Intercontinental Hotels Group PLC

Foreign Filer Report • May 7, 2008

6-K 1 ihg200805076k.htm 1ST QUARTER RESULTS

SECURITIES AND EXCHANGE COMMISSION

Washington DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For 07 May 2008

InterContinental Hotels Group PLC (Registrant's name)

67 Alma Road, Windsor, Berkshire, SL4 3HD, England (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F Form 40-F

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable

EXHIBIT INDEX

Exhibit Number	Exhibit Description
99.1	Headline dated 1st Quarter Results 2008

99.1

7 May 2008

InterContinental Hotels Group PLC

First Quarter Results to 31 March 2008

Headlines
o	5,267 net rooms
added in the quarter. System size up 6% year on year, taking the total to
590,361 rooms (3,983 hotels).
o	Global constant
currency RevPAR growth of 3.5%; impacted by Easter timing.
o	Total gross revenue*
from all hotels in IHG’s system of £2.2bn, up 10% at constant
currency.
o	Continuing revenue
up 15% from £196m to £226m, up 14% at constant currency. Excluding
£7m liquidated damages relating to one Americas development project
leaving the pipeline, continuing revenues up 10% at constant
currency.
o	Continuing operating
profit up 38% from £45m to £62m, up 40% at constant currency.
Excluding £7m liquidated damages, continuing operating profit up 24% at
constant currency.
o	Adjusted continuing
earnings per share (“EPS”) up 47% to 11.6p. Adjusted total EPS of
12.0p. Basic total EPS of 10.6p.
o	19,678 rooms signed,
taking the pipeline to 231,553 rooms (1,720 hotels), equal to 39% of
IHG’s existing system size.
*See appendix 5 for
definition. All figures and movements unless otherwise noted are at actual
exchange rates and before exceptional items. See appendix 3 for analysis of
financial headlines. Constant exchange rate comparatives shown in appendix
4.

| Commenting on the
results and trading, Andrew Cosslett, Chief Executive of InterContinental
Hotels Group PLC said: |
| --- |
| “IHG delivered
a good performance in the first quarter of 2008. Growth in revenue per
available room (RevPAR) of 3.5% was solid given the adverse impact of the
timing of Easter. We increased the number of rooms in our system by over 5,200,
more than twice the increase in the first quarter of 2007. We signed over 150
hotels into our development pipeline which now stands at over 1,700 hotels,
giving good visibility on future openings. “We continue
to focus on strengthening our brands. The response from our owner community to
the Holiday Inn relaunch has been very encouraging and we now have 21 hotels
operating with some or all of the elements of the new brand standards and
identity ahead of our full roll out which begins in the summer. “Even in a
less certain economic environment our broad market coverage, record pipeline,
strong brands and resilient fee based business model position us well for
continued growth.” |

| Rooms –
strong signings and openings | |
| --- | --- |
| o | In the quarter
19,678 rooms were signed. The growth of the InterContinental brand continued
with five hotels signed, including three in the Americas, taking the total
pipeline of hotels to 62. IHG signed its first Hotel Indigo outside the US in
London which is due to open in Paddington in the third quarter, and its second
Staybridge Suites hotel in the Middle East. This takes the pipeline of
Staybridge Suites hotels outside the Americas region to 10. The first
Staybridge Suites hotel in the UK will open in June in Liverpool. |
| o | 11,113 rooms were
added to the system and 5,846 rooms were removed, in line with our strategy of
driving quality growth, giving net room additions of 5,267. |
| o | The pipeline now
stands at 1,720 hotels (231,553 rooms). The pipeline of Holiday Inn brand
family hotels increased by 23 and now stands at 1,100 hotels (129,232
rooms). |

