Interco. Hotels Grp IHG 3rd Quarter Results

  Interco. Hotels Grp (IHG) - 3rd Quarter Results

RNS Number : 3739Q
InterContinental Hotels Group PLC
06 November 2012




                      InterContinental Hotels Group PLC

                  Third Quarter Results to 30 September 2012

                       Solid third quarter performance

                                      

Financial summary^1  2012  2011            % Change YoY
                                Actual CER^2 CER & ex. LDs^3
Revenue             $473m $467m     1%    3%              4%
Operating profit    $167m $153m     9%    9%             14%
Total adjusted EPS  40.6¢ 36.2¢    12%
Total basic EPS^4   59.8¢ 61.4¢   (3)%
Net debt            $472m $644m



Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
"We have delivered a solid  set of results in  the quarter with RevPAR  growth 
across all  regions and  outperformance in  key  markets such  as the  US  and 
Greater China.  Our  preferred brands  have  driven good  underlying  revenue 
growth despite  a  number  of industry  wide  issues  such as  the  timing  of 
holidays, slowing  economic  growth  in  certain  markets  and  the  political 
leadership change in China.

We continue to build a strong foundation  for future growth, with a good  pace 
of signings and openings, and we are on track to meet our full year net system
growth guidance. Our new brands are gaining traction, with the first  signing 
for EVEN Hotels in New York City in October and 12 signings for HUALUXE Hotels
& Resorts year to date.

The global  economic environment  remains  challenging. However,  our  forward 
bookings remain encouraging and we are  confident that IHG is well  positioned 
to continue to outperform based on the considerable strengths of the  business 
and our focused strategy for high quality growth."



Driving Market Share
•        Third quarter global RevPAR growth  of 3.9%, with 5.6% global  RevPAR 
         growth year to date.
         -               Americas third  quarter  RevPAR up  4.6%  (US  4.6%); 
                         Europe 2.0%; AMEA 2.9%; Greater China 4.0%.
         -               Average daily  rate  growth  of  3.4%  in  the  third 
                         quarter, the 9th successive quarter of growth.
•        Total system size of  672,252 rooms (4,573 hotels),  up 2.1% year  to 
         date (0.9% year on year).
         -               8,603 rooms  (56 hotels)  added and  3,224 rooms  (25 
                         hotels) removed  in  the quarter,  with  signings  of 
                         13,304 (85 hotels). Signings and openings broadly  in 
                         line with last year after excluding 4,796 rooms on US
                         Army bases (included in both figures for Q3 2011).
         -               Our new brands  are gaining traction  with the  first 
                         EVEN Hotel  signed in  October in  Manhattan under  a 
                         management contract. There  are 12  HUALUXE Hotels  & 
                         Resorts  in  the  pipeline,  with  8  signed  in  the 
                         quarter.
         -               Pipeline of 165,945 rooms (1,042 hotels), c.40% under
                         construction. 13% active global pipeline share.
         -               Greater China system size and pipeline up 11% and  7% 
                         respectively year on  year. Market leading  position 
                         with 60,115 rooms (181 hotels) open and 51,454  rooms 
                         (160 hotels) in the pipeline (31% of group pipeline).
Uses of Cash
•        Return of funds to shareholders
         -               $500m was returned to shareholders on 22 October 2012
                         via special  dividend  with share  consolidation.  As 
                         previously  announced,   the  $500m   share   buyback 
                         programme will commence in Q4 2012.
•        Growth investment funded by recycling capital
         -               Growth capital expenditure of $10m year to date (with
                         $5m in the quarter) reflects the unpredictable timing
                         of this type of spend, with a number of projects  now 
                         expected to complete early next year.
         -               2012   full   year    growth   capital    expenditure 
                         expectations  revised   to   c.$25m,   plus   c.$125m 
                         maintenance capital expenditure ($69m year to date).
         -               2013 growth capital expenditure still anticipated  to 
                         be $100m - $200m, plus c.$150m maintenance capex.
         -               Discussions     regarding     the     disposal     of 
                         InterContinental New York Barclay continue, but  will 
                         now be opened up and we expect strong interest from a
                         wider group of prospective buyers.
         -               InterContinental London Park Lane  is the next  major 
                         asset  being  considered  for  disposal  with  a  key 
                         milestone  in  the  process  being  the  opening   of 
                         InterContinental London Westminster later this month.
Current trading update
•                Provisional October global RevPAR growth^5  of 4.8%.
         -               Americas 6.1%; Europe 2.3%, AMEA 3.4%; Greater  China 
                         0.3%.
¹ All figures are  before exceptional items unless  otherwise ² CER = constant
noted. See appendices for financial headlines                exchange rates
^3 Excluding  $6m of  significant ^4            After ^5 See appendix 7 for
liquidated  damages  receipts  in exceptional items   definition
2011



Americas - Good growth in franchise royalties
RevPAR increased 4.6%, with 4.0%  rate growth. US RevPAR  was up 4.6% in  the 
third quarter, with 4.0% rate growth. On a total basis including the  benefit 
of new hotels, US RevPAR grew 5.7% in the third quarter, ahead of the industry
up 5.1%. Softer performance in July and September reflects the shift in timing
of certain holidays.

Revenue increased 2% to  $226m and operating profit  increased 10% to  $138m. 
After adjusting for owned hotel disposals in 2011 and the results from managed
lease hotels^6,  revenue was  up 6%  and operating  profit up  11%. This  was 
driven by good RevPAR growth across the region, resulting in a 7% increase  in 
franchise royalties, and a  $1m increase in fees  associated with the  initial 
franchising, relicensing and termination of hotels.

We signed 5,513 rooms (52 hotels) and opened 4,323 rooms (39 hotels) into  the 
system in the quarter. Openings included  3 Crowne Plaza hotels, 7 hotels  for 
our extended stay brands, Candlewood Suites and Staybridge Suites, and 3 Hotel
Indigo hotels. Signings included 43 hotels  for the Holiday Inn brand  family, 
with 2 Holiday Inn Club  Vacation resorts in the US,  2 Holiday Inn hotels  in 
Colombia and the first Holiday Inn Express hotel in the Bahamas.



