InterContinental Hotels Group PLC
Full Year Results to 31 December 2009
Financial results
|
2009
|
2008
|
% change
|
% change CER
|
|
|
|
Total
|
Excluding LDs1
|
Total
|
Excluding LDs1
|
Revenue 2
|
$1,538m
|
$1,897m
|
(19)%
|
(18)%
|
(17)%
|
(16)%
|
Operating profit 2
|
$363m
|
$549m
|
(34)%
|
(30)%
|
(36)%
|
(32)%
|
Total adjusted EPS 2
|
102.8 ¢
|
120.9 ¢
|
(15)%
|
|
|
|
Total basic EPS 3
|
74.7 ¢
|
91.3 ¢
|
(18)%
|
|
|
|
Total dividend per share
|
41.4¢
|
41.4¢
|
-
|
|
|
|
Net debt
|
$1,082m
|
$1,273m
|
|
|
|
|
All figures are before exceptional items unless
otherwise noted. See appendices 2 and 3
for
analysis of financial headlines.
Constant exchange rate comparatives shown in appendix 4. (% CER)
= change at constant exchange rates.
1 – excluding
$3m of significant liquidated damages (LDs) receipts in 2009 and $33m in 2008.
2 – hotels previously
accounted for as discontinued operations have been re-presented as
continuing
operations and the relevant comparatives restated.
3 – total basic EPS after exceptional items.
4 – Total gross revenue is defined as total room
revenue from franchised hotels and total hotel revenue from managed,
owned and
leased hotels. It is not revenue attributable to IHG, as it is derived
mainly
from hotels owned by third parties. The metric is highlighted as an
indicator
of the scale and reach of IHG’s brands.
Business headlines
|
·
|
Global constant currency RevPAR decline of 14.7%, with a
fourth quarter decline of 10.9%.
|
·
|
26,828 net rooms (252 hotels) added taking system size to
646,679 rooms (4,438 hotels), up 4% year on year.
|
·
|
55,345 rooms (439 hotels) added to the system, 28,517
rooms (187 hotels) removed.
|
·
|
52,891 rooms (345 hotels) signed, taking the pipeline to
210,363 rooms (1,438 hotels).
|
·
|
Total gross revenue4 from all hotels in IHG’s system $16.8bn
(2008 $19.1bn)
|
·
|
EPS benefited from effective tax rate of 5% (2008: 23%)
due to the release of certain prior year tax contingencies, primarily
as a result of the final resolution of various tax audits
|
·
|
Final dividend maintained at 29.2¢, equivalent to 18.7p. Total
dividend of 41.4¢, flat on 2008.
|
·
|
Exceptional operating charges of $373m include: (i) $197m
of non-cash asset impairments; and (ii) $91m charge related to a
management contract in the US.
|
Recent trading
|
·
|
January global constant currency RevPAR decline of 3.8%;
-7.2% Americas, -3.1% EMEA and +11.1% Asia Pacific, in part favourably
impacted by the movement of Chinese New Year into February.
|
Update on priorities
|
·
|
Focus on efficiency. 2009 regional and central costs $95m (31%) below 2008
levels, including around $50m of sustainable savings.
Additional sustainable savings of around $25m
delivered in managed and franchised cost of sales driving strong
underlying margin performance. In 2010
these c.$75m of sustainable savings will be maintained in both regional
and central costs and cost of sales.
|
·
|
Support hotel performance. IHG’s brands outperformed the market by 4.3 percentage
points in fastest growing APAC region and Americas’ RevPAR
outperformed by 0.5 percentage points. System
delivery continued to improve with 68% of rooms revenue booked through
IHG’s channels or by Priority Club Rewards members direct to hotel
(2008: 64%). 24% of rooms revenue booked
through the internet (2008: 20%). Priority Club Rewards members now
total over 48m (2008: 42m).
|
·
|
Build quality distribution. 1,832 hotels are operating under the new Holiday Inn
standards, 54% of the total estate. 75,000
rooms under construction of which over 50% are expected to open this
year. 2010 room removals are still expected to be in the region of
40,000.
|
Commenting on the results, Andrew Cosslett, Chief
Executive of InterContinental Hotels Group
PLC said:
|
“2009 was a very challenging year for the industry. The fourth quarter did show some improvement
in trends and occupancy has now stabilised. Rate however remains under pressure and we
expect trading to stay tough until business travellers return in
greater numbers.
“Through the year we took decisive action to reduce costs
and improve efficiencies. Our margin
performance, as a result, was good and our cash control enabled us to reduce our net debt from
$1.3bn to $1.1bn.
“Our focus on strengthening
the quality of our system did not waver. We
opened a record 439 hotels in the year and signed 345 hotels
into our pipeline, a good result given the challenging financing
environment. We removed 187 hotels in the
year and now have over 50% of the Holiday Inn estate operating under
relaunched standards. We expect to
complete this $1 billion programme on schedule and we are
seeing better performance from
relaunched hotels.
“Our business model has proved its resilience through
this downturn and, with our global scale, powerful system and
attractive brands, we expect to take full advantage of the upturn when
it comes.”
|
Americas
|
Revenue performance
RevPAR declined 14.9% in 2009, with a fourth quarter
decline of 12.5%. Revenues declined 20% to
$772m. Excluding one $13m liquidated
damages receipt in 2008, revenues declined 19%.
Operating profit performance
Operating profit declined 38% from $465m to $288m, or 36%
excluding the $13m liquidated damages receipt in 2008. Owned
and leased hotels’ operating profit fell from $55m to $11m, driven by
an overall RevPAR decline of 24.5% and a particularly challenging
trading environment in New York. In the
managed business, excluding the $13m liquidated damages receipt in
2008, operating profit declined $78m to a loss of $40m. This
was driven by a RevPAR decline of 17.8% which resulted in IHG funding
shortfalls in guaranteed owners’ priority returns on a number of hotels
managed for one owner. At year end an
exceptional charge of $91m was recognised comprising the write off of a
cash deposit related to these hotels and a provision for the total
estimated net cash outflows to this owner under the guarantee. Therefore future payments to this owner will
be charged against the provision and will not impact operating results.
Franchised hotels’ operating
profit fell 15% to $364m driven by a royalty fee decline of 10% and a
46% reduction in initial franchising, relicensing and termination fees.
|
EMEA
|
Revenue performance
RevPAR declined 14.8% in 2009, with a fourth quarter
decline of 10.4%. The UK
performed best with a full year RevPAR decline of 9.8% and a 5.8%
fourth quarter decline. Revenues declined
23% to $397m (17% at CER). Excluding one
liquidated damages receipt of $3m in 2009 and two totalling $16m in
2008, revenues declined 22% (15% CER).
Operating profit performance
Operating profit declined 26% (23% CER) from $171m to
$127m or 20% (17% at CER) excluding the net impact of the liquidated
damages receipts. Owned and leased hotels’
operating profit was down $12m to $33m. InterContinental
Park Lane, London delivered a strong relative performance with RevPAR
down just 1.7% during the year. Managed
hotels’ operating profit declined by $30m to $65m, or by $21m,
excluding the impact of the liquidated damages receipt in 2008. This was driven primarily by challenging trading
across the Continental European estate where RevPAR fell 19.6%. Excluding the net $4m liquidated damages
receipt, franchised hotels’ operating profit declined $11m to $57m (9%
at CER) driven by a RevPAR decline of 14.9%, partially offset by a 6%
increase in room count.
|
Asia Pacific
|
Revenue performance
RevPAR declined 13.5%, with a
fourth quarter decline of 4.6%. IHG’s
brands outperformed the market in Greater China by 8.9 percentage
points with a RevPAR decline of 16.9% and occupancy growth of 0.2%. Excluding one $4m liquidated damages receipt
in 2008, revenues declined 14% (15% CER) to $245m.
Operating profit performance
Excluding the liquidated damages receipt received in
2008, operating profit declined 19% from $64m to $52m. Operating
profit at owned and leased hotels fell $13m to $30m primarily
reflecting a RevPAR decline of 22.2% at InterContinental Hong Kong. Managed hotels’ operating profit declined $11m
to $44m (16% at CER) driven by a 12.5% RevPAR decline. Excluding the
$4m liquidated damages receipt in 2008, franchised hotels’ operating
profit increased $1m to $5m.
|
Interest, tax and exceptional items
|
The interest charge for the period fell $47m to $54m due
to a reduction in interest rates and lower average net debt.
The effective tax rate for 2009 is 5% (2008: 23%) due to the release of certain prior year tax contingencies,
primarily as a result of the final resolution of various tax audits. The underlying tax rate before the impact of
prior year items is 42% (2008: 39%). The
reported tax rate may continue to vary year-on-year but is expected to
increase in the medium term.
The $373m exceptional operating charge includes (i) $197m
of non-cash asset impairments; (ii) $91m charge related to a management
contract in the US;
(iii) $43m reorganisation and severance costs; (iv) $21m enhanced
pensions transfer; and (v) $19m in respect of the Holiday Inn relaunch.
|
Cash flow & net debt
|
Growth capital expenditure of $91m included a $65m
payment on completion of the Hotel Indigo San Diego. Maintenance
capital expenditure of $57m was 42% below 2008 levels.
IHG’s balance sheet has been strengthened with net debt
reduced to $1.1bn (including the $204m finance lease on the
InterContinental Boston). IHG has extended
its maturities and diversified its debt profile issuing a seven year
£250m bond in the fourth quarter and refinancing $415m of the
$500m term loan expiring in November 2010. In
addition, IHG has a $1.6bn revolving credit facility expiring May 2013.
|
RevPAR Sensitivity
|
IHG now estimates that a 1% change in global RevPAR
impacts Group EBIT by $13m, split as follows: $4m owned & leased;
$4m managed (of which $1m relates to the Americas managed business);
and $5m franchised.
|
Appendix 1: Rooms
|
Americas
|
EMEA
|
Asia Pacific
|
Total
|
Openings
|
40,584
|
6,427
|
8,334
|
55,345
|
Removals
|
(21,720)
|
(2,838)
|
(3,959)
|
(28,517)
|
Net openings
|
18,864
|
3,589
|
4,375
|
26,828
|
Signings
|
29,353
|
8,442
|
15,096
|
52,891
|
Appendix 2: Full
year financial headlines
Twelve
months to 31 December $m
|
Total
|
Americas
|
EMEA
|
Asia Pacific
|
Central
|
|
2009
|
2008*
|
2009
|
2008*
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
Franchised
operating profit
|
429
|
509
|
364
|
426
|
60
|
75
|
5
|
8
|
-
|
-
|
Managed
operating profit
|
69
|
201
|
(40)
|
51
|
65
|
95
|
44
|
55
|
-
|
-
|
Owned
and leased operating profit
|
74
|
143
|
11
|
55
|
33
|
45
|
30
|
43
|
-
|
-
|
Regional
overheads
|
(105)
|
(149)
|
(47)
|
(67)
|
(31)
|
(44)
|
(27)
|
(38)
|
-
|
-
|
Operating
profit pre central overheads
|
467
|
704
|
288
|
465
|
127
|
171
|
52
|
68
|
-
|
-
|
Central
overheads
|
(104)
|
(155)
|
-
|
-
|
-
|
-
|
-
|
-
|
(104)
|
(155)
|
Operating
profit
|
363
|
549
|
288
|
465
|
127
|
171
|
52
|
68
|
(104)
|
(155)
|
* 2008 comparatives restated for
those owned hotels previously accounted for as
discontinued operations, now re-presented as continuing operations.