| Americas: solid
performance |
| --- |
| Revenue
performance RevPAR increased
2.3%, driven by rate, with RevPAR growth of 4.6% in the first two months of the
year and a 1.2% decline in March due to the timing of Easter. Continuing
revenue grew 14% from $201m to $230m, driven by 11% growth in revenues from
owned and leased hotels and 16% growth in managed and franchised revenues.
Excluding the impact of $13m liquidated damages, continuing revenues grew
8%. Operating profit
performance Operating profit
from continuing operations increased 20% to $112m. Excluding the impact of $13m
liquidated damages, continuing operating profit grew 6%. Continuing owned and
leased hotel profit increased by $3m to $7m driven by ongoing improvement in
trading at the InterContinental Boston, which opened in November 2006 and 10%
RevPAR growth at the InterContinental New York. Managed hotel profit increased
$12m to $23m including the liquidated damages, and franchised hotel profit
increased $4m to $97m. |

| EMEA: strong
performance in the Middle East |
| --- |
| Revenue
performance RevPAR increased
5.9%, driven by rate, with RevPAR growth of 9.1% in the first two months and
0.8% in March. The Middle East continued to perform strongly, growing RevPAR by
20.2%. Continental Europe grew RevPAR by 5.7%, including a 12.3% increase in
France. In the UK, Holiday Inn and Holiday Inn Express outperformed their
market segment recording RevPAR growth of 1.5%. Continuing revenues increased
18% driven by 29% growth in managed and franchised revenues. Operating profit
performance Operating profit
from continuing operations increased £8m to £15m. The contribution
from continuing owned and leased hotels increased by £4m to £2m,
driven by RevPAR growth of 11.9% at the InterContinental Paris Le Grand and
continued improvement in trading at the InterContinental London Park Lane
following the completion of its refurbishment in June 2007. Managed hotel
profit increased by 38% from £8m to £11m reflecting the increase in
number of hotels under management and strong growth in the Middle East.
Franchised hotel profit increased from £6m to £7m reflecting 3.8%
RevPAR growth and 9.1% net rooms growth. |

| Asia Pacific:
further growth across all brands |
| --- |
| Revenue
performance RevPAR increased
5.1%, driven by rate, with RevPAR growth of 6.1% in the first two months and
3.4% in March. InterContinental and Holiday Inn brand performance were
strongest with 7.3% and 9.4% RevPAR growth respectively. Greater China RevPAR
increased 3.2%, driven by both occupancy and rate growth. Continuing revenues
increased 16% to $72m. Operating profit
performance Operating profit
from continuing operations increased 31% to $17m. Owned and leased hotel
operating profit increased $2m to $10m driven by RevPAR growth
of 9.2% at the InterContinental Hong Kong after completion of its rolling
refurbishment at the end of 2007. Managed hotel profit
increased $5m to $14m driven by the contribution from the increasing number of
hotels under IHG management in the region. |

| Overheads, Tax
and Exceptional items |
| --- |
| In the first quarter
aggregated regional overheads increased £1m to £17m and central
costs increased £1m to £18m. Based on the
position at the end of the quarter the tax charge on profit from continuing and
discontinued operations, excluding the impact of exceptional items, has been
calculated using an estimated effective annual tax rate of 29% (Q1 2007: 28%).
As previously disclosed, the
effective tax rate in 2008 is expected to be in the mid to high 20s and then
will trend upwards over time. As
previously announced IHG will make a non-recurring revenue investment of
£30m to accelerate implementation of the global relaunch of the Holiday
Inn brands, which will be treated as an exceptional item. £3m has been
charged in the period. |

| Disposals and
returns of funds |
| --- |
| IHG’s net debt
at the period end was £845m, including the $200m (£101m) finance
lease on the InterContinental Boston. 1.6m shares were
repurchased under IHG’s buyback programme during the first quarter, at a
cost of £13m, leaving £87m of the current buyback programme to be
completed. After the period
end, IHG sold its 17% interest in the Crowne Plaza Amsterdam City Centre for
€18m (£14m) including a €6m (£5m) agreed settlement for
the previous management contract and €2m (£1m) repayment of existing
loans. IHG will continue to manage the hotel under a new 40 year management
contract including renewals. |

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Appendix 1: Asset d isposal programme

| | Number of
hotels | Proceeds | Net book
value |
| --- | --- | --- | --- |
| Disposed since April
2003 | 181 | £3.0bn | £2.9bn |
| Remaining
hotels | 18 | | £0.9bn |

