsecured bank loans: | ||||||||||||||||||||||||
Euro floating rate | 5.3 | 121 | 121 | — | — | — | ||||||||||||||||||
— effect of euro interest rate swaps* | (0.6 | ) | — | (55 | ) | — | 55 | — | ||||||||||||||||
US dollar floating rate | 5.5 | 333 | 333 | — | — | — | ||||||||||||||||||
— effect of US dollar interest rate swaps* | (0.4 | ) | — | (50 | ) | 50 | — | — | ||||||||||||||||
Sterling floating rate | 6.9 | 275 | 275 | — | — | — | ||||||||||||||||||
— effect of sterling interest rate swaps | 0.0 | — | (75 | ) | — | 75 | — | |||||||||||||||||
HK dollar floating rate | 4.5 | 45 | 45 | — | — | — | ||||||||||||||||||
Net debt | 825 | 545 | 50 | 130 | 100 | |||||||||||||||||||
* |
F-58
Repricing analysis | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Effective | carrying | Less than | 6 months | 1–2 | More than | ||||||||||||||||||||
As at December 31, 2005 | interest rate | amount | 6 months | –1 year | years | 5 years | |||||||||||||||||||
% | (£ million) | ||||||||||||||||||||||||
Cash and cash equivalents | 0.0 – 4.5 | (324 | ) | (324 | ) | — | — | — | |||||||||||||||||
Secured bank loans (fixed)* | 6.5 – 7.8 | 28 | — | — | 28 | — | |||||||||||||||||||
Secured bank loans (floating) | 2.9 – 8.5 | 10 | 10 | — | — | — | |||||||||||||||||||
Unsecured bank loans: | |||||||||||||||||||||||||
Euro floating rate | 2.9 | 141 | 141 | — | — | — | |||||||||||||||||||
— effect of euro interest rate swaps* | (0.4 | ) | (55 | ) | — | 55 | — | ||||||||||||||||||
US dollar floating rate | 4.7 | 162 | 162 | — | — | — | |||||||||||||||||||
— effect of US dollar interest rate swaps* | 0.2 | (87 | ) | 87 | — | — | |||||||||||||||||||
Hong Kong dollar floating rate | 4.7 | 71 | 71 | — | — | — | |||||||||||||||||||
Net debt | 88 | (82 | ) | 87 | 83 | — | |||||||||||||||||||
Effect of currency swaps: | |||||||||||||||||||||||||
Receive and pay fixed* | (1.5 | ) | 3 | 3 | — | — | — | ||||||||||||||||||
Receive and pay floating | (2.0 | ) | 2 | 2 | — | — | — | ||||||||||||||||||
93 | (77 | ) | 87 | 83 | — | ||||||||||||||||||||
These items bear interest at a fixed rate. |
Repricing analysis | ||||||||||||||||||||||||
Total | Between | Between | ||||||||||||||||||||||
Effective | carrying | Less than | 6 months | 1 and 2 | More than | |||||||||||||||||||
As at December 31, 2006 | interest rate | amount | 6 months | and 1 year | years | 5 years | ||||||||||||||||||
(%) | (£ million) | |||||||||||||||||||||||
Cash and cash equivalents | 0.0-5.2 | (179 | ) | (179 | ) | — | — | — | ||||||||||||||||
Secured bank loans | 8.5 | 7 | 7 | — | — | — | ||||||||||||||||||
Finance lease obligations* | 9.7 | 97 | — | — | — | 97 | ||||||||||||||||||
Unsecured bank loans: | ||||||||||||||||||||||||
Euro floating rate | 4.0 | 54 | 54 | — | — | — | ||||||||||||||||||
— effect of euro interest rate swaps* | (1.0 | ) | — | (54 | ) | — | 54 | — | ||||||||||||||||
US dollar floating rate | 5.7 | 53 | 53 | — | — | — | ||||||||||||||||||
— effect of US dollar interest rate swaps* | (1.2 | ) | — | (51 | ) | — | 51 | — | ||||||||||||||||
Sterling floating rate | 5.6 | 102 | 102 | — | — | — | ||||||||||||||||||
Net debt | 134 | (68 | ) | — | 105 | 97 | ||||||||||||||||||
Foreign exchange contracts | (4 | ) | (4 | ) | — | — | — | |||||||||||||||||
130 | (72 | ) | — | 105 | 97 | |||||||||||||||||||
* | These items bear interest at a fixed rate. |
F-61
F-59
At December 31, 2006 | At December 31, 2005 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
value | Fair value | value | Fair value | |||||||||||||
(£ million) | ||||||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents (note 18) | 179 | 179 | 324 | 324 | ||||||||||||
Equity securities available-for-sale (note 15) | 57 | 57 | 145 | 145 | ||||||||||||
Derivatives (note 15) | 4 | 4 | 2 | 2 | ||||||||||||
Other financial assets (note 15) | 48 | 48 | 72 | 72 | ||||||||||||
Financial liabilities | ||||||||||||||||
Borrowings, excluding finance lease liabilities (note 20) | (216 | ) | (216 | ) | (412 | ) | (412 | ) | ||||||||
Liabilities under finance leases (note 20) | (97 | ) | (97 | ) | — | — | ||||||||||
Derivatives (note 19) | — | — | (6 | ) | (6 | ) |
At December 31, 2007 | At December 31, 2006 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
value | Fair value | value | Fair value | |||||||||||||
(£ million) | ||||||||||||||||
Financial assets | ||||||||||||||||
Equity securities available-for-sale (Note 15) | 46 | 46 | 57 | 57 | ||||||||||||
Loans and receivables: | ||||||||||||||||
Cash and cash equivalents (Note 18) | 52 | 52 | 179 | 179 | ||||||||||||
Other financial assets (Note 15) | 56 | 56 | 48 | 48 | ||||||||||||
Trade and other receivables, excluding prepayments (Note 17) | 209 | 209 | 214 | 214 | ||||||||||||
Derivatives (Note 15) | — | — | 4 | 4 | ||||||||||||
Financial liabilities | ||||||||||||||||
Borrowings, excluding finance lease obligations (Note 20) | (777 | ) | (777 | ) | (216 | ) | (216 | ) | ||||||||
Finance lease obligations (Note 20) | (100 | ) | (126 | ) | (97 | ) | (97 | ) | ||||||||
Trade and other payables (Note 19) | (527 | ) | (527 | ) | (511 | ) | (511 | ) | ||||||||
Derivatives (Note 19) | (2 | ) | (2 | ) | — | — | ||||||||||
Note 23 — |
At December 31, | At December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Cash and cash equivalents | 52 | 179 | ||||||
Loans and other borrowings — current | (8 | ) | (10 | ) | ||||
Loans and other borrowings — non-current | (869 | ) | (303 | ) | ||||
Net debt | (825 | ) | (134 | ) | ||||
F-62
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Movement in net debt | ||||||||
Net decrease in cash and cash equivalents | (131 | ) | (152 | ) | ||||
Add back cash flows in respect of other components of net debt: | ||||||||
(Increase)/decrease in borrowings | (553 | ) | 172 | |||||
(Increase)/decrease in net debt arising from cash flows | (684 | ) | 20 | |||||
Non-cash movements: | ||||||||
Finance lease liability | (9 | ) | (103 | ) | ||||
Exchange and other adjustments | 2 | 37 | ||||||
Increase in net debt | (691 | ) | (46 | ) | ||||