Appendix 3: Fourth
quarter financial headlines
Three
months to 31 December $m
|
Total
|
Americas
|
EMEA
|
Asia Pacific
|
Central
|
|
2009
|
2008*
|
2009
|
2008*
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
Franchised
operating profit
|
98
|
107
|
83
|
91
|
14
|
15
|
1
|
1
|
-
|
-
|
Managed
operating profit
|
7
|
33
|
(19)
|
1
|
17
|
20
|
9
|
12
|
-
|
-
|
Owned
and leased operating profit
|
29
|
44
|
4
|
16
|
11
|
12
|
14
|
16
|
-
|
-
|
Regional
overheads
|
(26)
|
(40)
|
(11)
|
(21)
|
(9)
|
(11)
|
(6)
|
(8)
|
-
|
-
|
Operating
profit pre central overheads
|
108
|
144
|
57
|
87
|
33
|
36
|
18
|
21
|
-
|
-
|
Central
overheads**
|
(48)
|
(39)
|
-
|
-
|
-
|
-
|
-
|
-
|
(48)
|
(39)
|
Operating
profit
|
60
|
105
|
57
|
87
|
33
|
36
|
18
|
21
|
(48)
|
(39)
|
*2008 comparatives restated for
those owned hotels previously accounted for as discontinued
operations, now re-presented as continuing operations.
**Fourth quarter 2009 central
costs impacted by c.$10m provision related to certain incentive plans.
Appendix 4: Constant
currency operating profit movement before exceptional items.
|
Americas
|
EMEA
|
Asia Pacific
|
Total***
|
|
Actual currency*
|
Constant currency**
|
Actual currency*
|
Constant currency**
|
Actual currency*
|
Constant
Currency**
|
Actual currency*
|
Constant currency**
|
(Decline)/ growth
|
(38)%
|
(38)%
|
(26)%
|
(23)%
|
(24)%
|
(24)%
|
(34)%
|
(36)%
|
Exchange rates
|
GBP:USD
|
EUR: USD
|
|
* US dollar actual
currency;
|
2009
|
0.64
|
0.72
|
|
** Translated at constant 2008 exchange rates;
|
2008
|
0.55
|
0.68
|
|
*** After Central Overheads
|
Appendix 5: Investor information for
2009 final dividend
Ex-dividend Date: 24 March
2010
|
Record Date: 26 March 2010
|
Payment Date: 4 June 2010
|
Dividend payment: Ordinary
shares 18.7p per share: ADRs 29.2¢ per ADR
|
For further information, please contact:
Investor Relations (Alex Shorland-Ball; Catherine
Dolton):
|
+44 (0) 1895 512 176
|
|
Media Affairs (Leslie McGibbon; Emma Corcoran):
|
+44 (0) 1895 512 425
|
+44 (0) 7808 094 471
|
|
|
|
High resolution images to accompany this announcement are
available for
the media to download free of charge from www.vismedia.co.uk . This
includes
profile shots of the key executives.
Presentation
for Analysts and Shareholders
A
presentation with Andrew Cosslett
(Chief Executive) and Richard Solomons (Chief Financial Officer and
Head of
Commercial Development) will commence at 9.30am (London
time) on 16 February at JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. There
will be an opportunity to ask
questions. The presentation will
conclude at approximately 10.30am (London
time).
There
will be a live audio webcast of the results presentation on the web
address www.ihg.com/prelims10. The archived webcast of the presentation is
expected to be on this website later on the day of the results and will
remain
on it for the foreseeable future. There
will also be a live dial-in facility
International
dial-in
|
0203
0379090
|
US Q&A conference call
There
will also be a conference call,
primarily for US investors and analysts, at 9.00am (Eastern Standard
Time) on 16
February with Andrew Cosslett (Chief Executive) and Richard Solomons
(Chief
Financial Officer and Head of Commercial Development).
There will be an opportunity to ask
questions.
International
dial-in
|
+44
(0)207 108 6370
|
|
|
US
Dial-in
|
517 345
9004
|
US Toll
Free
|
866 692
5726
|
Conference
ID:
|
HOTEL
|
|
|
A
recording of the conference call will
also be available for 7 days. To access
this please dial the relevant number below and use the access number
6370.
International
dial-in
|
+44
(0)20 7970 8458
|
US Toll
Free
|
877 814
5617
|
Website
The
full release and supplementary data will be available on our website
from 7.00
am (London
time) on 16 February. The web address is www.ihg.com/prelims10.
To watch a video of Andrew
Cosslett reviewing our results visit our YouTube channel at www.youtube.com/ihgplc
Notes to
Editors:
InterContinental
Hotels Group (IHG) [LON:IHG, NYSE:IHG (ADRs)] is the world's largest
hotel
group by number of rooms. IHG owns,
manages, leases or franchises, through various subsidiaries, over 4,400
hotels
and more than 645,000 guest rooms in over 100 countries and territories
around
the world. The Group owns a portfolio of
well recognised and respected hotel brands including InterContinental®
Hotels & Resorts, Hotel Indigo®, Crowne Plaza®
Hotels
& Resorts, Holiday Inn® Hotels and Resorts, Holiday
Inn Express®,
Staybridge Suites® and Candlewood Suites®,
and also
manages the
world's largest hotel loyalty programme, Priority Club® Rewards
with
48 million members worldwide.
IHG has nearly 1,400
hotels in its development pipeline, which will create 160,000 jobs
worldwide
over the next few years.
InterContinental
Hotels
Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales.
IHG
offers information and online reservations for all
its hotel brands at www.ihg.com and
information for the Priority Club Rewards programme at www.priorityclub.com. For the
latest
news from IHG, visit our online Press Office at www.ihg.com/media.
Cautionary
note regarding forward-looking statements
This
announcement contains certain forward-looking statements as defined
under US
law
(Section 21E of the Securities Exchange Act of 1934).
These forward-looking statements can be
identified by the fact that they do not relate to historical or current
facts. Forward-looking statements often
use words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’,
‘intend’,
‘plan’, ‘goal’, ‘believe’ or other words of similar meaning. By their nature, forward-looking statements
are inherently predictive, speculative and involve risk and uncertainty. There are a number of factors that could
cause actual results and developments to differ materially from those
expressed
in or implied by, such forward-looking statements.
Factors that could affect the business and
the financial results are described in ‘Risk Factors’ in the
InterContinental
Hotels Group PLC Annual report on Form 20-F filed with the United
States
Securities and Exchange Commission.
This business review (BR)
provides a
commentary on the performance of InterContinental Hotels Group PLC (the
Group
or IHG) for the financial year ended 31 December 2009.
Group Performance
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
Group
results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
|
|
|
|
Americas
|
772
|
963
|
(19.8)
|
|
EMEA
|
397
|
518
|
(23.4)
|
|
Asia Pacific
|
245
|
290
|
(15.5)
|
|
Central
|
124
|
126
|
(1.6)
|
|
|
____
|
____
|
_____
|
|
1,538
|
1,897
|
(18.9)
|
|
____
|
____
|
_____
|
Operating
profit
|
|
|
|
|
Americas
|
288
|
465
|
(38.1)
|
|
EMEA
|
127
|
171
|
(25.7)
|
|
Asia Pacific
|
52
|
68
|
(23.5)
|
|
Central
|
(104)
|
(155)
|
32.9
|
|
|
____
|
____
|
_____
|
|
363
|
549
|
(33.9)
|
|
|
|
|
Exceptional
operating items
|
(373)
|
(132)
|
(182.6)
|
|
___
|
____
|
____
|
|
(10)
|
417
|
(102.4)
|
|
|
|
|
Net financial
expenses
|
(54)
|
(101)
|
46.5
|
|
___
|
____
|
____
|
(Loss)/profit
before tax
|
(64)
|
316
|
(120.3)
|
|
___
|
____
|
____
|
Earnings
per ordinary share
|
|
|
|
|
Basic
|
74.7¢
|
91.3¢
|
(18.2)
|
|
Adjusted
|
102.8¢
|
120.9¢
|
(15.0)
|
Group
results
Revenue decreased by
18.9% to $1,538m and operating
profit before exceptional items decreased by 33.9% to $363m during the
12
months ended 31 December 2009. Included
in these results are $3m of significant liquidated damages received by
IHG in
2009 in respect of the settlement of a franchise contract in the EMEA
region.
During 2008, significant liquidated damages totalling $33m were
received across
the Group. Excluding these, revenue and operating profit before
exceptional
items decreased by 17.7% and 30.2% respectively.
The results reflect the
challenging global
economic environment faced by the Group throughout 2009.
Group RevPAR fell 14.7% during the year, with
declines in both occupancy and rate.
However, stabilising occupancy levels in the fourth
quarter indicated a
slight rebound in trading conditions which resulted in a RevPAR decline
of
10.9% compared to the fourth quarter in 2008.
Furthermore, IHG continued to achieve organic growth
during the year,
increasing its net room count by 4.3% or 26,828 rooms.
The Group also made significant progress in
the roll-out of the Holiday Inn brand family relaunch with 1,697 hotels
converted globally as at 31 December 2009.
In the year, the Group
took a number of
actions to improve efficiency and reduce costs which led to a reduction
in
regional and central overheads of $95m, from $304m in 2008 to $209m in
2009,
including a $23m favourable movement in foreign exchange.
As a result of the
declining real estate
market, the InterContinental Atlanta and Staybridge Suites Denver
Cherry Creek
no longer meet the criteria for designation as held for sale assets. Consequently, these hotels are no longer
categorised as discontinued operations and comparative figures have
been re-presented
accordingly.
The average US dollar
exchange rate strengthened
against sterling during 2009 (2009 $1=£0.64, 2008
$1=£0.55). Translated at
constant currency, applying 2008 exchange rates, revenue decreased by
17.0% and
operating profit decreased by 35.9%.
The results include an
exceptional
operating charge of $373m, which included a $91m charge comprising the
write
off of a cash deposit related to certain management contracts with one US
hotel owner and the total estimated net cash outflows to this owner
under the
guarantee, and $197m non-cash impairment charges.