For a full list please visit www.ihg.com/Investors

Appendix 2: Rooms

| | Americas | EMEA | Asia
Pacific | Total |
| --- | --- | --- | --- | --- |
| Openings | 7,456 | 2,434 | 1,223 | 11,113 |
| Removals | (4,536) | (636) | (674) | (5,846) |
| Net room
additions | 2,920 | 1,798 | 549 | 5,267 |
| Signings | 15,060 | 1,659 | 2,959 | 19,678 |

Appendix 3: Financial headlines

| Three months to 31 Mar
£m | Total — 2008 | 2007 | Americas — 2008 | 2007 | EMEA — 2008 | 2007 | Asia Pacific — 2008 | 2007 | Central — 2008 | 2007 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Franchised operating
profit | 57 | 55 | 49 | 48 | 7 | 6 | 1 | 1 | | |
| Managed operating profit | 29 | 19 | 11 | 6 | 11 | 8 | 7 | 5 | | |
| Continuing owned and leased operating
profit | 11 | 4 | 4 | 2 | 2 | (2) | 5 | 4 | | |
| Regional overheads | (17) | (16) | (8) | (8) | (5) | (5) | (4) | (3) | | |
| Continuing operating profit pre
central overheads | 80 | 62 | 56 | 48 | 15 | 7 | 9 | 7 | | |
| Central overheads | (18) | (17) | - | - | - | - | - | - | (18) | (17) |
| Continuing operating
profit | 62 | 45 | 56 | 48 | 15 | 7 | 9 | 7 | (18) | (17) |
| Discontinued owned and leased
operating profit | 2 | 1 | 2 | 1 | - | - | - | - | | |
| Total operating profit | 64 | 46 | 58 | 49 | 15 | 7 | 9 | 7 | (18) | (17) |

Appendix 4: Constant currency continuing operating profits before exceptional items

| | Americas — Actual
currency | Constant
currency | EMEA — Actual
currency | Constant
currency | Asia
Pacific — Actual
currency | Constant currency** | Total — Actual
currency | Constant
currency* |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Growth | 17% | 19% | 114% | 114% | 29% | 29% | 38% | 40% |

| Exchange
rates | USD:GBP | EUR:GBP |
| --- | --- | --- |
| Q1 2008 | 1.98 | 1.32 |
| Q1 2007 | 1.95 | 1.49 |

• Sterling actual currency.

** Translated at constant 2007 exchange rates.

*** After Central Overheads.

Appendix 5: Definition of total gross revenue

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.

For further information, please contact:

| Investor Relations
(Heather Wood; Catherine Dolton): | +44 (0) 1753 410
176 |
| --- | --- |
| Media Affairs
(Leslie McGibbon; Claire Williams): | +44 (0) 1753 410
425 |
| | +44 (0) 7808 094
471 |

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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.

UK Q&A Conference Call:

A conference call with Andrew Cosslett (Chief Executive) and Richard Solomons (Finance Director) will commence at 9.30 am (London time) on 7 May. There will be an opportunity to ask questions.

| International
dial-in: | +44 (0)1452 556
518 |
| --- | --- |
| UK Free
Call: | 0800 694
8084 |
| Conference
ID: | 43988921 |

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 43988921#

| International
dial-in: | +44 (0)1452 55 00
00 |
| --- | --- |
| UK Free
Call: | 0845 245
5205 |

US Q&A conference call:

There will also be a conference call, primarily for US investors and analysts, at 10.00am (Eastern Standard Time) on 7 May with Andrew Cosslett (Chief Executive) and Richard Solomons (Finance Director). There will be an opportunity to ask questions.

| International
dial-in: | +44 (0)1452 556
518 |
| --- | --- |
| US Toll
Free: | 1866 966
4782 |
| Conference
ID: | 43989314 |

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 43989314#

| International
dial-in: | +44 (0)1452 55 00
00 |
| --- | --- |
| US Toll
Free: | 1866 247
4222 |

Website:

The full release and supplementary data will be available on our website from 7.00 am (London time) on Wednesday 7 May The web address is www.ihg.com/Q1