Net debt at beginning of the year | (134 | ) | (88 | ) | ||||
Net debt at end of the year | (825 | ) | (134 | ) | ||||
Note 24 — | Share-based payments |
F-60
F-63
F-61
Short Term Deferred | Performance Restricted | |||||||
Incentive Plan | Share Plan | |||||||
Number of shares awarded in 2006 | 569,293 | 4,277,550 |
Short Term Deferred | Long Term | |||||||
Incentive Plan | Incentive Plan | |||||||
Number of shares awarded in 2007 | 675,515 | 3,538,535 |
F-64
Short Term Deferred | Performance Restricted | |||||||
2006 | Incentive Plan(iii) | Share Plan | ||||||
Valuation model | Binomial | Monte Carlo | ||||||
Simulation and | ||||||||
Binomial | ||||||||
Weighted average share price | 831.0p | 946.0p | ||||||
Expected dividend yield | 2.32% | |||||||
Risk-free interest rate | 4.9% | |||||||
Volatility(i) | 20% | |||||||
Term (years)(ii) | 2.0 | 3.0 |
Short Term Deferred | Performance Restricted | Executive Share | ||||||||||
2005 | Incentive Plan(iii) | Share Plan | Option Plan | |||||||||
Valuation model | Binomial | Monte Carlo | Binomial | |||||||||
Simulation and | ||||||||||||
Binomial | ||||||||||||
Weighted average share price | 652.8p | 702.0p | 627.0p | |||||||||
Exercise price | 620.0p | |||||||||||
Expected dividend yield | 2.73% | 3.18% | 3.62% | |||||||||
Risk-free interest rate | 4.10% | 4.69% | ||||||||||
Volatility(i) | 23% | 28% | ||||||||||
Term (years)(ii) | 2.0 | 3.0 | 6.5 |
Short Term Deferred | Performance Restricted | Executive Share | ||||||||||
2004 | Incentive Plan(iii) | Share Plan | Option Plan | |||||||||
Valuation model | Binomial | Monte Carlo | Binomial | |||||||||
Simulation and | ||||||||||||
Binomial | ||||||||||||
Weighted average share price | 498.0p | 550.0p | 494.0p | |||||||||
Exercise price | 494.0p | |||||||||||
Expected dividend yield | 3.74% | 3.49% | 3.81% | |||||||||
Risk-free interest rate | 4.73% | |||||||||||
Volatility(i) | 31.33% | |||||||||||
Term (years)(ii) | 2.8 | 3.0 | 6.5 |
Short Term Deferred | Long Term | |||||||
2007 | Incentive Plan | Incentive Plan | ||||||
Valuation model | Binomial | Monte Carlo | ||||||
Simulation and | ||||||||
Binomial | ||||||||
Weighted average share price (pence) | 1252.0 | 1262.0 | ||||||
Expected dividend yield | 2.13 | % | 2.13 | % | ||||
Risk-free interest rate | 5.40 | % | ||||||
Volatility(i) | 19 | % | ||||||
Term (years) | 3.0 | 3.0 |
Short Term Deferred | Long Term | |||||||
2006 | Incentive Plan | Incentive Plan | ||||||
Valuation model | Binomial | Monte Carlo | ||||||
Simulation and | ||||||||
Binomial | ||||||||
Weighted average share price (pence) | 831.0 | 946.0 | ||||||
Expected dividend yield | 2.32 | % | ||||||
Risk-free interest rate | 4.90 | % | ||||||
Volatility(i) | 20 | % | ||||||
Term (years) | 2.0 | 3.0 |
Short Term Deferred | Long Term | Executive Share | ||||||||||
2005 | Incentive Plan | Incentive Plan | Option Plan | |||||||||
Valuation model | Binomial | Monte Carlo | Binomial | |||||||||
Simulation and | ||||||||||||
Binomial | ||||||||||||
Weighted average share price (pence) | 652.8 | 702.0 | 627.0 | |||||||||
Exercise price (pence) | 620.0 | |||||||||||
Expected dividend yield | 2.73 | % | 3.18 | % | 3.62 | % | ||||||
Risk-free interest rate | 4.10 | % | 4.69 | % | ||||||||
Volatility(i) | 23 | % | 28 | % | ||||||||
Term (years) | 2.0 | 3.0 | 6.5 |
(i) | The expected volatility was determined by calculating the historical volatility of the Company’s share price corresponding to the expected life of the option or share award. | |
F-65
F-62
Short Term Deferred | Performance Restricted | |||||||
Incentive Plan | Share Plan | |||||||
Number of shares | Number of shares | |||||||
(thousands) | ||||||||
Outstanding at January 1, 2004 | 107 | 5,445 | ||||||
Granted | 231 | 2,665 | ||||||
Vested | (47 | ) | — | |||||
Lapsed or canceled | (50 | ) | (375 | ) | ||||
Outstanding at December 31, 2004 | 241 | 7,735 | ||||||
Granted | 625 | 5,174 | ||||||
Vested | (32 | ) | (1,278 | ) | ||||
Lapsed or canceled | (5 | ) | (997 | ) | ||||
Outstanding at December 31, 2005 | 829 | 10,634 | ||||||
Granted | 569 | 4,277 | ||||||
Vested | (328 | ) | (1,395 | ) | ||||
Lapsed or canceled | (69 | ) | (2,191 | ) | ||||
Outstanding at December 31, 2006 | 1,001 | 11,325 | ||||||
Fair value of awards granted during the period | ||||||||
At December 31, 2006 | 894.5 | p | 287.0 | p | ||||
At December 31, 2005 | 649.1 | p | 117.0 | p | ||||
At December 31, 2004 | 448.3 | p | 125.1 | p | ||||
Weighted average remaining contract life (years) | ||||||||
At December 31, 2006 | 1.0 | 1.3 | ||||||
At December 31, 2005 | 1.1 | 1.2 | ||||||
At December 31, 2004 | 1.7 | 1.0 |
Short Term Deferred | Long Term | |||||||
Incentive Plan | Incentive Plan | |||||||
Number of shares | Number of shares | |||||||
(thousands) | ||||||||
Outstanding at January 1, 2005 | 241 | 7,735 | ||||||
Granted | 625 | 5,174 | ||||||
Vested | (32 | ) | (1,278 | ) | ||||
Lapsed or canceled | (5 | ) | (997 | ) | ||||
Outstanding at December 31, 2005 | 829 | 10,634 | ||||||
Granted | 607 | 4,277 | ||||||
Vested | (328 | ) | (1,395 | ) | ||||
Share capital consolidation | (50 | ) | — | |||||
Lapsed or canceled | (57 | ) | (2,191 | ) | ||||
Outstanding at December 31, 2006 | 1,001 | 11,325 | ||||||
Granted | 675 | 3,539 | ||||||
Vested | (418 | ) | (1,694 | ) | ||||
Share capital consolidation | (68 | ) | — | |||||
Lapsed or canceled | (86 | ) | (1,707 | ) | ||||
Outstanding at December 31, 2007 | 1,104 | 11,463 | ||||||
Fair value of awards granted during the year (pence) | ||||||||
At December 31, 2007 | 1190.6 | 453.8 | ||||||
At December 31, 2006 | 894.5 | 287.0 | ||||||
At December 31, 2005 | 649.1 | 117.0 | ||||||
Weighted average remaining contract life (years) | ||||||||
At December 31, 2007 | 1.5 | 1.1 | ||||||
At December 31, 2006 | 1.0 | 1.3 | ||||||
At December 31, 2005 | 1.1 | 1.2 |
F-66
F-63
Sharesave Plan | Executive Share Option Plan | |||||||||||||||||||||||||||||||
Weighted | Aggregate | Weighted | Aggregate | |||||||||||||||||||||||||||||