Europe - Strong profit growth driven by owned hotels
RevPAR increased 2.0%, with 2.4% rate growth despite continued uncertainty  in 
macro economic  conditions  across  Europe.  3.9% RevPAR  growth  in  the  UK 
reflected stronger trading during the Olympic and Paralympic games with weaker
performance in the periods before and  after as expected. 8.8% RevPAR  growth 
in Germany reflects good rate growth due to the favourable trade fair calendar
and 2.0% RevPAR growth  in France was driven  by continued strength in  Paris, 
offset by declines in the provinces.

Revenue increased 2% (8% at CER)  to $112m and operating profit increased  21% 
(31% at CER) to $35m. At CER and after adjusting for a leased hotel  disposal 
and excluding results from  managed lease hotels^6,  revenue increased 6%  and 
operating profit increased 22%. This was  driven by 9.1% RevPAR growth at  the 
owned hotels and a $2m decrease in regional overheads ($1m as reported).

We signed 1,171 rooms (11 hotels) in the quarter including Holiday Inn  hotels 
for Georgia and Italy. The expansion of the Hotel Indigo brand continues  with 
3 hotels (246  rooms) signed across  Spain, Germany and  France. 924 rooms  (6 
hotels) were opened  into the system,  all for the  Holiday Inn Brand  Family, 
including 2 Holiday Inn hotels in London  and 2 Holiday Inn Express hotels  in 
the UK regions.



AMEA - Underlying profit growth
RevPAR increased 2.9%, with 1.1% rate growth. Trading conditions remain mixed
with strong  trading in  South East  Asia offset  by tougher  comparatives  in 
Japan, slowing economic growth in some  markets and the continued impact  from 
political unrest in some countries in the Middle East.

AMEA revenue decreased 14% (14% at CER) to $51m and operating profit decreased
20% (24% at  CER) to $20m.  At CER and  after adjusting for  a $6m  liquidated 
damages receipt in Q3 2011  and the disposal in Q3  2011 of a hotel asset  and 
partnership interest that  contributed $1m  to profits in  Q3 2011,  operating 
profit increased 6%.

We signed 1,373 rooms (6 hotels) in the quarter, including an InterContinental
Hotel in the UAE and 2 Holiday  Inn Express hotels in Indonesia. 652 rooms  (2 
hotels) were opened, including  Bahrain's first Holiday  Inn Express hotel  in 
the capital city  of Manama and  Crowne Plaza Doha  Airport; the first  Crowne 
Plaza hotel to open in Qatar. 



Greater China - Strong growth in revenue and operating profit
RevPAR increased 4.0%, with 3.8% rate  growth. July and August RevPAR  growth 
of 7% and 6% respectively was offset by a 0.9% decline in September. This was
driven by several industry  wide issues including lower  demand ahead of  both 
the Mid Autumn  Festival and  Golden Week  holiday periods  and the  political 
leadership change, the China - Japan island territorial dispute and a  broader 
economic slowdown across the region.

Revenue increased 15% (15% at CER) to $54m and operating profit increased  42% 
(33% at  CER)  to  $17m.  This  was driven  by  12.0%  RevPAR  growth  at  the 
InterContinental Hong  Kong  and  $3m  ($2m CER)  growth  in  managed  profits 
reflecting good RevPAR growth combined with 9% growth in managed rooms.

We opened 2,704  rooms (9  hotels) in the  quarter, including  3 Crowne  Plaza 
hotels (1,089 rooms). Signings of 5,247 rooms (16 hotels) take our pipeline to
51,454 rooms (160 hotels), giving us  a continued leading share of the  active 
hotel pipeline in Greater China.



Interest, tax, cash flow and exceptional items
The interest charge  for the  period was  $13m (Q3  2011: $15m)  due to  lower 
levels of net debt.

Based on the  position at  the end  of the quarter,  the tax  charge has  been 
calculated using an estimated annual tax rate of 27% (Q3 2011: 26%). The 2012
full year tax  rate is  now expected  to be  in the  mid to  high 20s,  moving 
towards the low 30s  in 2013. An  exceptional tax credit  of $59m relates  to 
prior year matters settled, together with associated deferred tax amounts.

Net debt was $472m (including the $211m finance lease on the  InterContinental 
Boston), down $172m on  Q3 2011 and  down $66m on the  year end position,  and 
does not reflect the $500m special dividend paid on 22 October 2012.

The provisional triennial actuarial valuation  of the UK defined benefit  plan 
as at 31  March 2012  indicates a  deficit of  £132m. In  anticipation of  the 
finalisation of the related Recovery Plan, a special contribution of £45m  was 
paid to the plan on 23 October 2012.
^6 See appendix 7 for definition



Appendix 1: RevPAR Movement Summary
        October 2012       Q3 2012             Q3 YTD      

          RevPAR*    RevPAR Rate   Occ.   RevPAR Rate Occ. 
Group        4.8%      3.9%  3.4%  0.4pts   5.6%  3.5% 1.3% 
Americas     6.1%      4.6%  4.0%  0.4pts   6.3%  4.3% 1.3% 
Europe       2.3%      2.0%  2.4% (0.2)pts  1.9%  1.5% 0.3% 
AMEA         3.4%      2.9%  1.1%  1.2pts   6.1%  1.8% 2.8% 
G. China     0.3%      4.0%  3.8%  0.1pts   7.6%  3.8% 2.2% 



*See appendix 7 for definition

Appendix 2: Third quarter system & pipeline Summary (rooms)
                        System                    Pipeline
         Openings Removals  Net   Total  YoY% Signings  Total
Group     8,603   (3,224)  5,379 672,252  1%   13,304  165,945
Americas  4,323   (1,823)  2,500 449,383  0%   5,513   73,326
Europe     924     (542)    382  101,505  2%   1,171   14,357
AMEA       652      (86)    566  61,249  (1)%  1,373   26,808
G. China  2,704    (773)   1,931 60,115  11%   5,247   51,454