Profit before tax was a
loss of $64m for
the year, compared to a profit of $316m in 2008. Basic
earnings per ordinary share decreased
by 18.2% to 74.7¢ and adjusted earnings per ordinary share
decreased by 15.0%
to 102.8¢.
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
Total
gross revenue
|
$bn
|
$bn
|
change
|
|
|
|
|
InterContinental
|
3.8
|
4.1
|
(7.3)
|
Crowne Plaza
|
3.0
|
3.2
|
(6.3)
|
Holiday Inn
|
5.4
|
6.8
|
(20.6)
|
Holiday Inn Express
|
3.6
|
3.9
|
(7.7)
|
Staybridge Suites
|
0.4
|
0.4
|
-
|
Candlewood Suites
|
0.3
|
0.3
|
-
|
Other brands
|
0.3
|
0.4
|
(25.0)
|
|
____
|
____
|
____
|
Total
|
16.8
|
19.1
|
(12.0)
|
|
____
|
____
|
____
|
Total
gross revenue
One measure of overall
IHG hotel system
performance is the growth in total gross revenue, defined as total room
revenue
from franchised hotels and total hotel revenue from managed, owned and
leased
hotels. Total gross revenue is not revenue attributable to IHG, as it
is
derived mainly from hotels owned by third parties.
Total gross revenue
decreased by 12.0% from
$19.1bn in 2008 to $16.8bn in 2009.
Translated at constant currency, total gross revenue
decreased by 9.9%.
|
Hotels
|
Rooms
|
Global hotel and room count
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
166
|
7
|
56,121
|
1,385
|
|
Crowne Plaza
|
366
|
24
|
100,994
|
7,612
|
|
Holiday Inn
|
1,319
|
(34)
|
240,568
|
(9,123)
|
|
Holiday Inn Express
|
2,069
|
137
|
188,007
|
14,213
|
|
Staybridge Suites
|
182
|
30
|
19,885
|
3,241
|
|
Candlewood Suites
|
254
|
50
|
25,283
|
4,642
|
|
Hotel Indigo
|
33
|
11
|
4,030
|
1,328
|
|
Holiday Inn Club Vacations
|
6
|
5
|
2,892
|
480
|
|
Other
|
43
|
22
|
8,899
|
3,050
|
|
|
____
|
____
|
______
|
_____
|
Total
|
4,438
|
252
|
646,679
|
26,828
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
3,799
|
214
|
483,541
|
17,574
|
|
Managed
|
622
|
37
|
157,287
|
9,047
|
|
Owned and leased
|
17
|
1
|
5,851
|
207
|
|
|
____
|
____
|
______
|
_____
|
Total
|
4,438
|
252
|
646,679
|
26,828
|
|
|
____
|
____
|
______
|
_____
|
Global
hotel and room count
During 2009, the IHG
global system (the
number of hotels and rooms which are franchised, managed, owned or
leased by
the Group) increased by 252 hotels (26,828 rooms; 4.3%) to 4,438 hotels
(646,679 rooms). Openings of 439 hotels (55,345 rooms) were focused, in
particular, on continued expansion in the US
and China.
System growth was driven
by brands in the
midscale limited service and extended stay segment. Holiday Inn Express
represented over 50% of total net growth (137 hotels, 14,213 rooms)
whilst
Staybridge Suites and Candlewood Suites combined represented
approximately 30%
(80 hotels, 7,883 rooms). IHG’s
lifestyle brand, Hotel Indigo, achieved net growth of approximately
50%, with
11 hotels (1,328 rooms) added during the year.
Significant progress has
been achieved on
the Holiday Inn brand family relaunch with 1,697 hotels open under the
updated
signage and brand standards as at 31 December 2009.
The relaunch aims to refresh the brand and to
deliver consistent best in class service and enhanced physical quality
in all
Holiday Inn and Holiday Inn Express hotels.
Non-brand conforming
hotels continued to be
removed from the system with total removals of 187 hotels (28,517
rooms) during
2009, predominantly Holiday Inn and Holiday Inn Express hotels.
|
Hotels
|
Rooms
|
Global
pipeline
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
63
|
(8)
|
20,173
|
(1,711)
|
|
Crowne Plaza
|
129
|
(4)
|
38,555
|
(2,914)
|
|
Holiday Inn
|
338
|
(49)
|
59,008
|
(5,253)
|
|
Holiday Inn Express
|
563
|
(156)
|
57,756
|
(12,514)
|
|
Staybridge Suites
|
123
|
(43)
|
13,360
|
(4,749)
|
|
Candlewood Suites
|
169
|
(73)
|
14,851
|
(6,939)
|
|
Hotel Indigo
|
53
|
(3)
|
6,660
|
(552)
|
|
Other
|
-
|
(1)
|
-
|
(90)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
1,438
|
(337)
|
210,363
|
(34,722)
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
1,158
|
(316)
|
126,386
|
(30,573)
|
|
Managed
|
280
|
(20)
|
83,977
|
(3,964)
|
|
Owned and leased
|
-
|
(1)
|
-
|
(185)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
1,438
|
(337)
|
210,363
|
(34,722)
|
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
Global
pipeline signings
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Total
|
345
|
(348)
|
52,891
|
(45,995)
|
|
____
|
____
|
_____
|
______
|
Global
pipeline
At the end of 2009, the
IHG pipeline
totalled 1,438 hotels (210,363 rooms). The IHG pipeline represents
hotels and
rooms where a contract has been signed and the appropriate fees paid. Terminations in the pipeline occur for a
number of reasons such as withdrawal of financing and changes in local
market
conditions.
IHG maintained a strong
level of new
signings despite the impact of the global economic downturn,
demonstrating
continued demand for IHG brands and represents a key driver of future
profitability.
In the year, signings
across all regions of
52,891 rooms were added to the pipeline. Overall, the opening of 55,345
rooms,
combined with an increase in pipeline terminations, resulted in a net
pipeline
decline of 34,722 rooms.
THE AMERICAS
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
Americas Results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
|
|
|
|
Franchised
|
437
|
495
|
(11.7)
|
|
Managed
|
110
|
168
|
(34.5)
|
|
Owned and leased
|
225
|
300
|
(25.0)
|
|
____
|
____
|
_____
|
Total
|
|
772
|
963
|
(19.8)
|
|
____
|
____
|
_____
|
Operating
profit before exceptional items
|
|
|
|
|
Franchised
|
364
|
426
|
(14.6)
|
|
Managed
|
(40)
|
51
|
(178.4)
|
|
Owned and leased
|
11
|
55
|
(80.0)
|
|
|
____
|
____
|
_____
|
|
335
|
532
|
(37.0)
|
Regional overheads
|
(47)
|
(67)
|
29.9
|
|
____
|
____
|
_____
|
Total
|
|
288
|
465
|
(38.1)
|
|
____
|
____
|
_____
|
|
|
|
|
|
|
Americas Comparable RevPAR movement on previous
year
|
12 months ended
31 December
2009
|
|
|
Franchised
|
|
|
Crowne Plaza
|
(15.9)%
|
|
Holiday Inn
|
(15.5)%
|
|
Holiday Inn Express
|
(12.9)%
|
|
All brands
|
(14.3)%
|
Managed
|
|
|
InterContinental
|
(16.2)%
|
|
Crowne Plaza
|
(19.2)%
|
|
Holiday Inn
|
(17.0)%
|
|
Staybridge Suites
|
(14.8)%
|
|
Candlewood Suites
|
(22.8)%
|
|
All brands
|
(17.8)%
|
Owned and leased
|
|
|
InterContinental
|
(28.2)%
|
Americas results
Revenue and operating
profit before
exceptional items decreased by 19.8% to $772m and 38.1% to $288m
respectively. Excluding the receipt
of
significant liquidated damages of
$13m in 2008, revenue and operating profit declined by 18.7% and 36.3%
respectively.
The region experienced
challenging trading
conditions throughout the year leading to RevPAR, revenue and profit
declines
across all ownership types. However, the
region’s US
comparable
hotels achieved a premium in RevPAR growth relative to the US
market.
Franchised revenue and operating profit decreased by 11.7% to $437m and
14.6%
to $364m respectively, compared to 2008. This decrease was
predominantly driven
by a fall in royalty revenues as a consequence of a RevPAR decline of
14.3%. Revenues also included the impact
of a
decline in real estate activity leading to lower fees associated with
activities
such as the signing of new hotels and conversions. An increase in
overall room
supply partially offset the decline in revenue and profit.
Managed revenues
decreased by 34.5% to
$110m during the year or, by 29.0% excluding the impact of $13m in
liquidated
damages received in 2008. All brands were impacted by the economic
downturn
which resulted in RevPAR declines of 17.8%.
Operating profit declined by $91m ($78m excluding
liquidated damages)
resulting in a loss of $40m. The loss
was due to the RevPAR driven revenue declines, IHG funding owner’s
priority
return shortfalls on a number of hotels managed by one owner and
certain
guarantee payments. At the year end, an
exceptional charge of $91m was recognised comprising the write off of a
deposit
related to the priority return contracts and the total estimated net
cash
outflows to this owner under the guarantee.
Therefore, future payments to this owner will be charged
against the
provision and will not impact operating results. The
managed results also included the impact
of provisions recognised following the devaluation of the Venezuelan
currency
and the potential impact of asset nationalisation.
Results from managed
operations include
revenues of $71m (2008 $88m) and operating profit of $nil (2008 $6m)
from
properties that are structured, for legal reasons, as operating leases
but with
the same characteristics as management contracts.
Owned and leased revenue
declined by 25.0%
to $225m and operating profit decreased by 80.0% to $11m.
Underlying trading was driven by RevPAR
declines, including the InterContinental brand with a decline of 28.2%. Trading at the InterContinental New York, in
particular, was severely impacted by the collapse of the financial
markets. Results also included the
impact of the sale of the Holiday Inn Jamaica, sold in August 2008,
which led
to a reduction in revenue and operating profit of $16m and $2m
respectively when
compared to 2008.
As a result of the
declining real estate
market, the InterContinental Atlanta and Staybridge Suites Denver
Cherry Creek
no longer meet the criteria for designation as held for sale assets and
consequently the results of these hotels are no longer categorised as
discontinued operations and comparative figures have been re-presented
accordingly.