Number of | Range of | average | intrinsic | Number of | Range of | average | intrinsic | |||||||||||||||||||||||||
shares | option prices | option price | value | shares | option prices | option price | value | |||||||||||||||||||||||||
thousands | pence | pence | £ million | thousands | pence | pence | £ million | |||||||||||||||||||||||||
Options outstanding at January 1, 2004 | 1,373 | 420.5 | 420.5 | 27,220 | 295.3-593.3 | 424.9 | ||||||||||||||||||||||||||
Granted | — | — | — | 6,951 | 494.2 | 494.2 | ||||||||||||||||||||||||||
Exercised | — | — | — | (7,430 | ) | 295.3-593.3 | 408.2 | |||||||||||||||||||||||||
Lapsed or canceled | (111 | ) | 420.5 | 420.5 | — | — | — | |||||||||||||||||||||||||
Options outstanding at December 31, 2004 | 1,262 | 420.5 | 420.5 | 0.3 | 26,741 | 308.5-593.3 | 447.6 | 5.3 | ||||||||||||||||||||||||
Granted | — | — | — | 2,105 | 619.8 | 619.8 | ||||||||||||||||||||||||||
Exercised | (118 | ) | 420.5 | 420.5 | (4,138 | ) | 308.5-593.3 | 429.1 | ||||||||||||||||||||||||
Lapsed or canceled | (280 | ) | 420.5 | 420.5 | (2,089 | ) | 345.6-619.8 | 465.3 | ||||||||||||||||||||||||
Options outstanding at December 31, 2005 | 864 | 420.5 | 420.5 | 0.4 | 22,619 | 308.5-619.8 | 465.4 | 8.5 | ||||||||||||||||||||||||
Exercised | (389 | ) | 420.5 | 420.5 | (8,365 | ) | 308.5-619.8 | 438.7 | ||||||||||||||||||||||||
Lapsed or canceled | (310 | ) | 420.5 | 420.5 | (175 | ) | 345.6-619.8 | 404.6 | ||||||||||||||||||||||||
Options outstanding at December 31, 2006 | 165 | 420.5 | 420.5 | 0.1 | 14,079 | 308.5-619.8 | 482.2 | 11.0 | ||||||||||||||||||||||||
Options exercisable | ||||||||||||||||||||||||||||||||
At December 31, 2006 | — | — | — | — | 6,002 | 308.5-619.8 | 430.2 | 5.0 | ||||||||||||||||||||||||
At December 31, 2005 | — | — | — | — | 8,710 | 308.5-619.8 | 434.3 | 3.5 | ||||||||||||||||||||||||
At December 31, 2004 | — | — | — | — | 12,569 | 308.5-593.3 | 426.4 | 1.7 | ||||||||||||||||||||||||
Fair value of options granted during the period | ||||||||||||||||||||||||||||||||
At December 31, 2005 | — | 164.0 | p | |||||||||||||||||||||||||||||
At December 31, 2004 | — | 136.0 | p |
Sharesave Plan | Executive Share Option Plan | |||||||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||||||
Number of | Range of | average | Number of | Range of | average | |||||||||||||||||||
shares | option prices | option price | shares | option prices | option price | |||||||||||||||||||
(thousands) | (pence) | (pence) | (thousands) | (pence) | (pence) | |||||||||||||||||||
Options outstanding at January 1, 2005 | 1,262 | 420.5 | 420.5 | 26,741 | 308.5-593.3 | 447.6 | ||||||||||||||||||
Granted | — | — | — | 2,105 | 619.8 | 619.8 | ||||||||||||||||||
Exercised | (118 | ) | 420.5 | 420.5 | (4,138 | ) | 308.5-593.3 | 429.1 | ||||||||||||||||
Lapsed or canceled | (280 | ) | 420.5 | 420.5 | (2,089 | ) | 345.6-619.8 | 465.3 | ||||||||||||||||
Options outstanding at December 31, 2005 | 864 | 420.5 | 420.5 | 22,619 | 308.5-619.8 | 465.4 | ||||||||||||||||||
Exercised | (389 | ) | 420.5 | 420.5 | (8,365 | ) | 308.5-619.8 | 438.7 | ||||||||||||||||
Lapsed or canceled | (310 | ) | 420.5 | 420.5 | (175 | ) | 345.6-619.8 | 404.6 | ||||||||||||||||
Options outstanding at December 31, 2006 | 165 | 420.5 | 420.5 | 14,079 | 308.5-619.8 | 482.2 | ||||||||||||||||||
Exercised | (101 | ) | 420.5 | 420.5 | (5,568 | ) | 308.5-619.8 | 471.9 | ||||||||||||||||
Lapsed or canceled | (7 | ) | 420.5 | 420.5 | (317 | ) | 438.0-619.8 | 526.8 | ||||||||||||||||
Options outstanding at December 31, 2007 | 57 | 420.5 | 420.5 | 8,194 | 308.5-619.8 | 487.4 | ||||||||||||||||||
Options exercisable | ||||||||||||||||||||||||
At December 31, 2007 | — | — | — | 6,583 | 308.5-619.8 | 455.0 | ||||||||||||||||||
At December 31, 2006 | — | — | — | 6,002 | 308.5-619.8 | 430.2 | ||||||||||||||||||
At December 31, 2005 | — | — | — | 8,710 | 308.5-619.8 | 434.3 |
Sharesave Plan | Executive Share Option Plan | |||||||||||||||
Outstanding | Exercisable | Outstanding | Exercisable | |||||||||||||
At December 31, 2006 | 0.8 | — | 6.4 | 5.1 | ||||||||||||
At December 31, 2005 | 1.9 | — | 6.9 | 5.2 | ||||||||||||
At December 31, 2004 | 2.8 | — | 7.3 | 4.6 |
F-64
Options outstanding | Options exercisable | ||||||||||||||||||||
Weighted | |||||||||||||||||||||
average | Weighted | Weighted | |||||||||||||||||||
Number | remaining | average | Number | average | |||||||||||||||||
outstanding | contract life | option price | exercisable | option price | |||||||||||||||||
thousands | years | pence | thousands | pence | |||||||||||||||||
Range of exercise prices (pence) | |||||||||||||||||||||
Sharesave Plan | |||||||||||||||||||||
420.5 | 165 | 0.8 | 420.5 | — | — | ||||||||||||||||
Executive Share Option Plan | |||||||||||||||||||||
308.5 to 353.8 | 735 | 3.5 | 343.3 | 734 | 343.3 | ||||||||||||||||
353.9 to 498.0 | 11,396 | 6.5 | 468.1 | 5,033 | 436.2 | ||||||||||||||||
498.1 to 619.8 | 1,948 | 7.5 | 616.8 | 235 | 595.0 | ||||||||||||||||
14,079 | 6.4 | 482.2 | 6,002 | 430.2 | |||||||||||||||||
For the year ended | |||||||||
December 31, | |||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
Intrinsic value of options exercised in the year | |||||||||
Short term deferred incentive plan | 5.6 | 0.2 | |||||||
Performance restricted share plan | 7.2 | 4.8 | |||||||
Sharesave plan | 1.9 | 0.3 | |||||||
Executive share option plan | 17.8 | 8.0 | |||||||
32.5 | 13.3 | ||||||||
Fair value of shares vested during the year | |||||||||
Short term deferred incentive plan | 1.7 | 0.2 | |||||||
Performance restricted share plan | 6.2 | — | |||||||
Sharesave plan | — | — | |||||||
Executive share option plan | 9.3 | — | |||||||
17.2 | 0.2 | ||||||||
Options outstanding | ||||||||||||||||||||
Weighted | Options exercisable | |||||||||||||||||||
average | Weighted | Weighted | ||||||||||||||||||
Number | remaining | average | Number | average | ||||||||||||||||
outstanding | contract life | option price | exercisable | option price | ||||||||||||||||
(thousands) | (years) | (pence) | (thousands) | (pence) | ||||||||||||||||