Notes to Editors:

InterContinental Hotels Group PLC (IHG) of the United Kingdom [LON:IHG, NYSE:IHG (ADRs)] is one of the world's largest hotel groups by number of rooms. IHG owns, manages, leases or franchises, through various subsidiaries, over 3,980 hotels and more than 590,000 guest rooms in nearly 100 countries and territories around the world. IHG owns a portfolio of well recognised and respected hotel brands including InterContinental ® Hotels & Resorts, Crowne Plaza ® Hotels & Resorts, Holiday Inn ® Hotels and Resorts, Holiday Inn Express ® , Staybridge Suites ® , Candlewood Suites ® and Hotel Indigo ® , and also manages the world's largest hotel loyalty programme, Priority Club ® Rewards with over 37 million members worldwide .

The company pioneered the travel industry’s first collaborative response to environmental issues as founder of the International Hotels and Environment Initiative (IHEI). The IHEI formed the foundations of the Tourism Partnership launched by the International Business Leaders Forum in 2004, of which IHG is still a member today. The environment and local communities remain at the heart of IHG’s global corporate responsibility focus.

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.

InterContinental Hotels Group PLC

GROUP INCOME STATEMENT

For the three months ended 31 March 2008

	3 months ended 31 March 2008 — Before exceptional items	Exceptional items (note 8)	Total	3 months ended 31 March 2007 — Before exceptional items	Exceptional items (note 8)	Total
	£m	£m	£m	£m	£m	£m
Continuing operations
Revenue (note 3)	226	-	226	196	-	196
Cost of sales	(104)	-	(104)	(98)	-	(98)
Administrative expenses	(47)	(4)	(51)	(40)	-	(40)
Other operating income and expenses	1	-	1	1	16	17
	____	____	____	____	____	____
	76	(4)	72	59	16	75
Depreciation and amortisation	(14)	(1)	(15)	(14)	-	(14)
	_____	_____	____	_____	_____	____
Operating profit (note 4)	62	(5)	57	45	16	61
Financial income	2	-	2	3	-	3
Financial expenses	(17)	-	(17)	(8)	-	(8)
	____	____	____	____	____	____
Profit before tax	47	(5)	42	40	16	56
Tax (note 9)	(13)	1	(12)	(12)	2	(10)
	____	____	____	____	____	____
Profit for the period from continuing operations	34	(4)	30	28	18	46
Profit for the period from discontinued operations (note 10)	1	-	1	1	-	1
	____	____	____	____	____	____
Profit for the period attributable to the equity holders of the
parent	35	(4)	31	29	18	47
	====	====	====	====	====	====
Earnings per ordinary share (note 11):
Continuing operations:
Basic			10.3p			13.0p
Diluted			10.2p			12.6p
Adjusted	11.6p			7.9p
Adjusted diluted	11.5p			7.7p
Total operations:
Basic			10.6p			13.3p
Diluted			10.5p			12.9p
Adjusted	12.0p			8.2p
Adjusted diluted	11.9p			7.9p
	====		====	====		====

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InterContinental Hotels Group PLC

GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the three months ended 31 March 2008

	2008 3 months ended 31 March £m	2007 3 months ended 31 March £m
Income and expense recognised directly in equity
Gains/(losses) on valuation of available-for-sale assets	3	(4)
Actuarial (losses)/gains on defined benefit pension plans	(4)	11
Exchange differences on retranslation of foreign operations	10	1
	____	____
	9	8
	____	____
Transfers to the income statement
On disposal of available-for-sale assets	-	(4)
	____	____
	-	(4)
	____	____
Tax
Tax on items above taken directly to or transferred from equity	2	-
Tax related to share schemes recognised directly in equity	(2)	3
	____	____
	-	3
	____	____
Net income recognised directly in equity	9	7
Profit for the period	31	47
	____	____
Total recognised income and expense for the period attributable to the
equity holders of the parent	40	54
	====	====

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InterContinental Hotels Group PLC