Appendix 3: Year to date system & pipeline Summary (rooms)
                        System                    Pipeline
         Openings Removals  Net    Total  YTD Signings  Total

                                           %
Group     26,052  (12,148) 13,904 672,252 2%   35,408  165,945
Americas  13,297  (6,112)  7,185  449,383 2%   18,246  73,326
Europe    4,149   (2,529)  1,620  101,505 2%   4,135   14,357
AMEA      2,520   (2,354)   166   61,249  0%   2,768   26,808
G. China  6,086   (1,153)  4,933  60,115  9%   10,241  51,454







Appendix 4: Third quarter financial headlines                            
3 mths to 30      Total    Americas   Europe     AMEA    G. China    Central
September 2012

Operating      2012  2011  2012 2011 2012 2011 2012 2011 2012 2011 2012  2011
Profit $m
Franchised      156   145  134  123   19   18   3    3    0    1     -     -
Managed         51    51    9    10   7    5    21   25   14   11    -     -
Owned & leased  35    29    9    7    17   15   2    2    7    5     -     -
Regional       (32)  (33)  (14) (14) (8)  (9)  (6)  (5)  (4)  (5)    -     -
overheads
Profit pre      210   192  138  126   35   29   20   25   17   12    -     -
central
overheads
Central        (43)  (39)   -    -    -    -    -    -    -    -   (43)  (39)
overheads
Group           167   153  138  126   35   29   20   25   17   12  (43)  (39)
Operating
profit
                                                                         
Appendix 5: Year to date financial headlines                             
9 mths to 30      Total    Americas   Europe     AMEA    G. China    Central
September 2012

Operating       2012  2011 2012 2011 2012 2011 2012 2011 2012 2011  2012  2011
Profit $m
Franchised      419   393  358  332   50   51   9    8    2    2     -     -
Managed         154   154   33   43   22   17   63   64   36   30    -     -
Owned & leased  85    76    16   13   37   38   4    4    28   21    -     -
Regional       (87)  (89)  (36) (37) (22) (26) (16) (15) (13) (11)   -     -
overheads
Profit pre      571   534  371  351   87   80   60   61   53   42    -     -
central
overheads
Central        (118) (112)  -    -    -    -    -    -    -    -   (118) (112)
overheads
Group           453   422  371  351   87   80   60   61   53   42  (118) (112)
Operating
profit



Appendix 6: Constant exchange rate (CER) operating profit movement before
exceptional items

             Total***       Americas       Europe         AMEA        G. China
          Actual*   CER** Actual* CER** Actual* CER** Actual* CER** Actual* CER**
Q3             9%      9%     10%   10%     21%   31%   (20)% (24)%     42%   33%
Growth/
(decline)
Exchange Third quarter                                    
rates:
         GBP:USD     EUR:USD   * US dollar actual         
                               currency
2012     0.63        0.80      ** Translated at constant  
                               2011 exchange rates
2011     0.62        0.71      *** After central          
                               overheads



Appendix 7: Definitions
Total gross revenue: 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.

Fee based margins: adjusted for owned and leased hotels, managed leases and
individually significant liquidated damages payments. Managed lease hotels:
properties that are structured for legal reasons as operating leases but with
the same characteristics as management contracts.

Provisional October RevPAR growth : represents actuals other than for
Americas, Europe and Group for which the last 4 days in October are estimated.









For further information, please contact:
Investor Relations (Catherine Dolton;   +44 (0)1895 512176
Isabel Green):
Media Relations (Yasmin Diamond, Kari   +44 (0)1895 512426 +44 (0) 7770 736849
Kerr):
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.
Conference call for Analysts and Shareholders:

A conference  call with  Richard Solomons  (Chief Executive  Officer) and  Tom 
Singer (Chief Financial Officer) will commence at 9.30am UK time on 6 November
and can be accessed  on www.ihgplc.com/q312. There will  be an opportunity  to 
ask questions.
UK Toll                   +44 (0)20 3003 2666

UK Toll Free              0808 109 0700

US Toll                   +1 212 999 6659
Passcode:                 HOTEL
A replay of the 9.30am conference call will be available following the event -
details are below:
UK Toll                   +44 (0)20 8196 1998
Replay pin                1338565
US conference call and Q&A:

There will also be a conference call, primarily for US investors and analysts,
at 10.00am Eastern Standard  Time on 6 November  with Richard Solomons  (Chief 
Executive Officer) and Tom Singer (Chief Financial Officer). There will be  an 
opportunity to ask questions.
UK Toll                   +44 (0)20 3003 2666

US Toll                   +1 212 999 6659

US Toll Free              +1 866 966 5335
Passcode:                 HOTEL
A replay of  the 10.00am US  conference call will  be available following  the 
event - details are below:
UK Toll                   +44 (0)20 8196 1998
Replay pin                3470588
                                   Website:

The full release and supplementary data will be available on our website  from 
7.00 am (London time) on 7 August. The web address is www.ihgplc.com/q312.  To 
watch a video of Tom Singer reviewing our results visit our YouTube channel at
www.youtube.com/ihgplc.
Notes to Editors:

IHG (InterContinental  Hotels Group)  [LON:IHG, NYSE:IHG  (ADRs) is  a  global 
organisation with  nine  hotel  brands including  InterContinental®  Hotels  & 
Resorts, Hotel Indigo®, Crowne  Plaza® Hotels &  Resorts, Holiday Inn®  Hotels 
and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®,  as 
well as our two newest brands, EVEN™ Hotels and HUALUXE™ Hotels & Resorts. IHG
also manages  Priority Club®  Rewards,  the world's  first and  largest  hotel 
loyalty programme with  over 69  million members  worldwide. IHG  franchises, 
leases, manages or owns over 4,500 hotels and more than 672,000 guest rooms in
nearly 100  countries and  territories. With  more than  1,000 hotels  in  its 
development pipeline,  IHG  expects  to  recruit  around  90,000  people  into 
additional roles across its estate 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.