Regional overheads
declined by 29.9% during
the year, from $67m to $47m. The
favourable movement was driven by increased efficiencies and the impact
of an
organisational restructuring undertaken to further align the regional
structure
with the requirements of IHG’s owners and hotels.
|
Hotels
|
Rooms
|
Americas hotel and room count
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
55
|
-
|
18,499
|
(3)
|
|
Crowne Plaza
|
202
|
15
|
55,690
|
4,566
|
|
Holiday Inn
|
884
|
(36)
|
158,201
|
(10,576)
|
|
Holiday Inn Express
|
1,846
|
124
|
158,284
|
12,260
|
|
Staybridge Suites
|
178
|
28
|
19,320
|
2,948
|
|
Candlewood Suites
|
254
|
50
|
25,283
|
4,642
|
|
Hotel Indigo
|
32
|
11
|
3,966
|
1,328
|
|
Holiday Inn Club Vacations
|
6
|
5
|
2,892
|
480
|
|
Other brands
|
22
|
22
|
3,219
|
3,219
|
|
|
____
|
____
|
______
|
_____
|
Total
|
3,479
|
219
|
445,354
|
18,864
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
3,245
|
194
|
398,004
|
15,934
|
|
Managed
|
223
|
24
|
43,638
|
2,723
|
|
Owned and leased
|
11
|
1
|
3,712
|
207
|
|
|
____
|
____
|
______
|
_____
|
Total
|
3,479
|
219
|
445,354
|
18,864
|
|
|
____
|
____
|
______
|
_____
|
Americas hotel and room count
The Americas hotel and room
count
increased by 219 hotels (18,864 rooms) to 3,479 hotels (445,354 rooms). The growth included openings of 375 hotels
(40,584 rooms), predominantly under the franchised business model. By brand, Holiday Inn Express generated
openings of 198 hotels (17,491 rooms) whilst the extended stay brands,
Staybridge Suites and Candlewood Suites, achieved openings of 78 hotels
(7,548
rooms) in 2009. Net growth also included
removals of 156 hotels (21,720 rooms), predominantly Holiday Inn and
Holiday
Inn Express hotels removed as part of the Group’s roll-out of the
Holiday Inn
brand family relaunch which entails the removal of lower quality,
non-brand
conforming hotels.
|
Hotels
|
Rooms
|
Americas pipeline
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
6
|
(1)
|
2,040
|
(253)
|
|
Crowne Plaza
|
33
|
(10)
|
6,962
|
(2,685)
|
|
Holiday Inn
|
216
|
(47)
|
27,942
|
(4,910)
|
|
Holiday Inn Express
|
486
|
(153)
|
43,438
|
(13,027)
|
|
Staybridge Suites
|
116
|
(38)
|
12,508
|
(4,170)
|
|
Candlewood Suites
|
169
|
(73)
|
14,851
|
(6,939)
|
|
Hotel Indigo
|
47
|
(8)
|
5,987
|
(1,045)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
1,073
|
(330)
|
113,728
|
(33,029)
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
1,063
|
(319)
|
111,108
|
(31,256)
|
|
Managed
|
10
|
(10)
|
2,620
|
(1,588)
|
|
Owned and leased
|
-
|
(1)
|
-
|
(185)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
1,073
|
(330)
|
113,728
|
(33,029)
|
|
|
____
|
____
|
______
|
_____
|
Americas pipeline
The Americas pipeline totalled
1,073
hotels (113,728 rooms) as at 31 December 2009. During the year, 29,353
room
signings were completed, compared with 60,402 room signings in 2008.
Signings
levels declined as a result of lower real estate and construction
activity amid
the economic downturn and an associated tightening of credit
availability. Demand in the key midscale
segment remained
positive, representing 66% of hotel signings.
EUROPE,
MIDDLE EAST AND AFRICA (EMEA)
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
EMEA
results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
|
|
|
|
Franchised
|
83
|
110
|
(24.5)
|
|
Managed
|
119
|
168
|
(29.2)
|
|
Owned and leased
|
195
|
240
|
(18.8)
|
|
____
|
____
|
_____
|
Total
|
|
397
|
518
|
(23.4)
|
|
____
|
____
|
_____
|
Operating
profit before exceptional items
|
|
|
|
|
Franchised
|
60
|
75
|
(20.0)
|
|
Managed
|
65
|
95
|
(31.6)
|
|
Owned and leased
|
33
|
45
|
(26.7)
|
|
|
____
|
____
|
_____
|
|
158
|
215
|
(26.5)
|
Regional overheads
|
(31)
|
(44)
|
29.5
|
|
____
|
____
|
_____
|
Total
|
|
127
|
171
|
(25.7)
|
|
____
|
____
|
_____
|
|
|
|
|
|
|
EMEA
comparable RevPAR movement on previous year
|
12 months ended
31 December
2009
|
|
|
Franchised
|
|
|
All brands
|
(14.9)%
|
Managed
|
|
|
All brands
|
(14.9)%
|
Owned and leased
|
|
|
InterContinental
|
(10.8)%
|
All ownership types
|
|
|
UK
|
(9.8)%
|
|
Continental Europe
|
(17.8)%
|
|
Middle
East
|
(14.0)%
|
EMEA
results
Revenue and operating
profit before
exceptional items decreased by 23.4% to $397m and 25.7% to $127m
respectively. At constant currency,
revenue and operating profit before exceptional items decreased by
16.8% and
22.8% respectively. The region received significant liquidated damages
totalling $16m in 2008 and $3m in 2009. Excluding these receipts,
revenue
declined 21.5% and operating profit before exceptional items declined
20.0%,
and at constant currency by 14.7% and 16.8% respectively.
During the year, RevPAR
declines were
experienced across the region, with declines in key markets ranging
from 9.8%
in the UK
to 17.8% in Continental Europe.
Franchised revenue and
operating profit
decreased by 24.5% to $83m and 20.0% to $60m respectively, or at
constant
currency by 18.2% and 13.3% respectively.
Excluding the impact of $3m in liquidated damages received
in 2009 and
$7m received in 2008, revenue and operating profit declined by 22.3%
and 16.2%
respectively, or at constant currency by 15.5% and 8.8% respectively. The decline was principally driven by lower
RevPAR across Continental Europe and the UK, partly offset by a 6%
increase
in room count.
EMEA managed revenue and
operating profit
decreased by 29.2% to $119m and by 31.6% to $65m respectively, or at
constant
currency by 25.0% and 29.5% respectively.
Excluding the impact of $9m in liquidated damages received
in 2008,
revenue and operating profit declined by 25.2% and 24.4% respectively,
or at
constant currency by 20.8% and 22.1% respectively.
The results were driven by managed RevPAR
declines of 14.9%.
In the owned and leased
estate, revenue
decreased by 18.8% to $195m and operating profit decreased by 26.7% to
$33m, or
at constant currency by 10.4% and 17.8% respectively.
The InterContinental Paris Le Grand in
particular, was adversely impacted by the economic downturn as both
business
and leisure travel declined in Paris. However, trading at the InterContinental Park Lane, London
was more resilient, with RevPAR down just 1.7% during the year.
Regional overheads
decreased by 29.5% to
$31m due to improved efficiencies and cost savings, as well as a
favourable
movement in foreign exchange of $6m.
|
Hotels
|
Rooms
|
EMEA
hotel and room count
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
65
|
1
|
20,586
|
(250)
|
|
Crowne Plaza
|
93
|
4
|
22,157
|
1,428
|
|
Holiday Inn
|
333
|
1
|
53,372
|
333
|
|
Holiday Inn Express
|
197
|
11
|
23,259
|
1,695
|
|
Staybridge Suites
|
4
|
2
|
565
|
293
|
|
Hotel Indigo
|
1
|
-
|
64
|
-
|
|
Other
|
2
|
1
|
293
|
90
|
|
|
____
|
____
|
______
|
_____
|
Total
|
695
|
20
|
120,296
|
3,589
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
520
|
28
|
78,216
|
4,140
|
|
Managed
|
171
|
(8)
|
40,634
|
(551)
|
|
Owned and leased
|
4
|
-
|
1,446
|
-
|
|
|
____
|
____
|
______
|
_____
|
Total
|
695
|
20
|
120,296
|
3,589
|
|
|
____
|
____
|
______
|
_____
|
EMEA
hotel and room count
During 2009, EMEA hotel
and room count
increased by 20 hotels (3,589 rooms) to 695 hotels (120,296 rooms). The
net
room growth included openings of 37 hotels (6,427 rooms) and removals
of 17
hotels (2,838 rooms). System growth by
brand was driven by Holiday Inn and Holiday Inn Express, which together
accounted for 65% of the region’s hotel openings, and by Crowne Plaza,
which achieved net rooms growth of 7% over 2008. By
ownership type, net movement during the
year included the conversion of 13 managed hotels in Spain
to franchise contracts.
|
Hotels
|
Rooms
|
EMEA
pipeline
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
23
|
(5)
|
6,100
|
(962)
|
|
Crowne Plaza
|
24
|
(1)
|
6,641
|
(646)
|
|
Holiday Inn
|
45
|
(5)
|
10,429
|
225
|
|
Holiday Inn Express
|
49
|
(8)
|
7,088
|
(702)
|
|
Staybridge Suites
|
7
|
(5)
|
852
|
(579)
|
|
Hotel Indigo
|
4
|
4
|
351
|
351
|
|
Other
|
-
|
(1)
|
-
|
(90)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
152
|
(21)
|
31,461
|
(2,403)
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
93
|
3
|
14,952
|
684
|
|
Managed
|
59
|
(24)
|
16,509
|
(3,087)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
152
|
(21)
|
31,461
|
(2,403)
|
|
|
____
|
____
|
______
|
_____
|
EMEA
pipeline
The pipeline in EMEA
decreased by 21 hotels
(2,403 rooms) to 152 hotels (31,461 rooms). The movement in the year
included
8,442 room signings, with continued demand for IHG brands in the UK, Middle East and Germany. Demand was particularly strong in the
midscale sector which represented 66% of room signings.
IHG’s lifetsyle brand, Hotel Indigo,
continued its expansion with four hotels in the closing pipeline,
including two
in London.
ASIA
PACIFIC
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
Asia
Pacific results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
|
|
|
|
Franchised
|
11
|
18
|
(38.9)
|
|
Managed
|
105
|
113
|
(7.1)
|
|
Owned and leased
|
129
|
159
|
(18.9)
|
|
|
____
|
____
|
_____
|
Total
|
|
245
|
290
|
(15.5)
|
|
____
|
____
|
_____
|
Operating
profit before exceptional items
|
|
|
|
|
Franchised
|
5
|
8
|
(37.5)
|
|
Managed
|
44
|
55
|
(20.0)
|
|
Owned and leased
|
30
|
43
|
(30.2)
|
|
|
____
|
____
|
_____
|
|
79
|
106
|
(25.5)
|
Regional overheads
|
(27)
|
(38)
|
28.9
|
|
____
|
____
|
_____
|
Total
|
|
52
|
68
|
(23.5)
|
|
____
|
____
|
_____
|
|
|
|
|
|
|
Asia
Pacific comparable RevPAR movement on previous year
|
12 months ended
31 December
2009
|
|
|
Managed – all brands
|
|
|
Asia Pacific
|
(12.5)%
|
|
Greater China
|
(15.6)%
|
Owned and leased
|
|
|
InterContinental
|
(22.2)%
|
All ownership types
|
|
|
Greater China
|
(16.9)%
|
Asia
Pacific results
Asia Pacific revenue and
operating profit
before exceptional items decreased by 15.5% to $245m and 23.5% to $52m
respectively. Excluding the receipt of
$4m in significant liquidated damages in 2008, revenue and operating
profit
declined by 14.3% and 18.8% respectively.