GROUP CASH FLOW STATEMENT

For the three months ended 31 March 2008

	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Profit for the period	31	47
Adjustments for:
Net financial expenses	15	5
Income tax charge	13	10
Exceptional operating items before depreciation	4	(16)
Depreciation and amortisation	15	15
Equity settled share-based cost, net of payments	1	(1)
	_____	_____
Operating cash flow before movements in working capital	79	60
Increase in net working capital	(27)	(25)
Retirement benefit contributions, net of cost	(11)	(10)
Cash flows relating to exceptional operating items	(3)	-
	_____	_____
Cash flow from operations	38	25
Interest paid	(16)	(6)
Interest received	2	4
Tax paid	(3)	(2)
	_____	_____
Net cash from operating activities	21	21
	_____	_____
Cash flow from investing activities
Purchases of property, plant and equipment	(9)	(18)
Purchase of intangible assets	(5)	(3)
Purchases of associates and other financial assets	-	(9)
Disposal of assets, net of costs	-	(5)
Proceeds from associates and other financial assets	4	22
	_____	_____
Net cash from investing activities	(10)	(13)
	_____	_____
Cash flow from financing activities
Proceeds from the issue of share capital	1	3
Purchase of own shares	(13)	(25)
Purchase of own shares by employee share trusts	-	(43)
Proceeds on release of own shares by employee share trusts	-	1
Increase in borrowings	38	55
	_____	_____
Net cash from financing activities	26	(9)
	_____	_____
Net movement in cash and cash equivalents in the period	37	(1)
Cash and cash equivalents at beginning of the period	52	179
Exchange rate effects	-	-
	_____	_____
Cash and cash equivalents at end of the period	89	178
	=====	=====

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InterContinental Hotels Group PLC

GROUP BALANCE SHEET

31 March 2008

	2008 31 March	2007 31 March	2007 31 December
	£m	£m	£m
ASSETS
Property, plant and equipment	983	950	962
Goodwill	113	110	110
Intangible assets	173	161	167
Investment in associates	34	32	33
Retirement benefit assets	43	-	32
Other financial assets	86	100	93
	_____	_____	_____
Total non-current assets	1,432	1,353	1,397
	_____	_____	_____
Inventories	3	3	3
Trade and other receivables	253	248	235
Current tax receivable	48	12	54
Cash and cash equivalents	89	178	52
Other financial assets	18	7	9
	_____	_____	_____
Total current assets	411	448	353
Non-current assets classified as held for sale	58	92	57
	______	______	______
Total assets	1,901	1,893	1,807
	=====	=====	=====
LIABILITIES
Loans and other borrowings	(8)	(5)	(8)
Trade and other payables	(381)	(381)	(390)
Current tax payable	(219)	(224)	(212)
	_____	_____	_____
Total current liabilities	(608)	(610)	(610)
	_____	_____	_____
Loans and other borrowings	(926)	(365)	(869)
Retirement benefit obligations	(60)	(50)	(55)
Trade and other payables	(141)	(111)	(139)
Deferred tax payable	(85)	(77)	(82)
	_____	_____	_____
Total non-current liabilities	(1,212)	(603)	(1,145)
Liabilities classified as held for sale	(3)	(5)	(3)
	_____	_____	_____
Total liabilities	(1,823)	(1,218)	(1,758)
	=====	=====	=====
Net assets (note 14)	78	675	49
	=====	=====	=====
EQUITY
Equity share capital	82	69	81
Capital redemption reserve	5	4	5
Shares held by employee share trusts	(15)	(40)	(41)
Other reserves	(1,528)	(1,528)	(1,528)
Unrealised gains and losses reserve	22	19	19
Currency translation reserve	17	(3)	6
Retained earnings	1,492	2,146	1,504
	______	______	______
IHG shareholders’ equity (note 15)	75	667	46
Minority equity interest	3	8	3
	______	______	______
Total equity	78	675	49
	=====	=====	=====

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InterContinental Hotels Group plc