Visit   www.ihg.com    for   hotel    information   and    reservations    and 
www.priorityclub.com for more on Priority  Club Rewards. For our latest  news, 
visit   www.ihg.com/media,   www.twitter.com/ihg,   www.facebook.com/ihg    or 
www.youtube.com/ihgplc.
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.

















InterContinental Hotels Group PLC

GROUP INCOME STATEMENT

For the three months ended 30 September 2012



                    3 months ended 30 September   3 months ended 30 September
                                            2012                          2011
                       Before Exceptional           Before Exceptional     

                   exceptional       items      exceptional       items     

                         items    (note 8) Total       items    (note 8) Total
                           $m          $m    $m          $m          $m    $m
Continuing                                                              
operations
                                                                       
Revenue (note 3)           473           -   473         467           -   467
Cost of sales            (188)           - (188)       (197)           - (197)
Administrative            (97)         (4) (101)        (93)          28  (65)
expenses
Other operating              2           -     2           1          28    29
income and
expenses
                        _____        ____  ____       _____        ____  ____
                          190         (4)   186         178          56   234
                                                                       
Depreciation and          (23)           -  (23)        (25)           -  (25)
amortisation
                        _____        ____  ____       _____        ____  ____
                                                                       
Operating profit           167         (4)   163         153          56   209
(note 3)
Financial income             -           -     -           1           -     1
Financial expenses        (13)           -  (13)        (16)           -  (16)
                        _____        ____  ____       _____        ____  ____
                                                                       
Profit before tax          154         (4)   150         138          56   194
(note 3)
                                                                       
Tax (note 9)              (35)          60    25        (33)          17  (16)
                        _____        ____  ____       _____        ____  ____
Profit for the                                                          
period from
continuing                 119          56   175         105          73   178
operations
                         ====        ====  ====        ====        ====  ====
                                                                       
Attributable to:                                                        
  Equity holders          118          56   174         105          73   178
   of the parent
  Non-controlling           1           -     1           -           -     -
   interest
                        ____        ____  ____        ____        ____  ____
                         119          56   175         105          73   178
                         ====        ====  ====        ====        ====  ====
                                                                       
Earnings per                                                            
ordinary share

(note 10)
Continuing and                                                          
total operations:
  Basic                                 59.8¢                       61.4¢
  Diluted                               58.8¢                       60.5¢
  Adjusted              40.6¢                       36.2¢                
  Adjusted              39.9¢                       35.7¢                
   diluted
                         ====             ====        ====             ====





InterContinental Hotels Group PLC

GROUP INCOME STATEMENT

For the nine months ended 30 September 2012



                    9 months ended 30 September    9 months ended 30 September
                                            2012                           2011
                      Before Exceptional            Before Exceptional      

                  exceptional       items       exceptional       items      

                        items    (note 8)  Total       items    (note 8)  Total
                          $m          $m     $m          $m          $m     $m
Continuing                                                               
operations
                                                                        
Revenue (note 3)        1,351           -  1,351       1,317           -  1,317
Cost of sales           (565)           -  (565)       (566)           -  (566)
Administrative          (270)         (4)  (274)       (262)        (31)  (293)
expenses
Other operating             6           -      6           9          46     55
income and
expenses
                       _____        ____   ____       _____        ____   ____
                         522         (4)    518         498          15    513
                                                                        
Depreciation and         (69)           -   (69)        (76)           -   (76)
amortisation
Impairment                  -          23     23           -           9      9
                       _____        ____   ____       _____        ____   ____
                                                                        
Operating profit          453          19    472         422          24    446
(note 3)
Financial income            2           -      2           2           -      2
Financial                (40)           -   (40)        (49)           -   (49)
expenses
                       _____        ____   ____       _____        ____   ____
                                                                        
Profit before tax         415          19    434         375          24    399
(note 3)
                                                                        
Tax (note 9)            (110)         126     16        (99)          34   (65)
                       _____        ____   ____       _____        ____   ____
Profit for the                                                           
period from
continuing                305         145    450         276          58    334
operations
                        ====        ====   ====        ====        ====   ====
                                                                        
Attributable to:                                                         
 Equity holders          304         145    449         276          58    334
  of the parent
 Non-controlling           1           -      1           -           -      -
  interest
                       ____        ____   ____        ____        ____   ____
                        305         145    450         276          58    334
                        ====        ====   ====        ====        ====   ====
                                                                        
Earnings per                                                             
ordinary share

(note 10)
Continuing and                                                           
total operations:
 Basic                                 154.3¢                       115.6¢
 Diluted                               151.7¢                       113.6¢
 Adjusted             104.5¢                        95.5¢                 
 Adjusted             102.7¢                        93.9¢                 
  diluted
                        ====              ====        ====              ====









InterContinental Hotels Group PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the three and nine months ended 30 September 2012





                                     2012         2011         2012      2011

                                  3 months     3 months     9 months  9 months
                                                  ended        ended     ended
                                     ended
                                           30 September 30 September       30
                              30 September                           September
                                                     $m           $m
                                        $m                                  $m
                                                                         
Profit for the period                  175          178          450       334
                                                                         
Other comprehensive income                                                
Available-for-sale financial                                              
assets:
  Gains/(losses) on                     1         (17)          (3)       (5)
   valuation
  Losses reclassified to                -            -            -         3
   income on impairment
Cash flow hedges:                                                         
  Reclassified to financial             -            1            -         4
   expenses
Defined benefit pension                                                   
plans:
  Actuarial gains/(losses),                                              
   net of related tax credit:
   2012 3 months $1m, 9                                                   
   months $3m (2011 3 months
   $12m, 9 months $11m)                 20          (3)           17       (1)
  Change in asset                                                        
   restriction on plans in
   surplus and liability in                                               
   respect of funding
   commitments, net of                                                    
   related tax: 2012 3 months
   $2m charge, 9 months $11m                                              
   credit (2011 3 months $12m
   credit, 9 months $10m              (10)          (1)            2       (4)
   credit)
Exchange differences on                                                   
retranslation of foreign
operations, net of related                                                
tax: 2012 3 months $1m
charge, 9 months $nil (2011 3                                             
months $1m credit, 9 months
$1m charge)                             33         (32)           24      (18)
Tax related to pension                   -            3            1         6
contributions
                                     ____         ____         ____      ____
Other comprehensive                     44         (49)           41      (15)
gain/(loss) for the period
                                     ____         ____         ____      ____
Total comprehensive income             219          129          491       319
for the period
                                     ====         ====         ====      ====
                                                                         