Despite RevPAR declines of 13.5%, the region’s brands
demonstrated
outperformance relative to the market.
Franchised revenues and
operating profit
decreased by 38.9% to $11m and by 37.5% to $5m respectively. Excluding the impact of $4m in liquidated
damages received in 2008, revenue decreased by 21.4% and profit
increased by
$1m or 25.0%. The decline in revenue was
driven by lower RevPAR and the loss of royalties following the removal
of six
hotels (1,067 rooms) which did not meet IHG’s brand and quality
standards.
Managed revenue decreased
by 7.1% to $105m
and operating profit decreased by 20.0% to $44m. RevPAR
across the Greater China managed
estate declined by 15.6%, primarily due to room oversupply in key
Chinese
cities, such as Beijing
and trading upside in 2008 from the Olympic Games.
In the owned and leased
estate, revenue
decreased by 18.9% to $129m and operating profit decreased by 30.2% to
$30m. These results were driven by the
InterContinental Hong Kong, where RevPAR declined 22.2% during the
year.
Regional overheads
decreased by 28.9% to
$27m, due to the impact of regional restructuring and lower marketing
costs
associated with the ANA joint venture in Japan.
|
Hotels
|
Rooms
|
Asia
Pacific hotel and room count
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
46
|
6
|
17,036
|
1,638
|
|
Crowne Plaza
|
71
|
5
|
23,147
|
1,618
|
|
Holiday Inn
|
102
|
1
|
28,995
|
1,120
|
|
Holiday Inn Express
|
26
|
2
|
6,464
|
258
|
|
Other
|
19
|
(1)
|
5,387
|
(259)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
264
|
13
|
81,029
|
4,375
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
34
|
(8)
|
7,321
|
(2,500)
|
|
Managed
|
228
|
21
|
73,015
|
6,875
|
|
Owned and leased
|
2
|
-
|
693
|
-
|
|
|
____
|
____
|
______
|
_____
|
Total
|
264
|
13
|
81,029
|
4,375
|
|
|
____
|
____
|
______
|
_____
|
Asia
Pacific hotel and room count
Asia Pacific hotel and
room count increased
by 13 hotels (4,375 rooms) to 264 hotels (81,029 rooms), including the
opening
of 27 hotels (8,334 rooms) offset by the removal of 14 hotels (3,959
rooms).
The growth was predominantly driven by the opening of 17 hotels (5,776
rooms)
in Greater China reflecting continued expansion in one of IHG’s
strategic
markets.
|
Hotels
|
Rooms
|
Asia
Pacific pipeline
at 31
December
|
2009
|
Change
over 2008
|
2009
|
Change
over 2008
|
|
|
|
|
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
34
|
(2)
|
12,033
|
(496)
|
|
Crowne Plaza
|
72
|
7
|
24,952
|
417
|
|
Holiday Inn
|
77
|
3
|
20,637
|
(568)
|
|
Holiday Inn Express
|
28
|
5
|
7,230
|
1,215
|
|
Hotel Indigo
|
2
|
1
|
322
|
142
|
|
|
____
|
____
|
______
|
_____
|
Total
|
213
|
14
|
65,174
|
710
|
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
2
|
-
|
326
|
(1)
|
|
Managed
|
211
|
14
|
64,848
|
711
|
|
|
____
|
____
|
______
|
_____
|
Total
|
213
|
14
|
65,174
|
710
|
|
|
____
|
____
|
______
|
_____
|
Asia
Pacific pipeline
The pipeline in Asia
Pacific increased by
14 hotels (710 rooms) to 213 hotels (65,174 rooms).
Pipeline growth was fuelled by the Greater China
market which generated 75% of the region’s room signings, followed by India,
which contributed a further 16%. From a
brand perspective, Crowne
Plaza
experienced the
highest demand with 45% of the region’s room signings, followed by
Holiday Inn,
which contributed a further 32%. During the year the first Hotel Indigo
was
signed in Hong Kong.
Central
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
Central
results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
124
|
126
|
(1.6)
|
Gross central costs
|
(228)
|
(281)
|
18.9
|
|
____
|
____
|
_____
|
Net central costs
|
|
(104)
|
(155)
|
32.9
|
|
_____
|
____
|
_____
|
|
|
|
|
|
Central
Results
During 2009, net central
costs decreased by
32.9% from $155m to $104m. The
significant reduction was driven by management actions to increase
efficiencies
and implement cost-saving measures across the Group.
Relative to 2008, the 2009 net central costs
also benefited from a $16m favourable movement in foreign exchange
whilst the
2008 results include the receipt of a favourable $3m insurance
settlement.
SYSTEM
FUNDS
|
12 months ended 31
December
|
|
2009
|
2008
|
%
|
System
fund results
|
$m
|
$m
|
change
|
|
|
|
|
Assessments
|
1,008
|
990
|
1.8
|
|
____
|
____
|
____
|
In the year to 31
December 2009, system
fund assessments increased by 1.8% to $1.01bn primarily as a result of
the
growth in system size and marketing programmes.
Hotels operated under IHG
brands are,
pursuant to terms within their contracts, subject to cash assessments
for the
provision of brand marketing, reservations systems and the Priority
Club
loyalty programme. These assessments,
typically based upon room revenue, are pooled for the collective
benefit of all
hotels by brand or geography into the System Funds (the Funds). The Group acts on behalf of hotel owners with
regard to the Funds, and the Owners’ Association, the IAHI, provides a
governance overview of the operation of the Funds. The operation of the
Funds
does not result in a profit or loss for the Group and consequently the
revenues
and expenses of the Funds are not included in the Group Income
Statement.
OTHER FINANCIAL
INFORMATION
Exceptional
operating
items
Exceptional
operating items of $373m consisted of:
|
$91m
charge, comprising an onerous contract provision of $65m for the future
net unavoidable costs under a performance guarantee related to certain
management contracts with one US hotel owner, and a deposit of $26m
written off as it is no longer considered recoverable under the terms
of the same management contracts;
|
|
$19m in
relation to the Holiday Inn brand family relaunch;
|
|
$21m enhanced pension transfers to deferred members of the
InterContinental Hotels UK Pension Plan who accepted an offer to
receive the enhancement as either a cash lump sum or an additional
transfer value to an alternative pension plan provider;
|
|
$197m of
non-cash impairment charges reflecting the poorer trading environment
in 2009, including $45m relating to hotels reclassified from held for
sale assets;
|
|
$43m which
primarily relates to the closure of certain corporate offices together
with severance costs arising from a review of the Group’s cost base; and
|
|
$2m loss
on disposal of hotels
|
Exceptional
operating items are treated as exceptional by reason of
their size or nature and are excluded from the calculation of adjusted
earnings
per share in order to provide a more meaningful comparison of
performance.
Net
financial expenses
Net financial expenses
decreased from $101m
in 2008 to $54m in 2009, due to lower net debt levels and lower
interest rates.
Average net debt levels in 2009 were lower than 2008 primarily as a
result of
cost reduction programmes and an increased focus on cash.
Financing costs
included $2m (2008 $12m) of interest costs
associated with Priority Club Rewards where interest is charged on the
accumulated balance of cash received in advance of the redemption
points
awarded. Financing costs in 2009 also
included $18m (2008 $18m) in respect of the InterContinental Boston
finance
lease.
Taxation
The effective
rate of tax on the combined profit from continuing and
discontinued operations, excluding the impact of exceptional items, was
5%
(2008 23%). The rate is particularly low
in 2009 due to the impact of prior year items relative to a lower level
of
profit than in 2008. By excluding the
impact of prior year items, which are included wholly within continuing
operations,
the equivalent tax rate would be 42% (2008 39%). This rate is higher
than the UK
statutory rate of 28% due mainly to certain
overseas profits (particularly in the US)
being subject to statutory rates higher than the UK statutory rate,
unrelieved foreign
taxes and disallowable expenses.
Taxation within
exceptional items totalled a credit of $287m (2008 $42m)
in respect of continuing operations. This represented the release of
exceptional provisions relating to tax matters which were settled
during the
year, or in respect of which the statutory limitation period had
expired, together
with tax relief on exceptional costs.
Net tax paid in
2009 totalled $2m (2008 $2m) including $1m (2008 $3m)
in respect of disposals. Tax paid is
lower than the current period income tax charge, primarily due to the
receipt
of refunds in respect of prior years, together with provisions for tax
for
which no payment of tax has currently been made.
Earnings
per share
Basic earnings
per share in 2009 was 74.7¢, compared with 91.3¢ in
2008. Adjusted earnings per share was 102.8¢, against 120.9¢
in 2008.
Dividends
The Board has
proposed a final dividend per share of 29.2¢ (18.7p).
With the interim dividend per share of 12.2¢
(7.3p), the full-year dividend per share for 2009 will total 41.4¢
(26.0p).
Share
price and market
capitalisation
The IHG share
price closed at £8.93 on 31 December 2009, up from £5.62
on 31 December 2008. The market capitalisation of the Group at the year
end was
£2.6bn.
Capital
structure and
liquidity management
In response to the
challenging economic
environment the Group continued its focus on cash management during
2009. In
the year, $432m of cash was generated from operating activities, with
the other
key elements of the cash flow being:
|
proceeds
from the disposal of hotels and investments of $35m; and
|
|
capital
expenditure of $148m, including $65m to purchase the Indigo San Diego.
|
The Group is
mainly funded by a $1.2bn syndicated bank facility, of
which $1.1bn matures in May 2013 and $85m is a term loan that matures
in
November 2010.
In December 2009, the
Group issued a
seven-year £250m public bond, at a coupon of 6%, which was
initially priced at
99.465% of face value. The £250m was
immediately swapped into US dollar debt using currency swaps and the
proceeds
were used to reduce the term loan which matures in November 2010 from
$500m to
$85m. Additional funding is provided by
a finance lease on the InterContinental Boston.