Range of exercise prices (pence) | ||||||||||||||||||||
Sharesave Plan | ||||||||||||||||||||
420.5 | 57 | 1.0 | 420.5 | — | — | |||||||||||||||
Executive Share Option Plan | ||||||||||||||||||||
308.5 to 349.1 | 565 | 2.3 | 347.7 | 565 | 347.7 | |||||||||||||||
349.2 to 498.0 | 5,905 | 5.3 | 462.6 | 5,905 | 462.6 | |||||||||||||||
498.1 to 619.8 | 1,724 | 6.8 | 618.1 | 113 | 593.7 | |||||||||||||||
8,194 | 5.4 | 487.4 | 6,583 | 455.0 | ||||||||||||||||
F-67
F-65
Hotels | Onerous | ||||||||||||
reorganization(a) | contracts(b) | Total | |||||||||||
(£ million) | |||||||||||||
At January 1, 2005 | |||||||||||||
Current | 4 | 1 | 5 | ||||||||||
Non-current | 4 | 2 | 6 | ||||||||||
8 | 3 | 11 | |||||||||||
Income statement | — | (1 | ) | (1 | ) | ||||||||
Expenditure | (4 | ) | — | (4 | ) | ||||||||
At December 31, 2005 — all current | 4 | 2 | 6 | ||||||||||
Income statement | (2 | ) | — | (2 | ) | ||||||||
Expenditure | (2 | ) | (2 | ) | (4 | ) | |||||||
At December 31, 2006 | — | — | — | ||||||||||
Note 25 — | Deferred tax payable |
Other | ||||||||||||||||||||||||||||
Property, | Deferred | short-term | ||||||||||||||||||||||||||
plant and | gains on | Employee | Intangible | temporary | ||||||||||||||||||||||||
equipment | loan notes | Losses | benefits | assets | differences* | Total | ||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||
At January 1, 2005 | 492 | 122 | (113 | ) | (39 | ) | (30 | ) | (50 | ) | 382 | |||||||||||||||||
Disposals | (150 | ) | — | — | 34 | — | 3 | (113 | ) | |||||||||||||||||||
Income statement | (87 | ) | — | (11 | ) | (5 | ) | 32 | 56 | (15 | ) | |||||||||||||||||
Statement of recognized income and expense | — | — | — | (5 | ) | — | (2 | ) | (7 | ) | ||||||||||||||||||
Exchange and other adjustments | 1 | — | 1 | (1 | ) | (3 | ) | (1 | ) | (3 | ) | |||||||||||||||||
At December 31, 2005 | 256 | 122 | (123 | ) | (16 | ) | (1 | ) | 6 | 244 | ||||||||||||||||||
Disposals | (126 | ) | — | 2 | — | — | 7 | (117 | ) | |||||||||||||||||||
Income statement | (2 | ) | (26 | ) | 31 | (1 | ) | 16 | (32 | ) | (14 | ) | ||||||||||||||||
Statement of recognized income and expense | — | — | — | 1 | — | (27 | ) | (26 | ) | |||||||||||||||||||
Acquisition of subsidiary (Note 31) | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||
Exchange and other adjustments | (9 | ) | (4 | ) | 1 | 2 | 1 | 2 | (7 | ) | ||||||||||||||||||
At December 31, 2006 | 119 | 92 | (89 | ) | (14 | ) | 17 | (44 | ) | 81 | ||||||||||||||||||
Income statement | 1 | (4 | ) | (2 | ) | 3 | 3 | (30 | ) | (29 | ) | |||||||||||||||||
Statement of recognized income and expense | — | — | — | 3 | — | 27 | 30 | |||||||||||||||||||||
Exchange and other adjustments | 3 | (1 | ) | (3 | ) | — | 1 | 3 | 3 | |||||||||||||||||||
At December 31, 2007 | 123 | 87 | (94 | ) | (8 | ) | 21 | (44 | ) | 85 | ||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Property, | Deferred | short-term | ||||||||||||||||||||||||||
plant and | gains on | Employee | Intangible | temporary | ||||||||||||||||||||||||
equipment | loan notes | Losses | benefits | assets | differences* | Total | ||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||
At January 1, 2004 | 519 | 123 | (37 | ) | (42 | ) | (37 | ) | (49 | ) | 477 | |||||||||||||||||
Disposals | (5 | ) | — | — | — | — | — | (5 | ) | |||||||||||||||||||
Income statement | (17 | ) | — | (77 | ) | 17 | 5 | (5 | ) | (77 | ) | |||||||||||||||||
Statement of recognized income and expense | — | — | — | (14 | ) | — | — | (14 | ) | |||||||||||||||||||
Exchange and other adjustments | (5 | ) | (1 | ) | 1 | — | 2 | 4 | 1 | |||||||||||||||||||
At December 31, 2004 | 492 | 122 | (113 | ) | (39 | ) | (30 | ) | (50 | ) | 382 | |||||||||||||||||
Disposals | (150 | ) | — | — | 34 | — | 3 | (113 | ) | |||||||||||||||||||
Income statement | (87 | ) | — | (11 | ) | (5 | ) | 32 | 56 | (15 | ) | |||||||||||||||||
Statement of recognized income and expense | — | — | — | (5 | ) | — | (2 | ) | (7 | ) | ||||||||||||||||||
Exchange and other adjustments | 1 | — | 1 | (1 | ) | (3 | ) | (1 | ) | (3 | ) | |||||||||||||||||
At December 31, 2005 | 256 | 122 | (123 | ) | (16 | ) | (1 | ) | 6 | 244 | ||||||||||||||||||
Disposals | (126 | ) | — | 2 | — | — | 7 | (117 | ) | |||||||||||||||||||
Income statement | (2 | ) | (26 | ) | 31 | (1 | ) | 16 | (32 | ) | (14 | ) | ||||||||||||||||
Statement of recognized income and expense | — | — | — | 1 | — | (27 | ) | (26 | ) | |||||||||||||||||||
Acquisition of subsidiary (note 31) | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||
Exchange and other adjustments | (9 | ) | (4 | ) | 1 | 2 | 1 | 2 | (7 | ) | ||||||||||||||||||
At December 31, 2006 | 119 | 92 | (89 | ) | (14 | ) | 17 | (44 | ) | 81 | ||||||||||||||||||
Othershort-term temporary differences relate primarily to provisions and accruals andshare-based payments. |
F-66
At December 31, | |||||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Analyzed as: | |||||||||||||
Deferred tax payable | 79 | 210 | 234 | ||||||||||
Liabilities classified as held for sale | 2 | 34 | 148 | ||||||||||
At December 31 | 81 | 244 | 382 | ||||||||||
At December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Analyzed as: | ||||||||||||
Deferred tax payable | 82 | 79 | 210 | |||||||||
Liabilities classified as held for sale | 3 | 2 | 34 | |||||||||
At December 31 | 85 | 81 | 244 | |||||||||
F-68
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
At January, 1 | 20 | 117 | 139 | |||||||||
Total recognized income and expense in the year | — | 15 | 17 | |||||||||
Dividends paid to minority interests | (1 | ) | (177 | ) | (26 | ) | ||||||
Disposal of hotels (Note 11) | (13 | ) | — | (11 | ) | |||||||
Disposal of Soft Drinks business (Note 11) | — | 66 | — | |||||||||
Acquisition of subsidiary (Note 31) | 3 | — | — | |||||||||
Exchange and other adjustments | (1 | ) | (1 | ) | (2 | ) | ||||||
At December, 31 | 8 | 20 | 117 | |||||||||
Note 26 — | Minority equity interest |
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