Attributable to:                                                          
  Equity holders of the               218          129          490       318
   parent
  Non-controlling interest              1            -            1         1
                                    _____        _____        _____     _____
                                      219          129          491       319
                                    =====        =====        =====     =====















InterContinental Hotels Group PLC

GROUP STATEMENT OF CHANGES IN EQUITY

For the nine months ended 30 September 2012



                                    9 months ended 30 September 2012
                             Equity     Other Retained Non-controlling      
                               share reserves* earnings        interest
                             capital                                     Total
                                                                        equity
                                 $m        $m       $m              $m     $m
                                                                        
At beginning of the period       162   (2,650)    3,035               8    555
                                                                        
Total comprehensive income                                               
for the period
                                   -        21      469               1    491
Issue of ordinary shares           9         -        -               -      9
Movement in shares in                                                    
employee share trusts
                                   -        18     (63)               -   (45)
Equity-settled share-based         -         -       19               -     19
cost
Tax related to share schemes       -         -       17               -     17
Equity dividends paid              -         -    (174)               -  (174)
Share of reserve in equity                                               
accounted investment
                                   -         -        5               -      5
Exchange adjustments               8       (8)        -               -      -
                               ____      ____     ____            ____   ____
At end of the period             179   (2,619)    3,308               9    877
                               ====      ====     ====            ====   ====



                                    9 months ended 30 September 2011
                             Equity     Other Retained Non-controlling      
                               share reserves* earnings        interest
                             capital                                     Total
                                                                        equity
                                 $m        $m       $m              $m     $m
                                                                        
At beginning of the period       155   (2,659)    2,788               7    291
                                                                        
Total comprehensive income                                               
for the period
                                   -      (17)      335               1    319
Issue of ordinary shares           7         -        -               -      7
Movement in shares in                                                    
employee share trusts
                                   -        26     (80)               -   (54)
Equity-settled share-based         -         -       23               -     23
cost
Tax related to share schemes       -         -        3               -      3
Equity dividends paid              -         -    (102)               -  (102)
                               ____      ____     ____            ____   ____
At end of the period             162   (2,650)    2,967               8    487
                               ====      ====     ====            ====   ====





* 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

30 September 2012

                                                2012         2011        2011

                                         30 September 30 September 31 December
                                                  $m           $m          $m
ASSETS                                                                     
Property, plant and equipment                   1,345        1,363       1,362
Goodwill                                           94           88          92
Intangible assets                                 354          300         308
Investment in associates and joint                 83           74          87
ventures
Retirement benefit assets                          58           28          21
Other financial assets                            144          145         156
Non-current tax receivable                         42            -          41
Deferred tax assets                               202          111         106
                                               _____        _____       _____
Total non-current assets                        2,322        2,109       2,173
                                               _____        _____       _____
Inventories                                         4            4           4
Trade and other receivables                       509          449         369
Current tax receivable                              -           31          20
Derivative financial instruments                    4            -           3
Other financial assets                              5            -           -
Cash and cash equivalents                         170           99         182
                                               _____        _____       _____
Total current assets                              692          583         578
Non-current assets classified as held             236          225         217
for sale
                                              ______       ______      ______
Total assets (note 3)                           3,250        2,917       2,968
                                               =====        =====       =====
LIABILITIES                                                                
Loans and other borrowings                       (21)         (16)        (21)
Derivative financial instruments                    -          (1)           -
Trade and other payables                        (741)        (693)       (707)
Provisions                                        (1)         (23)        (12)
Current tax liabilities                          (71)        (122)       (120)
                                               _____        _____       _____
Total current liabilities                       (834)        (855)       (860)
                                               _____        _____       _____
Loans and other borrowings                      (610)        (701)       (670)
Derivative financial instruments                 (19)         (42)        (39)
Retirement benefit obligations                  (191)        (181)       (188)
Trade and other payables                        (557)        (500)       (497)
Provisions                                        (1)          (2)         (2)
Deferred tax liabilities                         (99)         (88)        (97)
                                               _____        _____       _____
Total non-current liabilities                 (1,477)      (1,514)     (1,493)
Liabilities classified as held for sale          (62)         (61)        (60)
                                               _____        _____       _____
Total liabilities                             (2,373)      (2,430)     (2,413)
                                               =====        =====       =====
Net assets                                        877          487         555
                                               =====        =====       =====
EQUITY                                                                     
Equity share capital                              179          162         162
Capital redemption reserve                         10           10          10
Shares held by employee share trusts              (9)          (9)        (27)
Other reserves                                (2,901)      (2,894)     (2,893)
Unrealised gains and losses reserve                69           51          71
Currency translation reserve                      212          192         189
Retained earnings                               3,308        2,967       3,035
                                              ______       ______      ______
IHG shareholders' equity                          868          479         547
Non-controlling interest                            9            8           8
                                              ______       ______      ______
Total equity                                      877          487         555
                                               =====        =====       =====