Net debt at 31
December 2009 decreased by $191m to $1,082m and, in
the table below, included $204m in respect of the finance lease
commitment for
the InterContinental Boston and $415m in respect of currency swaps
related to
the sterling bond.
|
2009
|
2008
|
Net
debt at 31 December
|
$m
|
$m
|
|
|
|
Borrowings
|
|
|
|
Sterling*
|
-
|
152
|
|
US Dollar*
|
866
|
889
|
|
Euro
|
216
|
224
|
|
Other
|
53
|
90
|
Cash*
|
(53)
|
(82)
|
|
____
|
____
|
Net debt
|
1,082
|
1,273
|
|
____
|
____
|
|
|
|
Average
debt levels
|
1,231
|
1,498
|
|
____
|
____
|
* Including the
impact of currency derivatives.
|
2009
|
2008
|
Facilities
at 31 December
|
$m
|
$m
|
|
|
|
Committed
|
1,693
|
2,107
|
Uncommitted
|
25
|
25
|
|
____
|
____
|
Total
|
1,718
|
2,132
|
|
____
|
____
|
Interest
risk profile of gross debt for major currencies
at
31 December
|
2009
%
|
2008
%
|
|
|
|
At fixed
rates
|
90
|
53
|
At
variable rates
|
10
|
47
|
|
|
|
InterContinental
Hotels Group PLC
GROUP INCOME STATEMENT
For
the year ended 31 December 2009
|
Year ended 31 December
2009
|
Year ended 31 December
2008
|
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(note 3)
|
1,538
|
-
|
1,538
|
1,897
|
-
|
1,897
|
Cost of sales
|
(769)
|
(91)
|
(860)
|
(852)
|
-
|
(852)
|
Administrative
expenses
|
(303)
|
(83)
|
(386)
|
(400)
|
(59)
|
(459)
|
Other operating
income and expenses
|
6
|
(2)
|
4
|
14
|
25
|
39
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
472
|
(176)
|
296
|
659
|
(34)
|
625
|
Depreciation and
amortisation
|
(109)
|
-
|
(109)
|
(110)
|
(2)
|
(112)
|
Impairment
|
-
|
(197)
|
(197)
|
-
|
(96)
|
(96)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Operating
(loss)/profit (note 3)
|
363
|
(373)
|
(10)
|
549
|
(132)
|
417
|
Financial income
|
3
|
-
|
3
|
12
|
-
|
12
|
Financial expenses
|
(57)
|
-
|
(57)
|
(113)
|
-
|
(113)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
(Loss)/profit
before tax (note 3)
|
309
|
(373)
|
(64)
|
448
|
(132)
|
316
|
|
|
|
|
|
|
|
Tax (note 5)
|
(15)
|
287
|
272
|
(101)
|
42
|
(59)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit
for the year from continuing operations
|
294
|
(86)
|
208
|
347
|
(90)
|
257
|
|
|
|
|
|
|
|
Profit for the year
from discontinued operations
|
-
|
6
|
6
|
-
|
5
|
5
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit
for the year
|
294
|
(80)
|
214
|
347
|
(85)
|
262
|
|
====
|
====
|
====
|
====
|
====
|
====
|
Attributable to:
|
|
|
|
|
|
|
|
Equity holders of
the parent
|
293
|
(80)
|
213
|
347
|
(85)
|
262
|
|
Non-controlling
interest
|
1
|
-
|
1
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
294
|
(80)
|
214
|
347
|
(85)
|
262
|
|
====
|
====
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
Earnings
per ordinary share
(note 6)
|
|
|
|
|
|
|
Continuing
operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
72.6¢
|
|
|
89.5¢
|
|
Diluted
|
|
|
70.2¢
|
|
|
86.8¢
|
|
Adjusted
|
102.8¢
|
|
|
120.9¢
|
|
|
|
Adjusted diluted
|
99.3¢
|
|
|
117.2¢
|
|
|
Total operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
74.7¢
|
|
|
91.3¢
|
|
Diluted
|
|
|
72.2¢
|
|
|
88.5¢
|
|
Adjusted
|
102.8¢
|
|
|
120.9¢
|
|
|
|
Adjusted diluted
|
99.3¢
|
|
|
117.2¢
|
|
|
|
====
|
|
====
|
====
|
|
====
|
InterContinental
Hotels Group PLC
GROUP
STATEMENT OF COMPREHENSIVE INCOME
For
the year ended 31 December 2009
|
2009
Year ended
31 December
$m
|
2008
Year ended
31 December
$m
|
|
|
|
Profit
for the year
|
214
|
262
|
|
|
|
Other
comprehensive income
|
|
|
Available-for-sale
financial assets:
|
|
|
|
Gains/(losses) on
valuation
|
11
|
(4)
|
|
Losses/(gains)
reclassified to income on impairment/disposal
|
4
|
(17)
|
Cash flow hedges:
|
|
|
|
Losses arising
during the year
|
(7)
|
(14)
|
|
Reclassified to
financial expenses
|
11
|
2
|
Defined benefit
pension plans:
|
|
|
|
Actuarial losses,
net of related tax credit of $1m (2008 $13m)
|
(57)
|
(23)
|
|
Decrease/(increase)
in asset restriction on plans in surplus
|
21
|
(14)
|
Exchange
differences on retranslation of foreign operations, including related
tax credit of $4m (2008 $1m)
|
43
|
(56)
|
Tax related to
pension contributions
|
-
|
8
|
|
____
|
____
|
Other
comprehensive income/(loss) for the year
|
26
|
(118)
|
|
____
|
____
|
Total
comprehensive income for the year attributable to equity holders of the
parent
|
240
|
144
|
|
====
|
====
|
InterContinental
Hotels Group PLC
GROUP
STATEMENT OF CHANGES IN EQUITY
For
the year ended 31 December 2009
|
Year ended 31 December
2009
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the
year
|
118
|
(2,748)
|
2,624
|
7
|
1
|
|
|
|
|
|
|
Total comprehensive
income for the year
|
-
|
63
|
177
|
-
|
240
|
Issue of ordinary
shares
|
11
|
-
|
-
|
-
|
11
|
Movement in shares
in employee share trusts
|
-
|
49
|
(61)
|
-
|
(12)
|
Equity-settled
share-based cost
|
-
|
-
|
24
|
-
|
24
|
Tax related to
share schemes
|
-
|
-
|
10
|
-
|
10
|
Equity dividends
paid
|
-
|
-
|
(118)
|
-
|
(118)
|
Exchange and other
adjustments
|
13
|
(13)
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
At end
of the year
|
142
|
(2,649)
|
2,656
|
7
|
156
|
|
====
|
====
|
====
|
====
|
====
|
|
Year ended 31 December
2008
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the
year
|
163
|
(2,720)
|
2,649
|
6
|
98
|
|
|
|
|
|
|
Total comprehensive
income for the year
|
-
|
(90)
|
234
|
-
|
144
|
Issue of ordinary
shares
|
2
|
-
|
-
|
-
|
2
|
Repurchase of shares
|
(3)
|
-
|
(136)
|
-
|
(139)
|
Transfer to capital
redemption reserve
|
-
|
3
|
(3)
|
-
|
-
|
Movement in shares
in employee share trusts
|
-
|
15
|
(53)
|
-
|
(38)
|
Equity-settled
share-based cost
|
-
|
-
|
49
|
-
|
49
|
Tax related to
share schemes
|
-
|
-
|
2
|
-
|
2
|
Equity dividends
paid
|
-
|
-
|
(118)
|
-
|
(118)
|
Exchange and other
adjustments
|
(44)
|
44
|
-
|
1
|
1
|
|
____
|
____
|
____
|
____
|
____
|
At end
of the year
|
118
|
(2,748)
|
2,624
|
7
|
1
|
|
====
|
====
|
====
|
====
|
====
|
*
|
Other reserves
comprise the capital redemption reserve, shares held by employee share
trusts, other reserves, unrealised gains and losses reserve and
currency translation reserve.
|
InterContinental
Hotels Group PLC
GROUP
STATEMENT OF FINANCIAL POSITION
31
December 2009
|
2009
31 December
|
2008
31 December
|
|
$m
|
$m
|
ASSETS
|
|
|
Property, plant and
equipment
|
1,836
|
1,684
|
Goodwill
|
82
|
143
|
Intangible assets
|
274
|
302
|
Investment in
associates
|
45
|
43
|
Retirement benefit
assets
|
12
|
40
|
Other financial
assets
|
130
|
152
|
Deferred tax
receivable
|
95
|
-
|
|
_____
|
_____
|
Total
non-current assets
|
2,474
|
2,364
|
|
_____
|
_____
|
Inventories
|
4
|
4
|
Trade and other
receivables
|
335
|
412
|
Current tax
receivable
|
35
|
36
|
Cash and cash
equivalents
|
40
|
82
|
Other financial
assets
|
5
|
10
|
|
_____
|
_____
|
Total
current assets
|
419
|
544
|
|
|
|
Non-current assets
classified as held for sale
|
-
|
210
|
|
______
|
______
|
Total
assets (note 3)
|
2,893
|
3,118
|
|
=====
|
=====
|
LIABILITIES
|
|
|
Loans and other
borrowings
|
(106)
|
(21)
|
Trade and other
payables
|
(688)
|
(746)
|
Provisions
|
(65)
|
-
|
Current tax payable
|
(194)
|
(374)
|
|
_____
|
_____
|
Total
current liabilities
|
(1,053)
|
(1,141)
|
|
_____
|
_____
|
Loans and other
borrowings
|
(1,016)
|
(1,334)
|
Retirement benefit
obligations
|
(142)
|
(129)
|
Trade and other
payables
|
(408)
|
(392)
|
Deferred tax payable
|
(118)
|
(117)
|
|
_____
|
_____
|
Total
non-current liabilities
|
(1,684)
|
(1,972)
|
|
|
|
Liabilities
classified as held for sale
|
-
|
(4)
|
|
_____
|
_____
|
Total
liabilities
|
(2,737)
|
(3,117)
|
|
=====
|
=====
|
Net
assets
|
156
|
1
|
|
=====
|
=====
|
EQUITY
|
|
|
Equity share capital
|
142
|
118
|
Capital redemption
reserve
|
11
|
10
|
Shares held by
employee share trusts
|
(4)
|
(49)
|
Other reserves
|
(2,900)
|
(2,890)
|
Unrealised gains
and losses reserve
|
29
|
9
|
Currency
translation reserve
|
215
|
172
|
Retained earnings
|
2,656
|
2,624
|
|
______
|
______
|
IHG
shareholders’ equity
|
149
|
(6)
|
Non-controlling
interest
|
7
|
7
|
|
______
|
______
|
Total
equity
|
156
|
1
|
|
=====
|
=====
|
InterContinental
Hotels Group PLC
GROUP
STATEMENT OF CASH FLOWS
For
the year ended 31 December 2009
|
2009
Year ended
31 December
|
2008
Year ended
31 December
|
|
$m
|
$m
|
|
|
|
Profit
for the year
|
214
|
262
|
Adjustments for:
|
|
|
|
Net financial
expenses
|
54
|
101
|
|
Income tax
(credit)/charge
|
(272)
|
59
|
|
Depreciation and
amortisation
|
109
|
112
|
|
Impairment
|
197
|
96
|
|
Other exceptional
operating items
|
176
|
34
|
|
Gain on disposal of
assets, net of tax
|
(6)
|
(5)
|
|
Equity-settled
share-based cost, net of payments
|
14
|
31
|
|
Other items
|
1
|
3
|
|
_____
|
_____
|
Operating cash flow
before movements in working capital
|
487
|
693
|
Decrease in net
working capital
|
59
|
123
|
Retirement benefit
contributions, net of cost
|
(2)
|
(27)
|
Cash flows relating
to exceptional operating items
|
(60)
|
(49)
|
|
_____
|
_____
|
Cash
flow from operations
|
484
|
740
|
Interest paid
|
(53)
|
(112)
|
Interest received
|
2
|
12
|
Tax (paid)/received
on operating activities
|
(1)
|
1
|
|
_____
|
_____
|
Net
cash from operating activities
|
432
|
641
|
|
_____
|
_____
|
Cash
flow from investing activities
|
|
|
Purchases of
property, plant and equipment
|
(100)
|
(53)
|
Purchase of
intangible assets
|
(33)
|
(49)
|
Investment in
associates and other financial assets
|
(15)
|
(6)
|
Disposal of assets,
net of costs and cash disposed of
|
20
|
25
|
Proceeds from
associates and other financial assets
|
15
|
61
|
Tax paid on
disposals
|
(1)
|
(3)
|
|
_____
|
_____
|
Net
cash from investing activities
|
(114)
|
(25)
|
|
_____
|
_____
|
Cash
flow from financing activities
|
|
|
Proceeds from the
issue of share capital
|
11
|
2
|
Purchase of own
shares
|
-
|
(139)
|
Purchase of own
shares by employee share trusts
|
(8)
|
(22)
|
Proceeds on release
of own shares by employee share trusts
|
2
|
2
|
Dividends paid to
shareholders
|
(118)
|
(118)
|
Issue of
£250m 6% bonds
|
411
|
-
|
Decrease in other
borrowings
|
(660)
|
(316)
|
|
_____
|
_____
|
Net
cash from financing activities
|
(362)
|
(591)
|
|
_____
|
_____
|
|
|
|
Net
movement in cash and cash equivalents in the year
|
(44)
|
25
|
Cash and cash
equivalents at beginning of the year
|
82
|
105
|
Exchange rate
effects
|
2
|
(48)
|
|
_____
|
_____
|
Cash
and cash equivalents at end of the year
|
40
|
82
|
|
=====
|
=====
|
InterContinental Hotels Group plc
NOTES
TO THE FINANCIAL STATEMENTS
1.