At January, 1 | 8 | 20 | 117 | |||||||||
Total recognized income and expense in the year | — | — | 15 | |||||||||
Dividends paid to minority interests | — | (1 | ) | (177 | ) | |||||||
Disposal of hotels (Note 11) | (6 | ) | (13 | ) | — | |||||||
Disposal of Soft Drinks business (Note 11) | — | — | 66 | |||||||||
Acquisition of subsidiary (Note 31) | — | 3 | — | |||||||||
Exchange and other adjustments | 1 | (1 | ) | (1 | ) | |||||||
At December, 31 | 3 | 8 | 20 | |||||||||
Note 27 — | Operating leases |
F-67
At December 31, | At December 31, | At December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Due within one year | 27 | 36 | 55 | |||||||||
One to two years | 21 | 31 | 51 | |||||||||
Two to three years | 19 | 25 | 47 | |||||||||
Three to four years | 14 | 19 | 38 | |||||||||
Four to five years | 9 | 14 | 31 | |||||||||
More than five years | 100 | 149 | 884 | |||||||||
190 | 274 | 1,106 | ||||||||||
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Due within one year | 28 | 27 | ||||||
One to two years | 19 | 21 | ||||||
Two to three years | 16 | 19 | ||||||
Three to four years | 14 | 14 | ||||||
Four to five years | 11 | 9 | ||||||
More than five years | 108 | 100 | ||||||
196 | 190 | |||||||
F-69
At December 31, | At December 31, | At December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Contracts placed for expenditure on property, plant and equipment not provided for in the financial statements | 24 | 76 | 53 | |||||||||
Note 28 — | Capital and other commitments |
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Contracts placed for expenditure on property, plant and equipment not provided for in the financial statements | 10 | 24 | ||||||
At December 31, | At December 31, | At December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Guarantees | 11 | 20 | 9 | |||||||||
Note 29 — | Contingencies |
At December 31, | ||||||||
2007 | 2006 | |||||||
(£ million) | ||||||||
Contingent liabilities not provided for in the financial statements relating to guarantees | 5 | 11 | ||||||
F-68
Note 30 — | Related party disclosures |
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Total compensation of key management personnel | ||||||||||||
Short-term employment benefits | 9.5 | 6.5 | 5.5 | |||||||||
Post-employment benefits | 0.5 | 0.2 | 0.2 | |||||||||
Termination benefits | — | 0.8 | 0.8 | |||||||||
Equity compensation benefits | 7.9 | 6.9 | 4.1 | |||||||||
17.9 | 14.4 | 10.6 | ||||||||||
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(£ million) | ||||||||||||
Total compensation of key management personnel | ||||||||||||
Short-term employment benefits | 9.4 | 9.5 | 6.5 | |||||||||
Post-employment benefits | 0.5 | 0.5 | 0.2 | |||||||||
Termination benefits | — | — | 0.8 | |||||||||
Equity compensation benefits | 9.1 | 7.9 | 6.9 | |||||||||
19.0 | 17.9 | 14.4 | ||||||||||
F-70
Note 31 — | Acquisition of subsidiary |
Carrying | ||||||||
values | Fair | |||||||
pre-acquisition | value | |||||||
(£ million) | ||||||||
Intangible assets | 1 | 8 | ||||||
Current assets (excluding cash and cash equivalents) | 4 | 4 | ||||||
Cash and cash equivalents | 4 | 4 | ||||||
Trade and other payables | (3 | ) | (3 | ) | ||||
Current tax payable | (1 | ) | (1 | ) | ||||
Deferred tax payable | — | (1 | ) | |||||
5 | 11 | |||||||
Minority interest | (3 | ) | ||||||
Net assets acquired | 8 | |||||||
Goodwill on acquisition | 2 | |||||||
Consideration, satisfied in cash (including costs of £2 million) | 10 | |||||||
Cash and cash equivalents acquired | (4 | ) | ||||||
Net cash outflow | 6 | |||||||
Carrying | ||||||||
values | Fair | |||||||
pre-acquisition | value | |||||||
(£ million) | ||||||||
Intangible assets | 1 | 8 | ||||||
Current assets (excluding cash and cash equivalents) | 4 | 4 | ||||||
Cash and cash equivalents | 4 | 4 | ||||||
Trade and other payables | (3 | ) | (3 | ) | ||||
Current tax payable | (1 | ) | (1 | ) | ||||
Deferred tax payable | — | (1 | ) | |||||
5 | 11 | |||||||
Minority interest | (3 | ) | ||||||
Net assets acquired | 8 | |||||||
Goodwill on acquisition | 2 | |||||||
Consideration, satisfied in cash (including costs of £2 million) | 10 | |||||||
Cash and cash equivalents acquired | (4 | ) | ||||||
Net cash outflow | 6 | |||||||
F-71
F-69
F-70
F-71
F-72
F-73
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(£ million) | ||||||||||||||
Profit available for IHG equity holders in accordance with IFRS | 405 | 496 | 383 | |||||||||||
Adjustments: | ||||||||||||||
Amortization of intangible assets | 1 | (1 | ) | (3 | ) | |||||||||
Impairment of property, plant and equipment | 3 | (17 | ) | 30 | ||||||||||
Disposal of property, plant and equipment | 35 | (107 | ) | 5 | ||||||||||
Depreciation of property, plant and equipment | (20 | ) | (31 | ) | (20 | ) | ||||||||
Deferred revenue | 14 | 15 | 5 | |||||||||||
Gain on held for sale equity investment | 27 | — | (28 | ) | ||||||||||
Pension costs | (6 | ) | (20 | ) | (9 | ) | ||||||||
Staff costs | (30 | ) | (1 | ) | 2 | |||||||||
Change in fair value of derivatives(i) | (2 | ) | 6 | 52 | ||||||||||
Provisions | (2 | ) | (3 | ) | (5 | ) | ||||||||
Impairment of investment in associates | (2 | ) | — | — | ||||||||||
Current and deferred tax: | ||||||||||||||
on above adjustments | 13 | 16 | 4 | |||||||||||
methodology | 69 | (2 | ) | (79 | ) | |||||||||
100 | (145 | ) | (46 | ) | ||||||||||
Minority share of above adjustments | — | 4 | 3 | |||||||||||
100 | (141 | ) | (43 | ) | ||||||||||
Net income in accordance with US GAAP before cumulative effect of change in accounting principle | 505 | 355 | 340 | |||||||||||
Cumulative effect of change in accounting principle, net of tax | (19 | ) | — | — | ||||||||||
Net income in accordance with US GAAP | 486 | 355 | 340 | |||||||||||
F-74
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million, except per ADS amounts) | |||||||||||||
Net sales | 1,362 | 1,521 | 1,606 | ||||||||||
Operating and administrative expenses | (1,124 | ) | (1,323 | ) | (1,374 | ) | |||||||