NOTES TO THE INTERIM FINANCIAL STATEMENTS

| 1. |
| --- |
| These interim financial statements have been prepared in accordance with
International Accounting Standard 34 ‘Interim Financial Reporting’
using, on a consistent basis, the accounting policies set out in the 2007
InterContinental Hotels Group PLC (the Group or IHG) Annual Report and
Financial Statements. These interim financial statements are unaudited and do not constitute
statutory accounts of the Group within the meaning of Section 240 of the
Companies Act 1985. 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 2007 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. |
| --- |
| The results of overseas
operations have been translated into sterling at the weighted average rates of
exchange for the period. In the case of the US dollar, the translation rate for
the three months ended 31 March is £1= $1.98 (2007 3 months, £1 =
$1.95). In the case of the euro, the translation rate for the three months
ended 31 March is £1 = €1.32 (2007 3 months, £1 =
€1.49). Foreign currency denominated assets and liabilities have been translated into
sterling at the rates of exchange on the last day of the period. In the case of
the US dollar, the translation rate is £1=$1.99 (2007 31 March £1 =
$1.96; 31 December £1 = $2.01). In the case of the euro, the translation
rate is £1 = €1.26 (2007 31 March £1 = €1.47; 31 December
£1= €1.36). |

3.	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Continuing operations
Americas (note 5)	116	102
EMEA (note 6)	58	49
Asia Pacific (note 7)	36	32
Central	16	13
	____	____
	226	196
Discontinued operations (note 10)	5	10
	____	____
	231	206
	====	====

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4.	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Continuing operations
Americas (note 5)	56	48
EMEA (note 6)	15	7
Asia Pacific (note 7)	9	7
Central	(18)	(17)
	____	____
	62	45
Exceptional operating items (note 8)	(5)	16
	____	___
	57	61
Discontinued operations (note 10)	2	1
	____	___
	59	62
	====	===

5.	2008 3 months ended 31 March	2007 3 months ended 31 March
	$m	$m
Revenue
Owned & leased	63	57
Managed	53	38
Franchised	114	106
	____	____
Continuing operations	230	201
Discontinued operations – Owned & leased	11	17
	____	____
Total $m	241	218
	====	====
Sterling equivalent £m
Continuing operations	116	102
Discontinued operations	5	9
	____	____
	121	111
	====	====
Operating profit
Owned & leased	7	4
Managed	23	11
Franchised	97	93
Regional overheads	(15)	(15)
	____	____
Continuing operations	112	93
Discontinued operations – Owned & leased	3	2
	____	____
Total $m	115	95
	====	====
Sterling equivalent £m
Continuing operations	56	48
Discontinued operations	2	1
	____	____
	58	49
	====	====

6.	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Revenue
Owned & leased	27	25
Managed	20	16
Franchised	11	8
	____	____
Continuing operations	58	49
Discontinued operations – Owned & leased	-	1
	____	____
Total	58	50
	====	====
Operating profit
Owned & leased	2	(2)
Managed	11	8
Franchised	7	6
Regional overheads	(5)	(5)
	____	____
Total – continuing operations	15	7
	====	====

7.	2008 3 months ended 31 March	2007 3 months ended 31 March
	$m	$m
Revenue
Owned & leased	40	36
Managed	28	22
Franchised	4	4
	____	____
Total $m	72	62
	====	====
Sterling equivalent £m	36	32
	====	====
Operating profit
Owned & leased	10	8
Managed	14	9
Franchised	2	2
Regional overheads	(9)	(6)
	____	____
Total $m	17	13
	====	====
Sterling equivalent £m	9	7
	====	====
All results relate to continuing operations.

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8.	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Exceptional operating items
Gain on sale of associate investment	-	11
Gain on sale of other financial assets	-	5
Office reorganisations (a)	(2)	-
Holiday Inn brand relaunch (b)	(3)	-
	____	____
	(5)	16
	====	====
Tax
Tax on exceptional operating items	1	2
	====	====

All exceptional items relate to continuing operations.
a)	Relates to further costs incurred on the relocation of the Group’s head
office and the closure of its Aylesbury facility.
b)	Relates to costs incurred in support of the worldwide relaunch of the Holiday
Inn brand family that was announced on 24 October 2007.

| 9. |
| --- |
| The tax charge on the combined profit from continuing and discontinued
operations, excluding the impact of exceptional items (note 8), has been
calculated using an estimated effective annual tax rate of 29% (2007 28%),
analysed as follows. |