InterContinental Hotels Group PLC

GROUP STATEMENT OF CASH FLOWS

For the nine months ended 30 September 2012



                                                          2012           2011

                                                 9 months ended 9 months ended

                                                   30 September   30 September
                                                            $m             $m
                                                                           
Profit for the period                                       450            334
Adjustments for:                                                            
         Net financial expenses                             38             47
         Income tax (credit)/charge                       (16)             65
         Depreciation and amortisation                      69             76
         Exceptional operating items                      (19)           (24)
         Equity-settled share-based cost                    17             20
         Other non-cash movements                          (1)              -
                                                         _____          _____
Operating cash flow before movements in working             538            518
capital
Net change in loyalty programme liability and               139            100
System Fund surplus
Other changes in net working capital                      (174)          (159)
Utilisation of provisions                                  (12)            (7)
Retirement benefit contributions, net of cost              (29)           (41)
Cash flows relating to exceptional operating                (1)           (31)
items
                                                         _____          _____
Cash flow from operations                                   461            380
Interest paid                                              (19)           (25)
Interest received                                             2              1
Tax paid on operating activities                           (72)           (66)
                                                         _____          _____
Net cash from operating activities                          372            290
                                                         _____          _____
Cash flow from investing activities                                         
Purchase of property, plant and equipment                  (23)           (35)
Purchase of intangible assets                              (53)           (27)
Investment in other financial assets                          -           (50)
Investment in associates and joint ventures                 (3)           (38)
Disposal of assets, net of costs                              -            142
Proceeds from other financial assets                          5              6
Tax paid on disposals                                       (2)            (1)
                                                         _____          _____
Net cash from investing activities                         (76)            (3)
                                                         _____          _____
Cash flow from financing activities                                         
Proceeds from the issue of share capital                      9              7
Purchase of own shares by employee share trusts            (45)           (57)
Dividends paid to shareholders                            (174)          (102)
Decrease in borrowings                                     (99)          (112)
                                                         _____          _____
Net cash from financing activities                        (309)          (264)
                                                         _____          _____
Net movement in cash and cash equivalents in the           (13)             23
period
Cash and cash equivalents at beginning of the               182             78
period
Exchange rate effects                                         1            (2)
                                                         _____          _____
Cash and cash equivalents at end of the period              170             99
                                                         =====          =====



InterContinental Hotels Group plc

NOTES TO THE INTERIM FINANCIAL STATEMENTS





1. Basis of preparation

   
   These condensed interim financial statements have been prepared in
   accordance with the Disclosure and Transparency Rules of the United
   Kingdom's Financial Services Authority and IAS 34 'Interim Financial
   Reporting'. They have been prepared on a consistent basis using the
   accounting policies set out in the InterContinental Hotels Group PLC (the
   Group or IHG) Annual Report and Financial Statements for the year ended 31
   December 2011.

   

   These condensed interim financial statements are unaudited and do not
   constitute statutory accounts of the Group within the meaning of Section
   435 of the Companies Act 2006. The auditors have carried out a review of
   the financial information in accordance with the guidance contained in ISRE
   2410 (UK and Ireland) 'Review of Interim Financial Information Performed by
   the Independent Auditor of the Entity' issued by the Auditing Practices
   Board.

   

   The financial information for the year ended 31 December 2011 has been
   extracted from the Group's published financial statements for that year
   which contain an unqualified audit report and which have been filed with
   the Registrar of Companies.





2.   Exchange rates

   
  The results of operations have been translated into US dollars at the
   average rates of exchange for the period. In the case of sterling, the
   translation rate for the nine months ended 30 September is $1= £0.63 (2012
   3 months, $1 = £0.63; 2011 9 months, $1 = £0.62; 2011 3 months, $1=£0.62).
   In the case of the euro, the translation rate for the nine months ended 30
   September is $1 = €0.78 (2012 3 months, $1 = €0.80; 2011 9 months, $1 =
   €0.71; 2011 3 months, $1 = €0.71).

   

   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 (2011 31 December $1 = £0.65; 2011 30
   September $1 = £0.64). In the case of the euro, the translation rate is $1
   = €0.77 (2011 31 December $1 = €0.77; 2011 30 September $1 = €0.74).

   





3. Segmental information                                                  
                                                                        
  Revenue                                                                
                                 2012         2011         2012         2011
                       3 months ended     3 months     9 months     9 months
                                               ended        ended        ended
                           30 September
                                        30 September 30 September 30 September
                                   $m           $m           $m           $m
                                                                        
  Americas (note 4)               226          222          626          638
  Europe (note 5)                 112          110          318          295
  AMEA (note 6)                     51           59          159          159
  Greater China (note               54           47          162          142
   7)
  Central                           30           29           86           83
                                 ____         ____         ____         ____
  Total revenue                    473          467        1,351        1,317
                                 ====         ====         ====         ====
                                                                        
  All results relate to continuing operations.



 Profit                           2012         2011         2012         2011

                         3 months ended     3 months     9 months     9 months
                                               ended        ended        ended
                           30 September
                                        30 September 30 September 30 September
                                     $m
                                                  $m           $m           $m
                                                                        
 Americas (note 4)                138          126          371          351
 Europe (note 5)                   35           29           87           80
 AMEA (note 6)                      20           25           60           61
 Greater China (note 7)             17           12           53           42
 Central                          (43)         (39)        (118)        (112)
                                 ____         ____         ____         ____
 Reportable segments'                                                    
  operating profit
                                    167          153          453          422
 Exceptional operating             (4)           56           19           24
  items (note 8)
                                 ____         ____         ____         ____
 Operating profit                  163          209          472          446
                                                                        
 Financial income                    -            1            2            2
 Financial expenses               (13)         (16)         (40)         (49)
                                 ____         ____         ____         ____
 Profit before tax                 150          194          434          399
                                 ====         ====         ====         ====
                                                                        
 All results relate to continuing operations.