|
Basis
of preparation
|
|
The audited
consolidated financial statements of InterContinental Hotels Group PLC
(IHG) for the year ended 31 December 2009 have been prepared in
accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union and as applied in accordance with the
provisions of the Companies Act 2006.
With effect from 1
January 2009, the Group has implemented IAS 1 (Revised) ‘Presentation
of Financial Statements’, IAS 23 (Revised) ‘Borrowing Costs’, IFRS 8
‘Operating Segments’ and IFRIC 13 ‘Customer Loyalty Programmes’. Except for certain presentational changes,
including the introduction of a ‘Group Statement of Changes in Equity’
as a primary financial statement, the adoption of these standards has
had no material impact on the financial statements and there has been
no requirement to restate prior year comparatives.
In all other
respects, these preliminary financial statements have been prepared on
a consistent basis using the accounting policies set out in the IHG
Annual Report and Financial Statements for the year ended 31 December
2008.
Two hotels, which,
prior to 30 June 2009, were classified as assets held for sale and
whose results were presented as discontinued operations, no longer meet
the criteria for designation as held for sale assets.
Consequently, the results of these hotels are now
reported as continuing operations and prior period results have been
re-presented on a consistent basis. The
impact has been to increase revenue from continuing operations for the
year by $34m (2008 $43m) and to increase operating profit from
continuing operations, before exceptional items, for the year by $8m
(2008 $14m).
|
2.
|
Exchange
rates
|
|
The results of operations have been translated into US
dollars at the average rates of exchange for the year.
In the case of sterling, the translation rate is $1=
£0.64 (2008 $1=£0.55). In the
case of the euro, the translation rate is $1 = €0.72 (2008 $1 = €0.68).
Assets and
liabilities have been translated into US dollars at the rates of
exchange on the last day of the period. In
the case of sterling, the translation rate is $1=£0.62 (2008 $1 =
£0.69). In the case of the euro, the
translation rate is $1 = €0.69 (2008 $1 = €0.71).
|
3.
|
Segmental
information
|
|
|
|
Revenue
|
|
|
|
|
2009
|
2008
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
772
|
963
|
|
EMEA
|
397
|
518
|
|
Asia Pacific
|
245
|
290
|
|
Central
|
124
|
126
|
|
|
____
|
____
|
|
Total
revenue
|
1,538
|
1,897
|
|
|
====
|
====
|
|
|
|
|
|
All results relate
to continuing operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
2009
$m
|
2008
$m
|
|
|
|
|
|
Americas
|
288
|
465
|
|
EMEA
|
127
|
171
|
|
Asia Pacific
|
52
|
68
|
|
Central
|
(104)
|
(155)
|
|
|
____
|
____
|
|
Reportable
segments’ operating profit
|
363
|
549
|
|
Exceptional
operating items (note 4)
|
(373)
|
(132)
|
|
|
____
|
____
|
|
Operating
(loss)/profit
|
(10)
|
417
|
|
|
|
|
|
Financial income
|
3
|
12
|
|
Financial expenses
|
(57)
|
(113)
|
|
|
____
|
____
|
|
Total
(loss)/profit before tax
|
(64)
|
316
|
|
|
====
|
====
|
|
|
|
|
|
All results relate
to continuing operations.
|
|
|
|
|
|
|
|
Assets
|
2009
$m
|
2008
$m
|
|
|
|
|
|
Americas
|
970
|
1,240
|
|
EMEA
|
926
|
958
|
|
Asia Pacific
|
631
|
613
|
|
Central
|
196
|
189
|
|
|
____
|
____
|
|
Segment
assets
|
2,723
|
3,000
|
|
|
|
|
|
Unallocated assets:
|
|
|
|
Deferred tax
receivable
|
95
|
-
|
|
Current tax
receivable
|
35
|
36
|
|
Cash and cash
equivalents
|
40
|
82
|
|
|
____
|
____
|
|
Total
assets
|
2,893
|
3,118
|
|
|
====
|
====
|
4.
|
Exceptional
items
|
|
|
2009
$m
|
2008
$m
|
|
Continuing
operations:
|
|
|
|
|
|
|
|
Exceptional
operating items
|
|
|
|
|
Cost of sales:
|
|
|
|
|
Onerous management
contracts (a)
|
(91)
|
-
|
|
|
|
|
|
|
|
Administrative
expenses:
|
|
|
|
|
Holiday Inn brand
relaunch (b)
|
(19)
|
(35)
|
|
|
Reorganisation and
related costs (c)
|
(43)
|
(24)
|
|
|
Enhanced pension
transfer (d)
|
(21)
|
-
|
|
|
|
____
|
____
|
|
|
|
(83)
|
(59)
|
|
|
Other operating
income and expenses:
|
|
|
|
|
Gain on sale of
associate investments
|
-
|
13
|
|
|
Gain on sale of
other financial assets
|
-
|
14
|
|
|
Loss on disposal of
hotels*
|
(2)
|
(2)
|
|
|
|
____
|
____
|
|
|
|
(2)
|
25
|
|
|
|
|
|
|
Depreciation and
amortisation:
|
|
|
|
|
Reorganisation and
related costs (c)
|
-
|
(2)
|
|
|
|
|
|
|
|
Impairment:
|
|
|
|
|
Property, plant and
equipment (e)
|
(28)
|
(12)
|
|
|
Assets held for
sale (f)
|
(45)
|
-
|
|
|
Goodwill (g)
|
(78)
|
(63)
|
|
|
Intangible assets
(h)
|
(32)
|
(21)
|
|
|
Other financial
assets (i)
|
(14)
|
-
|
|
|
|
____
|
____
|
|
|
|
(197)
|
(96)
|
|
|
|
____
|
____
|
|
|
(373)
|
(132)
|
|
|
====
|
====
|
|
Tax
|
|
|
|
Tax on exceptional
operating items
|
112
|
17
|
|
Exceptional tax
credit (j)
|
175
|
25
|
|
|
|
____
|
____
|
|
|
|
287
|
42
|
|
|
====
|
====
|
|
Discontinued
operations:
|
|
|
|
Gain on disposal of
assets (k):
|
|
|
|
Gain on disposal of
hotels **
|
2
|
-
|
|
Tax credit
|
4
|
5
|
|
|
____
|
____
|
|
|
6
|
5
|
|
|
====
|
====
|
|
|
|
|
|
|
|
*
|
Relates to hotels
classified as continuing operations.
|
|
**
|
Relates to hotels
classified as discontinued operations.
|
4.
|
Exceptional
items (continued)
|
|
These items are
treated as exceptional by reason of their size or nature.
|
|
a)
|
An onerous contract
provision of $65m has been recognised for the future net unavoidable
costs under a performance guarantee related to certain management
contracts with one US
hotel owner. In addition to the provision,
a deposit of $26m has been written off as it is no longer considered
recoverable under the terms of the same management contracts.
|
|
b)
|
Relates to costs
incurred in support of the worldwide relaunch of the Holiday Inn brand
family that was announced on 24 October 2007.
|
|
c)
|
Primarily relates
to the closure of certain corporate offices together with severance
costs arising from a review of the Group’s cost base.
|
|
d)
|
Relates to
the payment of enhanced pension transfers to those deferred members of
the InterContinental Hotels UK Pension Plan who had accepted an offer
to receive the enhancement either as a cash lump sum or as an
additional transfer value to an alternative pension plan provider. The exceptional item comprises the lump sum
payments ($9m), the IAS 19 settlement loss arising on the pension
transfers ($11m) and the costs of the arrangement ($1m).