	3 months ended 31 March 2008 — Profit	Tax	Tax	3 months ended 31 March 2007 — Profit	Tax	Tax
	£m	£m	rate	£m	£m	rate
Before exceptional items:
Continuing operations	47	(13)		40	(12)
Discontinued operations	2	(1)		1	-
	____	____		____	____
	49	(14)	29%	41	(12)	28%
Exceptional items:
Continuing operations	(5)	1		16	2
	____	____		____	____
	44	(13)		57	(10)
	====	====		====	====
Analysed as:
UK tax		(2)			(4)
Foreign tax		(11)			(6)
		____			____
		(13)			(10)
		====			====

By also excluding the effect of prior year items, the equivalent effective tax rate would be approximately 35% (2007 34%). Prior year items have been treated as relating wholly to continuing operations.

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10.
Discontinued operations are those relating to hotels sold or those classified
as held for sale as part of the asset disposal programme that commenced in
2003. These disposals underpin IHG’s strategy of growing its managed and
franchised business whilst reducing asset ownership.
The results of discontinued operations which have been included in the
consolidated income statement, are as follows:
	2008 3 months ended 31 March	2007 3 months ended 31 March
	£m	£m
Revenue	5	10
Cost of sales	(3)	(8)
	____	____
	2	2
Depreciation and amortisation	-	(1)
	____	____
Operating profit	2	1
Tax	(1)	-
	____	____
Profit for the period from discontinued operations	1	1
	====	====
	2008 3 months ended 31 March pence per share	2007 3 months ended 31 March pence per share
Earnings per share from discontinued operations
Basic	0.3	0.3
Diluted	0.3	0.3
	====	====
The effect of discontinued operations on segment results is disclosed in notes
5 and 6.

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| 11. |
| --- |
| 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. |

	3 months ended 31 March	2008	3 months ended 31 March	2007
	Continuing operations	Total	Continuing operations	Total
Basic earnings per share
Profit available for equity holders (£m)	30	31	46	47
Basic weighted average number of ordinary shares (millions)	292	292	354	354
Basic earnings per share (pence)	10.3	10.6	13.0	13.3
	====	=====	====	=====
Diluted earnings per share
Profit available for equity holders (£m)	30	31	46	47
Diluted weighted average number of ordinary shares (millions) (see below)	295	295	365	365
Diluted earnings per share (pence)	10.2	10.5	12.6	12.9
	====	=====	===	===
Adjusted earnings per share
Profit available for equity holders (£m)	30	31	46	47
Less adjusting items (note 8):
Exceptional operating items (£m)	5	5	(16)	(16)
Tax (£m)	(1)	(1)	(2)	(2)
	____	____	____	____
Adjusted earnings (£m)	34	35	28	29
Basic weighted average number of ordinary shares (millions)	292	292	354	354
Adjusted earnings per share (pence)	11.6	12.0	7.9	8.2
	====	====	====	====
Diluted weighted average number of ordinary shares (millions)	295	295	365	365
Adjusted diluted earnings per share (pence)	11.5	11.9	7.7	7.9
	====	====	====	====

	2008 3 months ended 31 March millions	2007 3 months ended 31 March millions
Diluted weighted average number of ordinary shares is calculated as:
Basic weighted average number of ordinary shares	292	354
Dilutive potential ordinary shares – employee share options	3	11
	____	____
	295	365
	====	====

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12.	2008 31 March	2007 31 March	2007 31 December
	£m	£m	£m
Cash and cash equivalents	89	178	52
Loans and other borrowings – current	(8)	(5)	(8)
Loans and other borrowings – non-current	(926)	(365)	(869)
	____	____	____
Net debt	(845)	(192)	(825)
	====	====	====
Finance lease liability included above	(101)	(99)	(100)
	====	====	====