Financial income and financial expenses | (11 | ) | (24 | ) | (33 | ) | |||||||
Income before income tax expense and minority interest | 227 | 174 | 199 | ||||||||||
Income tax credit/(expense) | 111 | (56 | ) | 79 | |||||||||
Gain/(loss) on disposal of assets, net of tax(iv) | 167 | (14 | ) | 3 | |||||||||
Minority interest | — | — | (24 | ) | |||||||||
Income from continuing operations before cumulative effect of change in accounting principle | 505 | 104 | 257 | ||||||||||
Cumulative effect of change in accounting principle, net of tax(v) | (19 | ) | — | — | |||||||||
Discontinued operations: | |||||||||||||
Result for period, net of tax(vi) | — | 41 | 62 | ||||||||||
Surplus on disposal, net of tax(vii) | — | 210 | 21 | ||||||||||
Net income | 486 | 355 | 340 | ||||||||||
Per ordinary share and American Depositary Share | |||||||||||||
Basic(ii) | |||||||||||||
Continuing operations | 129.8 | p | 20.0 | p | 36.2 | p | |||||||
Cumulative effect of change in accounting principle | (4.9 | )p | — | — | |||||||||
Discontinued operations | — | 48.2 | p | 11.7 | p | ||||||||
Net income | 124.9 | p | 68.2 | p | 47.9 | p | |||||||
Diluted(iii) | |||||||||||||
Continuing operations | 127.2 | p | 19.5 | p | 35.7 | p | |||||||
Cumulative effect of change in accounting principle | (4.8 | )p | — | — | |||||||||
Discontinued operations | — | 47.1 | p | 11.5 | p | ||||||||
Net income | 122.4 | p | 66.6 | p | 47.2 | p | |||||||
F-75
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Net income in accordance with US GAAP | 486 | 355 | 340 | |||||||||
Other comprehensive income: | ||||||||||||
Transfer to Britvic of minimum pension liability on December 14, 2005, net of tax of £21 million | — | 49 | — | |||||||||
Minimum pension liability, net of tax charge of £1 million (2005 £20 million credit, 2004 £1 million charge) | 6 | (48 | ) | 8 | ||||||||
Change in valuation of marketable securities, net of tax credit of £7 million (2005 £6 million charge, 2004 £3 million charge) | (32 | ) | 9 | 29 | ||||||||
Change in fair value of derivatives, net of tax credit of £nil (2005 £2 million credit, 2004 £nil) | 3 | (4 | ) | (2 | ) | |||||||
Currency translation differences | (157 | ) | (132 | ) | 83 | |||||||
(180 | ) | (126 | ) | 118 | ||||||||
Comprehensive income in accordance with US GAAP | 306 | 229 | 458 | |||||||||
Defined benefit | ||||||||||||||||||||||||
pension plans | ||||||||||||||||||||||||
Change in | Derivative | |||||||||||||||||||||||
Minimum | valuation of | financial | Currency | |||||||||||||||||||||
pension | FAS 158 | marketable | instruments | translation | ||||||||||||||||||||
liability | adoption | securities | gains/(losses) | differences | Total | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
At January 1, 2004 | (72 | ) | — | 2 | 4 | 10 | (56 | ) | ||||||||||||||||
Movement in the year | 8 | — | 29 | (2 | ) | 83 | 118 | |||||||||||||||||
At December 31, 2004 | (64 | ) | — | 31 | 2 | 93 | 62 | |||||||||||||||||
Movement in the year | 1 | — | 9 | (4 | ) | (149 | ) | (143 | ) | |||||||||||||||
At December 31, 2005 | (63 | ) | — | 40 | (2 | ) | (56 | ) | (81 | ) | ||||||||||||||
Movement in the year | 6 | — | (32 | ) | 3 | (164 | ) | (187 | ) | |||||||||||||||
Adjustment to initially apply FAS 158, net of tax | 57 | (79 | ) | — | — | 5 | (17 | ) | ||||||||||||||||
At December 31, 2006 | — | (79 | ) | 8 | 1 | (215 | ) | (285 | ) | |||||||||||||||
F-76
At | At | ||||||||||
December 31, | December 31, | ||||||||||
2006 | 2005 | ||||||||||
(£ million) | |||||||||||
IHG shareholders’ equity in accordance with IFRS | 678 | 1,084 | |||||||||
Adjustments: | |||||||||||
Intangible assets: | |||||||||||
Cost: goodwill | 703 | 761 | |||||||||
other intangible assets | 502 | 655 | |||||||||
Accumulated amortization | (244 | ) | (260 | ) | |||||||
961 | 1,156 | ||||||||||
Intangible asset — minimum pension liability | — | 1 | |||||||||
961 | 1,157 | ||||||||||
Property, plant and equipment: | |||||||||||
Cost | 354 | 327 | |||||||||
Assets classified as held for sale | — | 21 | |||||||||
Accumulated depreciation | (23 | ) | (19 | ) | |||||||
331 | 329 | ||||||||||
Investment in associates | 9 | — | |||||||||
Other financial assets | (28 | ) | (14 | ) | |||||||
Non-current assets classified as held for sale | (7 | ) | (21 | ) | |||||||
Current assets: | |||||||||||
Other receivables | 44 | 31 | |||||||||
Current liabilities: | |||||||||||
Deferred income on property transactions | (13 | ) | (15 | ) | |||||||
Other payables | 16 | 8 | |||||||||
Non-current liabilities: | |||||||||||
Deferred income on property transactions | (260 | ) | (309 | ) | |||||||
Other payables | (98 | ) | (41 | ) | |||||||
Provisions | — | 4 | |||||||||
Accrued pension liability | — | 15 | |||||||||
Deferred tax payable: | |||||||||||
on above adjustments | (133 | ) | (204 | ) | |||||||
methodology | (4 | ) | (10 | ) | |||||||
Liabilities held for sale | — | 1 | |||||||||
818 | 931 | ||||||||||
Minority share of above adjustments | 2 | — | |||||||||
820 | 931 | ||||||||||
IHG shareholders’ equity in accordance with US GAAP | 1,498 | 2,015 | |||||||||
F-77
Year ended | Year ended | Year ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||||
(£ million, except per ADS amounts) | ||||||||||||||
Numerator: | ||||||||||||||
For basic and diluted earnings per ordinary share and ADS | ||||||||||||||
Before cumulative effect of change in accounting principle | 505 | 104 | 257 | |||||||||||
Cumulative effect of change in accounting principle, net of tax | (19 | ) | — | — | ||||||||||
After cumulative effect of change in accounting principle | 486 | 104 | 257 | |||||||||||
Denominator: | ||||||||||||||
Denominator for basic earnings per ordinary share and ADS | 389 | 521 | 710 | |||||||||||
Effect of dilutive securities: | ||||||||||||||
Employee options and restricted stock awards | 8 | 12 | 10 | |||||||||||
Denominator for diluted earnings per ordinary share and ADS | 397 | 533 | 720 | |||||||||||
Basic earnings per ordinary share and ADS from continuing operations: | ||||||||||||||