 Assets                                   2012         2011        2011

                                   30 September 30 September 31 December

                                             $m           $m          $m
                                                                   
 Americas                                1,004          950         908
 Europe                                    902          873         816
 AMEA                                      284          273         276
 Greater China                             392          372         388
 Central                                   250          208         228
                                         ____         ____        ____
 Segment assets                          2,832        2,676       2,616
                                                                   
 Unallocated assets:                                                
 Non-current tax receivable                 42            -          41
 Deferred tax assets                       202          111         106
 Current tax receivable                      -           31          20
 Derivative financial instruments            4            -           3
 Cash and cash equivalents                 170           99         182
                                         ____         ____        ____
 Total assets                            3,250        2,917       2,968
                                         ====         ====        ====



4. Americas                                                               
                              2012          2011          2012          2011
                    3 months ended      3 months      9 months      9 months
                                             ended         ended         ended
                        30 September
                                      30 September  30 September  30 September
                                $m            $m            $m            $m
  Revenue                                                                
   Franchised                  151           141           411           385
   Managed                      23            31            70           101
   Owned and leased             52            50           145           152
                              ____          ____          ____          ____
  Total                         226           222           626           638
                              ====          ====          ====          ====
  Operating profit                                                       
   Franchised                  134           123           358           332
   Managed                       9            10            33            43
   Owned and leased              9             7            16            13
   Regional                   (14)          (14)          (36)          (37)
     overheads
                              ____          ____          ____          ____
  Total                         138           126           371           351
                              ====          ====          ====          ====
                                                                        
  All results relate to continuing operations.





5. Europe                                                                 
                              2012          2011          2012          2011
                    3 months ended      3 months      9 months      9 months
                                             ended         ended         ended
                        30 September
                                      30 September  30 September  30 September
                                $m            $m            $m            $m
  Revenue                                                                
   Franchised                   25            23            67            65
   Managed                      34            34           105            79
   Owned and leased             53            53           146           151
                              ____          ____          ____          ____
  Total                         112           110           318           295
                              ====          ====          ====          ====
  Operating profit                                                       
   Franchised                   19            18            50            51
   Managed                       7             5            22            17
   Owned and leased             17            15            37            38
   Regional                    (8)           (9)          (22)          (26)
     overheads
                              ____          ____          ____          ____
  Total                          35            29            87            80
                              ====          ====          ====          ====
                                                                        
  All results relate to continuing operations.





6. AMEA                                                                   
                              2012          2011          2012          2011
                    3 months ended      3 months      9 months      9 months
                                             ended         ended         ended
                        30 September
                                      30 September  30 September  30 September
                                $m            $m            $m            $m
  Revenue                                                                
   Franchised                    4             5            14            13
   Managed                      35            42           110           112
   Owned and leased             12            12            35            34
                              ____          ____          ____          ____
  Total                          51            59           159           159
                              ====          ====          ====          ====
  Operating profit                                                       
   Franchised                    3             3             9             8
   Managed                      21            25            63            64
   Owned and leased              2             2             4             4
   Regional                    (6)           (5)          (16)          (15)
     overheads
                              ____          ____          ____          ____
  Total                          20            25            60            61
                              ====          ====          ====          ====
                                                                        
  All results relate to continuing operations.





7. Greater China                                                          
                              2012          2011          2012          2011
                    3 months ended      3 months      9 months      9 months
                                             ended         ended         ended
                        30 September
                                      30 September  30 September  30 September
                                $m            $m            $m            $m
  Revenue                                                                
   Franchised                    1             -             2             1
   Managed                      24            21            64            54
   Owned and leased             29            26            96            87
                              ____          ____          ____          ____
  Total                          54            47           162           142
                              ====          ====          ====          ====
  Operating profit                                                       
   Franchised                    -             1             2             2
   Managed                      14            11            36            30
   Owned and leased              7             5            28            21
   Regional                    (4)           (5)          (13)          (11)
     overheads
                              ____          ____          ____          ____
  Total                          17            12            53            42
                              ====          ====          ====          ====
                                                                        
  All results relate to continuing operations.







8. Exceptional items
                                    2012         2011         2012      2011

                                 3 months     3 months     9 months  9 months

                                    ended        ended        ended     ended

                              30 September 30 September 30 September        30
                                                                     September
                                        $m           $m           $m
                                                                            $m
  Continuing operations:                                                 
                                                                        
  Exceptional operating                                                  
   items
   Administrative expenses:                                             
     Litigation provision              -            -            -      (22)
       (a)
     Resolution of                     -            -            -      (37)
       commercial dispute (b)
     Pension curtailment               -           28            -        28
       (c)
     Reorganisation costs            (4)            -          (4)         -
       (d)
                                   ____         ____         ____      ____
                                    (4)           28          (4)      (31)
   Other operating income                                               
     and expenses:
     VAT refund (e)                    -            -            -         9
     Gain on disposal of               -           28            -        37
       hotels (f)
                                   ____         ____         ____      ____
                                      -           28            -        46
                                                                       
   Impairment:                                                          
     Other financial assets            -            -            -       (3)
       (g)
     Reversal of previously                                             
       recorded impairment
       (h)                               -            -           23        12
                                   ____         ____         ____      ____
                                      -            -           23         9
                                   ____         ____         ____      ____
                                     (4)           56           19        24
                                    ====         ====         ====      ====
  Tax                                                                    
  Tax on exceptional                    1          (8)         (12)         3
   operating items
  Exceptional tax credit (i)           59           25          138        31
                                   ____         ____         ____      ____
                                     60           17          126        34
                                    ====         ====         ====      ====



 These items are treated as exceptional by reason of their size or nature.
 a) Related to a lawsuit filed against the Group in the Americas region, for
     which the final balance was paid in March 2012.
 b) Related to the settlement of a prior period commercial dispute in the
     Europe region.
 c) Related to the closure of the UK defined benefit pension scheme to future
     accrual with effect from 1 July 2013.
 d) Arises from a reorganisation of the Group's support functions.
 e) Arose in the UK relating to periods prior to 1996.
 f) Related to the sale of three hotels in North America ($9m) and the sale
     of a hotel and related investment in Australia ($28m).
 g) Related to available-for-sale equity investments subject to prolonged
     declines in their fair value below cost.
 h) Relates to the reversal of a previously recorded impairment charge on a
     North American hotel and, in 2011, mainly related to the partial reversal
     of an impairment charge recorded on another North American hotel that was
     sold in June 2012.
 i) Represents 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,
     together with the recognition of deferred tax assets as a result of the
     associated reduction in future uncertainty as to their recoverability
     and, in 2011, related to a revision of the estimated tax impacts of an
     internal reorganisation completed in 2010.