The payments and transfers were made in January 2009.
|
|
e)
|
Recognised
at 30 June 2009, comprising $20m relating to a North American hotel and
$8m relating to a European hotel, arising from a review of estimated
recoverable amounts taking into account the current economic climate. The charge of $12m in 2008 related to a North
American hotel.
|
|
f)
|
Relates to
the valuation adjustments required at 30 June 2009 on the
reclassification to property, plant and equipment of four North
American hotels no longer meeting the ‘held for sale’ criteria of IFRS
5 ‘Non-current Assets Held for Sale and Discontinued Operations’ as
sales are no longer considered highly probable within the next 12
months. The adjustments comprise $14m of
depreciation not charged whilst held for sale and $31m of further
write-downs to recoverable amounts, as required by IFRS 5.
The results of two of the hotels, previously
classified as discontinued operations, are now reported as continuing
operations and prior period results have been re-presented on a
consistent basis.
|
|
g)
|
Relates to
the Americas
managed operations and reflects the impact of the global economic
downturn and, in particular, IHG’s funding obligations under certain
management contracts with one US hotel owner. $21m was charged at 30 September 2009 and $57m
at 30 June 2009, following on from the $63m recognised at 31 December
2008.
|
|
h)
|
The
impairment charges relate to the capitalised value of management
contracts and arise from revisions to expected fee income.
In 2009, the impairment was recorded at 30 June 2009
and relates to Americas
managed operations. In 2008, the
impairment related to EMEA managed operations.
|
|
i)
|
Relates to
an available-for-sale equity investment and arises as a result of a
significant and prolonged decline in its fair value below its cost.
|
|
j)
|
Relates to
the release of provisions which are exceptional by reason of their size
or nature relating to tax matters which have been settled or in respect
of which the relevant statutory limitation period has expired.
|
|
k)
|
Relates to
tax arising on disposals together with the release of provisions no
longer required in respect of hotels disposed of in prior years.
|
5.
|
Tax
|
|
The tax charge on
the combined profit from continuing and discontinued operations,
excluding the impact of exceptional items (note 4), has been calculated
using an estimated effective annual tax rate of 5% (2008 23%) analysed
as follows.
|
|
|
2009
|
2009
|
2009
|
2008
|
2008
|
2008
|
|
Year
ended 31 December
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
Before
exceptional items
|
|
|
|
|
|
|
|
Continuing
operations
|
309
|
(15)
|
5%
|
448
|
(101)
|
23%
|
|
|
|
|
|
|
|
|
|
Exceptional
items
|
|
|
|
|
|
|
|
Continuing
operations
|
(373)
|
287
|
|
(132)
|
42
|
|
|
Discontinued
operations
|
2
|
4
|
|
-
|
5
|
|
|
|
____
|
____
|
|
____
|
____
|
|
|
|
(62)
|
276
|
|
316
|
(54)
|
|
|
|
====
|
====
|
|
====
|
====
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
UK tax
|
|
9
|
|
|
(5)
|
|
|
|
Foreign tax
|
|
267
|
|
|
(49)
|
|
|
|
|
____
|
|
|
____
|
|
|
|
|
276
|
|
|
(54)
|
|
|
|
|
====
|
|
|
====
|
|
|
By also excluding
the effect of prior year items, the equivalent effective tax rate would
be approximately 42% (2008 39%). Prior
year items have been treated as relating wholly to continuing
operations.
|
6.
|
Earnings
per ordinary share
|
|
Basic earnings per
ordinary share is calculated by dividing the profit for the year
available for IHG equity holders by the weighted average number of
ordinary shares, excluding investment in own shares, in issue during
the year.
Diluted earnings
per ordinary share is calculated by adjusting basic earnings per
ordinary share to reflect the notional exercise of the weighted average
number of dilutive ordinary share options outstanding during the year.
Adjusted earnings
per ordinary share is disclosed in order to show performance
undistorted by exceptional items, to give a more meaningful comparison
of the Group’s performance.
|
|
|
2009
|
2009
|
2008
|
2008
|
|
|
Continuing
operations
|
Total
|
Continuing
operations
|
Total
|
|
|
|
|
|
|
|
Basic
earnings per ordinary share
|
|
|
|
|
|
Profit available
for equity holders ($m)
|
207
|
213
|
257
|
262
|
|
Basic weighted
average number of ordinary shares (millions)
|
285
|
285
|
287
|
287
|
|
Basic earnings per
ordinary share (cents)
|
72.6
|
74.7
|
89.5
|
91.3
|
|
|
====
|
====
|
====
|
====
|
|
Diluted
earnings per ordinary share
|
|
|
|
|
|
Profit available
for equity holders ($m)
|
207
|
213
|
257
|
262
|
|
Diluted weighted
average number of ordinary shares (millions)
|
295
|
295
|
296
|
296
|
|
Diluted earnings
per ordinary share (cents)
|
70.2
|
72.2
|
86.8
|
88.5
|
|
|
====
|
====
|
====
|
====
|
|
Adjusted
earnings per ordinary share
|
|
|
|
|
|
Profit available
for equity holders ($m)
|
207
|
213
|
257
|
262
|
|
Adjusting items
(note 4):
|
|
|
|
|
|
|
Exceptional
operating items ($m)
|
373
|
373
|
132
|
132
|
|
|
Tax on exceptional
operating items ($m)
|
(112)
|
(112)
|
(17)
|
(17)
|
|
|
Exceptional tax
credit ($m)
|
(175)
|
(175)
|
(25)
|
(25)
|
|
|
Gain on disposal of
assets, net of tax ($m)
|
-
|
(6)
|
-
|
(5)
|
|
|
____
|
____
|
____
|
____
|
|
Adjusted earnings
($m)
|
293
|
293
|
347
|
347
|
|
Basic weighted
average number of ordinary shares (millions)
|
285
|
285
|
287
|
287
|
|
Adjusted earnings
per ordinary share (cents)
|
102.8
|
102.8
|
120.9
|
120.9
|
|
|
====
|
====
|
====
|
====
|
|
Diluted weighted
average number of ordinary shares (millions)
|
295
|
295
|
296
|
296
|
|
Adjusted diluted
earnings per ordinary share (cents)
|
99.3
|
99.3
|
117.2
|
117.2
|
|
|
====
|
====
|
====
|
====
|
|
Earnings
per ordinary share from discontinued operations
|
2009
cents per share
|
2008
cents per share
|
|
Basic
|
2.1
|
1.8
|
|
Diluted
|
2.0
|
1.7
|
|
|
====
|
====
|
|
The diluted
weighted average number of ordinary shares is calculated as:
|
|
|
2009
millions
|
2008
millions
|
|
Basic weighted
average number of ordinary shares
|
285
|
287
|
|
Dilutive potential
ordinary shares – employee share options
|
10
|
9
|
|
|
____
|
____
|
|
|
295
|
296
|
|
|
====
|
====
|
7.
|
Dividends
|
|
|
2009
cents per share
|
2008
cents per share
|
2009
$m
|
2008
$m
|
|
Paid during the
year:
|
|
|
|
|
|
Final (declared for
previous year)
|
29.2
|
29.2
|
83
|
86
|
|
Interim
|
12.2
|
12.2
|
35
|
32
|
|
|
====
|
====
|
====
|
====
|
|
|
41.4
|
41.4
|
118
|
118
|
|
|
====
|
====
|
====
|
====
|
|
Proposed for
approval at the Annual General Meeting (not recognised as a liability
at 31 December)
|
|
|
|
|
|
Final
|
29.2
|
29.2
|
84
|
83
|
|
|
====
|
====
|
====
|
====
|
|
The proposed final
dividend is payable on the shares in issue on 26 March 2010.
|
8.
|
Net debt
|
|
|
2009
|
2008
|
|
|
$m
|
$m
|
|
|
|
|
|
Cash and cash
equivalents
|
40
|
82
|
|
Loans and other
borrowings – current
|
(106)
|
(21)
|
|
Loans and other
borrowings – non-current
|
(1,016)
|
(1,334)
|
|
|
____
|
____
|
|
Net debt
|
(1,082)
|
(1,273)
|
|
|
====
|
====
|
|
Finance lease
liability included above
|
(204)
|
(202)
|
|
|
====
|
====
|
9.
|
Movement
in net debt
|
|
|
2009
|
2008
|
|
|
$m
|
$m
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents
|
(44)
|
25
|
|
Add back cash flows
in respect of other components of net debt:
|
|
|
|
Issue of
£250m 6% bonds
|
(411)
|
-
|
|
Decrease in other
borrowings
|
660
|
316
|
|
|
____
|
____
|
|
Decrease in net
debt arising from cash flows
|
205
|
341
|
|
|
|
|
|
Non-cash movements:
|
|
|
|
Finance lease
liability
|
(2)
|
(2)
|
|
Exchange and other
adjustments
|
(12)
|
47
|
|
|
____
|
____
|
|
Decrease
in net debt
|
191
|
386
|
|
|
|
|
|
Net debt at
beginning of the year
|
(1,273)
|
(1,659)
|
|
|
____
|
____
|
|
Net
debt at end of the year
|
(1,082)
|
(1,273)
|
|
|
====
|
====
|
10.
|
Capital
commitments and contingencies
|
|
At 31 December
2009, the amount contracted for but not provided for in the financial
statements for expenditure on property, plant and equipment and
intangible assets was $9m (2008 $40m).
At 31 December
2009, the Group had contingent liabilities of $16m (2008 $12m) mainly
relating to litigation claims.
In limited cases,
the Group may provide performance guarantees to third-party owners to
secure management contracts. The maximum
outstanding exposure under such guarantees is $106m (2008 $249m). Payments under any such guarantees are charged
to the income statement as incurred.
From time to time,
the Group is subject to legal proceedings the ultimate outcome of each
being always subject to many uncertainties inherent in litigation. The Group has also given warranties in respect
of the disposal of certain of its former subsidiaries.
It is the view of the Directors that, other than to
the extent that liabilities have been provided for in these financial
statements, such legal proceedings and warranties are not expected to
result in material financial loss to the Group.
|
11.
|
Other
commitments
|
|
On 24 October 2007,
the Group announced a worldwide relaunch of its Holiday Inn brand
family. In support of this relaunch, IHG
will make a non recurring revenue investment of $60m which will be
charged to the Group income statement as an exceptional item. During the year, $19m (2008 $35m) has been
charged.
|
12.
|
Group
financial statements
|
|
The preliminary
statement of results was approved by the Board on 15 February 2010. The preliminary statement of results does not
represent the full Group financial statements of InterContinental
Hotels Group PLC and its subsidiaries which will be delivered to the
Registrar of Companies in due course. The
financial information for the year ended 31 December 2008 has been
extracted from the IHG Annual Report and Financial Statements for that
year as filed with the Registrar of Companies, except as re-presented
for discontinued operations (note 1).
|
|
Auditors’
review
|
|
The auditors, Ernst
& Young LLP, have given an unqualified report under Chapter 3 of
Part 16 of the Companies Act 2006 in respect of the full Group
financial statements (2008: Section 235 of the Companies Act 1985).
|