Before cumulative effect of change in accounting principle | 129.8p | 20.0p | 36.2p | |||||||||||
Cumulative effect of change in accounting principle | (4.9 | )p | — | — | ||||||||||
After cumulative effect of change in accounting principle | 124.9p | 20.0p | 36.2p | |||||||||||
Diluted earnings per ordinary share and ADS from continuing operations: | ||||||||||||||
Before cumulative effect of change in accounting principle | 127.2p | 19.5p | 35.7p | |||||||||||
Cumulative effect of change in accounting principle | (4.8 | )p | — | — | ||||||||||
After cumulative effect in change in accounting principle | 122.4p | 19.5p | 35.7p | |||||||||||
F-78
Year ended | Year ended | Year ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2006 | 2005 | 2004 | |||||||||||
(£ million) | |||||||||||||
Cash inflow from operating activities | 230 | 302 | 444 | ||||||||||
Cash inflow/(outflow) on investing activities | 620 | 1,863 | (151 | ) | |||||||||
Cash outflow from financing activities | (1,002 | ) | (1,906 | ) | (631 | ) | |||||||
(Decrease)/increase in cash and cash equivalents | (152 | ) | 259 | (338 | ) | ||||||||
Effect of foreign exchange rate changes | 7 | (7 | ) | (1 | ) | ||||||||
Cash and cash equivalents | |||||||||||||
At start of the fiscal year | 324 | 72 | 411 | ||||||||||
At end of the fiscal year | 179 | 324 | 72 | ||||||||||
UK pension benefits | US pension benefits | US postretirement benefits | ||||||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
(£ million) | ||||||||||||||||||||||||||||||||||||
Service cost | 5 | 20 | 17 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Interest cost | 13 | 30 | 26 | 5 | 5 | 5 | 1 | 1 | 1 | |||||||||||||||||||||||||||
Expected return on plan assets | (14 | ) | (33 | ) | (25 | ) | (4 | ) | (4 | ) | (4 | ) | — | — | — | |||||||||||||||||||||
Net amortization and deferral | 4 | 5 | 7 | 2 | — | — | — | — | — | |||||||||||||||||||||||||||
Recognized net actuarial gain | — | — | — | — | 2 | 2 | — | — | — | |||||||||||||||||||||||||||
Net periodic pension cost | 8 | 22 | 25 | 3 | 3 | 3 | 1 | 1 | 1 | |||||||||||||||||||||||||||
UK pension benefits | US pension benefits | US postretirement benefits | ||||||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 6.10% | 5.80% | 6.90% | 8.00% | 8.00% | 8.00% | — | — | — | |||||||||||||||||||||||||||
Discount rate | 5.00% | 4.70% | 5.30% | 5.80% | 5.50% | 5.75% | 5.80% | 5.50% | 5.75% | |||||||||||||||||||||||||||
Expected long-term rate of earnings increases | 4.60% | 4.30% | 4.30% | 3.50% | 3.50% | 3.50% | 4.00% | 4.00% | 4.00% |
F-79
2006 | 2005 | 2004 | ||||||||||
Health care cost trend rate assumed for next year | 10.0 | % | 9.0 | % | 9.5 | % | ||||||
Rate that the cost trend rate gradually declines to | 5.0 | % | 4.5 | % | 4.5 | % | ||||||
Year that rate reaches the assumed ultimate rate | 2017 | 2015 | 2014 |
UK pensions benefits | US pensions benefits | US postretirement benefits | |||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||
Change in benefit obligation | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
(£ million) | |||||||||||||||||||||||||
Benefit obligation at beginning of year | 275 | 600 | 102 | 89 | 12 | 11 | |||||||||||||||||||
Service cost | 5 | 20 | — | — | — | — | |||||||||||||||||||
Members contributions | 1 | 2 | — | — | — | — | |||||||||||||||||||
Interest expense | 13 | 30 | 5 | 5 | 1 | 1 | |||||||||||||||||||
Benefits paid | (7 | ) | (11 | ) | (6 | ) | (6 | ) | (1 | ) | (1 | ) | |||||||||||||
Curtailments | — | (7 | ) | — | — | — | — | ||||||||||||||||||
Actuarial loss arising in the year | 12 | 67 | — | 3 | (1 | ) | — | ||||||||||||||||||
Separation of Britvic | — | (426 | ) | — | — | — | — | ||||||||||||||||||
Exchange and other | (1 | ) | — | (12 | ) | 11 | (1 | ) | 1 | ||||||||||||||||
Benefit obligation at end of year | 298 | 275 | 89 | 102 | 10 | 12 | |||||||||||||||||||
Accumulated benefit obligation (all vested) | 284 | 264 | 88 | 100 | — | — | |||||||||||||||||||
UK pensions benefits | US pensions benefits | US postretirement benefits | |||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||
Changes in plan assets | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
(£ million) | |||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 251 | 472 | 61 | 55 | — | — | |||||||||||||||||||
Contributions payable | 4 | 46 | 2 | 2 | 1 | 1 | |||||||||||||||||||
Members contributions | 1 | 2 | — | — | — | — | |||||||||||||||||||
Benefits paid | (7 | ) | (11 | ) | (6 | ) | (6 | ) | (1 | ) | (1 | ) | |||||||||||||
Actual return on assets | 21 | 77 | 6 | 3 | — | — | |||||||||||||||||||
Separation of Britvic | — | (335 | ) | — | — | — | — | ||||||||||||||||||
Exchange | (1 | ) | — | (7 | ) | 7 | — | — | |||||||||||||||||
Fair value of plan assets at end of year | 269 | 251 | 56 | 61 | — | — | |||||||||||||||||||
F-80
UK pensions benefits | US pensions benefits | US postretirement benefits | ||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
Net amounts recognized | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Fair value of plan assets | 269 | 251 | 56 | 61 | — | — | ||||||||||||||||||
Projected benefit obligation | (298 | ) | (275 | ) | (89 | ) | (102 | ) | (10 | ) | (12 | ) | ||||||||||||
Funded status | (29 | ) | (24 | ) | (33 | ) | (41 | ) | (10 | ) | (12 | ) | ||||||||||||
Unrecognized prior service cost | 1 | — | — | |||||||||||||||||||||
Unrecognized net actuarial loss | 76 | 27 | 3 | |||||||||||||||||||||
Net amount recognized | 53 | (14 | ) | (9 | ) | |||||||||||||||||||
Amounts recognized in the balance sheet consist of: | ||||||||||||||||||||||||
Accrued pension cost | (29 | ) | (13 | ) | (33 | ) | (39 | ) | (10 | ) | (9 | ) | ||||||||||||
Intangible asset | 1 | — | — | |||||||||||||||||||||
Other Comprehensive Income (before tax) | 65 | 25 | — | |||||||||||||||||||||
Net amount recognized | 53 | (14 | ) | (9 | ) | |||||||||||||||||||
Amounts recognized in Accumulated Other Comprehensive Income consist of: | ||||||||||||||||||||||||
Net actuarial loss | (77 | ) | (20 | ) | (2 | ) | ||||||||||||||||||