13.	2008 3 months ended 31 March	2007 3 months ended 31 March	2007 12 months ended 31 December
	£m	£m	£m
Net increase/(decrease) in cash and cash equivalents	37	(1)	(131)
Add back cash flows in respect of other components of net debt:
Increase in borrowings	(38)	(55)	(553)
	____	____	____
Increase in net debt arising from cash flows	(1)	(56)	(684)
Non-cash movements:
Finance lease liability	(2)	(2)	(9)
Exchange and other adjustments	(17)	-	2
	____	____	____
Increase in net debt	(20)	(58)	(691)
Net debt at beginning of the period	(825)	(134)	(134)
	____	____	____
Net debt at end of the period	(845)	(192)	(825)
	====	====	====

14.	2008 31 March	2007 31 March	2007 31 December
	£m	£m	£m
Americas	402	427	388
EMEA	420	375	376
Asia Pacific	274	283	267
Central	83	71	83
	____	____	____
	1,179	1,156	1,114
Net debt	(845)	(192)	(825)
Unallocated assets and liabilities	(256)	(289)	(240)
	____	____	____
	78	675	49
	====	====	====

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15.	2008 3 months ended 31 March	2007 3 months ended 31 March	2007 12 months ended 31 December
	£m	£m	£m
At beginning of period	46	678	678
Total recognised income and expense for the period	40	54	240
Equity dividends paid	-	-	(773)
Issue of ordinary shares	1	3	16
Purchase of own shares	(13)	(25)	(81)
Movement in shares in employee share trusts	(6)	(47)	(64)
Equity settled share-based cost	7	4	30
	____	____	____
At end of the period	75	667	46
	====	====	====

The proposed final dividend of 14.9 pence per share for the year ended 31 December 2007 is not recognised in these accounts as it remains subject to approval at the Annual General Meeting to be held on 30 May 2008. If approved, the dividend will be paid on 6 June 2008 to shareholders who were registered on 28 March 2008 at an expected total cost of £44m.

| 16. |
| --- |
| At 31 March 2008 amounts contracted for but not provided for in the financial
statements for expenditure on property, plant and equipment was £9m (2007
31 December £10m; 31 March £23m). At 31 March 2008 the Group had contingent liabilities of £10m (2007 31
December £5m; 31 March £5m), mainly comprising guarantees given in
the ordinary course of business. In limited cases, the Group may provide performance guarantees to third-party
owners to secure management contracts. The maximum exposure under such
guarantees is £110m (2007 31 December £121m; 31 March £113m).
It is the view of the Directors that, other than to the extent that liabilities
have been provided for in these financials statements, such guarantees are not
expected to result in financial loss to the Group. The Group has 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 warranties are not expected to result in financial loss to the Group. |

17.

| Other commitments |
| --- |
| In March and June 2007, the Company made the first two payments of £10m
under the agreement to make special pension contributions of £40m to the
UK pension plan. A further payment of £10m was made on 31 January 2008
and the final £10m is scheduled for payment in 2009. 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 £30m which will be charged to the income statement
as an exceptional item during 2008, of which £3m has been charged in the
first quarter. |

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EEDocs PBEnd

| INDEPENDENT REVIEW REPORT TO InterContinental Hotels Group
pLC |
| --- |
| Introduction We have been engaged by the Company to review the condensed set of financial
statements in the interim financial report for the three months ended 31 March
2008 which comprises the Group income statement, Group statement of recognised
income and expense, Group cash flow statement, Group balance sheet and the
related notes 1 to 17. We have read the other information contained in the
interim financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements. This report is made solely to the Company in accordance with 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. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed. Directors' Responsibilities The interim financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the interim
financial report in accordance with the Disclosure and Transparency Rules of
the United Kingdom’s Financial Services Authority. As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this interim financial report
has been prepared in accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the European
Union. Scope of Review We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity’ issued by the
Auditing Practices Board for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim financial
report for the three months ended 31 March 2008 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom’s Financial Services Authority. Ernst & Young LLP London 6 May 2008 |

END

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | InterContinental Hotels
Group PLC |
| --- | --- |
| | (Registrant) |
| By: | /s/ C. Cox |
| Name: | C. COX |
| Title: | COMPANY SECRETARIAL
OFFICER |
| Date: | 7 May 2008 |