9. Tax

   
  The tax charge on profit from continuing operations for the nine months
   ended 30 September excluding the impact of exceptional items (note 8), has
   been calculated using an estimated effective annual tax rate of 27% (2011
   26%) analysed as follows.





                              2012 2012 2012   2011 2011 2011
 3 months ended 30 September Profit  Tax  Tax Profit  Tax  Tax

                                  $m   $m rate     $m   $m rate
                                                       
 Before exceptional items       154 (35)  23%    138 (33)  24%
 Exceptional items              (4)   60         56   17    
                              ____ ____       ____ ____    
                               150   25        194 (16)    
                              ==== ====       ==== ====    
 Analysed as:                                           
         UK tax                    (9)            (7)    
         Foreign tax                34            (9)    
                                  ____           ____    
                                    25           (16)    
                                  ====           ====    





                              2012  2012 2012   2011 2011 2011
 9 months ended 30 September Profit   Tax  Tax Profit  Tax  Tax

                                  $m    $m rate     $m   $m rate
                                                        
 Before exceptional items       415 (110)  27%    375 (99)  26%
 Exceptional items               19   126         24   34    
                              ____  ____       ____ ____    
                               434    16        399 (65)    
                              ====  ====       ==== ====    
 Analysed as:                                            
         UK tax                      24           (17)    
         Foreign tax                (8)           (48)    
                                   ____           ____    
                                     16           (65)    
                                   ====           ====    









10. Earnings per ordinary share

    
   Basic earnings per ordinary share is calculated by dividing the profit for
    the period available for IHG equity holders by the weighted average number
    of ordinary shares, excluding investment in own shares, in issue during
    the period.

    

    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 period.

    

    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.



 Continuing and total             2012         2011         2012         2011
  operations
                             3 months     3 months     9 months     9 months
                                  ended        ended        ended        ended

                           30 September 30 September 30 September 30 September
 Basic earnings per                                                      
  ordinary share
 Profit available for              174          178          449          334
  equity holders ($m)
 Basic weighted average                                                  
  number of ordinary
  shares (millions)                 291          290          291          289
 Basic earnings per               59.8         61.4        154.3        115.6
  ordinary share (cents)
                                 ====         ====         ====         ====
 Diluted earnings per                                                    
  ordinary share
 Profit available for              174          178          449          334
  equity holders ($m)
 Diluted weighted average                                                
  number of ordinary
  shares (millions)                 296          294          296          294
 Diluted earnings per             58.8         60.5        151.7        113.6
  ordinary share (cents)
                                 ====         ====         ====         ====
 Adjusted earnings per                                                   
  ordinary share
 Profit available for              174          178          449          334
  equity holders ($m)
 Adjusting items (note                                                   
  8):
    Exceptional                     4         (56)         (19)         (24)
      operating items ($m)
    Tax on exceptional            (1)            8           12          (3)
      operating items ($m)
    Exceptional tax              (59)         (25)        (138)         (31)
      credit ($m)
                                 ____         ____         ____         ____
 Adjusted earnings ($m)            118          105          304          276
 Basic weighted average                                                  
  number of ordinary
  shares (millions)                 291          290          291          289
 Adjusted earnings per            40.6         36.2        104.5         95.5
  ordinary share (cents)
                                 ====         ====         ====         ====
 Diluted weighted average                                                
  number of ordinary
  shares (millions)                 296          294          296          294
 Adjusted diluted                                                        
  earnings per ordinary
  share (cents)                    39.9         35.7        102.7         93.9
                                 ====         ====         ====         ====





 The diluted weighted average number of ordinary shares is calculated as:

  
                                 2012         2011         2012         2011

                         3 months ended     3 months     9 months     9 months
                                               ended        ended        ended
                           30 September
                                        30 September 30 September 30 September
                               millions
                                            millions     millions     millions
 Basic weighted average                                                  
  number of ordinary
  shares                            291          290          291          289
 Dilutive potential                                                      
  ordinary shares -
  employee share options              5            4            5            5
                                 ____         ____         ____         ____
                                  296          294          296          294
                                 ====         ====         ====         ====



11. Dividends
                                 2012         2011         2012         2011

                               9 months     9 months     9 months     9 months

                                  ended        ended        ended        ended

                           30 September 30 September 30 September 30 September

                              cents per    cents per           $m           $m
                                  share        share
   Paid during the                                                       
    period:
   Final (declared for            39.0         35.2          113          102
    previous year)
   Interim                        21.0            -           61            -
                                 ____         ____         ____         ____
                                 60.0         35.2          174          102
                                 ====         ====         ====         ====
                                                                        
   Proposed for the                                                      
    period:
   Interim                           -         16.0            -           46
                                 ====         ====         ====         ====





12. Net debt
                                               2012         2011        2011

                                         30 September 30 September 31 December
                                                 $m           $m          $m
                                                                         
   Cash and cash equivalents                     170           99         182
   Loans and other borrowings - current         (21)         (16)        (21)
   Loans and other borrowings -                (610)        (701)       (670)
    non-current
   Derivatives hedging debt values*             (11)         (26)        (29)
                                               ____         ____        ____
   Net debt                                    (472)        (644)       (538)
                                               ====         ====        ====
   Finance lease liability included            (211)        (208)       (209)
    above
                                               ====         ====        ====



 * Net debt includes the exchange element of the fair value of currency swaps
    that fix the value of the Group's £250m 6% bonds at $415m. An equal and
    opposite exchange adjustment on the retranslation of the £250m 6% bonds is
    included in non-current loans and other borrowings.





13. Movement in net debt
                                               2012         2011        2011

                                       9 months ended    9 months   12 months
                                                             ended       ended
                                         30 September
                                                      30 September 31 December
                                                 $m           $m          $m
                                                                         
   Net (decrease)/increase in cash              (13)           23         107
    and cash equivalents
   Add back cash flows in respect of                                      
    other components of net debt:
   Decrease in other borrowings                   99          112         119
                                               ____         ____        ____
   Decrease in net debt arising from              86          135         226
    cash flows
                                                                         
   Non-cash movements:                                                    
   Finance lease liability

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