Deferred tax | 20 | — | — | |||||||||||||||||||||
(57 | ) | (20 | ) | (2 | ) | |||||||||||||||||||
December 31, 2006 | ||||||||||||
Before | After | |||||||||||
FAS 158 | FAS 158 | FAS 158 | ||||||||||
adjustments | adjustments | adjustments | ||||||||||
(£ million) | ||||||||||||
Deferred tax liability | (217 | ) | 1 | (218 | ) | |||||||
Accrued pension liability | (54 | ) | (18 | ) | (72 | ) | ||||||
Accumulated Other Comprehensive Income, net of tax | (62 | ) | (17 | ) | (79 | ) | ||||||
Total shareholders’ equity | 1,515 | (17 | ) | 1,498 |
UK | US | US | ||||||||||
pensions | pensions | postretirement | ||||||||||
benefits | benefits | benefits | ||||||||||
(£ million) | ||||||||||||
2007 | 4.0 | 5.5 | 0.5 | |||||||||
2008 | 4.1 | 5.6 | 0.5 | |||||||||
2009 | 4.2 | 5.7 | 0.5 | |||||||||
2010 | 4.3 | 5.8 | 0.6 | |||||||||
2011 | 4.4 | 5.9 | 0.6 | |||||||||
2012-2016 | 23.5 | 31.6 | 3.3 |
F-81
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Assets to be disposed of | — | — | — | |||||||||
Assets to be held and used | — | 24 | 18 | |||||||||
Total | — | 24 | 18 | |||||||||
Disclosed as: | ||||||||||||
Impairment charges recognized under IFRS: | ||||||||||||
(Credit)/charge for the year under IFRS | (3 | ) | 7 | 48 | ||||||||
Adjustment to impairment recognized under US GAAP | 3 | 17 | (30 | ) | ||||||||
— | 24 | 18 | ||||||||||
Charged against: | ||||||||||||
Intangible assets — goodwill | — | — | — | |||||||||
Property, plant and equipment | — | 24 | 18 | |||||||||
— | 24 | 18 | ||||||||||
F-82
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||
Accumulated | Net book | Accumulated | Net book | |||||||||||||||||||||
Cost | amortization | value | Cost | amortization | value | |||||||||||||||||||
(£ million) | ||||||||||||||||||||||||
Management & franchise contracts | 88 | (38 | ) | 50 | 96 | (42 | ) | 54 | ||||||||||||||||
December 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
Goodwill by reporting unit: | |||||||||
Americas managed | 111 | 130 | |||||||
Americas franchised | 600 | 645 | |||||||
EMEA managed | 36 | 38 | |||||||
Asia Pacific | 65 | 66 | |||||||
Goodwill | 812 | 879 | |||||||
Trademarks | 362 | 462 | |||||||
Total | 1,174 | 1,341 | |||||||
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(£ million) | ||||||||||||
Current taxes | (25 | ) | 59 | (60 | ) | |||||||
Deferred taxes | (101 | ) | — | 7 | ||||||||
Total | (126 | ) | 59 | (53 | ) | |||||||
F-83
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
(%) | ||||||||||||
UK corporate tax standard rate | 30.0 | 30.0 | 30.0 | |||||||||
Permanent differences | 2.2 | 11.1 | 3.8 | |||||||||
Net effect of different rates of tax in overseas business | 3.7 | 10.2 | 6.7 | |||||||||
Adjustment to tax charge in respect of prior periods | (0.7 | ) | (16.6 | ) | (20.4 | ) | ||||||
Benefit of tax losses not previously recognized | (3.1 | ) | (0.2 | ) | (1.0 | ) | ||||||
Adjustments to valuation allowance | (22.0 | ) | 0.4 | (1.7 | ) | |||||||
Other | (0.5 | ) | (1.4 | ) | (0.2 | ) | ||||||
Impact of disposals, provision releases and one-off items | (44.9 | ) | 3.0 | (35.5 | ) | |||||||
Effective tax rate on continuing operations | (35.3 | ) | 36.5 | (18.3 | ) | |||||||
F-84
December 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
(£ million) | |||||||||
Deferred tax liabilities: | |||||||||
Excess of book value over taxation value of property, plant and equipment | 138 | 242 | |||||||
Taxation effect of deferred gains | 92 | 122 | |||||||
Intangible assets | 127 | 163 | |||||||
Investments in associates, joint ventures and partnerships | 29 | 41 | |||||||
Other temporary differences | 105 | 96 | |||||||
491 | 664 | ||||||||
Deferred tax assets: | |||||||||
Taxation effect of losses carried forward | (167 | ) | (123 | ) | |||||
Taxation effect of employee benefits | (14 | ) | (14 | ) | |||||
Taxation effect of share based payments | (25 | ) | (1 | ) | |||||
Other temporary differences | (67 | ) | (69 | ) | |||||
(273 | ) | (207 | ) | ||||||
218 | 457 | ||||||||
Of which: | |||||||||
Current | (58 | ) | (40 | ) | |||||
Non-current | 276 | 497 | |||||||
218 | 457 | ||||||||
F-85
Employee | Facilities | Other | IHG | |||||||||||||
costs | costs | costs | total | |||||||||||||
(£ million) | ||||||||||||||||
Balance at January 1, 2004 | 7 | 7 | 4 | 18 | ||||||||||||
Expenditure | (7 | ) | (3 | ) | (4 | ) | (14 | ) | ||||||||
Balance at December 31, 2004 | — | 4 | — | 4 | ||||||||||||
Expenditure | — | (1 | ) | — | (1 | ) | ||||||||||
Balance at December 31, 2005 | — | 3 | — | 3 | ||||||||||||
Expenditure | — | (3 | ) | — | (3 | ) | ||||||||||
Balance at December 31, 2006 | — | — | — | — | ||||||||||||
F-86
F-87
Additions | ||||||||||||||||||||
Balance at | charged to | Balance at | ||||||||||||||||||
beginning | costs and | Exchange | end of | |||||||||||||||||
of period | expenses | differences | Deductions | period | ||||||||||||||||
Year ended December 31, 2006 | ||||||||||||||||||||
Provisions for bad and doubtful debts | 47 | 16 | (5 | ) | (15 | ) | 43 | |||||||||||||
Year ended December 31, 2005 | ||||||||||||||||||||
Provisions for bad and doubtful debts | 43 | 14 | 4 | (14 | ) | 47 | ||||||||||||||
Year ended December 31, 2004 | ||||||||||||||||||||
Provisions for bad and doubtful debts | 45 | 20 | (3 | ) | (19 | ) | 43 |
Additions | ||||||||||||||||||||
Balance at | charged to | Balance at | ||||||||||||||||||
beginning | costs and | Exchange | end of | |||||||||||||||||
of period | expenses | differences | Deductions | period | ||||||||||||||||
Year ended December 31, 2007 Provisions for bad and doubtful debts | 43 | 12 | (1 | ) | (6 | ) | 48 | |||||||||||||
Year ended December 31, 2006 Provisions for bad and doubtful debts | 47 | 16 | (5 | ) | (15 | ) | 43 | |||||||||||||
Year ended December 31, 2005 Provisions for bad and doubtful debts | 43 | 14 | 4 | (14 | ) | 47 | ||||||||||||||
Year ended December 31, 2004 Provisions for bad and doubtful debts | 45 | 20 | (3 | ) | (19 | ) | 43 |
S-1
S-1
By: | /s/ Richard Solomons |
Title: | ||